If eBooks Are the Future, Do Publishers Have a Plan?

Written originally in November of 2009 by Linda Dishman, the question does need to be asked, what now for publishers? I believe the question has not been answered. However, I believe that the question will be answered in a way most of us have not imagined. Here is where you can find the original piece - http://www.fastcompany.com/blog/lydia-dishman/all-your-business/are-ebooks-brave-new-world-profitability-publishers. Enjoy the piece: 

The numbers are in, and eBooks may very well be the bright spot in book publishing's dim future--but only if publishers can figure out a way to keep the momentum going.

EBook sales accounted for $46.5 million as of the end of September, according to the International Digital Publishing Forum (IDPF), but that number only represents trade eBook sales through wholesale channels. Retail numbers may be as much as double these figures due to industry wholesale discounts, says IDPF. It's a drop in the bucket for book sales overall, which amounted to about $1.26 billion for the month of September, according to the Association of American Publishers (AAP).

What's most astonishing, though, is that eBooks have sold like hotcakes without a marketing or sales strategy. Publishers are moving quick to catch up as new digital innovations come to market.

"Everybody's awake now," says Mike Shatzkin, a 40-year industry veteran and founder of the Idea Logical Company, a firm of digital publishing futurists. He lauds larger publishers such as Random House and Hachette for being way ahead in terms of the mechanics of getting eBooks to market. But one of the publishers' biggest problems, he says, is that their selling strategies are built around book formats, and not about the interests of the people reading those books.

Brian O'Leary, founder of Magellan Media, a publishing industry consultancy, agrees that the approach to finding the eBookworms varies from publisher to publisher. For instance, he notes many of Hachette Book Group's titles have had simultaneous print, audio, and e-book versions that are marketed and sold using common campaigns.

HarperStudio's publisher, Bob Miller, acknowledged that their overall strategy so far, is integrated with their print program because many of their eBooks and digital audiobooks have traditional print versions. This from the HarperCollins imprint that rocked the publishing world recently when they announced a 50-50 profit-sharing deal with authors--a departure from the traditional 7% to 15% royalty-- and publishers of the multi-media "Vook" CRUSH IT!

Miller speculates that commercial fiction categories such as thriller, mystery, suspense, romance, and science fiction will continue to sell briskly in digital format. "Readers of these genres will continue to like the convenience and low cost of this format and are less concerned about having the physical book to keep on a shelf," he says.

But O'Leary suggests publishers such as HarperStudio would do well to take a page from the genre publisher's playbook. Though he's not advocating a one-size-fits-all marketing strategy, he notes that Harlequin has enjoyed much success by marketing short-form digital downloads for Nocturnal Bites separately, and recently announced the start of a digital-only imprint.

Indeed, Harlequin Enterprise Ltd.'s Brent Lewis, vice president of digital and Internet for Harlequin Enterprises Ltd., has been leading the strategic charge of Harlequin's digital publishing and marketing programs that now reach over 50 million readers in ebooks and digital audio, as well as on Harlequin's own site, in mobile distribution, and digital-only content.

Lewis' revealed Harlequin's not-so-secret ingredient in an interview with Fast Company last year: their consumers. "At Harlequin we have a very powerful brand that people have been very loyal and engaged to since the business began."

While Harlequin has its finger on the (ahem) throbbing pulse of its readers, it will be interesting to see what strategies evolve at Random House when industry vet and ex-Amazon employee Madeline McIntosh assumes the newly created position of President, Sales, Operations, and Digital on December 1. Her appointment will "unify their physical and digital sales efforts for adult, children's, and international titles, distribution, publishing operations, IT, and corporate digital-publishing capabilities in an interconnected team,"according to a statement from Markus Dohle, Random House chairman and CEO.

They managed to pull out a blockbuster under current leadership. Crain's New York Business reported sales of Dan Brown's The Lost Symbol sold 100,000 e-books its first week out, or about 5% of total sales for the book. September ebook sales at Random House (much of which are presumably The Lost Symbol) pulled in $22.6 million, which is a 700% increase over Kindle sales last year. While every month can't be a Dan Brown blow-out, a good marketing strategy to find and retain loyal readers will help shore up the revenue model.

Right now, Shatzkin says eBooks are more profitable than print because there is no physical inventory, and in many cases the publisher has negotiated lower royalty payments (and other than the aforementioned specific instances, no one seems to have a marketing plan). As such, he believes Amazon, proprietors of the Kindle eReader, is subsidizing publishers for digital editions because the price they are paying up front for a digital edition is the same as for the print version.

O'Leary believes this too, will change. As publishers gain experience and sales grow, the cost of creating them will fall. "In the last year retail prices for e-books have been set lower than their print counterparts. If those lower prices stick, they will leave little room for retailer or publisher profitability under the traditional publishing model," he adds.

Yet Shatzkin wonders whether good marketing strategies and proper branding of digital books won't keep them from being cost prohibitive to the consumer. "There is plenty out there to read that's free. Will the public plunk down $25 for Ted Kennedy's eBook?" he asks, then responds, "I think it will take a while to answer that question."

Is iPad supercharging eBook piracy?

Here is the piece for your perusal:

Recently, Scott Turow, the best-selling author of legal thrillers, including "Innocent"--his just released sequel to "Presumed Innocent"--was named president of The Authors Guild. That Turow, a practicing lawyer, was named president is probably no coincidence, considering the myriad issues that authors and publishers now face as digital books and e-book readers not only disrupt the marketplace but leave it vulnerable to that nasty little vermin commonly known as piracy.

In an interview with Media Bistro's Galley Cat (see video below), Turow talked about how author royalty rates for e-books were too low, but the larger problems for authors and publishers involved piracy. "It has killed large parts of the music industry," he said. "Musicians make up for the copies of their songs that get pirated by performing live. I don't think there will be as many people showing up to hear me read as to hear Beyonce sing. We need to make sure piracy is dealt with effectively."

Why this suddenly more-alarming tone? Well, though Turow recognizes that the iPad has clearly taken the e-reader to a whole new level, he doesn't specifically single out the iPad as the No. 1 catalyst for pirating. But I am. 

To put it in the context of the music world, it goes something like this: You remember the first MP3 players to catch on? They were from a company called Rio and the early ones used SmartMedia memory cards as their storage medium. Then there were more Rios, and most of them were really pretty good (I still run with a Rio Chiba). I look at these players as the Kindles, Nooks, and Sony Readers of the e-reader world. 

But then the iPod showed up. Sure, there had been piracy ever since people started burning CDs, but the iPod was the big accelerant. You can say what you want about iTunes ruining the music industry with its 99-cent single-track downloads (why buy the whole album for $10, when you can buy just the two good songs on it for $2?), but the fact that so many millions of people were carrying around iPods that could store thousands of songs only fueled the transition to fully digital music, no discs attached.

As e-readers go, Amazon won't let us know exactly how many Kindles it has sold, but most estimates put it in the 2 million to 3 million range, give or take a few hundred thousand. Apple sold a million iPads in a month. And though sheer numbers and critical mass are important, what's more alarming is what the iPad can do. No, it can't support Flash, but it sure does a nice job with PDF files and a host of other document formats that can be easily imported to the device via the appropriate app, most of which cost less than $3. (GoodReader, which I use for PDF files, costs 99 cents; you transfer files to the app via iTunes.) 

A quick scope of Pirate Land reveals a hodgepodge of content in a variety of formats, and other bloggers have already touched upon this aspect of e-book piracy in other pieces. I particularly liked an article done earlier in the year by The Millions' C. Max Magee titled, "Confessions of a Book Pirate," in which MacGee does a Q&A with a BitTorrent uploader who goes by the handle The Real Caterpillar. My favorite Caterpillar quote:

"Perhaps if readers were more confident that the majority of the money went to the author, people would feel more guilty about depriving the author of payment. I think most of the filesharing community feels that the record industry is a vestigial organ that will slowly fall off and die--I don't know to what extent that feeling would extend to publishing houses since they are to some extent a different animal. In the end, I think that regular people will never feel very guilty 'stealing' from a faceless corporation, or to a lesser extent, a multimillionaire like [Stephen] King."

This guy, like most e-book pirates--or the ones uploading the files--tends to take the time to scan the physical books into a computer, obtains the text via OCR (optical character recognition), makes corrections, and converts them to a variety of file formats. The same goes for comic books, which are being rampantly shared on The Pirate Bay. As you might have guessed, a number of comic book reader apps are available for the iPad and its large high-resolution color screen, turning it into the perfect digital comic book reader. And let's not leave out magazines, which are also being scanned and uploaded to BitTorrent sites.

At the moment, book piracy is dwarfed by that of the music, movie, and game industries. But it is gradually growing. Shortly after the launch of the iPad, TorrentFreak took a look at a small group of popular business titles and calculated that unauthorized e-book downloads on BitTorrent grew by 78 percent on average--and that was when Apple had sold only about 300,000 iPads.

Ironically, though the early lack of standardization may have adversely fragmented the e-book market, it may have also slowed down piracy. The Kindle still has its own platform and file format for e-books, but most of the big e-reader players, including Apple, have now adopted the ePub format.

It seems that most of the EPUB files available are converted from PDF files (scans of books), but what's scary is how compact the files are (less than 1MB) and how easy they are to load into iBooks and other e-readers that support the EPUB format. Though the size of movies and games can easily exceed 1GB and take hours to download (just ask folks who own the PSP Go how they long they have to wait to download games they've legally purchased), e-books can be shared in a few seconds. It seems that it's only a matter of time before file sharers move from exploiting the "analog hole" (scanning a hardcopy book) to the digital world of cracking copy-protection schemes and stripping legally bought e-books of their DRM.

For now, readers who are upset with the rising price of e-books have taken to posting low ratings on books on Amazon. Turow's "Innocent," for instance, sells for $14.99 as an e-book, which is essentially what the hardcover costs, and certain readers have given the book one-star ratings to express their displeasure. Turow is quite aware of the situation, but still supports his publisher's pricing scheme, arguing that if you don't want to pay $15 for the e-book, buy the hardcover (or wait for the e-book to go down in price). He's right, but certain people get angry when they feel they're getting a raw deal, and, like the publishers who are free to price their e-books however they want, these protesters are free to rate books however they want. As an author, it is incredibly aggravating, because you have no control over pricing--only the publisher does.

Free markets and free speech aside, I have my doubts that higher pricing for e-books is a good long-term strategy. Alas, as we've learned from the music industry, keeping prices steady at around $10 to $12 an album has done nothing to help combat piracy and may have, in fact, contributed to it. Eventually, more people are going to go from leaving bad ratings on books at Amazon to doing something more vindictive, like uploading DRM-free EPUB files to file-sharing sites. And mega-bestselling writers like J.K. Rowling, author of the "Harry Potter" series, are finding out that readers also get angry when you don't make your book available as an e-book. "Harry Potter" books are among the most heavily pirated out there.

How much is pirating hurting the publishing industry? Well, in that same "Confessions of a Book Pirate" article, Magee cites a study done by Attributor, a "firm that specializes in monitoring content online," that claims that "book piracy costs the industry nearly $3 billion, or over 10 percent of total revenue." Most people think that figure is very inflated, but the point is there are some big numbers involved and they only stand to get bigger as powerful e-readers like the iPad become more prevalent and tempt people to acquire content without paying for it because, well, too many of them have become used to it.

If there's a silver lining, it's that people don't read anymore. At least that's what Steve Jobs said in January 2008 in The New York Times when the Kindle first appeared.

"It doesn't matter how good or bad the product is, the fact is that people don't read anymore," he said. "Forty percent of the people in the U.S. read one book or less last year. The whole conception is flawed at the top because people don't read anymore."

Of course, that was then, and this is now: Apple is now a full-fledged bookseller, going head to head with Amazon, Barnes & Noble, and Borders--not to mention any place else you can buy books, from Wal-Mart to your local drugstore. When the company announced that it had sold 1 million iPads in a month, it also bragged that iPad users had downloaded 1.5 million e-books from its iBooks Store. I assume the host of free public-domain e-books in Apple's catalog make up a large portion of that number (although it apparently doesn't include the freebie "Winnie the Pooh" that was offered with the iBooks app). So the appetite is there, particularly if the price is right.

What do you guys think?

This question-piece is from David Carnoy of CNET. You can read the original piece here: http://reviews.cnet.com/8301-18438_7-20005008-82.html.

The Next Few Weeks

A whole plethora of eBook readers are now on the market. This might be confusing for a few people and to the tech savvy among you exciting. Many of you might remember the battle for standards through the seventies, eighties and even the nineties from video playing machines to software. I believe we are in such a time. Our previous blog - Amazon Vs Apple Be Damned: Publishers Pine for Universal eBook Format, has already mentioned this fact.

This is why I have decided that I will try to publish as many eBook reader blogs and reports on as many eBook readers as possible. I hope that these pieces will help you make up your mind on what to purchase. I also hope to cover topics such as eBook piracy in as much detail as possible.

I look forward to reading your comments and discussions on this blog. Thank you.

June's Audio Book Best Sellers

Here are the month of June's Audio Books best sellers:
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Amazon Vs Apple Be Damned: Publishers Pine for Universal eBook Format

NEW YORK (Reuters) — Giants and upstarts of publishing gathered at the annual BookExpo America here last week agreed e-books will transform the business but believe the big change will come when there is a standard format across which all e-books can be published and shared.

The industry has been going through a tumultuous period as Apple and Amazon duke it out for dominance in the nascent market for electronic books.Both want their devices — the iPad and the Kindle — to be the one consumers use to read e-books, and each wants to be the biggest virtual store were such content is sold.

For Michael Serbinis, chief executive of Kobo, a company that allows users to buy e-books and read them on most devices, that battle is a distraction to the real changes coming.

“Today you can buy a book at Barnes and Noble and you can buy a book at Walmart and you don’t have to keep them in separate rooms in your house,” he said. “You buy a book from Apple and Amazon and you have got to keep it tied up with your Apple universe or your Kindle universe.”

Ultimately, consumers want freedom, said David Shanks, chief executive of leading publisher Penguin Group USA.

“Our fondest wish is that all the devices become agnostic so that there isn’t proprietary formats and you can read wherever you want to read,” Shanks told Reuters. “First we have to get a standard that everybody embraces.” The issue, he said, is the fear of piracy and how to set a common digital rights management system to thwart it.

The battle over technology formats is a familiar one. A century ago, Edison and Victor made records that could not be played on each other’s players. There was the Betamax/VHS videotape struggle and more recently Blu-ray beat out HD DVD.

BookExpo showed traditional books are alive and well. There was buzz for the upcoming book from news parody king Jon Stewart and raucous Rolling Stones guitarist Keith Richard’s memoirs as well as a book on home design by Barbra Streisand. And there was evidence of change coming in the age of e-books, although the new format was displayed only in one small corner of the sprawling Javits Center convention halls.

Among the digital companies here were Sideways, which helps authors and publishers transform text into multimedia content, adding video, pictures and features such as Twitter feeds.
Another company, Ripple, allows adults to buy children’s e-books and record their voices reading them. And there were gadgets such as the enTourage eDGe — a twin-screened device which opens like a book to reveal an eReader on one side and a NetBook on the other.

Eileen Gittins of Blurb, which helps authors and companies self-publish, predicts e-books will make up half of all sales in five years. In 2009, the global publishing business, including print and digital, was worth $71 billion, according to PriceWaterhouseCoopers.
“We’re seeing now in book publishing what had happened previously in the music publishing industry. And that is, a massive disruption of the business model,” she told Reuters.
The problem is that the cost of printing is a minor cost of publishing whereas developing work with an author and marketing it consume the lion’s share of costs.
That means, she said, that the book industry will become more like the movie business. “The book publishing industry is becoming more blockbuster focused,” she said.

Susan Petersen Kennedy, president of Penguin Group USA, said publishers will not make the same mistakes as the music industry, which had an epic struggle over electronic distribution and piracy and lost huge market share. “It’s always treated as if the publishers are the Luddites,” she told Reuters in an interview. “The devices have not caught up with the content. Contrary to popular opinion, the book is actually so far more flexible.”

Serbinis says the industry will see dramatic change. He predicted consolidation among publishers and said tablet computers will be common. He expects readers to eventually be able to lend e-books to each other.

And books won’t just be for bookstores any more as new distribution channels from mobile phone companies to gaming companies join the party, he said. “It won’t only be the bookstores that have gone digital,” he said.

You can read the original article here: http://www.wired.com/epicenter/2010/05/universal-e-books-format/all/1

Photo: Men dress as the iPad and Kindle in effort to promote their company that recycles old electronics during the April 3, 2010, release of the iPad at the Apple store on Fifth Avenue.
Bryan Derballa/Wired.com

The audio book and when it can be useful

I was never really a fan of the audio book until I had the opportunity to listen to one. I was with a friend in Canada, and we were driving from Regina to Calgary. The journey between the two cities is seven hours. Now throw in the fact that it was winter and was snowing. Canada has a reputation for its snow. I leave the rest to your imagination. Listening to "The Luckiest Guy in the World" was nothing short of wonderful. Apart from the wintry conditions, the book was a breathe of fresh air. I thoroughly enjoyed the narration. It also made me appreciate the audio book in the sense that some books look like a right handful to read. 

However, there is one thing we must not forget, bad narration really does ruin a perfectly good book. Let me give an example (here comes the controversy), Seth Godin is a great public speaker and very interesting to watch in action. For those of you who don't know Seth Godin, he is one of the co-founders of Squidoo, and bestselling author of books such as "Unleashing the Idea Virus" and "All Marketers are Liars". I must complain though that when Seth narrates in one of his books, well, it is not enjoyable. His voice was monotone and frankly boring. Many of you might disagree but why not head on down to Audible.com to download his free audio book "Tribes" and see (hear is what I should say) what I mean. I can also think of some other books such as Adam Khoo's Secrets of Self-Made Millionaires and narrated by Adam could have been better. I am sure Adam would not agree with me just as some of you but hey, you be the judge. Oh, and by the way, Secrets of Self-Made Millionaires is a very interesting book. 

Criticism or not, good audio books are still really good value and should be enjoyed. I can only imagine how most of you enjoy your audio books. Maybe you are one of those people who lights up a cigar and listens to one of Arthur Conan Doyle's books or you put the kettle on for a cup of tea while listening to Oscar Wilde, you can not argue that audio books are useful and here to stay.

Our full and proper Domain

This is to let everyone know that http://nosadigital.yolasite.com is now http://nosadigital.com/

Audio Books Best Sellers

Here are the best seller audio books from Michael Lewis, Jonathan Kellerman, and David Baaldacci to mention a few: