TOC 2012: the wrap
"Change forward fast (repeat)" was the slogan for O'Reilly's ToC in New York, following on Digital Book World three weeks earlier. The bustling meeting boasted the largest attendance yet, almost 1500 people (100 fewer than DBW): change is good for the conference business.
Some "repeat" played between ToC and trade-centric DBW, but ToC's forward-thinking was more techie and experimental. That's not to say trade was missing: sessions considered the role of libraries and ebook lending; kids' books; trade experiments using short form content and QR codes; nonfiction ebook sales patterns. There was also the last-minute addition of one San Francisco/Silicon Valley bookseller and his startling vision for the bricks-and-mortar future.
A complete "tradie," David Borgenicht, who co-authored the Worst Case Scenario series and whose company, Quirk Books, brought us Pride and Prejudice and Zombies, said he came to sample the smorgasbord of "food for thought" and the devices/ platforms at ToC's "digital petting zoo." Others also praised the hands-on "zoo".
"Digital creates a more level playing field and enables you to play around with the conventions of publishing," Borgenicht believes. Like many, he sees short-form as very viable and has plans to do serialized novels. He hoped to find technology to help carry him "from the idea phase through to the product." Taking the much-discussed "Lean Startup" words of keynoter Eric Ries to heart, he was looking for a way "to do what publishers don't do very well: manage and pivot on change as it happens and engage the audience at a much earlier stage."
In their "Real World Agile Publishing" session, O'Reilly's Joe Wikert and Sourcebooks' Dominique Raccah described how they're putting Ries's ideas about pushing a product out quickly, soliciting reader feedback, and updating, into practice.
With Todd Sattersten's Every Book Is a Startup, O'Reilly released two chapters (28pp) as a $4.95 ebook in July, promising free updates to purchasers who bought early; asked readers to weigh in on topics for the rest of the book; and followed a "dynamic" pricing model, where purchasers coming later to the party would have to pay more. A print or print-and-e bundle would cost higher still.
This "changing the flat tire while driving down the highway," Wikert asserts, is ideal for "riskier or cutting-edge topics;" for testing the market with a "raw" manuscript needing a smaller investment that can boost visibility for a later, "finished" product; and of course, for O'Reilly's tech-savvy consumers and authors. It's essential that the author buy in, and as Raccah noted, be "thick-skinned" enough to deal with negative feedback.
When Sattersten's model is applied to a trade book like the project Sourcebooks is doing with futurist David Houle, it seems very experimental indeed. Raccah, an evangelist for "user-centric models based on your key verticals," says "you have to start with the customer experience and work backward." She also wants to create a better author experience, since the moment the author hands over the manuscript, "control" has been "lost" and "frustration" sets in.
Sourcebooks put up four chapters of Houle's The Shift Age, and asked for reader input on pricing models, content delivery, etc. What they've found is how "time-intensive" the whole process is. The experience thus far has suggested they might end up with a new offshoot - a webinar business. Yet Raccah is concerned that in this "agile" model, a book may never get done. There's another caveat: what is striking in this experiment and others like it is the numbers: thus far, only 250 readers have signed on to be involved in the process.
A whole range of numbers was forthcoming from Judith Curr, head of S&S's Atria, who expects that this year over a third of her business will be ebooks. Curr mentioned bestselling author Jennifer Weiner's 44-page "instant" A Short Story as an example of "speed to market": submitted on October 26, it was revised October 27, available for pre-order October 28, on sale October 31. It sold 4500 copies the first week and 68,000 thus far. But although ebooks are "an entry point, print is still two-thirds of my business, so how do we integrate the two?" Curr asked.
One answer may be Quick Response codes. When Atria put them in ads, the take-up was small: only a couple hundred scans each. They're still experimenting. But when they put them inside certain books, they've had more success. In Tom Watson's $29.99 Timeless Swing golf book, published in March 2011, the tags enabled the reader to see instructional videos at no additional charge. There have been more than 17,000 scans. Surely this is the kind of "bridge" that would make bundling an e and p product especially attractive in future.
Curr's dream is that with more powerful NFC-enabled mobile phones, "the book will become the store." If, say, an advertising poster in an upscale clothing chain store leads a customer to "tap and buy" an Atria book on her smartphone, that store will get a cut of the transaction. But that experiment "is some months away."
In the here-and-now, Andrew Savikas, who used to be in charge of ToC, touted the advantages of O'Reilly's subscription operation Safari, which he now heads. There are 20,000 titles on Safari, and "less than half" cater only to tech professionals. The subscription model sidesteps piracy and DRM: customers know that access is predicated on payment. And publishers are paid for what the customer actually views.
While "very few" Safari customers read cover to cover, the average publisher payment is 7 cents per book page view. O'Reilly's boffins calculated that if you rated what a publisher gets for a typical New York Times hardcover bestseller, the per-page payment would come out to only 3.5 cents. Advantage: subscription model.
Mobile usage is additive rather than cannibalizing; it peaks at night and on weekends. More than half of Safari's usage is generated by titles more than three years old. Video usage is up 70% in a year. The business is international – 30%-plus individual subscribers are outside the U.S – and is primarily institutional, both corporate and governmental. It's also growing - for the past six years - in double digits.
For those who are not in the subscription game, Joe Karaganis of Columbia University's American Assembly addressed the topic of piracy. "Three months ago, SOPA in the US and ACTA in Europe looked like done deals. Now, with powerful citizen mobilization movements, that isn't the case."
Raid-based enforcement doesn't scale. There may be a few cases of "punishment-as-spectacle" but "there's a futility in this approach." Thus, the SOPA and ACTA idea of making enforcement "automated," but then privacy questions come into play.
What we are seeing now in universities in developing countries is the emergence of massive digital "shadow libraries." Copying "will grow exponentially" as digital readers get cheaper and cheaper. It will be "hugely disruptive." Given the problems we face, "you can't just say that SOPA is bad. You need to suggest a positive set of proposals" in its place, Karaganis warned.
Meanwhile, former Borders UK CEO Philip Downer told listeners at a retail panel that he fears a future of "nice" bookstores for "nice" (educated, affluent) people and, as supermarkets etc. retreat from the business, "no bookshops for anyone else." Verso/Books and Books' Jack McKeown sees a "hybrid market" of readers who embrace digital, others who embrace a digital-print combo, but also holdouts who, in the absence of a killer device like the iPod, will continue to resist digital reading entirely.
Yet the most interesting voice from the bricks-and-mortar front was a last-minute addition to the program: an unlikely bookseller with a Silicon Valley pedigree. When Praveen Madan - who studied engineering in his native New Delhi, came to Texas for an MBA, and did management consulting for a dozen years - talked about his vision of the bookstore future, everybody sat up and listened.
In 2006 Madan took a year off; in 2007 he and wife Christin bought San Francisco's 3200-sq.-foot Booksmith; a year later, when Berkeley's famed Cody's Bookstore closed, they teamed with Cody's former events manager to start Berkeley Arts & Letters for mounting lectures and programs in venues around the city. Now Madan is hoping to spearhead the rescue of Kepler's, a 10,500-sq.-foot, long-established store in Menlo Park, the very heart of Silicon Valley.
A family business and among the best-known independents in America, Kepler's had been in crisis for years. Like many stores, it was, Madan says, "in a debt spiral: they cut inventory because there wasn't enough cash, so sales dropped while fixed costs remained and they had to cut more inventory, etc. All the while, customers kept asking, ‘Where is the book that I want?'"
Madan wants to "redefine" the notion of a community bookstore and divide Kepler's into two businesses via a complicated, bifurcated legal structure: a for-profit bookstore and a "not-for-profit top-tier community cultural" organization. Technology is having an "isolating impact" and he wants to provide a way "to reconnect." People also recognize, he says, that 18 years after Amazon started, "a well-curated physical bookstore experience is still better than Amazon's algorithms" for browsing and recommendations.
To survive and flourish, Madan wants to diversify the revenue model to include "memberships, services, experiences, tax-deductible corporate sponsorships." He wants to be community-owned – he and Clark Kepler would be only two of the shareholders. He wants to take author events to Silicon Valley "corporate campuses." And he wants to be the first independent to sell - or even "give away" a Nook or a Kindle with, say, a $500 membership – and doesn't particularly care which.
Taking a lesson from Jeff Bezos's playbook, he says, "It is not important for me to make money on every book a customer buys. I need that relationship and for the customer to feel comfortable in it.
"You cannot stick your head in the sand hoping that Amazon will go away. The problem with what the independents are doing with the Google ebooks platform is that it is a terrible experience. I have no illusion that we'll ever make money on ebooks. But if you re-engage the community and form really strong relationships with publishers and writers, you can make money in other ways."
If publishers want independents to survive, they can help by rethinking a "broken and antiquated back-office system that was designed for 1975. It is the black hole that sucks in the energy resources of the store and takes away valuable staff time. A publisher turns the screws on a store for $50!
"Most ebook technical standards have been driven by Amazon, Apple, B&N, Google – the publishers who could have played a role haven't played it. They've been dragged kicking and screaming into the ebook world." Madan is looking for 5-10 houses who are "willing to try new ideas" and partner. He doubts they will be the biggest firms.
"The business we are in fundamentally is public education – like museums." He hopes the Internal Revenue Service "will buy the idea" of the bifurcation." And he hopes to be over the transition within a year.
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