Gatekeepers No More

A fascinating article on WSJ.com about “Wool,” which launches in print today after already having made the author a millionaire on digital sales alone:

Hugh Howey’s postapocalyptic thriller “Wool” has sold more than half a million copies and generated more than 5,260 Amazon reviews. Mr. Howey has raked in more than a million dollars in royalties and sold the film rights to “Alien” producer Ridley Scott.

And Simon & Schuster hasn’t even released the book yet.

In a highly unusual deal, Simon & Schuster acquired print publication rights to “Wool” while allowing Mr. Howey to keep the e-book rights himself. Mr. Howey self-published “Wool” as a serial novel in 2011, and took a rare stand by refusing to sell the digital rights. Last year, he turned down multiple seven-figure offers from publishers before reaching a mid-six-figure, print-only deal with Simon & Schuster.

The publishing industry is in danger of losing control of the digital market as more and more tools are being put in the hands of authors to allow them to make and sell their books directly to readers. This piece is fascinating in detailing how this author knew he had the publishers under his power and not vice versa.

He’s even able to set his own pricing, which ends up with the digital, Kindle version of the first five books retailing for $6 and the paperback of the same retailing for $15, which resembles realistic and non-gougy pricing. Plus, when dealing with Amazon, he gets 70%, while with a traditional publisher he would get only 15% or less. The economy of this thing is a no-brainer.

Authors can now create their own books, package them, and sell them on globally-available marketplaces with minimal cost and with profit shares much larger than they can by going through the traditional publishers. They can also use blogs and social services to do all their own marketing nearly free of charge.

You can say how you wish things weren’t being controlled by DRM-laden marketplaces like the Kindle Store or iBooks, but the ease of access to the tools and methods or creation and distribution is eroding the traditional publishing market’s authority over the medium.

I Love You, Kill Screen, But…

This is what I get quarterly from Kill Screen for $40 a year; just shy of 100 pages:

This is what I get from the Grantland Quarterly for $48 a year; about 340 pages including a pull-out style section:

To be fair, Kill Screen is full color and has a lot more content that either isn’t available on the website or is delayed there after the print publication. (Grantland is done in 2-color groups and has mostly content that was published on the website about six months earlier, but it’s hardcover.)

I love both publications and think that they are both full of a lot of very, very good writing, but there’s a value comparison here that’s not in Kill Screen‘s favor, especially considering that Kill Screen has ads and Grantland Quarterly doesn’t.

Notes for “New Publishing and Web Content”

Moderator: Jeffrey Zeldman, founder of Happy Cog

Panel: Paul Ford, editor @ Harper’s; Lisa Holton, 4th Story Media; Mandy Brown, Creative Director @ Etsy; Erin Kissane, independent editor of web content (A List Apart, Happy Cog)

Abstract: In this panel we’ll explore the creative, strategic, and marketing challenges of traditional and new (internet hybrid) book publishing and online magazine publishing, and how these fields intersect with content strategy and client services.

Notes:

  • Which will die first, newspapers or Flash?
    • Ford – the same a lot of ways, complicated to get started and all normally funded by advertising – says Flash
    • Brown – Flash; the industry is changing in many ways; one corner is changing quickly and the other is changing very slowly; NYT still makes money off print and will keep doing it for a while
    • Kissane – there are other ways to make things move around than Flash – the content is important and Flash is ephemeral
    • Zeldman – trick question as neither one will go away, but Flash is going to become less important as a platform
  • Given that newspapers and books seem to be in trouble, is this a good time to start a publishing company?
    • Brown – an industry transition is a good time to jump in, so yes – people will be trying new things and that’s exciting
    • Holton – started a new company a while back to marry books with digital media, but a good time because (1) small companies can react to the market, (2) people don’t provide just services anymore, now they teach as well
    • Ford – terrible time to try and shoehorn existing content models into the web (that day is over); really interesting time to leverage the extraordinary ecosystem of what’s out there
  • What’s the web good for as a platform?
    • Ford – not so much a publishing platform, but as a customer service platform – talking to people, giving them what they need, helping them understand what they need, and reaching them in that way – how do I serve and interact with people and give them value for their money?
    • Brown – this is like a return to the independent bookstore – a human connection, conversation, and personal recommendations
  • Zeldman – when publishing traditional books, you’re also providing a unique experience and interaction through the web
    • Holton – “The Amanda Project” as an example – users make a game out of it and create a story as a collaborative experience – weekly publishing of a really good idea to extend the narrative; give the users props for the ideas that you use; two forms of the craft of publishing: editing for print and writing/editing on the web; more specific prompts give you better results
    • Kissane – some of the web participant ideas and such make it into print books – print book schedule is so long, but publishing online happens once per week – provides better engagement for the reader; a sequel takes 1.5 years to bring out, and the readers are 1.5 years older!
  • Zeldman – people who are Tweeting *as* characters from shows (Mad Men) as a social zeitgeist – these are unrelated people who create these things and enhance the experience for those who are watching; we know our users are going to do these things anyway, so why not bring those people in to help the project succeed?
  • Who owns the book in new publishing?
    • Brown – example of Amazon and the 1984 issue – when you buy an ebook, it is likely not going to last as long as a paper book because you really don’t own it, you instead pay for access for a time, but you are gaining the ability to access things you might not normally be able to access
    • Zeldman – it’s also DRM that messes up this relationship
    • Kissane – one of the great things about right now is that you can have both; search and discovery is easier with electronic forms of publishing (Google Books)
    • Zeldman – libraries have been doing this for a while, especially because older documents and manuscripts are damaged every time they are handled and with electronic media you remove that limitation (and limitations of space/geography)
    • Ford – How would this device work after the apocalypse? – there were no Kindles in “The Road” – there is a sense with permanence with paper; so many problems with licensing and ownership now
    • Brown – eBooks are currently by-products of print publishing
    • Holton – different kinds of publishing will be prevalent in different publishing methods
  • Zeldman – does the format affect what we buy?
    • Ford – publishers have an opportunity to play around and figure stuff out – don’t outsource this stuff
    • Brown – a lack of curiosity on the part of a lot of publishers – don’t want to engage, don’t want to learn new things
    • Holton – sympathetic towards big publishers
    • Brown – in a model of expensive distribution, it makes sense to have broad product range and try to reach broad customers
  • Zeldman – the problem for traditional publishing is the loss of control, but we still need editors
    • Kissane – in web content, we have much to learn from traditional publishing, especially long-term planning and content plans
    • Ford – this is a good time to broader the editorial tent
  • Audience questions – I have no notes because I asked one :)

Let’s Watch Where This Goes

Barnes and Noble just opened a digital audiobook store. From Publisher’s Weekly:

Barnes & Noble has taken another step in deepening its role in the digital marketplace, launching its Audiobook MP3 Store on Barnes & Noble.com. The store will feature spokenword audiobook MP3s available for download and transfer to iPods, iPhones, MP3 players and other portable devices. The site is launching with more than 10,000 titles across all genres, priced between $10 and $20 per download.

“As the use of MP3 players, iPods, iPhones and other digital devices continues to increase, it is important for Barnes & Noble to continue to expand our audio selections,” said Tom Burke, executive v-p, E-Commerce Barnes & Noble. Overdrive is managing the distribution of titles through the BN.com site. Later this year, B&N is expected to launch an e-bookstore, following its acquisition earlier this year of Fictionwise.

And it’s all DRM-free.

I wonder what that new e-bookstore is going to look like.

I’ll Repeat It: “Worry about Your Customers”

Booksquare on Amazon’s purchase of Lexcycle two days ago:

Right now, it’s time for the publishing industry to step up to the plate. Stop worrying about fake issues like text-to-speech and start worrying about your customers. You may not be able to stop the settlement you negotiated and you cannot stop Amazon from acquiring better technology. But you can demand that your books be sold in the most consumer-friendly manner possible. Take the initiative to be a leader in the future of books — recall that your competition is changing rapidly — and you’ll be a leader in the future of reading.

[…]

The Lexcycle sale is great news for the hard-working team that developed this incredible application, against so many odds. It’s not so great news for everybody else. Consumers are slowly being locked into a single vendor. Publishers are being backed into Amazon’s corner. Yet, yet, yet, I ask again: where are the publishing initiatives, the fresh thinking, to protect the free market?

There’s more at the original article.

The greatest strength of the Kindle format isn’t the reading device or even the book format, but the ease with which you can purchase and download a book. Stanza was a worthy attempt at a competitor.

Thoughts on Ebook DRM Standards

I’ve recently been performing some research into so-called “social DRM” as it applies to digital files for my own knowledge bank. I’ve been very interested in the approaches to DRM shown by groups such as The Pragmatic Programmers and ebooks purchased from outlets like Lulu, where the name of the purchaser is automatically embedded within the purchased file in order to provide it with some measure of discouraging sharing/piracy.

iTunes has done this from the start, and even though they have dropped the traditional notion of DRM from their music files now, they still mark each and every file you download with the email address of the Apple ID used to purchase the song. It’s not used in any sort of enforcement application (that we know of to date), but knowing it’s there stops some people from posting the tracks publicly or sharing them with anyone who is not a close personal friend or relative (my conjecture).

In doing this research, I ran across a two year old blog post from Bill McCoy of Adobe. He has some words to say about the same, which is fascinating coming from the GM of their ePublishing department. His comments are in reaction to the Steve Jobs note from 2007 regarding music and DRM—something that ended up happening less than two years after the fact. I also ran into some more recent comments from McCoy, speaking to the establishment of a DRM standard that is cross-platform instead of complete advocacy for the removal of traditional DRM systems from ebook titles.

Let’s talk about why this isn’t feasible and how we can learn from the past.

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Once Again, It Comes Down to Value

Electronic Cottage reports that there’s a small-scale user revolt boycotting Kindle titles that are priced higher than the new release and/or bestseller $9.99 price point:

Now, Amazon has many books over the $9.99 price it promised for new releases when Kindle was first launched. That price was a major selling point to convince buyers that the large investment in a Kindle would pay off over time. The price also acknowledged the obvious: a Kindle edition is less valuable than a hardcover; although you cannot pass along your Kindle edition to friends, you are at least paying a significant amount less than the hardcover price. Unfortunately, short-sighted publishers feel they are losing dollars instead of realizing that a $9.99 Kindle sale doesn’t usurp a hardcover sale. It is a brand new entity. A plus. Pure gravy.

Kindle owners have organized a boycott of Kindle editions over $9.99. The uprising is ably helped by Amazon’s own online tools: the 9.99boycott community and a boycott discussion forum. Cleverly, the boycotters are using the Amazon tags feature to tag books over $9.99 with the 9.99boycott tag. Boy, if I were a publisher or author, I sure wouldn’t want to see my books listed at the top of the tag’s “Popular Products” under the boycott tag.

Interesting that part of the article here is that Amazon has provided customers with all the tools they need to create an uprising within their own service. Pay attention to the number of books the author says he purchased at the lower $9.99 price point. Like iPhone applications, there appears to already be a price ceiling forming with the Kindle.

I don’t think this is what Amazon was going for, nor do I think they promised everyone $9.99 books, but (again) like the App Store, the customer base is showing what they’re willing to pay.

(Via Tools of Change for Publishing.)

You May Take This As Encouragement

Michael Hyatt on why people in traditional publishing need to be blogging (transcribed from the embedded video):

…People get stuck right here. Because they think: ‘Okay; Do I want to start a corporate blog or do I want to start a personal blog?’ And we’ve all seen those personal blogs where it’s just—you know—somebody’s diary, and it’s boring, and it’s not that interesting, and we’ve all seen the corporate sites, where it’s nothing but a stream of PR announcements. You know, I don’t think either one of those will garner a lot of traffic, and I think fundamentally it’s a false dichotomy. I think the best corporate blogs are blogs that are personalized—that are about the individuals in the company that are writing the blog.

We are a nation—maybe a world—of voyeurs. Reality TV is still very popular. People want an inside look at how you think, what you have to say, how your company operates. And the great thing about publishing is it’s very mysterious. I get emails all the time from people who—they can’t fathom how a book makes its way to the market […] but they just don’t know what the process is. They’re mystified by it. And for you to peel back the curtain a little bit in a blog and give people an inside look at your company connects them to your company. And an inside look at your own life connects them to you.

He goes on to list twelve reasons why publishers should be blogging. I think you should watch the video to receive the context and to hear the rest of the talk, because it’s really good. I’ll place a summary of the twelve reasons behind the cut below.

In his post linked above, he entreats other publishers to attend the O’Reilly Tools of Change for Publishing conference next year (where this talk was taped):

I also one of two traditional publishers who participated in the “CEO Panel.” (The other one was Tim O’Reilly himself.) Surprisingly, I did not see any other CEOs from traditional publishers in attendance. Perhaps I just missed them. Perhaps they sent people to attend. Frankly, I think they need to attend themselves. This is not something you can afford to delegate.

If you are a traditional publisher, you need to be there next year. The world is changing fast. This is the only conference I know of that is totally dedicated to exploring the future of publishing.

I hope this conference gains steam over time. The list of presentations was staggeringly interesting. I plan on watching a handful of the other presentations over the weekend. You can find them at toccon.blip.tv.

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Something for Nothing Can Make You Something

Chris Anderson is the editor-in-chief of Wired.

I don’t expect that to draw you in for a very exciting post. What I do want to share with you is that he believes that the future of commerce and business, especially over the Internet, is in giving things away for free. An article about this very subject was the cover story in Wired about a year ago, and Anderson is writing a book that will be out in July called, simply, Free.

Pay attention to this one, because it’s possibly very revolutionary and is likely to turn some heads. He thinks you should be giving stuff away in order to make money.

He’s not necessarily talking about the Gilette model, either:

Thanks to Gillette, the idea that you can make money by giving something away is no longer radical. But until recently, practically everything “free” was really just the result of what economists would call a cross-subsidy: You’d get one thing free if you bought another, or you’d get a product free only if you paid for a service.

As examples, he mentions that after experimenting with paid content, both The New York Times and The Wall Street Journal are now free to read on the Web (excepting some information in WSJ). At the time of this writing, I can even browse NYT on my iPod touch, using an application they wrote that is also free to download.

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eBook Prices versus Print Prices – Are They Too High?

Are eBook prices edging a little too high for people’s comfort? Josh Quittner writes in Time:

If only the Kindle 2 were cheaper! Despite its other shortcomings, Amazon’s new and improved digital-book reading device does enough right that it could become the Model T of e-readers, capturing the imagination–and discretionary spending–of the masses. But in this wretched economy, in which most of us will purchase only nonessentials that save us money or make us money, I doubt folks will pony up $359 for a pleasure-reading gadget. And thanks to Amazon’s mysterious pricing policies, the old argument–that digital books are so much cheaper than their hide-bound ancestors–no longer holds.

Before a recent visit to my dear old mum, I purchased The Kindly Ones, by Jonathan Littell, a 992-page Nazi-palooza that, given the nearly 3-lb. weight of the new English translation, makes for an ideal Kindle selection. But when I got ready to buy it on Amazon, I blanched at the $16.19 price. Every Kindle text I’ve purchased since Amazon started selling the device in November 2007 has been $9.99. Indeed, that was one of the Kindle’s main draws: you could buy books wirelessly, on demand and at a fraction of the cost of their printed peers. Case in point: Littell’s book was listed in Amazon’s Kindle store with a hardcover price of $29.99, making the digital version seem like a real bargain. But later I discovered that Amazon’s bookstore was selling the new hardcover for $17.99. So the Kindle saved me all of $1.80. Big whoop.

Customers aren’t stupid. They realize that an eBook like that on the Kindle or on other electronic bookstores doesn’t cost as much to print, warehouse, or to distribute—because those things don’t cost anything. Quittner himself writes about an “old argument” that “digital books are… cheaper” than print pieces. A lot of people are used to purchasing a large portion of their books at the $9.99 price point on Kindle, because that’s an automatic discount applied to both new titles and to titles on the NYT bestseller list.

What shows the intelligence of the customer is that I don’t recall any publisher ever saying in public that eBooks would be less expensive than print ones. Amazon makes a big to-do about the $9.99 price point, enough so that Quittner believes in his article that Amazon is also the one who set the list price for the book he was trying to buy. (This is not true; list prices are set by publishers; Amazon decides what the sale price is, at least when it comes to Kindle titles. I don’t know how the print side of things works.) Customers are intuiting that digital books should not cost as much as print ones.

I ran into this myself just a few days ago. Now having the Kindle app for iPhone, I went to look at a few books to see if I wanted to buy anything. I landed on a book that in print is a mass market paperback. Its Kindle price? $7.99—identical to the pricing of the hard copy version. I don’t think I need to write long on how quickly that decision was made for me.

Companies—and this is not limited to publishers—are underestimating the human desire to own physical objects. To many people (and at least to me), physical ownership of a piece of property, such as a DVD on which a video game is coded, or a stack of paper on which words are printed, is more valuable than a collection of bits that make up even a functionally equivalent electronic version of the same product. In addition, I have more control over the physical piece of property, especially when DRM enters the picture on electronic files and I’m being told what I can and can’t do with it.

What do you think? When you have a choice, which one would you buy? Would you buy both? What do you expect to pay for it?

Discuss, and feel free to answer the poll in the sidebar.