Monday, January 15, 2007

News, News Corp and Newstand

HarperCollins have made an interesting investment into Newstand, a company that digitizes and distributes books online and who are already working with them on their digitization programme. The press release report by Reuters states that together with NewsStand’s unit LibreDigital , HarperCollins intend to license the technology to book publishers that will allow them to typeset, produce, warehouse, distribute and market their books online. The level of investment is not know but it is sufficient for HarperCollins Group President Brian Murray to join the NewsStand board and put himself forward to speak at several events in this next quarter. This is the latest positioning by the major publishers and follows on the heels of Macmillan’s Bookstore, Random House’s and Simon and Schuster’s Content repository announcements and the purchase of Coutts by Ingram Digital Ventures. The digital arena certainly just got muddier.

It is now clear that the major’s see no difference between digital and physical distribution. They want both and they want to be the third party supplier of both digital and physical services to all and thereby offset some of their costs but more importantly minimize their risk. The statement that HarperCollins intend to license the technology to publishers is the furthest indication that their plans go past distribution and potentially upstream into production and editorial. It may seem far fetched to some but is perfectly logical to many.

The question of a publisher opening up their development to a potential competitor is always a risk, but is no different to that in the physical world today. However, the potential risks of putting all one’s eggs in one basket could be very high. It doesn’t guarantee a publisher can transfer to another easily and at a time when they are literally ‘cutting their teeth’ and the market is immature, the risk is even higher.

The ‘Brave New World’ report was about establishing consensus and commitment to the support of the existing channel and the support of booksellers in the digital world. It is ironic that in this week when publishers and booksellers sit down together to discuss this and try to establish the next steps, some are now proposing to become digital aggregators. Campaigns are already in play to get Publishers signed up but the question remains whether they will go direct or service the existing channel?