Digital Library Fallout Continues

The above poster comes from Sarah Houghton, who is the Acting Director for the San Rafael Public Library, Calofornia and writes a blog Librarian in Black. In frustration to the current non supply of some major publisher's ebook titles, Houghton had posted the notice on her library wall.

Yesterday, Penguin added fuel to the debate when it announced that they have effectively shutting down their ebook relationship with the major digital public library service provider, Overdrive. We find ourselves now asking many questions about the state of digital public library support from publishers and the thorny issue of the ebook rent and loan business models.

Why are some refusing to allow public libraries to loan out their ebooks which are freely available to buy in the market? Why has Penguin withdrawn its ebooks from the Overdrive digital library service? Why has a prominent group of major publishers refused to supply ebooks to public libraries? Why did HarperCollins previously invent a rule that said ebooks wear out after the same number of loans as their physical counterparts and must be bought again? Why are some insisting that library lending has to be done physically in the library and not over the networks?

If we look at the public library we see the friction many predicted between publishers and the libraries over digital content. You can wrap it up many ways, but at the heart lies commerce and the challenges of download to buy versus loan for free. If libraries seize the opportunity to loan ebooks and appeal to a wider and larger audience they could undermine today’s revenue streams. If they don’t seize the digital opportunity and remain wedded in the physical world they could spiral into obsolescence.

Some would suggest that libraries charge for ebook rentals and also sell downloads, but does this work against their public principles. Some would ask why publishers aren’t renting books out direct themselves and why we are still wedded to the ‘ownership’ model in a virtual world? If there were to be a significant shift in market demand, do publishers have rental models that would hold water?

Some like Bloomsbury Online are quietly forging library relationships and moving forward, whilst others appear to be standing firm behind the barricades and not moving.

The Overdrive service is not new and it is the dominant provider to public libraries today, not just in the US, but increasingly in many countries. The libraries like the retailers have left it to third parties to invest and provide the common platform and repository. Was this wise, – probably not? Was it inevitable given the funding, – probably? However, we are were we are and it isn’t going to change for some time.

The tragedy is that these battles are being fought in public at a time when we all try to help reposition the public library in the face of disruptive change, spending cuts and even closures. It would appear to be more about reacting to change, not from a collective, but a singular perspective.

Some of our other recent posts on this subject:
Can eBooks meet the Changing Social Demand? Nov 28th 2011
Whose going to capture the various library worlds? June 20th 2011
Amazon Takes Another Step to Join the Publishing Pieces May 5th 2011
Amazon Overdrive Potentially Lock Up Libraries April 20th 2011
Freeing eLibraries to Compete? March 15th 2011
Digital Library Madness: 26 and You Are Out February 27th 2011
'Public Libraries: Back to the Future'. Brave New World December 2010

HarperStudio RIP

Scribd have posted an internal letter to all staff of their innovative HarperStudio stating its closure.

Harper Studio’s mantra was that it was ‘committed to partnering with authors to publish books in a way that is effective, creative, and sustainable. We believe books are a vital part of our culture. We believe traditional publishing models are broken and are experimenting with new ones. We believe in embracing technology. We believe the future is now.’

HarperStudio was set up as the alternative way forward; with low author advances and high profit splits, high publisher branding and an ‘open’ online presence. Just 2 years in it is has been somewhat quietly closed.

Did HarperCollins give its imprint enough time what did they define as the measurement of success? Did stat up and corporate cultures clash as they often do when the new doesn’t align to the old. We remember a similair case in our own past when the accountants simply saw ‘one goose’ and where incapable of accounting for the golden egg. Maybe experiments should be done quietly without the fanfare and proof of concept achieved before the world is told and the marketing hype started.

It begs the obvious questions about ‘effective, creative and sustainable’ and also about experimenting from within the traditional environment. However we wait to hear what lessons were learnt and what went wrong.

The read to Scribd letter, HarperStudio to Close

ABC: Mobile Is A No Brainer

A survey from the Audit Bureau of Circulations reveals that print publishers are focusing on the Mobile market as a prime opportunity; to build their brand, reach new audiences, generate new revenue and offer advertisers locally targeted audiences.

ABC and its digital subsidiary, ABC Interactive, has some 4,000 members in North America and is a forum of the world's leading magazine and newspaper publishers, advertisers and advertising agencies. They recently conducted an online survey of its print publisher members. "Going Mobile: How Publishers Are Preparing for the Burgeoning Digital Market," offers an insight into some of the current initiatives in the mobile market.

The survey found that; over 80% of newspaper and magazine respondents believe users will increasingly become more reliant on mobiles as a primary information source in the next three years, 70% agree that mobile is receiving more attention at their publication this year than last, Over 66% believe their publication already has a mobile plan, 44% say that the devices increased visits by up to 10% today. 50% believe mobile traffic to their Web sites will increase by 5 to 25% in the next two years. So mobile is certainly on the agenda.

56% of senior executives have plans to develop a smartphone application in the next 24 months and 17% already have an app in production. However they do not plan to abandon print with 75% believing their publication will be available in a print form five years from now. Over 50% of thr respondents believe that the future business model of mobile content will be supported by both advertising and subscriptions and importantly 33% believe in the 3 next years that mobile will have a significant impact on their revenue.


To learn more, visit http://www.accessabc.com

Digitisation Is All About The Money

Some 10 years ago an 18-year-old Shawn Fanning released his Napster file-sharing program on the internet and started to destabilise the business models that had supported media over the best part of the last century - a digital revolution that continues today. Fanning turned the computer into a media and entertainment player and created ‘free’. At its peak in February 2001, more than 60 million people worldwide used Napster and in that month downloaded 2.79 billion songs.Putting the cat back in the bag was going to be hard.

Speaking at the Cannes Lions International Advertising Festival, Steve Ballmer, CEO Microsoft, warned that all media companies should not plan for revenues to bounce back to pre-recession levels, that traditional media business would continue to see their share of the advertising revenue move to digital. He stated that newspaper publishers have failed to generate new revenues from the digital opportunity and predicted that within 10 years all traditional content will be digital and online. He claimed that the old approach of simply trying to replicate a print newspaper online is doomed to fail. He failed to say where the money was.

Earlier this year, US Congress made permanent a requirement that all research funded by the National Institutes of Health be openly accessible, and others are following. Academic and scientific publishing is being challenged by online, free and searchable open access. Newspapers face meltdown as they attempt a digital transition and find that their ad revenues have left the room without them. Music is moving from the album and track to live and the musicians are taking back control. Music prices are in ‘free’ fall.

The challenge we face is not digitisation, but the business model or models to support digital media, be it books, films, music, TV, games, podcasts, whatever. We now have to also ask whether we are focusing on the right part of the value chain, or merely trying to prop up the traditional one? Yesterday, all creators, artists, authors were ‘lost’ and needed a publisher or intermediary to shape them and present them to the channel. Publishers understood the packaging and production of the media and also had the relationships to maximise its exposure to the market and its distribution through trusted channels. The consumer, creator and the reseller, all required the intermediary. However , does that translate to the digital world? Will all today’s players make it to the Brave New World, or just as with previous major changes,will some become victims of the change in business models and value?

Who do you think has a place in the future; the author, the agent, the publisher, the wholesaler/distributor, the reseller, the library, or a different player? More importantly, where’s the money and who gets it?

Harnessing the Publishing Network

The new market challenge is not traffic but turning networks and their traffic into money. Anyone can dream up a new service, or feature, but making it pay its way can often be hard. People often think that business models will remain the same or similar and those sales will grow expediently to accommodate all. The reality is that change brings new challenges that often confront the existing models.

What was the result on the music sector from the changes that the many P2P players such as Napster and Kazaa brought? Not only did their change the format, delivery, the breadth and range of tunes available and price perception, but ask where all the High Street music stores are today? When iTunes entered they found a way to channel sales and collect money. iTunes succeeded not because of the iPod but because Apple understood how to make money out of the latent demand for tracks. It joined the dots between consumer demand, an aggregated online repository and download service and an iconic device – simple but the best are always that!

When we look at newsprint we see new entrants in the form of the Internet news alerts, news aggregated services such as Google , the emergence of advertising options such as Craigslist and the new reporter - the blogger. Some newspapers will stand on the shore line watch the incoming tide and close their eyes. They can’t envisage the world without the authoritative watchdog journalist, printed copy and the profits they previously enjoyed. But the Internet doesn’t respect tradition it can democratise news and enable it to be not one way but a two way experience.

People now demand ‘my news’ tailored to meet their needs and tastes and they can do it in a heartbeat. Although the online subscriptions lights continue to flicker it’s only for a few who can command a price, for what is in the main, public domain news. The trick newspapers failed to do was to offer a customised service across newspapers and newspaper empires, but if network collaboration wasn’t in their dictionary it was in Google’s and Craigslist’s.

The Internet is about money and finding ways to make money from it is the game. Google was not the first search engine nor necessarily the best at the start, but what it understood was networks and how advertising revenues could be driven from people’s searching habits. It helps consumers find stuff on the web they could never find on their own and advertisers buy traffic. Simple, yet so difficult.

We now have to ask ourselves how we prepare for change, who will be the potential winners and who will be the potential losers. It’s not good enough to sit on the fence and watch, you have to participate. The hardest challenge is to get competing forces to recognise what they compete on and to start to collaborate on the rest in order to make a new offer that is different because of the collaboration. One of the best examples in publishing was the Crossref initiative and organisation one of the worst examples is the rights registry giveaway to Google. Collaboration is very difficult for most organisations, with every employee seeming to have ‘we know best’ running through their genes. Harnessing the huge publishing network offers the biggest opportunity, operating individually offers the same opportunity to others.

Buy to Own versus Rent to Read

When the book-trade first started its digital journey, the internet wasn’t a super highway, broadband and WiFi were distant dreams. The internet more of a dirt-track than a highway and cloud computing was invented. It made sense to migrate to digital storage devices such as CDs. These were relatively low cost, could be easily distributed along side physical materials and offered new digital features and relatively low cost.

We all know what happened to the CDRom in publishing and the early enthusiasms of the Internet.

We now find ourselves, years later, at the cusp of the second significant step change opportunity, the ebook mark 2. The super highway and broadband has happened and we now can effectively download large digital files to devices that are capable of holding hundreds of books. Amazon has gone one stage further and enable you download files directly from their store, over WiFi, to their Kindle.

So is downloading the right approach the logical business model? Has it the legs to last the course or is it as some believe a transitional step?

As the public is being whipped up into the pre Christmas ebook hype and we finally see content is starting to slowly become available, do we really think that the current slick looking Sony and geeky looking Kindle are the answer. Most of all is the business model right and that consumers should seriously invest in the ereader now?

Let’s take one step back. The world is going WiFi and broadband to boot. All laptops now come Wi-Fi enabled. Dongles are widely available to connect to the laptop from anywhere. The service contracts are now common to enable 3G services to now consume as unlimited much data. Smartphones are common and are connected to 3G services. So we are now moving to a ‘permanently connected’ broadband service. Who switches off their mobile?

So why on earth would you want a download model?

This brings us to an interesting switch from ‘buy to own’ to ‘rent to read’. It doesn’t stop the consumer buying perpetual access, or a physical digital bundle, it merely questions why you would buy a download that could be as obsolete at an 8 track in only a short time?

This doesn’t cover the question of whether the current one dimensional readers are the best digital devices, whether they can be read upside down on a sunny beach or backlit in bed. It merely questions how and what consumers should be investing in today and the digital business model we adopt.

Peter Gabriel: A Digital Music Poineer

Often we find articles which are just too good to condense and encapsulate what we would want to say. Today The New York Times has an article, ‘An Old Rocker Gets Digital’, which is on Peter Gabriel, the musician, entrepreneur and digital force. We would urge all to read it as it not only charts his digital evolution but clearly shows the direction music is going.

The article covers his latest venture, We7 , which enables users to choose between buying recordings and downloading a free version with a 10-second advert. Interestingly the ad expires after one month and Gabriel is the first to admit that the idea of advertising with a track would have been sacrilegious twenty years ago but, ‘Today, I have a different view: it’s a way to hold onto income for creators.’

Gabriel is also quoted, ‘With downloading, the artistic change hasn’t really hit yet. But it’s turned the economic model on its head. The major record companies have some smart people looking at digital models. But the question is, will the people at the top be willing to turn the business upside down?’

The final quote is a gem which is a wake up call for all who believe that there are at the centre of the value chain, ‘I don’t believe in the death of the major record companies, but as an artist, I’d love to see them reinvented as service companies.”

The Glass is Half Full not Half Empty!!

Today we read the fruits of ‘Digitise or Die’ in the Bookseller’s report of their conference.

One speaker was the author Andrew Keen who was reported saying that ‘The content business is in crisis’ and needs to fight back against the ‘tyranny’ of free content. However his argument that the potential change of business model in music and newspapers towards advertisement paid consumption is far from logical and shows a questionable grasp of both history and fact.

The recorded music sector is moving towards alignment with advertising, but because its free at consumption doesn’t mean its free. Nor is it the reason behind the chaos in this music sector. Where there is genuine free content, that is down to file sharing and nothing to do whatsoever with advertising. It also worth noting that music is enjoying good times in performance, merchandising and publishing.

The newspaper business has always had a business model heavily skewed towards advertising. Again the changes that are happening here are both complex and challenging. Newsprint is one sector and is different to magazines, serials and business information and to infer they are all the same may be seen by some as naive.

Keen, whose book was called, 'The Cult of the Amateur' is reported as saying that "When you take away the gatekeepers everything becomes crap. Writers don't get rich and famous on their own." He recognises the need to develop talent brand and holistic author offer'.

We are clearly seeing a shift in business models but today no commercial publisher, rights owner or model are based on totally free content. Today is not about Digitise or Die but about understanding and managing digital integration and change.

When you look at the current roles within the publishing life cycle. Simplistically, we see the Author as the content / rights creator, the publisher as the content / rights Manger, the retailers and libraries as the content / rights portals and the readers as the content / rights consumers. We now have to understand how creators get rewarded in a world where the book is just one part of the commercial jigsaw. What does it mean to manage content and how is it different from managing ‘books’. What does it means to be a portal and is that different from a bookshop or library. Finally, what does the consumer value and how does that convert into revenue.