Are You Selling Your eBooks Via An Honesty Box?

Imagine you have 100 ebooks and each has to be handed over to not one reselle,r but potentially many. Each reseller stores the files on their system and effectively sells copies of the file to their customers and can also sell them through other resellers to their clients. The files sold may be complete download sales and could if I have granted these could be sold as separate chapters. Some could be sold online as direct rentals, or under subscription. Some may be loaned by ‘libraries’. Revenue could be subject to an agency model on a ‘fixed price’ , or net sales as per a wholesaler terms. Whatever, the model, whatever the channel, whatever the price you only effectively learn what has been sold long after the event.

Now ask your CFO if they are happy giving the company assets to all resellers and then waiting, for them to tell you what they have sold and to pay you what some call as being ‘on consignment’ in a print world and via an ‘honesty box’ in the digital world. The difference is that in the print world you can count the units out the door and the stock in hand. In a digital world you merely hand over one copy of which many copies are made and sold, hopefully many times.

We are not questioning the integrity of any reseller service, we are merely pointing out that the digital ebook world is built on a lots of trust and not a lot of counter balances. Some aggregators do provide some statistics of sales online, others you wait for the sales report to tell you the facts after the event. In all cases money sits in cash flows waiting for yesterday’s financial processing to grind into action.

Now spare a thought for the author who is one link up the chain and has to wait until his royalty statement is produced to find out what sold and the royalties earned. It often can’t be done any sooner as it has ‘to be processed and consolidated with the old print royalty system’. We would suggest that authors may be a bit more digitally responsive with transparency and speedier in not instant reward. Some would suggest that they first have to earn out any advance on front list but on back list, we shouldn’t have the same block and maybe we should be thinking how and why rather than why not?

Digital is different but we spend far too much time dreaming up the sizzle and worrying about the formats and standards and selling and often very little focusing on how we could collect cash faster and more transparently. The next thing we will have is a new audit service to pour over the figures to validate that they are accurate or not and of course incur yet more cost to offset. The obvious candidates for this would be the likes of Nielson and Bowker.

We are living in a world of instant cash transactions, where a credit transaction made anywhere in the world can be see by all, where information is real time. We subject the ebooks to DRM authentication which automatically can validate licences in flight and the likes of Adobe can authenticate every encrypted licence of an ebook using their DRM solution in real time, yet we can’t appear to see sales and collect cash on payment. It somewhat ironic that it could be argued that Adobe today has better sales data on the transactions they licence, than the publishers! There should be no digital returns and what disputes may occur, can always be dealt with retrospectively. So why has the standards and processes not been delivered to provide live and transparent reporting of sales transactions in a standard manner. We bet its coming but not soon and probably at the same speed that the returns issue did in print.

Perhaps we have been so obsessed with readers, platforms, formats, aggregators, pricing and DRM we have forgotten to close the loop? Perhaps we shouldn’t be thinking about ‘messages’ as much as instant processes.

Another Day Another Kindle

We have been away on business whilst the Kindle 3 hit the market. The device was as expected and the reaction and pitch has been interesting to catch up on after the event:

Digital Demographics
Bowker, at a BISG's ‘Making Information Pay’ conference revealed demographic information that claimed that older readers are the biggest buyers of ebooks. The statement caused many industry thinkers to start to ponder about the attraction of large print, weight, ease of handling and much more perceptions. The reality is that older buyers are those that buy books full stop; they have more time, disposable income and much more. Is it surprising they are the ones buying ebooks – No? Some would say that it’s obvious that the grey market is the one with the largest opportunity and its somewhat condescending to find it a surprise.

Newsprint and magazines are going to go Kindle.
Newspapers may be going downhill but that doesn’t mean that the wave of large screen eInk devices have the answer. We now have PC news sites, smartphone apps and the ereader device. We know that Murdoch wants one, Hearst wants one and we assume the public want one, but the operative word may be one not three or four.
One important digital newspaper issue is how do readers want the news presented? Do they want it in alerts tuned to their personal preferences? Do they want it to look and feel like a paper, after all it has taken many years to perfect the user experience? Do they want it in summary with detail on request? Do they want ads or ads free? Do they want a fully interactive experience and animated experience or merely a captured textural one splattered with the odd greyscale image? Do they want colour?

Once we have addressed the format then there is the price or subscription issue? Then there is the issue about geography and getting the news delivered locally wherever you are in the world. We could go on...

Making the ereader bigger so it looks like a newspaper may not be the answer.

Textbooks are going to be Kindlebooks
Students are going to embrace the new Kindle. The logic appears to be that textbooks are too expensive so ebooks will take the market. So we expect the students to carry around a laptop or netbook, a Kindle and a smartphone? As we walk around the streets of Amsterdam this weekend we wonder who has smoked the most weed? Students require more than ebooks and they already have laptops and smartphones so why would they spend on a device that will give them nothing they don’t have today? Cheaper books have to be offset against the device cost. Students have to live and study with an open, connected campus world and will that fit with fortress Amazon? Princeton and other campus may adopt the device to drive their paperless dream but why not simply adopt a netbook and offer the student’s real choice. Some may say that its easy to create a news splash but living up to the logic can be hard.

Finally, the Kindle DX is priced at whopping $489, a higher price point than a Netbook.

Standards
The Kindle does not handle epub and the standard’s world will continue to argue that this the biggest weakness. We agree that an open standard is the best way but we also recognise the power and openness of Adobe’s other protected format Adobe eBook based on PDF. It may not offer everything that epub offers, but is supported by the same DRM services, ereader devices and is cheaper to produce. Amazon’s propriety format is either their Achilles heel or their trump card and until we see what others do over the summer, we believe that it remains difficult call for the independent.

Finally, we are disappointed that Amazon chooses to change the name as we were looking forward to reaching the K9 version in the future, but more on the DX brand later….

Standards

We fully support the standards bodies position on the use of individual ISBNs to identify the various different manifestations of a work. If there are three different ebooks, a hardback, two different paperback an audio and a large print, then each should be identifiable.

We also have long supported the use of the standard work number which has taken what seems an age to come to the market but can still do a much needed job in grouping all the various manifestations of a work under one umbrella. It would be good if some major players were to now insist on it use and full adoption and force the market to use it. There is nothing more frustrating than finding the various manifestations more by accident or resolving a widget only to be made aware of one of the works manifestations. The ITSC is not a traded unit but an attribute, or descriptor, that enables you to group many individual traded units together for information. It could be adopted initially just to group the digital manifestations of a work.

The other interesting areas are the selling of chunks, part works, chapters of digital editions and time rentals. These are harder to resolve but are equally important as they may have to be identified against royalty tracking, rights licensing and usage and permissions.

Finally, should be the ISBN on the copyright page of an ebook reflect; the physical book, the individual ebook, the work number? Today the ebook is usually a straight copy of the physical one and therefore using that should be acceptable but as they evolve and start to differ then this may not be the case. As the copyright relates to a work maybe this is where we should use the standard work number?

We do not envy the hard and often thankless work done by the standards bodies. They now not only have to grapple with an explosion of issues but more importantly have to communicate these succinctly to market and achieve their adoption.