Battle lines are being drawn in the digital book arena and
these are changing both in terms of goals and measures of success. The changes taking
place may appear relatively small and tactical today, but their impact could be
significant over time. How long they will take to deliver change is questionable,
but that they will, is inevitable.
Although there is much noise in the market and many are merely
shouting about what they are doing and it’s often hard to determine noise from
substance and authority. It is also has to be recognised that different sectors
have different issues and drivers and nowhere are there any silver bullets.
We would suggest that are five shifts taking place with the
Trade environment. These are all at different stages of evolution and moving at
different speeds, but will spawn more change.
Interestingly, as the overall
digital market will be shaped by all of them, it may not be wise to simply
cherry pick the ones you think apply to you and ignore the others.
We are now starting to see the emergence of serious players
and offers. Interesting, they have all pitched the consumer reading demand at
the high end and made ‘one price fits all’ offer.
Subscription offers need to
be geared to individual needs and yet encourage members to read more. Just
having the biggest library to choose from and expecting readers to consume 3
books a month is not the answer and niche genre offers are essential as well as
recognising variable reading demand patterns which will keep members hooked. Today
the churn rate is unknown and we suspect it will be quite high in the initial
period and therefore these services need to develop secondary community draws
to compliment and add subscription value and not merely appear as one trick pony’s.
We would expect them to follow other media subscription services and align themselves
to larger and complimentary subscription lists and this is essential as long
term as subscription offers continue to consolidate their customer facing
The old and somewhat irrelevant buy to own model that prevailed
in the physical market is fast becoming exposed. Although we have yet to see
the ebook used market happen, with only the Dutch service Tom
is challenging the courts, it is inevitable in a highly restricted
However as used books, DRM,
watermarking and on demand streaming services all overlap, maybe the emergence
of on demand means that we no longer have to test the first sale doctrine and
the used ebook market never happens. But unless on demand occurs, the used sale
market potential for ebook is bound to be tested and found wanting and it is inevitable
that the courts will eventually fall on the side of the consumer.
One of the challenges is about proving ownership, which with
DRM should be easy, but with the current DRM walled gardens is almost
impossible. Again with watermarking it should be also possible, but without a registry
and standards conformity, is again almost impossible. With no DRM, no
watermarking and no registry some would suggest that this is like closing the
stable doors after the horse has bolted.
We are firm believers in the democratisation of writing which
is currently exploding in the digital market and will continue to grow for the foreseeable
Self publishing is no longer about the slushpile of aspiring
writers all wanting to be the next EL James, but about the ability of anyone to
bypass the intermediaries and express themselves and publish their works. It facilitates
small publishing ventures as well as new and established writers. They may
select to use outsourced services to polish and refine their work, or simply publish
It challenges the ability of the intermediary to control what
is being bought and read and can level the marketing playing field. The
bestseller will still be a bestseller, but increasingly the backlist and
midlist authors will now have to do more themselves to promote their works and
in doing so find themselves head to head with others who have self published
and earn a greater percentage of the revenue they have generated.
Can traditional publishers use the self publishing services
to feed their lists, or have they now lost that opportunity? Maybe it’s down to
the value they will offer the writers and that may have to be more than just a ‘safe
home’ and a brand.
As author earnings continue to be squeezed by net receipts,
reduced advances and more competition, the publisher profits from digital have
been seen to grow. Maybe the widening gap is down to bad PR and communication,
but the writers are increasingly aware and continue to be the ones who create
the initial value.
One area that is very visible to authors under the KDP and
other self publishing services is their sales reporting and revenue payments. As
the authors will demand greater transparency on earnings, speedier payments and
an increased revenue share, there becomes less hiding place for publishers.
Publishers do add significant value, but now have to
increasingly demonstrate this and one potential knock on effect will be a
revision of digital rights to term based and separation of these from print.
Content, Context and Community
In the main, the market continues, to merely pour the
physical content into a digital container.
Some would suggest that this is
short slighted and ignores that it is just a transient step and some would even
argue is the equivalent to performing self-harm. We don’t say that all ebooks
must go down the multi media experience route, far from it, but that we should
be thinking about the user experience and making the digital rendition complimentary
and not just substitutional.
Digital also offers significant opportunities to grow
author, genre, reading and writing communities. These may be devolved to others
better suited or motivated to organise and curate. Digital also expands the
ways in which works can be discovered, validated and valued which applies to
both digital and physical renditions. It is no longer about describing books to
place them on dry one dimensional shelves, but about enabling them to be found in
many ways within a virtual environment. Standard bodies think library and
bookshop shelving, but today’s buyers don’t.
Too many what we have said, is not relevant to their
business today. They may wish to sit on the fence and wait for it to happen and
expect that they can respond quickly. To others they see these changes
happening, new opportunities and the ability to position themselves for
tomorrow and not run the risk of being too late to the party.