Three Start-ups That Could Change The Market?

New services are appearing weekly and all offer to either, save publishing, or redefine it within the new digital world. This last week has been no different and has seen three new services gain visibility, drive interest and create a significant volume of debate amongst the industry thinkers, and advisors.

What is now interesting is that services are being launched with outside funding and these are not only different, but are potentially very disruptive in how they challenge the way we do business and interact within the market.

Are objective today is not to decide the winners and losers but to explore some of the challenges and their potential to disrupt tomorrow.

Humble Bundle

Humble Bundle create a package of ebooks from different authors and offer these at a consumer driven price. In other words the consumer chooses how much they want to pay. If they pay more than the average payment they can receive additional ebooks and they also get to choose how their money should be divided. The files themselves are DRM free.

We all remember the famous event when Radiohead did the same consumer driven pricing for their album release, ‘In Rainbows  ‘. Some gave a cent, others paid a responsible sum, others paid a fee aligned to the standard RRP. It caused a stir, gave Radiohead loads of publicity and as a one off promotional exercise and according to who you listened to, worked, or didn’t. 

Humble Bundle are doing the same in other media sectors with their ‘brew’ bundles and now have extended it to ebooks. The collection on offer featured books by the likes of Cory Doctorow, Neil Gaiman, John Scalzi, etc. The titles offered are mainly backlist with the exception of one new Tor title.

Some may be forgiven to thinking that the children had actually taken over the chocolate factory.

The ebook bundle certainly  gives new meaning to the term ‘net receipts’ and raises many questions on rights, other renditions and the model’s sustainability if it were widely adopted.

Cory Doctorow claims combined sales have exceeded $400k. However how many of the bundle have or will be read and what is the percentage that is merely there to pad out the bundle to make it look attractive? Are the receipts spread evenly or do they go to the better known authors and to the detriment of others?

It certainly is a great promotional way to sell backlist, and maybe mix in some front list to add spice. It would also work were there is a clear genre attraction, but is it just another Groupon in the increasingly ‘Voucherclouded’ world? We can only read one book at any point in time and a bundle would suggest a high percentage will be mere shelf fillers to aid a promotion.

When ebooks are being sold at 97% discount, you can’t blame Humble Bundle’s for asking , how much?

Oyster

No it’s not the latest swipe card for London Transport, but a new start up which offers a different sort of a potential ‘pearl’ to publishing.

It is not the first, nor will it be the last start up to offer ebooks under subscription. However, it’s well funded and determined to push the increasingly visible issue of ‘licence versus ownership’ . Oyster claim to be the new ‘Spotify for ebooks’ and we can’t argue that this make sense and is long overdue.

However, just as Spotify have found in changing the music culture, there are many questions  and challenges Oyster now face in its drive to change book culture.

Oyster offer a  ‘much as you can eat’ for a straight monthly subscription. This makes good sense but we are all constrained by time and they are highly unlikely to have the field to themselves.

 The subscription has to offer a true value statement and match or compete with the current high discount offers in the market. This is becoming increasingly difficult as some front sellers are being discounted at ridiculous levels such as 97%. The traditional retailers can easily undermine the Oyster offer by heavy discounting on the leading titles and Oyster’s ability to respond may be somewhat limited.

The next challenge is on range. If Oyster offer the full range, then how will they be seen as different and what compelling reason will the consumer have to tie themselves into a contract as opposed to playing the market? They could ‘twig’ content and feed vertical niches, but as readers are eclectic in their habit, they will fall into the hole the big book clubs did before them. 

They could align with vertical interest groups, but today they have not said this is a route they are planning to take.

Then we have the commercial model and rights whether these sales fall under business as usual, subsidiary sales, or whatever. Asking publishers to revisit contracts can be a big negative and roadblock to getting content. Therefore publishers need to be able to square the subscription model against their existing contracts.

The subscription model is logical in a licenced environment but changing culture is not easy and the digital market has a reputation in being somewhat fickle even if there may be a pearl in the oyster.

Bookshout

Finally we come to what may be the most contentious of the start-ups, Bookshout. The new operation is attempting to aggregate readers ebook libraries, by what some may described as the back door.

A member gives Bookshout their Amazon, Nook and whatever logon details and allows Bookshout  to use these to effectively log on and verify their purchased ebooks. Bookshout then sets up copies of these ebooks on their service, enabling the reader to be effectively device and retailer independent. The new copy is provided by the publisher on the basis that Bookshout has established proof of previous purchase. Bookshout can not only consolidate a reader’s library onto their platform, they can also consolidate reading information and activity information and feed this back to publishers.

Obviously, Bookshout retails ebooks in their own right too.

Questions remain as to what DRM they are using and how what is effectively therefore a fresh licence can square with the like of the lack of a first sale doctrine on media today. The publishers appear happy , BookShout are happy, but how long before Amazon and Nook shut the back door? It somewhat like making a business on stealing someone else’s sale and expecting them to roll over.

Who does the customer have a contract with?

Obviously, their unique proposition is based on the member being willing to give them their personal access credentials and that the publishers accept that they have established proof of purchase of the original licence. Most importantly it is also based on them being able to operate, within what some may say, is a loophole in Amazon’s and Nook’s terms both with publishers and their consumers.

So is Bookshout the reading platform for all? Will it be the place of choice or merely somewhere one goes to aggregate their library? It may depend on how many people have ebooks from both Amazon and Nook which no one today can really answer but is a big question on which to build a business.

The interesting thing is that all three if successful are disruptive, but how do we measure success and is it sustainable or merely a flash of first mover excitement?

The LBF Debate On Relevance Of Publishers

The London Book Fair has once again come and gone and to some we spoke to there was little change to others the future was clearly keeping many awake at night. The Fair is a great place to witness the digital divide with those who are in the know and those who are frozen like rabbits in the digital headlights.

So it was a must to attend the ‘Great Debate’ on Monday on the motion “Authors and readers are all that matter. Publishers will become irrelevant.” For the motion were Cory Doctorow, the science fiction author and co-editor of BoingBoing, and James Bridle, an innovative publisher and writer. Against the motion were , Andrew Franklin of Profile Books and the infamous ex of everywhere and now of Bloomsbury Richard Charkin. The voting on the motion was always to be irrelevant as it was like asking a room full of doctors to vote on a motion that modern medicine is ineffective. However the points raised highlighted to us the digital divide that exists and that some publishers are clearly out of touch with their emerging markets.

Obviously it is impossible to group all the various different publishing sub industries such as academic, professional, education, trade reference, trade fiction etc and apply a generic brush to their different author rewards, economics, market drivers, digital drivers and content demands and so it often sounded that if something justified that a sector had got it right or wrong it applied to all.

The major challenge was to define ‘publishing’ and the value added roles from author to reader. Some would suggest that Bridle clearly made the point that publishers need to get back to basics and recognised that the new world offered many news ways to connect the dots that publishers have apparently forgotten. Franklin however reminded us of all that some regard as arrogant, old world and out of synch with today’s changing market. He lead with one could best describe as publishers know best and all else is drose. He went on to crusade against self publishing as if it was the devil and even made the claim that , ‘Free is too much to pay for the vast majority of self-published books,’ but quickly added as any speaker would having stuck the knife in, that “It’s too much to pay for some of the books that come from publishers.”

Some publishers today will still connect with Franklin’s view that the market is getting bigger, and that publisher profits are rising, and these means all is right and that publishers such as him are doing a good job and are essential. The problem is that parts of the publishing ecosystem are collapsing others are under threat, channels are consolidating, and the user resistance to change is moving faster than the market’s ability to respond.

There were many things missing from the debate such as words like ‘digital rights’, ‘royalties’,'rights registry','orphans' ‘pricing’, ‘catherine cookson’, ‘ian fleming estate’ ‘none compete’ and too much on self publishing. The fact that; YouTube has redefined quality of film and made everyone a director, Twitter has made everyone a 140 character journalist, Flickr has made everyone a photographer, Lulu and Amazon have opened the digital doors to all writers, Facebook has change communication, Spotify and Pandora has redefine music distribution, etc. appears to be lost on some and they expect to remain the guardians of good taste. That may be so today but writing has changed, language has changed and what was once the norm is no longer so.

We appear to be still a front list 13 week obsessed industry incapable of grappling with back list and mid list authors and orphan works.

It reminded us of that all so naïve statement at the time of the first GBS hearing when one major publisher employee stated that it must be right as their CEO knew what he was doing!

Charkin and Doctorow, were somewhat the professional debaters that lacked that cutting passion of Bridle or blind arrogance of Franklin. Yet it was these two that best summed up their side’s position at the end of the debate before the expected result was delivered.

Many thanks to Susan Danziger, Dailylit and Michael Healy, Books Registry and the Publishing Post

GBS : Googolopoloy Rules?

Are we sleep walking into the abyss or will common sense prevail over greed and vested interests?

The Google settlement is one of the greatest challenges to publishing yet so many sit idly on the fence uncommitted. It’s understandable that some industry bodies have members who are for and against the settlement and probably many who don’t fully grasp it, or hope that others will sort it out for them. There is no wait and see. There is no fudge it and fix it later. There are no excuse to be undecided. It is coming to the judgement moment and The Google settlement is either acceptable or unacceptable. However, if there is any shadow of doubt, it is better to reject it now, than accept it worth a shrug of the shoulders and a dream of retirement and problems for others to sort out.

Cory Doctrow in his blog today ‘Google Book Search settlement gives Google a virtual monopoly over literature’ makes his points clearly and concisely’ but do people read absorb debate or do they merely cover their eyes and ears and continue to shuffle forward.

Another article from Randy Picker at the Chicago Law School, 'The Google Book Search Settlement: A New Orphan-Works Monopoly?' asks many legal issues and also questions the antitrust question, ‘the level of direct coordination of prices is unlikely to mimic what would result in competition, I have real doubts about whether the consumer access pricing provision would survive a challenge under Section 1 of the Sherman Act.’

‘The opt out class action then is the vehicle for large-scale collective action by active rightsholders. Active rightsholders have little incentive to compete with themselves by granting multiple licenses of their works or of the orphan works.Plus under the terms of the settlement agreement, active rightsholders benefit directly from the revenues attributable to orphan works used in GBS.’

We would also recommend Pam Samuelson's PowerPoint as a summary of the legal issues in the Settlement. Question are raised as to whether scholarly works, which make up much of the corpus, are represented by the Guild and also whether this settlement is a privately negotiated compulsory license to orphan books and therefore a major restructuring of the future of the book industry by the back door.

The questions are now starting to be asked, but are people getting engaged, or are they too busy with today to worry, or even consider tomorrow. It’s taken a change of government in the US to finally wake up to the environment, what will it take for the publishing industry to wake up a smell the coffee?