History, Trends and Digital Changes in Media

Digital Music News have taken RIAA data and produced an interesting animated graphic of the changes in music purchases over the last 30 years. We strongly recommend that you view this as it shows how transient some technologies are and how it’s not just the technology that changes but how people buy and relate to media.

It would be great to be able to step forward and predict what will happen in the next twenty years but many of us would be struggling to see further than the next five years.

What is interesting is that the base content hasn’t radically changed, a song is a song and a recording is a recording and music made decades ago now lives comfortable alongside that made yesterday. In some cases the technology actually impeded the quality of the recording and forced the extremes to be toned down to fit.

The other interesting thing is that emerging music format technologies cannibalised their predecessors. 

Cassettes replaced vinyl, CD replaced cassettes, downloads replaced CDs and now streaming is replacing even downloads. We are moving to music on demand which is either paid for through other means, or is on subscription. This changes the question of ownership, collections, sharing and of course the reward earned by musicians, writers and producers. It also can change how we protect or identify usage rights and copyright ownership and some would suggest that the new technologies are more secure than all the belts and whistles of the early music DRM days.

If we produced a similar graphic for books, newsprint, film, tv they all would be different and we need to understand why and what similarities there are. Film and TV are probably the closest to music in the technology step changes, but differ in many other upstream ways. Interestingly the original formats of books and to a degree newsprint aren’t going away and it is easy to see books as the most resistant to technology.

However, all bar newsprint, show very similar patterns to the consumer trend from ‘buying to own’ to ‘subscribing to access’. Yes, the sectors are often moving at different speeds and even different directions but the trend is clear. DRM as we know it today is transient and past its sell by date and will become increasingly irrelevant in a streamed world where it happens albeit less obtrusively.

Therefore some would suggest that the challenge for book publishing is not the latest tablet, ereader, smartphone, app, enhanced ebook, but how we accommodate subscribing to access alongside the traditional buy to own, enabling both to flourish and appeal and importantly reward creators.

   

Retaining Author Relationships In A Transparent World

Technology and communications are changing not only our culture but also our relationships with others. It is not just about how and what we communicate but also about the transparency and openness of the communication. Where once we could not see, we now can and this can start to question and even undermine the trust and inter-dependency in relationships we once took for granted.  

We can all now see our financial transactions and business is now viewable in real time 24x7. Even our location, what we are doing, what we like and dislike can be tracked and visible to many. There is often no hiding place unless you are switched off. As recently witnesses in the news, even governments are exposed and they need to maintain their trusted relationships within an increasingly hostile environment.

When we look at the book business and it value and supply chains, this increased openness and transparency is opening up both new opportunities and also starting to question relationships and process we once took as given.  Increasingly, we are all questioning the value that others add and are now looking to technology and information to support these. These changes are changing relationships and what we expect from them and potentially exposing that thorny issue of trust.

We can no longer deny the rise in self-publishing. What was once seen as the slush pie and vanity publishing is fast becoming respectable and a vibrant publishing market in its own right. As this door widens it could impact on the traditional publishing chain and question what rights are traded, the terms and even the commercial relationships themselves. The process between rights and royalties may have been to many authors something that just happened, but as the likes of Amazon’s KDP and Kobo’s publishing and other services start to show live sales being accrued along with earnings, what once was a mystery to many authors is starting to become transparent. This shift is significant as it starts to force new rules on all and merely sticking to the old ways may in fact end up driving more to the new ones.

We have long argued that physical and digital rights should be separated. We accept that the two go hand in hand and that they are different to other rights such as Film and subsidiary rights. However, the terms under which they are licenced should be separated. Right reversals have a defined physical trigger in most contracts and this works today. However in a digital content world this can easily become perpetual licence as the inventory never goes out of print. If the two are joined under the same revert clause then the physical work can be locked in perpetuity irrespective of its performance. Term time licencing of digital would make sense, but these leads us to consider the information needed by the author on which to base their relationship and trust. We now have to accept a greater transparency, openness, availability of detailed information and timeliness of payments.

Of course some may say the wheel isn’t broken so it doesn’t need fixing, others may say they have a contract and that is that, but it is not about today but tomorrow and maybe it’s time for a change and one that reinforces the relationships and trust and negates the need to go for a more transparent and open deal.

What we can’t deny is that the world around us is changing and with it our approach to what we expect out of those we do business with and there is no reason to believe that should be any different for authors. 

BIC 2012: Rethinking The Future

This is a presentation i gave to the BIC New Trends Seminar 2012 on 20th June in London.

The one thing that is certain about tomorrow is that it will be different to today and anyone who says that they have a clear and defined long term digital strategy is someone to be avoided and treated with healthy scepticism. We can all spend too long looking backwards to spot trends, But the future is not a linear journey. Trends merely tell us where we have been, not our destination. However, history teaches us that much is cyclic and what comes around goes around albeit differently. Change as we have all witnessed, can and will be, very disruptive and there will be many digital ‘black swans’ moving forward.

Richard Charkin recently said that publishers need to now think and act as start-ups, which is a hairy prospect for many and will not suit all.

I believe that the future is often born out of understanding the past, recognising what is different and identifying the enablers that make change happen and for us to do things smarter.

Today, I want to share 3 stories that help present just one perspective of the future. These are merely three stories which weave together to present just one argument. Just one piece in tomorrow’s digital jigsaw.

The first story is about finding needles in haystacks

A couple of years ago I found myself in Ludlow market looking at a pile of old books. I bought three, two by the same author and one featuring an artist I admired. The first two were cloth bound and published in the late 1930s by Country Life and the author went on to be; an author, artist, environmentalist, TV personality and wildlife campaigner. I wanted to share with others; the art, the wildlife, the environmental perspectives, and their insight into life in a bygone age and of course the man himself. 

I started to think about reprinting them. I established the direct market potential, the audience and was confident it was viable as a quality two volume collector’s slipcase edition and so I started to research the rights to the works. However, tracking the rights to 80 year old works quickly became a challenge. Eventually with the help of friend, who is somewhat of an expert in orphan and public rights, we tracked down the estate’s owner and there the issue sits today. The exercise proved that even with a well know author and clear publication history, tracking down rights, be they orphans or just old works, can be a testing exercise.

Imagine tracking down a less notorious author’s work from even 50, 40, or even 30 years ago? 

I was one of the first to stand up against the audious Google Book Settlement. My opposition was and remains primarily over the proposed ‘land grab’ or adoption of orphan works. Does my quest to adopt an orphan damper my opposition, or push me towards the ‘nationalisation’ of orphans or mass digitisation some propose today? The answer remains no.

Thinking about a rights business reminds me that some ten years ago I was invited by the BBC to attend a special conference on their future. It was to be attended by all senior figures from the Director General down.

On the day I found myself joined by a group of what appeared to be students and teenagers complete with street clothing and undaunted by their surroundings. I felt somewhat out of place and wondering what on earth was happening. We were ushered into a room and ask to sit on tables with senior BBC executives. After a couple of speeches the most illuminating dialogue started around each table. It was all about technology, software, games, gadgets, viral events and the latest things, some of which I had never heard of. It was about how the BBC should engage and what they should do next. The BBC learnt a lot from that exercise. Interestingly the BBC was starting to recognise that they weren’t so much in the broadcasting business as in the content and rights business.

That fundamental realisation has helped them shape their BBC Worldwide commercial arm and changed much of what and how they work today.  

Publishing, be it; music, film, games, books, is about content and rights. It is a rights business from acquisition, development to trading. Yet it is somewhat ironic that we remain wedded to rights terms which would appear to be inappropriate to the digital world, stuck in the print world. We find ourselves now moving in that digital environment without a rights registry.

It’s like going into combat today with First World War technology – it’s plain just dumb.

The one thing Google would have at least given us was a registry and without one some would suggest that we are flying blind in the eye of a digital storm.

The second story is about that extraordinary man Charles Dickens

A couple of months ago I visited the Dickens exhibition at the London Museum. What is interesting is that Dickens lived through the great literacy revolution where the masses were able to read and his penny fiction was a way of feeding their new habit in a digestible form. Dickens was many things not just a writer of great novels. Dickens was a performer, a journalist, a letter writer, a pamphleteer, a theatre producer and a self publicist extraordinaire.

He not only wrote many works by the chapter, he also delivered them as ongoing works. He used the ‘penny press’ to presale the stories by instalment. In 1837 he was selling some 50,000 copies of his Pickwick periodicals at a shilling a time. These contained one chapter sandwiched between pages of adverts. Many of these adverts had little to do with books or even the subject matter of the story. In fact the adverts demonstrate the diversity of the audience. The journals appeared either weekly or monthly and given the number of chapters and volume of sales, plus the advertising revenues, should have earned him a good return. It is claimed that when Great Expectations was published in weekly instalment in 1861 it had weekly sales of some 100,000 units a week. Interestingly they didn’t diminish his book appeal but fuelled interest in the finally work.

The Victorian engineering, transport and communications revolution of Dickens’ time was, on reflection, as great as that we have today with our technology and communications revolution. The new railways, telegraph and postal services enabled him to travel extensively and communicate to a wide audience and between 1858 and 1870 he gave some 472 readings of his works in the UK and US.

In Victorian times the novel was often also enhanced by illustrations. Dicken’s ‘Sketches by Boz’ was illustrated by George Cruikshank and as with many Dickens tales the reader was able to picture both in words and in imagery the story as it unfolded. Today, we have often lost the imagery of yesterday, but does the new ebook now enable us to once again enhance and illustrate the book?

It is not hard to see the relevance of Dickens to today and why it is somewhat ironic that 2012 is the 200th celebration of his birth.

Some have adopted the short story and instalment model and Keita digital novels continue to be a huge success in Japan. In the West Stephen King and others have also ventured down the digital short story and instalment route. But why hasn’t a publisher grabbed this digital opportunity by the throat? Are we stuck in the economic 75,000 words, 256 page format of the print rendition?

When we have done digital short stories, we have even bound them into digital collections. It’s as if we missed the iTunes moment when singles were reborn. We continue to ignore the shortening attention span and channel hopping culture in which we live.

Has the publishing and editorial process got in the way of the instalment and short story? 

Short stories and instalments may also unlock further the democratisation of writing. Some would suggest that they may have greater potential for consumer engagement than the enhancing today’s somewhat stretched physical content model with digital media for media’s sake.

If we want more people to read then give them something exciting that they can quickly appreciate and value.

The third story is about the creation and development itself - the publishing front office.

In the late 90s as part of the research programme ‘publishing in the 21^st Century’ , Mark Bide, Mike Shatzkin , John  Wicker and myself went to HarperCollins in Manhattan. We were doing research into the digitisation of the publishing front office and the objective was to look at an Editorial system that they were using.  The system looked impressive and acted as we would expect but I felt there was something not right about it. A few questions later and what appeared to be a good system was turning into a dog.

To cut a long story short it was built like a transactional system and not as a content one. It lacked that intuitive feel needed by creative people. What workflow that did exist was ridged. Editors were being asked to enter other people’s information for little perceived benefit to them. The final blow was that a number of Editors had refused to use the system.

I remember saying, ‘if the customer service clerk refused to use the system you sack them, if the editor refuses to use the system you sack the system.’

Have we moved on in the last decade?

Well the answer is yes and no. Systems have been adopted but the divide between content and context and transactional information still exists. People still see production systems as often financial and transactional and somewhat divorced from the content. Marketing, promotional and bibliographic information is still often in parallel silos and not drawn directly from the content itself. There is still a gulf between content and transactional information.

This is not true in some sectors, such as education, where the complexity of the works and digital has demanded better tools. However when you look at others such as the development of some academic monographs, you can see huge opportunities for radical improvement which are not being taken today.

I would ask you to consider that the argument that these three stories give us is that tomorrow will be heavily influenced and shaped just as much by the changes that will happen upstream in we acquire, develop, repurpose, store, curate, and market content and rights as it will be downstream in how the promote, sell, distribute and trade them.  It is about understanding and getting back to the basics, what has worked in the past, what could work tomorrow, adapting and understanding the total environment.

Digital is not just about pouring physical books into digital containers. If we think that is what it is about we have missed the plot.

There are many pieces to the digital jigsaw and there is no one piece that fits all.

To date we have been digitally obsessed with devices, DRM and formats. Thankfully these are now relatively irrelevant and yesterday’s issues

·         Devices are evolving into platforms, content is becoming agnostic, and finally moving to being cloud based on demand

·         DRM is at last past its sell by date. But before we all run out and drop DRM it it is worth thinking about rights and permission, collective commons registration, and the ‘first sale doctrine’ . Some would suggest that not to do so may be as short sighted as when we got rid of the NBA without thinking about returns

We do have some exciting challenges downstream, such as:

·         working out what the difference between ebooks and apps and associated usage rights

·         moving from outright sales models to new models, which most probably will be subscription and rental based

·         redefining and creating tomorrow’s libraries

·         exploiting the rapidly evolving social networking environment and helping readers find a digital needle in a digital haystack, or as it is now called ‘discoverability’

·         working out how we audit the sales ‘honesty box’ environment we have created

Returning to basics.

There are only two people that count in the value chain – the author, creator who puts in the IP and the consumer who puts in the cash. Everyone in between adds cost, but more than ever has to add value. Digital publishing isn’t just about the downstream activity and the consumer it is about the life cycle of content, context and rights from Author to reader.

I believe that the argument I have presented today can present one piece to tomorrow’s jigsaw and new opportunities which themselves could be significant and impact the downstream market, provide long overdue development productivity and rights governance and, may even offer a opportunity that doesn’t just cannibalise existing print but can compliment it.

Review of our 2008 Predictions - 3. Rights

At the end of 2007 we made 10 predictions for 2008. Many predictions made have now been conveniently forgotten but we stand by our thinking at the time and believe it appropriate we openly review these individually and see what we think happened and assess them appropriately. Today we review the core of publishing and media – rights.

3. Rights – permissions and licensing will grow in importance and will someone step up to provide that elusive clearing house once promised prematurely by the likes of Rightscenter.com. Yankee Book Pedler and Subrights.com?

Who would have guessed the answer? Who would have envisaged Google putting down the money to make tit happen. Who would have envisaged the Great Book Bank Robbery? It took someone from outside to put the money to build what the industry so sorely needed a rights database. It was a pity that the industry will pay such a heavy price for its inability to do itself.

The other major focus areas were creative commons licence which is often as clear as mud to many but starts to address usage and permissions in a logical way. What it will mean to permissions, fair use and some publisher models will be interesting to watch.

Finally we had Orphan Acts and a potential land-grab of these in copyright but out of print lost titles. But here Google has been given one rule whilst the rest have to adhere to another.

A safe 10 out of 10 do you agree?

Is It Right.com?

This week we had a long discussion with a friend who is a literary agent and as usual we ended putting the book world right. The topics were broad and the discussion stimulating loosened by a couple of glasses of fine wine.

One area discussed was with respect to rights and rights contracts. We posed the question as to why rights contracts are written once and although addendums happen as new opportunities arise, in the main the contract is the contract until it reverts.

We talked about a major commercial lease we had just been involved in and the fact that leases have both term times and break clauses. Break clauses aren’t the same as reversal clauses but offer both parties the opportunity to recognise that the contract is working and continue or that it is not and gives either party the opportunity to break. Some break clauses can be one sided others apply to both parties but when the term of the let is say 15 years they recognise that things change and that its in both parties interest to be able to respond if necessary.

The question we posed was whether it would be wise to work rights contracts the same way? After all we see front list titles now being remaindered in after often shortening lifetimes. We see publishers wishing to change rights to perpetual models based on moving them to digital and print on demand. We clearly do not have a rights clearing centre or authoritative information service. It is ironic that this industry is about rights and content.

We firmly believe in rights reversals and that both parties are currently tied to contracts that were designed for yesterday, not today and because we don’t know what we don’t know, not tomorrow.

Yesterday Discounts -Today Exclusivity

We read so much now about the magic word ‘exclusive’. It is used as if it is something clever that a Marketing wiz kid has discovered to make the offer more compelling. The reality is that it is often born out of pure self interest and is inherently a bad trading practice. Like discounting it can work well in the right place and for the right reasons but if abused or over used it like others can become destructive.

We have Waterstones having a two week exclusive deal on the Sony reader. These are at a time when the market is starting to develop not restrict consumer digital awareness, choice and confidence. We have long wished that Audible adopted an open approach that enabled their DRM to be used under licence by all and not just by them. There are other deals, such as that between Ingram and the Fictionwise to restrict the usage of their new iPhone application. However, many of these such deals don’t restrict the title only the channel and delivery. Some would argue that they are bad practice, others that it’s market forces etc., others that its mere testosterone!

The joke about the exclusive book deals that Amazon has started to do and that others will surely now follow is that Amazon already has an exclusive. A Kindle tile can only be served up by them, over their exclusive connection, to their exclusive reader. So why does the title also have to be a digital exclusive? When we look at Booksurge and POD, we see similar desire and intent to restrict the channel, but not exclusivity today. If the publisher wishes their title to also be available via LSI or Rowe they merely have to do so. Some may agrue that Amazon has now seen a way to become the exclusive digital publisher of that title in perpetuity? Some may say that this is a cleaver and another cheap back door into acquiring digital rights?

Any publisher who enters into an exclusive distribution and retail agreement on digital content that is tied to an exclusive channel and technology needs to think about what they are trying to achieve and the potential risk versus short term reward. Authors and agents should also think about such ‘special deals’ both in terms of rights ownership and reversals.

As we move forward into this Brave New Digital World we must think not once but twice and avoid stumbling into practices that have long term potential dangers to all that may not have been thought out by those seking shortterm self gain.

The Consolidation of Intellectual Property

Content is clearly becoming media neutral and king of many converging sectors. This broadens the opportunity to exploit the intellectual property into many more and potentially new ways. This then obviously creates more value. The key is who owns the license to the rights and how are the rights acquired can be maximized?

An old publishing rule was to acquire rights broadly and use narrowly. In other words get as many rights as possible such that you have them if needed but that you start focused. Does this approach still hold today? Is it part of the digital dilemma, where publishers want to secure digital rights and not necessarily fully exploit them all, but authors and agents are reluctant to give them away?

The one thing that ties all media sectors together is rights. As media sectors converge then the rights lines also start to blurr but more importantly the players can become interchangeable. Fascinating times!

Last year we saw BBC Worldwide acquire Lonely Planet. Irrespective such acquisitions may, as we predicted at the New Year, become more common.

Today we read that the BBC Worldwide are considering entering other partnerships with private equity groups and other financiers in order to invest in other media production, publishing and intellectual property opportunities.

It is sobering to consider how small and fragmented the publishing industry is in relation to others. This makes even the large companies relatively easy targets. This has always been the case but what is now changing is that one rights company could potential buy into another rights company from outside their sector. What they buying is another rights business with content.