Between Commerce and Commons

I had fully intended to live blog the CCI interational conference Creating Value: Between Commerce and Commons. But it turns out the wireless access at the Brisbane Convention Centre, while pervasive, is not exactly inexpensive. So instead I’ll be playing catch up over the weekend and posting my notes and thoughts on the keynotes and panels.

So far it’s an excellent conference. Today I sat in on fantastic keynotes about creative brian development by Baroness Susan Greenfield and developing open access government data by Richard Allan. There’ve also been great papers in the panel sessions. But the big carrot, tomorrow, is Henry Jenkins‘ keynote. I’m very excited. Henry Jenkins is the reason I registered for this conference. I really enjoyed Convergence Cultures and Fans, Blogger and Gamers and have long admired his work. Needless to say, looking forward to his presentation.

Paperback writer reports from the front line

Via Justine Larbalestier‘s blog, a neato essayby author Justine Musk on writing and selling books. Musk offers some insightful musings on the economic realities of mass market PB fiction and the venus fly trap of book sales data. Here’s a little taster…

Because here’s the thing. In this age of such relentless number-crunching, books don’t get the shelf life they used to get. There’s no time for a slow build-up: either the book performs once it’s out of the gate (in fact, my deal for the sequel to the sequel to BLOODANGEL offers a ‘bonus’ if the book ships above a certain number of copies within the first few months of its release date) or it gets dumped from the stores altogether and the author gets tagged with a stigma that’s hard to overcome. The problem is that the best way to sell a book – the only way, for most books that don’t get the loving PR attention of the publishers – is reader word-of-mouth. And word-of-mouth, if it’s going to happen, takes a while to get up to speed. People not only have to buy the book, they have to actually read the damn thing, and recommend it to people, who also have to read it, and then have to… etc. And by the time enough people have read it to maybe make something start to happen, the book is out of stores and maybe even out of print.

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The problem of Amazon

Amazon has been flexing its muscles in both good and bad ways in recent weeks. A few publishers, namely Hachette Livre, have been making a show of defiance in the face of Amazon’s demands for a bigger discount from publishers. Bookseller.com reported the ongoing dispute had prompted Amazon to remove the “Buy Now” button from several titles by big-name authors, including Stephen King and James Patterson.

Hachette, quite reasonably I think, points out that Amazon already gets a very generous discount, up to 60%. That’s a huge step up from what bricks and mortar booksellers command. Publishers work on pretty slim margins for books, it’s one of the reasons why they have to publish so many titles to make the general trade publishing business model work. Any additional price discount to Amazon gouges the profitability of what, for many titles, is already a marginal proposition.

The industry is watching closely. Authors may well be worried if their titles are not on sale during the dispute. They’ll be even more unhappy when it comes time to negotiate their next contract, however, if publishers offer less because they can’t make the P&L stack up.

But here’s why everyone’s so nervous about it, and why it’s so important to find a solution to “the problem of Amazon”. Wall Street Journal reports that Amazon turned a literary novel by a first-time author into a 90,000 sales sensation. In one week.

The Web retailer chose the book as one of the best books of June and aggressively hyped it, including by posting a long and enthusiastic blurb from best-selling author Stephen King. The same blurb was printed inside “early reader” copies sent to reviewers, bloggers and booksellers.

Amazon also kept “Edgar Sawtelle” on its home page for two weeks at a 40% discount before the book hit stores, and posted an essay written by the author at Amazon’s request. “We also had a preorder banner in May, which is something we do for books that we think will have significant interest for our customers,” says Tammy Hovey, an Amazon spokeswoman.

The advance word — by a site thought to account for 15% of U.S. book sales — had significant impact. Ecco initially printed 26,000 copies but went back to press three times before the book hit stores, adding another 12,000 copies.

With this kind of power over a book’s impact in the marketplace, it’s no wonder everyone gets nervous when Amazon withholds its “Buy Now” button. It’s why Hachette’s insistence on standing up to a company that is increasingly behaving like a marketplace bully is so admirable.

Lies, damn lies and statistics

More from HarperCollins, this time some sweet data on the results of their recent experiements with “free”.

Publishers Weekly reported that at recent panels at BEA and the IDPF Digital Book conference HarperCollins shared the results of digital giveaway campaigns they did with books by Neil Gaiman, Erin Hunter and Robin Hobb.

Here’s the skinny:

Promotion for: Neil Gaiman’s American Gods
- Content given away: Full access to the book, through the company’s Browse Inside feature
- Number of page views generated: 3,827,306
- Average page views per visit: 46
- Number of clicks on a buy link: 1,177
- Result: Promotion bumped weekly sales of the title at bricks-and-mortar locations by 250%.

Promotion for: Neil Gaiman’s Fragile Things
- Content given away: DRM-free audio download of Gaiman’s short story “A Study in Emerald” to promote the collection Fragile Things
- Result: Promotion didn’t drive registration and, according to Harper, “readers bypassed our up-sell efforts” because content was “too easy to take and run.”

Promotion for: Erin Hunter’s Warriors, Volume 3
- Content given away: Browse Inside preview of 20% of the book
- Result: Preorders of the book increased 30%.

Promotion for: Robin Hobb’s Shaman’s Crossing
- Content given away: Full e-book (downloadable with DRM and registration)
- Result: Same-title and backlist sales of Hobb’s e-books increased.

The results are interesting and certainly seem to indicate the value of offering free open-access trials of content to entice people to buy the book. I hope more publishers will be willing to share data for the benefit of the industry.

The Amanda Project

The other day I was discussing with an agent whether authors should hold back digital rights from publishers until the publishers could demonstrate they had the know-how to fully exploit those rights. Well, HarperCollins US have just taken a big step toward bolstering my confidence.

Forbes.com has reported that HarperCollins, together with 4th Story Media, are producing The Amanda Project, a cross-platform interactive story series targeted at 12-14 year old girls. Readers will not only consume but participate in creating and sharing the narrative via social media and games.

Amanda Valentino is the elusive, charismatic, and alluring new girl at Evansville Township High School who arrives mid-year, leaves abruptly, and indelibly changes the lives of everyone around her in the process. Her story will be told across a variety of media in addition to the books — a social website where readers can interact with and become characters in the mystery, a related series of blogs chronicling the story as it unfolds, clues and seed posts on satellite sites, downloadable music and official and user-generated merchandise. Amanda’s fate will begin to unfold across the web during the fall of 2008, through the launch of the T.A.P. website in early 2009, and continue into the publication of the first book in Fall 2009.

This is complex and ambitious and I’m really excited about it. I also think it’s aimed at the right demographic – socially aware, digital native teen girls with hyper-connectivity. Needless to say it’s been a long time since I was a 12-14 year old girl, but I look forward to participating when The Amanda Project is released.

Digital doesn’t only mean e-books

Author and journalist Gary Kemble made a great comment in response to my last post that I wanted to elevate to the main blog since it’s worth talking about.

I  interviewed Cory Doctorow a couple of years back. I asked him if film companies had the right to protect their multi-million dollar investment in a film by trying to stop online sharing of movies.

He said: “That’s kind of like saying the Catholic church invests three generations of labour into the construction of a cathedral, how will religion continue after this Protestant Reformation of yours, right? Well, I don’t think the important thing is cathedrals.” http://www.abc.net.au/news/arts/articulate/200604/s1616706.htm

Same goes for books. I think once someone comes up with a user-friendly, cheap, eye-friendly and nice-to-use ebook reader, it’s game over.

I like books. I like to buy Stephen King books, because I’m a fan. I think I would do this regardless of ebooks. BUT, a lot of books I read, I’m kinda *meh*.

So basically, I think a lot of people will buy most of their books in electronic format then, if they really like the book, may go out and buy the dead tree version.

Yeah it’s a good observation, Gary, and Cory Doctorow is certainly the poster child for free e-book distribution. If I was ever in a position of negotiating with a book publisher about digital rights I’d be arguing pretty hard to implement some of his strategies.

But for me, this whole topic is not really about e-books. Sure, e-books are coming and they are part of the digital transformation that is overtaking traditional publishing. But I think too many people get side-tracked by the e-book debate (will it be a format or a device? When will it tip? etc) and forget that there are other ways that technology can change or threaten your business.

Amazon is already proving it with their moves to form a vertically integrated supply chain from POD publishing to direct-to-consumer book sales. Given that POD is now cheaper than traditional print for runs under 1,200 copies I would think this is a far bigger threat to publishers NOW than e-books are likely to be even in the near-future. It should be of interest to Australian publishers especially since print runs are smaller here.

Some bricks-and-mortar booksellers, like Borders US, are moving to establish POD centres inside their bookstores, and offering author services to along with it, such as in-store events and distribution within their retail chain. They also promise new special areas of their stores which will give such titles physicla shelf-space. With retailer-supported distribution, this takes self-publishing to a whole new level and is encroaching on some pretty significant areas of publishing that used to be solely the province of trade publishers.

I also think some populous nations will jump right over the e-book device debate altogether. In fact, they already have. Phone manufacturers have already stopped shipping 2G phones to Japan. You can only buy 3G there now. And mobile phone penetration in Japan is higher than 100%. So when there are more phone subscriptions than there are people in the country, and those phones are also high-speed internet browsers, integrated media centres with increasing memory capacity, why would a device that only reads book be of any interest? This is the same country, by the way, that last year shot five novels written on mobile phones into the top ten bestselling books list. Those readers didn’t need an e-book device to become fans of the books and turn them into hits.

The thing about structural changes in markets, though, is that they always create new business models and lucrative opportunities for those who can be the first to work out how to exploit them. So the thing I don’t understand is why every publisher isn’t experimenting like crazy to to find those opportunities. (Of course, some are experimenting, and I’m very happy about that and keen to point it out wherever I can)

The biggest opportunities may not be in e-books at all, but it in cheaper, more effective ways for publishers to connect with communities of readers, to brand and market their authors and to wring more long-tail sales from their backlist.

It’s time to take notice when The Economist worries about your business model

I read blogs daily that cover the ongoing changes in publishing, especially in digital channels. Through my little pipeline of RSS feeds, it’s easy to get tunnel vision and assume that, because the publishers I’m reading about are diving in to digital experimentation and thinking about new ways of doing business, that all publishers are doing so. In a few chats I’ve had recently with Australian publishers, agents and staff at writers centres, it’s clear this is not true.

Even The Economist, a conservative journal better known for its coverage of international trade and politics than the publishing industry, is observing the ways technology is changing publishing.

Publishing has only two indispensable participants: authors and readers. As with music, any technology that brings these two groups closer makes the whole industry more efficient—but hurts those who benefit from the distance between them.

When The Economist starts calling the race it’s time for publishers still in a default mode of ”wait and see” to move to “evolve or die”.

[Image Source: libraryman, licensed under Creative Commons Attribution-Noncommercial-Share Alike 2.0]

On experimentation

Apropos of a conversation I had with an industry pro on Friday, this nifty little comment from Galleycat:

…with the industry in as much flux as it is right now, it’s better to experiment and risk failure than to sit on the sidelines and then try to learn how to do what works after somebody else figures it out.

GalleyCat was referring to online promotion in the book industry, a panel he was on at BookExpo America (BEA). It’s an important observation in the context of book and author marketing, but I think it can also be applied across the whole digital publishing spectrum. If publishers adopt a “wait and see” attitude, they cede the market advantage. They may be worried about risk, or they may wonder who, among their industry rivals, will be the first to really seize the opportunity. However, are they sufficiently worried about people from outside publishing who are encroaching on their space – Amazon, Google and, before long I’d wager, Apple? Because when one or all of these behemoths turn their eye to a market, they colonise it. Seems like better sense to dive in, even if you’re not sure whether the water’s warm.

By the way, GalleyCat’s notes about online promotion from that BEA panel are fantastic. Go read them here.

Link Love 02-06-08

I am in Darwin for the annual get-together of state writers centre directors. Here it is warm and humid (which means my hair is annoyingly frizzy) and the ocean is blue. Not wussy sea green-blue, but Gold Coast motel artwork aquamarine blue. Since I’m spending more time looking around than reading feeds, I’m trusting youse all to be satisfied with a few nifty links:

• Guys Lit Wire: Fabbo new blog aimed at hooking teenage boys on great reads (and, frankly, I’m hooked as well)
• YA Mansion: Where all young adult writers live together in a mansion in New York City… apparently! But for those who are just visiting, you’ll find YA reviews, news, interviews and (and other things that rhyme with ewes)
• The Living: A ‘wovel’ (web-based novel) where you get to vote on the storyline. Thanks to the talented and extremely lovely Gary Kemble at articulate for the heads up!