As the saying goes, if you can’t baffle them with brilliance, then befuddle them with math. Actually, that’s not the way the saying goes, but in this case, the math being “composited” (or should that be, “composted”) and the way the saying goes are the same things.
Motoko Rich, in a Monday New York Times article about the pricing of ebooks, admits that “Publishers differ on how they account for various costs” but doesn’t let that stop her from coming up with a “composite” yet “necessarily simplified” cost-model that she says was based on “interviews with executives at several publishers.” So, right off, she admits that her formula is based on information provided by the exact people who seem to believe it’s in the best interests of their business to perpetuate the perception that in book publishing, up is down.
Motoko’s composite formula might be a bit more valid if it included information and insight from others who don’t have, as we say where I’m from, a dog in that hunt.
She should, for instance, follow this link to an article on the same topic that has a formula that didn’t require “composite” and simplified cost-modeling based on information from anonymous “executives.”
That’s because it’s an analysis by Peter Olson, the former CEO of Random House and now senior lecturer at Harvard Business School and Bharat N. Anand, the Henry R. Byers professor of business administration at HBS. I’d put them up against anonymous executives any day.
You can read the analysis for yourself, but, to necessarily simplify it, I’ll quote them: “This analysis suggests that e-books could, as a stand-alone business, be priced far below Amazon’s current $9.99 pricing and dramatically lower than (paper) books.”
My point — and their’s — is that the publishers’ arguments that ebooks “cost more than people think” is ridiculous.
But don’t get me wrong: I believe publishers should be free to charge a retailer whatever they want. And the retailer should have the right to charge the reader whatever they want — even if they lose money on the deal.
I am not in the “ebooks should be $9.99 or nothing” camp. If publishers want to charge the same price as hardback books, I’m all for them doing so. If they want to charge by the chapter, that’s fine too. If they want to charge by the sentence as Stephen King writes them in real-time, that’s totally dandy. I won’t pay it, but I’d defend their right to charge the wholesaler or retailer any price they want.
But please, don’t insult me by trying to convince me that the reason you are charging whatever you are charging is because you think I’ll believe that distributing bits costs the same as distributing atoms.
If you want to watch how book publishers can accelerate their own demise, watch what happens when the giant book publishers exercise their new-found freedom to jack up the price of e-books sold. I’ve written previously about the work of book industry veterans and Harvard Business School professors in examining pricing scenarios for digital versions of books. The objectives of book publishers in increasing the price of e-books is nuanced, but has more to do with protecting legacy channels and business models than in increasing the money that authors receive or decreasing the price that readers pay.
Those of us who read books on Kindles (and on iPhones and soon, on iPads) have no power other than our wallets to set pricing. And while there is talk of “boycotting” book purchasing if the price is above $10, I don’t think that’s a “boycott” — or, if it is, that’s like saying I’m boycotting Lamborghinis. Not purchasing something you feel is priced higher than its worth (or that you can’t afford, in my case, a Lamborghini) is not boycotting. It’s a fundamental principle of economics. Something to do with pricing elasticity, I believe.
According to the article, those who purchase lots of e-books — at least, the ones who are prone to boycotting — are going beyond “not buying” books over $9.99. They are going onto sites like Amazon.com and posting one-stars and negative reviews of such books. And if you are a publisher, you know what that means. Ouch.
While the author-loving part of me cringes at such tactics, the consumerist side of me hears the song, “Do You Hear the People Sing” from Les Miserables, when I envision such tactics.
Here’s the deal: Economics, not legacy-protection tactics, should set the market price of books. Authors and publishers should be compensated fairly for e-books sold. But the costs of paper, binding, warehousing, shipping and associated expenses should not be. (Or, at least, that’s what the experts say.)
Raise prices above what the market considers fair and not only will they stop buying, they will burn down Paris.
Over the past couple of years, I have talked with several individuals in the book-publishing field about Apple talking with book publishers. These weren’t people “speculating” that Apple wanted to use the iTunes channel (or something similar) to offer eBooks. These are people who know. Their timing was off, however. But they assured me it was on its way.
In my opinion, this is the key quote in the The Bookseller article:
“What is clear is that US publishers are desperate to combat the $10 Kindle price tag pushed by Amazon.com, and believe that if enough weight is given to it other retailers will be forced to follow.
Rather than repeat myself, here are links to previous posts that address this topic:
“I would much rather have an Apple Touchbook than the Kindle (which I own). However, you’re forgetting one small detail. The device is only one-third the equation. iTunes is another third. So far so good. A seamless way to get content from the store onto the device. What Apple is missing is the RELATIONSHIPS. They don’t have any relationships with book publishers that enables them to get access to the content…Could Apple develop these relationships? Sure. My point is that they haven’t started and this is where Amazon has a leg up. For most of us, they are one of our largest customers and we trust them.”
For those who follow Michael Hyatt’s blog, the CEO of the nation’s 6th largest book publisher provides bread crumbs along the way from that two year old comment to his recent telegraph of how he believes a device like the iSlate/iPad (or, in his post, the SI Tablet, a conceptual device to show what an iPad could be) will “be the end of book publishing as we know it.”
In other words, despite him never saying it or remotely implying it on his blog, I think Apple has talked with Thomas Nelson long before any 12th hour.
Two posts on the economics of eBooks: The notion that $10 an eBook is “cheap” is ridiculous. But whatever the book publishers want to charge is up to them, not the retailer. Frankly, as much as I like wholesalers and printers and binders and bookstores, the value of an eBook should be based on the cost of only two steps in the channel — the author (and his/her “people”) and the publisher (specifically, how much demand they can create in the marketplace). Much smarter people than I have figured that out. Tim O’Reilly, for instance, who charges more than $10 for eBooks he publishes — but also gives away others for free — sometimes the same book is available for free and for pay. My best post on the topic of eBook pricing actually quotes legitimate sources, and doesn’t depend on my hyptheses: Yet one more mystery about the enigmatic book publishing industry.”
And lastly, my post last week about gizmo channels:It’s not the gizmo that makes a gizmo successful explains, if you read it closely, that book publishers have never understood that it’s the “channel” not the device or the content that will ultimately determine their fate. Sorry, book people. Your key to success is not dictating prices (it’s against the law, I believe). Your key to success is finding great authors and rewarding them well by editing and marketing their “content” the best way(s) possible. Forget trying to dictate prices for digital content based on what it costs to pulp paper and warehouse “product.” That ship has sailed.
Twenty years ago, I attended for the first time, a wonderful (and then, a nearly three-week) program at Stanford University called the Stanford Professional Publishing Course. When I first attended (alumni of the program can parachute in for segments of the program, so I’ve been back briefly a few times), there were 200 students, 100 book people and 100 magazine people.
The attendees were typically in their early 30s and had been identified by their employers as a talented young publisher or editor or designer who could benefit by learning about all of their industry, and not just the part of it they were involved in day-to-day. The faculty was stellar — legends of book and magazine publishing. I was in my early 30s when I attended, but I spent long hours hanging out with living legends from book and magazine publishing.
The course was fairly rigorous when I attended — a big case study was involved, as I recall. But my fondest memory of the program was getting to pretend I was a college student again, except with the maturity to know what an incredible opportunity for gaining knowledge I was experiencing — man, youth is wasted on the young.
Without recounting the people I met or the things I first learned about at SPPC, one small example is this: a lot of my early understanding of the potential of the Internet — back before even when AOL was a household word — I learned there by hanging out with Paul Saffo, a longtime member of the program’s faculty.
Today, I learned that Stanford is severing their relationship with the program. A book publishing legend, Martin Levin, a long-time member of the program’s faculty explains the details on his blog.
I can appreciate the efforts that went into reviewing whether or not Stanford should continue its involvement with the program. When I attended, it was part of Stanford’s impressive array of programs it organizes for alumni. I never quite understood that arrangement — very few attendees, if any, were alumni — but I appreciated the level of credibility that added to the program — especially in who the faculty members were.
I’m sure this will be discussed by the hundreds of alumni of the program. Many friendships and professional contacts have been forged through the community of those who have attended.
Like so much else in the book and magazine world, however, change is a part of the natural order of things.
“Anyway, I keep picturing all these little kids playing some game in this big field of rye and all. Thousands of little kids, and nobody’s around — nobody big, I mean — except me. And I’m standing on the edge of some crazy cliff. What I have to do, I have to catch everybody if they start to go over the cliff — I mean if they’re running and they don’t look where they’re going I have to come out from somewhere and catch them. That’s all I’d do all day. I’d just be the catcher in the rye and all. I know it’s crazy, but that’s the only thing I’d really like to be. I know it’s crazy.”
Updated on Sunday, October 4: See note at bottom of post.
When I read that 20% of book publishers believe they should charge the same (or more) for a book in the form of a digital file that’s distributed online as they charge for the same book manufactured into a hardbound paper product, packed into cardboard boxes, stored in warehouses, distributed to bookstore shelves via 18-wheeler-trucks, returned and reimbursed if not sold by the retailer, I keep picturing all these little kids playing some game in this big field of rye and all.
I won’t repeat all I wrote on this topic in July, but its point was to echo the wisdom of Peter Olson and Bharat Anand that, “Prices of e-books should be shaped by cost structures and customer demand rather than by comparison to traditional paper book pricing.”
As I said in that earlier post, I believe digital devices (note I did not say “eBook readers” as I think they are merely transitional technology) offer publishers an incredible opportunity to add value to the basic book and therefore generate brand-extension opportunities that make “the book” the center of a vast new pool of revenue-generating opportunities.
But if publishers think “the book’s” price should be benchmarked to the price of a physical product, they are heading off the same cliff as record labels did — and will soon find themselves in the position record label executives find themselves today: Looking like that pivotal frame in a Road Runner cartoon when Wile E. Coyote is mid air, having just looked back at the cliff where the Roadrunner grins (help for those not following this: in this metaphor, the internet is played by the Roadrunner), he breaks the fourth wall with an “oh sh*t” glance to the audience and holds up a sign reading, “Help.”
But of course, by then, it’s too late.
So there you have it: Two references to great literature involving hapless fools wandering off cliffs. (Along with an inside-joking visual pun by using an image of the “Cliff”notes version of Catcher in the Rye.)
The record labels did this by thinking their product was a physical package and their important role was to control a pivotal juncture in the “supply chain.” They were so defensive of that belief, they grabbed the first anvil they could find: criminalizing their customers. And off the cliff they jumped.
And now, it appears some book publishers seem more inclined to view their job as protecting the existing supply chain rather than serving their shareholders. (And, apparently the authors, hey, forget them, they’re just “content.”)
Bottomline: If publishers attempt to screw the customers in an attempt to protect an out-dated supply chain model, the internet will crush them. Something publishers will call piracy will occur as naturally as gravity pulls Wile E. Coyote to the canyon’s floor. And those of us who love to read books will scratch our heads a little and wonder why we don’t feel guilty doing what publishers are calling “piracy” — by doing the same thing we’ve done all our lives when a friend lends us a book they’ve enjoyed or when we go check out a book at the “Free Library.”
By benchmarking the price of “the book” to a physical product, publishers will hasten their demise. And that’s a shame.
Readers need just one thing: Great books. Readers want to reward authors who write great books. Readers really care deeply about the authors who write great books and would gladly pay them directly for the great books they write. Even more than for listeners of a three-minute song, the reader who has invested many hours of their life reading a great book, actually wants to invest more into the opportunity to read more work from the author.
We (and I’m writing as a reader) care that publishers exist, because we believe they should be the place where great editors work — and great editors help good authors write great books. And we care that books we should read have the support necessary for us to discover them and to be able to easily purchase them.
But we (as a reader) don’t really want to pay to subsidize the current system of book publishing that was broken long before the internet existed. The way books are sold on a consignment model, for example, wherein the book retailer can return any unsold item for a full refund — with the high price of the break-out successful hardback print title subsidizing the wasteful and ridiculous model.
The attempt to have the sale of eBooks — which have no such consignment sales model — subsidize that failed physical book consignment model is beyond lunacy.
Dear publishers, charge for where you bring value — discovering, editing and marketing great authors. Don’t expect me to pay for all that waste you’ve created if I find a way to avoid it.
And publishers, please: Get back away from the cliff.
Update: The day after I posted this, an item appeared in the New York Times by Randall Stross, a professor of business at San Jose State University. Frankly, I tend to dismiss stuff Stross writes, but I always marvel that the New York Times gives him the platform to broadcast it. Today, Stross is doing all he can to imply there’s a looming menace to the book publishing industry that “books are about to be napsterized.” His is a call to arms for authors and publishers.
It’s crap.
Here’s the weirdest quote in the essay by Stross: “I will forward the suggestion along (to give away books free, like Nine Inch Nails does its music), as soon as authors can pack arenas full and pirated e-books can serve as concert fliers.”
The implication of that quote is to suggest musicians can monetize free content but authors can’t. In reality, a vast number of books published are, indeed, loss-leaders for authors. Consulting gigs, speaking fees and “publish or perish” professorships serve as the primary ROI on the investment most business writers gain from the investments they make in getting a book published. To use Stross’ example, however, if, for some hypothetical reason merely to follow Stross’ illogic, he were to give away the digital version of The Lost Symbol to anyone who wanted to download it — free, the lost revenue would be a rounding error to what he will make from all the different print versions, movies rights and marketing tie-ins he will receive over the life of the franchise.
While no one may ever pack an arena to hear Stross speak, the first weekend the movie The Lost Symbol appears in movie theaters, it is like $100 million will be generated — a number Nine In Nails couldn’t touch.
(Next, I feel that Stross will go after public libraries and their piracy menace.)
The premise of the original post is the same: Some publishers will start wrapping themselves up in the “P” word (piracy). And they will attempt to get authors to fight their battles for them.
The way publishers can fight back is to price correctly. A book that takes days to read is not the same as a song that takes three minutes or even a movie that take 90 minutes of your time. Priced correctly, digital books can be a boon to all parties. If publishers listen to fear-mongers like Stross, one day soon they’ll see authors and readers by-passing them altogether.
“Strange light fell over Australia on 23 September 2009. An unexpected dust storm blanketed New South Wales and Queensland, turning everything an eerie shade of amber. At its peak, the storm swept up 140,000 tons of soil per hour. In spite of the worst dust storm in 70 years, intrepid photographers ventured outside to document what was happening to their homes, neighborhoods, and country. This is what they saw.”
Long time readers of this blog know that one of the recurring heros who appears here is Derek Powazek. This 2008 post links back to some of his accomplishments I’ve written about, including the rise and fall of JPG Magazine and his role in helping HP Labs create MagCloud, a platform that enables the creation and distribution of magazines that utilize on-demand printing.
Strange Light is a 40-page magazine that Derek just published (in this case, I mean “just” as in “sometime during the night, U.S. time”) using MagCloud.
So, to recap: The dust storm occurred on Wednesday. Photographers — professional and amateur — headed out into the storm and, with no organizing or pre-event planning, captured “a day in the life of a dust storm.” As people with digital tools in their hands are wont to do, photographers and observers began to upload what they were seeing and experiencing and capturing to the web. With the speed and finesse of someone who has an up-close-and-personal understanding of the “community” aspects of photo sharing (trust me on that one) and who helped to innovate much of the processes of web-based “social-media” collaborative magazine publishing, Derek put together a magazine — and has given us just one more glimpse into the potential of the magazine format.
I spend a lot of time pointing out that arguments over the future of magazines are rarely about the magazine format — they nearly always are about some business model related to circulation, advertising or cost-structure.
Derek continues to prove the magazine format — and print — can be a new media platform, if one gets their head out of (or into) the dust clouds.
I’ll hand this to Chris Anderson and his publishers (Hyperion in the U.S., Random House in the UK). They aren’t just talking the talk about his new book, Free: The Future of a Radical Price. (As the book is being rolled out in different ways in different countries, not everything I’m writing here is applicable everywhere.)
They — and I say they because I’m assuming the pricing strategy of this book had to be a group effort — have simultaneously launched a book that has absolutely no discount when purchased from Amazon.com (Amazon retail price: $26.99, although, some Amazon “merchants” are offering discounts off of retail), however, as I write this, the un-discounted, paid version of the book is the #1 selling business book on Amazon.
One of the most interesting pricing strategies is on Audible.com where the unabridged version is free and the abridged version costs $7.49. Say what? Why is an abridged version more valuable than a full-length version? According to an “author’s note” on the abridged version, “Get the point in half the time! In this abridged edition, the author handpicked the most important and engaging chapters and points, cutting three hours from the length without losing key concepts. Time is money!”
Many years ago, publisher Tim O’Reilly, in writing about the topic of “piracy,” wrote this much-quoted observation: “Obscurity is a far greater threat to authors and creative artists than piracy.” To paraphrase Tim, “Obscurity is a far greater threat to authors and creative artists than giving away something for free.”
Except for a few exceptions, I’d be willing to say that most business book writers make more from appearance and consulting fees that result from the book, than from the book itself. Again, I can think of exceptions to that even as I write it. Chris explains in his book that that is his business model.
This book has been greeted with mixed critical response and a little bit of controversy, but the fact that it is being written about and is available in so many paid and free versions will drown out anything negative that is written about the book. In the end, people are talking about it (the opposite of obscurity) and when you’re in the third meeting in a week where someone quotes a book (as I have been in the past week), you make a note to order it on Amazon when you get back to the office — and pay full retail for the convenience.
*A couple of years ago, I blogged about advertising-supported books, including a late 1980s project called the Larger Agenda Series from Whittle Communications.
**Thanks for the headsup to RexBlog’s go-to expert on all things Kindle, Aaron Pressman.
I’m trying my best, but I can’t comprehend why book publishers should care what the gross revenue of a title distributed via eBook format is if the publisher and author still receive net revenues (after costs of goods sold) equal to or greater than what they receive for the hardback format. But, according to this article in the Wall Street Journal, there are book publishers who are pushing back on the notion of releasing an eBook version of a new book for a price any less than the retail price of the same book’s hardback version.
“Prices of e-books should be shaped by cost structures and customer demand rather than by comparison to traditional paper book pricing.”
Back to my question: Why should publishers care about the retail price of a book if they could increase their margins on each book sold at a lower price but delivered digitially? Here’s the math on that, again from Anand and Olson:
If we assume that the average retail price of a print book is $10, then the average wholesale price is $5 (the $5 difference represents the retailers’ costs for store rent and personnel, including a profit of, at most, only 50 cents for the retailer); the costs of paper, printing and binding are roughly $1, the author’s royalties (15 percent of retail price) $1.50, internal publishers’ costs (including marketing, sales, warehousing, inventory management and distribution) of approximately $2, on average, leaving a publisher’s margin of 50 cents.
About half of these costs vanish in the e-book world since the store rent and personnel that make up much of the $4.50 are unnecessary; $1 of paper, printing and binding are not be incurred; and an estimated 50 cents of publisher costs related to functions such as warehousing, inventory management, production management and distribution disappear.
In other words, if you follow Anand and Olson’s logic (as I do) the publisher’s bottomline is larger on a greatly discounted (from hardback) digital version of a book, even if the author’s royalty continues to be benchmarked to the full retail price of the hardback version.
Sure, there are those who lose out if a book is purchased in an eBook format, but it is not the publisher or author, rather, they are: Printers, binderies, shipping companies, book wholesalers, physical store retailers (both big box and independent).
If the publisher’s responsibility is to maximize the revenues to the author and to his or her company, it makes little sense to raise eBook pricing.
But I do agree, there can be exceptions: As Anand and Olson suggest, eBooks offer the opportunity to experiment with various pricing scenarios. For example, eBook distribution could provide publishers with the opportunity to sell books like music — in albums or collections. Or, perhaps, there could be dynamic pricing with additional premium content for a higher price or for pre-release access.
Just don’t blow it, publishers.
(Bonus enigma observation: The same Anand/Olson pricing argument could be applied to audio books. However, audio books distributed via physical media (price of Jon Meacham’s American Gospel via CD: $24.05) and audio books distributed digitally (the same book on audible.com: $23.07) are roughly the same price. In other words, book publishers have been able to discourage the expansion of the online distribution of audiobooks for years.)
I’ll admit, I got a bit of a head-start on the project because a couple of months ago, I purchased the Kindle version of the book after reading Aaron Pressman’s account of how the flow of the book is changed (for the better) by having hyperlinked endnotes. As the whole footnote thing is but one of the challenges of the post-modernist work, I decided to once more give the book a try. Doing it via a Kindle also means I can carry the book with me at all times (it’s on both my Kindle and my the Kindle-App on my iPhone — although the footnotes don’t work the same on the app version). Because the Infinite Summer project is broken down into 75-page per week increments, I feel a little more inclined to read the book in short chunks than I would otherwise. (It helps if you can read multiple books at one time — which is something I’ve done for a long time. I figure if I can keep up with characters and plots of multiple TV series, I can do the same with books.)
Anyway, since one of the non-starters for Infinite Jest is its sheer heft, it’s interesting to me that such a community who lives in a real-time, digital, 140-character world has been drawn to this bookish-meme. On the other hand, there is so much about the book that is entertaining and intriguing to those of us who are fascinated (obsessed) with the role that technology, marketing and media plays in our lives, that it makes sense the book is popular with this group. And by slowing down and reading the book a few paragraphs — or a few sentences at a time — one realizes that it’s not the volume of the book, but the precision of the book, that is most impressive.
For me, reading the book also corresponds with a renewed interest in tennis after several years of setting aside what used to be a big passion of mine. While one doesn’t need to know anything about the game to follow the narrative — Wallace footnotes and explains everything you could possibly not understand — it adds a layer of interest if you have ever been even a bit obsessed with the game.
Which leads me to on last thing.
Yesterday, Esquire magazine posted on its website a 1996 piece written by Wallace that is a nearly 12,000-word examination of the “physics and non-physics” of tennis. The article is, in Wallace fashion, filled with endnotes. But check out the javascript(?) pop-up that appears if you hover your cursor over the endnote number. That’s an example of how a publisher can “enhance” content by moving it from one medium to another, rather than just “repurpose” or “port” it.
*I would call this a “book club,” but the geekish crowd doing this makes the notion of “book club” seem so Oprah minutes ago. This is the kind of group that has a Google Calendar of suggested reading goals that has both page numbers and whatever one calls the numbers at the bottom of a Kindle screen. And did I mention the Infinite Jest Wiki, a totally separate project, but I’m just saying?
**If I’d written this a few weeks ago, I would have said such a long-piece about tennis would be impossible to find in a magazine today — but that’s before I saw (but haven’t read yet) Cynthia Gorney’s recent 8,500-word profile of Rafael Nadal, “Ripped (Or Torn Up?)” in the New York Times Magazine.
Like Anderson’s previous blockbuster book, The Long Tail, the new book started out as a Wired magazine cover story — so the ideas he puts forth in it have had lots of time for debate and pre-first guessing (or whatever you call sped-up second-guessing) in the blogosphere and elsewhere.* Also, as the original article was written before the economic meltdown, it will be interesting to see how a gut-wrenching recession may have altered the reaction the book will receive in the marketplace when it is officially released next Tuesday, July 7.
The publisher has reportedly already printed 80,000 copies of the book, so there’s a lot of cash riding on a book called free that costs $26.99 retail ($17.81 on Amazon).
In any discussion of the “power” of free (its marketing power was known long before the advent of the internet), there seems always to be a lot of rehashing of brands and products that have included “free” in their business models over the years: Think Gillette — give the razor away free, make money on the blades. Or think of almost anything one provides “free” that results in an indirect benefit rather than a direct benefit. My current favorite personal debate along these lines has to do with paid vs. free wifi. While all hotels and airports understand the value of providing the comfort of free air conditioning and restrooms to their passengers and guests, why do some hotels and airports not extend such logic to free wifi access to the internet while others do? Obviously, the answer has to do with the understanding by those airports who provide free wifi that the return on that “free” comfort/service is far greater than the licensing fee revenue they receive from selling internet access. Here’s one: One will arrive early at an airport with free wifi knowing they can be productive while waiting. More time that means more money spent in the shops and restaurants in the airport. Conversely, if one travels a lot and encounters paid wifi in airports and hotels, the value of purchasing a wireless 3G modem from a cell-phone carrier becomes easily apparent. (The current favorite public debate over this topic is free vs. paid content from newspapers — a topic Gladwell focuses on.)
What benefit do I get out of posting this item for free — or of doing anything on this blog that gives away ideas or suggestions I run across that may help someone — even a competitor — do something they may charge others for.
Well, hmmm. Let’s think.
Once I got an e-mail from Chris Anderson asking if it would be okay if he gave my name to a publishing group who wanted him to speak about how “the long tail” might affect magazine and journal publishing. As it was a publishing group and he’d read several posts I’d written regarding the book (or maybe the article), he knew I was at least somewhere in the ballpark of correct in explaining the concept to a group of publishers. More important to Anderson, I think he was probably making a few thousand dollars per speech at the time (vs. the “you can’t afford it if you have to ask” levels he makes now) and he knew I’d probably speak to the group for something closer to their budget, say, several one dollars for airfare and a room at a Hampton Inn.
Of course, I spoke. And for that group, I decided to do it for free for the opportunity to one day post (I’m using up that opportunity right now) that I can speak when you can’t afford Chris Anderson. Fortunately, at the meeting, someone heard me who had a specific nugget of information that has turned into a very worthwhile return on my investment of giving something away for free.
The whole notion of “free” is whirling around the media business these days — especially whirling around newspapering executives who want to equate “the business model” of leveraged rolled-up national newspaper chains with some notion of “journalism” or “free press.”
The argument by the rolled-up leveraged media executive is this: Giving away something for “free” always means that something that’s “paid for” will get killed.
I on the other hand, believe this: Free always kills things that are charged for, except when it doesn’t.
It’s sort of like the last line in Gladwell’s review of Anderson’s book:
“The only iron law here is the one too obvious to write a book about, which is that the digital age has so transformed the ways in which things are made and sold that there are no iron laws.”
As for whether or not the book will be a big hit? I predict it will, but the money it makes will pale in comparison to the appearance fees Anderson will continue to receive.
*On another front, the book Free has already stirred some controversy over free content included in it without citation. That’s called plagarism when someone I don’t know does it. However, when it’s someone I respect and trust and whose magazine and blog I’ve read for years, I give them the benefit of the doubt when they explain what happened, admit the screwup and take time to explain — not trying to get excused, but to explain — the screwup in great detail.
Update:Anderson responds to Gladwell’s focus on “the future of journalism” debate. Great quote in the post: “My business card says ‘Editor in Chief’ but if one of my children follows in my footsteps, I suspect their business card will say ‘Community Manager.’ Both can be good careers.
Here is the first paragraph of a story in Monday’s New York Times describing a new way that individuals or publishing companies can upload digital documents for sale on Scribd.com:
“Turning itself into a kind of electronic vanity publisher, Scribd, an Internet start-up here, will introduce on Monday a way for anyone to upload a document to the Web and charge for it.”
A “vanity publisher”?
The term “vanity publishing” is a pejorative implying that the writer could not get something published, so he or she paid a publisher to print up a few cartons of books that collect dust somewhere. Historically, vanity publishers were little more than scam artists whose revenues did not come from selling books, rather by hard-selling dubious services to people who wanted to see their books in print.
Yet during the past 15 years, though advances in print-on-demand book technology and now, a growing interest in digital books, there are a wide-array of services that enable would-be authors the opportunity to place books into the marketplace without having to pay “vanity publishers” to print up hundreds of books.
Nothing in the New York Times article today reveals what authors will be charged to have their books available on Scribd. I’m assuming the up-front costs will be minimal — or free. Such is the case with a new generation of on-demand print and digital publishing services like Lulu.com, that have transformed “vanity publishing” into a legitimate and viable business and opportunity for independent and self-publishers.
The days when someone needed to purchase a few thousand dollars worth of books to be “published,” are long-gone (although scam vanity-publishers still are around).
The use of the term “vanity publishing” to describe all forms of self- and independent-publishing should be long-gone, as well.
Update: Back to the main story, now that I have that rant off my chest. The Scribd Store has launched and I give it a insta-review thumbs-up. Scribd has been under fire recently for being a place where pirated e-books could be found. This move displays the service is run by people who are aware that liabilities can sometimes be turned into assets — for all concerned.
“For a publisher (and I use the term loosely) the terms for the Scribd store are impressive — publishers set the sale price directly, and keep 80% of the revenue (compare that to Amazon’s DTP program, where the standard terms are that Amazon gets to set the actual price, and the publisher only gets 35% of their “suggested” price). There’s also an interesting “automated pricing” option in Scribd, which uses an (unspecified) algorithm to set the sale price. But the pieces of the Scribd store I’m most excited about is the real-time reporting (compared with a lag of a month or more with most ebook resellers, including Amazon), the option to easily provide free updates to existing content, and the variety of adjustable display options — like preview amount, refreshingly optional DRM, and purchase-link images. Administering and understanding your sales in Scribd is downright delightful compared with the same for Kindle.”
When the Kindle II was released earlier this year, it included something Amazon touted as a “read-aloud” feature. Here’s a quote from NYTimes.com’s live-blog coverage of the release event on February 2: “Any book, blog, magazine or personal document can be read aloud,” Mr. Bezos said. “It’s very easy to go back and forth between reading and listening.”
Bezos & Co. chose to position the feature as something new and unique.
Unfortunately, publishers and authors, heard the announced feature as being something that could easily cannibalize the highly profitable “audible book” market. (I haven’t heard the Kindle II automated voice, but I feel certain it would never cannibalize a customer considering the choice between a computerized digital voice and, say, James Earl Jones reading the Bible.)
Obviously (and it should have been obvious then), Amazon should have positioned the “voice-over” service as an accessibility utility that is exactly the same type of utility that can be found on any computer, be it a Mac, Windows or Linux. In other words (the words Amazon should have used at the announcement if it wanted to bring up the feature), Amazon was providing those with vision impairments the same accessibility they have when using other technology. Let me try this again: Any e-book on a computer can be “listened to” using free accessibility utilities.
But no, Amazon blew it. They characterized the utility as “a feature” and created a backlash among publishers and authors who saw it as an assault on their high-margin audible books. So all hell broke loose with the Authors Guild. They immediately issued a statement blasting the “speaking” Kindle. And so, Amazon backed down and announced that authors and publishers could disable the feature.
And then, people who have fought hard for such accessibility tools on technology jumped into the fray. So then, the Guild’s president, humorist Roy Blount penned a New York Times op-ed trying to explain why the Guild was protesting. His piece featured his wry wit, but his argument hinged primarily on the fact he knows Andy Aaron of IBM who once told him that IBM’s text-to-speech technology could one day produce a southern accent. Again, witty, but proof Blount’s skills may be better for NPR game show repartee than serious policy debate.
And now, not only is Amazon catching it for trying to market “an accessibility utility” as a unique “feature,” but the Authors Guild is under-fire for its strong-arm tactics.
And CNN “iReporters” were there to catch the action:
Things would have been so much simpler had Amazon marketers and the Authors Guild had eyes to see and ears to hear. Next lesson: How to respond to lawsuits and ADA investigations.
Please note, I gave this post the title “Guessay,” which is a portmanteau of the words “guess” and “essay.” What you’ll read in this post is my conjecture based on several years of tracking one topic, first as a joke about Apple “fan-boys,” then out of geekish curiosity and now, with legitimate, business-related interest.
For three years, I’ve regularly posted items about something I call “Rumor #3, a device that is an oversized iPod Touch. As I’ve explained before in detail, I started describing this device before there were such things as an iPod Touch or iPhone. In some ways, these posts have been a running gag for me. However, as the owner of a media company that develops and manages magazines, video and an array of online media for corporate and association clients, I have a professional passion that causes me to always look for new ways in which old and new media can help develop closer relationships and conversations between people who work at organizations and the individuals they serve.
And so, with this background and a little bit of piecing together some fragments of a puzzle, I’ve decided it is time to post this guessay that attempts to put forth some predictions that will soon prove I’m an insightful technology forecaster, or (and this is what makes blogging fun) that it’s time you pulled my RSS feed off your newsreader.
Let me acknowledge also that all of the pieces of this story are not “new,” it’s just my piecing together of several parts of the puzzle and stepping out on a limb that is.
The 2009 introduction of a Rumor #3 device has been swirling for months: Starting back in December, TechCrunch said an oversized iPod Touch would launch this fall. A couple of weeks ago, there were rumors about Apple placing orders for 8×10 inch touch screens. Yesterday, there were rumors about some mystery code in the next generation iPhone/iPod Touch beta. But to me, more telling than any of these rumors, however, was the recent release of the Kindle iPhone App. This was a piece of the puzzle that I wasn’t expecting. However, after using it a few weeks, I’ve come to understand how (as I’ve said for three years) the new Apple device is not an eBook reader in the way the Kindle is an eBook reader, and so therefore, Apple is going to work with Amazon, rather than compete.
Also, I forgot to fill out an NCAA tournament bracket, so I was feeling that I should make some complex prediction that requires some far-fetched theory, so here goes:
Within the next 45 days, not later than May 1, Apple will unveil the “Rumor #3 device” — an oversized iPod Touch.
The comparative size
of an iPhone, a Kindle I
and an 8 x 10″ display.
The device will be an iPod Touch, not a netbook or a tablet computer: I can’t emphasize this enough: It’s not going to be “an eBook reader” (or a “Kindle Killer,” see below) or “a netbook.” I don’t believe the device will have a physical keyboard and Apple will be explicit in its marketing that this is NOT merely an “eBook reader” or in any way, a computer replacement. It will be marketed as a complimentary device that fits between your iPhone and desktop or laptop computer. It will operate just like an iPod Touch but the display will replicate the foot-print and weight of a spiral-bound notebook popular on college campuses. The rumored 8×10″ screen means the full device will have dimensions extremely close to the size of a standard 8 1/2 x 11 inch sheet of paper.
The first marketing push will be towards University students: The larger format for music/HD movies/YouTube app/Facebook app — those are all no-brainers for you to understand why this will appeal to this group. But think “interactive textbook applications” that will automatically synch with your computer via iTunes. For those familiar with the iphone, web and desktop software application Evernote, think of a textbook that way: a multimedia application that allows you to take notes (written, photographed or recorded) that synchs in real-time to the iPod, to the web and to ones computer desktop. Oh, and did I mention, it will hold lots of your music and you can watch HD movies or you can stream YouTube video. In fact, the reason I’m guessing an April unveiling of the device is related to the text-book “app” possibilities it offers. The first great opportunity for sales of this device is not the fourth-quarter holiday season, but the “back to school” window. One of the few promotions Apple runs year-after-year is one in which a person with a student ID can purchase a new Mac and receive a free iPod. While I doubt they’ll be giving the devices away, I believe the promotion will be centered on this device and will include a tremendous discount. I believe you’ll also be seeing an explosion of university-oriented and campus-specific iPod/iPhone Apps appearing during the summer, as well.
The price of the device will be no more than $500.
This is not a “Kindle Killer”: When it is unveiled, there will be lots of analysis about what this device will do to the Kindle. However, that type of analysis will miss the point of what this device is all about. I think the Kindle will find a place among those who want a single-function gadget that is as close to reading a physical book as possible. (Think book lovers, not gadget freaks.) The developers of the display technology used on the Kindle have been obsessed with replicating paper for decades and in that, they’ve been successful. Amazon has created a device and e-commerce process that makes purchasing books for that device drop-dead simple.
But Amazon, by releasing the iPhone Kindle reader App, has also demonstarted a “Second Phase” that is central to the company’s core expertise: It sells books. While I predict that within 18 months, more “Kindle-format” ebook files will be read via the iPhone App than on Kindles, there will still be plenty of Kindles around — and they will continue to be loved by those who want to use reading lights and have a battery that lasts for 20 hours. And Amazon will be making lots of money selling Kindle books to people who don’t own a Kindle.
Steve Jobs will announce the product: Again, this is a guessay. But I believe Steve Jobs will view this device as belonging to the pantheon of god-like products for which he’ll long be remembered.
Final thoughts: A couple of years ago, when I first wrote about such a device in comparison to the Kindle, one of my favorite bloggers, Michael Hyatt, the CEO of Nashville-based Thomas Nelson, the sixth largest book publisher in the U.S., made a comment on my post.
In that comment, Michael wrote:
“I would much rather have an Apple Touchbook than the Kindle (which I own). However, you’re forgetting one small detail. The device is only one-third the equation. iTunes is another third. So far so good. A seamless way to get content from the store onto the device. What Apple is missing is the RELATIONSHIPS. They don’t have any relationships with book publishers that enables them to get access to the content…Could Apple develop these relationships? Sure. My point is that they haven’t started and this is where Amazon has a leg up. For most of us, they are one of our largest customers and we trust them.”
I wonder if Apple has started developing such relationships? I’m sure Michael or others in the book publishing world may already have a good clue as to whether or not the guesses in this post have any merit.
But unlike when Michael wrote that comment, Apple may not even need a direct relationship to kick off this product.
Maybe that’s what the Kindle iPhone/iPod App is all about.
On May 1 or before, I look forward to seeing how my iPod Touch bracket predictions played out.
[Note about the photo illustrations: At the top of the post is my attempt to photoshop (actually, I used Keynote, but I'm using "photoshop" as a generic verb) something that would compare the scale of a current iPod Touch to one that is 8 1/2 x 11 inches. The photoshop illustration on the left of this story compares the size and display of an iPhone, Kindle and 8x10 inch horizontal display.]
Jeff Bezos officially unveiled the second generation of the Kindle yesterday. Here’s the press release and engaget has a hands-on video. (I would write more but I’ve outsourced any blogging on the topic of eBook readers to Aaron Pressman. Background: I am a power user of a Kindle, but think one day there will be a device that makes more sense in a multimedia era. Opinion: I assume Apple will offer one eventually, but I anticipate several on the Android platform.)
To mark the announcement of Kindle 2, here are some numbers to consider:
0: Number of leatherette covers that come with the new Kindle. (Unlike Kindle 1, you have to pay extra for the black cover.)
230,000+: Number of books on Amazon.com available for purchase in the Kindle format.
1,500,000: Number of public domain books digitized that can be read free on a mobile device’s web browser via Google Book Search. (The Kindle has a web browser, but it’s primarily a novelty feature.)
27,000+: Number of public domain books that can be downloaded free from Project Gutenberg that can be read using any eBook reader, computer and most smart phone and mobile devices.
200: Number of books held on Kindle 1’s internal memory. (1,500+ with memory card.)
1,500: Number of eBooks that can be stored on Kindle 2’s internal memory. (No slot for memory card.)
6,487: Number of books Thomas Jefferson sold to the Library of Congress after their 3,000-book collection was lost in a fire during the War of 1812. At the time, said to be largest collection of books by any individual in the U.S.
