Building a new world publishing business:Lessons from StanzaO’Reilly TOC ConferenceThe Future of the Book ConferenceNeelan ChoksiCEO, Lexcycleneelan@lexcycle.comtwitter: stanza_reader24 June 2009

Who Am I?CEO, LexcycleFormer COO, SpringSource – open sourcePresident and Co-Founder of SolarMetric (acquired by BEA Systems in 2005)Previous Employers – Exxon, Andersen Consulting, TechTrader, MIT Blackjack TeamExternal Board Seats – SpringSource, TasktopBS from MIT, MS from Stevens Institute of Technology, MBA from Univ. of Chicago Booth

eBooks – Inflection Point$68 million US Wholesale eBook sales last 4 quarters* Source: IDPF US Trade Wholesale Electronic Book Sales

Small but Growing Fast…2008: 0.467% of all books sales were eBooks per the AAP2008: 0.6% of all books sales were eBooks per Bowker Pub-TrackQ109: 2.4% of all books sales were eBooks per Bowker Pub-Track

The Drivers of the Opportunity

Mainstreaming of e-booksOprah Effect

Big Name Vendors

New HardwareNetbooksLots of new eReaders

Improved Displays: E Ink

Improved Mobile DisplaysLarger touch screens w/ crisp colorOTA, wirelessApp Store

Last 6 Months in eBooksJan 26 – Classics featured in iPhone TV advertisementFeb 5 – Google Book Search for iPhoneFeb 9 – Amazon Kindle 2 LaunchFeb 16 – Adobe Reader Mobile SDK 9Feb 25 – Indigo Shortcovers launchedFeb 27 – Hearst announces plans for eBook readerMar 4 – Amazon Kindle for iPhone LaunchMar 5 – B&N acquires FictionwiseMar 17 – Apple iPhone 3.0 O/S announced (eBook examples)Mar 19 – Sony and Google – 500,000 booksMar 23 – Borders UK ends iLiad for cheaper e-Book readerApr 3 – Lexcycle’s Stanza 1.8 availableApr 8 – Lexcycle, Adobe, Internet Archive release catalog spec - OPDSApr 11 – B&N / Sprint ereader discussions announcedApr 27 – Amazon acquires LexcycleApr 28 – Rumors of Apple “Media Pad” reported by Business WeekMay 6 – Amazon announces Kindle DXMay 13 – Sony announces 3rd party advertising in Sony ReaderMay 27 – Interead COOL*ER debuted at BEAJune 1 – E-Ink acquired by Prime ViewJune 8 – ScrollMotion featured in WWDC keynote

Stanza Overview

iPhone DistinctionsAs an eReader:International reachColor displayMulti-function deviceBuilt-in wirelessNo external light requiredApp Store – 55000 apps15% of smart phone market; 50% of web hits

Stanza iPhone & iPod Touch1.8 million users in 60 countries Over 8 million books downloaded 100,000+ books available (half free) Books in 35+ languages Featured in: NY Times, Boston Globe Time “Top 11 iPhone Applications” Forbes Wired “10 Most Awesome Apps” iTunes Top Applications of 2008

1.8 million users in 60 countries

Over 8 million books downloaded

100,000+ books available (half free)

Books in 35+ languages

Featured in:

NY Times, Boston Globe

Time “Top 11 iPhone Applications”

Forbes

Wired “10 Most Awesome Apps”

iTunes Top Applications of 2008

Stanza User CustomizationsApp available in 12 languages21 fonts optionsWide range of font sizes135+ font colors135+ background colors + nearly 30 background textures; choose your own background imageCompletely customize layout: alignment, hyphenation language, margins, line spacing, paragraph spacing, paragraph indentationAdjust behavior: page turn effects, book rotation

Primary UsageIn bed – 31%Commuting on bus / train – 28%In waiting areas – 13%At home – 12%At work – 5%At a bar or café or lunch or dinner – 5%On an airplane – 5%2 write-ins mentioned “In the bathroom”Readers enjoy having access to their library at all times in their pocket or handbag

Stanza and Publishers, Retailers, and Distributors

Publisher PromotionsPan Macmillan Excerpts – first to notice StanzaRandom House Free TitlesBack list of certain authorsIncluded excerpts for forthcoming booksHarlequin Free Titles4 free “Minis” in December16 free titles from each imprint in JanuaryBloomsbury 24 hour giveaway (UK only)Circle of Seven Book Trailers

Back list of certain authors

Included excerpts for forthcoming books

4 free “Minis” in December

16 free titles from each imprint in January

Sources of Free ContentHarlequinFeedbooksProject GutenbergMunseysBookGluttonRandom HousePan Macmillan (excerpts)

Partner with Existing Referral Retail PartnersDRM-enabled – currently only eReader formatIngram Digital is exclusive distributor for Fictionwise for DRM-enabled eReader titles DRM-free – EPUB and eReader format supportBooks On BoardFictionwiseSmashwordsAll Romance eBooksO’Reilly MediaBuying patterns representative of print sales

Ingram Digital is exclusive distributor for Fictionwise for DRM-enabled eReader titles

Books On Board

Fictionwise

Smashwords

All Romance eBooks

O’Reilly Media

Stanza BookbinderCreate standalone books applications for sale directly in iTunes App StoreBookbinderAnd more …

Lessons Learned

Lessons Learned - ReadersIts all about the people who are reading!

Lessons Learned - Readers(continued)Holistic view of the entire experience for a reader:Not enough to focus just on one piece. Readers expect more.Search / browse contentFind bookStart ReadingDown-load bookPur-chase bookAvailable via partners.

Lessons Learned - Readers(continued)Moving users from established behaviors takes time and patienceFriction = badImmersive readingThe bar is constantly moving up on everythingReading experiencePurchase experienceDiscovery

Reading experience

Purchase experience

Discovery

Publisher LessonsCalls to action need to be clear and contextualKISS – make it simple for the user Hold your technology providers, conversion houses, and distributors to a higher standard Keep experimenting – be bold Have a budget for marketing e-booksThink about multimedia and enhanced content

Publisher Lessons(continued)Figure out ways to support your authors better in the electronic worldWebsitesBlogs, Twitter, Social Networking, Book TrailersUnderstand the technologyDon’t let this just turn into a blockbuster industry:Find self-service methods and appropriate revenue splits for mid-tier authorsDon’t let “The Shack”s of the future slip away

Websites

Blogs, Twitter, Social Networking, Book Trailers

Understand the technology

Find self-service methods and appropriate revenue splits for mid-tier authors

Don’t let “The Shack”s of the future slip away

Author LessonsMake sure your publishers are making your books available electronically:Minimum formats: PDF,AZW, EPUBDon’t leave marketing just for the publishers:Twitter, Blog, You Tube, DiscussionsBe out there

Minimum formats: PDF,AZW, EPUB

Twitter, Blog, You Tube, Discussions

Be out there

Building a new world publishing business:Lessons from StanzaO’Reilly TOC ConferenceThe Future of the Book ConferenceNeelan ChoksiCEO, Lexcycleneelan@lexcycle.comtwitter: stanza_reader24 June 2009