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Digital Change in Publishing: a lesson learned in the US
Digital Change in Publishing:Lessons Learned in the US<br />Mike Shatzkin<br />To the IfBookThen Conference<br />Milan, Italy<br />4 February 2011<br />
A brief history of ebooks in the US<br />Why America was first: 300 million people, one language, one set of commercial laws<br />It started complicated in the early 1990s: Voyager Expanded Book and CD-Roms<br />Simple straight text in late 90s: Rocket Book, Softbook, then PDAs (Palm and MS) plus PDFs on PCs<br />Sony Reader introduced in 2005<br />Into 2007, Palm “dominates” device reading in a miniscule market<br />2<br />
But with the arrival of Kindle, everything changed<br />Kindle introduced November 2007: almost instant success<br />Why? Title selection; direct downloads; good reading experience; Amazon audience<br />And pricing<br />But that caused problems for publishers<br />3<br />
Why publishers wanted to restrain Amazon’s growth in 2009<br />Two segments of growth: online print sales and device-read ebook sales<br />Amazon market share north of 70%, perhaps 80% on both<br />Proven willingness to twist arms for margin<br />Online sales hegemony probably unassailable<br />Kindle alone was locking up heavy readers<br />Amazon’s very aggressive pricing was scary<br />4<br />
Agency was their answer; and maybe it worked<br />Key to agency: price set by publisher, not retailer<br />Five of six top US publishers do it; so most top titles are price-controlled<br />Amazon device ebook share drops 30-40%<br />Other factors: Nook, iPad, Google<br />5<br />
Experience with ebooks so far:some lessons learned<br />Price matters a lot, but high priced branded books can sell (even at $20!)<br />Early device adopters tend to be heavy readers (practical and financial reasons)<br />Effective interoperability was important, but provided within “closed” systems<br />Ebook sales, at least at first, are frontlist-driven<br />Impact on brick-and-mortar: significant<br />6<br />
And now America exports an ebook infrastructure<br />Three big companies might dominate the global ebook market, all American: Amazon, Apple, Google<br />Wild cards (at the moment): Kobo, Sony<br />And longer shots: Copia, Blio, consumer electronics players and mobile phone players<br />And a US player which should go global: B&N<br />7<br />
These players come with capabilities and audiences<br />All sourcing titles in all languages<br />All have multi-device platforms<br />Each has, or is developing, a separate content-focused app market; separate opportunities, separate platform challenges (Apple, Android in flavors, and Kindle – so far)<br />Many have ambitions to control some content exclusively<br />8<br />
How can local ebook resellers compete?<br />Carry titles in all languages<br />Deliver multi-device functionality<br />Keep up with features (lending, notes, dictionaries)<br />Deliver impeccable customer service<br />Provide local propositions for libraries and institutions<br />Deliver local in-store support and promotion (the B&N example)<br />9<br />
And retailers need to play to native strengths<br />Work with local authors, IP owners, and brands to capture and provide unique content<br />Maximize knowledge of local content silos, pricing practices, and rights<br />Market to your own language-based customers globally!<br />10<br />
What publishers should be thinking about<br />Don’t waste resources defending print; you can’t<br />Rethink your capabilities to gain advantage in digital: products and marketing<br />Don’t be fooled by a currently trivial ebook market, pricing protection, or VAT issues: US tells you change comes faster than you think<br />Be conscious of verticals; think about audiences you serve, not just IP you own<br />“Start with XML”: workflows must deliver print andepub<br />11<br />
We’re all global publishers now<br />Know Amazon, Apple, and Google like an American<br />Rethink exploiting your own IP: should you do an English edition? Or a dual-language ebook?<br />Rethink rights acquisition; should you acquire by territory instead of by language?<br />Recognize English-language books as a competitor at home; use price, release dates as weapons when you can<br />Accept this reality: bookstores will decline<br />12<br />