(Second of a series)

Last week, we looked at the ebook’s Giant Disruption. A new ecosystem in which Amazon eats publishers’ and agents’ lunch by luring authors into self-publishing.

Today, we examine the new regime’s impact on book-making and distribution processes.
The outcome will surprise few readers: Over time, the new book publishing business will look more and more like the software industry.

1/ Managing abundance. Traditional publishing’s most salient feature is the maintenance of high barriers to entry. The journey from manuscript to bookstore is an excruciating one. Publishers are deluged with books proposals; a quick glance at a few pages and the bulk of submissions is rejected. Still, far too many books get published. Several Parisian booksellers told me they sometimes have to return unopened boxes of books to distributors, simply because they don’t have enough space for them. Therefore, the 80/20 rule applies: most of the revenue comes from a small assortment of books. Digital publishing removes those barriers –brutally so: the floodgates are now indiscriminately open to every aspiring writer. This will have two effects: more difficult choices for the reader (see Barry Schwartz TED’s talk on The Paradox of Choice) and, on average, lower quality products.

Overtime, two factors will help solve the problem of the choice: search engines and manual curation. As semantic search rises, books content gets treated like data, searchable not only by words clusters, but by variations of meaning, pitch and, at some point, style. Put another way, a search engine will soon be able to differentiate and to attribute texts written by two novelists working in the same segment of literature.
Such breakthroughs will impact recommendation engines systems that already act a serious sales booster. Again, tech companies, such as Amazon (more than Apple, which does not seem to “get” search) will ride the wave thanks to their past and future investments into search and data analytics.

Semantic recommendation engines won’t kill the need for human curation. Like the app business where abundance creates a need for more human-powered guidance and suggestions (see Jean-Louis’ idea of a Guide Michelin for Apps), book sections of magazines and newspapers will have to adapt and find ways to efficiently suggest e-readings to their audience.

2/ The need for editing. The most potent selection tool will remain the quality of the product. In the iPhone/iPad AppStore, Apple guarantees the overall technical quality of what lands on its shelves. Apple’s primary motive is to avoid poorly coded apps that crash or, worse, interfere with the inner core of the iOS. No such things on Amazon. Once a manuscript is properly formatted (not very complicated), it’s eligible for sale. That’s where reality barges in. Many self-published authors insouciantly flog texts replete with grammatical errors and typos. Very few seem to rely on proper editing and proofing, this is the main divide between amateurs and pros. Editing is both a mandatory and costly process — but worth every penny. It is probably the most critical part of the value added by traditional publishers. In the digital world, it must remain a key component of the process.

3/ Segmented manufacturing. Self-published ebooks won’t escape the laws of digital economics, of decentralized and specialized crafts. Here again, ebooks publishing and the making of applications converge. The entire process will be handled by dedicated freelancers focused on specific tasks: manuscript formatting (easy for text, but complicated otherwise); cover design — it will become more important as digital bookstores gain in sophistication; editing and copy-proofing the manuscript by a competent and well-paid professional, etc.

At a higher level of complexity for a book production (rich media contents, interactive learning features and more), two forces will kick-in: cloud computing and offshore outsourcing. The most recent example is the San Francisco-based startup Inkling: last month, the company made its own cloud publishing setup Habitat available to the general public. It went a step further by relying on companies such as Aptara, a US corporation with the bulk of its 5000+ workforce located in India. Note that Aptara is a contractor for almost all traditional publishing houses such as Hachette Livre, Pearson, Oxford University Press… Inkling will bypass publishers by connecting customers and contractors through a collaborative platform that provides highly sophisticated correction and versioning tools. It is no incident that Matt McInnis, Inkling’s CEO, is an alumnus of Apple’s education division, as told in this recent Bloomberg BusinessWeek story.

Ebook publishing is often linked to value depletion for the entire food chain. Ebooks obey the other digital law: low price, high volumes. In this case, extremely low prices. But evidence shows professional authors can find their way in the new world.

Take thriller author and self-publishing advocate Joe Konrath. His blog is a well-documented plea for getting rid of what he calls “legacy publishers”. A year ago, he posted a 13,000 words dialog with his pal Barry Eisler. Eisler, is a former CIA operative; at the time, he was making headlines for turning down a $500,000 deal from his traditional publisher and taking the self-publishing road instead. I recommend reading their conversation, especially when the two discuss business strategies, such as the time-to-market problem:

— Barry Eisler: [Time to market]  was one of the reasons I just couldn’t go back to working with a legacy publisher. The book is nearly done, but it wouldn’t have been made available until Spring of 2012. I can publish it myself a year earlier. That’s a whole year of actual sales I would have had to give up.
— Joe Konrath: We can make 70% by self-publishing. And we can set our own price. I have reams of data that show how ebooks under $5 vastly outsell those priced higher.
— Barry Eisler: This is a critical point. There’s a huge data set proving that digital books are a price-sensitive market, and that maximum revenues are achieved at a price point between $.99 and $4.99. So the question is: why aren’t publishers pricing digital books to maximize digital profits?
— Joe: Because they’re protecting their paper sales.
— Barry: (…) Fundamentally, it’s extremely hard for an industry to start cannibalizing current profits for future gains. So the music companies, for example, failed to create an online digital store, instead fighting digital with lawsuits, until Apple–a computer company!–became the world’s biggest music retailer.
— Joe: I was in love with the publishing industry. It was my dream to land a Big 6 deal. And I still believe the industry is filled with intelligent, talented, motivated, exceptional people. I’m grateful to have sold as many books as I did (and continue to do.) My switch to self-publishing isn’t personal. It’s just business. I can make more money on my own.

For context, among tons of books Joe Konrath wrote, one, The List, was first rejected by a New York Publisher in 1999. In April 2009, he self-published it on Amazon for $2.99 and sold a first batch of 25,000 copies. Then he took the price further down (!) and had sold 35,000 copies at the time of the interview (March 2011). Today, The List is now available on Amazon for $11.97 (paperback, 310 pages) or $4.01 in Kindle format.

Before wrapping this up, I’ll answer a Monday Note reader who asked what would I do if I had to publish a book today. Like most journalists, I’m not short of ideas; my two most advanced projects are a global techno-thriller and an essay about internet economics. (Because of my day job, they are likely to stay untouched for quite a while…)
To me, it’s a no brainer: I’d go digital, especially if I publish in English.
Among the reasons:
Time to market: I’m not exactly the patient type who’ll wait for a release window that will fit my publisher.
Pricing: I’dont want to compete against well-established authors releasing their opus in the same format for the same price. Mine has to be lower.
Size and scope: I want to be able to publish a book with a number of pages based on the subject’s scope, as opposed to antediluvian dictates saying books should have x hundreds of pages.
Updating capabilities: for a business book, being able to quickly make a new version with fresher data (or thoughts) is a must.
Control: I like the idea of picking the professionals who will help me with editing and design; no such freedom with a traditional publisher. Same for marketing and promotion; there, given the level of frustration I often see authors endure, I’d rather go by myself, or hire the right person to do it.
Permanence: an ebook never dies; it’s as easy to find as a new release in digital bookstores. Great for personal branding.
Revenue: I’d rather bet on volume than on a small number of high-priced copies.

But I still might print a small limited edition on dead trees. Because despite all rationale I’ll always love paper books.

frederic.filloux@mondaynote.com

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