Working the Floor: Digital Book World Hits Its Stride

Sixteen hundred industry professionals and publishers attending the third annual Digital Book World Conference established its relevance and appeal to the book industry.

They heard reports that while publishers are in fact healthy and thriving in the new digital age, a lot more work is needed to let go of the habits of the past and live in the new interactive, multi-platform and vertically patterned business world of the future.

The cohort of newly minted consultants in attendance—emerging out of downsizing and transformation—are witness to their price as well as their opportunities.

David Nussbaum, CEO of F+W, the conference organizer, framed the event when he observed that we are in a process of deconstructing our old ways and that we need to embrace “purposeful but creative destruction.” If we fail to do so, we risk irrelevance.

Industry forecasters profile the market

The conference, held at the New York Sheraton, January 23-25, was chaired by Mike Shatzkin, founder ofThe Idea Logical Company. He opened the session to an overflow audience with, as only he can do, a comprehensive rundown of the challenges facing the industry moving forward: technology, product development, metadata usage and targeted marketing, social networking and verticalization, competition and collaboration.

Several speakers, including Jonathan Nowell of Nielsen Book, Kelley Gallagher of RR Bowker and James McQuivey of Forrester Research, presented up-to-date profiles of consumer and publisher attitudes and sales performance, noting that:

1. This past holiday season revealed that dollar book sales—print and digital—increased over the past year and, more importantly, as Evan Shnittman observed in a closing panel, publishers are enjoying increased profitability because of the mix of more digital and less print and, hence, reduced returns and smarter inventory practices.
2. Overall revenue shares from all sources digital are about 15% of sales (ranging from near zero to more than 50% depending on sector) and rising rapidly to a forecast 25-40% in the next few years.
3. “Power readers” who use portable devices appear to be dividing into thirds their preferences for e-ink dedicated readers, enhanced readers (color and touch) and iPads/tablets, presaging a permanent diversity of platforms that will need accommodation.

Framing the base from which e-Book penetration has yet to go, Gallagher noted that only 9% of power e-readers also read hardcovers, that 74% of power print readers have never purchased an e-book, 14% of e-reader owners do not use their devices and 75% of parents who buy books for their children haven’t bought an eBook.

McQuivey reported that the 25 million e-reader owners and 34 million tablet owners in the U.S. today will grow to 40 million and 61 million respectively by the end of 2012. And, the blurring of supply chain boundaries will widen as Amazon is forecast to publish 400 titles this year, and NBC/Universal just announced that they are moving into publishing.

Although McQuivey reported that in a survey of publishing executives optimism about the future was waning somewhat, in a publisher CEO panel that followed, Dominique Raccah, founder of Sourcebooks, proclaimed that we are entering a “renaissance of the Book.” The irony of the digital age and explosion of portable divides is that discussions about books and engagement in the uses of books are now a part of the common culture. It is not hard to recall not too long ago when for the vast majority reading a book was a special occasion.

Prescriptions for publisher success

Raccah’s prescriptions for publishers to provide value in the emerging industry ecosystem are:

1. Be customer-centric.
2. Craft immersive storytelling experiences.
3. Provide authors with branding and marketing support.
4. Provide platforms from which authors can interact with communities of interest.

John Ingram of Ingram Industries pointed out how shifting resources to support this new focus on author support, as well as on metadata management and data-based publishing models is made possible by the reduced cost of print edition inventories and returns, and by the smart use of print-on-demand.

In fact, as an audience questioner later pointed out, a comprehensive view of the production, marketing and economic benefits and challenges of digital workflow and digitally distributed content needs to include print-on-demand as a major option.

Importance of bookstores and libraries

A valuable feature of this year’s event was the integration of sessions on bookstores, agents and libraries. Both Oren Teicher, American Bookseller’s Association executive director, and Jim Hilt, speaking of the Barnes and Noble digital system, described how the physical store is blending the experience of discovery and curation with options for readers to make digital as well as physical book purchases at the moment of impulse—and fostering the emergence of a new digital- and print-based ecosystem. A panel of booksellers led by John Mutter of Shelf Awareness reinforced this emerging “bookstore renaissance.”

A panel including librarians, moderated by Nora Rawlinson, former PW editor and now heading 
EarlyWord, a reviews and information service to librarians, discussed the issues facing eBook collection development and circulation—and the resistance of major publishers to releasing books for circulation. eBook editions for eight of 15 recent best sellers on the USA Today list are not being made available to libraries.

A panel of agents discussed the new role of literary agencies in providing eBook publication and distribution as well as self-publishing and promotional support to their authors. It is no longer a question of whether agents will be engaged in providing publication services—but how.

The elephants in the room

The AAP Digital Issues Working Group sponsored a panel on the first day of the event that reported on the status of ePub3, now a fully developed format approved by the IDPF that supports the production of enhanced eBooks that can provide for fixed formats, embedded fonts, multiple rendition formats in a single file, interactivity with popups and overlays, adaptations to aspect ratios, and animation of graphics and object movement within a fixed space, among others. Regrettably, the standard has not been adopted by any of the major portable device distributors.

In fact, as they do at all the shows, the elephants in the room stand silent in the shadows, so to speak, but loom over every prognosis—having the power to call and redirect the shots are Amazon, Apple and Google. These three, together with Barnes & Noble, Baker and Taylor and Ingram, and perhaps Sony and Kobo, control the digital distribution network—and hence the flow of revenue and profitability— for the big six, as well as the next hundred and the 100,000 or so additional independent and small publishers that make up our industry.

Establishing communities of interest, social networking and marketing to “verticals” in order to focus resources and maximize return is now a cornerstone of sessions on web site design and features. A panel including executives from St. Martins Press, Simon and Shuster, Cool Springs Press and Chelsea Green shared demos of how they applied social marketing tools in developing communities of interest—three of the four with the objective of driving sales to their own bookshops and all to create a viral presence on the Net.

The future defined

Shatzkin, together with Michael Cader of Publishers Marketplace, moderated a closing panel of three publishers to explore “where we are, and where we are going.” Out of their questioning and discussion, the standout takeaway for me is that the industry is immersed in a period of focus on the techniques for effective execution of the new digital era business strategies. This is necessary in part to blend the new born-digital workflows and platforms, verticals marketing and business models with legacy print edition production and distribution into the retail and library ecosystems. These retail and library ecosystems will remain important centers for curation, validation and discovery of books. Evan Schnittman summed it up to an extent in citing among his publishing goals building out user communities, finding out who his customers are and driving them to wherever it is they want to buy their books.

Bringing author and reader together remains the publisher’s goal and defines its future.

Footnote: Vendors below and above the radar

Always informative adjuncts to a conference are the exhibits, which I love to browse for the unexpected as well as the expected that has escaped my attention. I always learn something new.

It remains a puzzlement, though, that the likes of Amazon, Apple, B&N, Sony and Google—while they are represented on panels, do not provide commercial support and presence at a show such is this.

Well represented, however, were major software-based and legacy content managers and distributors with their latest features: Aptara, Libre Digital, Baker & Taylor Blio, Ingram Digital, Innodata, Data Conversion Labs and others—the “book manufacturer” alternatives for the digital world.

Those below the radar that caught my eye among the 35 exhibitors were the following with unique propositions you might want to look at:

Copia: a fully realized online bookshop and application with social networking features offering millions of titles for sale in print and digital formats that also provides customized shops online to your own brand. (www.thecopia.com)

Litle & Co: providing online payment management for credit card merchant service offering system flexibility and competitive costing (www.litle.com)

Ez4phone, Inc.: A China-, Hong Kong- and U.S.-based new book publishing ios apps developer. (www.ez4phone.com)

BookOnPublish: A digital solution for cross-platform, multimedia eBooks with photos, embedded videos, animation, sound, reader feedback, and learning management system support (www.bookonpublish.com)

DocZone: Cloud-based conversion, formatting and production for print, web and eBook multiple platforms. (www.reallysi.com/doczonebookpublisher)