News & Trends: IDPF's Digital Book 2010 - More Standards Than Woodstock
It's difficult to imagine that the International Digital Publishing Forum's (IDPF) Digital Book 2010 could ever be compared to Woodstock; but, in fact, this year's sold-out event had a few sessions that were so crowded that dozens of people sat on the floor in the back of the room so as not to be in the way of the standing-room only crowd lining the room's back wall. Michael Smith, IDPF's executive director, joked that it looked like Woodstock.
For the first time this year, Digital Book was held in conjunction with BookExpo America, May 25, at the Jacob K. Javits Center in New York City.
The event covered a range of topics, from the agency model to the new editor/author relationship and thinking digital-first, as well as several workshops on EPUB production. Here are several important highlights from speakers at a few key sessions:
From "The Global Digital Book Community: Success Stories from Around the World"
- Tyler Ruse, senior director, solution consulting, Libre Digital (digital publishing solutions service): Harlequin Mills and Boon in the United Kingdom, which publishes digital versions of all of its titles (70 new titles per month), has seen preview-to-sale conversion rates of 14 percent to 25 percent for its e-books. The company sells via its own e-commerce site, and uses LibreDigital's services to distribute e-books to retailers. The company saw 110- percent growth in sales from Q1 2009 to Q1 2010.
- Daihei Shiohama, head of international business, Voyager Japan (digital distributor): Japan is the world's largest e-book market. Eighty percent of e-book content is sold on mobile phones, largely due to the popularity of manga titles. Twenty percent are sold on PCs. The market for sales is largely female readers in their twenties. Despite Japan's leadership in the e-book market, it is isolated from the rest of the world. E-books need to be made accessible to everyone, everywhere, and compatible with all devices internationally via the EPUB standard.
- Michael Tamblyn, executive vice president, content, sales and merchandising, Kobo (global e-reading service): Kobo has delivered e-books into 200 countries, and currently receives files from approximately 1,600 publishers worldwide. Many devices exist already for reading e-books; there will be more, and they will get better and cheaper. "Your e-books should be able to come with you from device to device." More than 10 percent of sales are made in non-English speaking markets; "there is a lot we can be doing with publishers to expand markets. … The more territorial rights can be simplified and streamlined, the better for everyone." He would like to see simultaneous e-book release in multiple markets, with multiterritory pricing.
From "Taking the 'Agency Model' Out for a Spin: New E-book Rules of the Road for Publishers"
- Erica Lazzaro, general counsel, OverDrive Inc. (distributor of e-book and audiobook catalogs to retailers and libraries worldwide): "The challenges we've had to deal with are contracts and [other things on the] operational side, tax implications, reporting." With the agency model, the publisher is the seller of record; it communicates a required retail price. The agency model is limited currently to the United States and Canada, but Lazzaro expects "it to roll out to other international territories." Fixed pricing for print and e-books is already being done in Germany, and is in effect in the music industry. The goals: pricing parity among retailers; simultaneous availability channelwide at retailers; publishers want to see that the price they're setting is being respected.
Some new requirements under the agency model are that, since the retailer is no longer the seller of record, sales-tax reporting is no longer the retailer's domain; publishers are discussing this and what data needs to be communicated with retailers and distributors.
- Andrew Weinstein, vice president and general manager, retail solutions, Ingram Content Group (a print and digital content distribution and services provider): Ingram partners with more than 1,500 publishers on more than 250,000 titles. The "good parts" of the introduction of the agency model are: that is has "brought a lot of attention to the space"; consumers have a breadth of choice in devices, format, price, etc.; and "innovation speeding up in the race to consumer adoption," said Weinstein.
The "not so good" aspects: "The agency model brought about a change in a 10-year business model in about one month, and the rushed implementation brought about a problematic transition where some titles were pulled from sale and their future availability is uncertain." Ingram now manages multiple contracts—a contract for each agency partner (publisher)—versus one contract per retailer. Catalog updates must be done daily. "Sales-tax policies and jurisdictions, once based on the retailer's business, now are based on each publisher's requirements." And retailers are accustomed to using price to merchandise to the consumer. The agency model will exclude publishers from retailer/consumer loyalty programs and other discounts. Weinstein would like to see best practices established for ISBNs, price, currency, business models and territories, with goals of "balancing unfair competition with potential disruptions to [the] consumer," and considering international implications and processes. The model has the industry in flux, but some developments are already in the works; for example, the Book Industry Study Group is currently working on best practices for sales and sales tax reporting.
- Bob LiVolsi, CEO and founder, BooksOnBoard (a global e-book retailer): The agency model "is part of a cure for predatory pricing of Amazon, Barnes & Noble and others." But the model "isn't done sorting out yet. Will it go across to [print] books as well?"
LiVolsi's million-dollar question: "Did we apply a neck tourniquet as a way to stop a nosebleed?" He said his company was given one week's notice to implement the back-end changes like taxes and blocking agency titles from loyalty programs, etc. "We went without product for about seven weeks due to the transition."In regard to the immediate impact of the agency model, he said, "They overlooked the wholesale channel … which has been the backbone for publishers. It hurts our customers, with prices up, no loyalty programs for these titles. Random House sales are up by more than 40 percent at BooksOnBoard (they did not choose to go the agency route) … and Harlequin as well. … Customers appreciate the perception of discount, not as much as how much you're discounting. … Discounting will continue on non-agency product."
Also, publishers guaranteed margins to Apple. "Apple does two times in revenue what the book industry does in one year. … What will happen to traditional bookstores, and do we care? I do."
LiVolsi ended with the question: Are there other alternatives to the agency model?
"EPUB Enhanced, Interactive and Connected": Details About the Forthcoming EPUB 2.1
- Peter Brantley, director of BookServer Project, Internet Archive: With devices like the iPad emerging, it's time "to rethink how we reach, inform and educate people …," using formats that are not strictly text. These principles guided recent revisions to the EPUB standard, an IDPF-established open e-book standard to simplify e-book distribution to accurately display content on multiple devices.
- Garth Conboy, president, eBook Technologies, Inc., and EPUB 2.1 Working Group vice chairman: EPUB 2.1 will feature enhanced support for rich media (e.g., video and interactivity—quizzes, games). It also will establish standards for enhanced global language support (and with support for reading beyond left to right). Annotation support and native support for mathematics (MathML) are also in the works. A draft of EPUB 2.1 will be made publicly available in December 2010, and plans to ready the standard for adoption are set for May 2011.
Find out more about the forthcoming EPUB 2.1 in an upcoming issue of the Book Business Extra e-newsletter. (If you are not currently a subscriber, you can sign up for a free subscription at BookBusinessMag.com, and click on "Subscribe to Book Business Extra," along the right-hand side of the site.)
You can view presentations from Digital Book 2010 at IDPF.org/events/presentations.htm.