From the Pew Report

It’s not a big number. It’s a huge number. For anyone doubting that the ebook explosion is racing forward at a tremendous pace, here’s proof as scientific and as unbiased as you can find.

As of today, many people have been playing with their new toys for less than a month. So reading too deeply into today’s ebook sales data will provide contradictory results. We’ll know much more by March or April as early buying patterns settle. The recent revision to 2014 instead of 2015 for 50% of all book sales going digital looks sound.

I’m in New York at Digital Book World 2012. More to follow.

Then I felt angry at Apple.

Long-time master manipulators of the press and of fan-boys worldwide, they could hardly expect calm when the only available reference point was Jobs’ Court Biographer reporting that textbooks were “the next business he wanted to transform. He believed it was an $8 billion a year industry ripe for digital destruction.” Come on Apple. Please don’t use the word “transform” interchangeably with “destruction”, follow that with a “no comment” for the press, and then blame us for speculating that the “big one” was going to detonate. And being disappointed when it did not.

Out with a whimper, not with a bang.

You can’t disrupt an $8 billion industry with eight multi-gigabyte e-textbooks and 20,000 assorted apps. The weapon of choice? A cobbled-together free software tool, iBooks Author, Mac-only, that makes authors sign away their publishing rights to Apple. And for distribution, let’s stick with the failing iBookstore. Education may well be “deep in Apple’s DNA,” but selling ebooks certainly is not.

Adding a very deep insult to injury, Apple, like Amazon before it, crawled all over EPUB 3 and then failed to support the new standard. Thanks a lot Apple for undermining about 50 man-years of great work from the IDPF. Apple is active on the EPUB 3 committees. So what happened?

I was surprised also that Apple chose to go after K-12 instead of higher education. The textbooks used for K-12 are arguably better-suited to a dollop of multimedia that higher-ed’s weightier tomes. But text adoption is tougher because you need to convince entire states instead of single professors or schools. And the market is much smaller.

There was one piece of good news in today’s announcement. Apple has always paid attention to accessibility issues, and it did so this morning:

Accessibility built right in.

iBooks Author lets you create books that people with disabilities can read and experience. The table of contents, glossary, widgets, main text, and more are built to automatically take advantage of VoiceOver technology. Add accessibility descriptions to any widget or media — including movies and quizzes — so even those with vision impairments can use them.

Still, accessibility in EPUB 3 = support for DAISY, yet that’s not part of Apple’s announcement. Color me confused.

I found two excellent posts this evening to help put today’s debacle in context. “Apple has a long way to go before it dominates K-12 classrooms the way it has done the music industry,” Sarah Kessler points out, in her thorough overview of how K-12 textbook publishing works.

By Apple’s count, 1.5 million iPads are being used by schools. But there are 55.5 million students enrolled in more than 130,000 U.S. schools. No matter how you slice it, the iPad is not a mainstream phenomenon in K-12.

Best of all is Audrey Watters’ examination of Apple’s “counter-revolution”:

So if this is a revolutionary announcement about reshaping textbooks and educational content, we must ask revolutionary for whom? For wealthy schools? For students who have iPads at home and parents willing to pay out of pocket for supplementary textbook materials? For publishers?

I expect we’ll be seeing some revisions to today’s announcements: Steve Jobs was always willing to back down when he was wrong. For me the big takeaway today was a reminder that education does not disrupt easily. Just because textbooks are pricey and printed on paper doesn’t mean that we need to trash them. I’ve worked with a lot of textbook publishers over the last decade and the staff I’ve met are highly-trained and dedicated to producing great books.

Yes, it’s profitable for large textbook publishers. But let’s keep the numbers in perspective. JP Morgan’s credible Apple forecasts (PDF file) show that the company will sell nearly $30 billion worth of iPads this fiscal year, which is at least three times the North American revenue from textbook publishing. Apple as a whole is more than 15 times the size of the textbook publishing industry, and many times more profitable.

There’s another industry larger than textbook publishing. Computer games. Content alone (without hardware) is twice as large! Content, in context.

M&S also received roughly half a million dollars from the provincial Government of Ontario during the 11-year span. The Block Grants to Book Publishers program of the Ontario Arts Council provides approximately $1 million annually to “Ontario-based Canadian-owned book publishers.” Online reports show that McClelland & Stewart received over $40,000 per year in each of the reporting years, $43,502 in 2011.

On January 10th Random House of Canada became the sole owner of McClelland & Stewart by acquiring the University of Toronto’s 75% stake in the publisher. According to reports “the university is receiving no compensation for this transaction.” Random House of Canada Limited was incorporated in 1944. It is now part of the Random House division of Bertelsmann AG. With 200 imprints in 19 countries, Random House is ”the world’s largest general-interest book publisher.”

Quill & Quire separately reports:

$6 million: The total amount of federal grants received by M&S and its children’s publishing division, Tundra Books, from the Canada Council for the Arts (from 2000–10) and the Department of Canadian Heritage (from 2006–10).

Canadian culture took a major hit on Monday with the sale of Canada’s most important book publisher, McClelland & Stewart. Canada’s largest university, the University of Toronto, took a gift horse and sold it to the Bertelsmann AG, the fifth-largest book publisher in the world, via its proxy, Random House of Canada. Random House of Canada is owned by Random House in the United States which felt that news sufficiently important to fail to issue a press release today. Likewise the University of Toronto.

Why do I feel that I’ve seen this film before? But that last time it had a happy ending.

As reported in The Canadian Encyclopedia, “Widespread publicity and concern was aroused by the announcement in 1971 that M&S was for sale. The Ontario government decided to provide a $1-million loan to prevent its sale to American interests. In 1984 the government again stepped in, freeing M&S from its debt obligation (some $4 million). This action depended on McClelland being able to raise over $1 million from the private sector; his success at this endeavour was an acknowledgement of M&S’s contribution to Canadian culture.”

As reported in The Globe & Mail today: “Before announcing the transaction, Random Canada quietly approached the office of Minister of Canadian Heritage and Official Languages James Moore to seek an exemption from long-established provisions of the Investment Canada Act, which specifically outlaw such takeovers. The company reported that Mr. Moore granted the approval ‘on the basis of the commitments we made that demonstrated that this investment is likely to be of net benefit to Canada.’”

What a difference 40 years makes.

For more information, see Roy MacSkimming’s The Perilous Trade: Book Publishing in Canada, 1946-2006.

By coincidence the ebook will be published tomorrow by McClelland & Stewart (div. Random House of Canada). It’s available tonight for pre-order on Amazon.com, but sadly not on Amazon.ca, nor on Chapter/Indigo, “Canada’s online bookstore,” Canada’s remaining national book chain (the one that’s getting out of books).

But, you say, how can that be? Even before today the very capable Random House was in charge of sales and marketing for McClelland and Stewart. Yes, I know. And they spell Macskimming with a lower-case “s”.

The Walrus is a prominent Canadian cultural magazine: think Harper’s or The Atlantic. The launch arrives with the heady proclamation that it “represents a first: no other magazine has brought its stories to a new audience via documentaries.” (I’m not sure how this differs: it’s The Atlantic’s video channel.)

Unfortunately YouTube already has a Walrus TV, an unrelated venture, featured also on the Upper Playground, “a leader in the contemporary art movement… committed to representing progressive urban lifestyles.” In other words, a clothing company.

The Canadian Walrus TV faces the routine cross-media challenge: How do you make compelling video out of compelling text?

A man sitting in a chair wearing a suit reads an excerpt from a book that was the basis for an article in a magazine. He is purported to be the author. Tense music conveys some tension.

It’s a long-standing challenge: creating compelling documentaries, even short ones. The National Film Board of Canada has done some excellent work here. Its complete library is now available for streaming online.

Today it’s an insult. Or a threat. Or a doom-filled prediction.

There is no decent place to stand
In a massacre

— The Captain, Leonard Cohen © 2012 Sony Music Entertainment

Yesterday morning Digital Book World published part one of my two-part look at the future of Barnes & Noble. We ran first with the good news. Next Tuesday the bad news report appears. Here’s a sneak preview.

In the first article I consider the strength of Barnes & Noble’s retail network which as of October 29, 2011 totaled 703 trade bookstores and 637 college stores; 1,340 stores in total. That’s a lot of retail outlets.

According to Barnes and Noble’s latest financial filings, “the 703 Barnes & Noble stores generally offer a Nook Boutique/Counter, a comprehensive title base, a café, a children’s section, a toys & games department, a DVD/BluRay department, a music department, a magazine section (and) a gift section….”

The 637 college bookstores are “primarily school-owned stores operated under contracts by B&N College. (They) generally sell and rent textbooks, and sell course-related materials, emblematic apparel and gifts, trade books, computer products and Nook ebook readers and accessories, school and dorm supplies, and convenience and café items.”

In yesterday’s DBW I examined the college bookstore business, one of Barnes & Noble’s ace cards. But selling textbooks and varsity jackets to students is a different business than selling cookbooks and fiction bestsellers to the general public. Students buy some fiction bestsellers, but the general public doesn’t buy $200 textbooks and school-labeled apparel. So the balance of this post concerns only “the 703 Barnes & Noble stores”.

This bricks & mortar network features as one of seven advantages that Barnes & Noble maintains in its 15+ year battle with Amazon.com. It’s not a real estate asset advantage; the stores are leased.

With Borders demolished, Barnes & Noble appears as “the last man standing”. The jury is still pondering the fate of Books-a-Million, its only bricks & mortar competitor, a money-losing second with 221 stores. Books-a-Million isn’t a national chain: its stores are mostly located in the southeastern United States. Its stores sales total perhaps 15% of Barnes & Noble’s. And its online presence is unremarkable.

And so Barnes & Noble’s strategic importance grows for publishers large and small as it becomes essentially the only place create a national showcase new printed books. Independent booksellers are key locales in many communities, but the administrative overhead of building a promotional campaign with 50 different companies instead of one alters the game.

Barnes & Noble claims, with a touch of hyperbole, that it “pioneered the concept of a retail store as a community center” and hosts up to 100,000 community events each year.

When William Lynch presented to the Liberty Media Investor & Analyst Meeting last November he stated that the stores are now the company’s “biggest competitive advantage.” I had been thinking of the stores as boat anchors, and Lynch made an excellent point. They certainly set the company apart from Amazon. Barnes & Noble knows retail very well: it’s been practicing the art of chain bookselling for decades.

But with Borders’ bankruptcy and all of the troubles that book chains are facing in Canada, Australia and the U.K., can Barnes & Noble succeed where everyone else has failed? Just because you’re last man standing at the massacre doesn’t mean your prospects are bright.

After Best Buy announced its Q3 financials on December 13th, the Wall Street Journal ran a startling analysis of Best Buy’s battle with Amazon. I added a section to the draft of part two of my article called “Best Buy is now a demo room for Amazon.”

I realized that the shape of things to come for Barnes & Noble may be presaged by Best Buy struggles as Amazon steps up the pressure in electronics. Then I saw an analysis by Michael Nowacki of Nowacki Asset Management recalling that Circuit City’s failure had led analysts to expect that Best Buy would reap huge benefits. “Best Buy, however, did not see a significant increase in business. In fact, they have been struggling to grow same-store sales and profits,” he wrote. This reminded me of Lynch’s November claim that Barnes & Noble is projecting a $300-$400 million sales lift from Border’s demise.

While Barnes & Noble is turning to toys and games as a safe haven in a turbulent retail climate, Best Buy is clinging to appliances, where it doesn’t face as much “competition from Amazon and other online retailers.” The Wall Street Journal concluded that defending against Amazon.com comes at a “steep cost.”

Two days ago Larry Downes published a barn-burning analysis of Best Buy’s problems titled “Why Best Buy is Going out of Business…Gradually.” The article is attracting both a huge readership and a ton of comments, most of them apparently from frustrated Best Buy customers. But once again the #1 threat is Amazon, which unquestionably is Barnes & Noble’s most daunting challenge.

And of course there are many differences between Best Buy and Barnes & Noble. Best Buy is a $50 billion company; B&N $7 Billion. 180,000 employees vs. 35,000; 1100 stores vs. 700. But that’s not the issue here. It’s just about bricks & mortar vs. online. It’s about Amazon’s relentless competition in every product category it services. That’s all.

I’m not convinced that the Barnes & Noble stores are a net asset. They currently operate near breakeven or a little below. Is it going to get any easier to make money in book retail in the next few years in a soft economy? I just don’t see it.

I started in the publishing business working in a both chain and independent bookstores. I love bookstores. The large publishers are going to have to step up to the plate and recognize what their businesses will look like without bricks and mortar showcases for books, both chain and independent. And then take the necessary steps to make sure they don’t disappear.

In the meantime check back with Digital Book World next Tuesday, January 10th to read my full analysis of Barnes & Noble’s business challenges in the years ahead.

A new development with value to the future of publishing is Boxie, the Story-Gathering Robot, invented by Alexander Reben at the renowned M.I.T. Media Lab. Boxie is a robotic journalist; it could handle those “man on the street” videos with ease.

As reported by the New Scientist, Boxie was “designed to wander the streets shooting video, the diminutive droid trundles up to people and asks them to tell it an interesting story.” It works (or at least it works when Boxie wanders the halls of M.I.T.).

Reben writes that “documentaries are typically captured in a structured way, using teams to interview people. We developed an autonomous method for capturing documentaries through a robotic camera…. We sent this robot out to autonomously gather narratives about its environment. The robot had a specific story capture goal and leveraged humans to attain that goal. The robot collected first person views of stories unfolding in real life, and as it engaged with its subjects via a preset dialog, these media clips were intrinsically structured.”

After watching the video it’s easy to see that “the types of users who encountered the robot were fairly polar; either they wanted to interact or did not – very few partial interactions went on for more than a minute. Users who partially interacted with the robot were found to treat it rougher than those who completed the full interaction.” It’s the same in the “real world”.

I’m looking forward to watching the evening news when we have Boxie out collecting video clips rather than the coiffed humanoids in use today.

Here’s a longer Boxie video on YouTube.

My niece Kelsey competed in the FIRST robotics competition in Waterloo in 2008

When life gives you lemons, make lemonade. When the legacy identification scheme for print books is ISBN, do your best to adapt a now antiquated and inadequate numbering system. Hats off to the ”60 unique individuals and 40 unique companies” who endured the “truly collaborative learning process,” put their differences aside, and came up with what I agree is an optimal interim solution.

The policy adheres closely to the most recent guidelines from the International ISBN Agency, and like that document includes an assortment of qualifiers, “substantially the same,” “significantly different,” “should have,” “reduce…confusion,” “as a last resort,” and so on.

Here’s the new ISBN policy in three simple commandments:

1. Assign a unique ISBN to each file format for each ebook.
2. The digital ISBN must be different than any print ISBN.
3. If you submit the same EPUB, PDF or Mobi digital file (and a few other defined formats) to a different distributor, use the same ISBN.

It’s easy to imagine how the ISBN system, after nearly 40 years of yeoman service, fell apart. Digital books can now be files, apps or web pages. Each version can vary, by software, browser, OS and/or device. Content and presentation often differ. Apple no longer natively supports Flash content; does content cease to exist if your device can’t play it? And so on. The International ISBN Agency published a good summary of the problems from its perspective, including the frank assessment that “current recommendations in the published standard are unhelpful, not least because they refer to obsolete file formats (and the technical file format is not necessarily the sole or even the main product differentiator).”

Yes, this is an interim solution until the development of the next grand metadata system, due to be released at my funeral. Is it perfect? No. Is it a big improvement and an important stop-gap measure? Absolutely.

Phil Madans, director of publishing standards for Hachette Book Group and committee chair for the policy group notes ”as Digital Books are still evolving, we intend to continue to refine and supplement the recommendations over time, building up a practical, fluid guide to how Digital Books should be identified.” Amen.

UPDATE: BISG offered a webcast January 11 designed to help clarify meaning and expectations regarding the BISG Policy Statement BISG held a webcast January 11 designed to help clarify meaning and expectations regarding the BISG Policy Statement. There’s more info about the webcast at Publishers Weekly and a link to the $49 instructional download.

He sets the tone by leading off with a flatly incorrect statement: “Back when the only way to get someone to read your work was to get them to actually buy your work first, a focus on selling and a focus on being read were the same thing.” Hmm. Yes, buying has always been a primary means of obtaining books, but lending by libraries and from friends has been the source of perhaps half of the books I’ve read in my life. Oh well, why let a fact get in the way of a good argument?

Ebooks exclusively from Amazon

Moving on: “If the cost of delivering one more copy of the book is zero, then choosing to sell your work is optional. You might choose to work hard merely to get people to read your work, leaving money out of the equation.” Indeed, this is a concept that Seth and several others have championed to great effect, and it’s been an eye-opener for most of us.

Seth then acknowledges an important issue often overlooked in the “free” debate: “If someone pays for your book, perhaps they’ll take it more seriously, focus a bit more energy on it.” That’s certainly my experience. I devote far more attention to the books I pay for. I just do.

And then we get to the heart of the post: “But the real question remains: are you writing to be read, or are you writing to get paid?” (Emphasis his.)

I was just starting to run through my mind: um, how about both when I got to his concluding paragraph, a throwaway apparently, as it appears in parentheses:

(An example of this is the publishers and authors that oppose libraries and the lending of ebooks. In these cases, even though money was paid, they’re apparently against being read – even though there’s zero evidence that library reading hurts book sales.)

Well, excuuuuse me, Seth. Here are two dates you might well remember:

December 8, 2010 The date you announced an exclusive partnership with Amazon.com for The Domino Project. (I assume that discussions began just after your August 23, 2010 announcement that you would no longer “publish in a traditional way.”) At the time of your announcement Amazon.com categorically refused to allow any Kindle ebooks to be loaned via a public library, even if the library had purchased the book.

April 20, 2011 The date on which Amazon.com acquiesced to public pressure and announced restricted lending of Kindle ebooks via a third party, Overdrive. Overdrive, who is doing its best, finally delivered on the service only this past September.

As Canada’s remarkable Prime Minister John G. Diefenbaker used to proclaim, “I have not seen such a conversion since St. Paul on the road to Damascus!”

Amazon is no friend of public libraries. It has become slightly less of an enemy than others. A friend of my enemy is…

December 6, 2011: I called out a librarian on this issue back in March. She was not responsive.

Every author who considers heading along the self-publishing route needs to immediately face the heart of darkness lying at the end of the river. There remains a very real stigma attached to self publishing, an enduring vestige of the days of the vanity press. Say what you will about the capriciousness and sometimes arbitrary nature of the traditional publisher’s manuscript acceptance process, it was the rare vanity press title that could approach the quality of even a third-class remainder from an established London- or New York-based book publisher. You know and I know that there’s great prestige associated with traditional publishing. Self publishing success in the age of ebooks in an inspiring story. But 99% of authors would cheerfully exchange their self-publishing stipend for the prestige of a puny Penguin.

Me, a Published Author!

Proponents of self publishing (of which I am one) might have you believe that the cursed stigma has been erased. It’s not true. It’s been modified, but only for the few who succeed to achieve substantial sales and a measure of fame. Instead of being merely a deluded fool with a fragile ego, you’re now a very lucky deluded fool whose ego may be intact. Most other authors will still be judged harshly by all but other self-published authors. And none will judge them more cruelly than the lucky few who made it past the tall editorial gates guarding the shrinking empires of the brand-name publishers.

Book publishing has always been much more than a business; if it was merely a business it would have disappeared alongside the bankrupt Johannes Gutenberg.  The power of the printed text has always conferred mystical powers upon Those Who Are Published. I’ve seen it myself. My resume was not closely scrutinized when delivered within the pages of my latest non-fiction book, while my competition evaporated. I suddenly appeared as the ideal tenant when my rental application arrived in a package with a smart-looking hardcover bearing my name.

So much of this snobbery is based on loosely-acquired wisdom. Most of the folks who condemn self publishing couldn’t name ten different publishing companies, and wouldn’t know whether Weidenfeld & Nicolson was founded before or after Beatty & Church. (Beatty & Church was the name of one of my early publishing companies, founded around 1980. It offices were on Beatty St. in Vancouver and Church St. in Toronto, but of course we intended the name to imply that the imprint had been established in the nineteenth century.)

Still I was always sheepishly conscious of which of my books bore my invented imprint and which sat smartly on my shelves with Doubleday or Saunders embossed on their spines. I had a chapter published in 2002’s The Columbia Guide to Digital Publishing. Yes, yes, that Columbia. Columbia University Press! Despite lifetime earnings of less than $100, it remains one of my proudest achievements.

Whatever makes authors so delusional?

It’s the same thing that drives us to buy a Lexus instead of a Toyota, to shop at Harrods and to drink Perrier. But as with luxury brands the power of established publishers is not just a matter of slick advertising luring gullible shoppers. Quality shows. Publishing is indeed a profession and demands myriad skills and extensive resources to execute effectively. Editors choose manuscripts with the self-conscious care. Established artists are entrusted with design tasks. The largest printing companies in the world use eco-friendly papers and the sturdiest of bindings to deliver an economical product that can leap off crowded bookshop shelves. Publisher’s reps fight hard for limited retail space while publicists cultivate relationships with reviewers and the talk shows.

Oh, you say, but it’s so much easier now that we can just self publish our work in digital form. Ebooks are so much simpler to produce. Ebooks were simple to produce, mainly because the early formats crippled the presentation of anything more complex than run-on text. That’s all changing now with the new EPUB 3 format. As somehow who has generated dozens of print books via PDF I can testify that EPUB 3 is vastly more complex than PDFs generated from QuarkXPress or Adobe InDesign. (I know that I lost half of my readers with that sentence. You see how complex it can be?)

And marketing those books sounds easy only if all you’ve studied is the author’s jaunty success story in People magazine. Yes the Internet lets you reach out directly to potential readers. Unfortunately the competition to be heard has increased a hundred times while the number of readers has increased by about 3%.

My advice to authors seeking to self publish is that step number one is to lose your self and learn how to publish, to publish just as professionally as the professional publishers you’ll be competing with. Even in this era of instant ebook ecstasy quality always shows to those who know.

Few authors have the necessary skills. Not a problem. The Internet has also enabled a fluid marketplace to assemble the skilled team required, or to pay a reasonable premium to a reputable self-publishing service for one-stop shopping. Create the best darned book you can, word for word, and image to image, both in print and in digital form.

Then the real work begins: finding your readers. Yes, they’re easier to reach, but as tough as ever to convince. The big plus from ebooks is price flexibility, sometimes negating the risk in the one-click buy, while adding a big dollop of convenience, enabling the spontaneous “Oh, what the heck” buyer. We always thought hardcovers were a bargain at $25; still reasonable at $50. Who knew there were hordes just waiting for $2.99?

Attitudes will change as professionals begin to realize that the imprimatur of a university press is no longer the only guarantee that the information within has value. Peer review, whether academic or from a single experienced editor, is only one imperfect method to filter what gets sold as a book.

The glory of publishing is seeing new ideas unleashed and unexpected tales heard for the very first time. Celebrate: a new age of abundance is upon us. The unexpected cacophony of voices compels adjustments to our systems of discovering and filtering. We’ll learn. We’ll learn from books and from every other dynamic form of publishing unleashed by the remarkable web.

Join the online chat this Friday, December 2^nd at 12-2pm GMT (7-9 am EST).