The Internet, E-books and the rise of the One World Publisher

Four years ago when Mark Coker launched his publishing platform Smashwords, he had an enterprising goal.

“I envisioned a free online publishing platform that would allow any author, anywhere in the world, to publish their work online in seconds,” said Coker.

He was among those who, from early, understood the transformative power of the Internet and its ability to become the New Frontier for the global book trade – a Digital Reformation challenging the conventional wisdom of the print-based Gutenberg Era.

The future of book marketing is on the Web,” says Coker, further explaining his rationale for creating Smashwords. “The advantage of e-publishing via Smashwords is that we allow you to shatter all geographic boundaries that stand in between you, the writer, and your audience.”

The latest report issued by the Association of American Publishers has once again, showed that futurists like Coker, Blio founder Ray Kurzweil, Amazon’s Jeff Bezos and many others, were right on target all along. According to the report, e-book sales in the US were up 158 percent in September compared to the same month in 2009 and are up 188 percent in 2010.

In contrast adult hardcover sales were down 40 percent in September and 8 percent in 2010.

A survey of almost 3,000 consumers conducted by the leading global business and strategy consulting firm, Bain & Company,  across six countries and three continents (United States, Japan, Germany, France, United Kingdom, and South Korea) shows that readers are inclined to read more if they have digital readers.

“With 15% to 25%  of book sales shifting to digital format by 2015, the book industry is heading into wholly new territory. Authors, publishers, distributors and retailers all will need to rethink their business models and their relationships with one another,” the report adds.

In addition, new data released by the technology and market research company Forrester shows that American e-book sales will reach almost $1 billion by the end of the year.

According the study findings, by 2015 e-book sales will have nearly tripled to almost $3bn, a point at which it says the industry will be “forever altered.”

Amazon Kindles

E-books still account for a relatively small share of the US book market. The Forrester study findings show that 7% of adults who read books and who are active online, read e-books regularly. Nevertheless it concedes the 7% “read the most books and spend the most money on books”.

Blogging on the subject, Forrester researcher James McQuivey said: “We have plenty of room to grow beyond the 7% that read e-books today and, once they get the hang of it, e-book readers quickly shift a majority of their book reading to a digital form. More e-book readers reading a greater percentage of their books in digital form means our nearly $3 billion figure in 2015 will be easy to hit, even if nothing else changes in the industry.”

Which brings us back to Mark Coker’s prognostication; the future of book marketing – and, no doubt, book publishing as well – is on the Internet. There is every indication that the rising digital tide with its varied currents of social networking, e-publishing and e-tailing platforms, is lifting all boats and giving the ambitious and the brave unlimited opportunities to achieve their dreams. Amazon is one of those wave riders that has risen with the tide and takes full advantage of the opportunities to “shatter all geographic boundaries” between it and consumers.

At the same time, it is not averse to rocking the boats of competitors in its bid to strengthen its dominant grip on the book trade, particularly in e-books (85 – 90 % of the e-book market); a goal which, ironically, is being facilitated by the very same internet, and digital technology. Talk about a two-edged sword.

About 8 months ago Amazon’s penchant for playing hardball was demonstrated when it got embroiled in a tussle with five of the largest US publishers over Amazon’s e-book pricing policies – including setting $9.99 as the default price for new titles and bestsellers. The big 5 wanted to set their own prices for their e-book titles. Amazon threatened to suspend direct sales of Kindle and printed editions of their books unless they agreed to a list of concessions. When one of the five – Macmillan – tried to play the role of upstart, Amazon carried out its threat.

Over the past two months, the online giant has made a number of acquisitive forays into publishing, signalling its intent to further strengthen the bookselling arm of the business by becoming a major player in book acquisitions and publishing. On September 14 Amazon announced that it had made a deal with bestselling author David Morrell to release his new thriller, “The Naked Edge,” along with nine of his previously published books, in e-book format exclusively in the Kindle Store. Morrell is the latest in a growing stable of high-profile writers who, of late, have been entering into exclusive publishing and distribution deals with Amazon.

One week later Amazon announced that its new publishing arm, AmazonCrossing would be releasing six new books this spring. Likewise, AmazonEncore will introduce eight new books around the same time. Both AmazonCrossing and AmazonEncore use customer feedback and other data from Amazon sites around the world to identify “exceptional books deserving of a wider, global audience.”

The same week of the AmazonCrossing announcement, Amazon unveiled two new apps – the Kindle for Android, a free application that lets readers read Kindle books on Android-powered devices, and a Kindle app for the new BlackBerry PlayBook tablet computer.

Within days, Amazon unveiled the ‘Beta Version of Kindle Plugin for Adobe InDesign(R)’, a new tool that allows publishers and content creators to more easily make their titles available for Kindle by converting Adobe InDesign(R) files directly into Kindle books “with a couple of clicks.’

This past week there was more big news. Amazon has inked exclusive publishing deals with HIT Entertainment, a leading provider of children’s entertainment, and the e-publisher, RosettaBooks, as well as with Toby Press. In conjunction with Amazon, RosettaBooks’ launched Hit Entertainment’s entire bestselling “Rainbow Magic“(TM) collection, all of which are available exclusively in the Kindle Store. Seventy-three books in the “Rainbow Magic” backlist catalogue are now available in the Kindle Store, and future books will launch in conjunction with the printed editions from Scholastic.

Meanwhile, Toby Press announced that Amazon plans to acquire the publication rights of up to 121 of its titles. They represent the works of 61 authors and include diverse fiction titles and works in translation. Amazon’s publishing imprints, AmazonEncore and AmazonCrossing, will re-publish the books as print and Kindle editions in the United States and globally subject to the authors’ agreement. The print editions will be available on amazon.com and its websites worldwide, as well as in bookstores throughout the United States.

At almost every turn Amazon is making good on its pledge to make books available to every nook and cranny of the globe via multiple distribution channels, including a myriad of mobile devices, directly to your PC through ‘Kindle for PC’ and in print via third-party wholesalers and bookstores.

But make no mistake, Amazon’s eye is fixed on the e-book market. And when it comes to the Kindle, Jeff Bezos is confident he’s betting on the right horse. He’s admitted openly to being “stunned” at the way Kindle sales have been outpacing Amazon’s hardcover sales in the US. Similarly, in May, June and July, Amazon reported that sales of books for Kindle in the UK had surpassed the sale of hardcover books, and that growth is accelerating.

Speaking to USA Today, Bezos was asked why Amazon doesn’t support the popular “e-pub” standard used by its competitors and many libraries.

“We are innovating so rapidly that having our own standard allows us to incorporate new things at a very rapid rate,” he replied, adding, “… we’re moving very quickly to improve the state of the art. It’s very helpful not to have to wait for some third-party standard to catch up.”

This sense of urgency, coupled with Amazon’s deep pockets and its dogged focus on competitive pricing, delivering goods quickly with minimum hassle to consumers, and on overall customer satisfaction, is reflected in the flurry of new initiatives unveiled in just the past two months.

What’s more, Christmas is around the corner. Publishers and booksellers throughout the world are reportedly expecting a Christmas boom in e-book sales this year. And just in time for the holiday season, you can give Kindle Books as gifts to anyone with an e-mail address – no Kindle required. The books are delivered instantly via e-mail and the recipient redeems the gift in the Kindle Store to read on any Kindle or free Kindle app.

As for sales of the new generation Kindle devices, according to Amazon, since their introduction in August, they have already surpassed total Kindle e-reader sales from October through December 2009.

Of course, Amazon has to contend with other heavyweights like Apple with its popular iPad. Apple is reportedly selling more than 200,000 iPads a week in the US. However, Media and publishing market-forecast firm Simba Information estimates that about 35% of iPad owners have not used the devices to read e-books. The estimate is based on the preliminary findings from a nationwide survey of over 1,800 respondents. Good news, no doubt for Amazon. (Interestingly, the survey also revealed that the PC remains the No. 1 e-book reading device, and was named by 68% of e-book users nationwide as the device most frequently used to consume an e-book.)

Recently Apple was criticised by Blio founder Ray Kurzweil for doing nothing to help e-books with the iPad. He says that most e-reading devices and apps, including the iPad, “destroy” any complex formatting and doesn’t facilitate complex text layouts, such as in textbooks and children’s books. Blio is a free e-reading application that presents eBooks just like the printed version, in full colour, with the same layout, fonts, and images.

Whatever promise competition between the giants holds for consumers, it’s worth noting that the urge to rule the market is one trait Bezos and Steve Jobs share in common. Apple-iTunes’ tussle a few years ago with recording companies over its insistence on maintaining a one-price model of 99 cents for songs downloaded via iTunes is a typical case in point. As with Amazon, this seeming bid to corner the market by dictating pricing didn’t go down well with the record labels.

And now this week, comes news that Amazon and Apple are being investigated for allegedly seeking to fix the price of e-books by signing contracts with 6 of the world’s biggest publishers banning them from selling their digital books to rivals for lower prices.

The US authorities say such contracts could “threaten to encourage coordinated pricing and discourage discounting”.

Joseph Esposito

The formidable clout wielded by e-tailing behemoths like Amazon, the Apple iBookstore, and also Google with its impending launch of Google Editions, lends credence to the likely emergence of the ‘One World Publisher’ posited by Joseph Esposito in a post on the Society for Scholarly Publishing website The Scholarly Kitchen. He offers a thought-provoking analysis of the internet’s growing impact on the global book trade through the medium of the e-book. Incidentally, Esposito is well versed on the subject. He’s the CEO of GiantChair, providing direct marketing services to the publishing industry on the Internet. He has served as an executive at Simon & Schuster and Random House, as president of Merriam-Webster, and CEO of Encyclopaedia Britannica, as well as CEO of the Internet communications company Tribal Voice and SRI Consulting.

Citing the relatively high cost of international shipping that consumers often have to bear when purchasing physical books online vis-a-vis the relatively low cost of most books, Esposito presents e-books as one of the gateways to change and a way of surmounting what, for many consumers, is a perennial problem, especially those based outside of North America and Europe.

“With e-books … the balance shifts, as a downloaded book can be delivered anywhere for the cost of bandwidth.  The economics of the Internet lead to porous national boundaries. Over time this will restructure the industry, leading to the emergence of the “One World Publisher,” one of the many unintended consequences technology is always happy to provide.”

Esposito adds: “Publishers with clout will demand global e-book rights; over time, the practice will become increasingly widespread and then universal.”

What are the implications of the hypothetical ‘One World Publisher’ for authors?

“If an author or agent faced with multiple options must determine which publisher to work with, and the author realizes that there will be only one publisher whose task it will be to serve a global market, then the choice will be to sign with the publisher best equipped to reach the widest market. If the print rights are part of the bargain, as they almost certainly will be, then the advantage goes to the publisher with the strongest print market … Globalization and e-books thus extends the reach of all publishers, but not equally.  The Internet is not a democracy.”

As for small publishers based outside of the US – the nerve centre of the global book trade –  Esposito’s prognosis of their growth prospects is sobering.

“Publishers that serve smaller markets, publishers working in Australia, India, even in the UK, increasingly will find themselves uncompetitive as the national trading barriers come down. This in turn will accelerate the acquisition of smaller publishers based outside the U.S.; those smaller publishers will become editorial units (one might say “be reduced to editorial units”) feeding locally-created products into the international digital publishing machine. Wal-Mart trounces Main Street.”

Should Esposito’s scenario come to pass, it would almost certainly occur in the midst of  a continuing drive towards corporate mergers and acquisitions which, over the years, have impacted a diversity of sectors, including publishing, media and entertainment, financial services, medicine and defence. At the same time, the growing wave of budget cuts and austerity measures being implemented by governments worldwide in the wake of the recent global financial crisis and recession, are likely to undermine the effectiveness of government regulatory agencies, such as the US Federal Trade Commission.

Esposito makes another cogent observation. “The Internet knows no boundaries, and attempts to put up barriers to the transmission of digital content are always subject to the ingenuity of a pimply teenager who has put aside his schoolwork in order to focus on his true mission of sticking it to the Man.”

Hopefully, man’s innate desire to be free and our natural inclination to resist domination and coercion in all forms and guises, will help to keep corporate greed in check.

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One response to “The Internet, E-books and the rise of the One World Publisher

  1. Pingback: The Internet, E-books and the rise of the One World Publisher … » Free Online Books to Read·

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