October 15th, 2009

The panel discusses the ebook

Absolutely not a place to be had at this event.  People hovering in corridors, others perched on tables. I’m actually sitting on the floor as i’ve arrived too late to get a place on a bench!  Not surprising really given the line up of Victoria Barnsley (Chief Executive and Publisher of HarperCollins UK), Richard Charkin (Executive Director of Bloombury Publishing), Andrew Savikas (Vice President of Digital Initiatives, O’Reilly Media), and Ronald Schild (Managing Director of MV8 Marketing).

So plenty of food for thought and lots of questions to pose at this session, starting off with ‘What is an ebook?’  or maybe even, what does the word ’book’ itself mean nowadays?  One answer was that books are actually no more than a  ’device’ and have been for centuries.  The general consensus at this event is that there should be plenty of room for digital content alongside the book as we currently know it, ie they shouldn’t compete, but rather they should compliment each other. 

Pricing of the ebook and digital information are also hot topics.  Richard Charkins’s view is that what it boils down into is value - if you throw in the digital content for a tiny sum, it devalues the product you are trying to sell.  He believes that digital is a different product and it shouldn’t be thought of in the same way as the printed book.  It’s just not the same.  Andrew Savikas points out that when you are selling books you are competing against other ‘products’.  Victoria Barnsley agrees about variable pricing but points out that publishers are currently arrogant.  Prices really need to be decided by the consumer who expect the value to go down.  Andrew points out that in the US retailers are taking control of pricing from the publishers but that in the UK it is the publishers who are taking control.  He also flags up that more consumer research and media research is needed because we simply don’t know the answers at the moment. 

Victoria then brings up the fact there are currently lots of different models to consider.  Should we follow the rental model, for example, or the subscription model?  And she stresses the difference between books and say music.  How many people read and re-read books time and time again?  Unlike with music, when you might want to listen to the same track time and time again, once you’ve read a paperback it may be some time before you go back to it again.  She suggests that maybe going to a rental model is the answer.  Richard is not sure he agrees as some books, he points out, have never been read at all!  Now is a time for experimentation, he says, it’s a question of doing lots of things wrong and occasionally getting things right.

The key thing here is that we don’t know what model the consumer is going to choose.  And when it comes to Digital Rights Management (DRM) the panel ask - is it necessary and does it work?  Ronald Schild thinks it doesn’t work and encourages piracy.  Even if the publishers apply it customers, if they want to, will ignore it anyway.  Victoria uses the example of what happened in the music industry to show how it won’t work.  Richard  responds that anything with an acronym he doesn’t understand is generally obsolute in about 3 years anyway!

We then move on to the Influence of Apple.  Andrew says that a part of it is sheer numbers, and Victoria agrees that we should be expecting something very exciting from them very soon.  At the end of the day we want as many devices as possible.  Richard urges us not forget the PC.  Delivering to that right now is just as important as to a hand-held device.  Ronald says that in the academic market he can’t see the future for large devices.  What we all want is full access to all your PC functionalities.  Richard then comments that lots of digital content actually still printed out and he tells us that we shouldn’t forget the stapler for holding all the bits of paper together!

So what’s the optimum ebook?  And what is the optimum venue?  Ronald says that of course the advantage of a printed book is that it’s nice to have it in your hand.  But in some events the ebook is just more practical.  Andrew ask whether the book is just a question of habit, and the context in which we know.  The way we are brought up.  Text is a great means of communication and text still matters, but when it is connected to the web it’s got to behave like the web.  Victoria says she thinks that the numbers of beautifully produced, higher priced books, will probably increase, especially in the gift market, 

This is a great event.  Those attending have really engaged and are up for the debate.  We may not have necessarily come up with the solutions but the panel have definitely made us think about the alternatives.

“Something happened yesterday,” says journalist and author Andreas Wirwalski, rather mysteriously. “What happened yesterday Jane?” To his left sits Jane Friedman, former CEO of HarperCollins Publishers Worldwide, and to his right is Jeffrey Sharp, an independent film producer (of Boys Don’t Cry and Revolutionary Road fame). What happened yesterday was the launch of Open Road Integrated Media, a new enterprise that Jane and Jeffrey will head.

Jane Friedman, Andreas Wirwalski, Jeffrey Sharp

Open Road Media is a content marketing company, financed by Kohlberg Ventures, that is making waves across the fair and appears all set to transform the e-publishing landscape and usher in the era of the integrated media company. “The e-book will be the centre of a multi-platform universe that will include film, video and other forms of digital entertainment,” says Jane.

The cornerstone of Open Road Media’s strategy will be what they call the ‘author branded backlist’. Jane expounds her mantra, “The absolute reality is that the author is the brand. We’re going back to the future, which I just love.” The plan is to market e-books through a proprietary online platform designed to reach consumers where they live, socialize and shop. Open Road Media’s e-books will be backed up by a world of premium audio and video content such as author profiles, behind-the-scenes features and mini-documentaries.

It isn’t just the conception behind the company or that the future of publishing has materialised in a big way that’s exciting. What’s equally impressive is the fact that Open Road Media’s launch titles will include the works of world famous authors like William Styron, Pat Conroy, Joseph Heller, and Dame Iris Murdoch. It won’t just be established writers who will join Open Media’s stable. New titles will be nurtured in their Studio division, as well as in Discovery, a premium self-publishing division. “We will also work with publishers, like Grove Atlantic, who own the rights to books by being their marketing arm,” says Jane.

“At Frankfurt this year it’s become obvious to me that publishers are understanding that digital is happening and that it’s happening fast,” says Jane. Jeffrey, who’s a first-timer at the fair, says that he’s always looked to the page for inspiration when producing films. “I always try to get authors to come to my sets. They’re a great resource and inspiration.” The genesis of his partnership with Jane, which seamlessly integrates the two industries they thrive in, lies in their collaboration on film adaptations when she was still at HarperCollins. “Both our industries, legacy publishing and independent film making, have been hit hard by the recession. So we were drawn to each other with the idea of taking things forward and starting something new,” explains Jeffrey. They both agree that the Berlinale Film Festival and the Frankfurt Book Fair have been crucial to the merging of their industries

Their vision is not to create a hybrid product, such as an interactive e-book, as much as it is a way to create a multimedia world around the e-book. True, Open Road Media will be better positioned to create film adaptations, as they’ll hold the rights to content for all media. But apart from these adaptations and mobile gaming, they’re an integrated media company in the sense that they’re marketing will encompass a variety of digital platforms. It’s a company that is “born digital” and will only print traditional books using print-on-demand technology. Jane says, “The idea that we send out a digital book and it isn’t coming back appeals to me. I’m done with looking at inventory.”

A little thought for the day. There were a few moments of silence last night at the Frankfurter Hof, typically occurring because a book fair regular would exclaim how empty the lobby was, how quiet everything was.

“There is a bit of a hubbub.”

“More of a ‘bub’”

“Just an ‘ub’” really.

[Lapse into glum silence.]

It had to be said there was truth to that overheard exchange, but it must be added, an unnecessary truth. The drop in overall Fair attendance is so miniscule, it can hardly be noticeable—a, say, 2% drop would translate to 490 people in the Frankfurter Hof lobby rather than 500, hardly grounds for mourning low party attendance.

But it is certainly through that the ranks of editors are thinning a wee bit more than 2% even if that loss is disproportionately Anglo-American. Distressing as that is, it ought not stop us from inviting book fair novices along to the parties (be they in the Frankfurter Hof of the Gleis 25 dive bar.) Last night I spotted Google’s Chief Legal Officer, partners in two different iPhone book app vendors, two book and media bloggers from California hanging out at the Frankfurter Hof. Let’s invite more, let’s all agree to find one non-traditional publishing services person not on our usual guest list and invite them along to one of the traditional parties we attend. One of these days, an iPhone app vendor might throw the Bertelsmann bash of the future, so let’s bring them along to ours so that they know do a Book Fair party is done…

Earlier this year I was chatting with a journalist who covers media for a prominent online magazine when the topic of Jane Friedman arose. Did I know what her plans were? No idea. He’d been getting the same response from everyone he asked and was clearly bewildered. But, he said, one word did keep coming up: legacy. No-one would tell him what it meant though. Aha, I thought. The rapid conglomeration of publishing businesses from the 1960’s through the present, combined with the subsequent layoffs necessitated by the relative failure of the mergers to produce the anticipated profits had combined to eviscerate the institutional knowledge of the combined intellectual property. So while these companies did have licenses to vast amounts of quality content, there were very few people left who knew very much about what the damn content was. Jane, however, had a pretty significant repository of information—she was a one-woman institutional memory. So, I suggested, if I had that knowledge myself, one thing I might do is, to use a wee bit of jargon, “arbitrage those asymmetries”—exploit the gap between what I knew of the value of a given backlist book and what that book’s publisher knew.

Fast forward to this early afternoon in the Film & Media Center where Jane is sitting down to a chat with her business partner, the film producer Jeff Sharp. Delighted, I am, to note the format. A conversation between two knowledgable folks is really an ideal format for presenting new business models to a rather disparate audience. The programming folks at the Book Fair are very mindful of this in how they approach authors: the conversation, as opposed to the reading, is the classic format for authors being introduced to the Frankfurt Fair goers, and using it more on the business side of things would be wonderful.

That all said, it’s the content, rather than the format, that has engendered a standing-room crowd. Metaphorically, we know what’s coming, for her new company is called Open Road Integrated Media, and it’s clear Jane wants to hit the open road. But, in the classic brusque locution, show me the money!

In a four page press release, she duly obliges. Consider the following an idiosyncratic cheatsheet for wherever you find yourself this evening when the question of what’s Jane up to arises.

— Arbitrage the Asymmetries! Basically Open Road is going to monetize Jane’s relationships with established authors with significant backlists: Styron, Conroy, Murdoch (Iris, not Rupert), Heller…Crichton is a TK (copyediting speak for “to come”), “joining the Open Road down the road,” says Friedman. What’s the asymmetry? Well, for one, it’s trust. Publishing is a people business, after all, and authors and agents trust her.

— “The Author is the Brand” Open Road’s not shooting to brand itself but is going to offer a platform for all the aforementioned authors’ content in an author-centric platform. So the trust is being reinforced by Open Road’s willingness to make the author front-and-center.

— Rich digital media. A digital media development firm called Code & Theory is developing a proprietary platform that hosts ancillary bells and whistles—profiles, audio, mini-documentaries, and so forth. (Notwithstanding the digital cornucopia, “the eBook is the center of our universe,” Friedman clarified—the video is promotional, not living inside the book.) Both Sharp himself and a third principal Luke Parker Bowles (yes, son of), have a background in film and video and believe that the quality of the Open Road video will be above the average. This appears to be a major dimension of the day-to-day activity of the company as they’re going to have significant in-house production facilities.

— “Co-Marketing.” They’re taking their digital platform and their video production facilities and integrating it with business partners focused on niche content: Kensington’s GBLTQ list and African-American list to start with and also some Grove Atlantic titles (“literary” being the niche: Jim Harrison, Mark Bowden, P.J. O’Rourke announced thus far…) Given the business relationship is described with a rather fuzzy “co-marketing,” this falls for the moment under the rubric of “terms not [yet] disclosed.”

— Frontlist and self-publishing. The division that will handle this dimension is called Studio and run by Gotham Books’ founding publisher Brendan Cahill. Parallel to Studio is Discovery, and Discovery is a “curated” self-publishing wing—both operations benefit from the integrated digital marketing platform, and from print-on-demand (with possible subsequent conventional distribution or licensing). Unclear so far though are the terms of the self-publishing deal and how significant a component of the projected revenue it constitutes. Friedman indicated that Open Road would be absorbing marketing cost: “We plan to service every author in whatever way the author wants.”

Other stuff you should know:

— Their website OpenRoadMedia.com is not going to retail eBooks. It’s a general marketing platform for the Backlist, and the Studio and Discovery frontlist.

— Although this was barely discussed, the movie production aspect of this has to be one of, if not the largest revenue stream; Sharp currently has Styron’s “Lie Down in Darkness” in development.

— No advances.

— Profit share, numbers undisclosed.

— 750-1000 titles in Year One is the plan, but Friedman did not indicate the proprtions of that comprised by established author backlist, frontlist Studio, frontlist Discovery, and co-marketing agreements with Kensington and Grove.

—While their profit share terms apparently the current royalty offered by publishers for digital, Friedman is not intersted in competing on price. It doesn’t matter if other publishers match her royalty rate because, she says, she’ll do a better job marketing. “The secret sauce is the marketing platform.”

I’d love to give you a two cent opinion on how this all adds up but one has to be cautious. It is clear that Friedman has a wealth of relationships to monetize, it is clear that Sharp knows how to produce financial successful movies, it is clear that they can make a very robust digital marketing platform happen, and that at both the author and publisher level, that platform will be very useful. If that platform is to make money by generating unit sales of eBooks, sales will have to be pretty enormous, but if the platform is also being licensed on a fee-basis above costs of production for all that amazing video, it could be profitable fairly quickly.

Juergen Boos, in his welcoming speech, reminds us that what we see at first isn’t necessarily the whole picture.  There is often more to see behind the first impression, just like in Antonioni’s cult film ‘Blow Up’ when a photographer realises he’s unwittingly captured the scene of a murder when innocently taking a picture of a couple in the park.  And so it is the case with Argentina.  At first glance Argentina may appear to be all about what’s on the surface - but there’s more to it once you start to dig a little deeper. 

For those of you who may have forgotten, the literature of Latin America was first Guest of Honour in 1976, and indeed Mexico was honoured in 1992 and Brazil in 1994 - so the ground has been well prepared for Argentina in a way.  Violence, reminiscences and myths, as well as humour, are the themes offered by Argentina in 2009, breaking ground for its appearance in 2010.  With over 300 publising houses and around 22,000 new publications every year, there will be many opportunities in the Argentinian book market.

2010 marks the bicentenary of Argentina’s independence, Victorio Taccetti reminds us.  What i hadn’t realised was that by the middle of the 20th century, as a result of education becoming a real focus in the country, Argentina boasted the largest publishing industry in the Spanish-speaking world.  Another impressive statistic is that the production of books has risen from 50 million copies in 1990 to over 82 million in 2008.  Average growth in the publishing sector has also risen to 8.5% since 2003.   It has to be said, not many other countries around the world can boast these figures nowadays.  In addition, if you add in imports and take away exports, Argentina is today a market that consumes 147 million books.  So that’s a huge market to tap into if you are not already doing business in that area.

Next to the stage is Magdalena Faillace, President of the Orgnaizing Committee for Argentina’s appearance in 2010.  She starts by asking the question: how much does Argentina belong to Latin America?  It’s not all about geopolitical aspects of course - they also have a shared history.  One of Argentina’s aims, she explains, is to open up to the world and to be a place where education and culture can be accessed by the masses, not just by the priviledged few.  Their aim, as Guest of Honour, is to show off the diversity of their country - not only the traditional side but the lesser-known one as well.  She also points out that the country is keen to show that they are not all about Borges, Maradonna, and tango!  There is so much more to offer now - the modern Argentina is also a producer of food and technology, and a place where a wide range of literature can be found.  It’s not about the past now - it’s about the future too.  Already in the build up to the Guest of Honour appearance, many bridges are already being built between Argentina and Germany.  And not just on the subject of immigration - there’s also the influence of German Expressionism which we already see in the tareas of theatre and art.  She finishes by announcing that Martin Fierro will be the cornerstone in next year’s exhibition and that the books and authors in the pavilion will be presided over by Jorge Louis Borges and Julio Cortazar, two of the most internationally well-known authors.  There follows a history of the Argentinian publishing industry and what they represent by Gloria Lopez Llovet de Rodrigue, representing the Argentine Chamber of Publications.  In the early 20th century publishing houses such as Abeledo Perrot, El Ateneo, Tor and Claridad were established.  There were also representatives from Spanish publishers too.  But it was during the Spanish Civil War that the greatest change took place when the offices established in Argentina went from being mere distributors to actual publishing houses because, due to the war taking place - and it should be noted as a result of heavy censorship - their parent companies found themselves unable to publish in Spain itself.  As a direct consequence many intellectuals made their way to Argentina and many ended up founding publishing houses themselves.  Nowadays there are many independent publishing houses, of all different sizes, in Argentina as well as a strong representation of the main Spanish, Mexican and Colombian firms which have now become well-established.

Author Mempo Giardinelli then gives us his views on Argentinian literature.  Romanticism is something that he talks about a lot, as is the importance of Buenos Aires as a city.  He also points out that topics such as history, immigration, politics, military rule, violence and exile are all things that bind Argentina’s literature together.  He then highlights some of the characteristics of Argentinian literature today: the predominant role of women; the country’s national history; immigration flows; how Argentina managed to shun the Magic Realism of the 60s and the so-called Boom; human rights and military rule; literature coming from areas in Argentina other than Buenos Aires; the powerful tradition of the short story; poetry; the essay; and finally, the bizarrely ‘exclusive’ list of authors currently being promoted by the literary establishment. 

Music from Argentina

Last to address the conference is Daniel Divinsky, who has been an independent publisher since 1967 at the publishing house Ediciones, and who is today representating the Argentina Chamber of Books.  He begins by telling the gathered press attendees that in 1977 he and his wife were sent to prison for four months as a result of publishing a children’s book, the copyright to which they had bought at the Frankfurt Book Fair.  He went on to explain that at the time it seems thousands of books were being burned by order of the government and people were getting rid of any titles that might be found to be compromising.   The story had a happy ending because the Frankfurt Book Fair came to their rescue.  Not only did they send a message of solidarity and support (thus protecting them from any further serious consequences) but they also extended a special invitaiton to the couple inviting them to that year’s Fair, including as they did so the vital air tickets which enabled them to get out of the country on their release!  A presentation of Argentina’s Guest of Honour logo wraps up the conference, followed by a musical interlude outside provided by a rather good Argentinian trio on piano, double-bass and accordian….

Prior to the start of the Book Fair there was a lot of speculation about what might happen: would attendance fall down thanks to economically collapsed budgets and exorbitant hotel prices? would the Fair be overrun with protests from Chinese dissidents angered by the selection of China as Guest of Honor?

Based on the first day and a half, things are clicking along as they should be. Juergen Boos, the Fair’s director, started off his special roundtable meeting by addressing the attendance question. Contrary to some people’s opinion that it “seems” less busy this year, the number of visitors to the fair dropped by a mere 0.8%, or 353 people, to 45,753. And in terms of the Rights Center, traffic is actually up by 5.8% to 3,850 visits yesterday. Obviously there’s no way to track the number of deals being done, but based on this level of traffic, it seems like business as usual. (I haven’t spent much time tracking down big book deals, but I did hear about an absolutely mental Michael Jackson graphic novel that’s coming out in the near future . . .)

A lot of questions at the “Meet the Director” lunch were directed at China being the Guest of Honor, and although he admitted that China could’ve done more in terms of freedom of speech and human rights, Boos was supportive of what China has done with this opportunity, pointing out that this was “a first step,” and the first time that China was presenting itself on foreign territory. Boos emphasized that this is the mission of the Frankfurt Book Fair: not to force the Chinese government to listen to dissidents, but to provide a platform where different people can interact with one another. A place where there are over 300 readings and presentations by dissident Chinese writers right alongside the thousands of official Chinese literary events.

The impact being Guest of Honor has on getting a country’s literature and culture out the rest of the world can not be understated. Last year only 8 works of Chinese literature (fiction and poetry) were translated into German. This year the total exceeded 160, including 60 titles that were subsidized by the Guest of Honor translation fund. And these figures are just for translations from Chinese to German—it’s virtually guaranteed that there will also be increases in the number of Chinese books published in English, Spanish, etc.

Another topic Boos touched on at the meeting was the future of the industry, shying away from making any definitive proclamations (no one can really predict the future), but drawing attention to the rise in mobile content, and his belief that this will dramatically increase over the next 3-5 years, especially in terms of STM and educational publishing.

The expansion of eBooks, mobile content, and the like, leads to the creation of a lot of new companies, and continues to provide a reason for people to attend the Frankfurt Book Fair even though more and more business is being done over e-mail and the Internet in general. As Boos said, you need to trust people to do business with them, and the best way to develop that trust is by meeting them in person. That’s what the Frankfurt Book Fair provides, and why the Book Fair continues to go strong despite the overall downturn in the economy.

One of the most interesting figures Kaidi Urmet of the Estonian Publishers’Association dropped in her speech about the Estonian Book Market was about the nearly inverted correlation between titles published in Estonia and overall sales. In 1991—just two years after the fall of the BerlinWall—only 1554 titles were published in Estonia. But because of the demand of readers, over 23,295,000 units were sold. The snapshot of 2007 paints a much different picture: 3410 titles were published (more than double the number from 1991), resulting in 8,853,000 copies (approx. 40% of the total in 1991).

Urmet pointed to the steady increase in book prices as the reason for this decline in sales. “In 1991 we were just starting to implement the capitalist model,” she said. “Books were much cheaper then—people could afford them.”

Although the past year has been rough on the Estonian book market (where hasn’t it been rough?), one of the bright spots has been the increased interest in memoirs and biographies. Rene Tendermann of Pegasus—which specializes in literary fiction and young adult titles—echoed this trend, pointing out that on the whole, nonfiction has done much better than fiction since the economic collapse. His big worry for the future is library funding though. About 20% of Pegasus’s sales are to libraries, but it looks like library funding will decrease by 40-50% in the next year.

Not all the news is bleak though. Ilvi Liive of the Estonian Literature Information Centre (ELIC) has had great success in recent years getting Estonian literature translated and published around the world. So far this year, 30 Estonian books have been translated into 15 different languages—including Albanian, German, Russian, and even English. This is a much different situation than what things were like in 2001 when the ELIC first came into existence and started developing a network of publishing contacts around the world.

One of the books she’s most excited about that’s launching at the fair is the French translation of the third volume of A.H.Tammsaare’s Truth and Justice, a five-volume Estonian family saga set in the 19^th and early 20^th centuries.

The latest issue of the Estonian Literary Magazine (produced by ELIC) is also releasing at the Fair and contains a range of articles on Estonian literature and reviews of a number of new titles. And for publishers interested in award-winning titles, there’s even a special feature on the Estonian Literary Awards of 2008.

Business Breakfast number 2. This one’s about the German book market. I could get used to digesting numbers about book markets around the world first thing in the morning. “This is just an appetizer,” says Bärbel Becker of the Frankfurt Book Fair. “It’s nearly impossible to present an overview of the market in just an hour.” Well, they gave it a good go.

Clemens-Peter Haase, Bärbel Becker and Anke Simon

Anke Simon, from the Börsenverein des Deutschen Buchhandels , laid out the statistics that summarized the German book market. 80 percent of the German population, totalling 82 million, claim to have bought at least one book in the last year. These readers don’t have a lack of options, with 94,000 titles being published in 2008 alone. Bookshops accounted for 53 percent of sales, sales over the internet sales 10 percent (much lower than in the UK or in America), and direct sales by publishers was an astonishingly high 18 percent.

The German market operates on a fixed price basis, which means that independent book stores, in theory, are not priced out of the market by the large chains. Consumers have it good, because compared to a VAT of 19 percent on most products books have a reduced VAT of 7 percent. German publishers have already begun to embrace the digital future, with 37 percent of the new titles published coming out as e-books as well. Things appear to be going pretty smoothly for the German publishing industry, which had turnover of 9,614 billion Euro last year.

What about translations and the sales of foreign rights? Bärbel says, more than once, “Germany is an open minded market, in terms of translating to and from foreign languages and absorbing foreign cultures. This is aided by generous funding and support by several foundations. There are a lot of programmes and a lot of opportunities for exchange.” 7,342 titles were translated into German last year, and a majority of these from English. But it’s mostly one-way traffic. Of the 7,605 titles translated from German, a small minority went into English language editions.

Anke reiterates that this global monopoly or hegemony, or what you may call it, of English by highlighting the fact that translation of scientific works have decreased dramatically because most German scientists now publish in English. Humanities and social sciences scholars, however, still write in German. To keep it this way, the Geisteswissenschaften International, a translation grants organization are, ironically, funding translations into English. Apparently this is the only way for accompolisehd academic and popular works to gain international recognition.

The most well known grants programme that subsidises foreign publishers who want to publish German titles - which has existed for the last 35 years and supported the translation of over 5000 books - is the one run by the Goethe Institute. Clemens-Peter Haase, who works at the head office of the Goethe Institute in Munich, asserts that there has been a growth in demand for the grants they offer. It’s usually European publishers who apply, but in recent times there has been an increase in interest from the Arab World and China. Possibly because of the Frankfurt Book Fair’s tie-up with the Abu Dhabi Book Fair, and China’s invitation as the Guest of Honour this year. Clemens-Peter says, “We like to support titles on democracy, civil society, regional and global issues, European integration, as well as outstanding contemporary literary works. This is synonymous with our cultural and political goals, and foreign policy objectives.”