Amazon’s new secret service, White Glove anybody?

white-glove

THIS MORNING I woke up with a great idea: what the heck, I said to myself, LITERARY AGENTS! Yes, literary agents! I actually tried to talk to them about digital editions and speculate on collaboration a zillion times two zillions years ago, but nothing, it all went straight through them, even worse than corporate publishers. Nevertheless, I kept pondering this morning, they represent a lot of authors and a lot of books, many of those are not published by traditional authors e they have them there, with no revenue whatsoever.
So what’s easier, what offers more mutual benefit, than saying “HEY AGENT! Here I am: let’s publish the ebook version of the releases you wish to promote more, those you deem better amongst the ones you are granted by the author, let each one do their bit, their big bit, let’s say that I (Simplicissimus) undertake all promotion and distribution expenses and give you 50% of my earnings, you keep some of them and I give the rest to the author“. “Or, that’s what I realised later, if you prefer, dear Agent, production and promotion expenses will be borne by you and the author and I will take care of distribution in every store: you give me 10%, 30% goes to the store and you are left with a big fat 60%. Not bad, right?“. We leave paper rights to the author, which means the agent, and with an ebook out there selling some copies, nevertheless circulating, maybe it’s going to be easier to convince some regular publisher. And why not, after the ebook is published, if we both feel it’s worth it, we can also publish the paper version digitally and sell it on Amazon, without leftover stock issues and all…

I thought about it for a couple of hours, time to decide that it was pretty damn cool. Pronto: gather some information, test the ground, let’s make sure if it’s true that agents have all these titles that make no money and do not circulate. Let’s see if they like the idea and if they see the win-win potential of this deal.

Surprise: I can get to talk to the first agent on my list who says “shuush… don’t say anything or it’s over! Amazon is already offering the same deal, but they do not want the word to be spread and neither do we!“. There’s no doubt they want it secret: just google Amazon White Glove to find out there’s no official page on the project.

OBVIOUSLY your favourite blogger is here to grass it all out, except for the name of my source. This is how Amazon’s White Glove project works, a sort of silent fracking of the publishing industry.

SO: the premise is that officially mainstream publishers and literary agents must appear all united against Amazon. This is how the can freely have all sorts of agreements with Amazon, even at the authors’ expenses.
Therefore you see publishers screaming and shouting against Amazon on topics on which Amazon seems to be completely right about: steep ebook prices (like Hachette), DRM, American imperialists who want to force their rules upon us, and at this pace, my dear madam, all these nice independent book shops will have to close and all these amenities that cannot be defended here. And let’s talk about that horrible self-publishing idea, afoot of all that’s mean and evil, literary Pandora’s box full of books that have the impertinence of wanting to be read despite they “are not printed” by a real publisher!

WELL. Then Amazon contacts the literary agent saying “Listen to me, let’s put all these books that no one wants to read on Kindle, as ebooks. I’ll take my usual 30% and the rest is yours to share with your author“. So agents sign, and make authors sing, accepting to have their ebook released as self-publishers. It’s all good, isn’t it?

HELL NO, IT AIN’T! Publishers, authors, agents do not get really pissed-off, as they should, at Amazon about this project ! Because there’s a little loophole: Amazon gets exclusive rights on that title. No one can sell it, not even the author by himself. If you then add the fact that a Kindle ebook is not cross-platform, this means damaging both, competition and the book itself, by preventing its fair circulation in order to be enjoyed by anyone who’s willing, regardless of their hardware or their systems.

This is what would really get me going, and I explicitly admire Amazon for what it does, unlike many others in the publishing world who are always ready to talk rubbish about it on shaky grounds, I’d be ready now to resort to Competition laws about this. Mainstream publisher will definitely help me out…

Here’s why if Amazon & Co. is bossing everyone around, the blame lies entirely with the publishers who put DRMs on their ebooks

drm-author-earnings-by-price1

Here’s what we could do immediately if publishers would stop locking up the ebooks and making them unusable in EPUB format by adding those notorious DRMs (of Adobe or, in a few cases, another type):

  1. Users could buy ebooks from any online bookstore, some here and some there, have their own digital library and manage all their ebooks as they see fit, regardless of where they bought them from. Creating management tools for these personal digital libraries would already be a business in itself. Thanks to DRMs, however, that’s not possible, yet Amazon does it with Kindle.
  2. Semantic search engines could index the entire contents of all the books: creating search/recommendation/analysis tools for reading/structural analysis of texts/analytical indices and a lot of other wonderful things could be done. Thanks to DRMs no, but on Kindle yes.
  3. Everyone would be able to read the book on many devices, having the text synchronized on all of them. Thanks to DRMs we can’t do that, but Kindle does it.
  4. Highlighting and underlining, just like notes and comments, could enhance the books for everyone, regardless of the platform being used, and anyone could create sites and applications for true large-scale social reading. But thanks to DRMs that’s not possible, yet on Kindle it is.
  5. The market of interactive and multimedia illustrated ebooks, and above all the audio-ebooks, could finally take off because their production, finally in standard (EPUB3) format, would be affordable and all devices would have appropriate software to read them. Thanks to DRMs, again, this isn’t possible.
  6. And obviously users could buy, download and move their ebooks to where they want to read them without the hassle DRMs create in the purchasing process. Thanks to DRMs buying an ebook is an act of heroism and confidence in the future; but that’s not how it is on Kindle, there everything works more smoothly.
  7. Etcetera.

The reality instead is that all the big publishers, and many of the small publishers pretending to be big in order to seem cooler, use Adobe DRMs. This, and only this, allows Amazon (and Apple and Kobo) to work on proprietary formats and platforms in order to “lock” their users inside their own purchasing and utilization environments.

Oh, and I forgot: in order to achieve this great result, those publishers actually PAY Adobe a significant amount for every single download carried out, because shooting yourself in the foot isn’t even free of charge. Brilliant, isn’t it?

Talking about a scalable business: here are the numbers (our numbers)

Everywhere I look, I keep reading sophisticated analysis on the fact that the ebook, my friend, won’t continue to grow at all like it used to. Then I discover that all this outstanding analysis is always based solely on the data of one American association (just one of them), the AAP which, of all the many possible limitations, certainly has one: it doesn’t have the ebook sales data from Amazon Kindle. Now, it would take much less than this to convince a shrewd commentator that the data is literally good for nothing, but that makes no difference.

As far as numbers are concerned, I prefer to talk about those that I know first-hand, the numbers of Simplicissimus Book Farm, whose main business consists in distributing ebooks: grouping together books of publishers (STEALTH) and self-publishers (Narcissus) in order to distribute them throughout all the available online bookstores, deducting a commission (5% on sales generated by STEALTH and 10% on sales generated by Narcissus).

Some warnings:

  • The data I’ll be presenting covers a time span that practically goes from when the ebook market actually emerged in Italy (end 2010 – beginning 2011) to the latest firm data available, that of last 31 March (i.e., very recent).
  • The data I’ll be presenting concerns the Italian market only, and does not include the numbers we’re beginning to obtain from investments made abroad, since about six months ago.
  • I’ll be presenting two types of data:
    1. the number of titles distributed (showing how big the catalogue of Italian books distributed by Simplicissimus Book Farm is and how it’s growing). Here we’re talking about single titles for payment ONLY (books are not counted twice if they’re available in several formats and free books are not counted at all);
    2. the value of transactions generated from this catalogue each month (in this case, in order to preserve data confidentiality as I’m required to for my shareholders, I’ll be using an index number, setting the value in euros of transactions generated in January 2011 to 100).

But let’s allow the graphs to do the talking.

In the graph below you can see the growth of the number of titles acquired and distributed on behalf of Publishers and Self-publishers (Narcissus):

grafico_6

As you can note, the number of titles we distributed climbed from 300 in January 2011 to over 30,000 in March 2014: increasing a hundredfold in 3 years and two months. Now we’re by far the leading Italian distributor in terms of number of titles distributed (more than 40% of all titles available in Italy).

If we look at the same data in its monthly distribution, we discover that we’ve become5 times better at obtaining new titles from publishers and self-publishers: 300 new titles in the month of January 2011, 1500 new titles in the month of March 2014 alone:

grafico_3

But how many sales have these titles generated over time, month by month? Here’s the data:

grafico_5

If we’ve been good at collecting titles to be distributed from publishers and self-publishers, the market’s been even better: the value of monthly sales of ebooks has grown in 3 years and two months by as many as 15 times! If we set the one-month sales value of January 2011 to 100 euros, the one-month sales value for March 2014 has become 1500.

Perhaps this data, considering that the Italian book market is worth, just to give an idea, about one seventh of the German market, is enough to explain why we’ve decided to invest in expanding our services abroad, hiring personnel of various linguistic areas (area managers for STEALTH in order to acquire publishers and community managers to promote self-publishing of Narcissus.me): it seems to us that the growth of the ebook market isn’t that bad after all 😉

Dear Publishers, operation Everything Must Go is just for you

Operation Everything Must GoToday STEALTHBooks, the ebook distribution platform of Simplicissimus, is starting Operation Everything Must Go. Here I’d like to explain what it’s about and, more importantly, why we’re doing it.

What is it about? Easy: from today until December 31st publishers (and only the publishers) can convert the books they still haven’t digitized at the lump-sum price of 15 euros per book (peanuts, for anyone who knows what I’m talking about), regardless of the number of pages (and with the only restriction being that they’re “black-and-white books”, fiction or non fiction). In exchange we ask the publishers (if they haven’t already done so) to entrust the distribution of their ebooks to STEALTHBooks .

Why are we doing it? This is a reasonable question, since we’ll obviously be losing money.

From a logical point of view the matter can be explained as follows: our main business is distributing ebooks, so the more we have to distribute, the more we sell and the more we earn, both ourselves and the publishers. And since one of the deterrents to the release of ebooks is the cost of conversion, we’ve decided to invest some money, not in advertising as so many do, but rather in paying for the bulk of conversions we perform for publishers, instead of making them pay the entire amount.

But behind this logic there lies a more profound vision, one that may be particularly interesting to all those digital publishing service providers which are preparing to offer conversion services, even in Italy, and may view this offer as competition against them, when it actually isn’t. This is how things are:

    1. Is conversion going to become free for everyone? Yes! This is inevitable over the long term. This is why there are epub editor projects all over the world that allow anyone to make an epub file by themselves at zero cost. And to do it well, too. This is why we invested and are still investing in BackTypo.
    2. So are these tools already capable of guaranteeing everyone an adequate service? No, not everyone: they’re still too complicated for many people, so many still need “the conversion” to be done for them.
    3. Feeding the business of conversions made in India at ridiculously low prices to then resell them making everyone believe they’re done in Italy (as many Italians do) seems to take the fair out of fair business practices. And don’t say “Well, you do it too“: not us, we have always openly declared (since 2009!) our partnership with Integra in India, and we have always added our own internal work (and lots of it) to provide proper conversions. In fact, in order to just break even, we can’t go below 0.50€ a page.
    4. So how can we afford to make this offer? Let alone the idea that after December 31st it will no longer be an offer, but will become standard practice .
    5. Clearly we’ll lose a ton of money, but we want to unlock the market. Publishers release around 3% of what they have in their catalogue, and we want to unlock this situation. There are those who do marketing by spending money on publicity, but not us: instead we invest our money in publicity, we’re using our money to subsidize the conversions of the publishers.
    6. And here’s the interesting part for all those Italians who really do work directly on conversions: once the offer phase is finished, if we have a significant number of books confirming the quality of this operation, we’ll create a large network of Italian converters, coordinated by us, who, using BackTypo, will convert and produce the best ebooks ever seen on the face of the earth.
    7. And we’ll do the same on all the other markets in which we operate or will operate: a network of Polish converters in Poland, Turkish converters in Turkey, Spanish converters in Spain and Latin America, Portuguese converters in Brazil, etc. Because in books, language is just too important to be overlooked.

So the conversions are and remain a paid service, it’s just that we’ll pay for them, aiming for a distinctly higher quality than what we see today.

Ebook sales in Italy: Big Guys vs Italians; is there a problem here, or is it just me?

STEALTH sales

Preliminary remarks

  • The data I’m talking about concerns STEALTH, the Simplicissimus Book Farm distribution platform that aggregates and distributes 37% of the books available on the market (more than one third).
  • The observations that I make are all based on a generalization which, in my opinion, is very realistic even though it can’t be demonstrated: in fact, I don’t have access to data regarding other distribution platforms (allow me to launch an appeal that will hopefully be heard: maybe it would be better if we share this data with each other, instead of paying for unrealistic incorrect estimates from so-called specialists who don’t have access to first-hand data like us…), and there’s always the chance (although highly unlikely, in my view) that their trends are completely different than those of STEALTH.

Some facts

  • Over the last year (data as of April 29th), the sales of ebooks distributed by STEALTH have grown by 400% in quantity (number of ebooks) and 250% in value (the average price has fallen).
  • If, however, we exclude the sales made through the stores of the Big Guys (Amazon, Apple, Google, Kobo, Barnes & Noble), the growth is “only” 82% in quantity and 50% in value.

Theory

  • Am I wrong to say that Italian ebook retailers (and not just the so-called independents at Ultima Books or Bookrepublic, but also those dependent on large groups, like Media World, IBS, Feltrinelli) have a big problem?
  • Am I wrong to say that in a situation where ebooks are naturally bought more frequently in the particular store the user finds already pre-installed on his new ebook reader, smartphone or tablet, the problem cannot be overcome, and the market will become increasingly carved up between the Big Guys (which already have 80% of the market today)?
  • Lastly and more importantly, am I wrong when I say that this indicates the need (and opportunity) to creatively find new paths and new channels for the promotion of ebooks, which are definitely not those of a foolish, and even a bit ridiculous, competition against the Big Guys? In other words: Are we really certain that an ebook must/can be bought only in a dedicated ebook store?