Should we launch a Book World Constituent Assembly? (Why Mario is right.)

Mario Guaraldi
Mario Guaraldi

We’ve argued and made up at least a thousand times and we’ll probably keep at it for another thousand: he’s the only outstanding Grand Old Man of the Italian publishing industry who still has a young-at-heart’s fighting spirit that never fails him, he’s Mario Guaraldi. Read this article he wrote a week ago: IL MERCATO DEI LIBRI CROLLA. E L’ASSOCIAZIONE EDITORI SPOSA LA RETORICA (THE BOOK MARKET IS CRASHING. AND THE PUBLISHERS ASSOCIATION EMBRACES RHETORIC).

Mario’s right about everything, except for one important thing: he’s mistaken to keep thinking that the AIE (Italian Publishers Association) is a relevant speaker concerning the future of the book market. He’s mistaken to think that all we have to do is, like he writes, “send home all the leadership of the AIE“. The AIE hasn’t mattered anymore for quite some time, in fact everything it does and says is totally irrelevant. And its leadership, just like its logic, is nothing other than the longa, or perhaps now brevis manus of the three or four publishing groups that are just now beginning to understand that, with the digital era, their domination is destined to crumble and collapse.

But I do think that calling for a Constituent Assembly of the Book World is good, fine and right. Why not? Why don’t we try, regardless of the AIE? I think, and I believe Mario agrees, that it’s worth a try. We can organize it to consider the key points that have to be dealt with in a constructive and propositional manner, leaving others to waste their time in an unproductive and foolish defense of a past that nobody feels any longing for. A Book World Constituent Assembly that meets in order to recreate the book market and book fair, based on new principles of economic, environmental and cultural sustainability, with the purpose of identifying:

  • new sustainable business models for all the key players in the book fair (digital first, etc.)
  • digital solutions for the circulation of culture (books that are out of print, sold out, but under copyrights, untraceable copyrights, etc.)
  • DRM

So who’s with me?. Other than Mario, I mean, co-opted ex officio 🙂

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 😉

Fausto Lupetti on the publishing industry: “This is no Economy”

[With this article I’d like to start a weekly reflection, every Tuesday, in touch with the publishers. Anyone with ideas, comments, criticism or requests to make can do so by sending me an email at antonio@simplicissimus.it. Thanks!]

Fausto Lupetti
Fausto Lupetti

We rarely run into publishers who are truly aware of the real situation the book industry is in. Up until two or three years ago many of them responded, shrugging their shoulders, “But what crisis! The book market is countercyclical; when there’s a crisis people have less money, so instead of going out they stay home and read a book.” Go figure.
Then came (and are still wreaking havoc) the multitude of publishers, but also and perhaps more importantly the authors, critics and intellectuals for whom yes, the book is in a crisis, but there’s a culprit: the world wide web, Internet, digital technology, ebooks. “What do you expect, ma’am, with all this stuff on the Internet, of course nobody reads any more!” Here that which Fausto Lupetti (more to follow) so wisely defines “the shore on which to land” (digital technology) is even indicated as the evil from which to run and hide. Well, go figure.

None, nobody, or few, very few stop to contemplate a now blatant situation with a little clarity: that strange situation for which the paper book market (and not just in Italy, but on a global scale, let’s just stop it with the victimist provincialism!) is no longer sustainable, “it’s no economy, again with Lupetti, while his now sure-fire landfall, his key to the solution, still can’t compensate for the losses which (due to irresponsible delays) are becoming quite heavy in the meantime: “In the balance sheet of the publishers and the supply chain including distributors and Bookstores the average loss is 20-25 %, which is not compensated by ebook sales.

It may seem like a mere outburst, this statement published by Fausto Lupetti in the blog on his digital distributor STEALTH. But those who know Fausto know that he is not a man of meaningless outbursts: a long-time publisher, he has succeeded in focusing the debate on themes of communication, publishing and introducing authors such as Jean Baudrillard, Alberto Abruzzese and Jacques Séguéla. And now he throws a stone in the pond of the book publishing industry:

“We actually try to stem the situation with cuts, but that’s not a good idea. It’s the business model that has to change. (…) To create innovation we have to change, we have to delete the memory of how we used to do things and do them in a completely different way, while maintaining the values of the publishing brand. (…) In fact, in the book supply chain everybody tries to pass off his problems on the next guy. The bookseller delivers a book after an entire week, the distributor charges the publisher ridiculous discounts, the publisher publishes scandalous books (in terms of product quality).”

And this diagnosis, given ruthlessly as befits a good doctor, is followed by a precise indication of the path to take:

“Changing the business model means diving into and believing in the technological innovation that in the communications field offers increasingly significant opportunities for work and efficiency, the thought economy is the only sector that is growing. Seizing the opportunity of digital technology that overcomes any distribution barrier of the book product in the world in order to internationalize our culture. In Italy we have a cultural heritage unparalleled by any other; we’re sitting on a gold mine, and enhancing its value in the world is an extraordinary opportunity that digital technologies offer us.”

There is a problem, however, and Lupetti’s reflection closes on this, as if inviting others into a discussion in order to find a solution:

“The problem is that the publishers don’t have their own resources to contend with a new business model for the book, let alone the capability to join together and form a system, and thus they cannot take advantage of the opportunity offered by the crisis and digital technology.”

And so what should we do? I have a few ideas, but I’d rather hear yours for now: I’m all ears!