The sold-out O'Reilly Tools of Change book publishing conference wrapped up this week with keynoters including Raymond Kurzweil, Tim O'Reilly and HuffPo's very own Arianna Huffington.
A good conference challenges you to stretch your thinking, and in this regard TOC didn't disappoint.
My personal highlights follow:
Killing DRM Softly
O'Reilly has been criticized in the past for using the TOC conference to browbeat complacent publishers on topics near and dear to O'Reilly's heart, notably the evils of DRM (Digital Rights Management). The DRM-will-kill-you theme was less prevalent this year, although Angela James of Carina Press (the all-digital imprint of Harlequin launching this June) struck a more constructive middle ground tone by urging publishers to tip their toes into the DRM-free waters by experimenting with a few titles (I previously addressed the DRM issue here: "Protect eBooks Or Trust Customers To Do The Right Thing?").
Publishers to Get Closer to Customers?
One theme this year was how ebooks give publishers the opportunity to get closer to their customers. In the past, big print publishers kept their customers at arms-length. They relegated the dirty work of customer relationship management to the retailers. While this offers publishers the benefit of not dealing with pesky customers and the hassles of ebook customer support, it also causes publishers to not know their customer.
At the Digital Book World conference (TOC's new competitor) last month, it was clear how out-of-touch some publishers were with their customers. Richard Nash of Cursor captured my sentiment when during a Q&A at DBW he challenged publishers on an ebook pricing panel to price books based on what customers want to pay, not on a cost-plus basis (where, for example, a publisher might add the cost of their Manhattan high rise office into the calculation of what an ebook should cost).
But back to the theme of publishers getting closer to customers. "Getting closer to customers" can mean many things, though it often means selling direct. One advantage of selling direct is that the publisher has an opportunity to own the customer relationship, capture the customer's contact information for later communication/email marketing, build its own community around the books and authors, and cut out middlemen like distributors and retailers.
EEK, a Customer! - How Publisher-Direct Sales will Accelerate Demise of DRM
I predict publisher-direct sales, if the practice catches on among publishers, will accelerate the demise of DRM'd ebooks. Why? If publishers become retailers and are forced to communicate with their customers and hear their problems first-hand, publishers will quickly realize what a hassle DRM is for their customers. Every time a customer emails the newly minted publisher/retailer with a support question like "the code I'm entering to activate my book isn't working," the publisher loses money just opening the email.
When publishers become retailers, they'll learn to further appreciate the valuable audience aggregation and customer service role played by retailers.
Stats Stats Stats
I love data. The Book Industry Study Group (BISG) presented new data on ebook adoption trends based on a survey of 44,000 consumers (of which, only about 3% were ebook customers), and the results were interesting.
- Despite all the hype about rich media interactive ebooks, consumers appear to prefer, at least for now, just words on screens, like words on paper.
BISG cautioned publishers to not rush to automatically adjust their strategies to cater to views and opinions of the early adopters, because as ebooks go mainstream the mainstream might have different needs and wants.
Arianna Huffington: We are in the Golden Age of Books
Another major theme of the conference was the importance of books and community. Although reading is primarily a solitary experience, readers have always enjoyed talking about books.
In at TOC keynote, Arianna Huffington, the co-founder and CEO of The Huffington Post, told publishers we are in the midst of the Golden Age of Publishing. Books don't end with the printed page, she said. "We need to leave behind this idea that old ideas are not worth talking about," she said. "Books are conversation starters and that's what publishers have the opportunity to facilitate on line better than anyone."
The Best Presentation at TOC
My favorite presentation of the conference was from Bob Pritchett of Logos Bible Software, in a session titled, Network Effects Support Premium Pricing. I remember attending his presentation four years ago at the first TOC in San Jose, so I knew I didn't want to miss his presentation this time. They're doing amazing stuff at Logos. They face an interesting challenge, one that every author and publisher faces: How do you compete against free? In their case, they sell about 10,000 bible study ebooks. How much has the bible changed over the last two hundred years? Not much. But what Logos excels at is making this information more accessible than ever before. They take a database-centric view of their vast and ever-growing library of content.
When you purchase a book from them, you're not just getting a static ebook, you're buying into a dynamic, integrated online application environment that becomes richer with each new publication, and with each new member to their community. Even if Bible study isn't your thing, check them out for future-of-publishing inspiration. I can't do them justice here.
The Future of Digital Textbooks
John Warren of the Rand Corporation moderated an interesting panel on the future of digital textbooks. As a preview to the panel, Andrew Savikas and John published an excellent Q&A interview with John's panelists over at the TOC Blog. Access it here.
(Disclosure: Flat World is near and dear to my heart and wallet -- I'm connected to them as an investor and advisor).
The challenges educational publishers face when transitioning to digital represent a hyper-exaggerated version of the same challenges trade publishers (publisher who sell through bookstores to consumers) face.
Why hyper-exaggerated? Because textbook publishers sell very expensive content, often $100 to $200 per book. The high cost of college textbooks is at a crisis level because textbook costs now render education unaffordable to many deserving students, especially at the community college level.
Whenever publishers create content for which there is great demand (such as textbooks), yet they make that content prohibitively expensive and inaccessible (textbooks), it causes customers to seek out alternative content options (piracy, used textbooks, etc.), all of which provide the publisher no economic benefit. Sound familiar?
Digital textbooks offer potential relief to students and their parents. The challenge for college textbook publishers is to make the transition to lower cost digital products without putting themselves out of business.
Yes, There are Publishers and Readers Outside the U.S.
Speaking of the world, most American publishers and authors take a U.S.-centric view of the world. Among print publishers and their agents, their focus is to carve up and sell the rights to overseas partners and let them worry about the rest of the world.
Yes, the U.S. represents the largest single market for books, but this will change, especially with the rise of ebooks because it's difficult to slice customers by language or geography on the borderless Internet.
US publishers should also look to foreign publishers to help serve the US market.
Ramy Habeeb, of Arabic publisher Kotobarabia, gave a great keynote that offered fascinating insight into the market for Arabic books. According to Habeeb, the market for Arabic books, measured by the number of literate consumers who read Arabic, is approximately 300 million people, the same market size as the United States. Over 100,000 of them live in New York City alone, he said.
He explained both the challenges and the opportunities for publishers looking to tap into the huge market for Arabic-speaking and reading consumers. He spoke about the impact of censorship in large Arabic-speaking countries such as Egypt and Saudi Arabia. Self-censorship among authors, he said, is also a problem, because few authors wake up in the morning thinking, "I wonder how I can get arrested today." Habeeb, himself based in London, sees censorship declining once free market mechanisms enable each country to realize the far-reaching economic and cultural benefits of a thriving book publishing community.
Prepare for Exponential Growth in Ebooks
A final highlight of the conference was Tim O'Reilly's interview with uber-inventor and master futurist, Raymond Kurzweil, the man behind the new Blio ebook platform. He spoke about how most forward-thinking people consider technology progression as linear (steady predictable progress), when in fact some of the most important technical progressions are exponential (progress accelerates over time, catching everyone by surprise). Ebooks are likely an exponential phenomena. They're not a fad, and they may reshape the book market faster than any of us believe.
If you want more from this year's TOC, visit the Tools of Change website for access to free video recordings of the event, as well as PowerPoints from some of the presentations. Click here for my conference notes from the 2009 Tools of Change.
Did you attend TOC this year? Share your favorite takeaways below.
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