mike shatzkin at ifbookthen 2012

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

Mike ShatzkinIfBookThen, Milan

February 2012

THE BIG DIGITAL CHANGE ISSUES IN

US PUBLISHING FOR 2012

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

AMAZON'S SHARE OF PUBLISHERS' REVENUES

(PRINT AND DIGITAL)• Over 30% of large pub volume and

growing (67% of e, 20-25% of p)

• Threats of shelf space reductions (bookstores and mass merchants)

• Proven impact of Amazon's onsite promotions (i.e. Sunshine Deals, Kindle Daily Deal)

• Publishers' challenge: Grow non-Amazon revenues wherever they can

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

AMAZON'S SHARE OF PUBLISHERS' REVENUES

(PRINT AND DIGITAL)• Over 30% of large pub volume and

growing (67% of e, 20-25% of p)

• Threats of shelf space reductions (bookstores and mass merchants)

• Proven impact of Amazon's onsite promotions (i.e. Sunshine Deals, Kindle Daily Deal)

• Publishers' challenge: Grow non-Amazon revenues wherever they can

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

AMAZON'S SHARE OF PUBLISHERS' REVENUES

(PRINT AND DIGITAL)• Over 30% of large pub volume and

growing (67% of e, 20-25% of p)

• Threats of shelf space reductions (bookstores and mass merchants)

• Proven impact of Amazon's onsite promotions (i.e. Sunshine Deals, Kindle Daily Deal)

• Publishers' challenge: Grow non-Amazon revenues wherever they can

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

AMAZON'S SHARE OF PUBLISHERS' REVENUES

(PRINT AND DIGITAL)• Over 30% of large pub volume and

growing (67% of e, 20-25% of p)

• Threats of shelf space reductions (bookstores and mass merchants)

• Proven impact of Amazon's onsite promotions (i.e. Sunshine Deals, Kindle Daily Deal)

• Publishers' challenge: Grow non-Amazon revenues wherever they can

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

AMAZON'S POTENTIAL TO CORNER KEY BOOKS OR

AUTHORS• They know reading patterns• Ability to offer authors higher

royalties, onsite promotion• Can build some reach to other

channels (i.e. libraries, other retailers)

• Can offer advances; take authors or push up what publishers pay

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

AMAZON'S POTENTIAL TO CORNER KEY BOOKS OR

AUTHORS• They know reading patterns• Ability to offer authors higher

royalties, onsite promotion• Can build some reach to other

channels (i.e. libraries, other retailers)

• Can offer advances; take authors or push up what publishers pay

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

AMAZON'S POTENTIAL TO CORNER KEY BOOKS OR

AUTHORS• They know reading patterns• Ability to offer authors higher

royalties, onsite promotion• Can build some reach to other

channels (i.e. libraries, other retailers)

• Can offer advances; take authors or push up what publishers pay

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

AMAZON'S POTENTIAL TO CORNER KEY BOOKS OR

AUTHORS• They know reading patterns• Ability to offer authors higher

royalties, onsite promotion• Can build some reach to other

channels (i.e. libraries, other retailers)

• Can offer advances; take authors or push up what publishers pay

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

SPEED OF EBOOK ADOPTION

(DOES IT SLOW DOWN? SOME SIGNS IT MIGHT...)• Doubled or more for four straight

years (2007-2010 inclusive)

• New research suggests slowdown of growth (BISG/Bowker consumer study, 2nd half of 2011)

• Verso research shows increase of ebook resistance

• New devices that enable other activities could mean less reading

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

SPEED OF EBOOK ADOPTION

(DOES IT SLOW DOWN? SOME SIGNS IT MIGHT...)• Doubled or more for four straight

years (2007-2010 inclusive)

• New research suggests slowdown of growth (BISG/Bowker consumer study, 2nd half of 2011)

• Verso research shows increase of ebook resistance

• New devices that enable other activities could mean less reading

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

SPEED OF EBOOK ADOPTION

(DOES IT SLOW DOWN? SOME SIGNS IT MIGHT...)• Doubled or more for four straight

years (2007-2010 inclusive)

• New research suggests slowdown of growth (BISG/Bowker consumer study, 2nd half of 2011)

• Verso research shows increase of ebook resistance

• New devices that enable other activities could mean less reading

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

SPEED OF EBOOK ADOPTION

(DOES IT SLOW DOWN? SOME SIGNS IT MIGHT...)• Doubled or more for four straight

years (2007-2010 inclusive)

• New research suggests slowdown of growth (BISG/Bowker consumer study, 2nd half of 2011)

• Verso research shows increase of ebook resistance

• New devices that enable other activities could mean less reading

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

VOLATILITY AND EXPERIMENTATION IN

PRICING• Agency model has enabled big publishers to

maintain frontlist US prices at $9.99-$14.99• Impact of self-pubs and indies on pricing

(could they make it harder for pubs to get higher prices?) – Big action at bargain tiers $0.99-$4.99– Increase of selection and awareness at lower price points– Increase in bestseller representation of lower-priced books

• Reduction in pricing influence of print

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

VOLATILITY AND EXPERIMENTATION IN

PRICING• Agency model has enabled big publishers to

maintain frontlist US prices at $9.99-$14.99• Impact of self-pubs and indies on pricing

(could they make it harder for pubs to get higher prices?) – Big action at bargain tiers $0.99-$4.99– Increase of selection and awareness at lower price points– Increase in bestseller representation of lower-priced books

• Reduction in pricing influence of print

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

VOLATILITY AND EXPERIMENTATION IN

PRICING• Agency model has enabled big publishers to

maintain frontlist US prices at $9.99-$14.99• Impact of self-pubs and indies on pricing

(could they make it harder for pubs to get higher prices?) – Big action at bargain tiers $0.99-$4.99– Increase of selection and awareness at lower price points– Increase in bestseller representation of lower-priced books

• Reduction in pricing influence of print

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

WILL ANYTHING BUT IMMERSIVE READING SELL

RELIABLY AS EBOOKS? (SO FAR, NOTHING HAS...)

• All consistent success is immersive reading

• Different investment-return scenarios

(additional costs for less-likely-to-sell ebooks)

• App market pricing discouraging• Potential to change with HTML5 apps

and new ePub 3 specifications

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

WILL ANYTHING BUT IMMERSIVE READING SELL

RELIABLY AS EBOOKS? (SO FAR, NOTHING HAS...)

• All consistent success is immersive reading

• Different investment-return scenarios

(additional costs for less-likely-to-sell ebooks)

• App market pricing discouraging• Potential to change with HTML5 apps

and new ePub 3 specifications

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

WILL ANYTHING BUT IMMERSIVE READING SELL

RELIABLY AS EBOOKS? (SO FAR, NOTHING HAS...)

• All consistent success is immersive reading

• Different investment-return scenarios

(additional costs for less-likely-to-sell ebooks)

• App market pricing discouraging• Potential to change with HTML5 apps

and new ePub 3 specifications

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

WILL ANYTHING BUT IMMERSIVE READING SELL

RELIABLY AS EBOOKS? (SO FAR, NOTHING HAS...)

• All consistent success is immersive reading

• Different investment-return scenarios

(additional costs for less-likely-to-sell ebooks)

• App market pricing discouraging• Potential to change with HTML5 apps

and new ePub 3 specifications

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

WILL US PUBLISHERS MOVE ON OPPORTUNITIES

TO OWN NON-ENGLISH TRANSLATIONS?

• Self-publishing authors doing it on their own!

• Translators everywhere can sell their services to publishers anywhere

• US publishers looking for ways to expand

• Promising translations at time of initial deal could be appealing to authors

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

WILL US PUBLISHERS MOVE ON OPPORTUNITIES

TO OWN NON-ENGLISH TRANSLATIONS?

• Self-publishing authors doing it on their own!

• Translators everywhere can sell their services to publishers anywhere

• US publishers looking for ways to expand

• Promising translations at time of initial deal could be appealing to authors

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

WILL US PUBLISHERS MOVE ON OPPORTUNITIES

TO OWN NON-ENGLISH TRANSLATIONS?

• Self-publishing authors doing it on their own!

• Translators everywhere can sell their services to publishers anywhere

• US publishers looking for ways to expand

• Promising translations at time of initial deal could be appealing to authors

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

WILL US PUBLISHERS MOVE ON OPPORTUNITIES

TO OWN NON-ENGLISH TRANSLATIONS?

• Self-publishing authors doing it on their own!

• Translators everywhere can sell their services to publishers anywhere

• US publishers looking for ways to expand

• Promising translations at time of initial deal could be appealing to authors

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

WILL BARNES & NOBLE UNVEIL A WORKABLE GLOBAL STRATEGY?

• Scale would seem to require it• The challenge: economics of reading

devices require also selling the content

• B&N already has extensive relationships with non-US sources of content

• B&N Nook at 1/2-Amazon in US has been most successful competitor to Kindle

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

WILL BARNES & NOBLE UNVEIL A WORKABLE GLOBAL STRATEGY?

• Scale would seem to require it• The challenge: economics of reading

devices require also selling the content

• B&N already has extensive relationships with non-US sources of content

• B&N Nook at 1/2-Amazon in US has been most successful competitor to Kindle

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

WILL BARNES & NOBLE UNVEIL A WORKABLE GLOBAL STRATEGY?

• Scale would seem to require it• The challenge: economics of reading

devices require also selling the content

• B&N already has extensive relationships with non-US sources of content

• B&N Nook at 1/2-Amazon in US has been most successful competitor to Kindle

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

WILL BARNES & NOBLE UNVEIL A WORKABLE GLOBAL STRATEGY?

• Scale would seem to require it• The challenge: economics of reading

devices require also selling the content

• B&N already has extensive relationships with non-US sources of content

• B&N Nook at 1/2-Amazon in US has been most successful competitor to Kindle

Logical

Idea

The

Company

© 2012 The Idea Logical Company, Inc.

CONTACT

Mike ShatzkinThe Idea Logical Company

info@idealog.com@MikeShatzkin