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Five things we learned about publishing in 2011

Lessons from Amazon, self-publishing, ereading studies, HTML5 and DRM.

Many of publishing’s big developments from 2011 will continue to shape the industry in 2012. So with that in mind, here’s a look at five of the most important lessons from last 12 months.

Amazon is, indeed, a disruptive publishing competitor

If it wasn’t apparent before, Amazon’s publishing intentions became plainly obvious this year. The wave started out small, with a host of expanding self-publishing tools for authors, but it grew to tsunami proportions as Amazon launched imprint after imprint, from romance to science fiction. Amazon also hired industry heavy-hitter Larry Kirshbaum, who “is charged with building something that will look like a general trade publisher.‘”

Some of Amazon’s publishing projects.

Amazon further extended its reach into publishing when it launched the Kindle Owner’s Lending Library. The ebook lending waters already were murky and contentious for publishers — HarperCollins instigated a memorable dustup, as did Penguin — but Amazon’s move into the space caused a full-fledged uproar among publishers as well as authors, and may have damaged the publisher-library relationship further.

O’Reilly’s Joe Wikert highlighted one of the main problems from the publisher perspective:

As Amazon stated in its press release, “For the vast majority of titles, Amazon has reached agreement with publishers to include titles for a fixed fee.” So no matter how popular (or unpopular) the publisher’s titles are, they get one flat fee for participation in the library. I strongly believe this type of program needs to compensate publishers and authors on a usage level, not a flat fee. The more a title is borrowed, the higher the fee to the publisher and author. Period.

And Amazon may be encroaching on feature magazines like the Atlantic and the New Yorker as well. In a sign of possible things to come, freelance journalist Marc Herman took his long-form story, “The Shores of Tripoli,” and expanded it into a $1.99 Kindle Single. According to his blog, he has plans to expand on the model, which would further sideline traditional publishing avenues.

Publishers aren’t necessary to publishing

Authors have figured out they don’t need publishers to publish books. The self-publishing book market saw quite a boom this year as the publishing format started becoming more mainstream and the services offered by self-publishing companies became more comprehensive — providing authors with platforms, sales, marketing, editing, etc.

Amazon has a role in this boom as well. The Wall Street Journal reported that “Amazon.com Inc. fueled the growth [in self-publishing] by offering self-published writers as much as 70% of revenue on digital books, depending on the retail price. By comparison, traditional publishers typically pay their authors 25% of net digital sales and even less on print books.”

Another trend emerged this year to further sideline the publisher’s role: the rise of the agent-publisher. This controversial and contentious business model allows agents to step in to provide expanded publishing services to authors. In an interview, Booksquare’s Kassia Krozser explained that the new agent-publisher role emerged because of failings on the part of traditional publishers: “Traditional publishers need to not only rethink how they sell their value to authors and agents, but they also need to rethink the economic structure of their deals.” Krozser also expressed concerns that the agent-publisher role carries a conflict of interest — see her interview here.

Readers sure do like ebooks

There good news is that people are still reading and they’re embracing the digital transformation. The Book Industry Study Group (BISG) released a report in November that showed that readers are solidly committing to digital books. A couple highlights from the report:

  • Power buyers are spending more. More than 46% of those who say they acquire e-books at least weekly … report that they have increased their dollars spent for books in all formats, compared with 30.4% of all survey respondents.
  • “… nearly 50% of print book consumers who have also acquired an e-book in the past 18 months would wait up to three months for the e-version of a book from a favorite author, rather than immediately read it in print.”

The number of devices sold is telling as well. A Pew report found that “ereader ownership growth in the U.S. doubled in six months, from 6% to 12% of adults owning an ebook reader.”

Though the new Kindle Fire is selling at a loss, Amazon reported that it is selling Kindles at a clip of “well over one million Kindle devices per week” — at least for the three weeks following Black Friday. Amazon hasn’t disclosed the total number of devices it has sold, but one analyst estimates the sales to be 8% of total revenues in 2011 and predicts that amount will rise to 9.9% in 2012. So … a lot of Kindles. Combine those numbers (vague as they might be) with the 40 million iPads sold, and the conclusion is clear: ereading is now mainstream.

HTML5 is an important publishing technology

HTML5 entered the publishing space in a big way this year — some calling it the “future of digital publishing.” From storage to multimedia to content behavior (think shaking the iPhone or automatically sizing for different screen sizes) to geolocation to a host of other interactive features, HTML5 has squared itself up to become an important player in the industry. Amazon (mostly) embraced it in its Kindle Format 8, and HTML5 is supported in EPUB3.

HTML5 is platform agnostic and may even be able to save — or make — publishers money. In an interview early in the year, Google’s Marcin Wichary explained:

It’s very important to recognize that HTML5 fits all the devices you can think of, from the iPhone in your pocket to Google TV to the tablets to small screens and big screens. It’s very easy to take the content you already have and through the “magic” of HTML5, refine it so it works very well within a given context. You don’t have to do your work over and over again. Of course, all of these different means come with different monetization opportunities, like ads on the web or on mobile devices.

You can view Wichary’s full interview below.

DRM is full of unintended consequences

It turns out DRM does more than provide publishers with a false sense of security — locking the content of books also locks those books into a platform (ahem, Kindle). This point was highlighted by author Charlie Stross in a November blog post in which he argued that DRM had become a strategic tool for Amazon:

… the big six’s pig-headed insistence on DRM on ebooks is handing Amazon a stick with which to beat them harder. DRM on ebooks gives Amazon a great tool for locking ebook customers into the Kindle platform. If you buy a book that you can only read on the Kindle, you’re naturally going to be reluctant to move to other ebook platforms that can’t read those locked Kindle ebooks — and even more reluctant to buy ebooks from rival stores that use incompatible DRM … If the big six began selling ebooks without DRM, readers would at least be able to buy from other retailers and read their ebooks on whatever platform they wanted, thus eroding Amazon’s monopoly position.

So, to recap, we’ve learned that DRM doesn’t stop anyone from pirating, nor does it come with the necessary data to support its impact. But it does give publishers one thing: a longer length of rope with which to hang themselves.

TOC NY 2013 — O’Reilly’s TOC Conference, being held Feb. 12-14, 2013 in New York City, is where the publishing and tech industries converge. Practitioners and executives from both camps will share what they’ve learned and join together to navigate publishing’s ongoing transformation.

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Comments: 11

  1. How about Content Curation as an emerging re-publishing trend?

    btw- why don’t you consider a commenting system such as Disqus? that would make it a lot easier for end-users. thanks.

  2. Curation and aggregation are always solutions to over saturated market segments. The core issue with regards to digital content is that app’s store, digital book stores and search are poor user experiences for discovering new content.

    I also agree strongly with the need for a better commenting system..

  3. The question of self-publishing vs. publishing is a tricky one. On one hand, traditional publishing houses are losing their ability as gatekeepers of new content; on the other, self-publishing has less roadblocks. It has to be an author-to-author basis.

    Good write up. Lot of great resources here.

  4. We feel your pain re: the commenting system. We’re working to roll out a new one soon. Thanks for your patience!

  5. While the headline “Publishers aren’t necessary to publishing” certainly grabbed ny attention, it doesn’t ring true for me. Perhaps, some authors don’t need publishers, but the majority do need us and appreciate what we do.

  6. I just don’t get this whole hoohah over lending of eBooks. Libraries buy a hardcopy book and lend it over and over again without additional funds being provided to publishers or authors. Yes, ebooks sell for less, I understand that. But still … trying to fight the lending trend is old world thinking. Instead, publishers and authors should look for a way to capitalize on the trend. Try innovation instead of “business as usual.” As the article points out, more authors are finding that they don’t need publishers at all. Writing is on the wall, folks.

  7. I agree, great write up. I especially liked the info about DRM, which nobody really talks about. I agree it’s not a good idea and does pretty much nothing. Like the TSA. 🙂

    Jim Kukral

  8. The self-publishing option has always been an option to individual authors. They could always publish their books on their own. The printing cost is very small for someone to be discouraged from self-publishing their book. The problem with self publishing is how to make that book known-this is where publishers come into play, and this is also the reason why there are many different publishers; some are doing well, some are not.
    Amazon can never become the world’s only publisher by allowing authors to publish themselves; how many of them can Amazon make famous? Amazon cannot promote all authors the way they deserve. Every industry thrives because of balance. There is no “DO IT ALL” merchant.
    Cary, as far as lending, the issue that publishers have is that ebooks can be lended a limitless amount of times and be read simultaneously by millions of people. On the contrary a printed book has a limited number of borrowers, and it can be read by one person at a time.As you understand no publisher or author, or even Amazon can survive with this model.

    • Mary – You’re conflating self-publishing with Amazon Publishing. They are two entirely different things. Anybody can self-publish using tools offered by Amazon, but not everyone can be published by Amazon. I’ve written more about this here: http://robertkroese.com/post/29640730919/publishing-self-publishing-and-amazon-publishing-oh

  9. Excellent overview of the changes brought by 2011 and I wonder where we’re going in 2012. More Amazon? Probably.

    But I agree with Mary’s comment that the role of publishers, and especially the Big Six, is not over, far from it. Because they can do so much more for book discoverability than even the most talented and marketing savvy self-published author can! Where Amazon is playing a new game in particular is with Amazon Encore: based on sales and customer reviews they pull out of the tsunami of self-pubbed titles those that stand out and then re-publish them! Very clever! You could say that the self-pubbed titles on Amazon are like a virtual slush pile out of which readers (and not literary agents or editors) are the ones voting with their dollars for the best books.

    That changes the game of book discoverability and is an obvious advantage of Amazon over traditional publishers…

  10. It’s my understanding that over all these years and billions in VC Amazon has never actually turned a profit. (If I has I wonder how it has managed to turn around billions of VC into a profit.) I’ve never yet offered or published any of my work or sold any of my work with Amazon. World Domination has always been a worry, though I know I shoot myself in the foot. Amazon worries me and I have never been able to put a finger on it. I’ve recently taken to writing my own fiction live online in serial form. It doesn’t make money but what fun! Authors have the facility to do as they wish and I’d personally like to see a movement of serialized publishing. You might not make money but the whole debacle has become disgraceful. So shoot me!

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