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Publishing News: Wattpad raises $17.3 million in series B funding

A storytelling platform gets funding, publishers are missing the mark on digital, and an overview of the ebook industry.

Here are a few stories that caught my eye this week in the publishing space.

Wattpad raises $17.3 for its storytelling community

Wattpad LogoBookExpo America (BEA) took place this week in New York City. One of the big announcements made at the show was Wattpad’s newly raised $17.3 million in financing in a series B funding round led by Khosla Ventures. Wattpad is a social ereading and storytelling platform that connects writers with readers, and according to a story at GigaOm, the company vision is to establish the platform as the YouTube of writing. Andrew Chung, a partner at Khosla Ventures and a new board member at Wattpad, told GigaOm in an interview:

“You’re able to upload a story chapter by chapter, folks are able to comment on that chapter, and they can provide encouragement to the writer and actually signal where they’d like the story to go, which creates a type of engagement that’s impossible in an offline context. There’s a very strong parallel to the way that YouTube was able to do that for amateur or user-generated video content.”

Liz Gannes at All Things Digital took a look at Wattpad’s explosive growth, reporting that the platform now hosts five million stories and has about 500,000 added each month. Gannes also highlights the popularity of the site with readers, noting that “a book by teen author Jordan Lynde (a.k.a. XxSkater2Girl16xX on Wattpad) about a relationship between a teacher and a student, has been read nearly 20 million times.”

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Publishers are reducing themselves to book packagers

The BEA show this week also inspired insight. Brett Sandusky took a look at the notions swirling about digital publishing. He argues that publishers have been fooling themselves with the idea that “digital is free and easy,” that you can take your existing content, simply change the format and rake in the money. He writes:

“While our processes have arguably improved and modernized, the fact remains: viable digital business models require more than afterthought. Simply converting content and making it available for sale is a recipe for disaster. This prevailing free and easy digital model is actually harmful to our businesses.”

Sandusky says the real money in digital is in distribution. He called for a curated distribution experience and emphasized the importance of owning the customer experience:

“Right now, we take so much time to polish our content and our products, and then we just throw them away. All this content curation we’re doing (or at the very least talking about) makes no sense at all if we simply hand over the UX ownership to retailers and their locked devices. In fact, not owning the whole customer experience with regards to digital has basically reduced us to little more than book packagers for our retail partners. And, we’re not even getting paid for it.”

The real take-away from BEA, he says, is that it’s time to start focusing on the customer, to “[pay] attention to every touch point, every interaction, every experience and make sure we own it.” His post is a must-read this week.

A look at the state we are in

Jeremy Greenfield over at the Wall Street Journal’s MarketWatch put together a sort of State of the Publishing Industry post this week, looking at how ebooks are effecting change. He offers a nice roundup of the DOJ lawsuit, the B&N venture with Microsoft, trends in venture capital and important startup entrants to the publishing space, and a look at how children are responding to ebooks (PDF). Greenfield also talks about Pottermore and how J.K. Rowling’s moves to set up her own store and sell the Harry Potter ebooks directly to consumers — without DRM — is affecting the industry. He highlights two important points:

  1. “In the first month, she sold $5 million worth of e-books through her own store, Pottermore. … Pottermore’s success has renewed speculation that it’s possible for publishers to develop direct-sales channels.”
  2. “When Pottermore opened, it sold its e-books without digital rights management (DRM) software that is meant to prevent piracy. This move ran counter to what most book publishers currently do. … When Pottermore launched, piracy initially spiked, said [Pottermore Chief Executive Charlie Redmayne]. But a backlash from anti-DRM advocates as well as appreciative fans resulted in an overall 25% drop in piracy of Harry Potter e-books.”

You can read Greenfield’s entire roundup here.

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