Books 2.0 The future of Book Publishing in a

connected worldconnected world

Clive RichMarch 19th, 2010

ContentsContents

R fl ti th h• Reflecting the macro-changes• Operational consequences• What’s happening in relation to

contracts right nowN t t f di ?• New structures for a new paradigm?– Towards a new type of Distribution

contract?contract?– Towards a new type of Author’s

contract?– Towards a new model of organisation?

A NEW LANDSCAPEA NEW LANDSCAPEReflecting the macro-changes

TO BE NEGOTIATED CAREFULLY... TO BE NEGOTIATED CAREFULLYReflecting the macro-changes

AND IN A DIFFERENT WAY TO THE MUSIC INDUSTRY... AND IN A DIFFERENT WAY TO THE MUSIC INDUSTRY

Reflecting the macro-changes

The context: Multiple distribution partners

• “Multiple Channels”• “Multiple Devices”Multiple Devices• “Ubiquity”• “Mutual Interest”

ConsequencesConsequences

T diti l t • Traditional partners are now joined by:

Mobile– Mobile– Ebooks– ISP’sISP s– Devices– Hardware/Software companiesa dwa e So twa e co pa es– Brands– Portals/social networks – Aggregators– Consumers

NOVEL WAYS TO REACH NEW OUTLETSNOVEL WAYS TO REACH NEW OUTLETS

The context: Greater User empowerment

“O ”• “Opennesss”• “Open licences”p• “Sharing”• “Non Linear”• Non Linear• “Context, community,

i ”experience”• “Immersiveness”• “Consumer Trust”

ConsequencesConsequences

• Less control• Freedom for the user to ...Freedom for the user to ...• Multiple linking/book marking• Unbundling• More conversations• More conversations

TALKING TO USERS IN A NEW LANGUAGETALKING TO USERS IN A NEW LANGUAGE

The context: Multiple streams of value

• “Advertising reborn as content”

• “Freemium”“F l lik f ”• “Feels like free”

• “Bundles”u dles• “Value around product”

ConsequencesConsequences

• Downloads• Subscription

• Value added productsV l dd d • Ad supported

• Books bundled ith ft

• Value added services

• Aggregator dealswith software and/or hardware

• Micro transactions

• Aggregator deals• Rev share deals• Super distribution• Micro transactions

• Micropayments• Super-distribution• D2C business

modelsmodels

MOVING FROM ONE BIG VALUE STREAM MOVING FROM ONE BIG VALUE STREAM ...

TO MANY SMALLER VALUE STREAMS... TO MANY SMALLER VALUE STREAMS

Consequences for distribution contracts

M lti l di t ib ti t• Multiple distribution partners:– Requirement for multiple different

contract types for different contract types for different channels

– Some large and growing fast, some small and developing. The latter are just as importantare just as important

– Creates resource issue Creates resource issue

– Will collective licensing emerge?g g

Consequences for distribution contracts

G t t• Greater user empowerment:– Tension between traditional approval

rights/rights restrictions for content g gowners versus need to accommodate enhanced user involvement

– Less focus on DRM?

Focus on remedies rather than – Focus on remedies rather than prevention of activities?

M f P bli h ?– More transparency for Publishers?

– Access to Data ownership and use Access to Data ownership and use

Consequences for distribution contracts

Multiple streams of value:• Multiple streams of value:– Contracts catering for many more, but

frequently smaller multiple transactions

– Contracts permitting experimentation with business models whilst protecting w t bus ess odels w lst p otect g Publisher rev streams where practicable –use of minima? advances? Agency commissions? “Greater of” formulae? Equity?

– Contracts requiring commercial Contracts requiring commercial transparency and fluent accounting from distribution partners – garbage in creates garbage outg g

Consequences for author contracts

• Multiple distribution partners:– Transparency for authors more p y

likely than controls

– Issues around term/extent of rights/exclusivity of rights/exclusivity of rights/percentage splits developing as authors weigh up developing as authors weigh-up direct-to-market deals

Consequences for author contracts

• Greater user empowerment:

• Tension between integrity of product and ability to unbundle books

• Who controls access to and ownership of di ?audience?

• Access to Author becoming a key issue as • Access to Author becoming a key issue as need to generate additional content streams and experiences grows

Consequences for author contracts

Multiple streams of value:• Multiple streams of value:– Authors potentially being accounted to for

many more transactions than previously, across many different business models and across many different business models and often involving smaller amounts

– Increased focus on net-receipts calculations –– Increased focus on net-receipts calculations –should percentage splits increase if publishers have less costs?

– More rapid accounting becoming an issue

– Use of desktop audits to become more – Use of desktop audits to become more frequent

Towards a new model Towards a new model

Distribution contracts• Distribution contracts– Combination of multiple channels, greater

user involvement, and need to build multiple streams of value implies greater emphasis on streams of value implies greater emphasis on

• providing access to books as a service • partnership with distributors.

– Such partnerships are a better bulwark against piracy than legislative controls

– Need to build service propositions for users implies move away from “licence” or “sales” agreements and towards greater emphasis on g g pmutual “service” style agreements, supporting distribution partners in new ways

Towards a new partnership model

Publisher Partner Jointly• Product development • Regular delivery of

diff ki d f

• Promotion• Marketing

Publisher Partner Jointly• Providing community

development toolsdifferent kinds of unique content

• Product unbundling

• Distribution• Supporting data capture

and processing

• Driving traffic• Building user

conversations E b i • Access to authors

• Building context around authors

p g• Supporting channel

development• Collection

• Embracing business modelexperiments

• Format creation• Embracing of sharing

and portability of content

Collection• Reporting• Accounting

P i Ri k

• Format creation• Delivering

sponsorship andadvertisingco te t

• Proportionate Risk• Proportionate rewards

advertising• Data utilisation

Towards a new modelTowards a new model

A th g t• Author agreement– Greater author freedom to go to

market directly plus requirements market directly plus requirements to deliver books as a service implies greater emphasis on “service style” agreements with “service-style” agreements with authors

– Services provided in return for payments by way of tiered

i i BUT ith t commissions BUT without extensive advances, lower marketing and lower print costs?g p

Towards a new Model of service contract

Services provided;

• Sales• Product development

• Market insight• CRM

Services provided;

p• Channel development• Website development,

including D2C

• CRM• Royalty accounting• Credit/collections• Physical manufacturing • Brand sponsorship

• Merchandise• Creative

services/artwork

Physical manufacturing services

• Digital manufacturing servicesDi i l di d services/artwork

• Press, publicity and media buying

• Digital/online marketing

• Digital encoding and distribution

• Business Affairs servicesg g

Towards a new model organisationally

– “The time is now”– “Pressure is on ...”– “More haste, less speed?”, p

Embracing the great adventure

“One needs to place the footstep of courage into the stirrup of patience”

• Publishers already have the skills – digital is

(Shackleton)

Publishers already have the skills digital is just another channel for creative expression

• Digital work is ”Exclusively for Everyone”• Digital work is Exclusively for Everyone

• Project-based work involves everybody and i h i i l i l creates momentum with minimal internal

organisational disruption

The footstep of courage in the p gstirrup of patience.

Thank you.Thank you.