Publishing businessCheryl Goodman, Qualcomm: Of the 80 or so tablets announced, almost none of them had a content strategy and just connecting to the web isn’t a strategy. Will be a truncation of devices in the marketplace. A lot of these devices are fun but are not productivity devices. If going to monetize the entire carrier chain you need something pocketable and portable and need to be able to see the content outside. Single purpose devices is not where the marketplace is headed. Color is coming and that is what people want. Mirasol has very rapid response time and will do video well. Needs far fewer components that an LCD device does and so can make cheaper devices. Battery will last at lease 3 times more than an LCD device will. Sunlight viewable. Fundamental problem in the industry is the old-fashioned battery technology and short battery life on phones and devices. Mirasol will be selling the panels, not licensing the technology. Launching multiple devices with multiple partners in multiple regions before the summer. Will be 5.7 inch screens. They also have a frontlighting technology available that some manufacturers will be using. Contrast of device is the same as paper. The 5.7 inch size is not purpose meant for the reading industry. 5.7 inch is conducive to portability. Consumers don’t want huge devices, the want portable devices and publishers must start to design their content for portable use. One partner will be doing a dedicated educational device. Other partners will be doing rich multimedia content. Devices will be competitive in price and Qualcomm will not be seeing a return on investment initially. One partner is a publisher with 5 daily newspapers. Seeing a lot of partners using Android operating system.

Bob Sacks, mediaIDEAS: we are in a dual revolution, technological and social. It is more important to know how to search for a fact than it is to know a fact. We have not had the time to adjust to the new platforms that have arisen. Is hard to monetize technology when change is still happening. Aristotle said how we communicate alters what we communicate and it is still true.

David Renard, mediaIDEAS: Forecasts for paged-based media. More than 90% of revenues still come from print and over next 10 years 60% will come from digital side. Paper consumption by book publishers will drop by 50% by 2020. Moving to publishing model where everyone is a publisher. Ereading devices will hit an installed base of 2 billion devices will exist and if add smartphones installed base will go up to 4 billion devices. Average prices for tablets will decline to $100 by 2020. This year we will see first sub $100 ereading devices. The natural “silos” of newspapers and magazines are starting to disappear. Newspapers are trying to be magazines, rss feeds trying to be newspapers, books are trying to be feeds. For ereaders and tablets by 2020 will be 166 billion of revenue generated by paginated digital media. in 2020 will be about $120 per device spent on paginated media per device. As devices become cheaper they will eventually be given away in return for a subscription and may see a lot of this in the school market.

Jim Taylor, Harrison Group: been evaluating digital content and devices for 5 years. Looked at marketplace in October and January. What consumers want in digital media: in 2-3 years 14% expect to get an ereader and a tablet, both; 75 million tablets in US by 2015; 6% of market owns all three of tablet, ereader and smartphone. These people have a loyalty to content first above loyalty to the device. These people are willing to pay for content and publishers making a mistake by ignoring them. These people substantially more engaged in information universe than others. The revolution is already in place with multi-device users. Most of them use these devices while watching television. Among these people they are consuming more newspapers, magazines and books than they did before they had the devices. These people want printed content as well. Routine information on the devices and high end publications, where photos are important, will be the last to go digital. Real effect of digital revolution is to sponsor more consumption of digital content. The problem is that the devices in the market today do not meet the needs of these people in terms of display technology and battery life. They want content management, to be notified when content is coming, don’t want annual subscriptions and want content that can be exported to other users in other forms. Want to be able to share publications. Privacy is a central concern. Looking at publishers: only 5% of publishers expect to pass digital savings on to consumers but most consumers feel they should be entitled to the savings. Only 24% feel that digital is impacting print production. CPM is dead and the way to make money in the future is to get a commission on those who buy stuff from an ad in the magazine. 50% of publishers don’t understand about how the carriers charge to distribute their digital files. The real thing that publishers don’t know is how the public uses their tablets and devices. Their perception of how these devices are being used are completely different from what surveys are showing about how the devices are really used. Consumers understand that this is a revolution in reading not in technology and publishers don’t understand this. Publishers think this is primarily technological revolution and this is wrong. People will be spending as much as $126/month on media consumption in the future.

Michael Tamblyn, Kobo: in the last 2 years time has been really compressed in the ebook market. When first started thought that it would take 5 years to get to 10%. Now some people thinking it could be 40 – 50% of sales could be digital. Reading has to move from platform to platform and moves with you no matter what platform you are on. There are different kinds of behaviors attached to different kinds of devices, and what is clear is that people who read on dedicated devices read more that that it why it is important for Kobo to have a device. Also, having your own hardware allows for greater exposure in retail outlets and thus getting the Kobo name out into other markets. Further, for a lot of people today ebooks and ereading devices are synonymous. This may change in the future. A lot of people also want a tangible artifact in which their books can be held. Their new social reading application has been successful. People who engage in social reading end up spending 1/3 longer in the reading app than just plain readers. From their own data analysis: biggest segment is still fiction; juvenile and YA is big, followed by biography and business. Fiction may be most popular because devices do it the best. Sales efficacy of different platforms by value: web, Kobo ereader, Kobo powered readers and other eink, ipad, android, iphone, blackberry. Customer behaviors: 4 types of customers – voracious eink reader, the first time they buy the tend to buy about $35 in ebooks and every time they come back they spend $25 and do this several times a month, focused around eink devices, read a lot of fiction and doesn’t read much public domain, the were heavy bookstore print buyers; smartphone reader, they read primarily on smartphones, less of a steady customer, first time show up spend about $15 and then won’t buy for a few months and then come back and buy and then disappear for a few months; iPad reader, first day is worth about $22 and average is about $16, these people engage in their social reading apps; the freegan, they only read free content, massively resistant to marketing, hundreds of thousands of them, a block of customers who are looking at ebooks as a way not to pay for books. Kobo is doing very well, had excellent sales over Christmas and high sales continued through first three months of the year. Can find this presentation’s slides, and the Tools of Change one, on Slideshare. Search for Michael Tamblyn.

Ebook best practices:

Peter Balis, Wylie: tablets and iPad have lived up to the ability to render content in new ways and now need advanced versions of Epub 3.0. If the industry is going to grow then there needs to be more standardization, can’t keep producing “custom” versions for unique delivery platforms. Spending more as an industry than receiving in the enhanced area. With 3.0 almost everybody is participating in the standard and so this might make it more successful. In print a color product is a lot more expensive so have to make a lot of decisions as to how much color to use. All of that goes away in the digital space and can use much more color. Doesn’t matter how much color in and ebook. But when produce a digital book they don’t know if the customer will be reading it on a color or and eink device and so can look terrible depending on which device is used. Not simple. At Wylie fully support libraries. Most important thing that if people reading your content it is a good thing. Likes the idea of libraries offering buy buttons on their websites. Made a very firm decision that will not make an enhanced ebook just to raise the price. Will only do an enhanced book where the result will be better than the non-enhanced versions. Difficult to market enhanced ebooks because you must explain to the buyer why the enhancements are worth a higher price. Learned that the hardest thing to do was to create the infrastructure to handle ebook production, sales and marketing. Hiring people who would never had hired before in a print environment.

Brendan Cahill, Open Road: interesting to follow readers to see how they are using different media to find books. Don’t know what the future of enhanced ebooks is. Nobody knows what the reading public thinks yet. Still think that that readers want immersive text. They embrace the library market and use Overdrive in the US. They believe in the one ebook to one person lending model. Think that libraries are a great way of creating demand, especially for series books. Your marketing should be set up so that the recipient can make an immediate decision to buy the book and even allow him to buy it through the marketing presentation if possible.

5 COMMENTS

  1. A few points:
    Cheryl Goodman tickled me by suggesting that Mirasol doesn’t want to fall into the trap of not having a successful tablet strategy… but they’re happy to license their displays to those companies.

    David Renard suggests books are trying to be RSS feeds. I don’t see any sign of that. Ebooks might be trying to be multimedia products, but not RSS feeds.

    Jim Taylor says consumers don’t want annual subscriptions. Tell that to periodical companies. There are still plenty of us who like and trust periodicals enough to know we want them all, and we’re willing to pay in advance for content… especially when we get a good discount from an annual subscription.

  2. I agree with Jim, subscriptions are just a niche product, and this won’t sustain the market. Most users want the ability to “cruise” the web for information, the new business model needs to profit from that to make a sustainable business model. Who knows now, are targeted ads the answer? Only time and money will tell. I would prefer that to all the wholesale crap ads I see now. They will have to divorce Apple before that happens, unfortunately.

  3. Subscriptions might be a niche… but it’s still a huge niche, no need to count it out. People like to cruise for information, but there are still specialty magazines that “prepackage” the things readers know they want, and deliver it regularly. It’s the specialty magazines that benefit from subscriptions, whereas the more general news sources probably get as much or more business from cruising readers as subscribers.

    Specialty magazines also deliver ads targeted to that subject and its market, making them doubly valuable.

  4. Subscriptions are and will always be an important revenue stream. But they will only succeed in the eWorld when the publishers manage to develop a product that is worthy of subscription. Few are coming close right now, that is clear.

  5. Paul, thanks for passing this along for those unable to attend the conference.

    The real thing that publishers don’t know is how the public uses their tablets and devices. Their perception of how these devices are being used are completely different from what surveys are showing about how the devices are really used. Consumers understand that this is a revolution in reading not in technology and publishers don’t understand this. Publishers think this is primarily technological revolution and this is wrong.

    That’s interesting and I’d like to hear more specifics about it.

    Loved Michael Tamblyn’s comments. I recently acquired a Kobo ereader and also a Nook Color and find them great complementary devices. I hope Kobo eventually ports their social stuff over to the reader. I buy from both stores but prefer Kobo because of their coupons and general reader-friendliness. They just strike me as getting it. B&N does, for the most part, but still sometimes make me *facepalm*. The Nook Color is just a terrific device, though. I understand why people love their iPads so much now.

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