Book publishers know that their business is changing, and quickly. Whether it’s online publishing through the Web, downloadable e-books, or app development, digital content and the technology that supports it is the newest path to sales growth and customer satisfaction. In today’s book content marketplace, publishers have to master an ever-growing number of exotic technologies, even while these same technologies are being continuously updated, morphing into new versions of themselves that are more efficient and in constant need of sophisticated management and technical support.
To meet the needs of this transition, there is a burgeoning collection of digital vendors looking to supply fundamental digital infrastructure as well as strategic consultation to a book publishing industry marching relentlessly, if not always competently, toward a technology-enhanced future. As traditional book publishers contemplate adding e-books and other digital products in a rapidly evolving book marketplace, the need to reorganize and rethink business practices—not to mention executing them—is a growing demand.
More than ever, publishers consult vendors who can supply everything from turnkey systems that can manage content from acquisition to distribution to an à la carte menu of services that they can tap as needed. Based on an annual survey, “Uncovering eBooks Real Impact,” conducted by Aptara, a multifaceted vender that combines digital conversion, production, and market analysis services, the firm says that the acceleration of the adoption of e-books, especially in the trade book segment, means publishers almost always need some form of outside technical and production know-how to make sure their houses can capture digital demand and the revenue it produces.
Demand is growing. E-book sales in 2010 were up 40% over the previous year, according to Aptara’s annual survey of the digital book marketplace that collected 1,350 responses from a range of publishers. (That growth figure is almost identical to the 39% growth rate reported by the Association of American Publishers/Book Industry Study Group BookStats sales survey that found e-books sales in 2010 across all publishing segments rose 39%, to $1.62 billion). One out of five publishers in the Aptara study reports at least 10% of its sales are generated by e-books, and the figures are growing. The report also points to the importance of both print and digital content, emphasizing that 85% of all publisher respondents publish across all market segments and “are producing print and eBook versions of their titles. For the time being, print publishing’s legacy cost structure and business and production models are living alongside newer eBook-inspired practices.”
According to the report, over the past two years the proportion of trade book publishers adding e-books to their lists grew from 50% to 76%, a faster rate of e-book adoption than any other publishing category (64% of STM publishers added e-books and 55% of college publishers). And no wonder, according to BookStats, trade e-book sales in 2010 were up 201% over 2009. Forty-two percent of publishers in the Aptara survey said that “increasing” e-book revenues and “increased customer demand”—one, of course, leads to the other—are driving their plans to add e-books, while also marking the general embrace of e-books by the mainstream book reading culture.
Bill McCoy, executive director of the International Digital Publishing Forum, the digital publishing standards association, agrees. “IDPF no longer really needs to be an evangelist for e-books and digital reading—it’s happening across segments of publishing,” he says. McCoy emphasizes that EPub, the XML-based e-book standard IDPF developed to simplify e-book production, is attracting more publishers all the time. “While Amazon doesn’t presently use EPub as a distribution format, the majority of Kindle units sold are of titles sent to them as EPub by publishers,” he says. “So EPub really has become the lingua franca, which will only accelerate as EPub 3 gains adoption, with its HTML5-based support for fixed-layout, rich media, and interactivity.”
Trade book publishers are working with a range of partners, third-party providers that can introduce them to the intricacies of the category, train in-house personnel, or manage the technology for them outright in a cost-conscious and effective manner. “Different solutions work for different scenarios,” explains Chad Phelps, chief digital officer at F+W Media, a book and magazine publisher specializing in publications aimed at the hobbyist, self-help, crafts, and genre fiction categories; F+W has reorganized its publishing program with a focus on digital delivery.
According to the Aptara study, 66% of trade publisher respondents report using “external technology partners” for most of their e-book production. The report also claims that over the two years of the survey, the number of houses using in-house e-book production remains almost unchanged at 21%, down slightly to 20%.
Phelps ticks off a list of some of the software available and questions he has to consider, such as content management systems (“There are several considerations when choosing a CMS, including development costs, ongoing maintenance, and integration with other systems”), e-mail service providers (“integral to user engagement, revenue generation, and marketing”), analytics and reporting (to measure user engagement and success” and “create a robust analytics package that integrates with eCommerce and your Email Service Provider”) as well as digital content delivery, ad servers, online hosting, e-commerce, and social media tools. And as long as that list of considerations is, it will likely get longer.
Manageable Digital
That’s where companies like CodeMantra, Firebrand Technologies, and Aysling Digital Media Solutions come into sharp focus; these are digital vendors that can help a publisher manage print and digital publishing across the complete editorial/production/retail cycle. Walter Walker, director of publishing services at CodeMantra, a publishing services and software developer with a soup to nuts suite of digital services that, he explains, “makes digital publishing manageable.” CollectionPoint, a digital asset management and distribution platform, is the centerpiece of CodeMantra’s services and offers publishers everything from conversion services and title management to metadata and retail distribution. It’s a digital warehouse, Walker says, that supports print and digital output and allows a publisher to store “files so they can be easily discovered, retrieved, converted, and distributed.”
Walker agrees that publishers were adopting IDPF’s EPub standard in increasing numbers, although not XML, generally considered by new media professionals as ideal for outputting multiple kinds of documents. “We do see publishers progressively pushing for the adoption of XML as the source content at some stage in their production workflow,” Walker says. “The optimal situation is XML first, but that’s not always practical. Many are opting for an XML conversion just prior or just after pre-press. This can then lead to an expensive conversion to EPub or any other digital format, HTML5, for example. Subsequent editions of a title can then be efficiently published in all formats, print and digital.”
Founded in 1996 as a conversion house and based in Plymouth Meeting, Pa., outside Philadelphia, CodeMantra has “gone through the e-publishing evolution,” and Walker says the company is 40% ahead of last year’s revenue. CollectionPoint 3.0 was designed in collaboration with Oxford University Press, and to OUP’s specifications. OUP uses the system to manage more than 27,000 titles. The CollectionPoint platform has 40 clients, among them Bloomsbury, Chronicle Books, McGraw-Hill Professional, and Yale University Press.
CollectionPoint 3.0 is a browser-based, self-service platform that allows publisher to log on and do everything from get an ISBN and see Adobe InDesign files in production or browse the software to get a price for content conversion and implement the task immediately online. CollectionPoint gives publishers distribution access to 52 online retailer accounts. “We’re a one-stop shop,” Walker says. The company has 25 employees in the U.S. and employs 1,200 people at a production facility in Chennai, India, with plans to expand into the U.K. and Spain.
The steady drumbeat of publishers adding e-book production capabilities is also reflected at Firebrand Technologies, a digital services and e-commerce vendor founded in 1987. Firebrand Tech offers an equally broad suite of content services that allows a publisher to track manuscript submissions; acquisitions; contracts; editor, author and peer review access right through to production and front-office operations. “We work with publishers at an early stage to integrate digital strategy into their print programs,” says Firebrand president Doug Lessing, “not after the fact.”
Lessing is quick to note that the company has “doubled in size over the past five years, and we’ve grown from about 30 publisher clients to 150 today.” The company, which has 42 employees, also offers à la carte services; “some publishers want the whole thing, while some start with Eloquence (a metadata maintenance program) and work backward to adopt our title management services,” Lessing says.
Firebrand’s suite of content services offers five distinct but linked programs: title management software, which tracks manuscripts starting with acquisition; Eloquence, which manages metadata and distributes it to retailers; and an e-commerce service, which publishers can use to set up and sell direct from their own Web sites. In addition, three years ago Firebrand acquired NetGalley, the digital galley company, and “realigned all the software. We had to really define to the market what a digital galley is.”
Firebrand has added a concierge service to NetGalley that helps both reviewers and publishers using the system (“it’s helped us to listen to what the market needs,” Lessing says), and the service has about 100 publishers and more than 40,000 reviewers.
The newest Firebrand division is Firebrand Associates—a consulting service that supplements its software products with a program that offers access “to publishing veterans who can offer pragmatic strategic approaches to houses struggling to figure out how to organize their workflows”—and brought in former Consortium CEO Don Linn to direct it. “We try to tell publishers to use a phased approach to adopting digital, to start from the beginning of the title and not to view digital as an afterthought,” says Lessing.
Aysling Digital Media Solutions, a vendor offering everything from editorial production, content management, and digital design to app and HTML5 software development in addition to technical support, has more than 200 clients in book publishing (including Houghton Mifflin, Scholastic, and Harlequin), as well as magazine and newspaper publishing. Launched in 2005 as the software developer WoodWing USA, in 2009 the company recreated itself as Aysling Digital Media Solutions in order to add such services as training and support for publishers using the WoodWing software. The company is based in Ann Arbor, Mich., with an office in Orlando, Fla., and has about 40 employees, according to Aysling president Patrick Becker, who says his company has “doubled in size over the past two years,” primarily from adding the training component.
Becker says Aysling’s services have grown to focus on “teaching our clients how to fish,” rather than selling them a software package. He says Aysling “shares the production burden. We help our clients get through the initial production over several publishing cycles until they can do it on their own. It’s made us more of a partner with publishers rather than just a provider, and we’re more engaged with our clients now than ever before.”
Aysling’s WoodWing unit has a suite of standardized digital production tools based on Adobe’s Creative Suite and InDesign production software to offer what Becker calls a “production content management system,” rather than a pure digital asset management system. “WoodWing plans the content, gets the content out of a publisher’s DAM and then after production exports it back into the DAM,” Becker says.
“Our tools allow publishers to explore the digital market at little cost,” Becker says, noting that the entry point for a small publisher using Aysling is “about $20,000 to $25,000 for a basic set of tools including hardware. It will let them work at a high level and do anything a large publisher could do, after training.” WoodWing production tools allow publishers to link internal staff and external contributors to the same project and editors, writers, designers, and other vendors can access the same document as it moves through the workflow, Becker says.
Over the next three to five years, Becker says that Aysling plans to move aggressively to be a “global business and services provider. We’re not just installing technology but assisting our partners in production. We live and breathe this stuff so we can take a concept and help them turn it into reality a lot faster.”
Fighting Piracy
Unlike other vendors profiled, Attributor has a relatively narrow focus for its services. Attributor offers software that tracks e-books online and protects publishers from unauthorized copying and distribution of digital content—in other words, protection from digital pirates. At a time when digital publishing is growing exponentially, so are opportunities for digital pirates to undermine sales by making unauthorized copies of copyrighted material available online.
“We’re a fully outsourced digital solution that protects books and anything else in a file format form,” says Matt Robinson, president of Attributor, during a conference call, along with Attributor CEO Mike Grossman. “We don’t prevent digital piracy,” Robinson stresses, “but we drive it underground and protect a publisher’s sales.” Attributor’s primary product is Guardian, a “massive crawling Web application that searches millions of Web pages looking for infringing files.” Attributor couples its Guardian software with “human visual verification of algorithmically located infringement.” Once Guardian locates infringing files, the application immediately posts takedown notices; once removal notices have been posted, Attributor monitors the sites for compliance and future violations. Attributor has grown rapidly since it started about five years ago. Since the company launched its Guardian application in 2009, it has added more than 70 publishers as clients, for a total of 75 clients now, primarily book publishers.
Despite some debate in the book industry about the efficacy of antipiracy enforcement—some researchers believe piracy is just as likely to increase physical sales as hurt them—Robinson says their research shows that piracy hurts sales. “Giving materials away for free can be a marketing tool, but when you’re a publisher trying to make money, it can be a problem,” says Robinson. “We can show millions of takedowns and big increases in sales to follow after we put a stop to the infringement. The data don’t lie.” Robinson says the biggest current digital pirates are “cyber lockers,” or online file-storing firms like Rapidshare, 4shared, and hotfile, rather than peer to peer networks.
Attributor also offers publishers and authors an online portal with information on their titles as well as Guardian Forensics, which provides reports on how pirated books are being copied, the source of the files, and other information. Robinson says the company also plans to offer some new services in 2012, providing data “that will help book publishers make decisions. Piracy is usually a proxy for demand,” he says. “If a publisher has a high rate of piracy in Brazil for a book that’s not in Portuguese, maybe the publisher should be addressing that market. We’re looking to offer additional solutions to piracy in the marketplace.”
Managing E-distribution
Of course, digital distribution is a key element of all these broad e-publishing services platforms. Ingram Content Group, a longtime industry presence in print as well as the digital space, has been joined by newer entities like InScribe, a startup digital distributor that offers e-book distribution as well as other consulting services aimed at the digital marketplace.
Marcus Woodburn, v-p digital products at Ingram Content Group, said that while Ingram can offer a pretty broad menu of digital management services, the company primarily engages with publishers’ “finished product during the last 10% of the production cycle, and we can distribute their content to the widest possible audience. We can reach a worldwide audience with physical or digital content.” ICG’s main product is CoreSource, a digital asset management platform used by more than 850 publishers to distribute digital content to nearly 160 retailers and librarians around the world. “You can sign one agreement and sell worldwide,” Woodburn explains. “Most publishers don’t have direct relationships with more than seven or eight retail partners.” Ingram also offers metadata management as well as POD services through its Lightning Source unit.
Woodburn says the cost to an individual publisher trying to manage metadata and stay on top of specs for new devices or software changes would be “a challenge,” and highlights the growing importance of experienced third-party digital vendors. CoreSource also integrates new business models from its client publishers into its offerings (subscription or individual chapter sales, for instance), Woodburn says, and publishers often learn how to make use of new business models that may benefit them. “It would cost a fortune for a publisher to do all this in isolation,” he says.
San Francisco–based InScribe Digital is a bit different. It’s a new digital vendor launched to take advantage of a new marketplace. InScribe started as an e-book distribution service in 2010 by its parent company, Isolation Networks, a firm that has specialized in digital music distribution for the past 10 years, in an effort to expand into e-books distribution. InScribe is directed by executive v-p and general manager Anne Kubek, a 20-year book industry veteran, mostly with Borders, where she was a senior executive. InScribe now has about 120 clients and distributes e-books to six major accounts, including Amazon, B&N/Nook, Kobo, Sony Reader Store, the iBookstore, and Books On Board, with plans for new retailers to be added in 2012.
“We start with a strategic discussion about pricing, how to market, whether to go with frontlist or backlist, what kind of content,” Kubek says, about presenting InScribe to new clients. “And we can provide project management for publishers looking to get into the e-book market and advise them on how to manage workflow, structure their staff, and how to manage metadata.” Kubek notes the InScribe Client Console is a protected log on that gives each publisher access to sales and royalty data consolidated on a daily and a weekly basis. Currently, she says, most InScribe clients are small, “but we can handle big publishers as well. We come from the digital music space so we’ve got traditional book and digital distribution expertise and we’re scalable.”
The company charges small houses an ingestion fee, an annual maintenance fee, and takes a revenue share per title; larger publishers with thousands of titles to distribute pay a flat annual fee. “That’s why we try to be clear about what each publisher needs, so we don’t have to charge for stuff they may not need,” she says. While InScribe does not do conversion itself, Kubek says the company partners with about 10 conversion houses, all offering different capabilities, pricing, and specialties, so she can guide her distribution partners “to the right conversion house. We’ve done the leg work and we can get samples and competitive pricing.”
“Most publishers know they need to be doing e-books, but the challenge is always how,” Kubek says. “You don’t have to do it all at once; give us 10 titles, see how the process works, and learn from it.”
More to Come in 2012
“Finding Your Way Through the Digital Maze” is the kickoff to what will be a regular series of features in 2012 by PW that will provide practical solutions for the problems confronting the industry as it makes its way through the digital transition. Editorial suggestions can be sent to Calvin Reid, creid@publishersweekly. com, while advertising inquiries can be directed to Cevin Bryerman at cbryerman@publishersweekly.com.
