This was PW’s third year at SXSW Interactive, the annual technology festival in Austin, Tex., and it may have been the toughest year to cover. While SXSW remains a great venue for discovering tech trends (and tech personalities), this year’s show offered as many challenges as insights. Programming, at least that involving book publishing and related ventures, seemed diminished and kind of flat—though SXSW has scores of panels and it’s impossible to see them all. In addition, this year an unusual number of panels were held in smaller rooms, resulting in lots of complaints from people who were turned away. Nevertheless, PW attended a handful of lively panels and presentations and the show remains a magnet for tech entrepreneurs and business-minded social visionaries. And one trend that stood out was the replacement of “transmedia” as a catch phrase for where content is headed by the word “crowdsourcing.” PW also spent time looking for startups and new ventures that either target the book market or offer products and business models with book industry tilts.
Take Mike Prasad, who PW met during SXSW at a small dinner organized by Open Road Integrated Media. Prasad is a young tech entrepreneur who already has a strong track record. Based in Hawaii and Los Angeles, he’s a former CTO and is now a social media and mobile media marketing guru (besides Twitter, he’s worked with Fast Company, Foursquare, and Facebook, among other big brands). In his words, he’s a “super enthusiast” who launches businesses focused on, and driven by, fan and niche geeky interests—especially those he believes lack a magnet community. Prasad calls his approach “niche geeky love,” which combines his fandom of things like manga, anime, gaming, horror movies, cocktails, graphic novels, and restaurants with his business skills and support team. The results are fan-focused W eb sites that both inform the targeted community and generate content and revenue based on fan involvement, and ultimately fan trust.
In 2010 Prasad launched Bit Love Media, a network of fan sites—Ani.me (anime and manga, 270,000 members), Dread Central (horror, 1 million uniques), and GirlGamer (female gamers, 15,000 members). He started GirlGamer because girls needed a place to talk games in a male-dominated video game culture. All the sites offer free accounts, news, online community, discount deals, and more. Prasad is part of a team working to build new site, AllManga.com, a fan community and platform for fans or professionals to create original manga (with a 70% revenue split for the artists), which he hopes to fund through Kinetiq, a startup incubator firm that he also formed. AllManga will provide online tools for publishing and a system to facilitate manga translation. Limited licenses will be offered for work that can be distributed in global markets with the potential for merchandise and e-commerce to come. “It’s all about stuff I love,” Prasad says of Bit Love Media, “and I put together a team to run it.” He’s backed more than 300 Kickstarter projects (he was named one of the top backers on Kickstarter) because, he says, it helps him get hooked on and learn more about new trends and possible ventures. During our talk he touted Home of the Brave, a smart and socially dystopian graphic novel he backed on Kickstarter that raised $13,000. Listening to Prasad is like taking a whirlwind ride on the entrepreneurial express. He’s a nonstop firehose of ideas, biz speak (“ideate” is a favored word), and possibilities, all delivered with a focus on creating “enthusiast media networks.”
Kinetiq, Prasad’s innovative technology incubator, is funded with state and federal money (combined with matching private capital) and charged with helping entrepreneurs launch tech-focused businesses in Hawaii. He says he uses technology and marketing to cultivate audiences and “create a culture [around fan interests]. If you enable enthusiasts you don’t have to worry about selling your product.”
While Prasad offers a glimpse of a new kind of entrepreneur focused on niche communities and social e-commerce, there were other ventures at SXSW that have, or could have, utility to book publishing.
Outright: Launched in 2008 and recently acquired by Go Daddy, the Web hosting service, Outright is a Web-based accounting and bookkeeping service targeting what product manager Priyanka Sharma calls “microbusinesses,” or “the 22 million self-employed small business owners who work for themselves.” Sharma says Outright links and organizes these microbusinesses’ financial accounts—including credit cards, bank and supplier accounts, Amazon, and Paypal. The Web service gathers each user’s financial information and can quickly spit out profit and loss statements and tax reports, and it is able to provide data in real time on the user’s best customers and most important vendors, among other things. Outright has just released an iPhone app that lets its users check their financial status at any time.
Sharma says the service is ideal for “self-employers, like authors, who have made it against all odds,” noting that the self-publishing category is exploding in general and is a likely market for Outright. She says the service has more than 300,000 users, including independent booksellers. The acquisition by Go Daddy, which targets small businesses, was a natural fit. “Authors are online but trust comes slowly,” Sharma says. “We want to expand our reach to new businesses.”
EveryLibrary: PW met EveryLibrary founder John Chrastka, cocktail in hand, at a late-night party at SXSW. Not your usual tech startup, EveryLibrary.org is a political action committee set up last December to work on the national level as an advocate for libraries. “We are focused on local library ballot issues because 97% of all library appropriations are made at the local level,” he explains. “If those levies lose on election day, library funding—and the communities [libraries] serve—suffer.” Chrastka, who was the membership director at ALA for a decade, says there are hundreds of millions of dollars in support for libraries on local ballot issues that are often decided by only dozens of votes in each case—initiatives that can be won with “help from outside political consultants that can make a huge difference.”
Chrastka was in Austin to raise funds and to distribute Awesome Little Library Boxes, an open-source digital-distribution e-books-in-a-box library program, used to deliver digital content to communities with inadequate Internet access. SXSW and the tech community, he says, are natural partners to the library community. “Librarians are early adopters, and libraries train late adoptors,” he said, noting that “libraries are training people to use stuff that was at SXSW three years ago.” EveryLibrary aids local libraries in preparing for ballot initiatives by providing strategic consulting and studies, training volunteers, offering financial support, and conducting direct get-out-the-vote efforts. EveryLibrary has already had an impact, helping the Spokane Public Library to pass a $1.6 million initiative to reopen several branches. And it doesn’t take much money to make a difference, he says. “We don’t need $50,000 to run a campaign, just $3,000 to $4,000.”
Gravidi: Walking through the Austin Convention Center on the first day of SXSW, we noticed a video display for Gravidi, an interactive video platform that lets consumers aggregate video trailers online, while adding original content around them (information about directors, actors, and content) and using e-commerce links to let users buy related merchandise and fan stuff. Tyler Malin, Gravidi chief marketing officer, explains that the venture was initially focused on licensing the technology to big brands, but he also says, “We wanted to create something completely consumer focused; to show the world how much fun interactive video can be.” At SXSW, the service was focused on film trailers and music videos to attract consumers, but it wasn’t long after chatting with PW that he started talking about including book trailers, a new and proliferating marketing format that could use some kind of aggregation and display effort—monetizing video content by embedding the trailers with e-commerce links as well as new content. “I love the idea of aggregating video trailers for books, graphic novels, and comics,” he says, noting that Gravidi can create “interactive experiences that give viewers access to interviews with authors/animators, reviews from major publications, and exclusive sneak peeks, connecting interested viewers to platforms to purchase books online.”
Malin says people like to shop while they watch video: “We work to push viewers to relevant purchase sites like iTunes and event-ticketing platforms.” Gravidi is still in beta and has about 20 people on staff. “We’re just at the beginning,” Malin says. “Any place where people are spending time creating great video for creative projects, we want to be involved in assisting content creators and engaging their audiences.”
Getting to Know DeviantArt
At one of the more interesting panels PW attended, two of the principals behind the Web site DeviantArt discussed where they see the future of content creation heading. DeviantArt was founded in 2000 and represents the kind of interesting paradigm of the future: it is a potential one-stop shop for developing a project, building an audience, and retailing the final product.
The site, which was cofounded by Angelo Sotira (who remains its CEO), began with 12 subcommunities. Now, according to Sotira, DeviantArt has over 3,000 communities and a unique base of users who each spend, on average, 20 minutes per visit. Along with the site’s editor and producer, Ron Martino, Sotira spoke at a SXSW panel called Creator vs. Audience: Next Chapter in Storytelling (#newStory). He says the mission of the site was always to “inspire and empower.”
More well known, at this point, among visual artists—the site has various revenue streams, including one as a retailer of prints—DeviantArt caters, at least in book-centric circles, to comics artists and graphic novelists. Many of the site’s users create artwork, sometimes paired with text and sometimes not, that is then commented on by other users. The popularity of certain images or stories, as indicated by a “statistics” section (which includes comments, favorites, views, and downloads), often drives sales, if the work is available as a print. Other revenue streams for creators are established through third-party rights deals that allow imagery posted on DeviantArt to be licensed.
Although both Martino and Sotira say that many within traditional content industries find the DeviantArt model strange and almost frightening—the copyright issue alone is a barrier—it is making inroads in the book and film industries. The pair note that actor Duane Johnson (aka The Rock) recently acquired film rights to a popular image (called “Sweet Halloween Dreams”) on Deviant Art.
On the book side, HarperCollins Children’s Books recently struck a deal with a writer named Sam Garton, who developed his readership, in part, on the site. (Garton was discovered by his agent, FinePrint Literary Management's Brooks Sherman, on Twitter.) The publisher recently inked Garton to do a picture book based on a character—an Otter—he shared on DeviantArt.
One of the things that DeviantArt offers, says Sotira and Martin, is hard numbers audience engagement. The pair says this is the equivalent of product marketing—and the size of the fan base of each project and content creator, as measured by DeviantArt, can and should be leveraged by conglomerates when choosing which projects to invest in. To this end, Martino and Sotira talked about a creator on DeviantArt who goes by the screen name Yuumei.
She has published multiple books on the site—the titles are akin to adult fairy tales and, through software she has ported in, they allow readers to graphically turn the pages. Yuumei has over 60,000 fans, over 27,000 downloads, and over 800,000 reads. She is currently selling her books through a third-party retailer, and, according to Martino, has been approached by “midlevel” publishers.
DeviantArt is also gaining more of a foothold with prose writers. Martino and Sotira say the site is already very popular among those writing poetry and that, overall, they have been focused on growing the writer community over the last four years. Numerous projects are on the horizon for the company—including content platforms that will allow creators to do more within the DeviantArt ecosystem, such as creating, crowdsourcing, and potentially selling their work exclusively through the site. At the SXSW panel, Martino pointed out that the crowdsourced element of Fifty Shades of Grey likely played a key role in its massive success. That trilogy not only began as fan fiction, but James, notably, reworked the story repeatedly, incorporating feedback from her audience. Martino and Sotira say that they believe “the line between production and consumption is being erased” and that crowdsourcing models like DeviantArt allow for projects that can be “organically grown.” And although the industry is not yet ready to embrace the DeviantArt model, the pair believes the fans and artists will lead the way. Certainly it’s not very often in the book publishing business that you hear someone say, as Martino did in Austin, that he thinks “the power is shifting to the creators.”