27 December 2011

Ebooks for the Masses

Everyone remembers the Betamax vs. VHS format war, but do you remember the player piano format war? How about the rail gauge format war? In nearly every innovation since the beginning of time there have been a handful of contenders ready to bring a new way of doing things to market. And in each case, a victor has emerged and this has not always been based on the best option, but the most readily available, simplest to produce or the first to market.

In many cases it has been industry itself that has decided on the winner of these contests, few times has the consumer been the decider. Whether decided by an industry group or business owners themselves, one thing is clear, the winner has always been selected with the consumers' best interest in mind. 'Best interest' is wide open for interpretation here, keeping in mind the context of business owners, just use your imagination, OK?

VHS won over Betamax because of several reasons really; it was easier to produce (cheaper), it allowed for more content on each tape and JVC was faster at licensing to other manufacturers than their counterparts at Sony. Some argue that Betamax was a better product, in today's reality, who cares? Nobody uses either now, tape format got us from 1975 to 1995 quite effectively no matter which format it was on.

What gets chosen as a format, is not nearly as important as the decision of the format itself. Anytime there are multiple formats, there is a fragmentation in the market, content makers are forced to spend extra efforts and money to produce and market multiple formats in multiple channels and consumers are confused or corralled.

When a format is chosen, a robust multi-device environment is created where content producers are eager to supply content because it can scale quickly and they can focus their efforts on a single manufacturing/promotional method rather than two (or more).

VHS beget DVD, DVD beget Blu-Ray and Blu-Ray beget the cloud. What's next? I don't much care. I've been buying my favourite content in every container so far, I've already budgeted to purchase another few more before my days are done. Heck, I don't even have to own it now thanks to Netflix. I'll rent it over and over again.

So, if the format wars have taught us anything it's that there's a mass audience that can be served if one format can be decided by an industry. The video industry is used to changing formats every couple of years, they have a protocol in place, a bi-weekly meeting on the newest format, they make their selection without much fuss. I'm simplifying this, but not too many industries have experienced this much change ever. Well, except for maybe the music industry, but those changes have been a little more spaced apart - going from vinyl to 8-track to cassette to CD to cloud.

With all of this knowledge on format wars, all of the learnings from similar industries and lots of business cases to draw from, why is the book industry so fragmented when making it's third format change in 500 years? The publishing industry is ripe with smart people, passionate about what they do and keen on advancement into the digital space. It's hard to figure out until you add one thing to the mix: The consumer. Not just the consumer, but the choices they are given and who is reaching them and where.

Now, in publishing there's not so much a format war but rather a go to market war. There are two formats, sure, but they are not so different - and either can be made to work on any device. So, it's not the format per se. It's what a singular format can provide in the way of a catalyst for the industry to go to market. We don't need a single file format, we need a single delivery format to the customer - a device agnostic approach that can scale with mass adoption, this can work with the existing file formats. In fact, the format doesn't much matter, it's irrelevant.

In nearly every format war that has anything to do with media content, decisions were made to provide the broadest appeal to the largest audience - to provide quick scale and mass adoption. You see, in the past, the retailer controlled the consumer and the retailer was hands off on the development of the product. The retailer was between the device manufacturers, the content producers and the consumer acting as a filter/flood gate and discovery point for products. This was a good mix, this is how things have been done for decades.

Right now, publishers are going to market through online retail or device specific deployment methods. Where are the brick and mortar booksellers in all of this? For centuries they have proven to be the best form of discovery and sales for books - B&M retailers are good at selling books, that's their job... and they sell a lot of them. Imagine what they could do if they were given the tools to sell ebooks.

It's 2011, almost 2012. We're not communicating with our minds or driving flying cars yet, but there is a distinct change from what we remember the role of the retailer to be. Retailers are becoming less and less utilized and doted on in today's marketplace by content producers. The consumer can now go direct to purchase content. "Dear Louis CK, here is my $5 cheque, please forward me a copy of your latest video." In today's model, the retailer can be bypassed, they are irrelevant in the eyes of some. This sounds like a utopia for content producers, but utopia also sounds like dystopia, which is not good (I looked it up). Which in the foreseeable future, is really what is being created.

I'm not criticizing Louis CK, he's a brilliant and funny comedian. He did a great job in creating buzz and getting people interested, the buzz and interest created discovery, discovery lead people to buy his video. A great story on many fronts, especially for DRM - when given the choice people will pay for content rather than steal it.

And, I'm not criticizing consumers for going direct to the source for content at all - I think it's great, that is... if consumers know what they want. In many cases, they don't. And, this is the major change in our paradigm right now - and many don't even realize it's happening. We are losing our points of discovery.

You see, where things really begin to break down with purchasing direct is in the discovery - consumers don't know they want until they see it or 'discover' it. They can only buy it direct if they know it's there. For years, consumers relied on good old brick and mortar retail stores to help them discover content. It was the act of shopping that exposed them to new titles, new releases, remainders, backlist, new authors, new genres and new ideas.

Shopping direct via online or through a reading device removes discovery from the consumer, they are unable to discover anything beyond the display of 4 or 5 titles on their tiny e-ink window. What's more is their curation is self induced by their own keywords. With each word they search, they are narrowing the field of discovery to the point where choice is a misnomer.

Good old brick and mortar stores allow humans to use all of their senses to discover, by touch, sight, feel, smell and taste (although, the latter is not preferred in most established shops). The act of discovery is aided by retails insatiable need to outdo one another with lavish displays and effective merchandising. The entire act of merchandising has been finely honed for the last 200 years to aid in discovery - to entice the purchase of products.

Retail shops are masters of merchandising for the sole purpose of discovery. This is their job; to make content attractive to a mass audience.

I've been told that large publishers can publish out 500+ titles in a year. How exactly will all of these titles be discovered once brick and mortar stores are eliminated from the equation? How can you effectively merchandise online? Sure, you can feature a title, perhaps even up to 10 titles can be featured through the sales window of a device. Ten spots for how many publishers? Publishing how many books? As a creative person, I've never been brilliant at math, but I'm sure the outcome of this equation isn't complimentary to the bottom line for any publisher.

What's worse is that consumers are locked into purchasing through a retail environment provided by the device they've happened to choose. "Device specific deployment is akin to selling milk to someone based on the model of refrigerator they have."

If you want to sell milk to a mass audience, you need to ask people if they’re thirsty, not ask what kind of fridge they have.

Trapping one’s self with a single device/platform serves the needs of few and alienates many – how does the consumer select the best provider? How, as a publisher, do you reach a mass audience? How do you encourage discovery on 500+ titles a year?

As we see today, content makers (publishers) are held hostage by the device makers, allowing the latter to dictate format, sales terms and pricing. In the end, consumers are left with little choice in the matter and little to choose from. Device makers have content makers at their mercy; pushing them into areas they don’t have expertise in (yet).

Without content, devices are useless. Content makers ultimately have the control.

What consumers need, what publishers need, what the retail industry needs... is one powerful voice pushing for content over device. Don't lock customers into an environment where they've got no choice. If you want an ebook, you should be able to buy it from anywhere and put it on whatever device you want. A device agnostic format and the ability to buy ebooks anywhere (online or in a retail store) puts the control back into the hands of the publishers and out of the device specific realms.

To target a mass consumer base, this is what needs to happen.

These are my observations as I prepare to launch ebooks into traditional brick and mortar stores. We have built a bullet proof system that deploys content to any device - allowing consumers to decide where to purchase content and what device to put it on. Mass retail stores that will be selling our ebook cards will once again provide merchandising services to the book industry, creating discovery amongst their many thousands of patrons each and every week.

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