Big Data & Books: Part 1

11242014-BigData&Books-LinkedInPost-KasThomas-FeaturedImage-KaitNeese

An interview with Kas Thomas.

Publishing business models are changing. The information age is in full effect. Almost every machine in our life will soon become smart. The question therefore becomes, how will this affect the book publishing industry?

I recently had the chance to interview futurist and science generalist, Kas Thomas, on the impacts of digital publishing and what the above means for those involved with selling books.

Below are some of the highlights from that Q & A session for your perusal:

 

Q.) How would you currently describe the average reader relationship with technology?

 

Strained! We still lack proper authoring tools for e-books. On the one hand, we have powerhouse tools like Word, InDesign, etc. But at the end of the day, books need to be ePub and/or KF8 (Kindle). Fundamentally, both major ebook formats are HTML underneath. This means we need HTML-compliant editing tools.

No one would say Word or InDesign is the right tool for creating HTML. People use Scrivener a lot now. It’s possible to use Calibre and a few others. Amazingly, Adobe and Microsoft have left a big hole here, and it’s not clear who will fill it.

 

Q.) In your opinion how have smart phones affected the US publishing industry the most since 2007?

 

I think to the extent lines have blurred between phone and tablet and e-reader capabilities, there’s been an impact, and the larger size of the new phones may break down those barriers even more. It’s not clear whether Kindle will ultimately rule the world here. Apple will have to gain market share over Android for it to “rule the world” in terms of e-books. That’s going to be hard, with Android currently at 70% share in most markets.

Chinese pre-orders for iPhone 6 are at 20 million units, though, and there have been a few early signs of Apple winning share back from Android in Japan (where Apple lost ground last year). Apple iPhone 6 will be in 115 countries by the end of this year, which is very good news for Apple. Working against Android is the platform’s constant version fragmentation. There is no “consensus version” of Android that developers can develop to.

They have to support a multiplicity of Android versions and device sizes. Basically, things are not getting any easier for Android developers whereas they are getting easier (arguably) for Apple developers. Apple could therefore begin a long, slow process of winning back market share from Android. We should be able to see progress on this in 6 months.

 

Q.) Where do you see book publishing in the US headed in the next 3 – 5 years?

 

There has been a lot of talk about super-rich formats with embedded video, etc. I believe there will be a few exciting successes in that department but not widespread adoption. If adoption of rich ebooks happens, it’s 5 to 6 years out. It’s way too early now. It won’t happen in 2015. But clearly, all publishers have to feel the impact of the e-book biz on their catalogs. You can’t ignore e-books any longer.

 

Q.) What is the next major issue US publishers will have to face and adapt to in regards to digital content consumption?

 

Basically the question is how to stop Amazon from consolidating the entire business. The Big 5 have been forbidden by the courts from conspiring on this. What we have is a Balkanized market — with the courts saying “No more Yugoslavia!”  Therefore we will see a test of bravery. Which of the Big 5 will be the first to break ranks from Amazon? (The nuclear option.)

E-books are a tiny percent of Hachette business and Hachette itself is a small unit in the parent company, so it’s conceivable Hachette might break from Amazon. Bear in mind Amazon is a public company with very thin operating margins, hence they would be quite vulnerable to a share-price drop if any one publisher broke from Amazon. The impact would be felt much more by Amazon than by the publisher. Amazon is actually in a position of weakness.

If you read between the lines of their e-mails on this subject you can see it. They are praying that no big publisher will “go nuclear.” And maybe none will. It’s a business matter — it has to make business sense to break off negotiations with Amazon, but since the publishers are mostly private companies, they can do it — it’s at management discretion.

I think it’s possible Hachette or one of the other majors will declare a one-year moratorium on Amazon dealings. If that happens, it will be disastrous to Amazon stock price and other publishers will be emboldened.

 

Q.) How has big data transformed the role of a publisher?

 

We’re only at the beginning of the transformation. Basically, Google and Amazon (and Adobe) have learned the power of analytics — they know the tremendous value that lurks in user data. The publishers don’t seem to have learned much yet about this, and until e-books are a bigger part of their business, maybe they won’t. Big Data is truly Amazon’s secret weapon. (And Google’s.)

Amazon is well positioned to take advantage of Big Data — and is taking advantage of it every day. (Have you noticed their ads alongside your Gmail?) Goodreads feeds into the Amazon data ecosystem — another powerful advantage. It would be foolish to bet against Amazon, going forward.

 

Q.) In regards to Amazon, how do you think US publishers should be reacting right now?

 

They can and will simply make the best business decisions they can make at the moment. They have been forbidden to act in concert. So unless Google, say, decides to set up warehouses and fulfillment centers and go up against Amazon as a bookseller, what we’re left with is each publisher on its own trying to figure it all out. It’s “each man for himself.”

Unfortunately, the U.S. government has decided to play no further role beyond slapping the publishers on the hand for collaborating. But Amazon clearly has monopoly power as a bookseller, yet the Justice Dept. doesn’t see it as unlawful. So publishers are left in a difficult position of having to make do with a lousy situation. But that’s what they’ll do.

 

Q.) Do you think Amazon will expand successfully outside of the US?

 

Yes. They are in India now and will do well there. After India, they will transfer what they’ve learned to other countries, on a case by case basis.

 

Q.) Who are the key players in digital publishing driving change?

 

Google could exert some power here, but won’t, because Android is largely open-source and so Google doesn’t have a lock on its own technology (unlike Apple). Adobe will continue to make great tools.Amazon will make great readers.

So the big unknown here is Apple:How will Apple try to influence this market? It has iTunes, it has a developer community, it has proprietary technology, it has great hardware, it has stores, and it is uniquely positioned to tie all of these elements together in a unified way. So perhaps we will have to look to Apple for vision in this area. They’re certainly surprised us (to the upside) before — in music. Maybe they can do the same for books?

 

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We love a good discussion and hope to hear your thoughts and comments below. Please feel free to comment in response to Kas’ feedback or answer some of these questions yourself and let us know what your predictions are.

Where do you see book publishing in the US headed in the next 3 – 5 years? What is the next major issue US publishers will have to face and adapt to in regards to digital content consumption? What companies have most successfully adapted digital into their core so far that you have seen?

Looking forward to your comments.

 

About:

11242014-Headshot-KasThomas-KaitNeese-LinkedInBlogPostKas Thomas is my #1 ranked connection on LinkedIn. He has worked for Adobe as a technical writer and is a self-proclaimed computer science generalist. Hehas over 79 patents listed on his LinkedIn profile, one of which was sold to Apple. He is a true “techie” with a unique perspective on new-era publishing. You can find more of his writing and opinions on the future of publishing at Author-Zone.com and BigThink.com

09092014-KaitNeese-LinkedIn-BigData&Books-KasThomasPostKait Neese has been working in the digital publishing sector of the book industry for the last five years.  She has completed the successful aggregation of over 55,000 titles in eBook form from Western publishers for distribution through her company’s global network.  Additionally she has attended over 39 International book fairs since 2010 and was recently a featured speaker at the First World Digital Publishing Conference held in Beijing, China.

 

 

  • http://www.daveriese.com Dave Riese

    This interview really got my juices flowing. Here are my thoughts:
    1. Readers use Amazon and Goodreads to discover books like the one they’ve just finished. The “Customers Who Bought This Item Also Bought” feature is a great selling tool. My book has been out for 4 weeks, but already there are two books in this section on my page. When people wonder, “Will I like his book?” they see that it is associated with a book they have heard of.
    2. At 68 years-old, I don’t have the 2 -3 years to wait to achieve my life-long dream of publishing a book (if I was lucky to get an agent and a publishing house.) What would I gain by making the ‘big time’? I cannot count on a marketing campaign for a debut novel or getting a plum spot on a bookstore table. The only value is that my book would be seen as ‘pre-vetted’ (by people with a monetary stake in it) and thus more likely to get reviewed in a newspaper or featured on a radio or TV show. But what happens after 90 days when my book takes up residence on the backlist. What control do I have over price and distribution then?
    3. I’d like to see a study comparing the effectiveness on sales of a newspaper book review as opposed to Amazon or Goodreads reviews. It’s easier to go there to see if it’s a book you want than it is to hunt on the internet to find a review.
    4. I’ve read about some agents who are beginning to see themselves as a facilitator to authors in other ways then selling a book to a publisher. One agent suggested his author write a 60-page book on a topical baseball subject in two weeks. The resulting ebook was a big success and soon Japan came calling asking for distribution rights. At the end of the year, the author had made more on that book than all his other sales combined. If an author and an agent can agree on sharing profits, why wouldn’t an agent team up with marketing experts to promote a book through alternative channels?
    5. Independently published books are selling more combined than traditionally published books. The short turnaround and low cost are fulfilling dreams all over the world. There are, of course, terrible self-published books, but go into any used bookstore and you have to marvel at the number of terrible books that have been published traditionally. An independent author must raise his book above the crowd but that is a challenge many writers are willing to take. The skills learned in doing so are invaluable.
    I hope this doesn’t sound like a rant but I feel passionately about the new publishing possibilities. I’m empowered like never before.

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