1. Books 2.0 The future of
Book Publishing in a
connected world
Clive Rich
March 19th, 2010

2. Contents
• R fl ti th macro-changes
Reflecting the h
• Operational consequences
• What’s happening in relation to
contracts right now
• N
New structures f a new paradigm?
t t for di ?
– Towards a new type of Distribution
contract?
– Towards a new type of Author’s
contract?
– Towards a new model of organisation?

3. A NEW LANDSCAPE
Reflecting the macro-changes

4. ... TO BE NEGOTIATED CAREFULLY
Reflecting the macro-changes

5. ... AND IN A DIFFERENT WAY TO THE MUSIC INDUSTRY
Reflecting the macro-changes

6. The context: Multiple
distribution partners
• “Multiple Channels”
• “Multiple Devices”
Multiple Devices
• “Ubiquity”
• “Mutual Interest”

7. Consequences
• T diti
Traditional partners are now
l t
joined by:
– Mobile
– Ebooks
– ISP s
ISP’s
– Devices
– Hardware/Software co pa es
a dwa e So twa e companies
– Brands
– Portals/social networks
– Aggregators
– Consumers

8. NOVEL WAYS TO REACH NEW OUTLETS

9. The context: Greater User
empowerment
• “Opennesss”
“O ”
• “Open licences”
p
• “Sharing”
• “Non Linear”
Non Linear
• “Context, community,
experience”
i ”
• “Immersiveness”
• “Consumer Trust”

10. Consequences
• Less control
• Freedom for the user to ...
• Multiple linking/book marking
• Unbundling
• More conversations

11. TALKING TO USERS IN A NEW LANGUAGE

12. The context: Multiple
streams of value
• “Advertising reborn as
content”
• “Freemium”
• “F l like f ”
“Feels lik free”
• “Bundles”
u dles
• “Value around product”

13. Consequences
• Downloads • Value added
• Subscription products
• Ad supported • V l added
Value dd d
• Books bundled services
with software
ith ft • Aggregator deals
and/or hardware • Rev share deals
• Micro transactions • Super distribution
Super-distribution
• Micropayments • D2C business
models

14. MOVING FROM ONE BIG VALUE STREAM ...

15. ... TO MANY SMALLER VALUE STREAMS

16. Consequences for
distribution contracts
• M lti l di t ib ti partners:
Multiple distribution t
– Requirement for multiple different
contract types for different
channels
– Some large and growing fast, some
small and developing. The latter
are just as important
– Creates resource issue
– Will collective licensing emerge?
g g

17. Consequences for
distribution contracts
• G t user empowerment:
Greater t
– Tension between traditional approval
rights/rights restrictions for content
g g
owners versus need to accommodate
enhanced user involvement
– Less focus on DRM?
– Focus on remedies rather than
prevention of activities?
– M
More transparency f P bli h ?
for Publishers?
– Access to Data ownership and use

18. Consequences for
distribution contracts
• Multiple streams of value:
– Contracts catering for many more, but
frequently smaller multiple transactions
– Contracts permitting experimentation
w t bus ess odels whilst protecting
with business models w lst p otect g
Publisher rev streams where practicable –
use of minima? advances? Agency
commissions? “Greater of” formulae?
Equity?
– Contracts requiring commercial
transparency and fluent accounting from
distribution partners – garbage in creates
g
garbage out
g

19. Consequences for author
contracts
• Multiple distribution partners:
– Transparency for authors more
p y
likely than controls
– Issues around term/extent of
rights/exclusivity of
rights/percentage splits
developing as authors weigh up
weigh-up
direct-to-market deals

20. Consequences for author
contracts
• Greater user empowerment:
• Tension between integrity of product and
ability to unbundle books
• Who controls access to and ownership of
audience?
di ?
• Access to Author becoming a key issue as
need to generate additional content
streams and experiences grows

21. Consequences for author
contracts
• Multiple streams of value:
– Authors potentially being accounted to for
many more transactions than previously,
across many different business models and
often involving smaller amounts
– Increased focus on net-receipts calculations –
should percentage splits increase if publishers
have less costs?
– More rapid accounting becoming an issue
– Use of desktop audits to become more
frequent

22. Towards a new model
• Distribution contracts
– Combination of multiple channels, greater
user involvement, and need to build multiple
streams of value implies greater emphasis on
• providing access to books as a service
• partnership with distributors.
– Such partnerships are a better bulwark
against piracy than legislative controls
– Need to build service propositions for users
implies move away from “licence” or “sales”
agreements and towards greater emphasis on
g g p
mutual “service” style agreements,
supporting distribution partners in new ways

23. Towards a new partnership
model
Publisher Partner Jointly
• Product development • Promotion • Providing community
• Regular delivery of • Marketing development tools
different ki d of
diff kinds f • Distribution • Driving traffic
unique content • Supporting data capture • Building user
• Product unbundling and processing
p g conversations
• Access to authors • Embracing
E b i
• Supporting channel
business model
• Building context around development
experiments
authors • Collection • Format creation
• Embracing of sharing • Reporting • Delivering
and portability of • Accounting sponsorship and
co te t
content advertising
• Proportionate Risk
P i Ri k
• Data utilisation
• Proportionate rewards

24. Towards a new model
• A th agreement
Author g t
– Greater author freedom to go to
market directly plus requirements
to deliver books as a service
implies greater emphasis on
“service-style”
“service style” agreements with
authors
– Services provided in return for
payments by way of tiered
commissions BUT without
i i ith t
extensive advances, lower
marketing and lower print costs?
g p

25. Towards a new Model of
service contract
Services provided;
• Sales • Market insight
• Product development
p • CRM
• Channel development • Royalty accounting
• Website development, • Credit/collections
including D2C
• Physical manufacturing
• Brand sponsorship services
• Merchandise • Digital manufacturing
• Creative services
services/artwork • Digital
Di i l encoding and
di d
• Press, publicity and distribution
media buying • Business Affairs services
• Digital/online marketing
g g

26. Towards a new model
organisationally
– “The time is now”
– “Pressure is on ...”
– “More haste, less speed?”
, p

27. Embracing the great
adventure
“One needs to place the footstep of
courage into the stirrup of patience”
(Shackleton)
• Publishers already have the skills – digital is
just another channel for creative expression
• Digital work is ”Exclusively for Everyone
Exclusively Everyone”
• Project-based work involves everybody and
creates momentum with minimal i
i h i i l internal
l
organisational disruption

28. The footstep of courage in the
p g
stirrup of patience.
Thank you.