Sunday, May 13, 2007

Ready, Set, Go

Yesterday, I reported on the first of two conferences held in New York this week to discuss emerging digital technologies. Today we'll talk about the second conference: "Making Information Pay," which was sponsored by the Book Industry Study Group (BISG).

I've mentioned the BISG more than once on this blog in the past. The BISG website describes the organization as "the U.S. book industry's leading trade association for research and supply chain standards and policies." They report on annual sales in the publishing industry every spring and did that study on used books I've talked about previously.

Nicole Poindexter of Hachette Group gave the keynote address. The Friday edition of Shelf Awareness provided a report from the conference: "Consumers are reading more and more online and want pieces of information, not full texts. As a result, making chapters and other parts of traditional books available is more important. 'Consumers don't want to read a whole finance book when they're only concerned with mortgages,' Nicole Poin-
dexter . . . said."

John Rubin followed Poindexter to the podium. He reported that for every 1% drop in the returns rate, the U.S. book trade could bank $22.7 million. His talk focussed on using the Web to manage book inventory.

For the last few years, I've paid particular attention to comments made by Mike Shatzkin, a frequent consultant to the book industry. The BISG introduction to his comments said:

In recent months, about a dozen companies have moved to become the content distributors in a digital world, where consolidation appears to be even more pronounced than in physical distribution. These companies are becoming known as DADs -- Digital Asset Distributors -- and understanding their services will be essential not only for exploiting new economic models like ebooks or page pay-per-view, but also for facilitating online marketing of physical books. It is obvious to publishers that their markets are moving into large online communities like MySpace and Second Life, beyond the reach of traditional print, broadcast marketing and in-store appearances. In fact, targeted book buyers are moving into thousands of smaller, niche-oriented online communities as well.

Shatzkin is saying that publishers online will need Internet distributors in exactly the same way they now use distributors when publishing traditional books.

According to Publishers Lunch (PL), Shatzkin has identified ten or twelve DADs, including Accenture, Bibliovault, CodeMantra, CPI, Donnelly, Harper/Libre Digital, the Bookstore (Holtzbrinck/
Macmillan), Ingram Digital, Random House and Value Chain International (Gardners).

Shatzkin also introduced a whole new vocabulary of acronyms. Beside DAD for the distributors, he uses DAR for the digital asset recipients like Amazon, Google, MySpace and blogs. Publishers are now DAPs or digital asset producers.

Remember the comment from the keynote address. This is not just about whole books; it's also about parts of books. Instead of having to pay $25 to buy an entire non-fiction book, in the new digital economy, a consumer will be able to purchase just the section of the book that he needs.

Christopher Hart, a vice president from Random House, spoke after Shatzkin and said: This is "not a move against Google and Amazon" and it's "not about DRM (digital rights management), and not about e-books." It's about "having books in the Internet conversation, and it's about books versus every other media possible." (PL)

This reasoning is what led Random House to develop Insight, Random House's new widget. Shelf Awareness quoted Hart: "It's very important to think differently inhouse. We have to start talking about new products online." Random House is encouraging its writers to look at other ways to disseminate information, beyond just their books.

A marketing expert at O'Reilly Media offered this anecdote: An honors computer student said to him, "Books? You mean those things you older people use?"

It's a whole new world out there.

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