In connection with comments about literary agents who also operate publishing ventures, digital book industry authority Mike Shatzkin said this about E-Reads:

It is worth noting here that there’s one dog that hasn’t barked. Richard Curtis was the first ebook publishing agent. He set up his E-Reads business over a decade ago. He also pays 50% royalties. Richard did not create E-Reads to compete with publishers on royalties but because when he did publishers just wouldn’t do the ebooks. He has built his enterprise since that time to nearly a $1 million annual business (meaning that he’s delivering half-a-million a year to authors for properties that, at least until very recently and perhaps still, would never have been put into ebooks by a publisher.) But his name is noticeably absent from the chorus using higher ebook royalties as a public prod to bedevil publishers.

For the complete article click here.

“Libraries make no sense in the future,” publishing consultant and futurist Mike Shatzkin recently said. “There is no need for a building.”

The building in which he made this pronouncement happened, unfortunately, to be a library. Obviously he was joking, but given the state of terror in which today’s librarians live, he didn’t exactly leave ‘em rolling in the aisles.

He subsequently felt compelled to amplify in all seriousness in a blog entitled It Will Be Hard to Find a Public Library 15 Years from Now, which I urge everyone connected to libraries – that means everyone, period – to read.

Poor librarians. They seem to be the victims of ham-fisted wisecrackers. I know because I made the same feeble attempt at wit several years ago at the dawn of the digital era. It was in the New York Public Library, and, like Shatzkin, there was a serious message beneath the kidding. Here’s what I wrote about that occasion.

Richard Curtis

***************************

I take pride in my sense of humor, but sometimes it can get rather heavy-handed. That was demonstrated about ten years ago when I was invited to the New York Public Library to give a talk to librarians about the future of books.

The venue was the Map Room, an exquisite gilded salon that epitomized an age that revered the printed book. The attendees, solemn acolytes of the Dewey Decimal System, fit perfectly into the decor. My subject, you will not be surprised to hear, was the digital revolution, and to illustrate it I brought with me some CD-ROM discs. On the podium I had piled a large number of impressively thick tomes. I then produced the discs and declared that all the content of those books and more could fit onto a few of the slim shiny objects I held before them. I declared that a day would come when brick and mortar institutions known as libraries might become irrelevant. Whereupon I gestured broadly at the magnificent building and said, “I’ll bet this joint would make a great condo.”

One hundred librarians volubly sucked in their breath and gaped at me as I had torn a page out of Audobon’s Birds of America and blown my nose in it.

“Just kidding, folks,” I said sheepishly.

Actually, I wasn’t. As print media – newspapers and magazines and books – enter the endangered lists, so do the brick and mortar venues that service them: magazine stores, book shops – and libraries. The contents and catalogues of most libraries are accessible online from practically anywhere in the civilized world. The only reason patrons must go them is to check out and return their physical books. But as libraries acquire e-books, even that function becomes irrelevant. As I recently wrote, E-libraries don’t have a locus. Their patrons have no loyalty to a specific branch; they can traverse cyberspace to locate and download the e-book they wish to “borrow”. Yes, libraries (like bookstores) have managed to remain relevant in the digital age by offering a warm and vibrant social center for scholars, students and book lovers. And many provide computers for patrons to search the Worldwide Web even though they could do as much from their home, office, or a café in Paris.

These ruminations are reinforced in Millions of Books, but No Card Catalog, a New York Times article by Noam Cohen describing the recent legal settlement of the lawsuit brought by the Authors Guild and a publishers group against Google, which since 2002 has been scanning millions of books into its colossal digital archive. Cohen suggest that “digitization of books is ending the distinction between circulating libraries, meant for public readers, and research libraries, meant for scholars.”

Cohen’s article ends on a hopeful note: “The digital-rights class-action agreement has the potential to make physical libraries newly relevant. Each public library will have one computer with complete access to Google Book Search, a service that normally would come as part of a paid subscription.” He cites an NYU professor, Thomas Augst, as asserting that Google is “creating a new reason to go to public libraries, which I think is fantastic. Public libraries have a communal function, a symbolic function that can only happen if people are there.”

Okay, you can hold up on the wrecking ball for now. But I have dibs on that 44th floor penthouse on the corner of 42nd Street and Fifth Avenue.

RC

Many people don’t realize it but the phrase “push the envelope” was created by test pilots. The “envelope” was the stratosphere and “pushing” it was a colorful phrase for testing the altitude limits of their aircraft.  The phrase has been broached recently in connection with another rocket ride, the explosive growth of the e-book industry. As it approaches the $1 billion threshold – roars up to it is a better phrase – the issue of when it will crash and burn or even just slow down has been raised.  But a study by Forrester Research, the respected consumer study firm, reassures us that there’s plenty of fuel in this rocket and we have a long, long flight ahead of us before the envelope starts pushing back.

Speculation began last March (See Can E-Book Sales Bubble Burst?) “The next year,” said futurist Mike Shatzkin, “will see a continuation of robust retail growth” which he puts “conservatively” at 3.5%. That means that “the e-book minimum expectation by next Christmas would be between 15 and 20 percent of the sales of a new title… And then it can’t really continue the same growth rate the following year because that would take us to a great majority of books read being e-books. And I don’t think you’ll find anybody expecting 60% or more e-book penetration in two years.” The saturation point? “It won’t start slowing down until e-book sales are 20-25% of what a publisher expects on a new title.”

Shatzkin concluded that the topping-out moment would occur at the end of 2012.

Forrester’s just-published five year e-book report is more expansive. Indeed, its authors assert that digital books will become the default for publishing. “The punchline,” writes analyst James McQuivey, “is this: 2010 will end with $966 million in e-books sold to consumers. By 2015, the industry will have nearly tripled to almost $3 billion, a point at which the industry will be forever altered.”

The key to Forrester’s optimism is the untapped potential of the e-book buyer, who currently represents only 7% of the book consumer pool. “Did you know that the two most common ways people get books today,” McQuivey informs us, “is borrowing them from a friend or getting them from the library? ” The 7% who read e-books “happen to be a very attractive bunch: they read the most books and spend the most money on books. And here’s the kicker – the average e-book reader already consumes 41% of books in digital form. Oh, and that includes the people who don’t have an e-reader yet, which is nearly half of them. For those that have a Kindle or other e-reader, they read 66% of their books digitally.”

“And that,” he concludes, “is why we pause to commemorate the crossing of the billion-dollar threshold, because from here things will move so quickly that by the time the dust settles, the book business may actually be the most digital of all media industries, even if it got the latest start.”

Read Why The Book Business May Soon Be The Most Digital Of All Media Industries and you may conclude it’s time to recalibrate your projections in the direction of a comfortably distant envelope.

Richard Curtis

Mike Shatzkin is a future Prognostication Hall of Famer but by his own admission he tapped a weak grounder to shortstop when he predicted that the iPad wouldn’t not have an “immediate significant impact on ebook sales.” In fact, the impact was nothing short of explosive.  For a couple of publishers, e-book sales tripled or even quadrupled after the Apple introduced its device.

Shatzkin’s prediction had by no means been crackpot. Though he knew the iPad would sell big time (it ended up selling 1 million units in a few weeks after launch), like so many of us he figured its biggest use would be videos and games, not reading. He was also skeptical that a lot of people would want to read on a pinkie-busting 1.5 pound iPad (Kindle weights 10 ounces).

How wrong can a prophet be? “I was proved wrong in less than a month,” confesses Shatzkin in a recent posting.  “Apparently if we get slightly larger and portable screens into people’s hands, they want to read books on them.” And consumers obviously were willing to sacrifice their pinkies to be early adopters of the iPad.

It’s okay, Mike. Your .299 batting average still puts you in MVP contention.

Richard Curtis

If you’ve been reading our monthly postings of e-book retail sales bulletins provided by the International Digital Publishing Forum, you are aware that as the numbers doubled, then tripled, and most recently quadrupled those of the prior year, the stridency of our prose has progressed deeper and deeper into the purple spectrum.  Right  now we’re tapping into our reserves of hysteria and if the curve gets much steeper we will have to be forcibly restrained. By the opposite token, if the curve flattens even a little we may climb out on a ledge – we’re that spoiled by unmitigated good news.

Will the joyride ever end?  Digital pundit Mike Shatzkin has dared to ask the question.

Though he says “Your guess is as good as mine,” in fact Mike Shatzkin’s guesses are far better than ours.  But he reminds us of the fundamental truth that nothing lasts forever.  There has to be a saturation point.  But what is it, when will it come, and what factors will make it happen?

The prospect for the near future looks rosy, in good measure because there are so many new platforms and devices coming on stream such as Copia, Blio, Apple’s iPad, Google Editions and a clutch of e-book readers with new features including color, larger screens, and touchscreen capability.  And we know that Amazon will counter competition with a host of Kindle upgrades and improvements.  So, says Shatzkin, the next year will see a continuation of robust retail growth which he puts “conservatively” at 3.5%. That means that “the e-book minimum expectation by next Christmas would be between 15 and 20 percent of the sales of a new title.” Then what?

“And then,” says Shatzkin, “it can’t really continue the same growth rate the following year because that would take us to a great majority of books read being e-books. And I don’t think you’ll find anybody expecting 60% or more e-book penetration in two years.” The saturation point? “It won’t start slowing down until e-book sales are 20-25% of what a publisher expects on a new title.”

He expects that topping-out moment at the end of 2012.

Read Ebook growth continues to accelerate; how long can this go on? and decide if your own guess is as good as Mike Shatzkin’s.

Richard Curtis

Ladies and gentlemen, start your crystal balls.

Digital Book World, a conference devoted to exploring the future of publishing both digital and conventional (if there is any such thing anymore) begins today with guru Mike Shatzkin as its driving organizer and master of ceremonies. It will take place at the Sheraton New York Hotel & Towers in New York City, January 26th and 27th.

The schedule is studded with publishing notables who have led the industry’s charge into cyberspace, but it will be attended by professionals who have to apply the thrilling advances in technology to a business still mired in another century, arguably the 18th.

But “Digital Book World isn’t just about strategies, it’s also about the network,” says the event’s website. “Because of our focus on consumer publishing, our speakers and attendees represent publishers of all sizes and niches – from HarperCollins, Penguin and Random House to Tor, Chelsea Green, National Geographic and Ellora’s Cave – as well as literary agents and other allied professionals, and vendors with an interest in the future of consumer publishing.”

Among the highlights are:

• An overview of Google Editions
• “Back-Loaded Book Deals” with Roger Cooper, Bob Miller and several agents
• “The Next Generation of eBooks”
• “Tomorrow’s Book Contract: New Language and Provisions to Reflect New Conditions” hosted by yours truly

A big draw on Wednesday will be “The Changing Agent-Author Relationship: How it Will Affect the Business Model” moderated by Sara Nelson of Oprah’s Book Club. Her panelists will be agents Gail Hochman, Scott Waxman, Brian DeFiore, and Wendy Keller of Keller Media.

A spectral but influential presence will be Apple, which will be announcing details of its tablet on the afternoon of the conference’s second day, and not a few attendees will be glancing at their blackberries to learn details of the breaking news. Ironically, that will happen around the time of a concluding statement by Guy LeCharles Gonzales of Digital Book World entitled “The Future of Publishing is Bright”.

You can click here to visit the conference website and here to view the schedule.

Richard Curtis

Don’t start the e-book revolution without us. That seems to be the message coming out of the literary agent community as reflected in their response to invitations to a major conference taking place in New York City’s Sheraton Hotel and Towers at the end of January and presented by F+W Media (publisher of Writer’s Digest and Writer’s Market)

The revolution has overcome countless obstacles on the road to the tipping point, but one stubborn source of resistance has been the agents. Their intransigence has not been so much a matter of hostility as uncertainty. Caught flat-footed by developments that went from zero to warp-drive speed in the blink of an eye, agents have struggled to get a handle on their role in the new e-world order. Though they take pride in being ahead of their clients, in the case of e-books many of their authors are way ahead of them, doing things or at least thinking thoughts that do not involve services commissionable by their agents such as self-publication of unsold books. Other agents simply want to be able to answer author questions or help their clients find a place in a universe that seems to be hurtling out of control. One wag described it as “Agents on the verge of a nervous breakdown.” (See Why Don’t Agents Want to Play?)

Mike Shatzkin, chairing Digital Book World on January 26th-27th, is determined to draw agents into the e-book process by designing a number of programs specifically to interest them. “The Changing Agent-Author Relationship: How It Will Affect the Business Model,” chaired by Oprah’s Book Club’s Sara Nelson, is one such. Another, “Tomorrow’s Book Contract,” chaired by yours truly, features several agents, a lawyer and a publishing company rights manager presenting wish lists of contract language and provisions reflecting changes in the publishing landscape.

Other panels and speeches will address non-e-book topics of concern to agents such as “Back-Loaded Book Deals: No (and Low) Advance Contracts, Profit-Sharing and Other Innovative Business Models”.

With its glittering roster of publishing industry star speakers and panelists, we’re told that the conference is almost sold out, but if you’re a literary agent you can be sure Mike Shatzkin will do his best to squeeze you in.

For complete information, visit Digital Book World.

Richard Curtis

We scoff at prophecies of Mayans
And offer toasts to healthy buy-ins.
So what if 2012 draws nigh?
Prognostications? Mike’s our guy.
Seers of yore are mere ersatz kin
Compared to clairvoyant Mike Shatzkin.
We hope his crystal ball discloses
A featherbed of ruby roses.
Richard Curtis

Mike Shatzkin’s name was a challenge to find a rhyme for, but challenging imagination is what Shatzkin, the publishing industry’s oracle in residence, is all about. He’s done it again in a year-end blog posted on his Shatzkin Files website.

“It is customary,” he writes, “for those of us who do crystal-ball gazing to make some calls about the year ahead at around the time the celebrants head for Times Square. I am not a man to flout custom.” Shatzkin then offers us a baker’s dozen of predictions for the coming year. Here’s an abstract. For the fully fleshed out version click here. You might want to take a tranquilizer first. The unprepared or unaware tend to manifest symptoms of airsickness.

• At least one major book will have several different enhanced ebook editions.
• The growing incidence of bookstore-less cities will provoke the mass merchants to explore a greatly increased title selection inside their stores as a magnet to attract disenfranchised bookstore customers.
• Ebooks that are too short to be print books will become a real factor in ebook sales, opening up new opportunities for publishers but even more for authors.
• Driven by new entrants in the field, self-publishing, and unbundled aggregations of print books, the gap between the items listed in “Books in Print” and the items that should be listed in a directory of “Ebooks Available” will continue to grow.
• The rearrangement of the big publishers’ IP portfolios will begin in 2010 as they emphasize what they do best: deliver narrative-writing and children’s books to multiple outlets in large quantities.
• By the end of 2010, ebook sales will routinely constitute at least 20% of the units moved for midlist and the lower tier of bestsellers and at least 10% of the units for really big bestsellers.
• By the end of 2010, the experiment with “windowing” ebooks — withholding them from release when the hardcover comes out — will end as increasing evidence persuades publishers and agents that ebook sales (at any price) spur print book sales (at any price), not cannibalize or discourage them and, furthermore, that this withholding effort does nothing to restrain Amazon’s proclivity for discounting.
• Managing territorial rights for ebooks will be a growing problem the industry will have to deal with.
• Some authors who have developed huge followings on Facebook and Twitter and their own blogs start to demonstrate that they can have a serious positive impact on the books of other authors they favor.
• With the arrival of Google Editions in the first or second quarter of 2010, there will be multiple channels to the ebook market through a variety of players: Google, Amazon, Apple, Baker & Taylor’s Blio, Kobo (formerly Indigo), and Sony will not be alone!
• Because there are so many players fighting for a foothold in ebooks, discounting them deeply will be the “new normal.”
• The merchandising challenge for ebooks will ultimately be met web page by web page over the entire Internet. This future paradigm will be tipped in 2010 when we start to see ebook stores on more and more non-book web sites, each trying to deliver some sort of value-add with curation or follow-on products.
• The big meme coming out of 2010 will be “what is a book?”) Publishers will increasingly be releasing productions that contain video, audio, animation, slide shows, and interactive game elements. Movie, TV, and game producers will see an alternate marketing and revenue channel available through “ebookifying” content they have and moving it through book channels like a “tie-in.” Where one stops and the other begins will become increasingly difficult to see (and increasingly irrelevant).

Richard Curtis
Poem excerpt from “The Year of the Tweet” by Richard Curtis,(c) Richard Curtis reprinted from Publishers Weekly, December 21 2009 Reed Elsevier Magazines.

Ruminating about the current controversy about whether publishers should delay e-book reprints of hardcover books, Mike Shatzkin had an epiphany. And when Mike Shatzkin has an epiphany it usually ends up kicking the paradigm shift a hundred yards up the road.

“This is really about the agents and publishers trying to take control of ebook pricing, and value perception, back from Amazon,” says Shatzkin. One proof of his contention is that Barnes & Noble, a retailer that few consider to be a friend of publishers, actually agrees with the publishers’ position. B&N Chairman Len Riggio says holding off e-book reprints is “in keeping with the long-held practice of issuing paperback editions after the initial hardcover.”

“If the other biggest bookseller, which also has a dedicated e-reader and an aggressive attitude toward consumer pricing, seems okay with this idea, it strengthens my belief that it is about controlling Amazon, not about controlling ebook pricing,” says Shatzkin. “The desirability of restraining Amazon is certainly something the big publishers and Barnes & Noble can agree on.”

Shatzkin then touches on the essence of the power struggle: “If the big houses can do this, they can do much more than this. They can sell ebooks direct off their own web sites.”

Direct Sales of Books and E-Books by Publishers

Almost two years ago, in an article entitled Direct Sales: Publishing’s Last Stand, we surmised that a war between publishers and booksellers was inevitable, and the only effective weapon publishers have in their arsenal is direct sale of their books to consumers. “Publishers have awoken to the horrible realization that by allowing themselves to ” we said. “As their profit margins wear down to transparent thinness, they understand they must recapture the advantage or risk being marginalized even more than they are now.

“There is only one way for publishers to recover the initiative,” we concluded, “and that is to sell books directly to the consumer.”

War to the death? “It is hard to imagine this battle ending peacefully anytime soon,” asserts Shatzkin. Read about his epiphany at length on his blog: The ebook windowing controversy has subtext.

Richard Curtis

Michael Hyatt, CEO of Thomas Nelson, brought to my attention that he actually did (and promptly) respond to questions raised by Mike Shatzkin about Nelson’s self-publishing venture, WestBow Press. His response was in the form of a comment on Shatzkin’s blog, and we’re very happy to reproduce it here.

Richard Curtis
***************************************
Mike,

Thanks for asking these questions and giving me a chance to respond. I do, by the way, enjoy your blog and your perspective on publishing.

“1. How many such titles will they do per season or per year?”

This question doesn’t apply to the WestBow Press situation in quite the same way it applies to a traditional publisher. The WestBow model is the exact opposite of traditional publishing. In the traditional model, the publisher is the customer because the publisher buys manuscripts from authors. In the WestBow model, the author is the customer because the author buys services from the publisher.

The traditional model is resource-driven. The publisher is constrained by its access to capital and its appetite for risk. At Thomas Nelson, for example, we only do about 500 new titles per year, because we have a finite amount of capital that we can invest in royalty advances, inventory, and accounts receivable.

The WestBow model is demand-driven. The author is putting up the capital and taking the risk, so the publisher—or service provider, if you prefer—is only constrained by its ability to scale its operation up quickly enough to meet the demand.

All that to say, I have no idea how many titles we will do per season or per year. This is completely a function of demand.

“2. How will access to Nelson’s (always limited, as is any publisher’s) sales and marketing bandwidth be allocated to this imprint?”

Other than macro-level advice from time to time, none of Thomas Nelson’s resources will be allocated to sales and marketing. This is entirely ASI’s responsibility in the partnership. This kind of sales and marketing bandwidth is available to WestBow authors as a service from ASI, just like other services. Thomas Nelson’s bandwidth will be 100% focused on Thomas Nelson authors—just like now.

By the way, some of the questions we have received like this imply that traditional booksellers are the primary or only legitimate outlet for distribution. Many authors have their own platforms (e.g., speaking, blog, radio show, etc.) which more than justifies their investment in the WestBow model. They don’t need anyone else’s bandwidth to be successful.

“3. Will the books be vetted as suitable for Nelson’s Christian mission? And, if so, how and by whom?”

Yes, all WestBow Press titles must be congruent with the Thomas Nelson Content Standards. Every manuscript will be reviewed by either a WestBow editor who has been trained by us or a qualified freelancer who has been trained by us. This is precisely how we do it now at Thomas Nelson. In fact, I joked the other day that I think we have given the WestBow editors more training than our own people.

“4. Will the books be vetted at all for quality? Or will an author just choose the WestBow option and, if that’s the case, how much extra will be they paying and what will they be told they’re getting for their money?”

No, they will not be vetted for quality. They will be given a candid assessment of the quality and offered various editorial services that will make the manuscript better. But in the end, we are providing a service to the customer. He or she will be the final judge of quality.

These services are priced differently, depending on how involved they are. For example, substantive editing is more expensive than copy editing. Copy editing is more expensive than proof-reading. This is how it works in the world of traditional publishing, too, when we hire outside editors or proofreaders.

“5. The story says that Nelson editors won’t touch the books but will ‘monitor sales to identify potential big sellers.’ What’s the pre-monitoring launch plan? What’s the plan if Nelson editors actually identify a ‘potential big’ book?”

I’d like to tell you that we have all this figured out. We don’t. Here’s what I can tell you: we will be getting weekly sales reports from ASI. It will show all WestBow Press titles and how they are selling. We currently do this internally for our own titles at Thomas Nelson. We call it our “Movement Report.”

We will obviously pay attention to those WestBow titles that are selling the most or at the highest velocity. At some point, I envision one our editors reviewing the WestBow edition of the book and then calling the author to discuss the possibility of entering into a traditional publishing relationship with Thomas Nelson.

From that point, it will be handled as a typical author-publisher negotiation. We do not require them to publish with us or “lock them in” in via the WestBow contract in any way. They are free to publish with anyone they wish. However, we will have the early visibility and, hopefully, the first-mover advantage.

Someone asked on another forum, why would a WestBow author want to sign with Thomas Nelson if they already had proven they can be successful without us. Good question. The short answer is that they may not want to sign with us. No problem. Every situation is different.

But if they do sign with us, they will then go into our catalog, be represented by our sales team, and have the potential to get their books into other channels and accounts not available to them through WestBow.

I hope this answers some of your questions, Mike. I’m sure that I have created others! Please know that it is my desire to be as transparent and open about this as I can be, subject only to the availability of my time and attention.

Thanks again.