Most Favoured Nations – the lesser of 2 evils

I was not happy when I first came across this clause in an ebook retail contract, so my initial reaction was relief when it came under the same black cloud as The Agency Model, as one of the bad-boys of price fixing.

 However, now I’m not so sure that I’ll be glad to see it go. 

 It occurs in contracts where the publisher sets a suggested retail price for the retailer to base their own price on.  The retailer may sell at the suggested retail price (srp) – and a lot do, or they may offer their customers discounts – it’s up to them. 

The most favoured nations clause is in the contract between the publisher and the retailer, and by signing it, the publisher agrees not to give a title a lower srp at another retailer than the one he gives for that book to this retailer.  This sounds fair enough – the price (srp) is the price, and don’t confuse things by setting different prices in different shops, even your own website bookshop.

But some contracts take it further.  In order to put this into practice, the retailer asks the publisher to agree that the book may not go on sale anywhere at a lower price than their price.  This gives the retailer the right to trawl the web, to see if the book goes on sale anywhere in the world at a lower price, then drop their own price to match it. 

This is good for the retailer, because it gives them the right to match any special offer or price promotion or local price set to suit a poorer country.  This undercuts the effect of any retailer’s special promotion which is intended to attract customers.  It gives Amazon the right to never allow itself to be ‘undersold’; it gives any other retailer with that clause in their contract the right to price-match Amazon.  Which is why publishers fear it triggers a “race to the bottom”.

It is not good for publishers because it takes all control over pricing completely out of their hands.  Publishers cannot favour their own websites with special offers, because those offers will be discovered and matched.  They can’t do exclusive short-term promotions with particular retailers, perhaps in conjunction with a local radio interview, or newspaper extract, because that special limited offer will immediately be replicated all over the world.  What you do for one, you have to make available to all.  Perhaps it means publishers will come up with more creative marketing offers than price promotions, as they had to in the days of the net book agreement!

So why am I now better disposed towards the dreaded Most Favoured Nation clause?

Well there are a lot of dangers to ebook publishing, and admittedly one of them is the race to the bottom in pricing (exacerbated by many factors).  But what I see as a greater danger is the over-dominance of one retailer.  The Most Favoured Nation clause works for smaller retailers as well as large, so it gives them the chance to price-match the strategic discounting used by a big retailer trying to undercut them.  By allowing all the retailers to compete on the same terms, the publisher frees them to compete on price with the big ones. 

The problem is, dropping the price is an expensive pursuit because someone has to pay for that discount in lost revenue.  Under most contracts the retailer will have to pay the publisher the same amount (the wholesale price), regardless of how much they sell it for.  It takes nerves of steel to drop the price close to, and perhaps even below that wholesale price – and only certain retailers can afford to do that for long. 

So the ‘race to the bottom’ it provokes is not good for small retailers, but at least the favoured nations clause permits them to run in that race, rather than being left on the starting line with their wares priced out of the market. 

So the reason I favour the Favoured Nations is because it’s the lesser of two evils: although it’s bad, it’s not as bad as the alternative – life without bookshops.

Tools of Change, Chicago

I enjoyed reading the tweets from the one-day conference in Chicago the other day, so I thought I’d summarise just a few of them and share them here.  You can see the full range on Twitter at #tocchicago

Children’s Books

How to handle the friction between children’s ebooks and the desire to reduce screen time?
For many children, picture books are their first introduction to art.

Re childrens ebooks: what’s useful? What’s a gimmick? Engaging without distracting is the tricky part
What helps readers understand? What is engaging and motivating? What disrupts learning? Good questions generally, not just for children’s books.

Poetry

http://Pf.org Mobile poetry app: built to target folks standing in line. Works in single servings, which causes more poems to be accessed. Includes a fun “spin” browsing feature + mood categories.  Has increased exposure for poetry foundation. Reach up 300% while overall engagement has gone down.

Repackaging existing content helps expose it to new audiences.  Context may be just as important as content.

Uses of and representations of poetry online is the nexus of many online issues: Digital formatting can play havoc on poetry, where formatting is everything.

poetry will continue to have to compete agains Angry Birds & Pinterest but it will also thrive

Maybe the http://pf.org data suggests that print is the best home for poetry. Is that too radical? Hmm.
Maybe not:  Catherine Halley’s talk got me to give poetry a chance via Poetry Foundation’s app http://www.poetryfoundation.org/mobile/

The paradox of attention span: should lead toward shorter content, but poetry often requires more attention & time than prose

Crowd  Publishing

Distance.cc, a quarterly journal devoted to long essays about design. Funded by Kickstarter.

First Kickstarter effort by @nickd: cadence.cc, a book on design.  Sold out print run last year, still available as eBook. “my book wasn’t published by me, it was published by my audience.”

Readers are out there but you have to meet them on their terms on their devices.

“The more time you spend running around freaking out, the less time you spend building the future.”

“We need to stop thinking like publishers, and think more like software companies”

Distance Authors getting good visibility. An editor helps writers think through ideas and people take them more seriously.  A key feature is editing. “difference between an essay and a rant is that an essay offers an actual solution.”   prefers well-written and passionate writing to just passionate writing (Wants fewer rants, more essays)

Distance’s business plan included keeping it’s owner eating three burritos a week: “If either of those goals proves untenable – paying writers or eating burritos – the project is a no-go.” Ha!
Supply-chain issues still essential to authors. Self pub created closer connection to work, audience.

Information

“Seek information, not affirmation.”

We are creating a new form of ignorance that’s killing us. It does not distinguish between highly informed and well informed.  We’re not suffering from information overload, we’re suffering from information over-consumption.  What are healthy levels of information consumption? schedule your various channels/forms of information consumption; don’t consume right now just because you can

“Who wants to hear the truth when they can hear that they’re right?”   we’re a more polarized nation now b/c no matter what crazy thought you have, there’s a media outlet to tell u ur right.  The desire to be right frames our mass media. “Opinion tastes better than news” and pizza tastes better than broccoli.  We’ve industrialized our media for poor consumption habits the same way we have with fast food

Content

Content trapped forever in your CMS is the new content trapped in your CD-Rom.
Big question 1: can I get my data out in an open, easily-readable format?
Question 2: Can I get my data out for the same price I paid to put it in?
Question 3: (most important & overlooked) How much time will it take for me to get my data out?

people put themselves in data jail all the time

Have we gone fr “information wants to be free” to the 2nd half of that quote “or it wants to be expensive”?

Content is not a commodity. Data is a commodity. There are no sensationalized 5-day weather reports.

The idea that you should wake up and be a producer instead of a consumer changes your relationship with information.
Still thinking about writing 500 words every morning before 8am. Thinking about other changes too.

Show your work when publishing; empower readers to make up their own minds.  Not to do that is disrespectful.
instead of saying “this is great content,” think about WHY it’s great for your audience.

Libraries are the first line of defense against piracy.  This is an interesting question.

Credits

Thanks to #tocChicago Tweeters: @nelltaylor, @petdance, @theanalogdivide, @digipub. @aburke8  et al

and the speakers they Tweeted: Junko Yokota, Doug Siebold, Nick Disabato, Clay Johnson, Brian O’Leary.
Here are some of their slides:

http://nickd.org/log/nickd-oreilly-toc.pdf
http://www.slideshare.net/mobile/bfoleary/using-content-to-acquire-new-members

 

Ebook sales? Not telling you.

The Problem

One problem with selling ebooks is that it’s very hard to know exactly how many copies other titles have sold.  This means there is no best-seller list and very little data on the relative success of different genres.  It’s almost impossible to do a comparative analysis of the market as a whole, of the kind that magazines like the Bookseller do for print books on a regular basis.   As an ebook distributor, I only know how many copies my titles have sold, and I can’t compare their performance with sales of similar titles from other publishers.  Unless we are a publisher with huge lists across multiple genres, we can’t get a balanced picture of the market.

The Reason for the Problem

The reason for this is that there is such a small number of retailers selling ebooks in large quantities.  All the sales data for printed books is collected from the retailers, who report to Nielsen how many copies they’ve sold of each title.  Because there are so many bookshops giving this information, you can’t tell how many copies any one shop or company has sold.  The problem with ebook sales is that they are concentrated in so few retailers who are reporting their sales to Nielsen, that if those figures were published, it would expose their individual sales figures to the public, because by looking at the different formats (Kindle or ePub) we could deduce who had sold what.  As this kind of  information is normally considered confidential, the figures have not been released.

Will the Problem Go Away?

I hope that this problem is just a symptom of an immature market, and that it won’t be long before so many bookshops are selling ebooks that none are identifiable from the aggregated data.  However, as long as Amazon remain almost the only  retailer selling Kindle versions, their anonymity is never going to be protected, unless the format information is left out of the data.  That would again limit the usefulness of the data to publishers, who need to be able to make informed decisions about formats as well as topics and overall figures.

Maybe One Day

The news (on Moco News) that some publishers are opening up their book sales data to authors,  saving them from having to wait for their six-monthly royalty statement may well (as Laura Hazard Owen hopes in her article) prompt calls for greater openness about sales generally, and pressure to find a way round the commercial confidentiality risks of reporting ebook sales in particular.

Evolving Ebook Clauses

Ebooks have always been difficult to define.

Publishers used to claim that the ebook was just another delivery method for the author’s work, so naturally belonged implicitly under volume rights.  That didn’t last.  In 2001 Random House Inc lost a court case against Rosetta Books for trying to define them as part of volume rights.

Once it was established that ebook rights needed to be explicitly defined in the contract, definitions emerged which confined the ebook to being an electronic replica of a printed book.  They used words like ‘verbatim’, ‘in whole’, ‘unaltered’ etc in a form ‘primarily designed for reading’.

But it is very difficult to make a water-tight definition that can’t be mistaken for anything else.  On the Ebook Strategy course I teach at Book House, we always try, but ebooks are very difficult to pin down.  But although we can’t define it, we feel we instinctively know what an ebook is when we see one.

Now it looks as if ebooks are becoming even harder to pin down.  The ebook clause is evolving again.  This time the definitions aim to allow for enhanced editions, giving the publisher scope to make full use of the the features of ePub3 described in my last post.   Recent examples include the use of words such as ‘additional materials’ of various kinds to ‘enrich’ and enhance’ the reading experience.  Does the intuitive “knowing it when we see it” still apply?  If it has the full text of the book at its heart, with extra material added at the beginning or end, yes, we are happy to say it’s still basically an ebook.  But if the text itself is broken up, re-interpreted with images and audio, and perhaps even accessed non-sequentially, is it still an ebook?  Or has it become something else?  If so, what?

This is very exciting for readers, but the worry is that if the ebook is defined too broadly, it will encroach onto other rights, such as film, or app rights.   The challenge now is to hammer out new definitions that accurately describe the ebook in all its glory, without being so loose that anything goes.

Or will the divide disappear altogether, and this become another front line of convergence of media.

Ebooks have been around for just over 10 years, and in the mass market only for about 3 years.  It’s very early days for this new technology.  We are still making ebooks that look like books.  The first cars looked just like carriages.  Just as the very first car manufacturers could not imagine our sleek, fast cars of today, so we cannot imagine the ebooks of 2111.  I wish we could fast-forward, and take a look.

 

5 Reasons to Love ePub3

Everyone is talking about ePub 3 which is launched this autumn, so I went along to UCL’s Digital Publishing Forum to find out what the fuss is all about. This is what I discovered from a very good talk by Graham Bell of Editeur.

Where did it come from?

ePub 1 was the Open Ebook format (OEB) developed by the IDPF
ePub 2 is the one we use now. The first device we could read ePub books on was the Sony Reader, launched in 2008.
But many publishers and readers are painfully aware of it’s limitations, so the IDPF have been working on upgrading it.
Now they have ePub 3 about ready to use, and you can see the specs on their website at idpf.org/ePub/30/spec

What does it do?

  • Media: The thing that makes all the difference is that an ePub 3 file also contains other media, so things like audio, and animation can be added to the book, yet it still retains the all-important reflowing text of ebooks. These other media will appear in the correct place in the book, synchronised with the text – they don’t have to be grouped in an appendix at the back. Some ebooks do already include multi-media but they only work on a few types of reader, so if you have the wrong kind of phone, or your ereader is the wrong make, you miss out. ePub 3 aims to reduce these differences between machines as ePub 3 becomes a universally recognised industry standard.
  • Layout: Current ePub ebooks are fine for novels and straight text, but ePub3 goes much further – not just books but also magazines, newspapers, journals, corporate publications whose highly designed pages need a fixed layout to look great, are more likely to work well too.
  • Languages: whether the writing goes left to right or right to left, and starts at the front or the back of the book, whether it writes in letters or scripts or characters, ePub 3 will show it correctly.

How does it do it?

ePub 3 is based on HTML5. As this is the same code that many apps are created in, it will pave the way for ebooks to become more app-like. At the moment web browsers use HTML4 so we won’t be reading ebooks in Internet Explorer or Google Chrome.

HTML 5 is based on XML so ePub 3 tags keep meaning and structural descriptions separate from presentation instructions. This has the effect of making them less media-specific. An example is the <i> tag. Instead of meaning italics as it does in HTML 4, it means emphasised. A screen may be directed to show this in italics, but a read-aloud programme will know (directed by the CSS) to put a stress on that word when it reads it out. Similarly, the <b> tag no longer just means bold, it means strong, so the read-aloud will speak louder at that place.

What does this mean for publishers?

  1. Better slicing and dicing: selling parts of a book is something publishers would Ilke to do more of, and the new structural tags in ePub 3 make it much easier to do. Each chapter or section has its own self contained structure showing headings and subheadings in relation to the part, not just the whole. It’s like a row of terraced houses that you can move apart into small detached houses without the party walls falling down.
  2. Better page design: ePub 3 benefits from better styles in CSS. The designer can now put the page or parts of the page into columns and the reading device will fit them onto the screen, regardless of the size of the screen – they just reflow. This makes ebooks a possibility for a whole range of titles that really need that option in order to look good
  3. Better discoverability: no-one can buy a book unless they can find it, and online you find by searching. ePub 3 uses SVG graphics. This means that diagrams are ‘drawn’ on screen according to instructions instead of being a fixed image pasted in. Included in those instructions is the text for the diagram, right there in the text of the book. That has two benefits:
    • a diagram’s captions and labels are searchable like the rest of the text, from within the book as well as on the web in services like Google Books
    • because they are embedded in the text, diagrams and captions will always appear in the right place instead of re-flowing off somewhere else and getting separated.
  4. Better bells and whistles: all these things combine to make it easier to add things to help or entertain the reader. Instead of adding one photo, why not add a slide show? Maybe a diagram would be clearer if it was animated to show how it works. Want to know where Sherlock Holmes found the body? Here it is on Google maps. Ebooks will be able to be more like apps.
  5. Better metadata: the book’s details are included in the ePub 3 file showing title, author(s), publisher, date etc in a way that a computer can read (ie not just painted in the artwork of the cover). Based on this information, and its links to further information, the computer can classify the book appropriately in its database. Thus we will have the self-cataloguing book. That will make life easier for librarians

All we need now is lots of affordable ereaders to enjoy these lovely new ebooks on.

 

 

Agents – publish and be damned

Opinions abound about whether literary agents should help their authors to self-publish, as a big New York agency, Trident, comes out with the news that it is starting to do just that.

In all the flinging-up of hands in horror with allegations of greed and conflicts of interest, all the nuances are lost.  For example, Dean Wesley Smith says on his blog, that the dictionary definition of a publisher is one who issues copies of a book to the public, but I think the definition is so much more than that.

I think one crucial question is: who owns the rights?  When an author signs a deal with an ordinary publisher, they hand over to them the right to publish their book.  However when an author self-publishes their book, they don’t give any rights to anyone – they own all the publishing rights and are making use of them.  If an agent buys rights in an author’s book, then perhaps yes, they are publishing it,  but if the agent does not acquire any rights, leaving the author in the driving seat, then they are not publishing it, but rather they may be helping the author to self-publish it.

Another question is: who is paying for it?  Some agents pay for the production of the ebook edition themselves, and take all the risk, as a publisher does, and perhaps the “royalty” they pay the author reflects that.  In other agencies the author pays for everything, paying the agent to do the work on his behalf.

And how is the agent paid – in profits, or on commission?  This is another defining feature.  If the agent has paid for the production and any other work such as marketing, then they will need to get that money back through sales. They would probably need to suggest a 50:50 split of the income in order to cover their outlay.

If on the other hand, the author has paid the production costs, then commission on the sales made as a result of the agent’s work is more appropriate, and would be much lower than 50%.

Dean Wesley Smith says an agent stands to make “a ton more money” on a book by charging “publishing fees” plus commission than they would if they sold the rights in the usual way, and only received commission, and he says this leads to a conflict of interest.  The only thing is, an agent will always make more money selling the rights to a mainstream publisher, because of the huge difference in the number of copies the book will sell and the advance it will get.  For an agented author, the self-published route is a last resort for when the commercial publishers have given up.

And anyway, in my experience, those “publishing fees” tend to get spent on production – that’s what they’re for – and it is extremely unlikely that any agent or  author would make a ton of money out of a book published in this way.  If they thought the book was capable of that, they would sell the rights to a proper publisher.

Copyright gone wrong?

Is our copyright law doing its job?  The Hargreaves Review had a look and made some recommendations, and these were discussed today at the Westminster Legal Policy Forum: What’s Next for IP Law?  Intellectual property law was discussed from all angles, not just copyright, and I made some notes.  Here are what seemed to me to be the main/most interesting points:

1  Evidence based policy

Policy should be based on evidence, not on lobbying as it is now.
Evidence should be transparent in its methodology, open and peer-reviewed.
Evidence-based policy needs to replace ‘lobbynomics’
Not enough evidence exists, so £5m funding for research.

2 Proposed New “Copyright Exchange”

Intended to be a central and easy place to buy and sell rights.
It will be run by users and rights holders, with industry at the heart of it, led by private sector with incentives from government
Rights holders can choose to licence their rights through it, at the price they set.
A very ambitious plan.
Needs a lot of refining to avoid danger of making licences that rights holders don’t want eg granting licences to people the author hates.

3 Harmonisation

Not enough harmonisation between countries, even within EU, for seamless international protection and licensing, especially of patents.
Differences in copyright exceptions too, which may never be resolved eg due to difference of opinion on making hardware levies to remunerate rights holders for users making format-shifting copies.  UK wants exception for format shifting but not with levies.
UK plans are very radical and ambitious so we should help and advise EU in its review of IP law.

4 Penalties

Piracy needs to be tackled in a stronger more systematic way. Absence of online enforcement and visible consequences leads to lack of respect for IP law by public; but improved means of online enforcement with international cooperation and better punishments will change user behaviour.

5 Outdated?

As ever, establishment (Government and IPO) seems to think copyright is mostly OK and has proposals to strengthen and streamline it.  Campaigners seem to think that radical changes to the basis of copyright need to be made, and we are falling behind US and Europe in terms of user rights and justice.

What’s your view?