Acquisitions

Working with Australian publishers and authors in the e-world

Linda Carmichael, James Bennett

After thinking about how best to approach such a broad topic I decided that it would be most useful if I concentrated on three projects that James Bennett is currently involved in.

The projects are diverse, they are all in their infancy and they each focus on different, but complementary, areas of our business. We anticipate a project cycle of between 6 to 12 months for each.

We are confident that these projects have the potential to open up new areas of the Australian ebook market. We know that they present an opportunity to explore new business models and relationships.

The common factor is the way we are integrating the specific ebook issues into the project plans. The object is that when the projects are complete, e-books will be a core component in our marketing and business strategies, and fully integrated into our key operations.

E-books, like any new enterprise, will require a whole of business approach. We need to consider the impact on all of our business operations, not just the obvious ones like IT and Sales. There is a change management element involved. We need to consider the potential impact on Customer Services, on Receiving and Invoicing and the impact on our New Titles Services and Blanket Order Services.

We also have to consider that we have an extremely broad customer and supplier and publisher base.

We work with single person special libraries, school libraries, public libraries of all shapes and sizes, Academic, State and National Libraries both here and overseas. Our suppliers cover the whole spectrum of Australian Publishing - self-publishers to international publishing groups. To give you an idea of the scope of our operations, in the past year we have traded with over 12 000 separate publishers and distributors.

When James Bennett talks about e-books, we are not talking about a single, identifiable and marketable product.

We are talking about a myriad of formats and business models, from different sources, all of which require a degree of individual attention so that they can be incorporated into our operations. This takes time and it takes patience and it requires us to be both broad minded and flexible.

With e-books we are now addressing issues such as copyright and territorial rights for electronic material to a level not common when selling print titles.

Most of the e-book work we have engaged in so far has been aimed at developing company infrastructure and new business relationships. We have taken this approach so that when we do go to our customers and say 'these are the e-books that are available to you', the product is:

• something our library customers want to purchase;
• they will be products easily incorporated into existing library operations and
• they will be simply part of our day-to-day operations.

Well that is the plan.

Over the past two years I have been involved in every aspect of our journey into e-books. If there is any advice that I can give someone starting out on that journey, it is:

• Be prepared to have your assumptions challenged.
• Don't go in and think, 'this is the way it will work' because sure enough it won't be.
• And keep your sense of humour. You will need it after you have been 'dot.commed' for the forth time in a row.

So what are the projects we are working on?

The first project involves collaboration with a major Australian Trade and Commercial publisher to develop and distribute a range of e-book titles aimed at libraries.

The second project involves working with a group of small electronic publishers to offer a selected range of e-book titles and formats to libraries who would like to experiment with e-books, but have minimal resources to explore new technologies.

The third project involves the collection of Australian e-book title and publisher data for inclusion in a commercial bibliographic database

Project 1

This is the project with the longest time frame for implementation, and the one that will require the greatest investment in new technology. We also think it is the project with potentially the greatest benefits for us, for the publisher involved and of course for our customers. .

We have been actively pursuing the topic of e-books with the major Australian publishers for the past two years, with rather mixed success. When we started out, we quickly realised no-one knew

• if there was a going to be an e-book market,
• what the business model might be
• what technology would be required

But what they did know was that the thought of selling e-books to libraries was innovative but just too hard.

Now over the past twelve months, we have seen some significant developments in the 'e-book' business and generally people are starting to relax a bit. We are more familiar with the different e-book business models and formats, and we have a greater sense of the e-book expectations of both publishers and customers.

We are starting to see a distinction between e-book models aimed at consumers and e-book models aimed at institutions.

And after having been 'dot.commed' a number of times, we now have a much healthier appreciation of how different the e-book business is from the e-book business.

Its been a learning curve.

The project we are engaged in enables us to use the e-book knowledge we have acquired to complement a publisher's e-book knowledge. By combining our respective organisation business strengths, the plan is to develop an effective distribution of e-book titles to libraries.

Our long-term goal is to develop a business model that will enable us to work with other publishers who are interested in selling e-books to libraries, but are not sure how to go about it.

The publisher we are working with has a limited range of titles available through Questia and Ebrary, through NetLibrary and through the online retailer ebooks.com. They have recognised that while working with these utilities has great benefits, the titles are only available to a limited market, the market is primarily US based, and unlike a print book, they do not have a stake in the 'e-book' as the end product in itself. The e-book developed on one of these utilities remains in a proprietary format, more often than not developed from the digital scanning of a hard copy book.

The library market is vitally important to their print sales and their long-term goal is to grow the library market in e-book sales.

Based on this experience, they are reviewing their digital printing processes with the view to incorporating e-books into the final production stages.

This will ensure that where possible a new title can be converted to e-book format to be sold along side the hardcopy. It is of major concern to them that they maintain archival control over the digital version.

At the same time they are working through their backlist to identify titles that are suited to production in e-book form.

James Bennett brings to the collaboration our knowledge of the library market, and substantial book selling experience. Our relationship with the publisher is long-standing and we both have a sound appreciation of how the other does business.

We will be developing a system to store and distribute these e-books. While the publisher is perfectly happy to develop the e-book, they don't see any advantages in setting themselves up as an online ebookshop. That isn't their business. But it is ours.

We know their range of titles and can identify what sells to different libraries. We will be working with the publisher to develop the range of titles to be first offered as e-books.

We are in the process of working through a mutually acceptable business model to sell the e-book titles. It needs to be ensured that the best interests of the publisher, the book supplier and the potential customers are well served.

Our initial discussions have highlighted three key areas that need to be addressed in order for the project to progress.

They are:

• Technology
• Electronic Rights
• Copyright and Licensing

Technology

• For the publisher, they have had to make a decision whether to upgrade their existing in-house electronic publishing processes to a platform neutral format such as XML, or to maintain their current system
• They also have to consider the archiving of the digital titles, and long term storage and access.
• We need to have technology that will enable us to not only store the titles, but also to track security levels, inventory, sales, licensing and distribution. It is of critical importance that we have a system that meshes with our existing order management, receiving and invoicing processes.
• We have begun to assess the technology available that can handle this type of operation. The technology is generally designed for ebook retail, not e--book supply, so we are analysing our business needs to ensure we get a best fit technical solution, and one that allows us to expand our business in the future.
• The final file format of the e-book titles is still under consideration. It is likely that encrypted PDF format, licensed to a network rather than an individual PC offers the potential customer most flexibility.

Electronic rights

Electronic Rights were described to us as being the 'e-book showstopper' for a publisher.

You need to be aware that even though a book may be produced using a digital process it does not always mean that the title can be sold in digital format. If the electronic rights have not been negotiated, you will never see an e-book.

The publisher is now going through the slow process of re-negotiating the electronic rights to each title they have commissioned.

This process involves redrawing contracts with all the contributors and copyright holders and a re-negotiation of the royalties. This includes negotiations with the

• author
• compilers of statistical tables and indexers
• photographers
• and anyone else who had a hand in the work

If a contributor withholds the rights, or prices them too high, the contribution is excluded from the final digital product. For a publisher, the rights negotiation is often the hardest part of the e-book process rights.

We were advised that the negotiation of electronic rights to photographs was extremely problematic, leading to the decision not to include photographs in the eventual digital titles. With some photograph libraries asking up to $20 000 per photograph to secure the electronic rights, inclusion of photos makes the an ebook an uneconomic enterprise.

While the negotiation of the rights is a process independent of the proposed collaboration, we do need to manage the expectations of our customers who would expect that the digital title would be exactly the same as the print title.

Copyright and licensing

Another key area to be worked out is Copyright and Licensing. Of general publisher concern is the potential to exploit the copyright of digital titles.

Discussions have touched on how to best address this concern. We are investigating the technical solutions available - such as encryption, computer network licences, and limiting print options. Information is also being gathered on current licensing models for electronic products.

We know that all of these issues will take some time to sort through and we are yet to discuss pricing models, physical distribution and packaging the titles for sale.

We are confident though, that this project holds great promise for all involved.

Project 2

This project allows us to build on our traditional relationship with Australian's non-commercial publishers who are expanding into e-books, and it allows us to develop new relationships with the burgeoning e-book-only publishers.

It is really a slight variation on what we do with our Public and Tertiary Kits. The actual form of the project springs from something we have wanted to do for some time, but just haven't found quite the right mix of publishers or products do it with.

We have become aware that when customers talk to us about e-books, they are often using the term as shorthand to describe a product like NetLibrary, or the handheld devices like the REB1100's.

However we have also noticed that when some libraries closely identify these products with ebooks, they automatically assume because they don't have access to them, then they are locked out of the ebook experience altogether.

We could see there was an opportunity for some niche marketing here and we had a few brainstorming sessions.

When we first approached publishers about e-books, we were quite disappointed because the very publishers we thought would be going into ebooks in a big way, that is large commercial and trade publishers, were not interested in them at all.

At the same time we trying to interest commercial publishers in e-books, we began to realise that there was considerable e-book activity among the small non-commercial publishers.

It should be noted that of the 10 000 or so new Australian monographs published last year, only 40 per cent came from the trade publishers - 60 per cent came from the non-commercial presses. These non-commercial publications form the core of our new titles and blanket order services and we have a reputation as specialist suppliers of Australian non-commercial titles.

Where we had previously sold the print titles, some publishers were keen to see us sell the e-books.

However none of the e-book titles were easily integrated into our existing services. They weren't core collection, and were often e-book editions of older titles in print. If we had a particular publisher profile, we also had a particular e-book customer profile and we couldn't see that mythical customer buying them.

However a solution to our niche-marketing problem has come in the form of a group called EPPRO - the Electronically Published Professionals. This is an umbrella group of small print and e-book publishers and authors. The organisation was founded in Victoria, and they have members in Australia, New Zealand and the United States.

We already sell print titles by some of the members and they recently contacted us about their wider e-book activities. There is a lot of fiction, mostly romance, science fiction and fantasy, some children's books and some non-fiction. These aren't vanity presses, some of the authors mentioned were also with commercial publishers, and the electronic publishers have an editorial role in the e-book production.

We arranged to be sent more details on the publishers themselves and on their titles.

One of the things that EPPRO does is run a e-list for their members and a notice went up on the list advising that an Australian Library Supplier was interested in hearing about their titles.

Since then we have received a steady trickle of e-mails from all sorts of e-book publishers and Australian authors who are published by US e-book publishers. And a number of e-book samples have also come across my desk.

Seeing the samples gave us an opportunity to rethink how we had been approaching non-commercial e-books, and also how to give customers a low-tech, low cost opportunity to introduce e-books to their patrons.

While there are e-books in basic PDF format, the e-books that have caught our attention are in HTML format, using a CD-ROM as the carrier and a web browser as the viewer. I take the view that if the creator calls it an e-book, then it is an e-book.

Some e-books are stand alone, using single or multiple web pages with hyperlinks between the chapters. Others are more sophisticated, with hyperlinks, popup footnotes and links to external websites if there is an active Internet connection.

They aren't necessarily great literature, but imagination has gone into how the e-books have been constructed and how they can be delivered. They don't need installation on a network and they aren't tied to a specific machine or device. They are reasonably secure, and if a library lends out music CD's, then there is no reason why they can't lend out the e-book on CD. These e-books are also reasonably priced.

From this, we are developing an 'e-book sampler' for want of a better name. It will be in a similar format to our existing Kit service so that the sampler will fit with library selection patterns. The intention is to offer a variety of fiction and non-fiction e-books in formats that do not require the loading of specialist readers, or installation on a particular device.

Now this isn't in itself a huge innovation, but it does represent a convergence of interests. By working with a group like EPPRO and other non-commercial e-book publishers, we can move our tradition of supplying non-commercial material into a new format.

By starting off with a sampler approach, it gives us flexibility in how we market the titles. We can offer something new while still operating within a familiar marketing model like the Kits.

It also allows us to respond quickly when new titles come along, and to make changes if we don't have the right title or format mix.

But above all the advantage for our customers is that they can see the variety of e-books that are out there, and maybe try some of them, without significant outlays.

This paper was proposed for the Acquisitions SA Seminar 'Consortia 2001 - A management odyssey' held in Adelaide, 9th November 2001

Project 3

This project will have a significant impact on our internal operations and infrastructure. It also represents another opportunity to expand on an area where we have considerable expertise, and to build on an existing business relationship.

James Bennett has recently announced a partnership with Book Data to combine our respective data collection and record creation activities. The aim of this partnership is to develop a commercial database of bibliographic records for Australian titles.

It may not always be apparent to our customers, but our organisation has two distinct operational areas. Half our operations are devoted to selling books, the other half is devoted to collecting information about books to sell.

Our collaboration with Book Data means that we will be expanding not only the scope of our title data collection, but the range of information we keep about the titles we collect. This will affect not only the structure of our title database, but also the structure of our publisher database.

The impact of collecting more information will eventually be seen in our title services and on JBO.

We have a team of buyers who are in constant communication with a whole range of publishers and their representatives. We load title information from files sent from the major publishers, book distributors and utilities. Our buyers go through trade publications, catalogues, review journals and newsletters. Plus we have a research department that tracks down orders for titles that aren't listed. .

All told we add about 4500 titles to our database per month, and we upgrade nearly the same number. It is a big operation, but we do comprehensively cover the whole spectrum of Australian Publishing, and a major proportion of relevant overseas publishing.

To make any changes to the current data collection effort is not a trivial undertaking.

Fundamental to the Book Data partnership has been the mutual adoption of the ONIX XML standard as our data transfer and data mapping protocol. This standard has been specifically developed for representing and communicating book product information in electronic form.

Use of ONIX XML has significant advantages for us. It is an international standard specifically designed to meet the needs of publishers and suppliers. It uses standard code tables and allows for data elements to be recorded in multiple levels of specificity. It also provides a structure to reflect and maintain national and international rights, distribution, pricing and availability.

But above all, ONIX XML it is specifically developed to incorporate metadata models for electronic media and ebooks.

This means we do not have to develop our own standard for identifying e-books, because they are already incorporated into ONIX XML along with other print formats. ONIX will be maintaining international codes for Electronic Publication Types and it allows for the distinction between ebooks published in OEB, HTML and PDF formats as well as the proprietary formats such as Books24x7 and Gemstar. In addition, the ONIX XML provides a mechanism for linking different editions, both print and electronic, together and we are looking at ways to incorporate this feature into our database structure.

However changing our title record structure is only part of the story. We must also notify every publisher and supplier currently sending us title information, to advise that we are expanding our title notification requirements.

Over the next six months we will be putting together an information package for the suppliers on our database giving details of the additional information we would like to receive. Central to this will be the request to send us information about any ebook titles that the publisher may be producing.

We are aware that ebooks are not integrated into the standard title notification streams. This largely reflects the new position of ebooks in Australian publishing. More often than not, their production and sale is outsourced to an online retailer or subscription service, who undertakes the digitisation process on behalf of the publisher.

By requesting publishers to include these titles in their normal notification services, we hope to eventually bring their ebooks into the mainstream.

At the same we time are alerting our existing publishers to ebooks, we also need to consider that there are online retailers who also undertake a publishing role, and that these new businesses may not link in with the more traditional publishing networks that we are familiar with.

If we are to successfully capture information about Australian ebooks, then the challenge for us will be to actively create an ongoing relationship with this new form of non-commercial publishing.

We believe that taken together, these projects will capitalise on our known strengths, and build a solid foundation for us to move our business forward as Australian e-book publishing grows.