March 24, 2010
The release of Apple's iPad and thousands of iPhone apps is forcing Australian publishers to quickly develop their publishing strategies to stay in the burgeoning market.
Beatrix Potter's bunnies must be hopping with excitement. Her classic illustrated children's books have been adapted for television, film and even ballet.
Now Australian developer LoL Software is creating iPhone apps for a dozen of the books for the British arm of Penguin Books.
e-books on the Apple iPad.
Peter Rabbit and friends will be available to Apple iPhone and iPod Touch users later this month.
Interactive digital applications, or apps, of Dr Seuss's The Cat in the Hat, Rachael Bermingham and Kim McCosker's 4 Ingredients (another LoL creation), The Sydney Morning Herald's Good Food Guide, and Hilary Mantel's Booker Prize-winning novel Wolf Hall are already on sale.
There were more than 27,000 book apps in Apple's App Store at last count, some 2000 more than there are game apps, according to mobile advertisement business Mobclix. The app store generated more than $US250 million ($A272 million) in revenue last December alone.
It's no wonder software developers are busily tweaking iPhone apps or developing new, graphically rich purpose-built products for Apple's much-hyped iPad tablet device.
This uber-gadget is exercise book-sized, looks like a blown-up iPhone, and will land in Australia in late April.
Meanwhile, Amazon's Kindle, a handheld device for reading mainly text-based books and media, has been here since late last year. Its "e-ink" technology means the sensation of reading on a pixelated screen can become a thing of the past, and the range of novels available through Amazon.com has given the device mainstream appeal. "Disposable" genres like romance, crime and fantasy have proven particularly popular.
Forming a digital strategy
Despite all of this, many book publishers in this country have yet to formulate a digital strategy.
At a talkfest on the subject last month, Federal Innovation Minister Kim Carr announced a Book Industry Strategy Group to look at how retailers, publishers, agents and authors can make the most of new technologies.
The working group is due to report back within a year, but is that soon enough when technologies, rookie app developers and the big international operators such as Amazon, Apple and Google, with its Google Editions e-book retail plan, are moving at such a pace?
Australia Council for the Arts chief executive Kathy Keele made her feelings on the matter clear at the same event last month, saying sales of e-books now constitute an estimated 5 to 6 per cent of the book market in the United States.
"Like many Australian consumers I excitedly opened my Kindle recently, ready to embrace this brave new world of e-books," she said.
"My excitement dropped ... once I realised that there wasn't, yet, a great deal of Australian books out there."
So why are some book publishers still working out e-book strategies?
Surely the success of Apple's iTunes store in the music sphere gave some inkling of what was to come?
Those who had for some years invested in e-publishing programs for their academic titles, such as Allen & Unwin and Macmillan, were well positioned to jump when the general reader did. But they didn't know how or when they would need to.
The Kindle had been a huge success in the US, but Amazon had given no indication as to when the device would reach Australia.
Perhaps spurred into action by the growing buzz about the iPad and take-up of free e-reader apps for the iPhone such as Stanza, it announced a snap international launch last October.
Amazon had the delivery method (via 3G, the third generation wireless technology most new mobile phones use today), pricing structure (around $A2.18 for classics that are out of copyright and $A10.87 for new books) and billing system (though Apple's iTunes and App stores make it even easier for us to shop).
But territorial rights have prevented Australian Kindle users from purchasing much other than out-of-copyright titles or those for which no local publisher owns the rights.
A group of e-publishing pioneers had been planning last month's sold out Digital Revolution: Publishing in the 21st Century symposium for a year in a bid to address such issues.
Allen & Unwin academic and digital publishing director Elizabeth Weiss, Macmillan digital strategy manager Victoria Nash, co-founder and director of Spinifex Press Susan Hawthorne, digital publishing consultant Anna Maguire, Australian Publishers Association industry professional development manager Dee Read and program officer at the Literature Board of the Australia Council Nicola Evans formed the Australian Publishers Association's Digital Publishing Training Steering Group, a body to ensure our industry wasn't left behind.
Their colleagues and competitors were keen to hear what they, and their handpicked guests had to say. They wanted to know which books they should publish digitally, when and in what form, where they should sell them, how much they should charge, and what royalty they should pay their authors.
Weiss says the technology giants are each trying very hard to dominate in the e-book market in divergent and contradictory ways.
"It's challenging for the book publishing industry to establish sensible commercial relationships with them so that publishers can sustain their businesses and continue to pay authors enough to make it worth their while to write," she says.
Playing catch-up
During the symposium in Sydney, speakers alluded to another reason some major publishers here are playing catch-up many are local branches of multinationals and have to fit in with head office's plans and Australia is not always the highest priority for London or New York.
Multinationals HarperCollins, Random House, Simon & Schuster and Hachette either declined or were unavailable to comment on their e-book plans (they weren't the only ones Apple executives preferred not to comment, and Amazon ignored requests for an interview).
Penguin Australia chief executive Gabrielle Coyne was quick to respond, though.
"We certainly do plan to release our mono [black ink on white paper] books as e-books as a matter of course and will be doing so as we establish our supply chain and devices become readily available to Australian readers," she said.
"We're also working closely internally and with our colleagues elsewhere in the group to review our full-colour books both on our adult's and children's lists and the best and most creative ways to make this content available."
Penguin Australia last year worked with InyerPocket Software (which in turn partnered with LoL Software) to produce an app for Jungle Drums, by Animalia author Graeme Base.
Weiss says everyone has now realised it's time.
"It's a revolution. Even my 81-year-old father knows about the Apple iPad," she said.
Weiss doesn't believe the Australian industry is that far behind, saying most of the movement in the US has been over the past 12 months.
"This has developed very fast, and Australian publishers wanted to see how it developed before committing to e-book formats."
And while the Kindle is here, it was launched without marketing or publicity backup. "It's not in shops, and there is no dedicated Australian Amazon site," she says.
Apple has only just advertised for a manager for its iBooks program in the region, so the launch of its iBookstore, which is expected to sell primarily text-based mainstream fiction and non-fiction titles for the iPad, is likely to be some months away here. It will be operational in the US from early April.
Apple's iPhone Developer Program allows just about anyone with technical and creative nous to become a publisher. Pay $A108 and wade through the documentation, and you too could be creating "e-books" for the iPhone and iPad.
Fairfax Media's marketing and newspaper sales director Robert Whitehead warns that finding a market for your app may not be so easy, though. While sales of Fairfax's Good Food Guide apps are reportedly in the tens of thousands, this is partly as a result of cross-promotion in the group's newspapers.
"It's clear at this early stage that the people who succeed with apps will be those who can provide major exposure in other media outlets to generate awareness to generate the sales," Whitehead said. "With 150,000 apps on the App store, for example, they don't just sell themselves."
According to technology blog gigaom.com, there were more than 28,000 app developers out there in December. They waited an average of 4.78 days for Apple to approve their apps, and app store users downloaded an average of 4.8 apps each. A quarter of those were paid (most paid apps cost anywhere between 99c and $9.99, with an average price of $2.70).
"With over 58 million app store users, 280 million apps were downloaded in December, generating more than $US250 million in revenues, of which 30 per cent goes to Apple and 70 per cent to developers," gigaom.com reports.
Winning new business
LoL Software's Phil Bosua, who presented those figures at the symposium last month, says his company is winning new business by approaching publishers "that have great content". He has been in the publishing business for around a year. The Beatrix Potter project involves producing individual apps for a dozen of the titles, including Peter Rabbit, Squirrel Nutkin and Benjamin Bunny, as well as an app taking in all 12 titles.
Bosua says the apps will be "true to the original books" and focus on "replicating the reading a book or bedtime story experience but adding narration".
Where all of this leaves traditional book publishers remains to be seen.
Weiss has been epublishing for years through her involvement in academic publishing. "It's no coincidence that the two major publishers who have invested in e-books to date [Allen & Unwin and Macmillan] have education lists."
Allen & Unwin has around 1500 e-books "out in the world", and the majority are trade (general rather than educational). The publisher will now release e-books at about the same time as print titles as a matter of course.
Weiss says most trade publishers have already cleared e-book rights with their authors, but are still in the process of selecting and negotiating with e-book retailers, including Amazon and Apple.
Until last month, Amazon insisted on controlling pricing of e-books sold on its site, but the industry breathed a collective sigh of relief when Macmillan negotiated the right to set its own prices, and adjust them as it releases different print editions. For example, from hardback to large then small format paperbacks.
There are technical issues to contend with too, such as e-book file management and conversion, storage and digital rights management (access control technologies that can be embedded in an e-book to impose limitations on its usage). Another of the publishers' big concerns is piracy.
Weiss said, "We've found Allen & Unwin books on file-sharing sites".
Pirated books online are typically scanned from print titles, while the word is that others are hacked e-book files or files sourced from editorial and publicity departments.
Maguire says readers will be driven to piracy if they can't buy the book they want legally.
"In the United States, 28 per cent of e-book reader owners have pirated e-books," she said, adding that PC World magazine found that a third of Publishers Weekly's 2009 top-15 best-selling fiction works were available for illegal download through book-swapping and file-sharing networks.
Nash says Macmillan has more than 300 trade titles on the market as e-books already, and that number will rise to 500-plus this year.
Macmillan's Macquarie Australian Dictionary iPhone app "has sold extremely well despite being at high price point [$29.95] for an app, demonstrating demand for quality content", she says.
She too expects to sign a deal with Amazon within months, and notes that where a title is available in both a print and Kindle edition on Amazon already, 48 per cent of the retailer's sales are of the Kindle edition.
"Despite the hype, [digital publishing] is something that is moving," Nash told the publishers in Sydney. "We have a little bit of time, but we need to work together over the next year."
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