This week's Economist (May 26, 2007) has a story about the book industry and a sign of the future, and the country they highlight is Japan.
Now we - Alan and I - obviously are authors. Like very many other authors we share concerns and curiosities of what will become of our profession and product in a digital age. In my time we've gone from book manuscripts being delivered in print - my first book Services for UMTS and its publisher John Wiley & Sons (the world's largest publisher of engineering books) was right at the time going from printed manuscripts to electronic delivery (and that was mostly by diskette, not e-mail delivery). That manuscript was worked on in 2000 and that book was among the early ones by Wiley where the author delivered the full manuscript in electronic form. Certainly not the first, but so much still an innovation that my publisher was very pleased I could deliver the manuscript as a file and quite amazed I could do it in e-mail rather than mailing a computer diskette to the publisher.
That discussion was seven years ago while the internet was already "in full swing" and we had things like Napster eating into the music industry and its content. Perhaps book publishers felt insulated from the digital invasion.
Meanwhile other print mass media formats, newspapers and magazines found ever more threats from the internet, as did their major revenue source, advertising. But books seemed to be "safe". Stephen King released a book in digital form that he was selling by the chapter, that he didn't even finish (I believe, or else it was very much delayed and compromised before being terminated). Books seemed to be safe.
But books also started to appear in digital form. Many expensive printed reports (the kind that cost thousands of dollars each) started to appear in electronic form, via the internet. And some publishers started to experiment with more innovative digital formats and methods. That was one of the things that drew Alan and me to Futuretext to publish this book, Communities Dominate Brands, because if our book was about communities dominating, and sharing and viral marketing - then surely shouldn't the book have a chapter we could share for free with any prospective buyer. Like in launching this blog and the podcast, Alan and I wanted to practise what we preached. We wanted to have something that could be shared with our community, about our book on community. To us that made perfect sense. When we discussed this with traditional big publishers, they didn't want to do that fearing it would limit their sales (we discussed with several traditional publishers). But Futuretext saw the value in this, and allowed us to do it. That discussion was in 2004 when we were negotiating the contract to publish this book project. That was 3 years ago.
Still today I mail out several copies of our first chapter to people who haven't yet read the book - any of the people who read our blog - obviously - have had the right to receive that first chapter (and the foreword to the book by Stephen Jones the Chief Marketing Officer of Coca Cola) - and yes, even you - if you send me an e-mail to the regular address tomi at tomiahonen dot com - I will send you the pdf file with the first chapter, foreword and first Case Study of our book.
But this is the direction for even the 500 year old book publishing industry. An industry which had been "stagnant" for a couple of hundred years. But suddenly all of it is in turmoil. Not because of sending one chapter of a book. No, now books are fully digitally scanned by Google and copyright owners are challenging Google's right to put full content available and searchable. Used books are resold on Amazon within weeks after their original release. New authors can self-publish paperback books for a tiny margin above basic print costs and have print runs in the dozens, not even hundreds, and still call themselves published authors. And yes, like we reported, there is already auto-authoring software that will take a blog and turn it into a book. Yes, the book publishing industry of today is in very serious turmoil.
So just like we saw in music, gaming, newspapers, magazines, TV, movies, advertising etc - the digital revolution first appears on the internet (and then explodes to be much greater on mobile) But what of the tomorrow for books?
The Economist shows us the future for books, authors, publishers. And yes, our readers know it. For all the impressive power of the internet, which will continue to grow into the foreseeable future, the long term BELONGS to mobile. And that future already exists in Japan. The Economist:
"With sales of books in decline, a new market has come as a godsend to Japan's publishing companies. Sales of mobile-phone novels - books that you download and read, usually in installments, on the screen of your keitai, or mobile phone - have jumped from nothing five years ago to over 10B Yen (82 Million USD) a year today and are still growing fast."
Of course. If music goes mobile and earns more today than music online, if gaming goes mobile and earns more than online, if social networking goes mobile and today already earns more than online, if news, radio, TV, movies, advertising, banking, credit cards etc all are trending towards mobile, all the other mass media are heading to mobile - OF COURSE books will go there too. It just took a while for the industry to get the formats right.
Like we say repeatedly about Mobile as the 7th Mass Media channel - don't try to copy old media onto mobile. Invent the new. Mobile is not the dumb simple little brother of the legacy internet; no! mobile is as different from the internet as TV is from radio; and like TV can do all radio can do - but then much more radio cannot, so too with five unique benefits no other digital media can replicate, mobile can do everything that the internet can do, but so much more that the internet cannot hope to match. Of course books are migrating to mobile.
But five years? This is why it took Japan so long. First they tried to put existing bestselling top titles in print, to mobile (don't try to copy the old media to the new!!!) The Japanese were not paying for those, because the same titles were available in discount book stores for pennies. But create original new stories, written with that novella concept, shorter stories, and with a lot of passion etc, but unique content released first for mobile - that sells. So well, in fact that the bestselling mobile authors in Japan get their titles THEN published as printed books (and TV shows, movies, comics etc).
And yes, lets stop a moment and think about the money involved. 82 million dollars per year in books sold to mobile phones and still growing strongly in Japan. There are 90 million mobile phones in Japan. So averaging across the whole user base, BOOKS sold to mobile phones earn 90 cents per mobile phone subscriber per year.
Lets assume this will be copied everywhere (trust me, even if you think Hello Kitty or Sumo Wrestling will never migrate beyond Japan, this innovation of mobile books certainly will). Now multiply 90 cents across 2.8 Billion mobile phone users in the world today, May 2007. That is 2.5 BILLION dollars that the global book publishing industry could earn from mobile. For an industry worrying about declines in readership and diminishing cover prices and ever smaller print runs, 2.5 Billion starts to look very good. In particular if this is NOT cannibalizing any existing sales - on the contrary, this creates NEW superstar authors for PRINT books.
The Economist explains about the economics of book publishing. It is a HORRIBLY inefficient system today. Very much of the costs of books are wasted in extremely inefficient distribution. One bookstore has a stack of books of one title nobody buys. Another bookstore not far in the same city has run out. Books are very heavy and moving them from one store to another (and stocking them) is extremely expensive. Books have a short window of popularity so stores have to "guess correctly" and overstock to meet likely demand - and this always results in some titles being left unsold in a given store. An to add insult to injury, unsold books are sold at big discounts soon after the orinal title was released. So it is not even in the boostore's interest to hold onto an old title and keep its price as it was.
A very inefficient delivery system and massively destructive pricing system as a book once read can easily be resold as used, for example via Amazon.
But with mobile books, there is no bottleneck, no overstock, understock. No extra copies printed to be sold at a discount. No lost sales because the book was not available. And MOST importantly, the mobile books cannot be resold by the person who bought the book. So if you want to read the latest Harry Potter or whatever, you cannot borrow it from a friend, you need to buy your own. (oh, obviously you could try to borrow your friend's phone, ha-ha, but since 60% of married people won't even share their mobile phone with their husband or wife, its that personal, no chance of someone lending you their phone just so you can read the book you have on the phone)
All this means that the books can be "produced" MUCH cheaper than printing them to paper. The publisher and author can get a fair return on a book that costs MUCH LESS than traditional paper printed books. And the reader, the buying public, gets original, exciting, new content, by their fave authors, first-time released direct to mobile. No waiting in lines, ordering books that are on back-order, etc. And they cost less. Win-Win-Win. Is it any wonder this has taken off?
Yesterday "analogue" and printed books. Today digital and cannibalization. Tomorrow's authors will write for mobile and make their money there. Mobile truly is the newest, the 7th Mass Media channel. Anyone want to publish our next book for mobile?