When Authors Ask Us About the Consequences of "Piracy"

Over on the Tools of Change for Publishing blog, I've reprinted a great exchange from the Radar backchannel addressing an author's concerns about seeing his books gain steam on PirateBay. Here's Nat's take:

Fantastic! There's absolutely nothing you can do about it, and unless you see sales dipping off then I don't think there's anything you *should* do about it. The HF books work really well as books, so at best the torrents act as advertisements for the superior print product (not often you can say that with a straight face). At worst most of your downloads are going to people who wouldn't have bought the book at cover price and who will, if they enjoy it, rave about it to others. [emphasis added]

So long as the royalty checks are strong, take BitTorrent as a sign of success rather than a problem. A wise dog doesn't let his fleas bother him.

Check out the full exchange here.

Publishers Beware: Amazon has you in their sights

While I was wrong the other day about Google's AppEngine being a lock-in play (see the comments on that post), I don't think I'm wrong that Amazon has serious plans for vertical integration of the publishing industry. Having got retailers on the ropes, they now are aiming at publishers. From a Publisher's Weekly article entitled As Amazon soars, bookstores creep:

With Amazon's growing power in book sales, it's understandable that publishers may be a bit anxious on learning that in Amazon's 10-k filing with the Securities and Exchange Commission, the company lists among its many competitors not just bookstores but also publishers.

Amazon has seemingly embarked on a number of strategies to lock-in both consumers and publishers.

It is a free-market economy, and competition is the name of the game. But as Amazon's market power increases, it needs to be mindful of whether its moves, even those that may be good for the company in the short term, are ultimately destructive of the ecosystem on which they depend. I believe that they are heading in that direction, and if they succeed with some of their initiatives, they will wake up one day to discover that they've sown the seeds of their own destruction, just as Microsoft did in the 1990s.

At O'Reilly, we have a motto: "Create more value than you capture." It's a wise motto for companies far bigger than we are to adopt. If you do that, you ensure a healthy ecosystem. If you capture more value than you create, watch out, because stagnation is on the way.

Amazon has, so far, created huge value for the publishing ecosystem. Now, as they become more powerful, they need to be especially watchful that they don't irreparably damage an industry on which they too depend.

Amazon Gets Demanding with Print-on-Demand Publishers

We often hold up Amazon as an example of one of the original Web 2.0 companies. Their survival amid the tech meltdown was driven largely by the value of the data they'd acquired through thousands of reader reviews, recommendations, and "people who bought this bought that" collaborative filtering. Amazon was a system that grew more valuable with more users: a network-effect-driven data lock-in.

That kind of lock-in is implicit: publishers were free to sell their books elsewhere, and readers were free to buy them elsewhere. Such implicit lock-in is characteristic of other Web 2.0 success stories, like eBay and craigslist. These sites relied on the value of the unique data/marketplace they were building to implicitly raise enormous barriers of entry. Not much fun if you're a newspaper, but a boon for buyers and sellers.

But today's news from Amazon about Print-on-Demand is the latest move from Amazon revealing a trend toward much more aggressive explicit lock-in attempts. (Not that it's an entirely new strategy from the folks that brought you the "one-click" patent). Amazon has effectively told publishers that if they wish to sell POD books on Amazon, they must use Amazon as the POD printer. Small/self publishers are unsurprisingly feeling bullied.

Let's look at four levels of lock-in at play here:

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Goodbye, New York Times

I love The New York Times. I've read it almost every day of my life since I was in high school. For all its recent flaws -- the weirdo profiles of the major presidential candidates are the most high-profile -- it is still full of the most outstanding reporting. And, on the days that Gail Collins files, it offers up the most penetrating and entertaining opinion.

What's that? It's the last print copy of the Times I'll ever have delivered to my front door. Over the years, I've slowly weaned myself off subscriptions to physical newspapers, but it was hard to say no to the Times. The quality was high, the thump of the paper on the sidewalk was a pleasant sound to hear first thing in the morning, I liked the serendipity of walking through a print section, and I felt obligated to pay for the paper at a time when print subscribers were becoming an endangered species. But, after years of wavering, I'm done. The environmental argument alone should have been enough for me, but the simple fact is that I do more and more of my reading on a screen (the only holdouts: fiction and poetry). And plenty of that reading has been from the Times. What finally made me give in to the inevitable was realizing, one barely-dawn morning last week when I was reading the paper at our kitchen table, that I had already read much (most?) of it online. For all the pleasure of holding and print, the Times on paper is just too late. In 2008, today's paper is yesterday's news.

So now I'm a freeloader, although you could argue that my personal information, sent to the Times in return for a username and password, may have some value. I rarely, if ever, click on an ad on the Times's website. I would gladly pay for the pleasure and convenience of reading the paper online, just as I do for The Wall Street Journal, but I don't have that option. In this era of advertising-is-the-only-business-model, management at the Times Company has decided that I've decided that the value of what it sends to me is zero. I disagree -- and I'm not going to pay a premium for the proprietary and little-used Times Reader to make my point.

I'll miss the paper on paper, and I bet I'll buy it when I'm on vacation, as a treat, an indulgence. But if even people like me -- who adore The New York Times -- can no longer justify a print subscription, how can its print version survive, except as a high-priced, scarce product for an increasingly elite audience?

Penguin's Missed Ebook Opportunity

I've seen several softball pieces (such as this one) praising Penguin's decision to release, on Amazon's Kindle and Sony's Reader, some classics of English literature, starting with Jane Austen, with certain extras, in multiple ebook formats. Austen's Pride and Prejudice, for example, "will come with recipes from the era, copies of the book's first reviews, and a primer on social etiquette circa 1813." Another source adds "rules of period dancing, and illustrations of fashion, home decor, and architecture."

I'm guessing that the etiquette primer will not be what makes ebooks mainstream. Although ebooks should have extras, those extras should take advantage of the interactive medium, not merely deliver more -- and inferior -- text. This reminds me of the early days of CDs, when all sorts of trivial extras (outtakes, alternate takes) were added to discs as selling points. More recently, it's like the "deleted scenes" stuffed into DVDs. People, do you think those scenes were deleted because they were good?

What's most galling, of course, is that Penguin isn't attempting to increase interest in ebooks as a medium by making these classics, long past copyright, available in free, un-DRM-encumbered formats. In an old-meets-new mashup, publishers could use free distribution of still-in-demand classics to generate interest in a form, ebooks, that is still only in the earliest days of its potential public acceptance. Wouldn't you be more likely to try something new if it was free?

State of the Computer Book Market, Part 4 - The Languages

In this fourth post (one, two and three are found here) on the State of the Computer Book Market, we will look at programming languages and drill in a little on each language area.

Overall the 2007 market for programming languages was down (1.67%) in 2007 when compared with 2006. There were 1,809,695 units sold in 2006 versus 1,779,523 units sold in 2007 which is (30,172) fewer units in 2007. So the modest 1% growth in the Overall Computer Book Market must have been fueled by non-programming oriented books. You don't need a programming language to learn to use MacOsX, Vista or Office and that is where the growth was in 2007.

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State of the Computer Book Market, part 3 -- The Publishers

In this third installment, (part one, part two and part four later this week), we will look at how Publishers fared in 2007 when compared to 2006. The chart below shows our dashboard view of the Large publishers' results for 2007. The most notable change is that Wiley has assumed the leading spot as the largest publisher, with 29% market share of units sold. (We'll look at revenue share later in the analysis.)

2006 Pub Share	2007 Pub Share

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State of the Computer Book Market, Part 2: The Technologies

In this second installment (the first post is found here), we look at computer book sales in specific technology categories. Remember that we've organized the data into six "Category Families" -- Systems and Programming, Web Design and Development, Business Applications, Digital Media Applications, Consumer Operating Systems and Devices, and Other. Within each Family are category group, super-category, category, and atomic category, in a five-level hierarchy. For example, Systems and Programming includes programming languages, databases, software engineering, general programming, security, and so on. In the rest of this post, we will contrast Q4 2006 with Q4 2007 and the whole year of 2006 with 2007.

As a refresher, here is a new view of the Category Families with their sub areas for Q4 2007 compared to Q4 2006. In this view, we've changed the thickness of the borders to highlight the category hierarchy.

Recapping the big picture from the last post, what you didn't see is that the fast growth of Windows Vista was aided by the addition of 63 new titles [title count] that made the Bookscan data-set in 2007. (The data set consists of the top 10,000 computer books. So more titles in a given category typically means that new titles in that category have pushed titles from other categories off the bottom of the list. Shrinkage in the title count in a category doesn't necessarily mean that titles are unavailable, just that they are no longer selling enough copies to make the list.)

There were 15 Vista titles in the 2006 data and on 12/31/07 there were 78 or an 420% increase in count, while XP declined at a slower rate going from 125 titles in 2006 to 97 in 2007 for a -22.4% decrease in count. Combined, that netted 35 more titles in 2007 than in 2006 for XP and Vista. This is a distinct (isbn) count as well, so if a title makes it in the top 10,000 report for more than one week, it is counted only once. We wanted to see how many titles made up the category, not how often a title makes the report. But there is more to this category than is visibly apparent and we will cover that in more detail later in this post.

In the table immediately below, you can see how the cat_family groupings have performed (total units) both by quarter and yearly results. The only noticeable change is that the Consumer Operating Systems has swapped positions with Digital Media at the number 4 & 5 ranks.

Technorati Tags: Analysis, Books, Data, Markets, O'Reilly Media, Publishing, Trends

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State of the Computer Book Market, Part 1: The Market

As described in the post Computer Book Sales as a Technology Trend Indicator, and our other posts on the State of the Computer Book Market we have an updated series of posts that show the whole market's final 2007 numbers. Remember this data is from Bookscan's weekly top 3,000 titles sold. Bookscan measures actual cash register sales in bookstores. In other words, if you buy a book it gets recorded in this data. Retailers such as Borders, Barnes & Noble, and Amazon make up the lion's share of these sales.

Book Market Performance

Here's the year-on-year trend for the entire computer book market since 2003, when we first obtained the data from Bookscan. Please remember the data is for all publishers and NOT just O'Reilly. The slightly-thicker red line represents the 2007 data.

Click on the image to get a larger view.

As you can see, the clear seasonal pattern we've pointed out before still exists. The trend line for each year closely mirrors the year before, with remarkably consistent weekly ups and downs. (The computer book market cratered in 2001, shrinking twenty percent a year for three years until it stabilized in 2004 at about half the size that it was in 2000. We only have data going back to 2003.)

So what's was news in 2007? The year got off to slow start and by mid-year it looked like results were going end below the prior years. But around the middle of July, which is typically a slow time in computer books, the market climbed above the most recent years. Not only did the market climb above of the prior years, but it did not dip below any of the prior years until the third week in December [Christmas week]. That being said, the market ended up at 1%, or 4,089 units above 2006 - on a base of over 7.4 million units. That is truly a small increase but mostly realized in the second half of the year.

Another way to look at the market is with our Treemap visualization tool. This tool helps us pick up on trends quickly, even when looking at thousands of books. It works like this.

The size of a square shows the market share and relative-size of a category, while the color shows the rate of change. Red is down, and green is up, with the intensity of the color representing the magnitude of the change. The following screenshot of our treemap shows gains and losses by category, comparing the fourth quarter of 2007 with the fourth quarter of 2006.

Technorati Tags: Analysis, Books, Data, Markets, O'Reilly Media, Publishing, Trends

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We're Coming to NYC! Web 2.0 Expo CFP is Open

We started the Web 2.0 Expo to meet the demand that we saw in our conferences. The inaugural Web 2.0 Expo in 2007 was a huge success (and one that we are hoping to repeat in late April). It's a conference for people building websites, marketing them, and making money from them. It's also a conference with West Coast roots and as we have taken the conference around the world (Berlin and Tokyo) it's been modified for the region.

This September we are bringing the conference to New York. It will be just as big and just as long (September 16-19th at Javits Center). We are working with our passionate program committee: Clay Shirky, Dennis Crowley, Anil Dash (Six Apart), Oliver Hurst-Hiller (DonorsChoose), Michael Galpert (Aviary), Tristan Louis (tnl.net), Christopher Fahey (Behavior Design), Rick Webb, (Barbarian Group), Liza Daly (Interactive Factory), Karin Klein (Softbank Capital), Kenyatta Cheese (Rocketboom), Stephen Wellman (TechWeb), and Stefanie Syman (Lime.com). With their help we have come up with a new set of tracks: Landscape & Strategy, Media & Marketing, Design & UX, Tools & Technology, 2.0 at Work (how new technologies are affecting the workplace), Finance (inspired in part by our Money: Tech conference), and Policy & Compliance.

If you have something to say in these areas then submit a talk to our Call For Participation. The CFP is open until March 31st. If you intend to submit a talk you should clearly explain what the attendees will gain from your session and how they can use it when they go back to work. The full track descriptions are after the jump.

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Ignite Seattle 5 Schedule Posted

It was just over a year ago that Ignite Seattle held its first event. Our fifth one is this Tuesday (the 19th)at the CHAC. There will be 16 Ignite talks - very tech focused this time. These talks will each be 5 minutes long with 20 slides and only 15 seconds a slide. The doors open at 7; the talks start at 8. The schedule is right after the jump.

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Kathy Sierra: Creating Passionate Users at TOC

We'd hoped to get Kathy Sierra at our Tools of Change for Publishing conference, but had to settle for a video. I interviewed Kathy a couple of months ago about her approach to creating passionate users via the "I rule" moment, what publishers of all stripes (as well as anyone making presentations) can learn from her ideas about storyboarding non-fiction, as well as such things as why people are turned on by learning new skills, and why every day can be a kind of hero's quest.

That turns out to be good news, since we can share that video with you. (More video from the conference coming soon.)

The video we showed at the conference is about a half-hour long, cut from a much longer interview of about two hours. We hope to have more material from the original longer interview available on Safari soon.

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