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callawayReuters is carrying a story on publisher Nicholas Callaway, who has been publishing beautiful coffee-table books since 1980, has recently decided that books that used to belong on the coffee table will work better as interactive apps on a tablet. Whereas it used to be that huge pages with detailed pictures were the way to go, now Callaway is more interested in smaller screens.

"This is revolutionary," he says, stroking his finger at the iPad’s glass surface and prodding to open an app he has developed. "This is the Looking Glass. This is Alice in Wonderland. We are at the beginning of an entirely new medium."

But the article goes into a lot more detail about Callaway’s feelings on the current state of the publishing industry with regard to matters that go beyond the book. Rather than follow the traditional model of publishers just publishing and paying royalties, Callaway enters into partnerships with authors and oversees not just publication but merchandising as well. Rather than be limited to the traditional role of publishers and taking only one slice over the overall pie, Callaway and his authors “[build] ownership of intellectual property across many different forms.”

Callaway points to the Harry Potter phenomenon as being an area where the traditional publishers really lost out. Potter’s publishers, Scholastic and Bloomsbury, might have made millions from publishing the books—but they didn’t see a penny of the movie rights, which Rowling herself kept.

"The publishers had the opportunity and they did not see it. That is historically always the case with publishers, they either don’t have the film rights or consumer products rights and, if they do, they just license them away," Callaway said.

Of course, I would quibble a bit with Callaway here—it’s not as if keeping the movie rights was entirely up to the publishers. Any agent worth his salt would have told J.K. Rowling to hold onto them during the original contract negotiations, and it’s unclear whether Rowling would have been tempted by the sort of partnership Callaway would offer. She’s certainly done well enough in the traditional model. (Though I will can and will still gripe that she’s not done anything with the e-book rights.)

The article goes on to talk about how Callaway used prior connections with Steve Jobs and Apple (he published a book in 1983 that Jobs liked so much he invited its subject to give a presentation at Apple) to get in on the ground floor of Apple’s iPad launch, coming out with an interactive book app, “Miss Spider,” that was ready when the tablet itself was released. Since then, he has produced more than 20 iPad apps through the end of 2010.

Callaway has taken a long view of what computers could do for books. In 1995, he felt that the original Toy Story movie pointed the direction to the future of storytelling—but he had been waiting for the iPad to come out for much longer than that. He had been inspired by Xeroc PARC researcher Alan Kay’s depiction of a children’s computer, a tablet device called the “DynaBook”, in 1972. (Kay’s idea also inspired the One Laptop Per Child project.)

When he looks at the current state of publishing, with publishers struggling to come to terms with the growing primacy of e-books and the shrinking of their print market, Callaway sees traditional publishers moving too slowly. He has chosen to shift away from publishing printed books entirely—he licenses his titles to other publishers so he no longer has to deal with printing, shipping, and returns. When he signs new authors, it is to produce an interactive app first and work together as partners.

He says major publishers have yet to understand the changes afoot. "They are still thinking these are books in one form or another. They are not. They may originate … with a text book, but the finished product is not a book," he said.

The article then takes a slight detour to discuss Forrester analyst James McQuivey’s similar opinions on the matter. McQuivey suggests that publishers should realize they’re not in the book business, they’re in the storytelling business, and the form in which that story is told is going to change over time—so publishers should start experimenting with other storytelling forms.

"If you are a book publisher, you are asking, ‘Where do I get the money to fund that? I don’t have developers on staff and if I have to hire them I have to charge more for books, not less.’ So, in their current business model, they don’t see themselves as being in a position to change the book, so they don’t want to," McQuivey said.

He suggests that, to survive, publishers need to streamline and get rid of the overcomplicated and expensive system of shipping, distribution, and returns that can account for 25 to 40% of costs, develop better relationships with customers, and experiment with new forms of storytelling.

Then the article discusses Copia Interactive, a site where customers can not only buy e-books but can also discuss and annotate them. It also talks about what some authors are doing to experiment on their own.

It suggests publishers are now faced with the tough choice of keeping their old book-distribution business going, or developing new forms of business. Trying to do both could end in failure. Nonetheless, some publishers have taken at least tentative steps forward—Random House and HarperCollins either have or have hired executives with digital expertise, and have been trying to innovate in the digital field.

Creating enhanced content for fiction is a tricky proposition, since fiction is all about the world an author creates in the imagination of the reader. Fiction e-books may well remain largely the same as they are for some time to come. But only about 30% of the books sold in the US are fiction, and other genres have a lot more potential for enhancement.

The whole article is well worth reading—I’ve only skimmed the surface in this post. I came into it prepared to disagree about the potential for enhancement in the fiction works that are what I think of as e-books—but it’s true that other genres might very well be better-served by being able to present multimedia and other new ways to interact with the material. And the dilemma faced by publishers of whether to stick with the old or leap into the new resonates nicely with the piece I covered yesterday about publishers and pricing.

 
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