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«A Report Prepared for the Association of Canadian Publishers By Diane Davy President Castledale Inc. Association of Canadian Publishers 174 Spadina ...»

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These ‘pioneer’ publishers are working with suppliers to refine and adapt the systems to meet the specific needs of the Canadian market and later adopters will reap the benefits of this work. It will be very interesting to hear the results from users once these systems are fully implemented and in use.

PROFESSIONAL DEVELOPMENT OPTION:

• Next AGM have a presentation by publishers who are now implementing the new systems. The upside and downside. Include others who have proprietary systems.

However, many publishers did not adopt any of the programs researched, some because of the cost in both time and money, some because they have their own proprietary systems, some because they don’t perceive a need, some because they work with distributors who they feel provide the service.

The issue of cost is a very real concern. Many smaller and even mid-sized publishers simply don’t have the resources to deal with the implementation and the on-going fees required to license commercial software solutions.

The focus of many such publishers is on creating and producing their books and they depend on their distributors for much of the operational workflow.

Thus they tend to rely on those distributors to set the lead in establishing business standards that they then adopt.

Regardless of how individual publishers are dealing with their internal workflow processes, it is very apparent that there is more and more pressure across the industry to adopt better basic business practices to deal with both

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traditional and emerging business models. With eroding margins and changing markets, Canadian publishers need every possible advantage to survive and prosper.

PROFESSIONAL DEVELOPMENT OPTIONS:

• Develop and offer, possibly working in partnership with other industry groups (e.g. OBPO) and academic partners (e.g. Humber), a training program focussed on improving the business skills of working professionals

• Have an expanded mentorship/consultant program that offers publishers the services of selected consultants for a period of time to help them implement best business practices within their financial and people resources.

Digitization of Backlist Let’s for a moment look specifically at digitization of backlist.

Task Force Q: What infrastructure will be needed to digitize publishers’ backlists? Who will scan the backlists? Who will own the scans? Who will pay to scan the backlist and how much will it cost?

As we have seen, some publishers, particularly the larger ones, are investing in digitizing their backlist themselves, sometimes investing in internal equipment and sometimes working with outside suppliers.

There are several collaborative initiatives underway to help publishers deal with the digitization and exploitation of their backlists. These initiatives are working toward the best practice of giving publishers ownership and control over the digital versions of their titles.

Specifically there is a consortium of ACP publishers (Insomniac and ECW with Dundurn and M&S) who have received a Partnership Fund grant for an initiative described as: “Digitalizing Books for a New Market of Readers: a project to digitalize books and help the companies involved deliver books in electronic formats, transitioning these companies into a new arena of publishing to become an "on-screen" industry.” And in B.C. another group of Canadian publishers (Douglas and McIntyre, Heritage House, Raincoast, Oolichan, Theytus and Hedgerow) have banded together to build a package of digital non-fiction titles to sell to libraries in B.C

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and across the country. In addition to generating sales revenue, the process of preparing and converting their files is intended to help the participating companies better understand the process.

The experience gained by both these projects will help in developing valuable information on best practices for all Canadian publishers on how to manage the process.

PROFESSIONAL DEVELOPMENT OPTIONS:

• A follow-up workshop based on the both groups experience. Include suppliers of electronic services. Possibly with hand-outs that give a checklist of best practices.

It may be possible to work with an existing organization or organizations (e.g.

Access, BookNet, Library and Archives) who would function both as providers of the digitization service (probably working with an outside supplier) and as a central warehouse for digital data and a clearing house for digital rights on an non-exclusive basis (see more under Digital Asset Management).

Some of the larger organizations, particularly academic institutions, libraries and government, are purchasing equipment and doing their own internal digitization.

In addition, there are external suppliers (e.g. Lightening Source) and/or organizations (e.g. Access) that can help publishers. The simplest solution is to pay a supplier to digitize content. A standard cost that is thrown about in the industry is $90 per title to scan a hard copy and receive a digital file.

However, not all titles are equal and not all digitization is equal. It is in the best interest of publishers to get high standard digital files (PDF’s) that meet as many needs as possible.





BookNet, who has done research in this area, has concluded that this in not an area where Canadian publishers operating together as a collective would be likely to achieve significant economies of scale. BookNet also found that it can be difficult to get ‘apples to apples’ competitive quotes from suppliers as there is not yet an industry wide standard set of specifications.

However, as mentioned above, there are a number of organizations who could be partners in the process to take the burden of management off the publishers.

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DIGITAL ASSET MANAGEMENT

Task Force Q: Who will store and distribute digital copies of our works?

Should one company or organization do this, or should many? Should digital warehouses be involved in the sales and marketing of digital books? Or are they simply infrastructure? If rights agencies or retailers become clearinghouses for the sale of works in digital form, will the role of the publisher be reduced?

Physical books need to be warehoused and distributed with all the processing that goes along with order fulfillment. Digital assets need the electronic equivalent.

Some larger companies (e.g. HarperCollins, Harlequin) have or are developing their own internal digital asset warehousing and distribution solutions.

There are a number of companies (e.g. North Plains, Canto, Artesia) that specialize in selling or licensing software solutions specifically for the book industry. The advantages of these sophisticated, comprehensive programs are that they give user publishers the ability to manage and manipulate their assets themselves. However, like Klopotek or Acumen, they are relatively expensive and require significant people resources to implement.

There are also non-profit organizations, like Access Copyright, who are active in the field.

And, as discussed in the Digital Asset Distribution section, there are companies that specialize in managing and selling publishers’ aggregated digital assets, on a non-exclusive basis, to end users like libraries and universities in return for shared revenues or fees.

I don’t think at this stage there is any one right answer as to who is best positioned to provide this service. For publishers who are financially able, inhouse control provides the greatest flexibility and the fewest intermediaries, thus enabling publishers the maximum ability to generate future revenues from their content.

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EXPLOITATION

Task Force Q: Who is best positioned to exploit the distribution of books in digital forms? Can a co-operative organization help publishers maximize the digital use of their titles? Should a new organization be created to do this, or should existing organization be utilized/ Should different aspects of this process be allocated to different organizations (such as the ACP and ANEL, BookNet Canada, Access Copyright, Copibec, etc.) Ideally, the best people to exploit digital assets are publishers themselves.

That said, the degree of internal vs external management and control will depend on the individual company’s size, resources and own sense of its business model. In the same way that publishers find various ways to market and distribute their physical books, they are and will continue to find ways to market and distribute their digital content.

As outlined below, there are a number of companies and organizations who currently offer a variety of digital asset distribution and marketing services and there will be more. In addition there are several pilot projects run by publishers operating collectively that will be very interesting to watch over the near future.

Following is a brief examination of some of what is going on in the market place and some possible options.

Digital Asset Distributors Task Force Q: What digital rights or licences should publishers be ready to sell? To whom?

There are many emerging players in the digital distribution arena, from monolithic entities like Google who have very broad market reach to niche distributors like Canadian Electronic Library (Gibson Publishing Connections) who target specific customers like libraries. Most are for-profit but there are some (e.g. NetLibrary) that are non-profit organizations.

They use a variety of business models as follows:

• enterprises that sell physical books (e.g. Amazon, Indigo.ca, etc.) as well as other products

• enterprises that sell downloadable ebook content (eBooks.com, etc.) readable on a variety of platforms

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• enterprises that sell or license access to searchable, aggregated book content to target markets for the purposes of research or education and generally offer some sort of proprietary software platform that serves the specific needs of that market (e.g. NetLibrary, Canadian Electronic Library, etc.)

• enterprises that are search engine based and offer free access to aggregated book content to everyone on-line. Revenue is generated by selling ads that are automatically positioned adjacent to content by key word searches (e.g. Google, Microsoft, etc.) Many of these companies provide services much like those of traditional distributors and/or wholesalers but in a digital context.

For example, Gibson Publishing Connections is a full service distributor and sales agency serving the Canadian library market. Gibson’s represents client publisher’s digital content and has established relationships with Canadian libraries, providing selection and acquisition services for electronic resources.

Many libraries prefer to buy in groups or consortia which aren’t equipped to deal with individual publishers. Companies like Gibson serve as an intermediary between buyer and seller. They also offer specialized services that meet library needs.

Gibson has created a Canadian collection called the Canadian Electronic Library: Monographs from Canadian publishers, organized for the digital library. The Canadian Electronic Library (CEL) provides sophisticated full text search capabilities for all the content included in its catalogue To be part of the collection, publishers must sign a three-year, non-exclusive contract and submit titles of their choice in a PDF format. There is no cost, other than that of the digital file. Publishers may withdraw titles as they wish.

The standard pricing model is through a subscription agreement under which an institution buys annual access to the complete collection for a price based on the size and number of users in the institution.

Publishers earn revenue based on a formula which takes into account actual usage of each title as well as the number of titles submitted by a publisher as a ratio of the total collection.

It is important to note that library associations in several provinces have secured government funding for the acquisition of electronic resources, including books. Ontario for example has earmarked $15 million over the next

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3 years for ‘digital content’. Thus there is a real market ready and waiting for appropriate material.

Following is a sampling of some of the most prominent companies and organizations active in the field (most are American). Google will be dealt with separately.

Gibson Publishing Connections: (see above) Ebrary: (markets to libraries and other on-line channels, offers a variety of ownership and subscription models);

MyiLibrary: (specializes in the academic and professional markets);

NetLibrary: (provides econtent to academic, public, corporate and special libraries, offers an ‘easy-to-use information and retrieval system for accessing the full text of reference, scholarly and professional books) Questia: (describes itself as an ‘on-line library’ targeting the student market and specializing in the humanities and social sciences) eBooks.com: (downloadable consumer ebooks for use on PC, PDA or mobile phones) Mobipocket: (similar to eBooks.com) eReader.com: (similar to eBooks.com) Safari: (specializes in reference and text books, particularly for business and IT professionals and college students) Some of these companies also offer publishers the option of licensing their software for internal use to manage their own digital assets.

The standard business relationship with publishers is non-exclusive. Typically publisher receives an agreed upon share of the distributors revenues.

The fundamental revenue models are:

• Direct sales to consumers

• Sales or licensing of search services to aggregated content (generally to specialized customers like libraries, academic institutions, professional clients like lawyers, etc.)

• Ad sales Google Task Force Q: Should Canadian publishers attempt to develop a joint position on Google’s publishing programs? How can Canadian publisher’s best access the opportunities offered by Google while retaining control over their intellectual property.

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