For those in book publishing, 2011 was a surreal experience – books sales shifting dramatically to e-books, hundreds of retail stores closing, Amazon selling its own tablet to compete with the iPad. For some publishers, it was a dream and for others, it was a nightmare.
In a few weeks we’ll welcome 2012 and wake up from 2011 to start fresh, right? Wrong.
Some of the biggest stories of 2011 will continue to unfold in 2012. Here are the ones to watch:
Editor’s note: This will be our last post in 2011. If you have questions, comments, concerns or tips between now and 2012, feel free to email me here. See you in 2012!
In July, the unthinkable happened. Unable to find a suitor to rescue it from bankruptcy woes, Borders closed the nearly 400 stores it had left. The blow-up caused shockwaves in books, retail and real-estate.
Book publishers lost a main distribution conduit for their product – and one that made it relatively easy for readers to discover new books, books they may not have initially intended to purchase, but end up buying anyway.
As shelf space at bookstores dwindles and more books are bought online or on devices, just how new books will be discovered (“discoverability”) is becoming the most important issue to publishers.
New social tools have arisen to address the problem, like those provided by Subtext that allow users to share, discuss and recommend books. Publishers are scrambling to build promotional platforms, like email lists, Twitter followings and robust Facebook pages to highlight and sell their new authors to readers. And new e-bookstores are slated to launch in 2012, like the ambitious Bookish, a recommendation-and-discovery-engine-plus-bookstore from Hachette, Simon & Schuster and Penguin.
How will publishers price, market and sell their books in 2012 after the discoverability sea change in 2011? There’s only one reliable answer at this point: More digitally than ever before.
2. EPUB 3
In October, the International Digital Publishing Forum gave its final approval of the adoption of a new, standard book-publishing language, EPUB 3. Building and improving upon EPUB 2.0.1, EPUB 3 fixes interoperability issues for EPUB files between different devices and also adds a whole host of goodies for publishers and developers.
Built on HTML 5, another new programming language, audio, video and other sorts of multimedia can be inserted into book files. What was once the sole purview of apps and the Web is now bleeding into books.
The catch? For one, Amazon uses its own advanced publishing language, KF8, which was announced as its new standard around the same time and addresses many of the same issues. And, of course, no devices yet support the full EPUB 3 spec, meaning that we won’t see the effects of this new standard language until some time in 2012.
Related: Breaking Down the EPUB 3 Spec
It was the year of the tablet and no tablet made a bigger impact than the Kindle Fire.
In its first quarter in existence, Amazon was projected to ship nearly 4 million of the devices to consumers, catapulting it ahead of competitors like the Samsung Galaxy and into second place behind the dominant iPad2, which was projected to ship about 18 million units this quarter and owns 65.6% of the market, according to a recent report.
Publishers hope that the Fire will juice holiday book sales. Amazon may be thinking longer-term. The Fire is reportedly being sold at a loss – a loss the company is willing to take as a penalty for putting its stores into the hands of millions of consumers.
Will the gambit work? Will publishers see the hoped-for sales boost? We’ll know more on December 25 and 26, 2011, but we won’t have the whole picture until 2012.
Amazon launched Italian-language and Spanish-language Kindle stores with corresponding language-specific Kindles. Kobo launched its new tablet, the Vox, in the U.S. and Canada and may expand its international reach to the U.K. and France through deals with regional booksellers W.H. Smith and FNAC.
According to Hachette Digital senior vice president Maja Thomas, Spanish-language e-books and English e-books are two of the three biggest untapped growth opportunities for book publishers.
As book publishers in the U.S. seek to grow digital revenues, a relatively underdeveloped international marketplace for e-books could become an attractive target. While e-readers and tablets have yet to penetrate the market internationally as much as they have in the U.S., other devices that are often used for reading, like smartphones, are seeing explosive growth worldwide.
By 2016, 15% of all e-books will be purchased on smartphones, according to a recent report. What percentage will be purchased on smartphones in 2012? Less, certainly, but not none.
5. Agency/Department of Justice Investigation
In February, Random House joined the rest of the big-six publishers in adopting the “agency” pricing model where publishers set the price for their e-books across retailers. This a year after the other five, MacMillan, Penguin, Simon & Schuster, HarperCollins and Hachette, took advantage of the opportunity to set their own prices when it was given to them by Apple and the iBookstore.
While the move changed the dynamic of the publisher-retailer relationship – especially with the publishers’ largest retailer, Amazon – it may have opened a Pandora’s box.
In December, the Department of Justice confirmed that it was investigating Apple and five major publishers – all the big-six aside from Random House – in a pricing antitrust probe. While the investigation has been rumored since 2010, only recently have those rumors been confirmed by federal officials.
Further announcements and certainly a ruling by the Justice Department could have great ramifications for the industry in 2012.
Write to Jeremy Greenfield