Five Digital Publishing Questions for Marcello Vena

Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.

Amazon global publishing ebooks Kindle UnlimitedThe Digital Book World Conference + Expo, kicking off on January 13, 2015 is packed with an incredible amount of information and ideas about the digital publishing landscape at a time of remarkable transformations. To help attendees make the most out of those three days, Digital Book World is sitting down with conference speakers to help lay the groundwork for conversations that will take place at the conference and continue for many weeks and months afterward.

This is the thirteenth installment in our “Digital Publishing Questions” blog series, featuring Marcello Vena, Founder and Managing Partner of All Brain.

What do you think has been the most newsworthy event in the past year around publishing and digital change?

There was a lot of big news. The Amazon-Hachette dispute was certainly the most debated. Subscription services were another hot topic, as was the acquisition of Harlequin by HarperCollins.

But to me the most noteworthy event was the launch of the Fire Phone. As e-commerce is turning into ‘m-commerce,’ it’s clear that e-commerce leaders need to have compelling mobile strategies. Only Amazon could possibly deem it feasible to launch its own smartphone, seven years after the launch of the first iPhone. We should take for granted they were prepared for the flop (though perhaps not such a big one), and therefore we should not see it as a total failure. Amazon is gaining valuable experience and will not make the same mistakes twice. Be ready for a second attempt within the next twelve to eighteen months. M-commerce is bound to stay; just wait for the Moore’s Law to kick in and see what happens to the prices of smartphones in two to four years.

Related: Join Thad McIlroy at Digital Book World 2015 for a Close Look at the Mobile Outlook for Publishers

What are you anticipating as the big change we will see in 2015?

Consolidation and international expansion will be two key drivers of change. Penguin Random House, after its post-merger consolidation, should hopefully be able to gather some significant synergies and perhaps pursue a tighter integration. HarperCollins now has direct access to many non-English speaking countries thanks to the acquisition of Harlequin. An important source of digital growth will be constituted by international markets, as the U.S. market is maturing. There will be plenty of opportunities for internationally oriented publishers, distributors, service platforms, e-tailers and service providers.

What is the most important thing publishers need to accomplish in 2015?

The same thing as every year: stay relevant and healthy in a rapidly evolving environment. Publishers must do whatever it takes –including reinventing themselves, hiring outsiders, investing in new media– to be the best players at serving authors and readers by putting them in touch as much and as deep as possible. Books (in any format) are just one of the very many touch-points between authors and readers. Just waiting for the end of the digital tsunami is wishful thinking. It cannot be stopped; it can only be surfed on.

Will Amazon’s ebook market share grow in 2015, or will this be the year that Apple, Kobo, Google and Nook (or someone else) push them back?

It pretty much depends on the country. In U.S. and UK, Amazon’s leadership can’t be challenged in the short term. However, its market share is so great that growing more quickly than the market is a hard thing for Amazon, too. I would expect small adjustments in its market share, save for unforeseeable events, of course.

Elsewhere, though, Amazon is not always the market leader. One reason is because Amazon is present in only a relatively small number of countries compared with those where Apple, Google and Kobo are already established. Another reason is that Amazon sometimes faces strong local competition. The most evident case is in the biggest country of the European Union , Germany, where the local ebook-only player, Tolino, has recently taken the lead with an astonishing 45% market share of ebook sales in the third quarter of 2014.

In Germany as well as in other key EU countries like France and Italy, the battle for market share is all but won, making it not trivial for Amazon to turn the tables. For competitors, Tolino’s success case should be carefully analyzed and possibly replicated in other countries. That’s happening now with Messaggerie Italiane, which has just imported Tolino’s open ecosystem into Italy.

Are there any companies (start-up or otherwise) now flying below the radar that you think may break out in 2015?

Amazon itself is full of internal start-ups and experiments. As CEO Jeff Bezos says, the company invests billions of dollars in failures (and not just in the book business, of course). I would not be surprised if the next big thing is Amazon disrupting parts of itself. The age of business-as-usual is over. Change is the only constant. The most successful players will be those who prove best at continuously changing the business over and over.

Marcello Vena is the Founder and Managing Partner of All Brain. He’ll be speaking on a panel at Digital Book World 2015 called “Global Market Spotlight: Reports from Markets around the World,” exploring the latest trends in the world’s most rapidly evolving ebook markets and opportunities for publishers to take advantage of the publishing industry’s increasingly global nature.

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About Marcello Vena

Marcello Vena is the founder and managing partner of All Brain, the world's first on-demand leadership services organisation for top executives in the media and publishing industry, focused on exploring, inventing, delivering and executing businesses aimed at the future. Previously Marcello Vena had founded from scratch and managed the entire digital trade book business of RCS Mediagroup, one of the largest European publishers and owner of book prestigious publishing houses such as Rizzoli, Bompiani and Fabbri Editori. He has almost 20 years of business innovation experience across three continents (Europe, US & Asia), encompassing the roles of designer, entrepreneur, venture capitalist, management consultant, negotiator and general manager. Before entering the publishing industry in 2010, he has been working on innovating product, service, process and organizations in diverse industries such as: aerospace, semiconductor, internet, pharma&biotech, home appliances, apparel, logistics. He holds an MBA degree with Dean’s List Distinction from INSEAD (France, Singapore) and a MS degree on Electronics Engineering. He speaks all five main languages of Western Europe. Renowned speaker at international events on publishing (New York, London, Berlin, Frankfurt, Munich, Paris, Milan, Gothenburg) and member of the Digital Book World 2015 Conference Council. Twitter @marcellovena www.allbrain.org

3 thoughts on “Five Digital Publishing Questions for Marcello Vena

  1. Michael W. Perry

    Thanks for an interesting and thought-stimulating article. I would, however, disagree with this:

    “just wait for the Moore’s Law to kick in and see what happen to the prices of smartphones in two to four years.”

    Moore’s Law isn’t really the issue. Competition has already driven the cost of virtually every smartphone model but the iPhones t0 the barely above cost of production level. Amazon can do little about that other than to sell well below cost, and—unlike their Kindles—I doubt there’s a compelling corporate reason to do so.

    It’s good to know that retailers such as Tolino are ahead of Amazon in some European countries, but they seem to be making a major mistake. Quite a few Europeans can read English-languge, US-or-UK books with ease. Those Amazon competitors need to make it easy for American and British publishers and authors to release their ebooks through them. Otherwise they’ll be buying them from Amazon or perhaps Apple and establishing a habit of buying there.

    One option might be a consortium of the other-than-Amazon ebook retailers. It’d work much like publishing a print book through Lightning Source/Ingram does globally. Release an ebook to that consortium, and a host of ebook retailers could acquire it there and pay royalties through it.

    That’s particularly important come January 1, when releasing ebooks in EU countries acquires the additional complication of setting a retail price to deal with VAT on ebooks that vary from 3% (Luxembourg) and 5% (France) to above 20% in most EU countries.

    I’ve already raised the price of my books in preparation and given the fixed X.99 pricing schemes of companies such as Amazon and Apple, that means most ebooks in most countries will go up about 25% overnight. And keep in mind that money is going to taxes not authors or publishers. That’s why all of us hate the complications that introduces.

    Ironically, while one argument for the EU was to simplify sales and distribution across Europe, this VAT rule-change makes it far more complicated. That consortium could simplify both pricing and distribution. It could distribute to multiple ebook retailers across Europe and it could handle the sheer messiness of those varying VAT and, in some cases, differing currencies.

    In a nutshell, currently selling ebooks across Europe is very complicated for publishers and authors who’re taking any route other than Amazon and Apple. Those who want European ebook retailers to be able to compete with those US behemoths need to make distribution much less complicated and messy than it is now. It needs to become one-stop.\

    By the way, Tolino has a beautiful website. You can find it here:

    http://www.tolino.de

    And an iPad/iPhone reader here:

    https://itunes.apple.com/us/app/tolino-reader-ibs/id940107328

    Although the app seems targeted for an Italian audience.

    –Michael W. Perry, Inkling Books

    Reply
    1. Marcello VenaMarcello Vena Post author

      Thank you for sharing your thoughts Michael.

      The Moore’s Law isn’t an issue at all. It’s a big opportunity for a cost leadership player such Amazon.
      While intense competition can at times drive prices to the production cost level, the Moore’s Law drives the production cost level further down.
      The production cost of tomorrow is going to be a fraction of today’s. It’s a game changer and it allows late entrants, such Amazon, to play their cards.

      Without spoiling too much the DBW panel on international markets: “Global Market Spotlight: Reports from Markets around the World” let me say that in Europe there isn’t just Amazon and Apple. Players such as Kobo and Google that play a minor role in the US, hold important roles and significant market shares. They sell English content too.
      Morevover local digital players in the ebook distribution business (not only Tolino in Germany) distribute content in English launguage to most online retailers.

      By the current state of the digital reading in continental Europe, the distribution and promotion of content in English language is not the priority number one for digital retailers. There are many other things they can focus on to grow the overall market. And in any case, digital retailers already source ebooks in English language from international and national distributors. You just need to get your books to such distributors. But distribution alone doesn’t make any ebook successful. An effective local promotion is necessary (and not sufficient) to succeed.
      Distributing an ebook in English language in France, Spain, Germany or Italy and waiting for the checks will obviously never work.

      Reply
  2. Deran

    The world of online publishing is always evolving. One of the most notable changes in the last year has been the increase in the number and variety of platforms available for people who want to publish their content. There are a wide variety of apps and websites that make it possible to publish articles, eBooks, reports, white papers, podcasts, videos and other content in many different formats. Publishers can make their content available on platforms such as GooglePlay and Apple Newstand.

    New platforms are not only for people who create written content. For those who want to reach an audience using podcasts, there are more and more apps, softwares and services for doing this, such as Swell, SoundCloud and many others. Video is also a medium that grows more popular each year. There are now many new options for creating and publishing videos in addition to familiar ones such as YouTube and Vimeo. Short vidoes on Instagram and Vine, for example, are become widely used for both entertainment and commercial purposes. On the heels of these well known companies are smaller, emerging ones such as Wochit, which provides a variety of tools for creating and publishing videos.

    One reason for the explosion of new publishing platforms is the steady increase in the number of people who access the internet using smaller devices such as smartphones and tablets. It’s now important for publishers to reach audiences that are not using computers. This has been reflected in the world of digital publishing, as there are now many ways to publish content that people can read, watch or listen to from their mobile devices. With iMirus, for example, publishers can create their own branded apps that allow people to access their content on smartphones and tablets.

    There are also now more ways than ever to publish written content in the form of PDF files. These are easy for readers to access on any type of device. Platforms such as PixelMags and Issuu, for example, allow publishers to create as many online magazines as they want. Readers can access these via PDF files that they can download on computers, tablets or phones.

    As technology continues to evolve, there will most likely be more and more ways for publishers to reach their audiences. At the same time, there is more competition than ever. This means that publishers have the challenge of marketing their content and finding ways to make their brand stand apart from all the competition.

    Reply

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