Loch Lomond
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Publishers can no more operate without a supportive and congenial ecosystem than a fish can swim on the surface of the moon. We can buttress the fish with life-support systems, the biological equivalent of copyright litigation and a strategy built on maintaining a market position through acquisitions, but the cost is enormous, and it doesn’t change the underlying situation. Swim within an established ecosystem or perish.

In the book world, we now have an unusual situation in that there are competing ecosystems for e-books, which are controlled by major companies. Amazon, with its Kindle devices and proprietary formats, is the clear leader; Apple is a good but not outstanding competitor. The problem with attempting to work with either of these companies is that they alone set the rules — which brings to mind the tech industry witticism:

A standard is a great thing; everyone should have one.

Amazon has taken its proprietary system beyond the dedicated Kindle devices to the world of apps. This is how I personally read most e-books, using the Kindle app for the iPad. With Apple the limitation (besides the utterly crazy limitations on pricing in the iBookstore) is that you can only read e-books purchased from Apple on Apple devices. Users of Android phones and tablets need not apply.

The options outside these ecosystems or closed networks have been few. But now we are beginning to see the emergence of a third network that imposes fewer constraints on its participants. It is difficult to put a name to this ecosystem because its leadership is distributed, but it has now begun to draw into its orbit such organizations as O’Reilly Media, Pearson, Barnes & Noble, and Microsoft. It is the nature of this network that it can bring in more and more participants because the ecosystem itself is designed not to be controlled by a single authority but to permit, even to evangelize for, as broad a participation as possible.

Here are some of the pieces of this ecosystem:

  • Several years ago O’Reilly Media came up with the idea for a subscription-based e-book service for computer books. The O’Reilly organization approached the market leader in technical books, Pearson, and the two companies created a joint venture called Safari. Safari now includes the technical publications of most computer-book publishers in the U.S. The CEO of Safari is Andrew Savikas, a former O’Reilly executive.
  • When the largest college publishers in the U.S. decided to create a joint venture for the sale of ebooks, now called CourseSmart, the publishers, led by the largest college publisher, Pearson, put the service onto the Safari platform. The CEO of CourseSmart, Sean Devine, is a former Safari executive.
  • In order to assist in the financing of its e-book operations, Barnes & Noble has sought investment and strategic partnerships from such organizations as Liberty Media, Microsoft, and Pearson. Liberty Media brings with it a range of multimedia entertainment operations, which could benefit from access to Barnes & Noble’s Nook e-book system (anyone care to compete with Netflix or, for that matter, Amazon’s streaming options?), which currently trails Amazon by about three to one. Microsoft, in addition to capital, brings global distribution to the Nook services and possibly a platform play for mobile phones, PCs, and the new generation of tablets. Of certain interest to Pearson is the fact that Barnes & Noble controls the second largest college bookstore chain.
  • Safari acquired Liza Daly’s Threepress, which had created what was arguably the first HTML 5 e-book reader. This is a strategically important development, as such a reader runs entirely within a browser and thus is not subject to many of the business constraints Apple imposes on third parties.  Safari thus has an ebook subscription platform and a means to put e-books (or, for that matter, any other form of content) onto any and all devices that support Web browsers. Daly is Safari’s CTO.
  • Safari has also acquired PubFactory, a unit of iFactory, a highly regarded software company in the Boston area. iFactory is arguably the finest developer of electronic reference works anywhere (the OED’s online version was developed by iFactory). Daly, incidentally, is an alumna of iFactory. Safari thus has a comprehensive suite of tools for digital book publishing. No one else has anything approximating this at this time.
  • As readers of the Kitchen are undoubtedly aware, Peter Binfield, formerly the head of PLoS ONE, has started his own company, Peerj, with investment from the O’Reilly camp. Tim O’Reilly sits on Peerj’s Board.

This list goes on and on. It would take forever to note all of Pearson’s acquisitions in education technology or the significance of O’Reilly’s Tools of Change conferences, which are the learning camp for all publishers developing a digital strategy. Lest anyone think that these developments have little to do with scholarly publishing, I will note that in addition to the linkage to Peerj, Tim O’Reilly himself is the keynote speaker at this coming June’s gathering in San Francisco for the Society of Scholarly Publishing.

What are the characteristics of this evolving ecosystem?

  • Small pieces loosely joined. This is the title of an influential book by David Weinberger (“Small Pieces Loosely Joined: A Unified Theory of the Web“). The relationships among the participants in this ecosystem are nonexclusive but often mutually supportive. Anyone can join this network, though some (e.g., O’Reilly Media) have preferred positions.
  • No single controlling authority. This is of the essence. As is the case in any community, some participants are more vocal or play a bigger role, but there is no top-down source of power. There is nothing to stop a publisher, for example, from working with Safari on some items and then turning around and place books in the iBookstore.
  • Skepticism about DRM. DRM (digital rights management) may be of little interest to journals publishers, but few book publishers create ebooks without it. Many of the players of this ecosystem, however, are outspoken about the limitations of DRM, especially insofar as DRM interferes with the utility of a book from the point of view of the end-user. Some elements of this network are likely to have conflicting views about DRM, however. For example, I think it unlikely that Pearson will allow its high-priced college texts to be sold without DRM unless the text can be locked into other Pearson platforms and services.
  • An interest in D2C marketing. D2C — direct to consumer — is a key attribute of the Web, but it is somewhat alien to most book publishers, which have historically sold most of their books through intermediaries. O’Reilly Media began as a D2C company and only later began to sell through channels.

It is hard to predict what else this network will draw in, but I would not be surprised to see an online bookstore to compete with Amazon, provided that Safari can persuade enough publishers to participate (which means dropping DRM). Nor would it be surprising for Safari to go head-to-head with organizations such as HighWire Press, Publishing Technology, and Atypon Systems, platform providers for scholarly journals — though it is probably most likely that Safari will first pursue book publishers. We have no clue what will be made of the link through Pearson to the Nook, though the Nook devices provide a useful hardware complement to the software-based solutions pursued by the other participants of this ecosystem.

I said earlier that there is no single controlling authority to this ecosystem, but there is a philosophical center based in Sebastopol, CA, home of O’Reilly Media. We can now see the O’Reilly group implementing a strategy to counter the aggressive and proprietary moves of Amazon and Apple. It is too much to call this the O’Reilly ecosystem, but Tim O’Reilly’s influence can be felt everywhere.

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Joseph Esposito

Joseph Esposito

Joe Esposito is a management consultant for the publishing and digital services industries. Joe focuses on organizational strategy and new business development. He is active in both the for-profit and not-for-profit areas.

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31 Thoughts on "A New Publishing Ecosystem Emerges"

I want to make a bad joke about The O’Reilly Factor–which could be the alt headline for this post.
In this decade the role of the more traditional publisher is played by Pearson–but as a large global company in elhi, trade and higher ed they need to stay ahead of the curve in established and emerging markets.Someone has to take the lead. I’m not writing off B&N, nook, Microsoft or Yahoo–just yet. With business maturing, the ecosystem needs a balanced mix of fast moving forward thinking businesses as well as slow and steady players with wide reach.As usual, I appreciate the down to earth view of the publishing industry. At times it seems it should be or is much simpler than it seems–but all in all it is very complex with so many moving parts. At a certain point–if you do try this at home–and you are doing more than text and there is a large investment and it is a title that requires marketing and distribution, whether print and or e, a publisher needs to be part of an ecosystem. I am curious to see the path of tech, mergers and acquisitions in the coming years.

Thanks for clarifying the players and their positions, geneology of epublishers–where they come from and where they may or may not go in the future. I agree it would be tough for most publishers to give up DRM. If I were a publisher I cannot at this point see the business model that would apply for the whole industry. I’m sure if I am patient the new industry models and structure will soon reveal itself.

What a flattering view of O’Reilly’s influence! I’m glad that we’ve pushed the industry in a good direction and are providing some alternatives to the big guys.

One error: there is no connection between PeerJ and Safari. PeerJ is built on its own platform, and involves a public access science journal, not books.

Really interesting post, Joe. Another small error–Safari’s CEO is Andrew Savikas.

A useful survey of the digital publishing landscape. On the point of open vs common vs closed standards, book publishers have a long way to go before they catch up on the music industry in terms of the age-old format wars. Remember when digital music files were tied to a specific device, software or operating system (and in some cases, tied to specific record labels’ infrastructure)? Now, most music is distributed as .mp3 files, and is no longer tied to a device or OS (ok, some DRM might still remain, but it’s minimal). Multiple audio files formats still exist, but they are increasingly compatible across devices – either seamlessly, or with some simple file conversion tools.
In the world of music apps, tools like Audiobus and Audioshare make it easy to record, process, manage and share audio content from different apps within a single environment. So, with Audiobus I can record and process music in multiple apps, and capture it within a single app. Then with Audioshare I can easily manage the output files, and share them to external environments. Until publishers make e-books likewise compatible, or the hardware/software providers sort out their differences, e-publishing is going to be hamstrung.

NB One legacy of the old music industry still persists – some digital content on iTunes and Amazon, for example, is subject to territorial restrictions. (And don’t get me started on iTunes pricing policies for different countries…..)

Seems really odd that there’s no mention of EPUB in this article. Isn’t it a key standard in this new ecosystem?

Don’t EPUB files have to be converted to the MOBI format before they can be read on a Kindle device??? So much for a “common” standard…

Sure, but isn’t this really the article’s point? I believe EPUB is a core standard in the new ecosystem but Kindle is still doing its proprietary thing. However, as the article points out, Kindle’s ecosystem does not lock in users as much as Apple does.

Well, yes – the value of reaching a common standard is the underlying argument, but the article also reveals that within book publishing, there is still a lot of proprietary stuff going on… I remain optimistic, but the publishing world has some way to go before it achieves what has been done in the music industry.

I noticed that too. Sure, EPUB is fundamental to all of this and many of these players were instrumental in creating the EPUB 3 standard in the first place. O’Reilly’s bringing out a book on it, done in collaboration with the IDPF. Liza Daly is one of the foremost experts on EPUB and was key in its development. (Joe characterized her Ibis Reader as an HTML5 reader but he could just as well have characterized it as an EPUB 3 reader.) I can assure you that every publisher and aggregator mentioned is very focused on EPUB. So my take on the lack of explicit mention of EPUB is that it is taken for granted in this new ecosystem. And for good reason: it is what liberates content from the proprietary systems. It also happens to be the best input _to_ the proprietary systems: iBooks is _very_ EPUB 3 compliant, and while yes, EPUB gets transformed to KF8 or Mobi for Amazon’s proprietary ecosystem, even Amazon says EPUB is the best source format to supply to their transforms. Its the water (or at least a fundamental component of it) to those fish Joe mentioned in his opening sentence.

Yes, my mention of EPUB was somewhat rhetorical. I think it is important to bring EPUB into the conversation. It is a good name to use when trying to convince vendors of proprietary ebook reading systems to adopt open standards. Every purchaser of ebooks should be asking these vendors, “Do you have it in EPUB format?”

Hear, hear!!!! (I mean that not just in the exclamatory sense, but literally: hear what this guy is saying.)

In case some of you don’t know who Paul Topping is, he has probably done more to make sure our modern technologies can handle math properly than anybody else, bar none. While he is head of Design Science (most of you probably know their MathType, and their MathFlow underlies lots of the technologies we use), his sentiments here have nothing to do with promoting his company. (Neither do mine; I have no connection to DesignScience, I just know Paul.) He has been a main driver to establish and advance MathML.

I wouldn’t usually put a comment into SK that is so focused on an individual, but I wanted people — particularly scholarly publishers — to realize where he’s coming from on this. MathML is _built into_ EPUB 3 (and HTML5, for that matter), which is a major reason that browser / eReader technology is finally getting math-enabled.

These are the kinds of benefits the ecosystem gets from standards like EPUB 3 and HTML5.

And as Paul points out, it is readers, users, publishers — all of us — pushing for EPUB (and specifically EPUB 3) that is finally getting it to happen in a meaningful way.

Bill, you are so kind! Thank you! In the interest of full disclosure, my comments ARE related to my company’s business. Since EPUB3 includes MathML and the other ebook formats do not, we are interested in EPUB3 eventually becoming the dominant ebook format. Of course, that is not the only reason I think EPUB3 is the way to go. I fully support this new publishing ecosystem for all the reasons covered wonderfully in this article.

Your use of the word “ecosystem” out of proper context demonstrates a woeful lack of proficiency with the English language and a servitude to the latest linguistic trends. Employing ephemeral buzzwords to attract attention is no different than holding a shiny object in front of a monkey. As an author you must value language and thus not participate in its corruption. And before a knee-jerk and wholly unoriginal “but language evolves, silly” response forms in your brain, look up the word “evolution.” Might want to look up “ecosystem” while you’re at it. Otherwise, good article.

As the editor of this blog, I’ll weigh in.

The first definition of “ecosystem” in the OED is “a biological community of interacting organisms.” The second definition is, “a complex network or interconnected system” with the example given as, “Silicon Valley’s entrepreneurial ecosystem.”

As for “evolution,” the OED has as its second definition, “the gradual development of something.”

I think these usages are widely and commonly accepted. It does help to look things up, as you note.

As an editor, I am grateful to see this response!
I had no problem with the use of “ecosystem” and that is the word that drew me into reading the entire article. Mr.Esposito seems to have taken the pulse of this part of the publishing industry and has given an accurate diagnosis of the current status–and he gave me some new information.
Thank you, Mr. Esposito and Mr. Anderson.

A couple years ago I was told, by someone in a position to know, that O’Reilly’s profits still came almost entirely from print books. I think the percentage mentioned was 95%. Was this true? How has it changed, and is the trend sustainable?

As a miniscule (6 titles) publisher of niche market bicycle tour guide books, thanks for clarifying the confusing e book platforms. Of course, some of the commentators added in EPUB to confuse me even more.

I have not coverted any of my titles to an e-format precisely because of the conflicting e-book formats and lack of being able to market the e-books broadly.

Cyclotour Guide Books is not a POD publisher. We do maintain a stock of books and it is becoming increasingly more expensive for us to continue to have small press runs.

We have been consistently selling a total of approximately 500 books per year since 1993.

The ebook evolution and growing pains reminds me of the time of the browser wars, when coding standards were being developed and fought over, and largely ignored by Microsoft, and perhaps now, largely adapted universally because of demand, to the benefit of all. I am hopeful that a standard for ebooks will be demanded, developed, and adapted by all of the players mentioned here and that the ebook will be separated from its device-dependency. A good standard would be beneficial to all players and consumers in the end, leveling the playing field. Because really, this is all about money and control, as were the browser wars. Let’s play ball! And play it with the same rules for all teams.

Though the Safari model might be good for publishers, it appears to result in non-existent royalties for the authors.

Reblogged this on Sandi Layne and commented:
I don’t often reblog, but this article fascinates me. If you are in any way involved with publishing – writing, editing, e-book formatting, etc. – I encourage you to read this post in its entirety.

This is very interesting. It’s only instructional and educational publishing, correct, not literary publishing? That’s what it seems like. As a leading educational content company, we wrote about the changing publishing business in the inaugural post on our blog. More than half of what we work on these days is digital, and it’s news like this that keeps pushing that percentage even higher. Thanks for sharing! We’ll continue to follow this story to see what comes of it.

Actually there is something in it in this ecosystem that usually need the support to get popularized, indeed we know that it has a lot of online bookstore competitors rising.

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