Tag Archives: HarperCollins

Apple, Amazon and the uncertain future of the book startup

Over the past few years, I’ve encountered countless startups that claim they are going to disrupt or revolutionize book publishing.

I once thought we might see one of those take off. Today, I’m not so sure. Book-related startups face a particularly tough path forward. Here are a few reasons why.

When Amazon is the chief disruptor, the odds are stacked against you

Any company that comes along trying to reinvent book publishing is competing not only with traditional book publishers but also with Amazon, which is almost 20 years old but keeps finding new ways to shake things up. Print book buying continues to move online and Amazon, which is now delivering on Sundays and offering same-day delivery in a growing number of cities, has a lock on that business. Kindle, launched in 2007, is the dominant ebook reading platform and Amazon is continually rolling out improvements to the Kindle e-reader and Kindle apps — sharing, search and so on — that rival what many startups have tried to do.

amazon box, amazon prime

A couple of exceptions are two companies that Amazon has acquired: reading-based social network Goodreads in 2012 and digital comic book retailer comiXology this past April. Yet those companies, both founded in 2007, were already several years old by the time Amazon bought them. They were able to grow at the same time as Amazon’s digital book business grew. An ebook startup that launches today must grow in Kindle’s shadow.

Companies that attempt to make improvements on the actual process of reading books on a screen are hindered by the fact that if they’re not supported by Kindle, they won’t be able to gain a wide audience. One company that didn’t support Kindle but still seemed to be gaining traction was the Berlin-based Readmill, but it was acquired by Dropbox earlier this year and its technology will be absorbed into that company.

Book publishers aren’t obsolete, self-publishing isn’t going away

Unlike newspaper publishers, the large traditional book publishers are doing pretty well, thanks in part to increased profits from ebooks. This week, for instance, we saw profits rise at Simon & Schuster and HarperCollins. Titles from traditional book publishers dominate bestseller lists. A lot of self-published authors are doing well, too, but quite a bit of their success is tied to Kindle and it’s unclear that startups can do much to assist. It’s going be tough for them to draw authors away from either traditional publishers or Amazon. That’s why I’m skeptical of companies that aim to crowdsource publishing

book, open book, book pages, bookshelf

Book-related startups aren’t going to gain much traction by starting with the premise that “book publishers are dinosaurs.” As publishing consultant Mike Shatzkin wrote earlier this year:

“An incumbent’s job is to continue to maintain economic viability. A start-up’s objective, often, is to ‘change the paradigm.’ If the paradigm does change, the incumbent needs to roll with that, but they don’t need to be an instrument of change. A start-up often does. That is an inherent difference in perspective that a start-up can’t afford to ignore.”

Witness Inkling, which started out as an iPad textbook publisher in 2010, expanded with a number of digital titles that it sold through its website and apps and indexed via Google — and then shut down its consumer-facing business this week. It’s going to focus on delivering enterprise products and services to publishers. That’s not a very sexy proposition but, as Inkling CEO Matt MacInniss told Fast Company earlier this year:

“The reality is that [these publishers] actually did know their business better than we did, even if they weren’t as tech savvy as we were. We had to listen to the vision they had for themselves and find ways to support that vision with our technology.”

Text is text, social is social

Startups that focus on delivering original ebook content or on helping readers find new books begin from the premise that readers have trouble finding enough things to read. This notion seems absurd: Anybody on the internet these days is overwhelmed with an infinite list of free things to read and a zillion services trying to curate reading material for them. There is not room here for a new recommendation service that is focused specifically on books: Readers don’t have time for it. They have too much other stuff they’ve been meaning to read already, whether it’s a book or a blog post.

Similarly, I don’t think there’s room for a new service that tries to make reading more social. Goodreads, imperfect though it is — and it’s due for a major design overhaul as well — has accumulated a critical mass of readers and authors and is now incorporated into most Kindle e-readers, bringing it to a larger audience. And there’s plenty of book discussion on existing “general” social networks Facebook and Twitter, where authors are engaging directly with readers. Recently, I’ve noticed a mini-trend: When people want to share a passage from something they are reading on their mobile device, they simply screenshot it and share the screenshot (hint: You can do this on the Kindle Paperwhite too). No separate app necessary.

Discoverability is more of a publisher problem than a reader problem: Witness the failure of book publishers’ joint venture Bookish, which was sold to another social reading startup and ebook retailer, Zola Books, earlier this year. Zola, too, has failed to gain traction; while I admire the company’s mission to sell ebooks, I’m skeptical that it can succeed due to all the factors listed in this story.


Apple + “Netflix for ebooks”

Two ebook subscription services, Scribd and Oyster, launched last fall. (Scribd already existed as a document-sharing site but changed its focus.) They both offer users access to an unlimited library of ebooks for under $10 a month. I don’t think both of these services will survive, but one of them might. Both are expanding, though neither has shared user numbers — Scribd now has over 300,000 titles and Oyster has over 500,000. A lot of these titles are self-published books (via a deal with Smashwords), but an increasing number of traditional publishers are also participating. HarperCollins is the only big-five publisher making its titles available to either service thus far, but that company has commented publicly on its success with the model, and either Scribd or Oyster or both will likely sign another big-five publisher soon.

Oyster children's

So here’s an idea: What if Apple bought one of these companies, as it is rumored to be buying hardware and streaming music service Beats? It would be a bargain — far, far less than the rumored $3.2 billion Beats is going for — but Apple would be acquiring the work that these services have already done in terms of securing rights to the books included through them. Amazon is reportedly considering launching its own ebook subscription service as well (separate, apparently, from the Kindle Owners’ Lending Library, which is essentially a marketing tool for self-published authors at this point) and this would allow Apple to get ahead. (Since Apple was found guilty of conspiring with publishers to fix ebook prices last year, it’s highly unlikely to launch a service like this from scratch; even such an acquisition might come under scrutiny.)

An ebook subscription service, fueled with content from traditional book publishers and backed by and distributed through Apple: Now, that could be revolutionary. But the revolution wouldn’t be coming from one company alone. It would come from a combination of forces, new and old. That’s the kind of disruption that readers might actually be able to use.

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Tim Cook profiled in “Haunted Empire: Apple After Steve Jobs” [Video]

There wasn’t a whole lot new in this chunk of the Haunted Empire: Apple After Steve Jobs, which Yukari Kane mostly focuses on Apple CEO Tim Cook and his characteristics that are often the opposite of Steve Jobs. Cook is a character but not the same character that brought Apple to its current success.

From the WSJ excerpt:

As tough as Cook was reputed to be, he was also generous. He gave away the frequent-flier miles that he racked up as Christmas gifts, and he volunteered at a soup kitchen during the Thanksgiving holidays. He had also participated in an annual two-day cycling event across Georgia to raise money for multiple sclerosis; Cook had been a supporter since being misdiagnosed with the disease years before. “The doctor said, ‘Mr. Cook, you’ve either had a stroke, or you have MS,’ ” Cook told the Auburn alumni magazine. He didn’t have either. His symptoms had been produced from “lugging a lot of incredibly heavy luggage around.”

An earlier piece in the New Yorker online edition painted a dreary picture of Apple post Steve Jobs and the video above does delve into that viewpoint a bit.

Apple’s latest version of its mobile operating system, iOS 7, looks pretty but is full of bugs and flaws. As for innovation, the last time Apple created something that was truly great was the original iPad, when Jobs was still alive. Although the company’s C.E.O., Tim Cook, insists otherwise, Apple seems more eager to talk about the past than about the future.

From the video:

[Has Apple lost its touch? Are they still King of the Hill?]

KANE: I think the answer is obvious to me. The answer has got to be yes. This is a company who had revolved around Steve Jobs for so long, I mean that was something that Jobs himself went out of his way to make sure of. And the people there are conditioned to operate, to play off of his strengths and weaknesses. And so now you’ve got this completely opposite guy in Tim Cook, who is I think brilliant in many ways, but in different ways. But so they’re going through some growing pains in that.

Meanwhile, Publishers Weekly has the following review of the book:

Jan 27, 2014 – The globe-bestriding computer-maker loses its soul in this lively business history. Former Wall Street Journal technology reporter Kane follows Apple after the 2011 death of founder Steve Jobs as the company’s knack for conjuring breakthrough i-gadgets lapsed into a series of ho-hum upgrades, misfires like the befuddled artificial intelligence app Siri, and interminable patent lawsuits, while market share, profits, and stock price eroded. Kane makes the story a study in CEO leadership styles, contrasting Jobs’s visionary bluster with his successor Tim Cook’s icy bean-counting and the histrionics of Samsung’s “wise emperor” Lee Kun-hee, whose quality crusade involved burning an entire factory’s inventory in front of its weeping employees. Kane unearths plenty of colorful material here, including lawyerly jousting, hilariously lame new-product unveilings, and conference-room psychodramas between bullying execs and groveling underlings. The author’s great-man theory of Jobs’s “unfiltered” leadership as the indispensable motor of Apple’s innovation doesn’t explain much; her unusually rich dissection of Apple’s ugly dealings with its FoxConn manufacturing partner suggests that Cook’s merciless wringing of profits out of exploited Chinese labor is as much the soul of Apple as Jobs’s oft-hyped intuition for design. Still, this well-paced, vividly detailed narrative reveals the machine surrounding the Jobsian ghost at Apple and brings the company’s high-flying mythology down to earth.© Publishers Weekly

We’re getting an advanced copy this week which we don’t expect to be as pessimistic and the publicity-generating excerpts above.  Interesting bits will be posted here.

Haunted Empire: Apple After Steve Jobs is available March 18th from Harper Collins ($12.74 Amazon/$14.99 iBookstore)

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No, seriously: Oyster comes pretty close to being a Netflix for ebooks

A lot of startups want to be the Netflix (or Spotify, Pandora, whatever) for ebooks. That is, they want to provide unlimited access to ebooks for a flat monthly fee.

But this is really hard to pull off, because services like this need enough books to make the prospect of paying a flat fee for them palatable. Publishers are reluctant to sign up their titles, in part because of the difficulty of paying authors when their books are viewed this way. So you have services like Amazon’s Kindle Owners’ Lending Library, which contains over 400,000 titles — the vast majority of them self-published stuff that you have never heard of.

When I first heard about the New York-based startup Oyster last year, I was extremely skeptical. Backed by Peter Thiel’s Founders Fund and founded by former Hunch, Google and Microsoft employees, the company claimed last October that it would be the Netflix of ebooks. Then we didn’t hear much from it for nearly a year. I pretty much assumed the founders hadn’t been able to pull it off and I was not surprised.

I was wrong, though: On Thursday, Oyster launched on iPhone with over 100,000 in-copyright ebooks (i.e., not free public domain stuff) that users can access for $9.95 a month. It’s currently invite-only, and I’ve been testing the app for about a week now. The books are good: Real stuff you’ve heard of, from real publishers. The app’s design is fabulous: It looks and feels like a real app designed by a real tech company. Oyster isn’t perfect, but it actually delivers what it promises, and I recommend giving it a try.

First things first: How’s the content?

The app’s design is important, but if the content isn’t there, a service like this won’t work. So the key thing is that Oyster has the books: Over 100,000 in-print titles, plus public-domain titles that are not included in that 100,000 figure.

A warning: You will not find hot new bestsellers here. But you will find real books that you have heard of, published within the last decade, from publishers that you have heard of (if you follow that sort of thing). A sampling of the books available: Water for Elephants by Sara Gruen, Life of Pi by Yann Martel, The Best American Short Stories 2012, Tolkien’s Lord of the Rings and The HobbitInterpreter of Maladies by Jhumpa Lahiri, The God Delusion by Richard Dawkins, In Sunlight and in Shadow by Mark Helprin, Shutter Island by Dennis Lehane, Everything is Illuminated by Jonathan Safran Foer, Predictably Irrational by Dan Ariely, Just Kids by Patti Smith.


Publishers participating — i.e., making at least a few titles available, not their whole catalogs by any means — include HarperCollins, Houghton Mifflin Harcourt, Workman, Algonquin, Melville House, Rodale, Open Road, RosettaBooks, F+W Media and self-publishing distributor Smashwords. You’ll note that HarperCollins is the only big-five publisher on that list, though Oyster says it’s in negotiations with all the big guys. As for Smashwords, if you were wondering if Oyster is filled with self-published stuff you have never heard of, it isn’t: You can find a specific Smashwords title if you are looking for it, but Oyster will only feature select Smashwords titles on its home screen (as it only features select titles from other publishers).

Oyster wouldn’t get into details with me about how it’s compensating publishers and authors, and wouldn’t state whether newer, more well-known titles are getting better royalties than older ones. CEO Eric Stromberg told me, “We’ve had the benefit of other seeing other types of access models like this, seeing where they have done things the right way and where they tripped up, and structured our model in a way that is beneficial to content owners.”

Thank goodness for offline reading

If you want to watch a movie on Netflix while you’re on a plane, you’re screwed: You can’t download it for later. With Oyster, however, after you add a book to your reading list, you can access it offline. You only need an internet connection to download new titles. That’s awesome.

The app’s design is fabulous

The iPhone app is crisp, clean and intuitive to navigate. You can tell that it was designed by folks with a serious tech and mobile background: Cofounder and chief product officer Willem Van Lancker was a lead designer for the Google Maps iOS app. In my pre-launch tests, the app never crashed or froze up.

Oyster’s home screen offers Netflix-style browsing, with books’ covers arranged in rows in categories like “New & Noteworthy,” “Award-Winning Fiction,” “Book to Blockbusters” and “Popular Science.” To delve deeper, you can browse by genre (history, fiction and literature and so on) or search by title or author. When you see a book you want to read, you can either press a “play” button to start reading right away or press a little “+” icon to add it to your reading list.

Oyster Shutter Island

When you start reading a book, you can adjust the type size and screen brightness or select one of five typographic “themes” that change the font, line spacing, colors and textures of the reading screen. “It makes it a little bit more human and less geeky,” Van Lancker told me. It’s a small, pleasing thing that’s just one example of the close attention to detail in the app’s design.


There are discoverability and social aspects, if you care about that

Just as I don’t usually care what my social network is watching on Netflix, knowing what my social network is reading is not a must-have for me in an app like this. Oyster does have social features: You can follow other users, see what they’re reading and recommend books to them. But the social features don’t overwhelm the app, and you can ignore them if you want to. That’s especially early on, when I don’t know anybody who has actually signed up to use Oyster yet.

Oyster does have a recommendation algorithm, but it’s not a big part of the app at launch. “As we gain insight into the preferences and activity of readers as well as the similarities among books, recommendations will become more highly personalized and will change over time,” Stromberg told me. To start, though, the company is relying on human editors to curate featured sets of books and titles.

Now for the not-so-good

Oyster’s largest limitation is platform: It is only available on iPhone at launch. Stromberg told me that he’s particularly bullish on mobile reading because people have their phones with them all the time, and that’s why the company went with iPhone first. In some ways, I can see the logic of this: Having Oyster on iPhone first makes it easy to dip into and out of books while you’re in transit, and the fact that you don’t need an internet connection to read them (once you’ve added them to your reading list) really does make it easy to dip in and out.

That said, part of me thought it would have made more sense for Oyster to launch on iPad first. I think that most people do most of their serious book-reading at home, and at home, reading on a phone probably isn’t your first choice. It means that right now you can’t really curl up with a book through the Oyster app.

Regardless, you won’t have to wait too long for iPad: That app is coming this fall.

Android users may simply be out of luck: Stromberg said Oyster currently has no “concrete plans” to launch on platforms beyond iOS.

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Heads up, ebook buyers: Here’s how much you’re likely to get in the Apple ebook settlement

All five publishers who were accused of conspiring with Apple to set ebook prices at the launch of the iBookstore have settled with the federal government and with the states, and until now it has been unclear how much money customers would get from those settlements. On Friday, though, the states released new documentation laying out how much people who made qualifying purchases are likely to receive.

Short answer: If the states’ settlement with the publishers is finalized, customers who bought an ebook from any one of the five settling publishers between April 1, 2010 and May 1, 2012 will be eligible for a refund of up to $3.06 per book. If you’re one of those people, you’ll get that money as a credit to the digital bookstore where you purchased the book.

It’s taken awhile to even get to this “final” — but still preliminary — dollar amount. That’s because HarperCollins, Hachette and Simon & Schuster settled with the Department of Justice right away, back in April 2012, but the remaining two publishers in the lawsuit — Penguin and Macmillan — didn’t agree to settle until December 2012 and February 2013, respectively. Penguin and Macmillan’s settlements have been approved, but not finalized.

So last year, without Penguin and Macmillan included in the settlement, it appeared that eligible consumers would get a refund between $0.25 and $1.32 per ebook. Once Macmillan and Penguin decided to settle, though, the total settlement amounts increased — to $162.25 million — and so the payments will be bigger.

Assuming the Macmillan and Penguin settlements go through — they’re set to be finalized on December 6, 2013 — anybody who bought an ebook from Hachette, HarperCollins, Simon & Schuster, Penguin or Macmillan between April 1, 2010 and May 1, 2012 will get a refund of $3.06 if that ebook was a New York Times bestseller at any point in its publishing history, and $0.73 per ebook that was never a NYT bestseller.

How will you know if you qualified for the settlement? You should receive an email from the ebook retailer. You might actually have received this email last year, if you made qualifying purchases from HarperCollins, Hachette or Simon & Schuster. But if you bought a qualifying ebook from Penguin or Macmillan, you probably did not receive the email notice until today.

Regardless of which publisher you purchased an ebook from, though, your settlement amount will be the same. And you’ll receive it as a credit to the digital bookstore that you bought the ebook from — Kindle, Google or whomever.

This settlement guide that my colleague Jeff Roberts published last year is still a good guide; just swap out the dollar amounts mentioned there for the higher figures provided in this post. You can also check out the states’ ebook settlement website; I’ve embedded the key document below. And Amazon has made its own ebook settlement page, too.

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Apple could pay nearly $500 million in ebook case

Apple could get smacked with a $500 million bill from the states and class action lawyers in the ebook pricing suit, based on the amounts that the settling publishers have already paid out.

Earlier this month, federal judge Denise Cote found Apple guilty of colluding with five publishers to fix ebook prices at the launch of the iBookstore. The five publishers named in the case — Hachette, Penguin, Random House, HarperCollins and Simon & Schuster — have already settled and paid damages to the states and in the class action suit. In a document that the court made public Tuesday, the Texas attorney general provided Judge Cote with a chart showing the amounts that the states have agreed to pay. The red markup is by me:

apple trial publisher damages

The chart shows that the publishers have paid out over $166 million so far. Earlier this month, a lawyer from Hagens Berman — the class action firm in the case — told my colleague Jeff Roberts that Apple would likely face a liability payment of harm to consumers times three, minus the $166 million already paid out by publishers. On Wednesday, Law360 reported (paywall) the same thing, calculating that if Apple loses its appeal it would face about $490 million in damages. I annotated the chart above with those figures.

Referring to the chart above, NYU law professor Harry First told Law360, “Just looking at the percentages straight, the plaintiffs at least appear to have some sort of good strategy in terms of settlements, so the later settlements don’t get as good a deal. That means Apple’s in for more of a jolt.”

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Steve Jobs Biographer Walter Isaacson Dropped From eBook Price Fixing Case


Walter Isaacson, the author of the best-selling biography about Apple co-founder and former CEO Steve Jobs, will not have to share his notes or testify in an ongoing lawsuit over alleged eBook price fixing between Apple and book publishers.

Lawyers wanted to see Isaacson’s notes from interviews with Jobs in an effort to establish Apple’s agreements with publishers, but Isaacson refused to hand them over, citing a New York law that allows journalists to shield their sources.

The lawyers want Apple to pay for its alleged part in a price fixing scheme related to eBooks sold in its iBookstore.

Last August, the U.S. Department of Justice filed an antitrust lawsuit against Apple, Hachette, HarperCollins, Macmillan and Penguin for attempting to overthrow Amazon’s hegemony on eBooks by collaborating to standardize how much is charged for digital titles.

They also subpoenaed Isaacson and wanted to see the notes he made from interviews with Jobs, arguing that the reporters’ shield did not apply in this case. But paidContent has obtained new court documents that show the parties have agreed to drop Isaacson from the case.

Apple and Steve Jobs, on the other hand, are still very much at the heart of the complaint. All five publishers have agreed to settle with the DoJ since the lawsuit was filed, but Apple won’t back down, and the Cupertino company is rejecting the accusations that it formed a conspiracy to raise book prices and lure publishers away from Amazon’s Kindle.

One of the court documents is an email exchange between Jobs and James Murdoch, a senior executive at News Corp’s HarperCollins, which discusses eBook pricing. You can read it below.

Steve Jobs Emails by

Source: paidContent

Report: EU authorities ready to accept Apple, publishers settlement in ebook price fixing investigation

According to a new report from Reuters, EU authorities are about to accept a deal with Apple and four book publishers in order to end an antitrust investigation into whether Apple conspired with publishers to prevent Amazon from undercutting Apple’s ebook pricing. The companies originally proposed the settlement in late August, and it would see Amazon go back to its original ebook pricing for two years. By making the deal, Apple and the publishers will be able to put an end to the antirust investigation and avoid related fines:

Apple, Simon & Schuster, News Corp unit HarperCollins, Lagardere SCA’s Hachette Livre, and Verlagsgruppe Georg von Holtzbrinck, the owner of German company Macmillan, made the proposal to the European Commission in September…Pearson Plc’s Penguin group, which is also under investigation, did not take part in the offer.

In the U.S., the U.S. Department of Justice has come to similar agreements with at least three publishers. Apple unsuccessfully attempted to delay the settlements until the case goes to trial in June 2013. According to Reuters, EU regulators could accept the settlement as early as next month:

“The Commission is likely to accept the offer and announce its decision next month,” the person said.