Digital Publishing - the current picture by Debbie Williams

GILBANE GROUP A DIVISION OF OUTSELL, INC.

October 1st 2010 A Blueprint for Book Publishing Transformation: Seven Essential Processes to Re-Invent Publishing by David R. Guenette, Bill Trippe, and Karen Golden

Outsellâ&#x20AC;&#x2122;s Gilbane Group: Research Report

Table of Contents

Page #

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 A Blueprint User’s Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Digital Comes to Book Publishing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 The State of Book Publishing Today . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 E-book Market Sizing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 Trade Book Publishing: How the Kindle Drove E-book Publishing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Educational Publishing: Solutions Have to Address Both Market and Cost Problems . . . . . . . . . . . . . . . 24 Agility, Flexibility, and XML Help STM Publishers Meet Demands . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Many Challenges, Many Opportunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Book Publishing’s Seven Essential Publishing Processes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Mapping Processes to Specific Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Planning Processes and Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 Editorial and Production Processes and Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Rights and Royalties Processes and Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Manufacturing Processes and Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Marketing and Promotion Processes and Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69 Sales and Licensing Processes and Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 Distribution and Fulfillment Processes and Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Publishing Processes: Steps toward Better Efficiencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 What is a Digital Book? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 Digital Reading Experience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 The Many Forms and Faces of Digital Publishing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 The Quest for “Searchability” . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 Utility, and Other Benefits of Digital Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 When is a Digital Book a Print Book? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 98 Digital Book Publishing Industry Outlook . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 E-Books Have Arrived . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 XML Becoming Core Publishing Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Digital Publishing is Digital Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 E-Reader Devices in Flux, But So What? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123 Significant Barriers Remain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 Integration and Interoperability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 Rich Media and Enhanced E-Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 A Brief Glimpse into the Future . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 147

Table of Contents (continued)

Page #

Blueprint Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 Wolters Kluwer Health: Digital – and the Right Partner – First . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 McGraw-Hill Higher Education: Going All Out Digital Starts with XML-Early Education . . . . . . . . . . . . 158 John Wiley & Sons: When Digital Means Print . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 165 Hachette Book Group: Sticking to Standardization and Best Practices . . . . . . . . . . . . . . . . . . . . . . . . . . 174 Appendix A: Blueprint Study Methodology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 180 Appendix B: Survey Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 182 Introductory Section of Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 184 Publishing Processes Sections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 185 Trans-Publishing Processes: Goals and Barriers to Digital Publishing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 Appendix C: Blueprint Sponsors and Vision Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 Aptara: Driving Digital Innovation in Publishing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 192 BISG: Informing and Empowering the Book Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 193 Hewlett-Packard Company: Imaging and Printing Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 MarkLogic: Revolutionizing the Way Today’s Enterprises Consolidate, Discover, and Distribute Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196 North Plains Systems Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 Océ North America, Production Printing Systems: Delivering Productivity across the Enterprise . . . . 198 Really Strategies, Inc.: Eliminating Barriers for Publishers to Create and Deliver Content to the World Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 Appendix D: Digital Book Publishing Industry Directory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202 Appendix E: The “Blueprint” Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 275

Table & Figure Titles

Page #

Table 1. New Title Production Numbers, 2008 and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Table 2. Non-Traditional Book Production Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 Figure 1. Publisher Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Figure 2. Worldwide E-Books Market by Segment, Content Sales Only, 2009 . . . . . . . . . . . . . . . . . . . . . . . 14 Figure 3. Worldwide E-Books Market as a Proportion of Total Books, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Table 3. Regional E-Books Market Size and Growth, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Figure 4. Percentage of Gross Revenue from E-book Publishing Today . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Figure 5. Expected Gross Revenue from E-book Publishing in Five Years . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Table 4. Kindle E-Book Availability by Book Type, Spring 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Table 5. Sample E-Book Cost and Revenue Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Table 6. Differences Across E-Book Devices, Smartphones, and Tablets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Figure 6. Book Publishing Segments Represented in Blueprint Survey . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Figure 7. Software System Used in Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Table 7. Klopotek Modules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Table 8. Focus on Publishing Software Modules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Table 9. Firebrand Technologies Title Management Solutions Modules . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Figure 8. Digital Editions Considered During New Title Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 Figure 9. Relative Timing of Digital and Print Title Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Figure 10. Digital-Only Title Consideration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 Figure 11. DAM Usage Versus Other Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Figure 12. End Format for Print Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 Figure 13. Usage of Outsource Services for Print Publishing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 Figure 14. Usage of Outsource Services for E-Book Publishing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Figure 15. Lulu.com’s Recent Charge Schedule for POD Books . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Figure 16. Promotion and Marketing Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Figure 17. CoreSource as Distribution Channel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Figure 18. CoreSource Fulfillment Platform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 Figure 19. Firebrand Technologies ONIX Platform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 Figure 20. E-Book or Print Book? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86 Figure 21. Untethered Device Adoption Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 Figure 22. The Voyager Company’s 1991 “Expanded” Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 Figure 23. Disney Reader, with Callouts of Interactivity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92 Figure 24. Interactivity Takes Many Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Figure 25. Online Access to Digital Texts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 Figure 26. Mixable Textbooks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95

Table & Figure Titles (continued)

Page #

Figure 27. Digital Printing and Digital Workflows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 Figure 28. BISG “Point of No Return” Findings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102 Figure 29. Kinds of Digital Publications Produced by Book Publishers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 Figure 30. Length of Time of XML Used by Book Publishers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 Figure 31. Percentage of Titles in XML at Book Publishers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 Figure 32. Reasons for Using XML . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 Figure 33. Use of XML Repositories for Content and Metadata . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111 Figure 34. Reasons for Using XML Repositories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 Figure 35. Reasons for Not Using XML Repositories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114 Figure 36. Perception of E-Books’ Support of Digital Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 Figure 37. Reasons for Using Digital Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117 Figure 38. Book Publishing Companies’ E-Book Production Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . 124 Figure 39. Digital Formats in Use at Book Publishers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Figure 40. Respondents’ Reasons for Digital Publishing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126 Figure 41. E-Readers Galore! . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 Figure 42. Levels of Interoperability Among Publishing Processes at Book Publishers . . . . . . . . . . . . . . . 133 Figure 43. A Glimpse of Integration to Come? North Plains TeleScope Publishing Platform . . . . . . . . . . 137 Figure 44. Level of Rich Media Use in Digital Publishing Efforts Today . . . . . . . . . . . . . . . . . . . . . . . . . . . . 139 Figure 45. Level of Rich Media Use in Digital Publishing in Five Years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 140 Figure 46. “Columbus: Discovery” Multimedia Title, 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 Figure 47. “The Elements,” a Contemporary Enhanced E-Book . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142 Figure 48. A Sampling of Video Formats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 144 Figure 49. A Copia E-Reader, Showing a Reading Community Review Page . . . . . . . . . . . . . . . . . . . . . . . . 146 Figure 50. Disruptive Technologies on the Horizon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 Table 10. Major Cloud Vendors and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 Figure 51. Respondents’ Self-Identification with Specific Publishing Process . . . . . . . . . . . . . . . . . . . . . . 186 Figure 52. Respondents’ Identification of Size of E-Book List . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 Figure 53. Position Title Breakout for Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 Figure 54. Position Title Breakout for Editorial and Production . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188 Figure 55. Digital Publishing Gross Revenue Percentages Today . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191 Figure 56. Digital Publishing Gross Revenue Percentage Projections in Five Years . . . . . . . . . . . . . . . . . . 191

Acknowledgements Thanks to Frank Gilbane, President of The Gilbane Group, for his support and understanding. We also thank our new parent company, Outsell, of which The Gilbane Group became a division during the time we worked on Blueprint; Outsell has been very helpful, and we’ve enjoyed the fruits of their own research and analysis on e-books and digital publishing, referencing and quoting liberally from their related reports, to the great improvement of our own efforts. In particular, we thank Anthea Stratigos, Marc Strohlein, Ned May, and Sheila King, and that hardly exhausts the list. We are especially appreciative of all the book publishing professionals who let us bother them so much, both from publishing companies and from the vendor and consultant communities that we found to be both generous and open. Our association with Book Industry Study Group (BISG), and, especially, its executive director Scott Lubeck, has been productive and very pleasant. Finally, and very much in the last but not least tradition, we thank our sponsors for supporting this study. We hope that thousands download this study, and that every one of them becomes the perfect lead. Megan Prosser, of Aptara, was incredibly helpful, as was Marianne Calilhanna, of Really Strategies. Andrew Gordon of Océ North America deserves special credit for his patient tutorials about digital printing; Anat Herring of HP Indigo Digital Printing Solutions deserves our gratitude for getting us a terrific case study subject in Lynn Terhune, of Wiley & Sons. MarkLogic’s Jason “JT” Tidwell, long-time client of The Gilbane Group, showed continued good grace with putting up with our demands, as did Joshua Duhl, of North Plains, another of our favorite repeat clients. —David R. Guenette

A Blueprint User’s Guide The main audience for the study, A Blueprint for Book Publishing Transformation: Seven Essential Processes to Re-Invent Publishing, is book publishers; however, it was created to be used in a number of different ways, at different times and circumstances, by different audiences. Our over-arching intent is to have approached the subject of e-book and digital publishing from the perspective of the book publisher, emphasizing the publishing processes familiar to all as the starting point for further exploration. Book publishers – and other interested parties – who don’t have time to read, please let these chapter descriptions guide your reading. Background on Digital Publishing The introductory chapter, Digital Comes to Book Publishing, is provided as background; those readers familiar with e-book publishing already may wish to skip on to other parts of the study. For those who are newly coming to the subject of e-books and digital publishing in relation to book publishing, we hope you will find sound perspective and solid basis here before moving on to other elements of this study. Essential Processes of Traditional and Digital Publishing The second chapter, Book Publishing’s Seven Essential Publishing Processes, provides a general background on the processes of book publishing, tied together with e-book specific and digital publishing in general considerations. In this chapter, we begin to apply our analysis, drawn both from extensive interviews and from a significant web-based survey we designed and conducted over two months. We also explore the specific issues at work in book publishers today and how print-centric publishing processes are changing as e-books and digital publishing become more important elements of a book publisher’s business. Defining the Digital Book The third chapter, What is a Digital Book?, is an essential part of this study. We found that just as the various book publishing processes had to be clearly defined and presented within the context of digital publishing, the very nature of “digital book” required exploration, too. This chapter does not answer the question definitively; instead, it provides a perspective about digital publishing to help readers be conceptually inclusive and open to what cannot yet possibly be well-defined or yet well-known. Where Book Publishing is Going… and What May Block the Way The Digital Publishing Industry Outlook, the last chapter, takes on the charge of analysis of current e-book and digital publishing practices and challenges while seeking to define what is important for the book publisher to keep in mind moving forward. We’ve brought quotes from your fellow practitioners, reports from the survey concerning key barriers and likely technology developments, and our own best efforts to share our understanding about what is ahead for digital publishing.

Concrete Case Studies in Digital Publishing As an essential part of our research, we’ve undertaken in-depth interviews with book publishers and have produced case studies that emphasize real-world experiences. The case studies presented in the appendix reflect most of the key issues facing real book publishers seeking to make a real business out of e-books and digital publishing. We hope that these case studies will be seen as resources for readers, and will help our readers present effective and compelling arguments to colleagues and management as they advance their digital publishing efforts. Taken together, the case studies provide a different way of telling the same story as the rest of the study, but as grounded in practical reality as possible. Digital Book Publishing Industry Directory This list is a useful tool providing an alternate snapshot of where the book publishing industry is, especially in terms of tools and services. These types of vendors sometimes spring up and disappear quickly; an online, self-maintaining, yet editorially shaped resource would be ideal but our static version is a very good start. A Note About Our Methodology We worked in partnership with the sponsors of our multi-client study to develop and validate answers to key questions about the transition to digital publishing now taking place in the book publishing industry. We investigated these questions using a combination of quantitative and qualitative methods, and relied on our sponsors to arrange introductions to their key reference accounts – customers who have deployed innovative solutions using their systems, tools, services, and applications. We investigated, in a systematic manner, how our sponsors’ content systems, tools, services, and applications are being deployed. We interviewed both the technical and business leads for projects within the reference accounts. We used the questionnaire that we’ve developed to enable us to characterize the size, scope of deployments, and outcomes, together with open-ended questions through which we gathered an experiential assessment of the projects. We gather sufficient qualitative information from the reference accounts to develop comparative case studies. Finally, we compared and contrasted the business and technology drivers among the multiple deployments across a range of organizations. We then mapped the technology landscape for contentcentric solutions and documented our analysis. In addition, we identified the key business drivers and critical success factors demonstrated by the vendor-nominated customers and by other publishers we interviewed.

Executive Summary It truly is a whole new world for book publishing. Publishers know this of course, as do their partners, vendors, and, of course, their booksellers. There are the obvious signs – the Kindles you see in friends’ hands and on the subway and the lines at the Apple store when the iPad was introduced. For industry observers, there are also the daily headlines about Google, Sony, Apple, and Amazon. PW Daily, the Monday-Friday e-mail blast from Publishers Weekly has e-book-related articles in almost every edition; we have counted more than one edition in the past year where every article was about e-books. After the devastating economy of late 2008 and early 2009, book publishers are seeing more numbers that are positive. The revenues for digital publishing – and e-books specifically – are very strong and promise to continue to grow. Some segments of book publishing, including STM (scientific, technical, and medical) and professional, reached the digital revenue tipping point long ago. Some research from our Outsell colleagues, summarized later in this report, suggest other segments will start to tip in the next year or two. These larger forces are creating significant pressure inside of book publishing. The goal of this study was to look at how publishers are adapting their traditional processes – many decades old and older – to adapt to digital publishing. Since these processes are usually aided by technology, the study took aim at the tools and systems publishers have been using and are starting to use. The excitement of the marketplace is tempered by some of our analysis. While there are many bright spots – production and digital printing jump to mind – other process areas lag, are too nascent, or are waiting for industry standards and best practices to coalesce. What makes the landscape particularly challenging for book publishers is the rapid-fire addition of new channels and business models and the need to codify these models in their internal processes and systems even before they can fully evaluate how valuable some of these channels and models are. Still the big picture for book publishers is very positive. The revenues are there, and growing. Readers are excited by the new devices and are demonstrating their excitement in fast-growing device and e-book sales. Publishers are moving ahead quickly across a broad front of process improvement and technology investment. Our case studies point to some of the smartest bets publishers can make in the near- and medium-term. We expect that a look at these process areas in another year would show steady improvement in most areas and marked improvement in those areas tied most directly to revenue growth and e-book promotion. For publishers and their technology and service partners, the challenge of the next few years will be to invest wisely in technology and process improvement while simultaneously being aggressive about pursuing new business models. We hope this study helps book publishers with such a balancing act.

Digital Comes to Book Publishing These headlines, all of which occurred within a one-day period in May 2010, were designed to spark panic in the heart of every book publisher: ‘Google Editions’ Could Transform Publishing Google Editions: Let the e-book war begin Open vs. Closed: Google Takes on Amazon and Apple in e-Books With or Without You, Your Google Editions Will Have Unique ISBNs What will be the best iPad app for reading Google e-books? Google Editions still due in ‘late June or July’ Our best advice to book publishers: Take steady, even breaths, and stick to your knitting. Of course, this advice – apart from the breathing aspect – can easily cause plenty of panic itself, especially when wrestling with the definition of “knitting.” What is a book publisher’s “knitting” these days? In one sense, the book publisher should be what it has always best been about – discovering, improving, and making public good (and even great) books. But what has changed for book publishers is the radically different world in which they interact today, and that is the world of bits and bytes: digital content, digital communication, and digital commerce. Today’s knitting must include, right along with the traditional goals of discovering, improving, and making public great books, the always-ongoing effort to improve the processes for meeting these goals. And today that invariably means mastering the digital tools and techniques within publishing processes. If done right, today’s efforts toward digital publishing processes will “future proof” the publisher, because today’s efforts done right are aimed at adding value to the content in media neutral, forwardly compatible forms.

We need to emphasize that the present day for book publishers should involve XML formats as early in the publishing process as possible. We are convinced that e-book formats will evolve and change and that new ones will emerge. XML stands today as the one standard format that will enable publishers to best create, manage, and curate content over time. Moreover, the future will expand how XML and metadata can support strong integration among the various publishing processes within the publisher’s own work. Even more valuable, as the industry moves forward, will be the interoperability of metadata and its subject content across the multiplying value chains from authors to publishers, to distributors and sellers, to readers, and all the known or still not yet discovered participants along the way. This study, A Blueprint for Book Publishing Transformation: Seven Essential Processes to Re-Invent Publishing, provides a guide for book publishers to discover where they are this moment regarding digital transformation. It also offers specific case studies and analysis of how book publishers should approach getting to where they need to be to take advantage next year and in the years ahead. Remember the Chinese proverb that every problem is also an opportunity… as long as one keeps breathing.

The State of Book Publishing Today What is going on in book publishing today? Even for those of us who may be able to take a calming breath or two, there’s no denying that business is stressed. A number of major trade publishers – starting with Houghton Mifflin Harcourt – stopped acquiring titles for a while. While there are a number of reasons given for this, the main message drawn by the industry as a whole was about as dark as could be: trade book publishing is in big trouble. Now, is trade publishing really in “big trouble?” Despite journalists’ and analysts’ comments, it may not yet be time to abandon all hope. According to Bowker’s estimates, new title production dropped a noticeable (but small) 1.25% from 2008 to 2009, as shown in Table 1. More striking than the small overall drop is the steep decline (almost 15%) in fiction titles while all other types of trade titles showed healthy growth, especially in a difficult market. Table 1. New Title Production Numbers, 2008 and 2009 Rank

Category

2009 Production

2008 Production

Growth

Fiction

45,181

53,058

-14.85%

Juveniles

32,348

29,825

8.46%

Sociology/Economics

25,992

24,737

5.07%

Religion

19,310

18,296

5.54%

Science

15,428

14,100

9.42%

138,259

140,016

-1.25%

Total

As Rachel Deahl reported in the November 24, 2008 issue of Publishers Weekly: It’s been clear for months that it will be a not-so-merry holiday season for publishers, but at least one house has gone so far as to halt acquisitions. PW has learned that Houghton Mifflin Harcourt has asked its editors to stop buying books. Josef Blumenfeld, Vice President of Communications for HMH, was reported by Deahl as saying, “In this case, it’s a symbol of doing things smarter; it’s not an indicator of the end of literature. We have turned off the spigot, but we have a very robust pipeline.” But the article also referenced “the highly leveraged HMH” that could be suffering from “the company’s need to cut costs in a tight credit market as about the current economic slowdown.” A week or so later, National Public Radio ran a story that built upon the HMH news, citing that “several publishing houses [Simon & Schuster, Thomas Nelson] announced layoffs or salary freezes, and a major reorganization at Random House left two major players in the business without jobs.” The story, Book Industry Enters Shaky Chapter, by Lynn Neary, ran on December 5. In Table 2, a look at the top publishers by title output in 2009 shows who is providing content to the longtail marketplace through the web, according to Bowker statistics. The point here is the large number of titles emanating from what Bowker calls “non-traditional” publishing, which includes e-books and print on demand. Table 2. Non-Traditional Book Production Numbers Publisher

Number of Titles

BiblioBazaar

272,930

Books LLC

224,460

Kessinger Publishing, LLC

190,175

CreateSpace

21,819

General Books LLC

11,887

Lulu.com

10,386

Xlibris Corporation

10,161

AuthorHouse

9,445

International Business Publications, USA

8,271

PublishAmerica, Incorporated

5,698

Neary quotes Jonathan Burnham, the CEO, vice president, and publisher of Harper, an imprint of HarperCollins, saying, “We were already facing certain big challenges before the recession came along, and those challenges were connected to the traditional mechanisms of the book business.” Burnham’s major concerns are two-fold. The first is the need for trade publishers to find an alternative to the system of returns that allow stores to return unsold books to warehouses, resulting in books being shipped back and forth across the country at great cost. The other concern? Burnham says, “The industry must now truly grapple with digital advances, like electronic readers, that are already leading to dramatic changes.” Fast forward to 2010 and a thought-provoking article about changes in the book industry. Writing in the April 26 issue of The New Yorker in an article called Publish or Perish: Can the iPad topple the Kindle, and save the book business?, Ken Aulleta notes: In the weeks before [the iPad product launch], the book industry had been full of unaccustomed optimism; in some publishing circles, the device had been referred to as “the Jesus tablet.” The industry was desperate for a savior. Between 2002 and 2008, annual sales had grown just 1.6 per cent, and profit margins were shrinking. Like other struggling businesses, publishers had slashed expenditures, laying off editors and publicists and taking fewer chances on unknown writers… The industry’s great hope was that the iPad would bring electronic books to the masses – and help make them profitable. The diversity of the publishing industry is illustrated well in Figure 1, which delivers the results of a question in an Aptara survey: “What industry segment(s) best describe your publications?” Figure 1. Publisher Type 5% 15% 32% Professional: Science / Technical / Medical (STM) Trade / Consumer Education / College Other Education / K-12

16%

31%

E-book Market Sizing The Gilbane Group’s parent company, Outsell, Inc., published the report Worldwide E-Books Market Size & Forecast Report, 2009-2012 (June 21, 2010), in which Ned May explores how the landscape for e-books is unfolding across all content types. The report also focused on the potential revenue opportunities for all publishers targeting e-books. Here’s an interesting data point: Outsell forecasts the worldwide e-book market to grow at a compound annual rate of 42% from 2009 to 2012. While this is robust growth and worthy of note, it obfuscates a set of divergent dynamics underlying the segments and regions comprising the market. The e-book market today is not one market but several distinct markets and it is unfolding at different rates across the world’s regions. Like this Blueprint report, the Outsell report segments the market into narrow slices that closely mirror the print book market, although Outsell’s three primary fields – education, professional, and consumer – is somewhat simpler than our breakout. “As a starting point in this divergence,” May writes, “the definition of e-book (or e-textbook) is subtly different depending on the core market it is designed to serve.” Figure 2. Worldwide E-Books Market by Segment, Content Sales Only, 2009 $1.8 $1.3

Total Education E-book Market

Total Professional E-book Market

$1.5

Total Consumer E-book Market

Worldwide E-Books Market Segment Size ($ Billions)

Our definition of e-books fits nicely with Outsell’s, which defines e-books as downloadable units of digital book content that can be read on a variety of devices (e.g., laptops, e-book readers, and smartphones). The Blueprint defines digital publishing more broadly as including websites based on content from existing books, for example, but Outsell also is mindful of the difficulty in differentiating the two categories. “However, the standard form of this content is changing for some types of ‘books’ as publishers increasingly look to explore the inclusion of video and audio to support the text where appropriate,” writes May. “In practical terms, this means the category of educational e-books includes a wider variety of formats than trade books, which keep a closer alignment to their print counterparts.” He provides another useful caveat about defining the e-book market: Digital Comes to Book Publishing ©2010 Outsell, Inc. 14

One of the challenges in discussing the e-book market is that e-readers can range from a proprietary software platform accessible via the web to a dedicated standalone device. In between is a range of other options that include proprietary software downloaded to a computer, laptop, or handheld device as well as relatively ubiquitous software programs such as Adobe Reader and even Microsoft Word… Complicating this further is that the lines between these different “readers” are increasingly blurred. For example, the Amazon Kindle is a standalone device that utilizes a proprietary format, but it also accepts other formats such as Adobe PDFs. Additionally, the Kindle reader platform is also available for download to a computer, smartphone, and even computing tablet like the iPad. Outsell sizes the education e-book market at $1.8 billion or 11.5% of the global education book market. The professional e-book market is estimated at 10.5% of the worldwide professional book total, or $1.3 billion, and the consumer e-book market is forecast at just 4.2% of the consumer book market, or $1.5 billion. Figure 3. Worldwide E-Books Market as a Proportion of Total Books, 2009 11.5%

10.5%

4.2%

Total Education E-book Total Professional E-book Total Consumer E-book Market Market Market E-Books' Proportion of Each Worldwide Books Segment Source: Outsell estimates ©2010 Outsell, Inc. Reproduction strictly prohibited.

Outsell estimates the market expanded by 48% in 2009, and for now, the US is seeing the greatest rate of growth across all segments. However, Europe, the Middle East, and Africa (EMEA) will soon overtake the Americas in terms of growth and is forecast to reach a three-year compound annual growth (CAGR) of 51% through 2012. This growth is off of a much smaller base than the US market, however, as consumers across much of EMEA have generally been slower to adopt e-books. Although results from the Blueprint web-based survey we conducted as part of the research of this study don’t directly reflect market size for e-books, the results do reflect the current state of e-book revenue contribution and revenue expectations in five years. The growth from today’s gross revenue contributions among responding book-publishing professionals compared to their assessments of percentages of gross revenues at book publishing companies from e-books in five years mirrors the anticipated CAGR growth trend.

Table 3. Regional E-Books Market Size and Growth, 2009 2009 E-Books Market Size ($ Millions)

3-Year CAGR

3,023

41%

Americas

3,167

41%

EMEA

975

51%

485

31%

4,627

42%

When asked about the percentage of gross revenue that e-book-specific activities generated at their company, survey respondents indicated that the majority of book publishers see less than 5% of gross revenues from e-book efforts, as shown in Figure 4. Figure 4. Percentage of Gross Revenue from E-book Publishing Today Less than 5% of gross revenues are from e-book activities

34.9%

There is no revenue from e-book activities

27.5%

Less than 15% of gross revenues are from e-book activities More than 25% of gross revenues are from e-book activities Less than 25% of gross revenues are from e-book activities I don’t know

19.3%

7.3%

3.7%

7.3%

Source: Gilbane Group Publishing Survey, July 2010 Question 68, "What is the current level of activity, measured as a percentage of overall gross revenue, of the ebook-specific activities at your book publisher?" Base = 109 ©2010 Outsell, Inc. Reproduction strictly prohibited.

In contrast, expected revenue from e-book efforts in five years’ time runs high, with the majority of book publishers expecting 15% or higher of gross revenues to come from e-books, as shown in Figure 5. Figure 5. Expected Gross Revenue from E-book Publishing in Five Years More than 25% but less than 50% of gross revenues are from e-book activities

26.4%

More than 15% but less than 25% of gross revenues are from e-book activities

22.6%

Less than 15% of gross revenues are from e-book activities

21.7%

More than 50% of gross revenues are from e-book activities Less than 5% of gross revenues are from e-book activities There is no revenue from e-book activities I don’t know

13.2% 5.7% 4.7% 5.7%

Source: Gilbane Group Publishing Survey, July 2010 Question 70, "At what level of activity, measured as a percentage of overall gross revenue, do you see for the e-book-specific activities at your book publisher in five years time?" Base = 106 ©2010 Outsell, Inc. Reproduction strictly prohibited.

There is much more to book publishing than trade books, though the public generally may not know this. College and K-12 publishers have been doing very interesting things in the digital realm, and STM and legal publishers were among the first online publishers (and CD-ROM before that). The list of historical digital efforts and brand new digital publishing undertakings is long and growing. But for panic generation – right alongside hope and hype making – nothing outstrips trade publishing.

Trade Book Publishing: How the Kindle Drove E-book Publishing In early spring 2010, a quick check on Amazon.com reported 461,899 results for “All Kindle Books.” Table 4 provides the breakdown, as shown on Amazon. Table 4. Kindle E-Book Availability by Book Type, Spring 2010 Category

Number of Titles

Fiction

158,277

Nonfiction

282,904

Advice & How-to

33,797

Arts & Entertainment

35,169

Biographies & Memoirs

17,286

Business & Investing

36,399

Children’s Books

17,736

Comics & Graphic Novels

753

Computers & Internet

17,101

Cooking, Food & Wine

5,044

Fantasy

7,293

History

41,655

Humor

10,046

Kindle Default Dictionaries

Lifestyle & Home

23,736

Literary Fiction

13,316

Mystery & Thrillers

20,678

Parenting & Families

9,944

Politics & Current Events

14,724

Reference

15,688

Religion & Spirituality

35,432

Romance

26,056

Science

42,115

Science Fiction

9,332

Sports

6,210

Travel

6,447

There are bound to be plenty of titles showing up in multiple categories in this list, but even assuming a three-to-one ratio for repetition, there are a lot of titles available for the Amazon Kindle e-reader platform, especially keeping in mind that the Kindle is only about three years old. Keep in mind too that many of these titles – and probably some altogether different ones – are available in other e-reader formats, as well as PC-oriented titles for Adobe Digital Editions, PDF, ePub, .txt, and etc. And then there are titles available through aggregator sites – especially in the education and professional areas – and those (usually high-value) titles from professional and STM publishers that aren’t likely to want to show up on a trade book retailer’s virtual shelves. But let’s get back to the Kindle title explosion. How has this happened? Step One: Begin Selling Books Online (or, Create Amazon.com) The first step was the emergence of Amazon and some other online booksellers that became leading places for the selling of books, virtually and otherwise. Even looking at book publishing in a generic way, ignoring the wide range of book types and markets, there have been several big developments over the last decade or so. One such development has been the growth on online bookstores, of which Amazon remains the 800-pound gorilla. Amazon got to be so big because it made book buying easy through wide title selection, good prices, and a simple, attractive, and trustworthy buying experience. Other bookstores – Barnes & Noble is perhaps the best next example – followed suit, even as the brick and mortar bookstores have been falling away. Step Two: Learn the Value of the Book Online This second step was Amazon (and to some extent, other online booksellers) learning which titles were selling how much. One nice outcome of the high-volume booksellers handling book transactions online – from publisher orders and distribution to letting visitors browse and buy online, title by title – is that all this activity is easy to track, especially with tools like enterprise resource planning platforms, web metrics, and audience tracking and personalization (e.g., “Customers who bought this item also bought”). And so enters a new thing in book publishing: knowing not just how many copies of a given book are sold but how customers are seeking, evaluating, and buying them. Book publishers in many markets have never been close to the customer in this way, but new technologies are giving book publishers visibility into the customers’ wants, needs, and habits that they have never had before. Not that book publishing was without such tools, notably ones from Bowker and Nielsen. Nonetheless, Amazon’s relationship with the book publisher is a direct and highly motivated one for each party, as a relationship of producer and seller.

Step Three: Make Book Buying Easy The third step was that Amazon created an infrastructure that supports and expands upon the book publisher’s traditional promotional efforts. Amazon’s ongoing efforts expand its role as a promotion and marketing asset for the book publisher, through book marketing material presentation, by improving discoverability, adding personalization, and building Amazon Associate linking. Discoverability, a term wrapped by so many in so much magical language like “SEO,” “taxonomy,” and “social communities,” is the means of making books known to the prospective buyer via search. Personalization is the association of similar reading choices to promote similar buying patterns. Associate site linking is a way to accomplish contextual promotion and advertising of titles across a much larger number of sites than simply Amazon, while driving sales only through Amazon. Amazon’s numerous options for customer interaction for a title, such as the Look Inside! function, reviews, recommendations, and rankings, make Amazon a far more effective co-marketer for book publishers than any actual storefront. In short, Amazon makes it easy for the book publisher to benefit from the advantages of online marketing and promoting. And Along Came E-Books… and Revenue Amazon’s e-book play has to be admired. The company has become an important part – often the majority – of book publishers’ print sales. To capture a good share of the e-book market Amazon turns to its publishers and reports to them several important facts, including an in-depth knowledge of the publisher’s titles, because Amazon carries them; the audience interest in the specific titles, because Amazon sells the titles and tracks these numbers; and the search metrics for the particular title and titles from other publishers that meet the same book-type and subject category. From these reports, it is but a short step – and getting shorter all the time – to provide reasonable sales projections for print titles as e-book titles. Put your print titles into Kindle, goes the tempting argument, and reap the bottom line, done on a title-by-title basis.

For a book publisher, it is not hard math to discern if an e-book edition will make financial sense, based on such revenue expectations. Table 5 is a simple example we created to illustrate “e-book math.” Table 5. Sample E-Book Cost and Revenue Analysis Unit Sales Forecast Title X has sold 1,000 print copies for the previous three years. First year sales were 2,200. Estimate is for annual units of e-book sales.

600

One-time costs Title X’s rights and royalties situation seems clear, but a contract check and agent correspondence will confirm this and update the royalty system to include the new e-edition.

$200

Title X’s production files are available within the publisher’s DAM, but a production manager will need to confirm this and hand off files for e-book conversion.

$200

Title X’s conversion to e-book format

$100

Title X e-book edition’s ONIX packaging and distribution to Amazon, including updating inventory, account receivable, and other back end business platforms.

$100

Total one-time costs

$600 Revenue Forecast

E-book edition sales price

$9.95

E-book edition discount to Amazon (this is conservative, given the reports about Amazon’s buying books at the regular wholesale price of the print title)

50%

Total gross revenue, year one

$2,985.00

Revenue after payment of royalty to author (25% of gross revenue, equallng $746.25)

$2,238.75

Net revenue after payment of one-time costs of $600

$1,638.75

The assumptions are here for example purposes only, and the success of the scenario in Table 5 depends on many factors, including:

• Are the rights and royalties well-tracked, simple, and easily discernable by the editorial worker? • Are back office systems (accounting, inventory, and royalties) easily accessible and updatable by the editorial worker?

• Are the print book production files well managed, retrievable, and in a format appropriate for efficient e-book conversion?

• Is the e-book file easily packaged and transmitted to the e-book retailer?

In this simple scenario, with positive answers to the questions above, the revenue expectations are reasonable, and, indeed, the associated costs per title would likely be lower when applied across many titles. For a mid-size publisher of 200 titles per year, for example, one might assume that a front-, mid-, and backlist of titles going back three years (600 titles) may represent 300 titles that can be considered by dint of sales history to present reasonable sales expectations as e-books. Furthermore, these are recent titles that may have a better chance of the author/agent contracts cleanly anticipating e-book editions, and production files that are more likely to be appropriate for e-book conversion, all of which would work to further constrain the costs associated with moving forward with an e-book publishing program. If the price and revenue assumptions listed above are extended as an average for a list of 300 titles, the first year’s net revenue for the publisher would be $491,625, on a direct cost of $180,000. So, basically, Amazon comes to our example book publisher and says, “Would you like an extra halfmillion in income next year?” Not to mention other benefits, including:

• Expanded promotion for title; • Strengthened competitiveness for publisher; • Potentially lower cost moves into other e-book formats; • Expanded sales of title through other e-book formats; • Expanded sales through print-on-demand (POD) and short run, with little or no additional file costs;

• “Just-in-time” inventory of backlist titles through POD. What Is in It for Amazon with E-Books? So why is Amazon, with its Kindle device and its proved-out ability to encourage book publishers to publish in the Kindle format, doing it? The obvious answer is that Amazon wants to expand its book selling business to e-books, and not only that, but in its own proprietary format, Kindle. But this expansion is not without its challenges, especially the challenge of entrenched profit models for publishers (and royalty models for authors), which are commonly based on the list price of the book. Aulleta notes that “Amazon had been buying many e-books from publishers for about thirteen dollars and selling them for $9.99, taking a loss on each book in order to gain market share and encourage sales of its electronic reading device, the Kindle.” This approach has been effective, with, according to The New Yorker article, the close of 2009 seeing Amazon accounting “…for an estimated 80% of all electronic-book sales, and $9.99 seemed to be established as the price of an e-book.” The price causes concerns among book publishers, even while currently they are losing nothing relative to the typical wholesale revenue. Aulleta quotes DavidYoung, the chairman and CEO of Hachette Book Group USA, saying, “The big concern – and it’s a massive concern – is the $9.99 pricing point. If it’s allowed to take hold in the consumer’s mind that a book is worth ten bucks, to my mind it’s game over for this business.”

So publishers are pushing back on Amazon’s demands for the uniform $9.99 price point for e-books. This seemed to come to a head at the start of 2010, when Macmillan, the behemoth trade publisher, refused to follow Amazon’s pricing scheme for Kindle titles, all up to then available through Amazon at $9.95. It remains to be seen whether Amazon will succeed in its efforts to establish the e-reader (Kindle) as the expected e-book format and the Amazon channel as the expected source for most e-book sales, But clearly, not all have been happy: many trade publishers, fearful of print book price erosion, were sympathetic to the Macmillan et al agency pricing revolt, where the retailer is, in effect, selling on commission and, typically, for a smaller percentage of the revenue than the 50% wholesale discount of traditional practice. The current flurry of interest in the agency model may prove to have legs for publishers wanting more control over pricing, and they have at least temporarily been given a boost. Part of the boost may come from the hope and hoopla about iPad, and from the many other existing and coming e-book reader and general portable devices (e.g., netbooks) yet to come. The real question for publishers of all stripes is not whether Kindle will rule the market or if the iPad will be the Kindle “killer” and save the book business, but instead whether book publishers can create and produce their products in ways that allow, cost-efficiently, the flexibility to serve whatever forms, factors, and fancies their customers may want. Table 6 notes the various strengths and weaknesses for different types of digital publishing across e-reader-capable devices. Table 6. Differences Across E-Book Devices, Smartphones, and Tablets Type E-Readers

Primary User Interaction Consume

Display Size

Display Format

Display Speed

Connectivity

Primary Content Revenue Model

Battery Life

Best Content Match

Medium

Grayscale Slow

Limited Data

Subscription Transaction

Long

Books Linear

Smartphones Communicate

Small

Color

Fast

Full- Voice Data

Advertising

Short

News Single Media

Tablets

Medium

Color

Fast

Full Data

Subscription Transaction Advertising

Medium

Magazines Multimedia

Engage

Educational Publishing: Solutions Have to Address Both Market and Cost Problems A big part of book publishing is textbooks, along with the instructor and student ancillary publications that support learning, notes Outsell, in the November 9, 2009 report, The Outsell Education 100. Outsell describes the overall market this way: We’ve established that the education industry is diverse, global, and comprised of a variety of players and products. It is highly fragmented, even in some of the areas that have been in play for decades such as content available in textbooks or training materials. What is happening is that the type of content is changing, the financial models of selling content are changing, and the market composition and global markets are changing. At the same time, the market size is almost static with an estimated US 2010 growth rate of about 3%. The challenges in higher education publishing have been identified for some time now, but the problems continue to grow. Here’s an excerpt from the report Digital Platforms and Technologies for Publishers: Implementations Beyond “eBook”, published in 2009 by The Gilbane Group: Copyright law has a major impact on how printed books are sold. While buyers of a book are precluded from copying and distributing information found in the book that they purchased, they do acquire a perpetual assignable license to use the book and then sell it to another reader if they so desire. Although many readers prefer to collect and retain books that they have purchased, other readers lack the space or inclination to keep their books and eventually sell them. The internet has played a very important role in enhancing the market for used books.

Used books have a minimal impact on the trade, STM, school and children’s markets. However, the higher education market has been severely affected by used books. While many people believe that used books save students money, quite the opposite is true. The preponderance of used books significantly reduces the number of new units that are sold by publishers. In that publishers are responsible for providing significant amounts of costly pedagogical support elements for instructors and students, the price of new books must be increased to compensate for the lower number of units that are sold. As the price of textbooks increases, the number of copies diminishes further and the cycle repeats itself.

This above example illustrates the importance of publishers choosing a business model that reflects the behavior of their customers and that offers pricing that is commensurate with the value that customers derive from each content product. Digital publishing affords publishers much more creativity and flexibility in pricing their products. Free from the costs of manufacturing and distributing printed books, publishers have quite a different cost structure to work with. And channel costs and discount structures can be less because retailers do not need to pay to ship the books and to dedicate space in their store to display the books for sale. Other costs such as royalties and permissions need to be rationalized in light of the potential growth of digital content products. What is going on in education digital publishing would make for a multi-volume report in its own right, but there are a number of very interesting efforts underway that speak quite eloquently about digital publishing’s role in the healthy future of this book publishing segment. Perhaps most impressive is CourseSmart, for its assembling of major Higher Education publishers into an effective production process and delivery platform. CourseSmart: An Early Implementation of Integrated Digital Publishing Focused on Audience CourseSmart was founded and is supported by five higher-education textbook publishers: Pearson, John Wiley, Cengage Learning, McGraw-Hill Education, and Bedford, Freeman and Worth Publishing Group, but today has 14 publishers participating. This effort brings together thousands of textbooks across hundreds of courses in an e-book format on a common platform, with the following objectives:  To provide an environment where faculty can access digital texts for evaluation purposes;  To create a marketplace where students could buy e-textbooks;  To support business partners. CourseSmart hopes to reduce what has always been a high cost for publishers, even while helping teachers find the most relevant and applicable textbooks in the correct editions. From the students’ perspective, such a resource helps resolve access barriers, since the mass of e-textbook content is in a common format. While it is early days as yet, part of the hope behind CourseSmart is to become the single – or, at least, main – distribution channel into college stores and institutions. Currently, CourseSmart uses two content formats, including a proprietary format that delivers an online version of the textbook, and a downloadable format called VitalBook, powered by software developer VitalSource (now part of Ingram Content), which allows users to download the textbook to one laptop or PC. This format was designed specifically for the teaching and learning environment, and is also used by other publishers in this marketplace with large and complex texts, such as John Wiley. At least at this moment, CourseSmart does not support formats that would enable its e-textbooks to be delivered to e-book reader devices such as the Amazon Kindle. Digital Comes to Book Publishing ©2010 Outsell, Inc. 25

Although device developments such as the iPad may enable textbooks that rely heavily on color or that would benefit from other rich media, the experience of having an e-textbook on a laptop or PC is becoming well-established, and laptop penetration among higher education students is as high as 80% of incoming freshmen in the US. Not surprisingly, the business model CourseSmart uses with students is quite different from the traditional textbook purchase model. Instead, students take out a subscription to the textbook for a specified period, although an alternative model that would allow limited use for four more years of access is reportedly being considered. VitalSource’s VitalBook e-book format uses proprietary DRM technology. This approach to textbooks may remind some readers of Safari Books Online, which pioneered technical e-books through an online environment. Sean Devine, CourseSmart’s CEO, had spent six years as the CEO of Safari Books Online, a leading provider of electronic access to computer and business books founded in 2001 by O’Reilly Media, Inc. and The Pearson Technology Group, with the goal of gathering technology books into an online database serving IT, programming, and design professionals. A wellknown aspect of Safari Books Online is the Rough Cuts service, where authors publish their working manuscripts to give customers early access to pre-published information, and where readers post feedback to the editors and authors. Collaborative authoring is a small step further, and it remains to be seen if CourseSmart and similar efforts taking form in digital textbook publishing might succeed as significant custom publishing environments. For many publishers, figuring out how to benefit from the digital transformation in book publishing can seem as painful as a root canal. But while educational publishers have always had some connection with the process of learning, digital publishing clearly expands the utility of texts to support learning – whether through interactivity, improved search, or rich media.

Agility, Flexibility, and XML Help STM Publishers Meet Demands Most publishing professionals understand that journal publishing has for the most part run ahead of book publishing in the adoption of digital production and distribution. There may be any number of reasons for this, but one, certainly, is that the high-value content of scientific, technical, and medical information tends to appear first through peer-reviewed journals, not books. In addition, the need for access is often very time sensitive: for most scientists, for instance, there’s not much enthusiasm for using out-of-date research when trying to cure cancer. In its history, STM’s digital inception is similar to the history of digital legal publishing, where LEXIS launched publicly in 1973, offering full-text searching of all Ohio and New York cases, and by 1980, had completed its hand-keyed electronic archive of all US federal and state cases. The NEXIS service, added that same year, gave journalists a searchable database of news articles. Medline, one of the oldest bibliographic archives, came out of the National Library of Medicine, with the first online interface developed in 1984 by Ovid Technologies, Inc., now a significant part of the publisher Wolters Kluwer Health.

And much like the requirements of legal publishing, STM content often carries high-level search and retrieval requirements, including complex taxonomies, composition-challenging tables, math, and chemical formulae, which made working in SGML (the Standard Generalized Markup Language and XML’s predecessor) common, despite the pain of it. Clearly, STM – as well as a number of legal and professional publishers with highly structured references and directories – have their own demands on top of those shared by other book publishing segments. Much of the progress in XML use in editorial and production processes owes a debt to these segments of book publishing. One specific aspect of XML application in book publishing is what is commonly called an XML repository, a server platform that provides capabilities to store, search, enrich, analyze, and dynamically deliver content. Typically, on top of such platforms, technology partners build information access, editorial and production tools and interfaces, and delivery solutions used by publishers to accelerate the creation and distribution of titles. One of the major benefits of XML repositories is that when they are properly implemented, a book publisher can more easily repurpose content, creating new information products faster and delivering them through multiple channels, in what is often called “content agility.” Flexibility comes from a number of capabilities including the integration of immense stores of data from distributed sources, enhancement of the content, and structured search and navigation. What these capabilities can mean for e-book and digital publishing generally is easy enough to see: book publishers can create content once, but publish many ways, such as the various e-book formats, or to aggregators, or within distinct portals, making content available in as many formats and as many contexts as possible, and as efficiently and economically as possible. As Outsell’s report, <title>XML: The Necessary Ingredient for Information Publishing</title>, from June 22, 2009, noted: The tenth anniversary of XML recently passed without so much as a candle being blown out, but as this report will show, perhaps that is the biggest testimony to its acceptance and success. Many standards and technologies seem to get (and require) an extraordinary amount of press, often in stark contrast to their actual impact and importance. XML, on the other hand, has had a sort of quiet revolution where, for many publishers, it has quietly become pervasive in all aspects of content markup, manipulation, and reuse. But, that doesn’t mean “we’re done.” XML may be pervasive, but much value remains to be exploited by most publishers and information providers.

As well, we will use their very solid definition of XML, found in the same report: One of the challenges in understanding XML is its chameleon-like nature – it is described in as many ways as it can be used. Most basically, XML is a specification sponsored by the World Wide Web Consortium (W3C) for creation of custom markup languages. In other words, users can define the markup elements. XML is a sort of lingua franca, enabling sharing of content across disparate computers, devices, and applications by defining the content of a document separate from its format. XML also enables serialization of data – which in layman’s terms is the ability to deconstruct, send, and faithfully reconstruct a document or other form of content.

Many Challenges, Many Opportunities Book publishing is hardly monolithic; it contains many market segments, of which the common breakout is as follows:

• Trade and Consumer • Higher Education • K-12 Education

• STM, Professional, Legal • B2B and Directories • Government and Regulatory

These are gross categorizations, and there are many subcategories. One example is that trade publishing contains religious publishing, which in the US market, especially, takes the form of “Christian Publishing,” but even within this sub-category there are bibles and references (concordances, for example), fiction, non-fiction, and, no doubt some education and professional publishing, too.

The response (in Figure 6) to the Blueprint survey, which shows the distribution of survey respondents among publishing segments, was somewhat more heavily reflective of trade publishing than the Aptara survey noted earlier, but since Aptara has many STM publishers as customers, the discrepancy is understandable. The “Other” category largely reflects trade variants, especially religious publishing, when individual text entries were reviewed. Figure 6. Book Publishing Segments Represented in Blueprint Survey Trade and Consumer

30.9%

STM, Professional, Legal

22.3%

Education, Higher

20.5%

Education, K-12

15.1%

B2B and Directories

4.2%

Government, Regulatory

4.2%

Other

3.0%

Source: Gilbane Group Publishing Survey, July 2010 Question 1, "In what segments of the book publishing market are your books sold? (Check all that apply)" Base = 337 ©2010 Outsell, Inc. Reproduction strictly prohibited.

The universe of book publishing is varied in other ways as well. These days, the phenomenon of selfpublishing has moved a great distance from the vanity press services of old; self-publishing is fast becoming the basis for the new publishing business model, as well as for new forms of books (think of blog-originated print books). The very nature of “book” is up for grabs, whether from the many efforts to support processes to create customized and one-off titles or because e-reader devices and personal computing platforms are increasingly supporting non-traditional book content such as audio, video, hypermedia, or collaborative virtual services. Obviously what segment of book publishing one is involved with means a lot; for example, each has different audience needs, different content use cases, different channels and media requirements, and different business needs and models. The questions raised by digital publishing opportunities and change requirements for book publishers are significant, and while some specific issues regarding digital publishing may be more or less applicable to one book publishing segment compared to another, the fundamental challenges face book publishers across the spectrum.

Here are some examples of questions every book publisher facing a move to digital publishing must wrestle with:

• What are the high-level business objectives (e.g., increased revenues, lower costs, customer

satisfaction, quality, and time to market) for producing digital content products? What results are publishers achieving now and what are their expectations?

• How do requirements such as royalty obligations and rights assignment and protection deter digital content publication?

• Where are the biggest pain points in providing digital content publications to internal and

external partners, suppliers, and/or customers? What major obstacles do publishers face with distribution of digital content products or parts thereof, across their own enterprise, in conjunction with partnering service providers, and to distribution channels?

• How are publishers making the business case for short- and long-term investments in the digital content publishing efforts?

• What role does business intelligence play in publishers’ digital content publishing efforts? • Once a business case is made, how are publishers prioritizing investments according to the

business issues they want to address? What kinds of change management issues are occurring? What role is IT playing in technology-driven decision-making?

• To what extent are standards such as XML, DOI, ISBN, ONIX, ePub, PDF, and others in use and how are they delivering value?

• How much cross-systems (departmental) collaboration takes place within the publisher? What

level of interoperability exists among the publisher’s publishing systems? Which cross-systems intersections require more attention?

• What e-commerce system implementations or e-commerce partners are publishers pursuing?

How is the imperative for “discoverability” affecting business decisions regarding digital content publishing? Are SEO efforts, social media communities, and self- and customer-generated content entering in the publisher’s business model?

• Are increasing benefits being seen by publishers in building direct customer relationships and feedback mechanisms?

Getting to answers for these questions, and others, is what this study is about.

Book Publishing’s Seven Essential Publishing Processes This chapter defines the book publishing process as a sequence of business processes common across most book publishing segments, whether trade, educational, professional, STM, or many others. In researching the topic and developing the report prospectus, we decided on a breakdown of seven business processes: 1. Planning 2. Editorial and production 3. Rights and royalties 4. Manufacturing 5. Marketing and promotion 6. Sales and licensing 7. Distribution and fulfillment Any such breakdown is a matter of judgment, and publishing companies vary based on size, market focus, and a variety of other factors:

• The breakdown could include anywhere from five to nine processes, and certain processes could be broken into their own category (sales, certainly);

• In large publishers, certain processes become highly specialized and segmented and can be supported by multiple, unrelated systems;

• Processes grouped together here can be discrete in practice. For example, in a large publisher,

separate groups will often handle subsidiary rights while other individuals will handle royalties.

Mapping Processes to Specific Systems Our research showed that some processes map cleanly to specific dedicated systems (e.g., a dedicated planning system customized to a publisher’s specific process). In other cases, a process is supported by more than one system or by one primary system and specific tools. For example, one educational publisher we consult with has several planning systems for different geographical locations, though it is trying to migrate all groups to one standard system. In another example, a trade publisher uses an enterprise resource planning (ERP) system for planning and tracking major milestones (e.g., manuscript complete, page proofs ready, and files to manufacturing), but then leaves it up to individual acquiring editors and the production editors to track individual manuscripts from inception to completion. On a smaller scale, publishers have long been creating ad hoc databases and spreadsheets to maintain data for royalties, contracts, assets, and schedules.

Another factor complicating a clear mapping exercise is that mergers, acquisitions, and divestments often require the acquired company to adopt the processes and systems of its new parent, or for the new parent to realize (and live with the fact) that its new acquisition is sufficiently unique that it must keep its own processes and systems intact. This section summarizes our research of the various publishing processes – and the systems and tools that publishers use to support these processes – including a discussion of the breakdowns and overlaps we often see among them. As such, this breakdown of seven processes is our stake in the ground. It’s also our attempt to make explicit common book publishing processes that are often well understood inside the industry, especially within each specialty. For example, book marketers know very well what they do, especially for their own markets but might only have a high-level understanding of manufacturing. One key assumption behind this report is that digital publishing will require publishing processes to be more integrated, efficient, and transparent. This call for higher integration and efficiency will require key stakeholders to have a more common understanding of other functional areas in order to help enable process improvement and tighter system integration. We are also interested in both supply chain issues and value chain issues, and attempt to highlight where e-books in particular and digital publishing in general introduce new requirements to both processes and their associated systems. A fundamental difference between traditional book publishing – print – and e-books and other digital publishing forms is that while print processes are increasingly digital in many of the publishing processes, the medium itself is physical and so, unavoidably, must at some stages participate in the physical world of paper, bookshelves, transport, etc. However, apart from digital-to-print on demand, digital publishing remains digital from start to finish, which means that computational processes and electronic transmission can be brought to bear on every aspect of publishing. The potential for creating highly efficient publishing processes – largely by advancing integration – remains tremendous for publishers, not just in the creation and production processes, but up and down the entire value chain.

Planning Processes and Systems Planning is where book title acquisition is undertaken, and typically where profit and loss (P&L) estimates for titles are calculated. This process can also include the development of at least preliminary marketing, production, and manufacturing costs and details. Of the process areas we looked at, planning is one where investments in technology range widely:

• Very light investment in desktop tools (e.g., Microsoft Excel and Access, Filemaker Pro) that are used to track key information. These can be informal (an editor keeping track of his or her own titles) to more formal (a complex spreadsheet or Filemaker database kept on a shared drive);

• Moderate to significant investment in a publishing-specific ERP or planning system. There are

a number of systems marketed specifically for planning, though they have a wide range of functionality to include title information management, inventory management, royalty tracking, and subsidiary rights management; Book Publishing’s Seven Essential Publishing Processes ©2010 Outsell, Inc. 32

• Significant to very significant investment in a major ERP system such as those from SAP or Oracle; • Anywhere from moderate to very significant investment in wholly custom systems built to the specifications of the publisher.

We kept hearing about Microsoft Office being used as planning system, and now we believe it. Figure 7 shows that office software such as Microsoft Office is used by half of respondents for title planning; the other half use a variety of custom-developed and general ERP or TIM platforms. Figure 7. Software System Used in Planning Office software such as Microsoft Office for book title planning purposes

49.3%

Custom-developed software from title planning purposes, and have this integrated with various other publishing processes (e.g., manufacturing, sales)

17.9%

General ERP platforms (e.g., SAP, Oracle, Great Plains, Microsoft Dynamics ERP) for book title planning purposes and have this integrated with various other publishing processes (e.g., manufacturing, sales) We use custom-developed software from title planning purposes, not integrated with various other publishing processes (e.g., manufacturing, sales) Off the shelf book title information management platforms with modules for integration with various other publishing processes

14.9%

10.4%

7.5%

Source: Gilbane Group Publishing Survey, July 2010 Question 10-PL3, "What general types of tools and sof tware platf orms are used f or your company’s planning process? (Check all that apply)" Base = 67 ©2010 Outsell, Inc. Reproduction strictly prohibited.

It’s notable that these latter three categories of technology involve customization, often extensive. This is not surprising considering the range of products that publishers develop, the variety of roles and titles in different publishing houses, and the wide variety of partner and vendor relationships from publisher to publisher. It’s hard to imagine one system that can codify all the variations in business process without extensive customization. One Consultant’s View Edwin Fager, a publishing industry expert and consultant (Kensai International Ltd.) who focuses on title information management platforms and royalty and ERP platforms for publishers, sees most vendor companies as small, with tight budgets, and the perception that their overall markets are constrained. For example, according to Fager, “Publishing Technology or Klopotek targets about 300 to 400 publishers [in the USA]… [while] Cyberwolf and MSGL… are targeting about 1,500 publishers [which tend to be smaller publishers].” Book Publishing’s Seven Essential Publishing Processes ©2010 Outsell, Inc. 33

Fager describes the world of “traditional” publishing software solutions breaking out as follows:

• At the top end of the market the main competitors are IBS, Publishing Technology, Klopotek, and Virtusales;

• At the low end are Cyberwolf and MSGL; • Only IBS and Cyberwolf are focused on selling an integrated ERP solution, while the others focus on selling modular best-of-breed solutions;

• Other competitors lack the market share, at least to date: Trilogy has only a few clients in the US; and iPub not many more;

• A number of current publishing clients are switching to general financial platforms to handle

rights and royalties (among other things), and a number of prospective publishing clients seem happy with SAP, Oracle, or other general business platforms in use.

Even bigger challenges remain, when electronic publishing is added to the potential publishing customer’s requirements. Fager sums it up: All the vendors are attempting to reposition themselves as digital publishing enablers, with various degrees of success, MSGL is promoting their ability to handle fractional sales [e.g., chapter sales], Cyberwolf has their digital download service, and Publishing Technology has their turnkey digital conversion and marketing service. IBS and Klopotek are promoting their ability to handle digital books. That said, each vendor, perhaps with the exception of Publishing Technology, lacks a key element that the others have, such as, for example, MSGL handling fractional sales for royalties but lacking a digital download service, or Acumen (Cyberwolf’s platform) offering the Digital Download Service, but no fractional sales capability. There are other players in this field, including MetaComet Systems, which manages the royalty payments, rights tracking, and royalty statements, and handles unlimited authors per title, reserve accounts, sub-rights, sliding scales, advances, and expenses applied against royalties, all while integrating with most AP or GL accounting systems. MetaComet Systems offers its platform, Royalty Tracker, as a web-hosted service or as an in-house installation. Like so many of its competitors, MetaComet Systems has a lot of small publishers on its customer list, but also a number of surprisingly large publishers on board, including Harcourt. Firebrand Technologies has recently added an e-book production capability to its stable of offerings that include title information management, an ONIX server and service considered very highly by many in the industry, and various components that support promotional and marketing efforts of publishers. Book Publishing’s Seven Essential Publishing Processes ©2010 Outsell, Inc. 34

Looking at the Survey Results We were curious to try to quantify title information management, royalty, and ERP systems with the question “What specific software programs and platforms are used for your company’s planning process?” Here is the list of products and their companies we included as choices:

• • • •

ACUMEN, Cyberwolf Advance, Publishing Technology, Plc. Advantage, Advantage Computing Systems Biblio3 and Biblio Publishing systems, Virtusales • BookMaster, International Business Systems • ELAN Book, Media Services Group

• Title Management Enterprise, Firebrand Technologies • Focus on Publishing, Focus Information Technology Services, Ltd.

• • • •

IPUB, IPRO Business Systems Klopotek/Global Turnkey Systems knk Publishing, knk Business Software AG Schilling, Schilling A/S

• TeleScope Publishing Platform, North Plains • Trilogy Title and Production Management, Trilogy North America • I don’t Know

• Other (Please Specify)

This list is not complete, but does cover most of these categories well, although outfits like AVATAR and Bradbury Phillips – both UK-based companies offering royalty-oriented platforms – could have been included, for example, and the list potential is much greater still (look at the Vendor Directory in the appendix for others). We found many responses we expected, but “I don’t know” and “Other” were the big winners, with “none” and “custom systems” the main entries filled in when “Other (Please Specify)” was checked. Cyberwolf, Firebrand Technologies, and Klopotek were in close first-through-third placement, with Virtusales a further distant fourth, among those companies that had any noticeable selection. Fager’s analysis is borne out by our survey results. To begin with, most publishers use general-purpose software for planning purposes instead of dedicated software. Almost 65% of respondents report using one of the following for title planning purposes:

• Office software such as Microsoft Office (49.3%) • General ERP platforms (14.9%) Custom-developed software represents 28.3% of respondents, leaving only 7.5% who report using “Off the shelf book title information management platforms with modules for integration with various other publishing processes.”

When asked, “What specific software programs and platforms are used for your company’s planning process? (Check all that apply),” respondents’ most common answers were Firebrand, Cyberwolf, Klopotek, ELAN, and Vista (Publishing Technologies). But several publishers also reported using custom systems here as well, along with SAP. Scratching the Surface: More Research Needed We encourage readers to understand that a more probing analysis would need to be done to fully understand how book publishers apply automation to the planning process. To begin with, we repeat our earlier point about “considering the range of products that publishers develop, the variety of roles and titles in different publishing houses, and the wide variety of partner and vendor relationships from publisher to publisher.” Also, we asked for “high- and mid-level book publishing professionals” to take the survey, and the titles of the respondents bear this out. More than 30% of respondents to the planning questions are C-level executives, and 18.4% hold the title of publisher. In other words, one half of the respondents are executives, and it is likely many of these respondents do not perform hands-on work with the planning systems themselves. We can imagine (and know of) scenarios where acquiring editors and editorial assistants do the work inside the planning tools, and more senior personnel are provided with reports and presentations generated by the tools. In other words, a person’s role in the process likely says a lot about how they would report on the system or tool they use in the process. Nonetheless, it seems clear to us that the way forward with integration will be found in one or several of the choices already being made within the industry. We wonder which of the following may provide an answer:

• Title information management platforms, tied into financial, production, marketing, sales, and fulfillment platforms, perhaps through modular components;

• General financial platforms, with specialized publishing-centric options; • Publishing-centric platforms, with robust API or middleware connections to general financial platforms.

Understanding the Market for Commercial Planning Systems It’s worth looking at some of these commercial systems in depth. First, the capabilities of these systems, inasmuch as they are successful, represent generalized needs and requirements of publishers. In other words, if a vendor has bothered to develop a feature or module, it has been in response to a perceived need or requirement. Second, and as discussed further in our outlook chapter, some of these platforms represent the most extensive and public attempts to integrate varied publishing functions. The success of the vendors – and more importantly the publishers – to reach high levels of integration with digital products may well be the key technology and process question for book publishers moving forward. Book Publishing’s Seven Essential Publishing Processes ©2010 Outsell, Inc. 36

Third – and most importantly – most of these platforms are used in other process areas. Publishing Technology’s Advance system (formerly the VISTA platform) is used extensively in rights and royalty operations and many of these systems have order-to-cash modules that are essential in sales management and distribution management. Indeed, it’s reasonable to say that some of these systems ended up in this category because they have title planning modules, not because they are primarily planning systems. Klopotek North America, Inc. The Klopotek Group claims that it is “by far the largest provider of solutions specifically designed for the international publishing community, servicing hundreds of individual customers, including the majority of the largest publishing entities in the world.” With the acquisition of Global Turnkey Solutions in 2006, the Klopotek Group was set to support “more than 11,000 users” around the world. Klopotek is a supplier of software and consulting services for publishers, from trade and specialist literature, school book and education publishers, to scientific publishing houses. Global Turnkey Systems was a leading supplier of enterprise resource planning (ERP) solutions to the publishing industry, and has been designed specifically for publishers of subscriptions and books in the areas of subscription management and customer service and fulfillment. Klopotek is clearly tuned into the market needs brought about by the explosion of digital product development. A recent Klopotek press release noted, “As the publishing industry continues to evolve into an increasingly electronic future… [publishers need to] support both their physical and online product development and distribution.” The press release goes on to describe Klopotek being focused on “…the system requirements for supporting the evolving production, editorial and distribution processes. The need for sophisticated production management, global contracts, rights and royalties and online integration capabilities within the context of physical and online distribution of both books and journal products… [requires Klopotek].” Putting aside the question of whether publishers achieve this with Klopotek’s offerings, Klopotek’s view of the market is in line with our analysis. In a move that is becoming standard in this area of product and services for publishers, Klopotek also offers software as a service (SaaS), an internet-based, on-demand service allowing publishers of all sizes and types to more rapidly access the Klopotek software.

Klopotek is a strong example of the “modular approach” to process integration, which means nothing more than its product offerings come in discrete entities – modules – that address one or another business process element of use to publishers. Table 7 provides the current Klopotek module list (not including several journal-specific ones). Table 7. Klopotek Modules Module

Description

Order to Cash

Covers book sales and distribution, journal sales and distribution, online business, and school teacher systems

Product Planning and Management (PPM)

Includes contracts, rights, and royalties; production; address management and marketing; product management; publicity; and sales statistics and customer and product information

Customer Care Management

Integrates customer acquisition, customer classification, customer service, complaint management, and call center activities

Advertising Sales and Management

Manages the information for sales calls, including data to support sales meetings

Editorial Planner

Project planning module, with all data created by this module exportable to PPM

Ingenta Online Platform

Platform for publishing content on the internet that contains IngentaConnect, IngentabyDesign, and pub2web, from alliance partner Publishing Technology

iPublishCentral

Self-service infrastructure solution from outsource vendor Impelsys that enables publishers to brand, market, promote, and distribute their products, regardless which format, on the web, but with special focus on e-books

Web Application Server

High-performance Java enterprise integration platform through which nonKlopotek systems can be integrated with Klopotek software, in both directions

ST4 Component CMS

Module from SCHEMA GmbH, which makes the XML-based editing and content management systems, SCHEMA ST4, for which Klopotek is exclusive worldwide implementation partner for the publishing industry

GTS UNISON

Solution that offers subscription management, order-to-cash, warehousing and accounting modules for the publishing and information industries, and which grew out of Klopotek’s 2006 acquisition of Global Turnkey Solutions, and aimed at integrating with PPM, as an end-to-end solution for the mid-market publisher

What makes Klopotek an interesting case for integration and interoperability is not only the companydeveloped modules relating to basic publishing processes, but also Klopotek’s willingness to work with other service or product vendors – Publishing Technology, Impelsys, SCHEMA – to offer as complete a solution as possible, even as some of Klopotek’s affiliate companies make claims of their own for wide-ranging integration solutions. While our sense is strong that Klopotek has a very sophisticated offering for integrating book publishers’ processes, our confidence that this level of integration is widely implemented is far weaker. We do look at the Klopotek offerings as a developing model for book publishers’ platforms.

Publishing Technology Like Klopotek, Publishing Technology is a larger, well-established vendor of planning and supply chain software for publishers. It was formed in 2007 following the merger of Ingenta, VISTA, and Publishers Communication Group (PCG). The combined company provides a wide range of software and services and represents perhaps the most comprehensive set of offerings available from one company, spanning acquisition, product development, production, title information management, sales, and distribution. Like Klopotek, their positioning centers on digital publishing, with their home page noting, “In the fast paced digital world, our services are designed with tomorrow’s market in mind. Supply chain to social networking, scholarly research to semantic web, Publishing Technology provides practical and accessible solutions and does the hard work for you.” For book publishers, Publishing Technology’s main planning offering is its platform Advance, which is its contemporary version of the VISTA product that has been marketed since the 1970s. The core modules available through Advance:

• Product Manager • Contract, Rights, and Royalties • Order to Cash • Relationship Manager • Information Commerce For societies and associations, Advance also has modules for membership management and meeting and event management. As Outsell noted in an Insight report at the time of the merger of the three companies, “The new company, Publishing Technology plc, will find itself straddling the central need of the industry – management of declining print sales while uncovering the potential for online growth. The new company will endeavor to help customers minimize the disruption caused by migrating from one to the other.” The two product companies, VISTA and Ingenta, did not have a great deal of overlap in customer and product focus at the time of the merger. VISTA had focused on providing electronic solutions to the problems inherent in print publishing: distribution, stock control and so on. Ingenta, on the other hand, had experience in online subscription management, through its Information Commerce System (ICS) and electronic hosting and publishing services for clients that were not staffed to provide full electronic services directly to the market.

Three years later, Publishing Technology is seeing this expertise combine in interesting ways:

• Publishing Technology offers its pub2web digital publishing platform, a hosted service that

provides publishers with a tailored environment to place their content online. Pub2web supports a variety of digital content, from journals and books to data sets and video clips. Support services include data conversion, e-commerce, and content discoverability management (metadata distribution, search configuration, and optimization).

• IngentaConnect is an online scholarly publications collection that offers a ready-made

audience for publishers’ content. It makes publishers’ content available to registered libraries, organizations, and researchers around the world. IngentaConnect handles usage reporting via standards such as COUNTER, and supports purchasing account features to meet document delivery needs. IngentabyDesign is an upgrade allowing publishers to apply their own branding and web design to their IngentaConnect web pages.

• To drive revenue to its digital products and support individual publishers’ sales and marketing

strategies, Publishing Technology’s Publishers Communication Group (PCG) offers full-service marketing and sales consultancy either in conjunction with, or separately from, other Publishing Technology services.

Writing about Publishing Technology a year after the acquisition, Outsell wrote that Publishing Technology “is unique in its capability to provide enterprise-wide software and services that straddle both digital and print production processes.” This unique position stems from Publishing Technology’s size and focus; it’s ability to tie numerous back office functions to a web interface; its strength and presence in the print publishing supply chain; and its ability to offer “a one-stop-shop solution for STM publishers seeking an online presence: They can simply hand over their online files and let PT handle online hosting, content conversion and enhancement, search, e-commerce, sales, and marketing.” Virtusales Virtusales is a relatively new vendor, but one that has managed to gain a reputation as one of the fast growing book publishing software solution vendors. They entered the market with a product focused on bibliographic title and digital asset management, but their software has expanded to include many other aspects of publishing management; editorial management, royalties, rights, and production management.

Here’s how their “About Us” puts Virtusales’ positioning, with messaging that highlights process integration for publishers: The release of our BiblioDAM Digital Asset Management system is revolutionizing the publishing process, enabling publishers to modernize their methods, improve workflow, and further embrace multimedia and other modern technologies... As a consequence, Virtusales now specializes in the following four core areas: Implementing the current functionality of Biblio3 and BiblioLite to book publishers Broadening Biblio3’s functionality by replacing disparate and legacy systems, keeping the system technologically advanced and programming “gaps” in functionality Building supplementary systems that integrate with Biblio3 and compliment the Virtusales portfolio of systems Building robust interfaces between Biblio3 and other core publishing systems within the publisher’s IT landscape and to third parties such as customers and suppliers Like Klopotek, Virtusales is modular in nature, although, also like Klopotek, its offerings can span a wide range. In addition to the main platform Bilbio3 system, the company offers BiblioLite, a tool for smaller publishers, by way of a web-based hosted system that provides a user-friendly way of managing reusable data that is BIC and ONIX-compliant. In addition, there is BiblioDAM System, a digital asset management system designed especially for book publishers, and which enables publishers to control and distribute all assets. BiblioDAM includes automatic version control; a transfer tool that provides a secure, robust method of transferring large numbers of sensitive and valuable files across the internet; conversion of files between popular file types such as Microsoft Office and open source files; and scalable storage and data replication. Biblio3 is described by the company as “an enterprise-class system that has been developed extensively, ensuring that your key publishing processes are handled with ease. Developed in the latest Microsoft .Net technology and SQL Server, Biblio3 is browser-based, which means that the system works equally well across both Mac and PC platforms and provides for straightforward remote access. The modules of Biblio3 include:

• Bibliographic, Editorial, Sales and Marketing module, which manages title data, images, and

documents as collections that can be accessed by real-time reports in formats such as Excel, PDF, Quark, XML and a native “interactive” reporting function. Other characteristics of this module are feeds in and out of other business systems and websites to ensure “in sync” data, the ability to generate “title information sheets” for a single or group of titles “with a single click of a button and then have them e-mailed directly out of the system, thus drastically improving the operational efficiency of staff.” Book Publishing’s Seven Essential Publishing Processes ©2010 Outsell, Inc. 41

• Production and Print Control module, which has as its focus on editorial and production

scheduling, estimating, and cost management applied to both book production process and reprint management, along with margin analysis and P&L reports.

• Contracts, Rights, Subrights, and Royalties module, which is aimed at managing contracts and

royalties along with the sale and acquisition of rights and sub-rights for a title or range of titles. In some implementations, the contracts module “front ends” a royalties payments system and stores the scanned paper contracts for ease of inquiry.

Schilling Schilling is a European company without a lot of activity in the US, and one that approaches book publishing process integration by providing a web-integrated ERP system to publishers. The company describes its product concept as based on “30% standard finance and 70% publishing solutions.” With Schilling’s fully integrated e-publishing solution, “everything is covered from sales, distribution, storage control of books, e-books, e-books for marketing, subscription, and royalty control, including new self-service functions for customers and authors,” according to marketing material. One of Schilling’s boasting points is that publishers can use the platform to start integrating processes quickly, and, like most other such platforms, Schilling has a modular approach. “Be quick to make your first success with the functions that you need the most here and now,” this company argues, “Later on it will be possible for you to expand your system with additional modules.” The total integration of the modules makes an automated updating of data possible wherever it may be relevant in the system, in such cases, for example, where a posting automatically triggers an updating in the stock and statistics module, payment in foreign currency in connection with discounts, freight costs etc. and updating of the relevant accounts in the nominal ledger accountancy. The modules offered by Schilling will have by now a familiar ring, although the emphasis on e-books and digital publishing is refreshing:

• • • • • • • •

E-Publishing Subscription Standing Order Conference Booking Marketing Royalty Advertisement Control Book Club

• • • • • • •

Project Life of the Book Sales Orders Nominal Ledger Stock and Distribution Sales Ledger Purchase Ledger Business Intelligence

SAP for Media By no means are all publishing process software platforms coming from specialty companies. Not surprisingly, big business platforms like Oracle and SAP have solid presence in this marketplace.

SAP for Media supports a comprehensive set of industry business processes for premium content publishers, including:

• Author Relations Management, which manages author relations, from first contact to contract entry, from royalty settlement to contract performance analysis;

• Editorial Collaboration, which manages tasks, resources, and schedules involved in the development of new titles;

• Subscription Sales, which addresses aspects of the subscription-based sales of products such as journals, loose-leaf collections, closed series, book clubs, and online content.

The business process of Author Relations Management, for example, reflects quite well the general needs of book publishers, including such areas as idea management, license acquisition, contract processing, rights clearance, outgoing royalties settlement, contract analysis, and activity analysis. The Editorial Collaboration and subscription Sales platforms are as thorough, and likewise, not surprisingly, are based on or extended from SAP applications such as SAP Intellectual Property Management, SAP ERP, SAP Product Lifecycle Management, and SAP Supply Chain Management. Based on SAP’s well-developed and powerful business process platforms, SAP for Media no doubt has extensibility and scalability for very large publishing houses, and several of the publishers answering our survey reported using it. Its orientation, however, also suggests a weakness of not keeping current enough with e-book and other digital publishing demands about which the more publishing-focused platforms are likely to be in front. Focus on Publishing Software Focus on Publishing Software describes itself as “the first complete accounting and management software solution for publishers,” and while the claim of ascendancy may be in question, Focus on Publishing stands in as a good example of the accounting orientation a number of publishing management platforms pursue. Focus on Publishing is a unified system that integrates various departmental functions, in what sounds very much like the module approach of other platforms, broken out into the two module categories in Table 8. As the company says, “the Focus on Publishing system is uniquely developed for the publishing industry to meet their accounting, administrative, and electronic data requirements.”

Table 8. Focus on Publishing Software Modules Financial Modules

Publishing Modules

Sales Ledger

Production and Scheduling

Returns Processing

Purchase Ledger

Author Royalties

Standing Orders

Nominal Ledger

Rights Management

EDI/XML Electronic Document transmissions

Cash Book

Marketing

Journal Review Management

Sales Order Processing

Subscriptions

Import Dispatch Information

Stock Control and Product information (ONIX version 2.0 compliant)

Cataloguing

Publishers’ Management Account

Job Costing

Consignment Control

Importation of orders from e-commerce website

knk knk Business Software AG, with its head-office in Kiel (in the very north of Germany) is a developer of business software for publishing houses that offers Microsoft certified publishing-specific modules that integrate with the Microsoft Dynamics (formerly Navision) software. knk employs about 120 staff at several locations in Germany and France and cooperates with several local partners in about 30 countries worldwide. The knkPublishing software, this company claims, “has been developed for the business organization of small and medium-sized editors of books, journals, magazines, newspapers, electronic media and other kinds of media (e.g., yellow pages and calendars). It handles a publisher’s editorial requirements and pays attention to the newest and important developments in this industry, i.e. e-books, new media; standardization of information interchange with authors, surveyors, printers; and best business practices in the publishing industry.” In one sense, knk can be described as trying to bring the power of Microsoft Business Solutions’ ERP to editorial and publishing services. Something of a counter to SAP for Media, one could argue, although how Microsoft ERP compares to SAP is a good question to consider. Firebrand Technologies Firebrand Technologies’ Title Management Solutions, a title information management (TIM) platform, now in Version 7, is a substantial newer offering in this space, one that seems to be competing head to head against larger competitors such as Klopotek and Publishing Technology. Title Management Solutions offers publishers software based on a centralized database with the capabilities to manage publishing, the company states, “from acquisition through reprints, with marketing and sales in between.” A core principle in the TIM design is that title information and collateral is collected in one central place “by those that know that information the best, at the time that they know it.”

Firebrand offers Title Management Solutions in both a hosted form, for companies that want to minimize up-front capital investment and still provide a predictable operating cost, and as an installed platform, run by a publisher’s IT department, on its own servers and operating systems. Title Management Enterprise uses a Microsoft SQLServer database, coupled with features such as RSSbased “desktop alerts” and e-mail alerts, and with Ajax controls for web browser integration for such UI assistance as “Recent Activities and Overdue Tasks,” “Multiple Saved Searches,” and “ Saved Lists of Titles/Projects/Contacts.” The full range of modules includes the list in Table 9. Table 9. Firebrand Technologies Title Management Solutions Modules Module

Description

Acquisitions

Handles proposal, through peer review, due diligence, and final decision, and helps acquiring editors to track the status of all submissions or proposals under review

Title Profit & Loss

Integrated with acquisition projects, with project-based P&L based on the publisher’s own pre-defined models; creation of P&L for each stage in lifecycle of the project (i.e., Acquisitions, Manuscript Transmittal, Print Decision, and Actual from ERP); and with the ability to carry multiple versions for each stage, including sales, royalties, expenses across multiple editions, and multiple years

Manage Global Contacts

Manages contacts for authors, freelancers, peer reviewers, publicity contacts, and professors/universities

Editorial

For capturing and managing title information efficiently and accurately in a single integrated database developed specifically for book publishers

Contracts

For managing and maintaining author-publisher contract specific details, including multiple contracts for a title or group of titles, traditional royalty author contracts, work-for-hire fee based contracts, and other contracts for creative contributors

Production

Supports the development of publishing project plans using configurable and customizable schedule templates

Manage Content Units Includes detailed task and file management for various iterations of manuscripts and other and Files materials, schedules building from pre-defined templates, tracks rack tasks, and generates desktop and e-mail alerts Manufacturing

Supports tracking manufacturing specifications, cost estimates, and purchase orders by title and printing, including reprints; maintains historical records for each component of a manufacturing process; and manages sourcing opportunities by analyzing data

Paper Management

For tracking paper inventory and assigning and reserving paper stocks for upcoming printing jobs

Marketing

For coordinating the marketing team across a wide range of activities by managing marketing plans, campaigns and projects, as well as creating, gathering, and disseminating marketing content throughout the lifecycle of a title, including sales catalogs and other promotional materials

Marketing Projects

Used to manage events, exhibits, ad campaigns, and promotional materials, as well as other marketing and sales for text book course adoption

XML Integration with InDesign

Includes new catalog export in XML, application support for InDesign templates, and snippets for page layout and import of title information

Sales

Provides support for the sales department

Publicity

For managing contact records by media, market, or category; creating review request and call lists by linking contact records to entered book titles; creating pitch letters and mailing labels using mail merge templates; and organizing and managing author tour schedules with event details, budgets, and notes

Reporting

Provides any information captured in the Title Management database as reports that can be displayed and shared.

Source: Firebrand Technologies 2010 Outsell, Inc. Reproduction strictly prohibited.

Planning Processes and Systems: Summing Up As these snapshots of the dedicated software systems show, this is a category of technology that does not lack for ambition. The full list of systems that could have qualified for inclusion in the survey is quite a bit larger. These vendors aim to capture the broad range of publishing business processes in a single system, a single modular system, or a single modular system integrated with modular offerings from other vendors. Two-thirds of respondents report that digital publishing titles are being considered right from planning and acquisition, which suggests to us that book publishers are moving away from early reactive stance regarding e-books, as shown in Figure 8. Figure 8. Digital Editions Considered During New Title Planning Digital editions are always or mostly considered as part of new title planning and acquisition

68.4%

Digital editions are never or almost never considered as part of new title planning and acquisition Digital editions are sometimes considered as part of new title planning and acquisition

I don’t know

18.4%

13.2%

0.0%

Source: Gilbane Group Publishing Survey, July 2010 Question 13-PL6, "Are digital editions considered at the stage of title planning and acquisition?" Base = 38 ©2010 Outsell, Inc. Reproduction strictly prohibited.

Significantly, this ambition seems to be met by publishers. Of those respondents who answered our questions about planning processes, a sizable majority indicated that the planning tools in use are usually comprehensive, most often helping publishers plan products from assessment through production or from assessment throughout the entire product cycle. The gap between the relatively low numbers of off-the-shelf title planning platforms listed in the survey question selected by respondents and the large percentage of book publishers claiming that their planning tools in use are comprehensive falls to a matter of definition or semantics. In the course of our interviews, we came to see that many book publishers do indeed have title planning systems in place, but the “systems” are not necessarily discreet software products. Rather, they are a system or systems developed over time to accomplish title planning processes. In some cases, such systems may be checklists or spreadsheets, but work well within the culture of the particular book publisher.

Just as significantly, our survey showed that digital publishing is highly important among today’s book publishers. Digital products are a key consideration for publishers and are a key part of the planning process for two-thirds of publishers. Moreover, in addition to being accounted for in the planning process, digital products are very often developed alongside print products. Figure 9. Relative Timing of Digital and Print Title Development

Digital editions of print titles are always or mostly developed as part of the development of print titles

44.7%

Digital editions of print titles are sometimes considered as part the development of print titles, but sometimes handled post print title publication through a conversion service or process

Digital editions of print titles are never or almost never considered as part the development of print titles, but instead are handled through a conversion service or process post print title publication

28.9%

26.3%

Source: Gilbane Group Publishing Survey, July 2010 Question 15-PL8, "Are digital editions developed concurrently with print titles? Digital editions of print titles are…? Base = 38 ©2010 Outsell, Inc. Reproduction strictly prohibited.

Finally, while digital-only products are still mainly the exception and not the rule, a quarter of publishers are already developing digital-only versions of books and close to half have done it, if but rarely.

We’re left with a picture of a book publishing industry with ambitious plans for digital product development, with senior leadership directly engaged, and with a vendor community with equal ambitions for their supporting products. As shown in Figure 10, about 75% of book publishers rarely or never publish digital-only titles. Figure 10. Digital-Only Title Consideration

Yes, but rarely

42.1%

31.6%

Yes

I don’t know

26.3%

0.0%

Source: Gilbane Group Publishing Survey, July 2010 Question 14-PL7, "Does your book publishing company ever publish digital only versions of books?" Base = 38 ©2010 Outsell, Inc. Reproduction strictly prohibited.

Editorial and Production Processes and Systems Editorial and production is where the planned book begins to take shape in the hands of authors and editors, and through the detailed efforts of design, production management, and final copy preparation. As we’ve seen already from the planning section, editorial and production processes don’t stand alone. Some of the planning vendors offer editorial planning modules, especially to support product acquisition and profit and loss analysis. Moreover, in digital content creation, the system supporting editorial and production may also be, in effect, the digital manufacturing system. For our purposes though, we defined editorial and production traditionally – from book acquisition through editorial development, design, manuscript development, copyediting, and final production. For book publishers who are still developing print books (as the vast majority still is), editorial and production is still about developing the book from inception until it is ready for manufacturing. In 2010, “ready for manufacturing” means delivery of an electronic file, typically a print-ready PDF file or a native production file such as those produced by a program such as Adobe InDesign or QuarkXPress.

Our direct experience with publishers has seen an increasing investment in improving editorial and production processes:

• Publishers have been working hard to improve on and even optimize these processes. They

have been analyzing their workflows, as well as looking at their own skill sets and those of their freelancers, vendors, and partners. While this process improvement may have sometimes been driven by a desire to cut costs initially, the need for digital product development has trumped cost containment, especially recently.

• Some publishers have gone so far as to specifically redesign their processes with an eye toward

“digital first” – the idea being to have digital products ready first – or sometimes “media neutral” – with the idea being print and digital products are developed in concert.

• Such process improvement efforts have often been undertaken in advance of investments in new

editorial and production software and systems. As more than one publisher explained it, they saw no sense in overlaying an old and potentially outmoded process on new and expensive software.

With this direct experience in mind, we were surprised to see that most of the survey respondents in this area reported a heavy reliance on desktop tools such as InDesign and QuarkXPress and far less use of centralized workflow systems such as K4, Woodwing Enterprise, and Quark Publishing System (QPS):

• 40.5% reported using Adobe Creative Suite • 11.9% reported using QuarkXPress And what is DAM? Wikipedia has a good definition: Digital asset management (DAM) consists of management tasks and decisions surrounding the ingestion, annotation, cataloguing, storage, retrieval, and distribution of digital assets. Digital photographs, animations, videos, and music are samples of media asset management (a sub-category of DAM).

Digital asset management systems include computer software and/or hardware systems that aid in the process of digital asset management. DAM’s day is yet to come, it would seem, and if more evidence is needed, those who indicated they use DAM cited MediaBank, from Wave Corporation, as the leader, but it was equal to “Other,” Documentum (EMC) and OpenText tied with “I don’t know,” and the many rest almost didn’t register at all. Custom systems developed in-house, file management platforms, and a little bit of content management systems seem to be how the majority of book publishers’ editorial and production processes handle production asset management of storage, organization, workflow, and revision control. Book Publishing’s Seven Essential Publishing Processes ©2010 Outsell, Inc. 49

The other tools or systems reported to be used to help automate editorial and production processes are:

• • • • •

K4 Klopotek RSuite CMS Quark QPS North Plains TeleScope Publishing Platform and TeleScope DAM • Silverchair Content Manager • PowerXEditor from Aptara • DPS or other applications from Content Data Solutions

• • • • •

Woodwing Enterprise SDL Contenta Artesia Mediabank FrameMaker

• DocBook and DITA open source tools • oXygen (XML editor)

As shown in Figure 11, close to 44% of respondents claim DAM usage at their book publishing company, but 26% still rely on file management, and only about 9% use content management systems to control asset access, which is less than half the number using custom solutions. DAM’s day is yet to come, it would seem. Figure 11. DAM Usage Versus Other Solutions Yes

43.5%

No, but we use a file management system

26.1%

No, but we use a custom, in-house process

21.7%

No, but we use a content management system

I don’t know

8.7%

0.0%

Source: Gilbane Group Publishing Survey, July 2010 Question 21-EDPR, "Does your editorial and production process use one or more digital asset management (DAM) platf orms to store publication elements (e.g., text, art, titles)?" Base = 23 ©2010 Outsell, Inc. Reproduction strictly prohibited.

It’s worth reporting an observation we made in the planning section, namely that a person’s role in the process likely says a lot about how they would report on the system or tool they use in the process. While the planning respondents were comprised heavily of C-level executives and publishers, the respondents in the editorial and production arena were varied, spanning the role of publisher, acquiring editor, and production management. The leading DAM vendors present some overlap – at least in terms of companies of origin – to the many companies listed earlier in relation to planning processes. Here is our list of DAM platforms:

• ActiveMedia (formerly ClearStory Systems)

• MediaBin, Autonomy/Virage MediaBin

• ADAM, ADAM Software • BiblioDAM, Virtusales

• •

• • • • •

• • • •

Cumulus, Canto Chuckwalla, Chuckwalla Documentum, EMC Corporation MediaBank, Wavw Corporation MediaBeacon, MediaBeacon, Inc. (formerly BrightTech, Inc.)

(formerly Autonomy Interwoven) Nuxeo DAM, Nuxeo Open Text DAM (formerly Artesia), Open Text DMG Portfolio, Extensive QuarkDMS, Quark TeleScope, North Plains WebNative, Xinet

Of the 15 DAM platforms listed in the survey question, “Please check off all digital asset management platforms in use for your book publishing company’s editorial and production process, for production asset management, with a focus on storage, organization, workflow, and revision control,” only a few DAM platforms showed up with any approaching significant numbers, and those were the longestablished, general-purpose DAM systems. MediaBank, for example, was equally well known as “Other,” and Documentum and OpenText tied with “I don’t know.” – not a strong showing for DAM. This lack of concentration of a few DAM platforms in editorial and production systems reflects a reality of the marketplace, including, to some degree, a rash of acquisitions, consolidations, and platforms that have come and now may have already left the marketplace, while other DAM platforms are quite new. While the desktop war has largely seen QuarkXPress cede more ground to Adobe’s Creative Suite in a lopsided two-horse race, the broader market for editorial and production systems is wide open, with a long list of small- and medium-sized vendors carving out corners of the marketplace. A system such as Silverchair Content Manager, for example, would only be seen in STM publishing while both K4 and Woodwing Enterprise have been adopted by K-12 publishers with design-intensive, full-color books. Moreover, some products are part of a hosted solution; Aptara’s tools are a good example, as are the offerings from Content Data Solutions.

Editorial and Production Process Trends Despite these differences in tools and systems, the survey results do shed light on some trends we have seen in practice at publishing companies. These trends include:

• Even print books have digital workflow and digital underpinnings; • XML is gaining in usage, and being seen further upstream in the editorial process; • Book publishers are taking more control of their assets; • Outsourcing is the rule and not the exception in editorial and production. Print Book Publishing is a Digital World More than 90% of respondents indicated that the final format for books going to manufacturing is either print-ready PDF or a native production file (such as Adobe InDesign). In direct discussions with publishers we see a growing use of print-ready PDF. Many publishers have optimized the later stages of production so that they are producing the print-ready PDF as well as a PDF suitable for e-book use and conversion. These manufacturing files are often managed in a digital asset management system or digital asset distribution (DAD) system so that they can be readily shared with print and e-book channel partners, including print-on-demand vendors. XML is Gaining in the Editorial Process 48% of respondents say they use either an “XML-first” or “XML-early” workflow. We define an XML-first workflow as one where XML is used from the start with manuscript through production, and we define an XML-early workflow as one where a word processor is used by authors, and then the manuscript is converted to XML. This 48% is then supplemented by an additional 20% choosing “XML-after-the-fact,” which we define as “XML is used after the native print edition file has been completed (post-production conversion).” The remaining responses were “no XML” (28%) and “I don’t know” (4%). We see this penetration of XML as highly significant, especially in a survey where trade and educational publishers account for two-thirds of the respondents and STM, professional, and legal accounts for only 22%. These latter segments, after all, represent the early adopters for XML usage upstream in the workflow (and SGML before that), and trade and educational publishers have traditionally lagged. It suggests to us that market forces are driving publishers to work hard at creating the kind of multichannel publishing XML is best at driving.

Print-ready PDF’s day is here, with almost 54% of survey respondents in Figure 12 saying that their book publishing companies use it for final title format. Native production files make up most of the other third. Figure 12. End Format for Print Books

Print ready PDF

53.8%

Native production file (e.g., Adobe InDesign, Quark)

I don’t know

Other

34.6%

7.7%

3.8%

Source: Gilbane Group Publishing Survey, July 2010 Question 18-EDPR, "What is the f inal print book title f ile f ormat at your book publishing company? (Check only one)" Base = 26 ©2010 Outsell, Inc. Reproduction strictly prohibited.

Book Publishers Take Control of Assets There were times when book publishers famously could never put their hands on the final production files for a book in print. They might have still been at the printer, or with their prepress vendor, or on a CD-ROM, DVD, Zip Disk, or optical disc somewhere. When publishers first began to create digital products, many found that the first step was to locate such files for conversion. They sometimes found themselves unable to find files, or having to pay their prepress vendor or printer a fee for providing a copy of the file. Now publishers are much more attuned to maintaining their source files themselves, or paying for a hosting service under far less onerous terms they were subject to in the past. Our survey found all publishers using some kind of mechanism for maintaining digital files and assets.

• 44% use a DAM system; • 26% use a file management system; • 22% use a custom, in-house process; • 9% use a content management system. Book Publishing’s Seven Essential Publishing Processes ©2010 Outsell, Inc. 53

We can only guess what this final category might entail, though we do know several publishers who are using hosted DAD systems such as those from LibreDigital and North Plains, others who use a similar service provided by their printer, and still others who create digital copies on physical media that are stored off-site. North Plains deserves a special note, because of the ambition of its TeleScope Publishing Platform (TPP), which builds on the company’s TeleScope DAM offering. While one best keep in mind marketing hyperbole, North Plains is onto something important, when it claims: A Revolution in Digital Publishing: North Plains’ TeleScope Publishing Platform (TPP) is the world’s first and only completely modular solution to address every aspect of the digital publishing workflow. Leveraging the industry expertise gained in serving the world’s largest publishers, the TPP’s innovative design redefines how publishers create, distribute, and sell their content. The powerful platform streamlines the publisher’s production workflow to dramatically improve time-to-market and capitalize on emerging revenue opportunities. We see the North Plains TPP effort as an important vanguard of publishing processes integration, and discuss this platform in some depth in the Digital Book Publishing Industry Outlook chapter. Editorial and Production Outsourcing is the Rule We asked two related question on how outsourced services are utilized in editorial and production: 1. What kind of services does your book publishing company use from outside services for its print book titles? 2. What kind of services does your book publishing company use from outside services for its e-book titles?

Almost all book publishers use outside services, although not so much for project management or quality assurance, as shown in Figure 13. “Crash publishing” comes up nil. Figure 13. Usage of Outsource Services for Print Publishing Editorial: Copyediting

15.6%

Editorial: Proofreading

14.3%

Artwork and graphic design

14.3%

Composition

11.7%

Editorial: Developmental editing

10.4%

Title/document conversion

10.4%

OCR capture and digitization

7.8%

Packaging: Product development from editorial through production

6.5%

Project management

3.9%

We don’t use outside services Quality assurance Crash publishing I don’t know

2.6% 1.3% 0.0% 1.3%

Source: Gilbane Group Publishing Survey, July 2010 Question 24-EDPR, "What kind of services does your book publishing company use f rom outside services f or its print book titles?" Base = 77 ©2010 Outsell, Inc. Reproduction strictly prohibited.

Strikingly, only about 3% of book publishers reported that they don’t use outside services for print title development, and only 13% said they don’t use outside services for e-book development. And while e-book outside services are, unsurprisingly, dominated by conversion services (with 32% of publishers using them for this service), the types of services utilized for both print and e-book development span the full range of editorial and production services:

• • • • •

Packaging Project management Developmental editing Copyediting Proofreading

• • • • •

Composition Artwork and graphic design Quality assurance Title/document conversion OCR capture and digitization

For publishing insiders, this is not breaking news, though the extent to which outsourcing has taken hold might well be. It frames a reality that many publishers have known for years, which is that key editorial, design, and production tasks are being done outside the walls of the company. It also points to the need, expressed well in at least one of our case studies, that publishers need to be cultivating deeper business relationships with their key vendors, and that indeed the term “vendor” should begin to give way to an understanding of the vendor as a key product development partner. Book publishers use outside services for e-books less than for print, but the big exception is for “title/ document conversion,” not surprisingly, as shown in Figure 14. Figure 14. Usage of Outsource Services for E-Book Publishing Title/document conversion

27.9%

We don’t use outside services

14.0%

Project management

9.3%

Editorial: Copyediting

9.3%

Artwork and graphic design

9.3%

Composition

7.0%

CR capture and digitization

7.0%

Editorial: Developmental editing

4.7%

Editorial: Proofreading

4.7%

Quality assurance

4.7%

Packaging: Product development from editorial through production

2.3%

Crash publishing

0.0%

I don’t know

0.0%

Source: Gilbane Group Publishing Survey, July 2010 Question 25-EDPR, "What kind of services does your book publishing company use f rom outside services f or its ebook titles?" Base = 43 ©2010 Outsell, Inc. Reproduction strictly prohibited.

Editorial and Production Systems: Summing Up We can conclude from the survey, from our interviews with publishers, and from the case studies that editorial and production processes likely represent the most honed and developed area for book publishers. We have seen directly the investment in improved processes, and have also been involved with many of the large-scale editorial and production systems in operation today.

We were especially pleased to see the high penetration of XML in the editorial and production arena, as we – and many others – remain convinced that XML provides the best means for publishers to drive flexible, highly automated, multichannel product development. And while the market for technology platforms remains wide open, publishers are well served by the platforms out there, many of which are tuned for selected markets and applications. At a very high level, production processes are nearly uniform and standardized. Print-ready PDF is near ubiquitous as a final format for passing files to manufacturing in all book publishing segments. In trade publishing, the advent of the Kindle and other devices, the advancement of ePub as a standard, the compelling economics of POD, and the growing capabilities of DAD systems have created a clear mandate for production and manufacturing – produce print-ready PDF, a PDF suitable for e-book distribution and conversion, and ePub, and you have solved at least 80% (if not more) of the channel needs. Outsourcing also plays a key role here. As more than one publisher has pointed out, the better outsourcing vendors represent a great deal of the practical experience and detailed expertise required for efficient digital publishing. Publishers need to optimize not only their internal editorial and production processes but also their processes that intersect with outsourcing vendors. As Neil Schmidt, Vice President, Operations, at Wolters Kluwer Health, notes, publishers achieve the highest benefit when their outsource vendors become true partners in the process and understand the publisher’s product goals and direction. We see these trends coming together in a promising model where – because processes are known, formats are standardized, and service providers are highly capable – publishers will be positioned to develop more digital products economically and predictably.

Rights and Royalties Processes and Systems Rights and royalties is where contractual obligations meet back-end business systems, including accounting and sales systems. Royalty tracking and rights tracking have always been complex, subtle areas of a book publisher’s operations, largely the province of specialists who have typically learned on the job and cultivated their knowledge over a long period of time. Consider the following:

• Even prior to digital product development, royalty tracking has had complexities such as multi-

author titles, authors with more than one title, revenue and payments in multiple currencies, and international revenue and tax reporting.

• Rights management has also been complex, with issues such as sub-rights, permissions sales, licensing, and territorial restrictions.

Digital product development has added layers – or perhaps more accurately dimensions – of complexity to each of these areas. Even in the simplest case – a single-author work with a single royalty rate – digital products were likely not accounted for before a certain point in time. As publishers have looked to produce digital versions of titles, this has often meant tracking down the original contact, confirming the royalty terms, and then presenting the author or agent with the proposed royalty arrangement for the digital version. While this simplest case might be readily solved by an altered contract, a new column in a spreadsheet, or perhaps a new rule in a royalty tracking system, the reality of book publishing is that the simplest case is dwarfed in complexity, and often in number, by much more detailed royalty arrangements – multi-author works, sold in multiple currencies, and with a perhaps short but growing list of digital incarnations, each of which might have its own royalty rates. Consider these examples:

• The college publisher who has opportunities to sell both custom print versions and custom electronic versions of a multi-author textbook;

• That same publisher now has the opportunity to also license that same textbook to an

aggregator, who in turn wants to sell the entire title, individual or multiple chapters of that title, or even individual or multiple chapters of that title blended with other author’s works.

Indeed, educational, technical, and professional publishers have significant markets for “chunking” their content in both print-on-demand and electronic form, sometimes sold as stand-alone modules, sometimes blended with content from other authors and publishers. The opportunities are there, and publishers are straining to develop the most efficient processes to recognize the revenue, attribute the revenue correctly to each product, and in turn to pay the royalties appropriately. Rights tracking has grown increasingly complex with digital product development. In acquiring rights for photos and illustrations, book publishers historically acquired specific rights related to one use – for example, to use an illustration in a print edition of a new book. If the book were to go into a second edition, the sub-rights person or an editor would go back to the rights-holder and acquire the new necessary rights, and so on. But the growth in digital opportunities and channels has rendered the old process obsolete, even though the rights-holders – sensibly from their point of view – don’t suddenly want to blow up the old model. In fact, though, publishers need to have flexible and more rapid abilities to determine the rights they might need to clear or acquire for a given book (or portion of a book in some markets). They need to then quickly acquire the rights, and later on they need automated and highly accurate ways of reporting on the use of those assets back to the rights-holders. We are mindful that we are writing about this topic while contentious issues are being worked out – sometimes publicly – between authors and publishers. We are also aware that there are new models and opportunities for both publishers and authors that may fundamentally alter the contractual landscape in some publishing segments. The purpose of this report is not to look into the merits of various approaches and positions but instead to look at the underlying processes and related technologies that publishers are implementing to support digital product development. Book Publishing’s Seven Essential Publishing Processes ©2010 Outsell, Inc. 58

Publishers’ Rights and Digital Rights and Royalties As we noted in the section on planning processes and platforms, many of those platforms are in fact broad offerings that include royalty and rights modules. Some examples:

• Klopotek’s “Product Planning and Management (PPM)” module includes both rights and royalty management;

• Publishing Technology’s Advance platform includes a “Contract, Rights, and Royalties” module; • Virtusales Biblio3 has a “Contracts, Rights, Subrights, and Royalties” module. Our direct experience with publishers has shown a mix of these platforms and custom platforms in use for royalty and rights tracking. Just as often, publishers use home-grown tools (e.g., spreadsheets and ad hoc databases) and some larger publishers have built custom systems on top of general-purpose databases (e.g., Oracle and SQLServer) and run complex royalty and rights tracking and reporting applications that they have been maintaining and extending for several years. Our survey probed a number of issues with how publishers perceive the ease with which they can calculate, pay out (or collect on), and report on rights and royalties obligations. The results are mixed. While some publishers reported little problems with these issues, others reported significant issues and a lack of automation. It is clear from the survey and from our direct experience with publishers that they are hard pressed to automate many of these new models in current systems. The complexities are the definition of what we remember being termed as “friction” in the early days of e-commerce – where terms and conditions are hard to figure out and harder still to codify in automatic processes. Still, as discussed in the outlook section, these complexities and lack of automation have not diminished the appetite publishers seem to have for new product development and for experimenting with new channels and devices.

Manufacturing Processes and Systems Manufacturing is where the physical product is made manifest through pre-press work, through to actual print and binding. Indeed, to a certain extent “manufacturing process” is a misnomer for book publishers, as few book publishers do their own print manufacturing any more. In most publishers, manufacturing is really “manufacturing management” – vendor management, cost estimating and tracking, job tracking, and reporting on all of the above. Our observation on planning processes and systems holds here as well. Many of those systems are in fact broad offerings that include functionality critical to cost estimation and tracking, title scheduling, and P&L analysis and tracking. As one example, Virtusales Biblio3 platform has a “Production and Print Control” module can be used to schedule printing, estimate and track costs, and improve on margins for a wide variety of print jobs.

Our direct experience with publishers once again shows a mix of the use of these commercial platforms, the use of custom systems, as well as the use of ERP systems such as those from SAP. Larger publishers have tended to make the larger investments here as even incremental improvements in manufacturing line items such as paper usage can be significant. Smaller publishers are more likely to rely on desktop and ad hoc tools for cost estimating, scheduling, and tracking. Against this backdrop, what is less clear about manufacturing in the digital age is how traditional manufacturing processes and personnel are being brought to bear on digital product development. While publishers have sometimes been using the cost estimation and scheduling tools to track digital products, the development of digital products seems to largely be the province of editorial and production teams, together with their vendors and development partners. In some cases, there is a dedicated digital product team that may be part of editorial and production operations or set off from it. Typically, though, these functions are not aligned closely with publishers’ manufacturing operations, in our experience. Consider the following models we saw in the course of our research:

• A mid-sized trade publisher where the digital product team reports directly to the company CEO, and includes its own sales, marketing, and product development functions;

• A small STM publisher where the editorial and production staff has been producing both print and digital products concurrently for several years. New digital products that require special focus are guided by a vendor management specialist who reports directly to the Vice President for Editorial and Production;

• A mid-sized educational publisher where acquiring editors have recently been renamed as

product managers and have been given product development and management responsibility for both print and digital products. Along with this, the production department is now responsible for production and QA of both print and digital products, where a separate team had done those tasks previously.

Long-time followers of publishing know that publishers have tried many organizational approaches to developing digital products – a period of separate groups, separate divisions, even spinoffs have been followed by periods of re-integrating the digital product teams back into normal editorial and production operations, only to evolve back to separate groups again. We seem to be in a period where book publishers are trying to leverage multi-channel publishing technologies such as XML into an organizational structure where one team is made capable of developing all products. Yet to a certain extent, is manufacturing the outlier?

Merging Digital Publishing and Digital Printing The answer may well lie in the future of multi-channel product development all the way through to the delivery of print-ready PDF and e-book files (ePub and other formats). If publishers reach such an integrated process, they could well take it all the way through to distribution of these files out to print and digital partners, which North Plains’ TPP, LibreDigital, and other DAD products are well on the way to doing. This is the promise of integrating multi-channel publishing workflows with a distribution mechanism such as a DAD. Such a solution would be especially powerful if it were then tightly integrated with a comprehensive cost estimating, scheduling, and tracking system – especially for a publisher with a deep product catalog. Tod Shuttleworth, Senior Vice President and Group Publisher, Specialty & Global Publishing, Thomas Nelson, comments, “We’re finding new sales through print on demand (POD), which is now a huge proportion of our production mix, as well as e-book formats. Most authors are just delighted.” For Thomas Nelson, POD largely applies to its soft cover titles, but softcover is a big part of its publishing program each year. “The biggest change is that we’ve halved our inventories thanks to better inventory control and print on demand,” says Shuttleworth. “When we get our sales forecasts, we print a month’s demand forecast, as opposed to what we used to do before, which was three-to-six months [for offset].” Shuttleworth feels that Thomas Nelson is fortunate to have Ingram Content, of which the POD service Lightning Source is part, “in our back door,” which makes it easy for Ingram to deliver once or twice a day any shortfalls that Thomas Nelson inventory may have. “We never miss a beat if it is softcover,” Shuttleworth says. Our research finds other publishers that are already doing exactly this. As one major trade publisher explained, its production process yields the precise outputs it needs – print-ready PDF and ePub, together with the necessary bibliographic and business metadata to produce ONIX feeds and other partner feeds required. At the point where production is complete, the manufacturing team has exactly the end products it needs to go to print and to go to e-book partners. Given the business model – popular trade books – first-run printing is nearly always offset, but additional printings can be digital short-run. Interestingly, this publisher has one printing provider that handles all of their printing for all titles – offset for first-run and sizable additional print runs, digital short-run for select additional runs, and print-on demand for older titles that don’t sell significant volumes any more. This publisher has found the mix of printing methods that has worked for it, and seems to have optimized the process for its market needs. Impressively, this publisher had reached a point of very high automation for both print and e-books, together with a strong partner relationship with its printer that serves this publisher’s needs.

Each publisher’s specific needs will vary, but each publisher needs to consider how it can reach the optimum process and manufacturing “mix” that is right for the publisher. The advancements in digital printing are impressive and moving ahead at a smart pace still. The Book Industry Study Group produced an excellent small publication, Digital Book Printing for Dummies, which asks and answers many of the questions publishers should be considering. A publisher’s answers to these questions can help drive a manufacturing strategy that could make the optimum use of the different forms of digital printing:

• Do you produce low quantity first prints and reprints? • Do you often place titles out of print because of low sales? • Do you destroy unused inventory? • Is your product mix right for digital (printing) technology? • Have you considered costs? • Do you have the resources to create a new POD business model? • Do you have the systems flexibility to automate a POD workflow? • Do you have a title that needs frequent revisions? These are excellent questions that all publishers should be asking of themselves, while simultaneously educating themselves on digital printing options available to them. Some of the case studies here present intriguing new options for publishers, many of which are already in use. We’re seeing that many book publishers have added digital printing to the mix of book manufacturing options. Without question, average book print runs have continued to decrease. Without question, the use of digital printing by book publishers has exploded. POD Marches On: Enhanced technology and wider acceptance are fueling its momentum, by Teri Tan, and published in the May 25, 2009 issue of Publishers Weekly, offers a clarion call for digital printing: Short runs? Check. Print as needed? Affirmative. Near-offset quality? Absolutely. Personalization? Sure. Seriously, what’s not to like about POD (print on demand) and, by extension, digital printing? Ask any publisher that has gone POD, and especially self-published authors, and the answer is, go with it.

“On-demand printing is very much in demand in 2009,” notes David Taylor, president of Lightning Source, the biggest POD supplier around. “The business model, quality, and cost structure have matured considerably in recent years. With POD, publishers can better match supply to demand, thus eliminating the risks and costs associated with the book market.” All publishers, regardless of size or specialty, he adds, must take a long, hard look at their business fundamentals and cash flow. “A globally distributed print model, where publishers use the same file to print at multiple locations that are closest to the origins of the orders, has given the book industry a platform to publish smarter. POD is no longer an optional novelty; it is an integral and essential part of the future of publishing.” Best of all, the POD business model is essentially green. “Offset manufacturing requires a relatively large quantity to be printed in anticipation of sales,” adds Taylor. “Oft-times, the books go unsold and have to be destroyed, usually after being shipped and handled numerous times. In contrast, with POD, even one copy can be printed to fulfill a firm order or a short run made to replenish stock. This one-book-at-a-time manufacturing substantially lessens supply chain waste, reduces greenhouse emissions, cuts pulping and therefore landfill and conserves valuable natural resources.” And then there’s a well-known story from a keynote at the 2007 Tools of Change conference, given by Bob Young, Founder and CEO of Lulu.com, about print on demand. Young, during an inspection tour of a Lulu-com digital print partner, saw a book come off the line entitled Austria Investment & Business Guide, written in English, and he joked that he thought that someone had spelled “Australia” incorrectly. He told his audience of hundreds of book publishers that traditionally such a title would never be published, because of the cost of print relative to small market for such a book, but Young explained that their “opportunity as entrepreneurs… is to add value to the consumption of information,” driving home the point that audience size and run length are no longer an issue: there are niche markets to be successfully served using a print-on-demand model. At the very same conference, Ingram exhibited side-by-side with Microsoft Live Search Books, reflecting an outsource alliance agreement with Microsoft to provide high volume scanning and digital file management services for books being uploaded into the Live Search Books service. When publishers sign up to digitize content with Microsoft Live Search Books, they also have the opportunity to be added to MyiLibrary, which is Ingram’s digital book archive, which, through the digital printing entity of Ingram, Lightning Source, already had more than 350,000 titles listed at the time of the conference, and now holds over 600,000 titles. At another 2007 conference, Book Business (then called BookTech), Interquest presented results from its research on the on-demand book printing market in the Digital Book Printing Forum session, in which end-users spoke about the market. Even in what can rightly be described as “early days” for digital printing, the successes cited and reasons behind the choices made were strong. Book Publishing’s Seven Essential Publishing Processes ©2010 Outsell, Inc. 63

One of the speakers was Robert Saunders, Director of Sales for R.R. Donnelley Digital Services, who reported that his company had over 200 digital printing devices in R. R. Donnelley’s two digital book facilities in Allentown and Harrisonburg (PA). Saunders described the Allentown facility as a more traditional digital book site and identified the Harrisonburg site as the site of R.R. Donnelley’s Inventory Management Solution, which is intended to provide better inventory management through an inline digital print module. Launched in 2003, the Inventory Management Solution was at full capacity by 2005. A second line was added in 2006, with covers printed on HP Indigo machines. By the end of 2006, there were about 4,000 orders, totaling 1.7 million books. The line focuses on 5” x 8”, 6” x 9”, and 7” x 9” book formats, with page counts from 84 to 660 pages and a one- to two-week turnaround. Print runs ranged from 250 to 1,500, according to Saunders, with the split of new titles to reprint work about equal. Another speaker was Tom Lysenko, Vice President of Operations for the Penguin Group in the United States, who reported that Penguin started digital printing of paperback titles in 2003 with its partner R.R. Donnelley, with 500 active titles in 2006. Lysenko noted that the average run length was 538 copies in 2006 and that the average page count was 286. This digital printing operation had accounted for 141 million printed pages and driven the operational benefit of flexibility in inventory planning that allowed Penguin to keep titles in print while not committing to longer print runs. Penguin, Lysenko also argued, benefits from reduced investment in inventory and reduced inventory obsolescence, including positive cost and tax results. Penguin does not want to have more than six months of inventory. At the same conference session, Steve DeForge, President of Ames On-Demand, an operation that was strictly digital print, reported on his company’s operation as a custom publishing educational solution. Customers constructed their course materials themselves with existing content and materials that they provided, according to DeForge, who also reported that that 70% of the professors do it themselves, including pagination and creating indices. Ames On-Demand was a growing part of its company’s business but ceased operations in May of 2010. Lowering the Cost Per Unit, the Digital Way A lot of interest in POD started within the self-publishing arena, and today, this remains a healthy part of the digital printing business. But as book publishers further streamline and rationalize their own digital production processes – whether in-house or outsourced – the print-ready PDF final title format makes digital printing just another choice. Even today, however, digital printing for books is frequently dismissed out of hand, because book publishers used to offset prices for large book runs see that digital printing for comparable sized runs are not competitive. Fortunately, this bad cognitive habit is fast becoming rare, due to a more widespread recognition of the following digital printing advantages:

• Manufacturing Cost: Digital printing is less expensive than offset, per unit, on small runs; • Returns/Unsold: Digital printing of books reflects actual demand (POD) and/or smaller inventory (ultra short run), and hence far fewer (or no) returns or unsold copies;

• Spoilage/Shrinkage: Digital printing of books reflects actual sale (POD) and/or smaller inventory (ultra short run), and hence far fewer spoiled book in inventory;

• Carrying Cost: Digital printing of books reflects smaller or no inventory (just-in-time inventory),

and hence lower inventory value tax loads, square footage requirements and lower lease costs; drop-shipping from POD vendor saves on warehouse and fulfillment costs.

While it is true in many cases that book unit costs via POD are higher than offset, unit costs for a POD book can be lower, depending on how many units of the title are actually sold for a title. There is no question, for example, that the unit cost for POD is far less in a sale of one copy than the unit cost of one such unit produced via offset. Digital printing supports publishers’ pursuits of new and better inventory objectives, whether “zero inventory,” where a book order results in print-and-ship fulfillment; “low inventory,” where small numbers of ordered titles are maintained; “non-returnable” inventory, with POD sold as non-returnable units; or “direct fulfillment,” with POD titles fulfilled through outsourced services. Spoilage and shrinkage – banged up book units, whether in the warehouse, or returned from a book seller’s shelf – vary across titles, of course, but the longer a unit sits in the warehouse, in transit, or on the bookshelf, the larger the number of units lost; some studies show 10% or more of a typical book print run can be expected. Digital printing can reduce spoilage and shrinkage and therefore contribute to lowering the actual unit per sale cost. Costs typically associated with warehouse-related efforts aren’t usually directly tied to the title budget (P&L), and so these costs are often not part of unit costing. While this may reflect the book publishing industry’s accounting culture, it does nothing to change the facts: warehouse costs can range tens of cents to almost $2.00 per unit per year. Other cost factors most often left out of simpler unit cost comparisons between offset and POD include costs of capital, with offset printing requiring payment in advance of a unit’s sale, and one consultant to book publishers and book manufacturers has put the cost carrying to be greater than manufacturing costs for many titles selling fewer than 50 copies per year. There are costs associated with the unit cost advantages of offset, and these costs can be too dear, including lost sales from out-of-print or out-of-stock situations. Offset, by its very nature, offers less flexibility than POD and short-run digital printing, and with $1,000-plus plate charges and additional costs for proofs associated with the offset process, small runs and one-off titles are simply beyond consideration. At a 2010 Xerox Thought Leadership Workshop, Richard Hollick, Print on Demand Manager, Oxford University Press (OUP), described how and why OUP rigorously pursues POD benefits. He reported that a third or so of OUP’s 12,000 titles are available through POD and digital printing, not only to keep books in print, but also to publish titles with expected sales volumes under 100 per nine-month period, such as monographs with small audiences. Hollick also reported that an efficient POD program helps a publisher manage its warehoused and virtual stock. Since 2005, OUP has significantly reduced its inventory stocks.

Digital Publishing and Digital Printing: The Long and Short of It In the article, Short Run Books: Digital Printers Offer Runs of One to Many, by Melissa Tetreault, published in the March 2008 issue of Digital Publishing Solutions, the author starts with a concise argument for digital printing: Book publishers and printers strive for efficiency. Publishers want to clear inventory off the shelves quickly. Printers want a continuous stream of jobs. Productivity equals profit for both parties. Tetreault notes that creating books digitally is economically beneficial for future successes. “With shorter runs, inventory is minimal and money is in the bank as opposed to sitting on the shelf,” she writes. “Digital book publishing also provides creative license. Thanks to variable data printing (VDP), personalization is heavily impacting digital book publishing. Customized storybooks, custom publishing in higher education, and photobooks are just a few products attracting vendors to this space.” Statistics from InfoTrends, Inc., Tetreault points out in this article, show that runs of 250 to 499 are seeing a 40% increase in print frequency, as opposed to runs of 50,000 plus, which are seeing a 44% decrease in frequency. She quotes Guy Broadhurst, VP product marketing, Océ North America, “Book publishers can offer more titles while actually storing practically none!” The trend continues. Bowker’s recent analysis of book publisher activity notes that traditional US title output of new titles and editions dropped less than half a percent, from 289,729 in 2008 to a projected 288,355 in 2009, while at the same time reporting on huge growth for “non-traditional books.” What does Bowker mean by “non-traditional?” These “books are largely on-demand titles produced by reprint houses specializing in public domain works and by presses catering to self-publishers and micro-niche,” according to the company’s recent news announcement, in which Bowker projects that 764,448 titles were produced that fall outside traditional publishing and classification definitions. This represents a growth of 181% over the previous year. In the April 2009 issue of Printing Impressions, Technology Editor Mark Smith wrote an article of central relevance to book publishers and their manufacturers. In Digital and Offset Convergence – Going Long on Shorter Runs, Smith writes: As acceptance of the process and capacity grows, digital printing is extending the boundary of “short-run” work to produce more jobs that previously were done sheetfed… David Uslan, chief marketing -officer at Smith Litho in Rockville, MD, reports that his company has been seeing digital printing volumes growing rapidly, sheetfed offset work trending down, and web offset demand heading up in terms of -number of pages printed. “That’s how we’ve started to position our capabilities in the last few years,” he notes.

The author of this article notes that Smith Litho has added an HP Indigo 7000 digital color press to its existing HP Indigo 5000 digital press already in production, with “migration of offset work to digital printing…one factor in the company’s decision.” Another printer cited as moving to expand its digital printing capacity is Angstrom Graphics, whose CEO, Wayne Angstrom, is quoted as saying that print customers have been looking for ways to reduce their costs for some time now, including taking steps such as reducing product counts and running fewer pages. St. Joseph Print, a Toronto-based company, is cited by Smith as consolidating its offset and digital operations, with John Gagliano, the company’s president, describing customer crossover for web, sheetfed, and digital printing services. Gagliano is quoted in the article: “We are seeing more and more clients that need all three processes, but there are still a fair number that buy a la carte. We will be able to better service customers that will buy all three from one source.” St. Joseph Print, which currently has a mix of Xerox iGen3 color presses and Océ equipment, plans to upgrade its digital capabilities as part of $25 million dollar investment, according to Smith’s reporting. American Printer’s Denise Kapel, in a May 2010 article, Sprint to Win, cites InfoTrend’s surveys of commercial printers that also show progressive decline in long runs, with steady growth in runs “from one to 1,000 impressions.” Kapel’s central argument is that improvements among book printers in time and cost efficiencies, from wider adoption of automation in the form of web-to-print portals and production workflows, to better use of management information systems, provides book publishers with a path to short-run print production with minimal handling. Jim Hamilton, InfoTrends group director, on-demand printing, is quoted within this article as saying that part of growth is “directly attributable to web-to-print. You might have had digital print technology that was capable of doing those very short runs in 2004, but it wasn’t really cost effective if someone had to pick up the phone, take the order, and process the job manually.” Designed right, web-to-print can provide automated print ordering and integrate the orders into print production workflow, for what Hamilton calls “touchless” operations on short-run, quick-turn jobs. Kapel reports that InfoTrends has plotted out the general cost per impression for color devices, indicating that while offset meets or beats digital color print at runs over 10,000 impressions, it competes only with 2000-era or earlier digital devices on runs under 1,000. “Using a very simple running cost calculation, Océ’s Jetstream gets down under a penny per color impression at 20% coverage, but you’ve got to be running 40 million impressions per month to get there,” says Hamilton, in this article. “On the monochrome side, continuous feed devices have improved output quality, gone to a wider web that allows you to do 3-up-across 6 × 9-inch [impressions], and now offer halftone capability that looks pretty good,” says Hamilton, as reported by Kapel. In the 200+ ppm range of cutsheet devices, Hamilton notes Océ’s VarioPrint 6000 Ultra series, the Kodak Digimaster EX300, and Xerox’s digital duplex Nuvera 200/288 as key platforms. “Between those three, particularly for book-oriented work, there are some very interesting things going on in black-and-white [output],” reports Hamilton.

Figure 15 is from Lulu.com’s website, and shows the current cost break-out for individuals ordering print on demand books. Figure 15. Lulu.com’s Recent Charge Schedule for POD Books

Source: Lulu.com

Kapel also notes that inline bookletmaking is the most popular short-run finishing capability seen in InfoTrends’ survey results, including advanced runs using three-side trimmers. Hamilton notes that finishing multipage documents inline doesn’t slow the process. There are digital printers that offer different areas of experience and seek distinct customers. There are printers offering short-run printing, versioning-oriented printing, and one-off or books on demand. While plenty of printers may offer any combination, there are digital capabilities and equipment that may be better suited for one or another of these offerings. Other considerations for book publishers considering digital printing include the type of digital printer, where the main differentiation is between inkjet and electrophotographic digital printing. Electrophotographic remains best suited for runs at about 1,000, before the cross over to offset, for monochrome, becomes more competitive; electrophotographic digital printing is also better for half-tone reproduction and the highest quality output. With inkjet digital printing, because of several factors, including its higher print speed, and depending on equipment and job, some estimates for crossover to offset now range as high as 7,000 units.

Marketing and Promotion Processes and Systems Marketing and promotion is where, under the best of circumstances working along with early planning and editorial efforts, the key messages and customer targets are defined, publicity campaigns are mapped, and sales content created. As noted in the introduction to this report, e-commerce giants such as Amazon.com essentially forced publishers to morph into digital marketers. The very nature of sites like those from Amazon and Barnes & Noble demands that publishers be able to push electronic sales support content and metadata out automatically and efficiently. Moreover, as sales channels grew, as business models morphed, and as reading devices proliferated, publishers have needed to embrace more automation of their marketing functions. As a VP of marketing at a trade publisher remarked to us, “The name of the game used to be to get your book in the hands of key reviewers and media people. That is still important of course. But now I want our publicists to have toolkit for pushing widgets and other content into any viable or influential blog, community site, or other site related to the book and its audience.” An author at a reading of her new short story collection praised Goodreads.com over Facebook as a publicity channel for her book, but confirmed the importance of both. And she was delighted to report on Facebook a few days later that her book was being heavily promoted on a New Zealand website. It is indeed a brave new world. The section discussing distribution touches on the role of DADs in supporting the delivery of marketing content. Once again, though, the planning systems often play a role here. We’ve seen systems such as those from Firebrand and Publishing Technology act as the core repository for marketing metadata and sales support (title information sheets, author bios, reviews, etc.) Publishers are adopting best practices where key metadata is recorded in a single system so that it can be readily published as feeds to key selling partners.

Although Figure 16 represents statistically barely more than a straw poll, the top promotion and marketing efforts for e-books include social media-related undertakings, then e-book galley/ARC distribution and SEO, and then online bookstores, e-book author site (distinct from print, and social community participation. Figure 16. Promotion and Marketing Activities Social community building and marketing through your book publishing company’s own websites

18.9%

Blogs and/or Twitter and/or Facebook promotion of ebook titles

18.9%

Ebook galley and/or advance reader copy distribution

13.5%

Search engine optimization (SEO) or search engine marketing (SEM)

13.5%

Create or support print authors’ websites

10.8%

Create online bookstore for book publisher’s ebooks

8.1%

Create or support ebook authors’ websites

8.1%

Social community building and marketing through thirdparty websites and portals (e.g., Gather.com, Goodreads.com)

8.1%

Source: Gilbane Group Publishing Survey, July 2010 Question 25--PRM, "Which actions do the promotion and marketing process undertake or support?" Base = 37 ©2010 Outsell, Inc. Reproduction strictly prohibited.

It’s notable that the improved production processes we discussed in an earlier section also play a role here. Many publishers now routinely produce files that are suitable for Amazon’s Search Inside the Book, for Google Book, and other key discovery portals. Several publishers we interviewed have automatic or near-automatic processes for pushing out ONIX metadata, cover art, and a full book file to such partners. In some cases they are using their Title Information Management system, in other cases their DAD system, and in some cases a custom system based on a DAM or content management system. Many publishers are taking a close look at DADs – and many are coming on board – not just for distribution support but for marketing support. Several of the DAD systems answer the requirements of the Marketing VP cited above, who wants her publicists armed with tools to support blogs and other social media sites. They make it straightforward to push widgets out to reviewers and websites, and many of them can auto-generate landing pages and micro-sites for books and authors. The DADs are flexible enough to allow publishers to configure how much metadata and content gets pushed to different partners and channels. Publishers could opt to create the richest micro-site for their own purposes, to push full metadata and supporting content to one set of partners, and more limited metadata and supporting content to other partners, and so on. Book Publishing’s Seven Essential Publishing Processes ©2010 Outsell, Inc. 70

In the next section, on selling and licensing, one publishing executive expressed a good overall requirements statement for publishers everywhere, “For us, the goal either way is efficient creation and management of product records with the necessary usefulness.” Marketers could create a similar overarching requirement for their new systems, which is efficient creation, management, and distribution of marketing content and metadata so as to serve the varied needs of its marketing, sales, and publicity channels. One final point to make here is about catalogs. Publishers reported to us, while not universally, a general trend away from print catalogs. At minimum, publishers are decreasing the print runs for catalogs and producing fewer specialized catalogs for certain markets. In many cases, publishers have moved entirely to electronic catalogs or are in the process of moving. One development we have not seen yet is tight integration between TIM or DAD systems and electronic catalog systems. We have seen this requirement in RFPs from publishers but have not seen extensive examples of such integration in action.

Sales and Licensing Processes and Systems Sales and licensing is where the road to the customer begins, connections are made, and cash is exchanged – whether for the title itself or for other formats, and market rights and sub-rights. For sales and licensing professionals, digital publishing is morphing from a gleam in its proverbial mother’s eye to a key piece of the revenue mix. In some segments of publishing (notably STM, professional, and legal), digital publishing reached the revenue tipping point several years ago and longer. But now the Kindle has turned trade publishers into e-book production engines, and devices like the iPad promise to bring whole new capabilities and interactivity to markets such as education. Major publishers such as Pearson and Random House are reporting double- and even triple-digit growth in digital revenues. Much like rights and royalties, the scenarios for sales and licensing run the gamut from the very simple to the very complex. In the simplest scenario – an e-book version of a print trade title – the publisher merely needs to create an ISBN for the e-book, record the information in its sales system, and recognize the orders against the new ISBN. Interestingly, even the simplest scenario has its complexity, as some publishers have struggled with questions such as whether each format of an e-book should have its own ISBN and even whether each channel partner’s version of an e-book should have its own ISBN. It’s notable that different publishers are taking different approaches to this question, often to accommodate internal processes and systems that are difficult to change.

For publishers in markets such as STM, education, and professional, the scenarios grow far more complex. A few examples:

• A small STM publisher has created its own digital library, selling whole e-books and individual

chapters. It has both retail consumers of individual products and institutional licensees for the entire library. It would like to develop even more products (e.g., allowing a customer to create their own e-book out of different chapters of different books; allowing an institutional buyer to license a subset of the digital library based on subject matter). Its production capabilities are faster at adapting than are its business systems, but it is determined to create all of these products and more.

• A mid-sized educational publisher is creating individual e-books for sales through partners but

also is negotiating license deals with major aggregators. As it installs a new back-office system, it is creating ISBNs for the individual e-books while developing pricing schemes and product descriptions for the license options.

• A mid-sized trade publisher is aggressively producing an e-book program for sales through Kindle and other channels but also has a mature licensing program of its reference content. Through acquisitions, it has also brought other electronic products into its portfolio. As it combines the sales systems from the different companies, it doesn’t want any of its selling efforts to lag.

Another major question publishers are facing is what to do about identifying, cataloging, and selling products that are not ISBN-based. These include chapters of existing books, compilations of chapters, and other iterations of existing content. As publishers look to create more and more “chunks” of content, do they simply assign ISBNs to everything? And if not, how do they catalog these non-ISBN products in sales systems (and other systems) that are largely ISBN based? Selling Atoms of Content In one discussion with a large publisher, an executive mapped out the complexities he is faced with:

• For example, consider a chapter available for download, only online, and selling directly. Do you need an ISBN for that? Could it be the ISBN of the parent? This probably works as long as can accurately attribute the sales revenue and ultimately the royalties.

• What about the continuing atomization of content? Increasingly we will be selling atoms of

content. We’ll have to maintain product records with prices, more granular than what we have now in our systems. We could go without ISBNs for our internal purposes, but if you have trading partners, you will need something like ISBNs. Again, if you are only selling directly, maybe you don’t need ISBNs for each atom.

• For us, the goal either way is efficient creation and management of product records with the necessary usefulness.

• As atomization grows and we even look to sell individual components (e.g., an illustration or

photo), what is the relationship in our systems between the original saleable items (ISBNs) and component pieces of those items? Do we even need to track those relationships? We probably do.

• Where in the organization and in our systems do we need to understand this detailed information on these new atoms of content? In production only? Royalties? Sales tracking? Probably all of the above.

• The question of whether we need a unique ID (such as but not necessarily an ISBN) at lower levels might be more about trading partners, but also about the arcane nature of some of our multiple internal systems.

• Finally, we are very interested in subscription models. If we combine atoms of content in a

subscription product, we need for a subscription system (or a module of our sales systems) to figure out the allocations and pass them into the sales order processing system, and on to related systems such as rights and royalties.

There are approaches and best practices emerging out there. EDItEUR has a broad, international mission, which is the coordination of standards infrastructure for electronic commerce in the book and serials markets. It manages the ONIX and EDIFACT standards, and manages the interests of its members on international identifier committees including ISTC (International Standard Text Code), DOI (Digital Object Identifier), and RFID (Radio Frequency ID). It also provides management services for International ISBN Agency. The Book Industry Study Group (BISG) is also very active in this arena. BISG has formed a Sales Reporting Working Group within the Supply Chain EDI (SCEDI) committee to, among other things, review the EDItX Sales Report Format version 1.1. The EDItX formats, under the guidance of EDItEUR, are “intended for general book trade use, covering transactions between retailers, wholesalers and publishers where ordered items are supplied to, and for resale by, the trade customer responsible for sending the order.” BISG has also formed two working groups to explore the issues of Identification of E‐Books and the ISTC. As BISG has recently noted, “The ISTC has been called one of most important identifiers since ISBN. The ISO standard, published in 2009, identifies an underlying textual ‘work’ independently of a specific manifestation. It provides a much needed mechanism for identifying an original text that may be available in many seemingly different published versions with different ISBNs. By doing so, it has the potential to provide better, more targeted online search and discoverability.” Still, these best practices and emerging standards are in some cases nascent. In March of 2010, BISG published a paper on ISTC entitled, The International Standard Text Code: A Work in Progress. It’s an excellent paper that explains the ISTC standard while also discussing the practical challenges. One of its key conclusions:

But it will be publishers who must accept the challenge of taking forward the implementation of ISTC for new titles. They will do so first by registering their creative textual works to obtain an ISTC number; and then by loading ISTCs appropriately and accurately within the ISBN-based ONIX-for-Books data feeds they provide, via the bibliographic service companies, to the wider book trade community. In conversations with publishers, we heard consistently that external data feeds are a piece of the puzzle, but as the report and publishers note, the challenge is especially keen for internal systems that are largely ISBN based. And while there are revenue opportunities that could be supported by ISTC, publishers are, for the most part, creating their own internal identifiers for these new products now and looking at ISTC for the longer term. This should be watched closely, though, as efforts such as those from BISG are bringing excellent, practical perspective to these standardization efforts. Sales and Licensing Systems: Summing Up Once again we return to the point that the comprehensive systems we identified as planning systems have a critical role to play. Nearly all of those systems support sales in a variety of ways including order entry and order-to-cash processing. Some of them also support sales reporting, sales tracking, and even sales force management and commission tracking. The comprehensive targeted systems (Klopotek and others) and the general business systems (Oracle, SAP) have all been tuned to the detailed needs of the adopting publisher – their products, their SKUs/ ISBNs, their prices, their discount schedules. The critical issue for digital publishing is that revenue recognition for complex products gets dicey. Since these systems are almost always ISBN based, it can get very complicated to quickly slice and dice product, blend products, and create the supporting sales system infrastructure. The goal of the publisher scenario stated in the previous section stands as a good overall requirements statement for publishers everywhere, “For us, the goal either way is efficient creation and management of product records with the necessary usefulness.” It’s clear that sales and licensing systems need to account for the burgeoning business models and product offerings, while still making it relatively easy to add new products for selling, to record the sale, and to pass the sale information along to the other related systems.

Distribution and Fulfillment Processes and Systems Distribution and fulfillment is where the final part of the publishing process begins, getting titles into the hands of the readers themselves, or the supply chain services, like book distributors and wholesalers, that represent a long and firmly established aspect of book publishing.

“The once linear book industry supply chain is now a tangled web of relationships with multiple, occasionally competing business models in place,” says a tagline from a LibreDigital marketing piece, and we’re hard-pressed to disagree. The issue of supply chains and distribution mechanisms and channels for e-books is a hard one to nail down. On one hand, there are a good number of services – LibreDigital, Ingram Content’s CoreSource, Perseus Publishing Group’s Constellation, to name some – that offer comprehensive means for publishers to get e-book titles into the retail channels. Moreover, some of the major retail channels – Amazon.com, for example – will help publishers to get their e-books directly to them. On the other hand, significant difficulties present themselves to book publishers, including the following:

• Channels in competition, including book publishers’ direct selling of e-books; • Problems dealing with the different e-book formats demanded by the current marketplace; • Challenges in dealing with different business models, such as wholesale versus agency models, with retailers;

• Needing to consider new publishing concepts, such as title as “app” or via “widgets,” custom publishing, and POD;

• Marketing and promotion opportunities in flux, such as social media, SEO/SEM, author sites, traditional e-retailers, and Google Book Edition;

• Difficulty with ONIX and other distribution-related metadata that are supposed to make

transmission of e-books from publisher to retailers standards-based processes but fall short of their promise.

Given the confusing plethora of distribution possibilities and the many different kinds of distributionrelated details that require resolution, it is easy to see why book publishers can take comfort going with e-book analogs to print book distribution channels such as Ingram Content and Baker & Taylor. Unfortunately, such comfort can be offset by the discomforting matter of these familiar distribution models leaving too much margin on the table, a very familiar feeling from the print book experiences of publishers. In addition to the book publishers’ desires, there are also the increasing and varied expectations on the part of the e-book consumer. Even in these early days, customer expectations add pressures to sales and distribution options, including such matters as being able to access e-books or other forms of digital publications among any number of reading devices, computers, smartphones, and consumer electronics a content user may possess. Sharing and lending content can be another appropriate use, as is the explosion in multiple channel choices for content customers. If custom publishing proves popular, publishers will need to manage content chunk identifiers. This is far removed from the traditional book distribution environment. There will likely be some need to manage many file formats and the nuances within each file format. Add differing naming convention requirements by publishers and by channel partners, and the likelihood of different sizes, types, and segments of book publishers following different strategies and different market focus, and it is not hard to see why figuring out supply chains and distribution solutions within e-book publishing remains a barrier. Book Publishing’s Seven Essential Publishing Processes ©2010 Outsell, Inc. 75

There is also the issue of digital asset distribution (DAD) platforms, that haven’t gotten too far into e-book distribution service, but which may threaten the more “start-to-finish” offerings of some of today’s leading e-book distribution vendors. The rise of DAD for e-book and digital publication distribution is a conditional forecast, since not only are DADs still pretty new in the book publishing marketplace, but other distribution-related activities, such as ONIX metadata packaging, may continue to prove to be beyond the abilities or interest of book publishers, and remain one of several such services that can strengthen the attraction of full-service distribution vendors, and specialty service providers such as Firebrand Technologies. North Plains, with its solid roots in DAM, has extended its asset management platform into a publishing platform that includes a digital asset distribution component, called Distribute. Here’s how North Plains describes it: Your finished books are sent from TPP Publish module to TPP Archive for secure storage. Once there, TPP Distribute creates multiple, simultaneous distribution events to all your commercial partner sites, aggregators, and fulfillment service providers. Your book is then made instantly available for sale on TPP Sell. The TPP Sell bookstore allows you to sell books, merchandise, e-books, online subscriptions, and subscription libraries. TPP Distribute passes the ONIX data and all format fulfillment information to TPP Sell and your books are instantly available on your booksite. Other modules include Sell, along with Promote, which, given the DAM capabilities of the platform, can be populated with any mix of assets used in promoting and selling. We don’t mean to suggest that there are no other strong attempts in the marketplace to address these barriers, even as we think that there is much left to figure out, industry-wide. Ingram Content offers some very good services that address some of the barriers, as do LibreDigital, Impelsys’ iPublish, Value Chain International, and SmashWords, to name a very incomplete list of widely varying solution offerings. Ingram Content’s CoreSource Print book distribution giant Ingram Content has a well-developed e-book distribution offering in its CoreSource line, made up of three distinct but related services, as follow:

• CoreSourceContent Hub, the digital content repository in which content, metadata, and ancillary/ marketing materials are aggregated and made available to Ingram’s market-facing distribution solutions;

• CoreSourceAsset Management Suite (AMS), an extension of the publisher’s digital infrastructure

using a web-based digital asset management system enabling publishers to manage, re-purpose, syndicate, store, and archive their digital content, metadata, and promotional materials in any format;

• CoreSourceSearch and Discover, a turn-key solution to power Search Inside and Look Inside

capabilities through third-party websites, in which publishers make content available to authorized trading partners and their customers according to usage rules set by the publisher and enforced by Ingram.

The Ingram service is an attractive “turn-key solution” for enabling Search Inside and Look Inside functionality down the distribution channel (such as Amazon). Ingram hosts the publisher’s content on Ingram’s own servers, together with the associated metadata, page images, full-text in XML, and, depending on the level of service, search algorithms. Ingram undertakes digital transformation of the publisher’s title submitted in Print PDF, into the required ePDF, chunked PDF, page ePDF, and JPEG with ASCII text needed to distribute using MARC, ONIX, and/or custom electronic distribution files. The connection with Ingram Content’s digital printing/POD service arm, Lightning Source can be an added bonus for book publishers. Figure 17, a presentation slide from the Ingram Content website shows the CoreSource process in the abstract. This is an impressive service, but when a publisher operates through CoreSource, the publisher has already accepted “market-facing distribution” as Ingram’s own. Figure 17. CoreSource as Distribution Channel

Source: Ingram Content

Ingram Content’s fulfillment platform, shown in Figure 18, can use API, web browser, or widget mechanisms to deliver a publisher’s titles through to many destinations, including back to the publisher’s own storefront, e-retailers, aggregators or portals, social network sites, and across many search platforms. Figure 18. CoreSource Fulfillment Platform

Source: Ingram Content

LibreDigital From the “About” page of the LibreDigital website: When LibreDigital formed in 1999 to provide publishers with digital warehousing and e-distribution, the web was a place for e-mail, retail, and early content experiments. The term “blog” had just been coined. Social networking was the province of message boards and article comments. Google was a small company in Palo Alto. Mark Zuckerberg, the eventual founder of Facebook, was 15 years old. Although LibreDigital also focuses on periodical publishing (The New York Times is an investor), the company has gained plenty of attention from the book world. Here are two quotes that establish this bona fide: We chose LibreDigital as the ‘best of breed’ strategic partner for all digital services. –Baker & Taylor LibreDigital powers the largest real time content delivery platform on bn.com. –Barnes & Noble

LibreDigital has a lot in common with Ingram Content, including offering “a suite of software and services leading publishers use to transform, control, optimize and deliver digital content.” In fact, LibreDigital’s offerings come in three stages: LibrePublish, LibreMarket, and LibreAccess. The LibrePublish solution takes on a lot of work a book publisher would otherwise have to do itself, including much of digital transforming of files and the building of digital sales channels for the publisher’s content and associated metadata involved. Also similar to Ingram Content’s CoreSource, LibreDigital controls distribution rights and permissions of the publisher’s content (“at a granular level”). LibreMarket refers to LibreDigital’s tools for helping book publishers market their titles online and, hopefully, drive sales, through much the same mechanisms as CoreSource, such as content preview and sampling, social networks, and e-commerce support. LibreMarket Browse lets consumers view book content online in a familiar browser-based reading application, with search, zoom, and other interactivity features. With LibreMarket Promote, readers can market titles on a publisher’s behalf by way of online social networks, blogs, or their own websites through snippets of code that they can easily embed on a web page. LibreMarket Connect allows publishers to offer downloadable samples – such as “e-galleys” – of their digital content to consumers through publisher-branded web pages. Publishers can restrict online distribution of these DRM-protected samples by time and/or quantity, and LibreDigital argues that the optional consumer registration can provide valuable data about who is reading what content and enables future marketing opportunities. The third leg of the LibreDigital offering is LibreAccess, which focuses on fulfillment of digital content to consumers. With LibreAccess, publishers can establish a closer relationship with consumers by owning the online sales and fulfillment experience, while offloading the challenges of storing content, managing fulfillment, or tracking content distribution. LibreAccess further simplifies the process by allowing publishers to:

• Prevent piracy by optionally DRM-wrapping certain content formats for Adobe Digital Editions or Microsoft PlayReady;

• Integrate the purchase experience between e-commerce systems and LibreDigital’s content

repository and fulfillment technology, using the LibreDigital Application Programming Interface (API);

• Establish an infrastructure that enables new business models in the future by selling flexible access rights to underlying content instead of limiting content sales to specific formats.

Firebrand Technologies Firebrand Technologies offers a lot of platforms and services to book publishers turning to e-book publishing, including one of the earliest and well-designed title management platforms. In addition, Firebrand offers Eloquence, a service that supports book publishers electronically disseminating and controlling the title information and jacket images being used in the sale of their products, including transmission of rich formatted bibliographic metadata such as ONIX to distributors and online retailers such as Amazon, Barnes & Noble, Borders, Baker & Taylor, Ingram, Bowker, Muze, and 200 other trading partners. Firebrand also offers e-commerce services and NetGalley, an electronic galley service. Book Publishing’s Seven Essential Publishing Processes ©2010 Outsell, Inc. 79

Although Firebrand’s Eloquence services are aimed at helping publishers get the title information out to their supply chains, the newest offering from the company, Content Services, to be officially launched at Firebrand’s user conference in September 2010, is an alternative for bringing many of the most egregious hassles of today’s e-book market to heel. Content Services provides management, storage, conversion, and distribution of final book content. Fran Toolan, Firebrand’s Chief Igniter, commented in the May 2010 press release about the company’s “…commitment to integrating both content and metadata throughout the publishing workflow and out into the digital supply chain. Firebrand is uniquely positioned to help publishers develop digital workflows… as we build this new suite of services.” Firebrand’s Content Services include many e-book formats that may be handed off to a partner company, e-book Architects, for file format conversions. With Firebrand Technologies’ Content Services, publishers manage title records, files, and distribution from one source. Content Services allows publishers to create an e-book title using a familiar (at least to Firebrand customers), web-based Title Management wizard, and then “…upload content just once, pick from an array of conversion options, manage the conversion process, and then distribute it to where it needs to go. We support file and metadata management and distribution to all of the programs in which our clients are currently participating or want to participate in,” according to company marketing material. The system is flexible enough to work with other digital asset management (DAM) and distribution (DAD) systems; and Firebrand’s goals include working with their publishing customers to provide thorough integration of Firebrand tools with other companies’ business and technology solutions. Firebrand Technologies is well-known for its ONIX wrestling skills, mainly though the Eloquence service, which works with either Firebrand’s own Title Information Management (TIM) Solution, as a web-based standalone service, or imported from another TIM. Firebrand Technologies’ ONIX platform is shown in Figure 19. Figure 19. Firebrand Technologies ONIX Platform

Source: Firebrand Technologies

Firebrand’s Content Services build on the company’s SaaS model and offer the following solutions:

• Changes in Title Management will include integrated digital asset and workflow management

tools, secure digital file storage and warehousing, and detailed reporting and tracking, providing existing customers with a familiar interface that is the key to controlling title information, metadata, and content;

• Distribution to other storage vendors, online search and discovery programs, e-book retailers

and aggregators, print-on-demand vendors, and publisher websites for direct e-book fulfillment; this distribution of full book content is closely tied to the associated metadata flowing through Firebrand Technologies’ Eloquence metadata services;

• Quality File Conversion through a partnership with e-book Architects; • Marketing Services through NetGalley for digital galley and press kit distribution; • E-commerce Storefront and Direct E-book Fulfillment, using a pre-developed architecture

that allows publishers to serve site visitors with up-to-date title information and the ability to purchase titles in all formats.

Different Distribution and E-Commerce Models The three companies above – Ingram Digital, LibreDigital, and Firebrand Technologies – fit into the print book distribution ecology. What makes such solutions hard to call as fait accompli, however, are the many new alternatives for publishers and content creators connecting with their audiences and the very new business models that stem from the nature of digital formats and networked distribution mechanisms of the content. There are other strong contenders, as mentioned earlier, such as Impelsys’ iPublishCentral, a SaaS model of e-book distribution, self-described as a “self-service online content delivery and marketing solution.” Publishing Technology has pub2web, a hosting platform that supports, according to a company presentation, “all the information you publish. It is built from the ground up to showcase and connect all your content, regardless of format. It provides you with online publishing essentials such as content conversion, discovery, authentication, and customer support. It delivers sophisticated functionality in e-commerce, search, and browse. And it’s managed by you with strategic support from our team of digital professionals.” Impelsys iPublishCentral Impelsys CEO Sameer Shariff, at the recent Tools of Change conference, gave a presentation that summed up the business model challenges and opportunities for e-book publishers. Shariff started by setting the stage with today’s e-book retail scene:

• No direct contact between publisher and consumer; • Apps supporting multiple titles, more like a bookshelf – e.g., iBooks, Blio. Shariff believes that today’s dedicated retail models for e-books will give way to what he calls “convergent models,” with marketplaces similar to app stores, where apps, not just e-books, are sold. He also projects the following developments:

• Business models based on transactions and revenue sharing, through ad-supported content delivery;

• Business models based on transactions and revenue sharing, using rental and subscription models;

• Multiple price points for the same book, based on enhancements; • Direct relationship between publisher and reader that enables publishers to build relationships with readers;

• More data about customers will be available, including reading and buying habits, interests, what’s popular, what they seek;

• Pricing will see a shift. Value Chain International Value Chain International (VCI), which was an early player in e-book distribution, looks to provide building blocks for book publishers distributing and marketing their digital titles, with the stated aim of helping publishers “protect, diversify, market, promote, and increase your revenue streams.” Although the services and platforms of VCI look and sound a lot like Ingram Content and LibreDigital’s offerings, the target is broader than the traditional book publishing distribution systems. Whether a broader but more amorphous target for distribution channels is strength or a weakness remains to be determined, as is the potential of either or both Ingram and LibreDigital to move toward developing new channel opportunities themselves. On the other hand, VCI is focused on its own digital publishing platform, DX READER (not to be confused with Amazon’s Kindle DX). VCI’s offerings include DX Inspection and DX Review, both oriented toward resolving the inspection and publicity review copy processes for DX e-books. The company also produces a line of widgets that include “View Inside” and “Hear Inside,” which exploits DX Reader technology to cover the distribution of XML, ePub, PDF, illustrated copy, and audio widgets. “ViewPlus,” which VCI describes as a “super widget,” will, the company confidently asserts, “radically change how marketing and bibliographic information is both distributed and accessed through a single point.”

The world of widgets certainly holds a lot of room for improvement and expansion, but of perhaps more practical value is VCI’s digital asset distribution offering, a digital repository that automates and manages distribution of formatted and DRM secure digital content to digital aggregators, POD, and other third-party suppliers. The DAD can hold both digital content and associated digital marketing collateral such as podcasts, videos, and links to third-party digital materials. Other aspects of the VCI DAD include these distribution features:

• eCompile, an e-book compiler service that allows users to create customized e-books in the Adobe e-book Reader format;

• eSubscribe, to provide flexible, cost-effective, online access to an extensive catalogue of

intellectual content in the versatile DX Reader electronic format, through which users can subscribe to content of their choice for an elected time-frame, or add value to a subscription with the DX Reader Research Book, in which the user is enabled to add chapters or pages from subscribed books, create notes, and annotations;

• ePrint, a digital-to-print service that enables users to purchase print access to content, whether an entire e-book, selective chapters, or even single pages;

• eCopy, which prevents copyright infringements and ensures legitimate usage of authentic content, including copying and pasting text;

• My Wallet, which is a user’s personal online account that can be used to finance “micropurchases” and other convenient payment options.

Whether or not VCI’s DX Reader-oriented services will win in the marketplace, these breakout services stand as early steps toward alternative business models. It is interesting to note that many of the platform’s services have a digital rights management (DRM) orientation. Self-Publishing with Author Solutions And then there is self-publishing, which is a term that covers a lot of ground. Companies like Author Solutions, Inc., which acquired quite a few other “self-publishing” services to become the dominant player in this field, or, as the company puts it: We’ve become the leader in self-publishing, the fastest-growing segment in number of titles published over the past five years. Our publishing services platform can help traditional publishers of any size discover new literary talent efficiently. That means more authors, publishers, and organizations can generate revenue by publishing books than ever before.

The sheer numbers are impressive – recently totaling more than 85,000 authors that have self-published nearly 120,000 titles. Author Solutions Inc. (ASI) likes to emphasize that it is not strictly a self-publish enabler, but believes it also performs important work for book publishing generally. One example of this thinking is its recently launched AuthorHive, an integrated author marketing services and promotion company created to provide all authors – whether self-published or traditionally published – with resources that bring together all the essentials of successful book marketing. “Professional marketing consultants work with authors to design integrated book promotional campaigns to fit each author’s individual budget and goals. Authors choose from a rich array of publicity, multimedia, online, and event products and services,” the Author Solutions website says. The company claims to be “assisting traditional publishers with the adoption of self-publishing imprints,” that ASI views as providing traditional publishers a “farm team” from which they can discover new literary talent, along with services including sales, marketing, and fulfillment services; trade publishers Thomas Nelson and Harlequin are numbered among such traditional publishers. Of course, keep in mind that Author Solutions uses digital platforms to create and market print books, and like other self-publishing enablers, these companies are a boon to digital printer vendors. Smashwords, on the other hand, is an e-book publishing and distribution platform for e-book authors, publishers, and readers that offers “multi-format, DRM-free e-books, ready for immediate sampling and purchase, and readable on any e-reading device.” It’s free to publish and distribute with Smashwords, with the business model that of revenue sharing, with the lion’s share going to the author (typically, 85% of sales). According to this company, “over 3,500 serious writers and 100 independent publishers publish and distribute with Smashwords.” Many Smashwords authors have been previously published in print through mainstream publishers, or have had their works published in well-respected literary journals, the Smashwords website claims, perhaps a bit defensively. Starting March, 2009, Smashwords introduced new publishing options for publishers who want to publish and centrally manage two or more authors, and it is clear that Smashwords is trying to become an e-book aggregator, although its inclusiveness stops when DRM begins. And print, of course, is not ignored, with Smashword authors interested in creating print versions of their titles may work with Smashwords’ partner, WorldClay, for digital printing.

Publishing Processes: Steps toward Better Efficiencies The publishing processes common to book publishing share many traits, but perhaps the most frustrating shared trait is how book publishers can approach these same processes in such different manners. Fortunately, some of these processes – such as planning, are structurally no different for print and e-books, which is certainly not to say that it becomes an easy thing for a book publisher to judge content acquisition and markets for e-books. The efforts may be similar, but the marketplace and technical details of production, marketing, and sales and distribution channel navigation are very much in flux.

There are some publishing processes that map between print and e-book better than others. Manufacturing is the best example of a print book publishing process that has but a faint shadow in the e-book publishing world, although the advent of high-quality, high-production, and affordable digital printing is a solid and crucial connection between the worlds of print and digital publishing. In the case of digital printing, the distinctions between print manufacturing process and digital publishing process can virtually disappear. One of this studyâ&#x20AC;&#x2122;s main concerns is to highlight opportunities for book publishers to realize process efficiencies from digital publishing. A key consideration regarding process efficiencies is whether or how well publishing processes may integrate one with another, but in these early days of digital book publishing, effective integration is still largely elusive. We explore the issue of integration and interoperability of publishing processes in more detail in the outlook chapter.

Book Publishingâ&#x20AC;&#x2122;s Seven Essential Publishing Processes ÂŠ2010 Outsell, Inc. 85

What is a Digital Book? Here’s a quote from our 2009 report, Digital Platforms andTechnologies for Publishers: Implementations beyond “e-book.” Printed books are wonderful! They are readable, portable, colorful, affordable, and lovable. We have enjoyed books since the earliest moments of our childhood. Nonetheless, printed books have certain restrictions. As our collection grows, they are bulky and heavy. Linking to other resources cited in books is a clumsy process requiring a computer. Nonfiction and educational books are often outdated when they are published and they do not support rich media. And printed books are expensive to manufacture, warehouse, and ship. Digital books offer many advantages. Even more importantly, from a publisher’s perspective they offer very real and fast-growing markets. But digital books also offer the challenge of definition. When it comes to e-books that mimic the form and experience of print books, there’s not much confusion. The Kindle version of Kitty Kelley’s Oprah: A Biography basically looks like and reads like the print edition. But even in this simplest example, the differences are quite significant. What is the difference between an e-book and a print book? In the trade publishing model, following Kindle and its kind, the difference seems very negligible, at first glance. Figure 20. E-Book or Print Book?

Source: Amazon.com

Finding an e-book title through Amazon or any web search is more or less identical in process to looking for a print title; after all, the information about and samples provided of the book to help the customer make his or her selection will be mostly the same. Even the ordering of the book, regardless of version, is much the same. The convenience of nearly instantaneous download of the digital version of the book may be the first significant divergence. This alone represents a major change: no waiting for a package to arrive, no (or fractional) shipping costs to the customer or retailer, at least as far as book-filled pallet trucking the source to the store is concerned. This is not to say that there are no distribution costs involved with digital titles, as any publisher covering the costs of servers, digital file storage, and bandwidth well knows. There are also costs associated with struggling with ONIX metadata or using the services of LibreDigital or other electronic content distributors will tell you. The point is that there is a significant gap between the costs of print book distribution and fulfillment and e-book distribution and fulfillment, and the costs incurred today in e-book distribution and fulfillment are likely to drop as systems of greater automation, standardization, and capabilities become better established. Not surprisingly, there is no standard definition of an “e-book.” While some technology standards have been developed by the International Digital Publishing Forum (IPDF – previously the Open eBook Forum), these do not help to define what exactly an e-book is, perhaps in part because such standards have not yet been implemented across the industry. Outsell, Inc. defines e-books as downloadable units of digital book content that can be read on a variety of devices (e.g., laptops, e-book readers, and smartphones). The key to the concept of e-books is to think of the content as a discrete unit, and so a website based on content from a reference book would not count as an e-book. This definition coincides with generally agreed to perspectives of publishers. We agree with this most basic e-book definition: that of a discrete unit of content, which in the vast majority of cases is based directly on a print title. Market-sizing of e-books generally reflects the global market for revenues generated from sales of this type of digital content, rather than units sold. More importantly, these market estimates also typically exclude sales of individual book chapters and other forms of digital content that go beyond the more constrained e-book definition above. On the other hand, definitions of “digital books” are many and varied. For the purpose of this study, we define “digital books” as any digital content product that can be derived from book publishers’ product planning, editorial, and production efforts. While e-books in many publishing markets are a direct digital corollary to their print version, “digital books” stem from or are adding to publishers’ traditional print book efforts, or, more often recently, are originating as digital content products, together with or in lieu of print. The simplest conceptualization of “digital book” is the e-book, which is a digital analogue to a print book, delivered through dedicated e-book readers. Even here, though, the definition becomes murky when you think of the different formats, capabilities, and limitations of accessing e-books with computers and netbooks, through web pages or the wide variety of mobile devices such as smartphones, PDAs, and interactive tablets.

Answering the question of what defines a digital book is far more than having fun with semantics. We believe that book publishers have a far greater range of opportunity to conceive of and execute digital content products beyond the book analogue (e-book), even as this alone represents in many book publishing segments a very large opportunity. Nonetheless, any useful definition of the digital book must have room for print products that result from digital file formats and delivery, and, especially, print on demand and custom publishing. It’s worth noting that digital books often in turn produce more print, though this may seem contrary at first. Digital books can enable distributed printing and POD, and many publishers already have standard workflows that produce print, POD, and e-book versions of titles. Moreover, digital distribution platforms such as those from LibreDigital and North Plains are often used for storing print-ready PDF versions of titles for both offset printing and POD side-by-side with e-book versions of the titles. Finally, and most significantly, POD and distributed printing are core to the bottom line of publishing companies – and increasingly so as improvements in distributed printing and POD give publishers much greater control over inventory. These trends are discussed more fully in the section, When is a Digital Book a Print Book? We also see that the content technologies and services, both already present and emerging in the marketplace, are enabling non-publishers to participate in the content value chain in many different ways. Our definition of digital book therefore includes, under various circumstances, social media and e-commerce functions supporting and even creating – in the case of social media – digital content products. Finally, we see the content, asset, information, and transaction management systems within publishing enterprises as enabling cost-effective processes that allow digital content products to be profitably made, assembled, marketed, sold, and distributed. So, an e-book – a specific form of what we call digital books and digital content more generically – is not a physical entity. Bits and bytes, coupled with pervasive broadband, including public WiFi, offer easy-to-understand cost reduction for publishers, and some distinct advantages for the consumer of such titles. But what about the reading experience?

Digital Reading Experience One of the many reasons why e-books did not move forward a decade ago was that the reading experience was a problem. Yes, there were dedicated e-reading devices being offered at the time, and some argue that a number of these could provide a good reading experience. The problem was that no platform for portable reading managed to establish itself in sufficient numbers to offer an attractive enough market for enough publishers. This proved true despite the fact that PDF-based and HTMLbased titles were available and each already enjoyed some use on desktops and notebooks. As we’ve argued elsewhere in this study, the major impetus for e-books’ success in the last year or two may very well prove to be Amazon’s willingness to subsidize the market by offering low-cost e-books on its own Kindle device.

While there are many today who will complain about readability of e-Ink screen-based devices or about design and user interface preferences not followed by this or that e-reader, there is a clear and strong majority of enthusiastic Kindle and other e-reader users. The success of e-books and reading on smartphones, and most especially on Apple’s iPhone and iPod Touch devices, along with the newly transcendent iPad, have added millions to the electronic reading markets and have put to rest the old question of whether enough people could ever be interested in reading text on screens. Indeed, the iPad, along with the fast-developing netbook, tablet, and smart device landscape, has moved the screen reading debate on to richer fields – rich media content. Even before the iPad explosion – over one million sold within 30 days of the product’s release – strong growth was being projected for the iPhone and other what Outsell calls “untethered devices,” as shown in Figure 21. Figure 21. Untethered Device Adoption Rates

Total Units Sold (Millions)

1,000.000

100.000

10.000

1.000

0.100

0.010 Year 1

Year 2

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Years Since Introduced iPod

iPhone

Kindle

Sony Reader

Hypertext and Hypermedia (aka “Rich Media”) Both “hypertext” and “hypermedia” are terms that have faded from digerati fashion, but only as a reflection of style, not substance. Hypertext strongly emerged in the 1980s, as the personal computing revolution was in full swing, and early examples – including Apple’s Hypercard – gained interest not just from technical documentation producers or writers of help systems, but also from literary writers, among which most well known may be Michael Joyce with his novel An Afternoon. Like Julio Cortazar’s break-through meta-fiction novel, Hopscotch, which only ever existed as a print book, An Afternoon gave readers a number of alternative paths through numerous short chapters, using linking technology that was the basis of Hypercard. As multimedia became the next big goal for PCs, the interest in linking content files of all sorts grew into the concept of hypermedia. During much of the second half of the 1980s and well through the 1990s, CD-ROM was the main medium for complex and rich digital content. What is a Digital Book? ©2010 Outsell, Inc. 89

An example of this type of content is Voyager Company’s Expanded Book: Beethoven’s Ninth Symphony CD-ROM, from 1991. The screenshot in Figure 22 shows that the user can read about a score, explore terminology, and listen to the score by clicking various hyperlinks. Figure 22. The Voyager Company’s 1991 “Expanded” Book

Source: The Voyager Company, with music and Beethoven expertise f rom Robert Winter, and HyperCard programming by Steve Riggins, c. 1991

With the advent of the internet’s expanding use, based largely on a linking architecture, “hyperlinks” became widely known, even to the point of now being largely unnoticed in their ubiquity. As the internet evolved into the world wide web, and browsers supported wider ranges of multimedia, especially, much of this type of rich, digital content migrated to the web. Today, the typical term of art is “rich media,” but the term used by Bob Stein’s The Voyager Company back in the early 1990s for the hypermedia-rich CD-ROM based texts was “expanded book.” The Voyager Company published a series of expanded books, on topics ranging from music appreciation to Shakespeare’s plays (Macbeth) and fiction (Douglas Adams’ The Complete Hitchhiker’s Guide to the Galaxy). While the nascent reading platform at the time was early Apple Macintosh PowerBooks, not standalone e-reader devices, publishers today would do well to look at these titles for inspiration when considering whether and how to undertake rich media book titles that now most commonly go with the term “enhanced book.”

Interactivity, Up to the Second So, while e-books now available for Kindles and other dedicated e-book devices may resemble in their first generations the print titles they are usually drawn from, the concept of digital book already has expanded into forms that far exceed print-analog e-books. Baker & Taylor made a big splash at the January 2010 Consumer Electronics Show (CES), with its announcement and demonstration of “Blio,” an e-book platform neither tied to a specific e-book reader, nor limited to text, simple graphics, and incidental music. Blio offers publishers the service of producing Blio editions of the publishers’ titles, and these additions may carry video, audio, and other rich media interactivity. The market uptake is still an unknown at this time, but the Blio platform’s provision of rich media inclusion within book editions is compelling to many, even as the low-cost associated with publishing books in Blio adds to the interest. The Blio platform comes out of Ray Kurzweil’s K-NFB Reading Technology, Inc., which works on devices to aid the blind and sight-impaired to read. Rich media can allow authors to illustrate their content more clearly and allow readers to interact with their content. Video – if done right, of course – enables the author or some other member of the content team to give readers new perspectives on places, people, and concepts that would have been difficult to describe in print. Other types of rich media can accomplish these same ends, but including those forms of content is no guarantee such ends will be achieved. Like any content, matching the form and quality to the audience is an entirely different matter. Let’s keep in mind that the term “interactivity” is rather loose. After all, readers have “interacted” with novels for centuries, and literary theory has long held that the work is complete not simply when the author types “The End,” or the publisher ships the book from the printer, but when the reader engages. Some will argue, for instance, that text provides a much richer interaction than video, but there is plenty of countering history of interactive instruction, with the work an instructor put in preparing classroom material having great effect, or the value to an engineer using analytical data simulations. For certain types of e-books and digital publications, interactivity may mean much more specific capabilities than fleshing out a fire-breathing dragon or the sensation of a romantic caress. For businessto-business publishing – whether in the form of catalogs, directories, or references – interactivity is specific, practical, and more clearly defined. Education and STM publishing have their own forms of interactivity requirements, but share much with other professional publishing, especially in regard to navigating across discrete chunks of information through search and structured content. When you’re a doctor chasing down a diagnosis of a rash, being able to type in descriptive parameters and be linked to text, images, or additional up-to-date information (like a bulletin from the Centers for Disease Control) does the trick. In many types of trade publishing there remain plenty of opportunities for building types of interaction simply not possible in print titles: think of a digital cookbook, for example, where, when a recipe calls for “folding in” some ingredients, the user can link to a video showing what “folding in” is. A lot of the current interactivity efforts, at least in trade publishing, are found in children’s books, where features like audio “Read to Me” translate text to speech. Other common features include highlighting text (read along), animation, word definitions and pronunciation, and, of course, games, games, games. Figure 23 shows an image of a Disney Reader title, with callouts, from The Next Generation of E-Books: Witness It or Invent It, a presentation delivered at Tools of Change, 2010 by Sameer Shariff, the CEO of Impelsys. What is a Digital Book? ©2010 Outsell, Inc. 91

Figure 23. Disney Reader, with Callouts of Interactivity

Source: The Next Generation of E-Books: Witness It or Invent It, a PowerPoint Presentation at Tools of Change, 2010, presented by Sameer Sharif f , CEO, Impelsys

But the most interesting interactivity comes out of STM and education publishing. Knovel.com is a website through which engineers not only find books and data they need, but search for the content through sophisticated and context-sensitive mechanisms, often arriving at content that contains interactive tables that support the use of the critical data sought. Here’s one thing you can count on: what we don’t know about making great “enhanced books” far outweighs what we do know about it today. Fortunately, for most trade publishers, there is ample opportunity in straightforward e-books, and for professional, STM, and educational publishers, there are enough sound business reasons and potential revenue structures to continue to support rich media and interactivity efforts.

Interactivity takes many forms, and e-books and digital content – especially in the publishing segment of STM – can be extremely sophisticated and useful. The screen shot in Figure 24 is from Knovel.com, reporting on the details of a digital title that contains interactive tables. Figure 24. Interactivity Takes Many Forms

Source: Knovel.com

The Many Forms and Faces of Digital Publishing The type of content becomes an important differentiator of digital books, although, as we see with most trade e-books, rich media is not necessary. Of great interest especially in educational publishing, digital textbooks are already presenting all manner of rich media, from videos, audio, analysis tools and algorithms, and simulations. But the display media for these sorts of titles still – almost without exception (the iPad being such an exception) – are found in specific portals or similarly structured browser-based environments. The current prevailing practice is for educational publishers to start with existing print textbooks and re-purpose them for the learning environments of choice, even as many print or digital-only ancillaries get developed right alongside. One common choice is CourseSmart, a provider of college textbooks in digital format in a common online platform. The venture was founded and supported by of number of leading higher education textbook publishers, including Pearson Education, Cengage Learning, McGraw Hill Education, John Wiley & Sons, F. A. Davis Company, and the Bedford, Freeman, Worth Publishing Group.

Digital content formats can provide flexibility otherwise practically impossible in their print counterparts. For example, in a print world, the student is presented with the choice, typically, to but the whole textbook or not. If digital content workflows are designed to impose structure on the content in smaller measures than print publishing typically provides – say, for example, allowing students to buy individual chapters – then digital content can be re-combined in new ways. Called “granularity” or “chunking,” the process of defining logically sound subsections of a larger work (such as a textbook) makes available those subsections for independent applications, such as selling a part of the whole (sample chapter sales, for example), or creating new custom titles. This approach is already being undertaken in various book segments, and especially in educational publishing and STM publishing. In the educational market, Cengage Learning – a founding partner in CourseSmart – publishes print and digital content for the academic, professional, and library markets. In the academic marketplace, the company serves secondary, higher education, and graduate-level students, teachers, libraries, government agencies, and corporations in both traditional and distance learning. More to the point being made here is that Cengage Learning offers a custom textbook service, where parts of one digital textbook may be put together with parts from other digital textbooks and even with teacher created or supplied digital content. CourseSmart’s home page, shown in Figure 25, offered almost 11,000 textbooks as of May 2010. A number of these are available as apps through the Apple App Store, for iPhone or iPad. Figure 25. Online Access to Digital Texts

Source: CourseSmart.com

The fluidity of form for digital content is one of the most compelling qualities, but also one of its greatest challenges, especially in regard to mastering an editorial and production workflow that lends itself to multiple output, or “media neutrality.” The last two decades have seen enormous efforts on the parts of enterprises and some segments of book and journal publishing to cope with concurrent media requirements such as print, online, and CD-ROM. Across all segments of book publishing, in varying levels of complexity, this “create-once/publish many” model is a major strategic goal. With dozens of devices competing in the marketplace, with format and metadata standards still in flux, and with as yet unproved business models joined to display environments, any and all efforts publishers can undertake to minimize the work required to try new digital content formats should pay strong dividends. Cengage Learning republishes print textbooks from leading education publishers in digital form, and, as seen in the screen capture in Figure 26, promotes the mixing and matching of parts of e-textbooks with others, to create custom e-textbooks. Figure 26. Mixable Textbooks

Source: Cengage.com

The Quest for “Searchability” Wikipedia provides as deft a definition for HTTP as any: The Hypertext Transfer Protocol (HTTP) is an Application Layer protocol for distributed, collaborative, hypermedia information systems.

HTTP is a request-response standard typical of client-server computing. In HTTP, web browsers typically act as clients, while an application running on the computer hosting the website acts as a server. The client submits HTTP requests; the responding server stores or creates resources such as HTML files and images. The intent here is not to offer a remedial networking tutorial, but rather to illustrate that the concept behind hypertext – or, more broadly speaking, linking – is nothing new. Think about indexes, footnotes, endnotes, tables of content and tables or figures: publishers have been in the forefront of linking and pointing to content for hundreds of years. In fact, the active index link is an early and now common feature in e-books. This includes PDF, a format that by design was set to mimic static print pages, which can have active tables of content, indexes, and both internal and external links. In fact, the potential of search and retrieval of information has long been a driving factor in digital publishing, as, indeed, it has been a major rationale for the internet itself. We have come to take search and retrieval of information for granted, and publishers may overlook this very important aspect of digital titles. While it may be merely an occasional convenience to see when last a particular character had appeared in the course of reading, say, a murder mystery, for many types of publishing, the significant improvement in the speed and accuracy of find particular information is a big deal. The same is at least as true when it comes to finding books, both print and digital. The advantage goes to digital in that the entire contents can more easily be made available for the many search engines across the web, of which the giant remains Google. (Print books are exposed to search spiders, too, but, obviously, only if the content is somewhere made available in digital form; hence Google Book Search scanning its millions of titles.) The latest terms for book publishers who quite rightly see their responsibilities as including making the book and content known – the root of “publish” – are “searchability” and “discoverability.” There are many in the industry that predict the collapse of traditional retailers and e-tailers (have they already become “traditional?”) as the channels through which customers search for and find books. Amazon’s main retail play in books has been to become the go-to e-tailer for finding books, along with patio furniture, HDTVs, and the seemingly endless inventory in its virtual store. On the other hand, Google is making a play even as this study is being written. Originally scheduled for launch sometime in the summer of 2010, Google Editions will go online later in the year, according to press reports in August of 2010. As reported by the Wall Street Journal, on May 4, 2010, by reporters Jessica E. Vascellaro and Jeffrey A. Trachtenberg in their article titled Google Readies Its E-Book Plan, Bringing in a New Sales Approach: Google Inc. plans to begin selling digital books in late June or July, a company official said Tuesday, throwing the search giant into a battle that already involves Amazon.com Inc., Apple Inc. and Barnes & Noble Inc. Google has been discussing its vision for distributing books online for several years and for months has been evangelizing about its new service, called Google Editions. The company is hoping to distinguish Google Editions in the marketplace by allowing users to access books from a broad range of websites using an array of devices, unlike rivals that are focused on proprietary devices and software. What is a Digital Book? ©2010 Outsell, Inc. 96

The reporters note that Google users will be able to buy digital copies of books they discover through its book-search service. It will also allow book retailers – even independent shops – to sell Google Editions on their own sites, giving partners the bulk of the revenue. Rumors are flying, and one report just in suggests that almost all US publishers are on board, and that preliminary estimates that the store could launch with as many as 500,000 titles or even as many as four million e-book titles. Keep in mind that perhaps 50% of these titles are from books with expired copyrights that Google already offers for free. Of course, this may not be just a rumor. On October 9, 2009, Google announced that the number of scanned books was over ten million. The emphasis here is on “discover.” With its Google Book Search, Google has already gone a great distance toward making content “discoverable.” Regardless of the details of the legal settlement and the still not-entirely decided upon resolution of the legal suit brought against the company by many big publishers, Google Editions sees itself as putting publishers right where they like to be: easily and frequently before people who are looking for their books. It remains to be seen if book publishers see themselves so advantaged by Google Editions. Digital workflows within the book publisher’s process are not strictly required. One could always let Google scan a print title; after all, they had reportedly already spent $5 million for the first one million books by the end of 2007, although there have been many criticisms about the quality of Google scans. While there is little quantitative evidence to prove this, it is likely that publishers generally want to control the quality themselves, and anecdotal publisher response to poor scanning by Google bears out this obvious point. Furthermore, publishers want to own the resulting files, because a native PDF from a print production file is better for both discoverability and rendering. For a book publisher that has a digital workflow early in the publishing process, there is, in theory, more opportunity to enable searching for and discovering the content earlier, although there is not much evidence that promotion and marketing efforts to date have taken advantage of this potential. Still, the area of searchability and the mechanisms that may give the publisher more control and more options are still nascent in such efforts as semantic tagging, applying taxonomies, or simply getting advanced work out into social communities, to reviewers, and other promotional opportunities that will pick up their own Google (and Yahoo!, and Bing, and…) web trawlers.

Utility, and Other Benefits of Digital Content As we know, when reading a digital book on a connected platform, further exploration is much easier because of hypertext and links, and these links can be to almost any media – if, indeed, the assets aren’t already directly embedded. But it isn’t only a matter of linking to other resources that increases the utility of digital content. Other important aspects can include up-to-date content that may be personalized for a particular user in forms that expand and enrich the user experience. The potential for this kind of utility – whether informational purposes, or entertainment, or to drive commercial transactions – is why the emergence of the iPad platform has caused so much excitement.

Clicking on links provided by the author or publisher or launching a context sensitive search can be especially important to students and to many professional fields, and this kind of usefulness has driven electronic publishing well before the current e-book developments. Portability, however, is another aspect of e-books – applied to distinct e-reader devices, as well as smartphones, tablets, and, increasingly, some notebook and netbook form factors. In the next few years, we will see many impressive reading devices – and many not so impressive – and one should assume that new devices pretty much always will remain part of the e-book landscape. The only likely constant will be the increase in features and capabilities, including better display, better connectivity, better input mechanisms, and more memory and power. Digital publishing provides other benefits that derive from the digital nature of the process. More titles become possible in the digital world, where print-based constraints such as press costs, inventory, and warehousing, and physical distribution don’t factor into the profit and loss (P&L) equations that decide the fate – often negatively – for print-based publishing. The other side of reduced costs can be affordability, where lower prices reduce economic barriers to e-book buying (or other types of commercial transaction models), although pricing for even simple e-books is the source of much conflict and speculation, and will likely remain so for some time. Digital publishing provides new and expanded options for many new types of titles, ranging from custom collections to self-created. The digital publishing revolution make previously too expensive print titles – due to small print runs for offset to be economical, for example – back in reach. Digital publishing very much supports digital printing, and so, print books.

When is a Digital Book a Print Book? One of the great ironies of the digital publishing revolution is that it is providing new options for print titles. Advances in digital printing have broken the monopoly of offset presses that, due to unalterable pre-press and press costs, prevented publishers from producing titles in small print runs. Conventional wisdom has it that offset print runs must number in the 1,000-2,000 minimum copy range before the cost of the printing would put profit beyond reach, if not, indeed, price out at a net loss. (Obviously, the price one can charge for a book ranges wildly, depending on market, value, and perceived need, and there are many examples of very low print runs for high-priced books well before the advent of digital printing.) In fact, the costs for offset print runs vary on many counts, including the type of printing – four or more color vs. one-color, for example – as well as binding and cover options, paper quality, and more. The traditional role within book publishers of the manufacturing department was to bid out such press jobs, where price was one factor, along with schedule, quality, and shipping, among others. The responsibility was for PPB – paper, print, and binding – and this part of the publishing process remains central for print titles. That is not to say that decisions about page size and paper quality don’t matter in digital printing, or that there aren’t choices to be made about paper, trim size, or binding. Indeed, depending on some of these factors – a typical example is unusual trim size – digital printing may not be a viable option.

Things have changed radically in digital printing, with several large companies producing very high volume digital printing machines, including not only monochrome, but color as well. There are also a number of other companies handling more specialized digital printing (such as trim size) and machines for inline finishing (i.e., covers and binding), and many, many companies getting into the digital printing service. Together, these technologies and service companies provide many options for publishers: whether for one-off or very low runs to meet the needs of titles otherwise lost to sales through lack of inventory, or as small print runs for self-publishing authors, or any number of other production and business models. The promise of digital printing is simple: Receive an order; fill it easily, economically, and efficiently. Of course, this promise is as easily fulfilled when plenty of inventory exists, regardless of the type of printing used. But the assumption is that book publishing economics based on offset press costs can’t keep every title in stock all the time, and this assumption is well-founded. Digital printing can:

• Keep titles available and in print; • Avoidance of out-of-stock sale loss; • Supply titles to various channels or customers in a timely manner; • Control numbers of title copies; • Significantly offset shrinkage and waste; • Reduce or eliminate returns. Some publishers are pushing digital print of one-offs (POD) or small print runs, or ultra short runs (USR) as a mechanism to improve customer service, publish small run titles that otherwise would not make financial sense with offset press, and reduce inventory-related overhead such as warehousing and inventory tax liability. And then there are yet other potential advantages, one of which is the use of digital printing to produce custom publications. An excellent overview of digital printing was presented at the 2010 Tools of Change in Publishing conference, called Making the Case for Digital Printing, by Ashley Gordon, Mockingbird Press, and Brian O’Leary, Magellan Media Consulting Partners. Here is an excerpt from their vocabulary slide:

Figure 27, a slide from an excellent overview of digital printing presented at the 2010 Tools of Change in Publishing conference, provides a striking reiteration of how digital printing supports print titles. The key to digital printing utility is, however, the very same digital workflow changes needed for successful digital publishing such as e-books. Figure 27. Digital Printing and Digital Workflows

Source: Making the Case for Digital Printing, a PowerPoint presentation at Tools of Change, 2010, presented by Ashley Gordon, Mockingbird Press, and Brian O’Leary, Magellan Media Consulting Partners

Indeed, the benefits and application of digital printing raise a very interesting consideration: Are e-books the tail wagging the dog? It’s significant that virtually all of the digital workflow changes that will support publishers pursuing e-book and other digital publishing endeavors are also directly supportive of digital printing efforts. Virtually all digital printing services look for PDFs, but many will process properly structured titles in XML. In order to take advantage of digital printing, a publisher must have content in a workable digital form, or, if not, be prepared for in-house or third-party conversion or scanning of the content. Being able to distribute the digital titles effectively is another shared requirement between e-books and digital printing. Considering that print sales still account for the lion’s share of book publishers’ revenue and that digital printing provides the means to increase sales and reduce costs, it gets hard to argue against e-books and digital publishing being a benefit of digital printing.

Think Outside the Covers We believe it is better for publishers to think of digital publishing as the larger set of practices that provide more flexibility in terms of how digital content can be put together, with e-books being a specific subset. The good news is that a sound XML workflow for the publisherâ&#x20AC;&#x2122;s content will go a long way toward making many forms of digital content not only possible, but prepared for current and new business models. With the architecture in place for well-structured content and the ability to add rich metadata to the content, the book publisher today is in position to take advantage of various marketing and distribution automations, track usage, manage royalties and other value chain mechanisms, control rights, and otherwise pursue both existing and new and emerging markets, e-sales, and reduce costs.

What is a Digital Book? ÂŠ2010 Outsell, Inc. 101

Digital Book Publishing Industry Outlook Change is taking place in book publishing at a fast and furious pace. While a lot of change has been underway for some time – more and more publishers moving to a digital workflow, for example – many fundamental changes are taking place today. For some publishers, experimentation and best guesses often rule the day. Figure 28. BISG “Point of No Return” Findings Already happened

Sales

Happening now

Production

Happening soon (next 1 1/2-2 years)

Marketing

Not happening for awhile (next 3-5 years)

Manufacturing

Not happening for a long time (more than 5 years)

Information Technology

Never happening

Editorial

I don't know

Distribution 0%

20%

40%

60%

80%

100%

Source: BISG Making Inf ormation Pay 2010: Pre-Event Survey Question: When do you think these changes will reach a "point of no return", i.e., when traditional practices must yield to new practices driven by new technologies? ©2010 Outsell, Inc. Reproduction strictly prohibited.

The Book Industry Study Group (a research partner with this study) has recently published the results of a survey it undertook in advance of its annual publishing industry meeting, Making Information Pay. Figure 28 is a good presentation of the self-assessment by the book publishing industry about “tipping points.” Across the publishing processes (quite similar to this study’s own seven publishing processes breakout), with varying rates, change is more than just “in the air.” There are plenty of changes underway. Evidence suggests that the industry tipping point is imminent. Scott Lubeck, Executive Director of BISG, writes, “Unquestionably, the book industry is in a period of significant transformation. Digital change, in particular, is unavoidable – and the direction is one way. We will not suddenly find the number of bookstores growing or the e-book market shrinking. Even those publishing segments that have traditionally been ahead of the curve – professional, academic, and educational, for example – will find digital delivery accelerating as we get close to a world where everybody has a computer in their hand all the time.”

The Gilbane Group agrees wholeheartedly with Lubeck’s perception. The next step forward is, of course, to define in greater detail the substance of the changes going on in book publishing. Moreover, given the Gilbane Group’s long tradition of working with publishers from many book publishing segments, especially in areas such as content management strategy and implementation, this study is well-placed to identify and explicate the most-pressing and important book publishing change factors. The findings of A Blueprint for Book Publishing Transformation: Seven Essential Processes to Re-Invent Publishing, are that the following areas are significant within the book industry:

• E-books – and related digital publishing products – are very real and very important opportunities for every segment of book publishing; indeed, in many segments, other digital products are significant contributors to the top line and bottom line, well ahead of e-book revenues per se;

• XML continues to grow in application among book publishers, and especially in regard to the increasing and crucial shift to digital workflows;

• Digital printing has already emerged as a significant factor in book publishers’ choices for both manufacturing and distribution in and of themselves, but also as an important enabler of new revenues and new business models;

• E-reader devices and platforms are in great flux, but the real impact of such fast-evolving content consumption mechanisms is less significant relevant to the need of publishers to look to the next years and decades strategically, and stick to their core work of producing valuable content.

Before the book publishing industry declares “Mission Accomplished,” there are many very significant barriers to digital publishing meeting its full potential. These include:

• More problems remain for backlist titles than front list titles, although the march of time and

continuing efforts on the part of book publishers will address most of the acute problems of contracts, royalties, and rights that must be re-applied to new electronic formats of the existing titles;

• Confusion related to integration and interoperability (axiomatically), and the nascent evolution of selling, pricing, and business models, will continue to retard distribution mechanisms, channels, and value chain partners for digital publishing;

• Today there exist surprisingly few instances of integration or interoperability between publishing processes. Indeed, at many major book publishers, there remain a plethora of different platforms doing the same things, the legacy of building through acquisition. For big and small book publishers alike, the dearth of interoperable or integrated publishing process systems will become a bigger problem in the years ahead, blocking book publishers’ from gaining the biggest potential benefits from digital publishing;

• The prospect for “enhanced e-books” presents some big challenges for book publishers,

including stretching beyond traditional content production and cost requirements that may stretch already hard-pressed margins;

• Unsettled selling, pricing, and business models still in the “guess-work” phase of discovery and

application – in part related to the lack of interoperability and integration (again, axiomatically) – present quite distinct problems in their own right.

In other words, things are going along just fine for book publishers, with real advances in more efficient workflows and real markets for e-books and digital publishing products. All the remaining barriers can and should be looked at as opportunities, because the resolution of these barriers will provide far more extensive markets, products, and revenue, even while expanding efficiencies in content acquisition, production, and distribution. Such change can and should result in the long awaited and much required improvements in cost reduction and improved profit margins. Will the new golden era for book publishers be “just around the corner?” No. There remains a lot of technology work to be done, but the biggest factor in slowing progress is that many of the remaining barriers require industry-wide solutions, and point to the need for digital publishing infrastructure, and, hence, the development of standards and other cooperative efforts. The battles that mark such “public service” are well-known time- and energy-sinks, as such efforts will necessarily be, as any reader who has been involved in the development of the original ePub standard – or the ongoing efforts toward a third version of ONIX – will know all too well. There is room, of course, for the development of de facto standards in the form of emerging commercial platforms, but such developments are too hard to predict with any useful specificity.

E-Books Have Arrived The stories told in the introductory chapter of this study – including the discussion of the effective subsidizing role of Amazon.com – make clear that the time of e-books has finally arrived. E-book activities across publishers fall into different ranges of scope, but many are quite well along in their e-book publishing programs. A surprise we’ve encountered is that many book publishers are actually moving quite fast to e-books. Just one example: speaking with Tod Shuttleworth, at Thomas Nelson, a book publisher of some 400500 titles a year, we learned that virtually all of its frontlist is, as a matter of process, being put into XML format early in the editorial stage and then formatted as needed into any number of e-book editions for their various supply chain distributors and retailers. Thomas Nelson also has a robust backlist program (mostly through Innodata Isogen) that has seen many hundred of titles brought into e-book formats. Other conversations reveal far slower and earlier stage efforts. We were surprised to learn from Jabin White, of Wolters Kluwer Health, for instance, that its e-book efforts (apart from what the book side hands off to OVID and its SGML format) are currently modest, with the publisher pursuing limited pilots and implementation projects to date. This publisher is using Really Strategies’ RSuite to move titles into XML format early in that process, but the implementation of XML repositories is only in planning stages.

Indeed, much of the actual work of placing print titles into e-book formats is being done in conjunction with outsourcing vendors, or, in certain book publishing segments, as a combination of publisher and aggregator (especially in education). That outsource vendors (such as one of this study’s sponsors, Aptara Corporation) are playing such a central role in the creation of e-books is not surprising, especially given the young age of e-book publishing. There are a number of good reasons for the prominent role of outsource vendors in e-book and digital publishing:

• Outsource vendors know the detailed production mechanics of book publishing, having been in the business of composition and title production for many years, in many cases;

• E-book publishing technologies, including format standards conversion engines, are still

relatively new, and it makes economic sense for a small number of companies to invest in such technology and leverage the technology investments across many other companies;

• Over the last two decades, cost constraints and low margins in many segments of book

publishing resulted in publishers reducing staff in favor of outsourcing. Now, outsourcing is a familiar practice that extends to digital publishing and e-books.

As publishing processes’ interoperability and integration improve, and as digital publishing toolsets become less expensive and easier to use, we must consider the long term viability of outsourcing vendors helping book publishers. Fortunately for such vendors, however, we see publishing processes integration as being some time away. This, together with the state of flux in e-book devices and formats, makes the business opportunities for outsource vendors quite robust, at least for quite a while to come. Furthermore, it remains an open question whether book publishers will reconsider anytime soon their long-running habit of reducing basic editorial staff levels, even as book publishers may move to bring digital publishing platforms inside their walls. (With granularity and custom publishing tagging requirements – to name but one example of what the future needs of book publishing may involve – there are good arguments for re-developing in-house content tagging and metadata expertise, or partnering with the right outsource services.)

Figure 29. Kinds of Digital Publications Produced by Book Publishers E-books titles for general-purpose devices such as PCs, laptops, netbooks, tablets (e.g., iPad), smart phones

22.6%

E-book titles for dedicated e-readers such as Kindle, Sony, Nook, etc.

22.3%

Other forms of digital publications, such as for use in portals, library systems, and/or by aggregators (e.g., ProQuest, NetLibrary)

15.7%

Other forms of digital publications for use with print on demand and distributed digital printing

14.8%

Content applications for smart phones or other devices

13.2%

We do not currently have a digital publishing program, but have plans for one We do not currently have a digital publishing program, nor plans for one

10.1%

1.3%

Source: Gilbane Group Publishing Survey, July 2010 Question 4, "Does your publishing company currently produce any of the f ollowing categories of digital publications? (Check all that apply)" Base = 318 ©2010 Outsell, Inc. Reproduction strictly prohibited.

Very few survey respondents don’t have any plans for digital publishing, as shown in Figure 29. E-books for e-readers and general devices represent the biggest participation categories. The fact is that e-books have become a significant part of a book publisher’s efforts, especially when the broader description of digital publishing is used. There have been many surveys and reports regarding the size and expansion of e-book publishing programs, and while many polls and surveys about e-books have had limited and statistically questionable results, there have also been some very significant investigations into current and projected e-book market and publishing activity growth (among these rarer instances falls the work of our colleagues at Outsell, Inc.); both anecdote and evidence prove that e-books and digital publishing within book publishing are not passing fads. After more than a decade of false starts, missteps, and one or another important piece missing, e-books have already passed the inflection point.

XML Becoming Core Publishing Technology It is true that many book publishers still have little of their content in XML, but the survey results show solid progress toward what The Gilbane Group believes is a key technology for publishers, and the numbers show that book publishers are getting this religion. What we’ve also found is that while XMLearly is already a well-established practice among book publishers, XML repositories are still not widely in place or are under-used within these practicing book publishers.

XML-Early and XML-First Not only is the use of XML format for content already underway in significant numbers of book publishers, but many of these book publishers are pushing toward – and, in some instances, already succeeding – moving XML content format as early as possible in the content creation, editing, and production processes. In fact, the drive among our interviewees’ publishing companies to move title content into XML format early emerged as a central issue in the interviews. What is clear is that the XML-early approach is being handled either in-house through a variety of means, or, perhaps in equal or greater measure, through outsource vendors. There remain many exceptions to this, including at a number of the biggest publishers around; one such notable example is Random House. Figure 30 shows that just over half of respondents aren’t yet using XML, but only just less than 10% don’t plan to use XML. Twenty percent of those surveyed have been using XML for more than three years. Figure 30. Length of Time of XML Used by Book Publishers My book publishing company is considering using XML

35.4%

My book publishing company has been using XML for more than three years

19.8%

My book publishing company has been using XML for one to three years

15.6%

My book publishing company doesn’t use or plan to use XML

9.4%

My book publishing company has been using XML for less than one year

9.4%

I don’t know

10.4%

Source: Gilbane Group Publishing Survey, July 2010 Question 76 - GB Q "How long has your book publishing company been using XML within any of the publishing processes?" Base = 96 ©2010 Outsell, Inc. Reproduction strictly prohibited.

According to Andrew Weber, Senior VP, Operations & Technology, at Random House, XML is not introduced early in the workflow. “We are not doing [XML] until we get to making the ePub,” Weber says. Random House certainly considers XML-early, but this is seen as “early days” to take such action, even though already there is consensus that this is the direction the publisher will take. Nonetheless, Weber has the sense that “the tools are still fairly immature and there’s not necessarily a big benefit that we can identify yet from making the investment and dealing with all of the change management needed to get to XML-early.” He points to the large number of titles Random House publishes that contain complex layouts, and the company’s culture of designing every page. “These are things we have to take into consideration as we think about XML,” says Weber. “We see all of the potential benefits of XML, but we have to be able to make the books that are selling today, and so XML is just a complication.” Digital Book Publishing Industry Outlook ©2010 Outsell, Inc. 107

Samir Kakar, Aptara’s CTO, recognizes the differences among different segments of book publishing in regard to XML. “It is different for each of these kinds of publishers, and STM publishing adopted XML, and SGML earlier, before most other publishing segments, and there are some good reasons why,” notes Kakar. “When XML came into being, it was the journals world that moved most quickly, and then the book efforts followed. At that time, we started working with publishers that either had strategy in terms of going with XML, or those who were getting into it as something totally new, as a buzzword.” Almost 19% of book publishers responding to the question in Figure 31 have half or more of their content in XML format, while about 46% have none or little in XML. Over 17% said that they didn’t know, suggesting a significant level of confusion about XML among the book publishers responding. Figure 31. Percentage of Titles in XML at Book Publishers My book publishing company doesn’t have any of its content in XML

27.6%

My book publishing company has less than five percent of its content in XML

18.4%

My book publishing company has more than five percent but less than fifty percent of its content in XML

18.4%

My book publishing company has almost all of its content in XML My book publishing company has more than fifty percent of its content in XML

11.5%

6.9%

I don’t know

17.2%

Source: Gilbane Group Publishing Survey, July 2010 Question 77 - GB Q "What percentage of your book publishing company’s title content is in XML f orm?" Base = 87 ©2010 Outsell, Inc. Reproduction strictly prohibited.

Today, Kakar notes, Aptara still comes across publishers who have not moved into XML, “and that being trade publishing, which has been much slower in terms of adoption of XML.” The reason for renewed interest in XML is simple, says Kakar. “The e-book market is looking more real to trade publishers,” he reports, “and lucrative.” Earlier, the trade publishers’ thought process was that they would create a one-off fiction or non-fiction title and might never need re-use of the files, Kakar explains, “but since e-books happened, the reality is now dawning on them and they are scrambling to change their workflows to go to digital.” It is the movement toward e-books, as Kakar sees it, which is forcing the trade publishers’ move toward XML.

“Within the educational publishing world today,” remarks Chris Kaefer, Director, Content Strategy, at McGraw-Hill Higher Education, “I think that XML-early is the most dominant” approach being used in editorial and production workflows. “Certainly, for us this is the case, because it is difficult to ask the authors to work in XML, for many reasons.” Still, Kaefer has some questions about the value of XML-early because of challenges around tools like Adobe’s InDesign and its trouble managing XML. “When we get to ancillary material,” Kaefer says, “things can trail off quickly with respect to XML, partly because the ancillaries are not typically re-used as yet within digital workflows.” The distinction between “XML-first,” where authors deliver XML content, and “XML-early,” where content is put into XML format early in the editorial process, can be difficult to separate. Matthew Bennett, Executive Director of Product Management at Hachette Book Group (HBG), says, “We use an exclusively XML-first process. All of our content is created in XML before it’s laid out and printed. We always have our core XML content that we can convert to ePub, POD, or flow into InDesign to create our printable PDFs or whatever format we’re working on.” Bennett points out that even just two years earlier, HBG could have been considered an XML-early house, where what the author provided would get converted to XML within the HBG editorial process. He sees the use by the authors of Open Office and Microsoft Word today as “being basically XML-based word processors… because whether they [the authors] know it or not, they are basically providing us with XML, and we just have to extract it from the source.” Bennett is right, but the definitions of XML-first and XML-early may rest on the level of effort undertaken by editorial and production. “The authors don’t know that they are creating in XML, but everything now is XML on the back-end,” Bennett argues. “It’s just a matter of us mapping the tags to our systems. There’s always some work that has to go on to correctly tag things.” XML: What Is It Good For? Our parent company Outsell put together an excellent overview on XML in June 2009, in which it provided this brief overview of when XML an effective tool to use. Deciding whether XML is important to one’s enterprise is actually quite simple. Any or all of the following needs indicate that an organization is probably a good candidate for XML:

• Content integration: Bringing together and normalizing structured and unstructured content in different formats;

• Content repurposing: Using content in multiple products without having to re-create or reformat it;

• Multiple delivery formats: Satisfying clients’ demand for custom content delivery formats without creating multiple publishing streams;

• Fine-grained searching: Searching requires more granularity than simple keyword search; • Content syndication: Partnering with other content players requires ability to integrate, normalize, and repurpose content from multiple sources.

In addition to repurposing content and automating content delivery in custom formats, XML can also be used to add metadata to make content management easier. When asked what business benefits were derived through the use of XML, organizations gave Outsell the responses very similar to our own survey results. Outsell summed up its findings as the following: Since XML is for and about tagging, it is not surprising that adding metadata for content management was a clear leader. What is interesting is that the percentages of respondents using XML for repurposing content (16%) and for creating new products and revenue streams (15%) are both higher than for using XML for metadata and content delivery applications. The number of respondents citing new products and revenue streams shows that XML is one of those technology rarities that can drive both cost reductions and revenue enhancement at the same time. Survey respondents, as shown in Figure 32, gain several benefits from using XML – most having to do with book publishing where flexibility and repurposing content help the bottom line. A notable exception is supply chain requirements, which garner little advantage from using XML. Figure 32. Reasons for Using XML Use XML to make publishing more flexible and efficient

16.0%

Use XML for re-use and repurposing of content

15.0%

Use XML for creating new products and revenue streams

15.0%

Use XML to publish to multiple ebook formats

14.5%

Use XML to add metadata for content management

13.0%

Use XML to improve searchability

13.0%

Use XML to meet supply chain requirements I don’t know

6.5% 7.0%

Source: Gilbane Group Publishing Survey, July 2010 Question 78- GB Q "What business benef its are gained at your book publishing company through the use of XML f or title content?" Base = 200 ©2010 Outsell, Inc. Reproduction strictly prohibited.

XML Repositories XML is very well established in certain publishing sectors, especially STM, legal, and professional. Many of the very largest publishers have vast stores of XML-encoded content that drives both print and digital products. To more effectively manage these growing stores of content, these publishers and others have turned to XML repositories. XML repositories come from vendors such as MarkLogic, IXIASOFT, and EMC Documentum. There are also open source options such as eXist-db and the Oracle Berkeley DB XML repository. At one point, industry analysts ZapThink used to track more than 40 such technologies, but the market has focused primarily on the options listed here. And while we must note that MarkLogic is one of this report’s sponsors, we have to point out that MarkLogic is a clear market leader among major publishers and with technology partnerships with many publishing platform vendors (including Really Strategies, another of this study’s sponsors). Why do organizations look to XML repositories to manage their content instead of relational database management systems (RDBMSs)? As our survey results in Figure 33 show, some publishers do choose RDBMSs over XML repositories, but many are using XML repositories, both in the product development arena (editorial and production) and for content delivery over the web. Figure 33. Use of XML Repositories for Content and Metadata My book publishing company does not use XML repositories, but instead uses relational database platforms to store content and data

22.6%

My book publishing company is considering using XML repositories, but currently uses relational database platforms to store content and data (e.g., Oracle, proprietary CMS, structured SQL, data asset management systems)

22.6%

My book publishing company uses XML repositories, as well as relational database platforms to store content and data (e.g., Oracle, proprietary CMS, structured SQL, data asset management systems)

21.0%

My book publishing company only uses XML repositories

9.7%

I don’t know

24.2%

Source: Gilbane Group Publishing Survey, July 2010 Question 79- GB "Does your book publishing company use XML repositories f or its content and metadata?" Base = 62 ©2010 Outsell, Inc. Reproduction strictly prohibited.

The answer to this question lies in looking at the nature of XML itself, and how it changes documents (content) by adding markup to support multi-channel publishing, improved search, and flexible, dynamic delivery. This is a topic we have covered for many years at The Gilbane Group, dating back to the earliest days of XML and to the use of SGML before that. Although documents contain useful information, they haven’t traditionally been used as a source of data. The advent of XML changed this, as each part of a document could now be labeled with exactly the kind of data it contained, enabling targeted searches and the development of more powerful document-centric applications. Early attempts to manage XML documents often cobbled together full-text search engines, relational databases, and flat files. These early systems suffered from two main problems:

• Scalability limitations, as these systems tended to degrade past a few thousand documents, while many applications involved hundreds of thousands or even millions of documents;

• Lack of structured queries, since the full-text search engines were sometimes not XML aware and queries over metadata were limited to a few pre-selected fields.

For book publishing companies already using XML repositories for content and metadata, which of the reasons in Figure 34 drove the adoption of XML repositories? Enriching content is not a top priority for the use of XML repositories by book publishers, while modernizing processes, normalizing workflows, and multi-channel publishing rank high. Almost 15% of respondents – who were from publishers using XML repositories, answered “I don’t know.” Figure 34. Reasons for Using XML Repositories Need to normalize content formats and workflows

13.3%

Ability to publish on multiple channels simultaneously

13.3%

Need to “modernize” publishing processes

12.5%

To help solve dynamic content delivery requirements

10.9%

Benefits of centralizing content

10.9%

Have a very large information corpus and need accurate search and discovery or content manipulation

9.4%

Ability to monetize content

9.4%

Ability to enrich and understand content I don’t know

7.0% 13.3%

Source: Gilbane Group Publishing Survey, July 2010 Question 80- GB Q "For book publishing companies already using XML repositories f or content and metadata, which of the f ollowing reasons drove the adoption of XML repositories" Base = 128 ©2010 Outsell, Inc. Reproduction strictly prohibited.

Other problems included synchronization between the database and non-database components, the need to write custom code to process results, lack of node-based updates (a problem for large documents), and brittleness in the face of evolving schemas or DTDs. For those systems that attempted this work without a database platform, they often suffered from the usual laundry list of reasons why a database should have been used in the first place: concurrency, security, transactional safety, and so on. Some developers looked to open source databases for managing their XML assets. While a few of these have limited XML support, in the form of utilities for exporting relational data into XML formats, they typically do not support native XML data or XML-aware queries. The result is that users of these databases had to build a lot of custom functionality that offset any of the advantages they perceive open source databases to have. Over time, the major relational database vendors worked to address some of the gaps in XML feature coverage, giving developers more tools and functions for modeling the XML data, writing applications, and running queries. The result has been a steady growth in the use of relational databases for XML applications. Still, some of the most challenging applications push the limits of the relational databases and the mechanisms by which they support XML. This is especially true with very large documents, very large collections of documents, and applications where complex document types need complex parsing, manipulation, and querying. A solution to some of these problems was the introduction of XML databases. When these appeared shortly after XML 1.0 was released, people weren’t sure if they were a replacement for relational databases or a return to hierarchical databases. In fact, they were designed for the entirely new types of applications XML made possible. (For the record, MarkLogic considers and labels its product an “XML Server” and not an “XML database.”) XML databases have a number of features that are useful for working with XML. The most important are the XML data model, which is flexible enough to model subjects as diverse as technical documentation, health data, and customer profiles; XML-aware full-text searches; and structured query languages like XQuery. They are also designed to manage large numbers and a diverse array of XML documents. Other advantages include node-level updates (which reduce the cost of updating large documents), links, and versioning. Another advantage of XML databases is their ability to handle large documents, as well as large numbers of documents. Both of these are traditionally difficult to query in an RDBMS due to the time it takes to parse the documents and find the required data. XML databases solve this problem by parsing and indexing documents when they are inserted. This allows documents to be queried without further parsing and may even allow queries to be resolved only by searching indexes.

For those that are not using XML repositories and don’t plan to, the results shown in Figure 35 offer two significant reasons for not using XML repositories are both cost related, either directly, at 27%, or staff expertise requirements, at 33%. Figure 35. Reasons for Not Using XML Repositories Challenge of building XML knowledge, skills, and awareness

32.7%

Expense

26.5%

No significant channel or supply chain perceived need

16.3%

Clumsy XML authoring tools limit authoring in XML

Technology is not mature

I don’t know

10.2%

8.2%

6.1%

Source: Gilbane Group Publishing Survey, July 2010 Question 81 GB Q "For those that are not using XML and don’t plan to, which of the f ollowing reasons have prevented XML repository adoption?"" Base = 49 ©2010 Outsell, Inc. Reproduction strictly prohibited.

A final advantage is more flexibility in handling schema evolution than is found in relational databases. While schema evolution, or changes in the data model, is a normal thing, it can move slowly in the relational world if the particular relational database lacks tools or functions to make changes to the relational schema easier and more manageable. In the XML world, change moves more quickly, both because XML is new and because XML exposes users to more sources of change. Examples of the latter include external trading partners who control the schemas used to move data across organizational boundaries, rapidly evolving fields like finance and biology, and long-lived fields like mortgage and insurance contracts. Fortunately, some XML databases do not require fixed schemas and can easily handle data conforming to multiple schemas or multiple versions of a schema. Ironically, the strongest endorsement of XML databases to date is that the major relational databases are adding native XML storage capabilities. This shows that the need for and application of native XML data management has become well understood, and adoption increases continually.

XML Formats Can Mean Different Things There is some confusion among some book publishers about what “XML formats” mean. The key is to understand that there are two general applications within book publishing for the use of XML formats, as follows:

• The content being created, produced, and managed (i.e., re-use) is in an XML format – the create, produce, and store stage;

• The content being transformed into e-books or otherwise handed off to value chain partners

(such as aggregators) are in XML format, or derived from XML format – the transformational or distribution/delivery stage.

Further confusion about XML formats can follow in either of these stages. For example, there are some book publishers that see little need for any DTD or schema other than DocBook or NLM (National Library of Medicine), which these publishers see as a perfectly fine starting point for whatever customization may be required by the nature of the titles and content they most typically develop. Other book publishers wish for XML schema development efforts similar to those undertaken in other industries, such as DITA (technical documentation) or ATA (aeronautical industry), but addressing various book publishing segments with DTDs and schemas more relevant to their content types. This will likely continue as a debate for a long time, and, as more and more book publishers take on XML workflows and content enriching processes, it is likely that new XML schema specific to types of book publishing will emerge. Indeed, the Book Industry Study Group has launched an effort to examine precisely this question by forming a Digital Standards Working Group for Content Structuring. Early activities point to a broad effort to adopt or develop DTDs and schemas that will meet the widest range of book publishers. In addition, The Gilbane Group sees the need to explore in much more detail which specific XML formats publishers are using. The question about XML formats on the production side is itself hardly a settled matter. Eric Freese, Solutions Architect for Aptara, points out that when it comes to XML format, “You’ll be looking at DocBook or NLM DTD, because these identify the pieces of the content, and the semantic pieces within the content you need marked up. They can serve as a good, generic holder of the information, including any markup clues that you may need for whatever styling you may want to do to the content.” Freese notes, “Usually ePub would not be a good solution for storing the editorial masters, because it is essentially XHTML, and there is just not the expressiveness there to be able to do the kind of content manipulation and the management that most publishers want to do.” Freese admits that one could use ePub by putting spans around everything, “but it gets ugly really quick.” Freese sees ePub as an end-product format. “Do you want to keep your editorial master in paper and re-type it every time?” asks Freese. “EPub is just like paper – another delivery platform; that is all you should really think about using it for.”

Digital Publishing is Digital Printing Digital printing is already very well established, and is seen as very much a part of digital publishing programs among many book publishers. The reason? Digital printing makes a lot of sense. Many publishers have mature digital workflows for print that support digital printing well. The notion of an “all Adobe” workflow ending in print-ready PDF has been a mainstay for at least several years, for example. The theory of e-books enabling digital printing comes up against the reality that much of the digital printing – often referred to by an active subset of this technology implementation, print-on-demand – began to grow in practice well in advance of e-book publishing programs. The fact that a well-designed digital workflow used to improve savings and support the creation of new digital publications and revenues happens to be very applicable to digital printing is more of a coincidence than historical consequence. Figure 36. Perception of E-Books’ Support of Digital Printing

58.0%

Yes

I don’t know

31.0%

11.0%

Source: Gilbane Group Publishing Survey, July 2010 Question 73 - GB Q "Are ebook editions being published by your company because they can more easily support digital printing options such as print on demand (POD)?" Base = 100 ©2010 Outsell, Inc. Reproduction strictly prohibited.

One example of digital printing’s pre-e-book existence is John Wiley & Sons Global Digital Print (GDP) Program, which started over a dozen years ago, and currently manages digital printing for over 12,000 of this publisher’s 75,000-plus print titles. “One of the things that people in the industry are tripping over right now is the distinction between digital publishing in print and digital publishing in electronic [form],” says Lynn Terhune, Global Digital Print Administrator/Corporate, for John Wiley & Sons. “In the US we operate in a true-POD system, where the title is drop-shipped to the customer, and we also participate in Amazon’s and Ingram Content’s distribution programs,” Terhune notes. She is quick to point out that Wiley also uses digital printing for reasons other than that of GDP, which is to keep titles in print. “On the custom side of digital printing, Wiley does have a pretty strong program called Wiley Custom Select,” Terhune says. “There are custom titles, there are other titles stored in our warehouses that are printed digitally.” Cost savings and additional revenue are two key objectives to digital printing at Wiley’s GDP, but Terhune admits that getting exact numbers is still difficult, without getting the finance department to account for savings from having POD be non-returnable, and distribution costs and storage savings. Digital Book Publishing Industry Outlook ©2010 Outsell, Inc. 116

The custom book program Create, offered at McGraw-Hill, is another instance of what can drive print on demand and other digital printing solutions. Chris Kaefer, Director, Content Strategy, McGraw-Hill Higher Education, sees recent positive developments in the prices and technological capabilities to carry off small press runs of titles that require high-fidelity images or other complex components. “On POD or short run, there is a big differentiation in cost between black and white and color,” Kaefer notes. “Today, within Create, you can have a custom book with as few as 25 copies requested, in color, at a price point that is very palatable to everybody.” But Kaefer also points to custom publishing, saying, “This is something that people will continue to drive toward: they want highly customized, low run products.” For a print version of a Create project, what is delivered to the digital printer vendor is a set of PDF files that are the result of what the participating instructor has selected, melded into print-ready PDF. “Create is a platform that allows us to print otherwise out of print titles that an instructor orders,” says Kaefer, “because we still have that content in our repositories.” Figure 37. Reasons for Using Digital Printing Maintaining backlist and out-of-print title availability

21.5%

Publishing new titles through digital short run printing, because traditional offset print runs require too high a run to be economical

20.6%

POD/digital publishing as a means to reduce inventory liabilities, including returns control, incremental reprint options, and overstock risk management

16.7%

POD as a print distribution alternative

12.7%

POD/short run digital printing as a just-in-time (JIT) warehouse function for distribution and fulfillment, integrated with title inventory and planning systems POD/short run digital printing as custom publishing enablers

10.5% 7.0%

Digital printing as time-to-market competitiveness advantage (“crash publishing”)

5.3%

I don’t know

5.7%

Source: Gilbane Group Publishing Survey, July 2010 Question 74 - GB Q "Does your book publishing company use digital printing f or any of the f ollowing reasons?" Base = 228 ©2010 Outsell, Inc. Reproduction strictly prohibited.

Andrew Weber, Senior VP, Operations & Technology, Random House, also talks about the publishing house’s use of digital printers, including what some in the business refer to as Ultra Short Run (USR). “We have titles that don’t require very large print runs to keep them active, where we can print 100-250 copies of titles digitally, and the economics are not as good as offset, but not as bad as printing one at a time digitally.” The other application of digital printing at Random House is strict POD: “We have a range of other titles which are at the end of their life, but we want to keep them active… in a more pure print-on-demand configuration. We carry some of those in our warehouse, and we also make the files available to Ingram, Amazon, and Baker & Taylor for them to print for their customers.”

There are some POD initiatives taking place at Wolters Kluwer Health, where Jabin White is Director of Strategic Content. The biggest requirement for POD is the need to supply “pretty pages,” remarks White. “Every way we have to getting to that point today is tied to an existing outsource compositor, and that can make the economics of POD not work for us.” One challenge is simply getting the right files from the original vendor to the POD vendors, in the sort of file format needed, such as high resolution. “I could be sending Quark with embedded fonts, or print-ready PDF, instead of ePub, but it is the same headache,” notes White, who looks to WKH’s implementation of Really Strategies RSuite content management platform for publishing for the solution. “RSuite comes in where there’s always been tension between needing final pages, but also needing to be able to ‘nudge’ them,” says White. “I envision being able to come out of RSuite with a ‘closer-to-bluelines-than-has-ever-been-possible version’ that opens up some POD possibilities. Once we have more content in RSuite, we’ll be able to query RSuite, take advantage of the structure and semantic enrichment we’ll have in there, build a custom publication, and get to pages a lot easier than we can today.” White sees POD as a particularly good fit with STM publishing because the markets are finite, but high value. An unmistakably important trend is the high level of use digital printing now enjoys, even while a number of the reasons being cited range widely. Among the most common are keeping titles in print and what The Gilbane Group calls “just-in-time” inventory, but custom printing has a strong showing, and physical plant and other warehouse cost-related issues has some presence. Also, on the matter of formats cited for POD and digital printer hand off, print-ready PDF is the ubiquitous choice. POD and DAD (Digital Asset Distribution) Digital asset distribution systems remain much-considered, but under-used by book publishing, especially in terms of managing digital printing needs, despite the long-time practice of printer vendors receiving and handing off title files from and to publishers. Perhaps one significant change is that digital printing can demand many more orders, at, often, far smaller unit numbers, making file management and distribution much more demanding relative to offset print jobs. Another factor that may come into play in explaining why DAD hasn’t yet caught on is that book file transfers, while often a pain in the neck, aren’t that hard to do, and the digital print vendor, just like the offset print vendor (and often these are one and the same), is a motivated partner that supports the book publisher’s effort to send the printer work. The Gilbane Group believes that DADs aimed at e-book titles and e-book and digital publication files management and distribution need to be looked at more closely, to see if there is sufficient market need. Publishers and vendors need to more closely collaborate to make the DAD vendor offerings more widely used. This can begin with a look at the marketplace’s perceptions of needs, benefits, or shortfalls of such systems.

The Place for Printers Book Business, in its February 2009 issue, carried an article by James Sturdivant, titled, The Industry’s Future: Technologies and market changes are reshaping the book publishing landscape. Where are we headed? One excellent point made by Sturdivant was “Many of the changes we can expect to see five, 10 or even 15 years down the road, experts agree, will be driven by expectations in a media market built around consumer choice, rather than top-down, push-marketing models.” In terms of digital printing, Sturdivant had these projections: Any offset publisher [in 5 years] not offering POD as an option will have to upgrade to meet the demand for flexibility from publishers. Offset will continue to dominate front-list manufacturing. [Within 15 years] offset printing will have declined significantly as the price per unit and quality differences shrink for digitally printed books. POD and electronic distribution will allow book distribution models to more accurately meet demand, and this will include an erosion of returns. As we discussed in the manufacturing processes section for book publishers earlier in the report, book manufacturing printers have already moved strongly to digital printing, and The Gilbane Group sees no reason to disagree with the views widely held among print trade magazines and consultancies that the opportunity for book printers in the years ahead will increasingly be found in digital. Benefits such as customization, versioning, POD and short-run, inventory control, return reduction or elimination, and the process efficiencies of the book publishers’ digital workflows merging automatically and frictionless into digital printing and inline finishing workflows are already being well-proved by book publishers, and becoming standard best practices. What remains less clear of the years ahead is the answer to the question of whether or not traditional book printers – even as they move toward more digital printing – will continue to have the large share of book printing business, or find themselves sharing the expanded market for digital printing and POD with new players that participate much more broadly in the digital book workflow and business processes. Digital printing is already a real marketplace factor for book publishers. The types of companies that will be working with the book publishers over the next few years remain an open question, at present. Digital Printing Books Surge… Amazon, Lightning Source, Google Book publishers traditionally work with book printers, and the relationships are often long-established and well-set. The advent of competitive digital printing has forced a large number of book printers to expand their offset cababilities with digital, and, increasingly, effective workflow ingestion from book publisher to printer – whether as part of a DAD hand-off or not – has become a key differentiator among printing services. There are, however, other big developments in the world of digital book printing and Amazon.com yet again takes a central role, this time in the form of the Amazon.com BookSurge program. On March 31, 2008 the Amazon.com Books Team published this statement: Digital Book Publishing Industry Outlook ©2010 Outsell, Inc. 119

We wanted to make sure those who are interested have an opportunity to understand what we’re changing with print on demand and why we’re doing so. One question that we’ve seen is a simple one. Is Amazon requiring that print-on-demand books be printed inside Amazon’s own fulfillment centers, and if so why? Yes. Modern POD printing machines can print and bind a book in less than two hours. If the POD printing machines reside inside our own fulfillment centers, we can more quickly ship the POD book to customers – including in those cases where the POD book needs to be married together with another item. If a customer orders a POD item together with an item that we’re holding in inventory – a common case – we can quickly print and bind the POD item, pick the inventoried item, and ship the two together in one box, and we can do so quickly. If the POD item were to be printed at a third party, we’d have to wait for it to be transhipped to our fulfillment center before it could be married together with the inventoried item. The statement went on to emphasize “speed of shipping” as a key element to this dictate that Amazon. com would be the sole digital printing vendor for POD titles ordered through them. “Simply put, we can provide a better, more timely customer experience if the POD titles are printed inside our own fulfillment centers. In addition, printing these titles in our own fulfillment centers saves transportation costs and transportation fuel.” Amazon.com wasn’t insisting that book publishers use only Amazon’s digital printing services exclusively, but any titles otherwise printed digitally would have to be handled as inventory, not POD. “You can use a different POD service provider for all your units. In that case, we ask that you pre-produce a small number of copies of each title (typically five copies), and send those to us in advance (Amazon Advantage Program – successfully used by thousands of big and small publishers). We will inventory those copies,” the statement also included. Not surprisingly, Ingram Book Group (before the company changed its name to Ingram Content) issued its own statement, relative to its Lightning Source efforts. “Publishers are telling us they feel Amazon. com’s actions are not appropriate,” Ingram’s statement read, citing “free choice” as crucially important to book publishers’ own considerations regarding “insourcing and outsourcing.” Also not surprisingly, some book publishers, for whom POD is a central element of business, weren’t happy to hear about the Amazon.com BookSurge situation, especially after “Buy It Now!” buttons on Amazon book pages for POD titles from non-BookSurge sources started to vanish. Booklocker, a Maine-based POD publisher, filed suit. In a settlement dated December 16, 2009, Amazon agreed to allow Booklocker to continue to sell through Amazon.com the POD books Booklocker published, creating, in one instance, an exception to the BookSurge POD requirement announced in 2008. Booklocker did not bring a class action suit against Amazon.com, and so the settlement applies only between Booklocker and Amazon.com.

Meanwhile, Lightning Source, at Ingram Content, remains the big player in POD, at least in terms of volume. A February 2008 article by Patrick Henry in American Printer, titled Building Blocks, included a number of interesting statistics about the company: What’s the run length range for digital book printers? Lightning Source (LaVergne, TN) can claim bragging rights on the low end. As the production arm of Ingram Industries, the world’s largest book wholesaler, Lightning Source has the power of a global distribution network behind it – an advantage that almost makes this printer a market segment unto itself. Using advanced digital printing equipment from HP, IBM, Océ and Xerox, the company produces 1 million books per month from a database comprising more than 400,000 titles from about 4,300 publishers. The almost impossibly small size of the average print run – just 1.8 copies – is a testament to Lightning Source’s total mastery of the manufacturing process. Although updated numbers are hard to verify, one source puts Lightning Source’s total at over 60 million book units produced, with 600,000 books in its database, and now more than 6,500 publishers participating. Keep in mind, too, that Lightning Source has a second primary line of business: A comprehensive e-book digital fulfillment system that provides a full range of services from digital rights management to content delivery in multiple formats. Enter Google. An article by Norman Oder, in the September 17, 2009 issue of Library Journal, Espresso Book Machine can print paperback in minutes, reported on Google and On Demand Books (ODB), the maker of the Espresso Book Machine (EBM), having signed a deal to provide POD access to more than two million public-domain titles (i.e., published before 1923) in the Google digital files. Oder points out that “The deal also presages potential POD access to millions more in-copyright ‘orphan works’ should the Google Book Search settlement be approved.” The EBM, which its makers call “an ATM for books,” costs about $80,000-$100,000, but also can be leased. It takes about five minutes to print a paperback described as of “library quality.” EBM users have access to more than one million public-domain books through the Open Content Alliance (OCA), in addition to titles by a growing number of publishers and self-publishers. Jason Epstein, former editorial director of Random House and a co-founder of ODB, is quoted by Oder: “With the Google inventory the EBM will make it possible for readers everywhere to have access to millions of digital titles in multiple languages, including rare and out of print public domain titles.”

Norman Oder, in the same magazine’s May 6, 2010 issue, reported on new updates to the Google Editions plans originally announced at the Frankfurt Bookfair, in 2009. The title of the article, Google Editions, Bookstore in the Cloud, Will Go Live By July, wondered in its subtitle, “Another disruptive threat to publishing?” The article reported on the talk given by Chris Palma, Google’s manager for strategicpartner development, who spoke at a panel presented by Publishers Weekly and sponsored by the Book Industry Study Group, held at the offices of publisher Random House. Here’s Oder: Google Editions, the search giant’s “cloud bookstore” of titles available on any device, is slated to go live in June or July, posing an enormous challenge to existing digital bookselling models, continued disruption in the publishing world, and – as was made clear at a panel discussion in New York on May 4 – bypassing libraries in the near term. Google Editions is separate from the database intended to be created from millions of out-of-print books scanned from libraries, which certainly would be marketed to libraries, assuming the settlement, pending before a federal judge, is approved. With a sibling project, it’s not unlikely that Google will ultimately seek a library market, though Google Editions will be marketed via individual Google accounts. Oder reported that Palma described web-based cloud computing as a third major step in computing, after the mainframe/PC and the web. “Our market, and potential market, is not the people who’ve bought Kindles or iPads,” Palma said, but rather the 1.8 billion people who access the internet around the world. Google Book Editions and a ‘New World Order’ in Book Publishing, by Calvin Reid, in the May 5, 2010 issue of Publishers Weekly, also reported on the Google panel: Indeed the panel focused on the implications of the Google Book Editions, the much anticipated, much power-pointed and muchdelayed venture by Google that is designed to sell and provide access to millions of books online no matter what device a consumer uses to access them. Set to launch in June or July of this year – Google’s Chris Palma guaranteed the program would launch by the summer – Google Editions will have a dramatic effect on digital book market (and the print one was well) offering a vision of a new book publishing marketplace as a part of a “cloud computing platform” or a online marketplace where books can be searched for, bought and stored on the internet and read anywhere, any time, on or off line.

As to Google Editions and POD, the details are still unclear, even though the intention to be flexible in meeting publishers’ own plans for it. In BEA 2010: Getting To the Details with Google Editions, Norman Oder, in the May 26, 2010 issue of Library Journal, reported Google strategic partner manager Mark Nelson’s answer to the question, “Will Google Editions be compatible with print-on-demand?” The answer: “We do want to provide features for users; it will be up to the publishers.” Google Edition’s response to POD interest on the part of book publishers, will, of course, wait upon the book publishers’ desires, although Google may be the one making POD decisions for the million or so “orphan” and public domain titles already available beyond any book publisher’s control. While the specific situation of POD and Google Editions remains in flux at the moment, it stands, alongside Amazon.com’s BookSurge, as one more potential disruptor of the traditional book publishing value chain. The Gilbane Group believes that such potential disruption does not negate the clear and important benefits digital printing provides book publishers. At this stage, book publishers must realize that there are many real benefits to digital publishing, and that the new partners that are emerging to provide digital printing and POD capabilities to book publishers expand their business model choices and opportunities. Who provides POD is far less important than whether or not POD provides book publishers with expanded sales, new markets, and lower costs. Digital printing is already a well-proved component of book publishing’s success; the real issue with Amazon.com’s BookSurge or Google Editions involves marketing processes far more than production processes. Calvin Reid’s article also sees the author writing that Palma outlined a world that now features more than 51 million iPhone, iPods, and iPads; 100 million other smartphones; 5 million e-ink devices; and more than 30 million netbook computers. Palma talked of Google’s plans to offer e-books for any device or format including the ability to read e-books through a web-browser – HTML5, a new and secure web standard that will offer a variety of functionality, including the ability to read books, that will take place in a web browser like Google’s Chrome without any plug-ins. The Publishers Weekly article also noted that Palma said that although Amazon also offers a cloud computing vision of the future through its Kindle publishing platform, unlike Amazon, Google Editions offers an “open platform” to book retailing. The digitally connected market – to the tune of perhaps 2 billion prospective customers today – is the central issue, and digital versus offset, or who runs the POD line, is not. The same holds true in regard to e-book reader devices.

E-Reader Devices in Flux, But So What? Repeat after us: What happens to specific devices or formats, such as Kindle or the iPad, will not be a significant factor for book publishers. Indeed, our survey shows relative calm among book publishers regarding e-book readers, with only slightly less than 10% of publishers agreeing to this statement about e-reader confusion as a significant barrier, “There is confusion within the marketplace about e-reader device targets – too many devices and formats.” Barely 6% agreed to the related statement, “There is confusion within the book publishing company about e-reader device targets, and a ‘winner’ can’t yet be picked.” Digital Book Publishing Industry Outlook ©2010 Outsell, Inc. 123

While we are confident that the days of e-book publishing are here, it is notable that slightly more than 20% of those taking the survey indicate that their book publishing company is not yet engaged with e-books, as shown in Figure 38. On the other hand, 27.8% of book publishing houses responding to the survey cite 200 or more e-books published in 2009. More than 20% of respondent answers in Figure 38 showed that their book publishing company published no e-books or other digital publications, and about another third published less than 50 digital titles. Figure 38. Book Publishing Companies’ E-Book Production Numbers None

20.9%

Less than 50

32.3%

Less than 200

19.0%

Less than 500 Less than 1,000 More than 1,000

13.3% 6.3% 8.2%

Source: Gilbane Group Publishing Survey, July 2010 Question 3 "How many digital titles did your company (include all imprints) publish in 2009?" Base = 158 ©2010 Outsell, Inc. Reproduction strictly prohibited.

There will remain plenty of help for book publishers to deal with the format flux, and, as book publishers move more completely into digital workflow – and especially grow in sophistication in regard to XML content format within editorial and production processes – the difficulties to meet specific output format demands will ease. This help may come from outsource vendors who continue to specialize in and focus e-book format conversion, or from the growth of more capable and better established e-book format standards (such as ePub, which is going through a new revision to expand its handling of potential content-types and interactivity). This will also be helped by the likely de facto open format capabilities of emerging devices that will be able to present several kinds of e-book formats through e-book software (such as Blio, from K-NFB) and apps. The current usage of various digital formats is shown in Figure 39. Figure 39. Digital Formats in Use at Book Publishers Portable Document Format (.pdf)

28.2%

ePub, IDPF (.epub)

21.8%

Kindle (.azw)

15.6%

HTML (.html)

11.9%

Mobipocket (.prc, .mobi) Plain text (.txt)

9.2% 3.4%

Microsoft Reader (.lit)

2.4%

PostScript (.ps)

2.4%

FictionBook (.fb2)

1.4%

I Don't Know

1.0%

Other

2.7%

Source: Gilbane Group Publishing Survey, July 2010 Question 5 "What digital publishing f ormat(s) is your company using? (Check all that apply)" Base = 294 ©2010 Outsell, Inc. Reproduction strictly prohibited.

According to recent research from Informa Telecoms & Media, (Mobile Broadband Devices: From smartphones and smartbooks to netbooks, note-books, USB modems and ereaders, 2nd Edition, May 27, 2010): …e-reader [with embedded WWAN connectivity] sales are expected to peak at 14 million in 2013, before falling by 7% in 2014 as the segment faces increased competition from a wide range of consumer electronic devices.” The relative decline, according to their analysis, will be driven by a shift away from dedicated e-readers towards other multifunction device types, notably mobile phones and tablet-formfactor computing devices including the iPad. This is likely to lead to a segmentation of the e-reader market into two groups; low price, low feature models and higher price devices with advanced features. It is largely about revenues, a not surprising conclusion to draw about the business of book publishing. “Increased revenues through new products and markets,” comes in as the raison d’être of digital publishing, at 22%, with “Increased sales” at 17%, as shown in Figure 40. Business process improvements of various kinds actually overshadow direct revenue and sales business drivers, however, with cost control looming large. Figure 40. Respondents’ Reasons for Digital Publishing Increased revenues through new products and markets

21.9%

Increased sales through improved discoverability, including “long tail” sales improvements

17.1%

Customer satisfaction gains and increasing benefits in building direct customer relationships and feedback mechanisms

14.2%

Lower costs through single-source, multiple output processes

11.7%

Time to market improvements

10.5%

Control over returns and inventory expenses

9.7%

Improvements in process efficiencies

9.4%

Improvements in business intelligence I don’t know

5.1% 0.3%

Source: Gilbane Group Publishing Survey, July 2010 Question 83 "What are the high-level business objectives f or producing digital content products within your book publishing company? " Base = 351 ©2010 Outsell, Inc. Reproduction strictly prohibited.

This analysis seems quite sensible, in our opinion, in that the breakout mirrors two distinct classes of content: the straightforward narrative (as in novels and memoirs), and the “enhanced e-book,” defined by the incorporation of rich media and high levels of interactivity and connectivity. This second class of content is still largely to happen but there are already many early examples and a long conceptual history of this type of publication (think of Alan’ Key’s DynaBook concept from 1972, or The Voyager Company’s CD-ROM based “Expanded Books” from the late 1980s and early 1990s). The Informa Telecoms & Media research report, like many other analytical reports and news stories, refers to Apple’s iPad as the “highest-profile competition for dedicated e-readers,” but the analysis also rightly notes other multifunctional devices such as mobile phones, tablet computers, netbooks, and other portable consumer electronic devices as probable contributors to the competition with dedicated e-book readers. There are several types of e-readers (e.g., Sony and Kindle) and multifunctional portable computing devices (e.g., Apple iPad, smartphones, and tablets) vying in the marketplace, and this makes book publishers nervous. This will shake out in a couple of years and standard formats will emerge. Figure 41. E-Readers Galore!

Source: Outsell, Inc.

As January 2010’s Consumer Electronic Show (CES) well illustrated, there is a huge amount of activity on the hardware side of content presentation. We expect to see many new devices over the next year or two, even while IREX, a long-time e-reading device (relative, that is, to most other e-readers in this still-young marketplace), has recently filed for bankruptcy, and yet other readers with origins in the first big and largely failed e-book market efforts of a decade ago have long disappeared. Overall, we believe the convergence of functionality that supports enhanced e-books among general-purpose mobile communications and computing devices, with emerging standards for display, sale, and distribution of e-book titles, will make platform issues for digital publishers largely moot.

Significant Barriers Remain The good news is that e-books and digital publishing are doing okay within book publishing, generally speaking. The bad news is that there are many significant barriers to e-books and digital publishing. The way rights and royalties are being handled for digital publications – or, perhaps more to the point, often not being handled – is one big barrier that is only likely to grow larger as more digital product hits the streets. Another looming problem that is sure to add further pressures on rights and royalty processes, including rights tracking and royalty contract support, can be expected as digital publishing strives toward new products through “chunking” or making subsets from extant titles. Surprisingly, the issue of digital rights management (DRM) seems to be an issue with more sound than fury, with many publishers either reconsidering the use of DRM, even while remaining apparently happy with the e-retailers themselves imposing DRM (such as Adobe Content Server for PDF formats), or, in the case of online content, access control through authentication (e.g., log-in). We sought hard to find signs regarding the issue of integration or interoperability between publishing processes, especially as supported via technology platforms. While there are a surprisingly high number of offerings for title information management and enterprise resource planning (ERP) platforms aimed at publishers, both the uptake of these and the actual integration of publishing processes through these systems seem modest. Integration or interoperability will be, we believe, a major development in the advancement of improved publishing processes’ efficiency and overall cost-reduction, but the market education – as well as the hard work of figuring out how to achieve effective implementation – largely remains ahead. Very unsettled selling, pricing, and business models also provide significant barriers to book publishers trying to make a go of digital publishing. The good news here is that while there is still much more to be figured out, today’s market opportunity for book publishers is real and big enough to get them involved. Arguably, the market opportunity may be more the result of subsidy than pure market forces, but the matter is one of needing to get revenue coming in, and book publishers are seeing this happen. Like business models – and very much related to them – are the very unsettled distribution mechanisms and confusion about channels and value chain partners being encountered by book publishers. If any early conclusion about this matter can be drawn, it may well be that book publishers are doing with e-books and digital publishing what they’ve done with their print business over many decades, which is to rely on partners – Ingram Content, OverDrive, Baker & Taylor, LibreDigital, etc. – to handle the actual work of getting the e-books to e-book buyers. The irony may be that e-books are digital and in theory easily distributed and sold, unlike physical books that require a lot of handling, space, and diesel. Royalties and Rights: Acceptable Level of Confusion Another finding through the study is that the ongoing confusion about business models may not be a big factor in slowing e-book pursuit. This seems to be true even though there is a widely-held frustration among book publishers regarding the often clumsy methods of searching for and reporting on contracts and other central business documents related to royalty and rights issues for any title.

In effect, book publishers – almost without exception – wish for better mechanisms to make title information available to them easily, especially when backlist titles are concerned. Despite the march of technology into book publishing these days, the method for getting straight what royalty rates have been promised to the author under different circumstances, formats, and unit volumes is often based on sending someone in the office to look through file drawers or storage boxes for manila folders that contain the actual hardcopy of the relevant contract. This issue does produce a curious mix of complaint and compliancy today, with publishers wanting such information better managed, but neither expecting such platform support from the vendor community nor possessing a willingness to spend time themselves trying to solve the problem. We’ve found the royalty tracking and clarity issue is a pain in the neck for just about everyone, it doesn’t have that much power as a deterrent to developing an e-book, even while a practical resolution and technology management solution for royalties seems to be on almost everybody’s wish list. We believe the reason for this is that the additional revenue from e-book sales comes across as a pretty clear positive from not only the publishers’ perspective, but also the authors’ and agents’. “The rights and permissions issues have always been a real challenge,” says Chris Kaefer, Director, Content Strategy, McGraw-Hill Higher Education. “Now we are creating an environment that is much more granular from a customization perspective. But royalties is a tough nut to crack.” Kaefer admits that like a lot of publishers, McGraw-Hill has been anticipating royalty issues for many years, “whether it is the right to use an image in print or in digital, rights around font usage, and so forth.” Kaefer argues that the royalties issue is interesting because it has always been written around the print-centric product. “Now when I come bearing granular content, below the chapter level, when I’m starting to take sections and combine them with material from other authors, [resolving royalty issues] is going to be a really fun project.” The handling of rights and royalties in e-books is a pain today, Jabin White, Director of Strategic Content, Wolters Kluwer Health, Professional & Education, admits, even while he sees the resolution of these barriers getting better. “We have been requesting electronic permissions for everything for a couple of years, and our permissions process is no more broken or fixed than Elsevier’s…. Royalty solutions are in flux, so today royalties are difficult, but there’s a project in play to make this that much easier.” Neil L. Schmidt, Vice President Operations at Wolters Kluwer Health, agrees with White’s view that Wolters Kluwer sees royalties as an evolving issue. Schmidt points out that the issue of royalties is made more challenging within electronic publishing efforts, where, he says, “there’s royalties on a title and there’s royalties on individual articles, and then there’s royalties if someone is downloading a single paragraph.” Still, Schmidt points out, this is easy enough to figure out on a book title and for journals, since the publishing company tracks sales, and works on a typical royalty model as a percentage of sales. “The challenge in the electronic world is when this involves a partial book or part of an article, and that challenge is in convincing the author what portion of a book or an article translates into what payment,” Schmidt admits. “Quite frankly, I don’t know of any software program that accurately tracks that, and the model is still evolving: Do you do it through tracking the number of words used?”

What most concerns Schmidt is the complication of getting the author to understand that such granular usage isn’t reflected in a book royalty, bur rather for some piece of the book. “What does that arrangement look like?” asks Schmidt. “It’s not solved yet, and it is hugely cultural, the model is still evolving right in front of our faces, but there are still a lot of mindsets in publishing from years ago. It is solvable, Schmidt believes, but he sees that publishers are more interested in a solution, but that the software vendors haven’t caught up. Tod Shuttleworth, Senior Vice President and Group Publisher, Specialty & Global Publishing, at Thomas Nelson, knows that his publishing company uses the Klopotek system. “[Klopotek] means that we have better information than we’d ever had about royalties and contracts, and I assume that we are integrating that with the metadata [for specific titles] as it makes sense, but I can’t tell you that for sure because, honestly, it is more detail than I get into on a regular basis.” How much of a problem is knowing what the royalties are for the print editions, and the different digital editions? “That is not a problem at all,” says Shuttleworth. “For ninety-nine percent of the cases with our authors and their agents, they are just so happy that we found these new revenues streams and that we’re developing them, that they don’t care. Occasionally you get someone who wants to make a big deal about it, but then you ask him, ‘Well, okay, we’re doing all this to find new life and a longer tail for your property, and if you take these rights back, then what is your plan?’ And there is no plan. The fact that we’re finding new sales through print on demand (POD), which is now a huge proportion of our production mix, as well as e-book formats, most people are just delighted.” DRM: Being Solved by the Supply Chain? When it comes to digital rights management (DRM), things are even more up in the air among book publishers. Almost all rely on their supply chain partners or licensees to implement DRM on downloadable content, but also use access control to protect their online content. As Mark Tully, Director of Architecture, McGraw-Hill, comments, “In regard to DRM or other efforts and requirements to protect the content, McGraw-Hill Education tends to rely on two strategies: PDF titles may use DRM, but the main body of web-based titles relies on access control.” Chris Kaefer of McGraw-Hill Higher Education reflects a similar approach, when talking about DRM as a feature that comes up with a number of their e-book products. “There are two versions of the CourseSmart material,” Kaefer points out. “You can download content from CourseSmart to your client or desktop, and there is a level of DRM around that.” The other version of interacting with the CourseSmart material is to work online, where content control, such as limits on the number of pages that are permitted to be printed, are in place. “We’ve discussed for many years how much protection you put into your content, but still make it a good user experience,” says Kaefer. “On some of our other products, we’re starting to hold the DRM back in order to make the user’s experience more comfortable and simpler. It varies depending on the product, the target device, and the discipline that it is in. There is no wholesale DRM that is applied across all of our digital products.” Andrew Weber, Senior VP, Operations & Technology, Random House, is succinct: “Our terms of sale require that the retailers supply DRM. The implementation of that is up to them.”

Mike Monaghan, Head, Publishing Technology Group, Oxford University Press, is concerned about protecting OUP’s copyright and the investment that their authors have put into the content, and that concern manifests itself in several ways. “We regularly look at the web for instances of web piracy,” Monaghan says. “We ask our licensees to implement some form of DRM on the content that we license to them.” But like many of the other publishers interviewed, OUP doesn’t use DRM directly themselves, “because the distributor of the content adds it,” says Monaghan. “If we start distributing e-content ourselves, we would have to seriously think about DRM, but we haven’t made any decisions on that yet.” “Historically, we had required DRM on everything,” reports Tod Shuttleworth, Senior Vice President and Group Publisher, Specialty & Global Publishing, Thomas Nelson, “but … on a case-by-case basis we’ll look at the situation and decide to take DRM off. We’re becoming more and more convinced that – to quote O’Reilly – the bigger problem is obscurity, not piracy.” When Thomas Nelson is implementing DRM, it is actually being done by their various digital supply chain partners. “Our position has been, well, if DRM is a big deal for Apple, okay, fine,” he says. Backlist and Front List Issues The gulf between frontlist titles and backlist can be big, but not unbridgeable. Still, many of the barriers for book publishers of e-books affect frontlist and backlist titles differently. Typical differences between frontlist and backlist titles include the following:

• Frontlist titles have, for most book publishers, addressed with clarity the basic issue of electronic rights;

• Frontlist titles tend to have contracts that are more easily accessible, retrievable, and manageable;

• Blacklist titles can have legacy file formats that are more difficult to transform into digital

publications. In many cases, publishers may only have physical copies of older titles and will need to create a digital format from the physical copy;

• Blacklist titles may prove more challenging in regard to locating the right versions of the title’s production files.

Although only significantly old backlist titles may be unclear about the publisher’s electronic rights, since publishers did start paying effective attention to this issue quite a few years ago, a number of “old” titles remain valuable titles in the e-book realm, and there are some significant court cases still playing out between e-book publishers and print publishers over who controls electronic rights. A far more recent change – and far less pervasive one among book publishers – is that contracts for frontlist and recent backlist titles tend to be more easily retrieved and managed than older backlist titles. This ease of access is important not only because electronic rights have to be determined as book publishers consider moving an existing print title into one or a number of e-book formats, but because contracts and associated title business files are the first stop for rights assignments and conditions. For many publishers, the practice of even simply using a spreadsheet to consolidate this kind of information about the publisher’s titles is rare, never mind the use of title information platforms that are designed to make this kind of title-related information available anywhere, any time, and in any number of formats and reports. Digital Book Publishing Industry Outlook ©2010 Outsell, Inc. 131

Title file format – and, even more fundamentally, title file access – can be real deal breakers when it comes to economically sensible backlist transformation into e-books. While the growth in the use of digital asset management platforms and other content management systems among book publishers may help relieve these problems, many book publishers remain far away from having well-integrated title file asset management widely in place.

Integration and Interoperability If distribution and supply chain options seem bewildering, these can seem quite staid when compared to the issue of the integration or interoperability between and among the various publishing processes that are crucial to getting content created, shaped, and to the user. A Business Upgrade by Alison Clements, from The Bookseller’s Supply Chain supplement on February 26, 2010 is an article that looks at the long-term benefits of investment by leading publishers, bucking the recessionary trend of cost-cutting, by spending money on new integrated software systems. In this piece, the author presents a good list of the common problems an integrated system can overcome for publishers, as follows:

• Not being able to access accurate up-to-date information when required, for example when producing advance information sheets – staff are spending too long searching and crosschecking;

• Lack of visibility and control of rising production and distribution costs – manual cost comparisons, budgeting and forecasting are time consuming;

• Too much time and money spent maintaining a number of disparate systems, databases, word documents and spreadsheets – each system requires backing up and updating individually;

• Difficulty in managing schedules and workflow – keeping track of numerous separate schedules in order to meet deadlines can easily fail if one individual falls ill, for example;

• A complicated and laborious process for managing rights and sub-rights to control piracy; • Limiting systems that are unable to succeed in and exploit the digital space; • Inefficiency in sharing information such as ONIX with Nielsen, distributors, wholesalers and retailers;

• Facing a constant challenge to comply with new industry standards such as ISBN 13, ONIX 3, BIC 2.1.

Here’s the theory that spurred this report in the earliest days: If the content is digital, the publishing processes have a greater potential for interoperability through which book publishing can improve its efficiencies, expand its products and markets, and lower its costs. It is a nice theory.

We don’t want to bury the lead: While there have been plenty of efforts expanded on reaching the alldigital processes paradise, there remains only modest real world accomplishment. There are vendors that seek this promised land, and, fortunately, these companies offer value to book publishers even though falling short of the ultimate destination. We were especially interested in gleaning the practical advances on title information management (TIM) systems and enterprise resource planning (ERP) platforms within book publishing as it moves, increasingly, to digital publishing. Figure 42. Levels of Interoperability Among Publishing Processes at Book Publishers There is a modest level of interoperability between and among the various publishing systems in use at my book publishing company

51.1%

There is little or no interoperability between and among the various publishing systems in use at my book publishing company There is high degree of interoperability between and among the various publishing systems in use at my book publishing company

I don’t know

20.7%

16.3%

12.0%

Source: Gilbane Group Publishing Survey, July 2010 Question 84 - GB -Q "What level of interoperability exists among the book publisher’s publishing systems? " Base = 92 ©2010 Outsell, Inc. Reproduction strictly prohibited.

A very practical approach to process integration was found at Hachette Book Group (HBG). Matthew Bennett, Executive Director of Product Management at HBG, makes the useful point that book publishers integrate their systems where it’s important to them, but that there can be a different focus at a different book publishing company. “Here at Hachette, we have put a lot of time and energy into integrating our metadata,” Bennett says. “For us, it’s very important that we have systems of record for our content and the metadata associated with it.” Bennett points out that another big priority for HBG is to keep key business systems in sync. “Some publishing companies may have focused more on the ERP backend side of things,” he says, “and we certainly do integrate between our title management and ERP systems and our warehouse management system. We wouldn’t be in business if we didn’t.” But integration is a tough thing to quantify, Bennett argues, because it can be accomplished in a number of ways that are not always transparent to the business, even as the integration efforts may accomplish their goals. “Does integration mean that it’s all live, so if I change something in my title management it’s available in the warehouse system, or is overnight batch processing considered to be integration?” Bennett asks. “We certainly have very strong integration across everything,” he notes. “We don’t have multiple rekeying of data across our processes, and that’s important to us. But, it’s not all tightly integrated to the

point where if someone makes a change, everyone knows about it immediately.” At HBG, the in-house title information management system is the key to their process integration. “All of our publishers and publishing units use it. All title metadata is entered through it. Our ONIX feed is generated from it. That’s our single system of record for all metadata. We have plenty of workflows internally to know who needs to enter and approve what and when,” Bennett says. “It’s really as simple as that. Everyone is working on a standardized system. There are required fields so that you can’t proceed through the process or get a contract without having filled in various fields. In a nutshell, that’s how it all works.” Several Steps Toward Integration: North Plains TeleScope Publishing Platform Interestingly, HBG’s Bennett is now using the North Plains platform, although still early in the exploratory phases. North Plains’ drive to create more integration within digital publishing processes is a good match for HBG. Here is how North Plains puts its argument: However, the reality is that most vendors and solution providers tend to have strengths in one or more areas, forcing publishers to manage multi-vendor relationships if they intend to operate a complete e-book program. This can be very time-consuming for the publisher, not to mention that weak points are exposed with every new vendor solution integrated. Publishers are at considerable risk of implementing disjointed “solutions” that have little promise of providing any real cost savings or operational improvements. What these so called solutions will do however is eat up an incredible amount of the publisher’s time and provide little or no enhancement to their overall creative workflow, distribution, or asset monetization… The vendor should also have a true end-to-end solution that facilitates every aspect of a publishers’ entry into the e-book world so that they can easily integrate their online strategy into their existing processes. “We are witnessing the convergence of editorial, production, storage and distribution systems, bringing a revolution in publishing technology that will free publishers to produce any format, at any time, with massively reduced costs and timescales,” another line from a North Plains whitepaper states. Organizations are leveraging TeleScope Publishing Platform (TPP) to address their creative, operational, and workflow challenges, including:

• Disconnected and inefficient production processes; • Lack of unified collaboration and sharing among all contributors (photographers, authors,

editors, designers, marketers, and distributors), international offices, third-parties, and business partners;

• Wasted resources, both human and capital, due to needless searching for media assets,

recreating or repurchasing lost images, using incorrect versions, workflow bottlenecks, inefficient file transformation and delivery processes, lack of usage tracking, and lack of production automation;

• Embracing new technologies such as RSS feeds, user-generated content, and Web 2.0 applications;

• Identifying efficient ways to move images, video, audio, PDF, InDesign, PPT, Excel, Word, EPS,

GIF, and SVG files from where they are created and managed, into web pages, printed magazines, mobile devices, and a host of other delivery points;

• By enabling secure access and management of all digital media content throughout an

organization, efficient, centralized, and connected publishing workflow environment is established, right from the creative design stage through to production and distribution to all channels.

North Plains isn’t shy about TPP claims, and includes the following list in many of its marketing materials:

• Slash print book production times by up to 90%; • Reduce production costs by up to 80%; • Produce e-books at zero cost; • Automate distribution to partners and open new channels; • Sell e-content in a secure environment. TeleScope Publishing Platform is tightly integrated, and while TPP may not cover every single publishing process (no direct modules for royalties, for example), or provide enough functionality in and of itself for any particular of its processes as may be needed by some publishers, TPP does offer a clean platform for a lot of what is needed by digital publishers. That Adobe is a business partner, and special efforts have been made by North Plains to integrate well with Creative Suite and InDesign (and InDesign and XML) is itself noteworthy. North Plains TPP capabilities go well beyond this however, and include the following components:

• Publish: Import production-ready manuscripts, instantly convert them to XHTML and compose

books. Then instantly output them into print PDF and multiple e-book formats. There are additional packaging options from CD-ROM and SCORM through to instant online accessibility;

• Remix: Once the content is created, TPP Remix provides an Advanced Content Object

Management environment that moves it beyond books and documents into customized interactive documents – allowing both publishers and end-users to create custom content in real time;

• Distribute: Finished books are sent from TPP Publish module to TPP Archive for secure storage.

Once there, TPP Distribute creates multiple, simultaneous distribution events to all commercial partner sites, aggregators, and fulfillment service providers. The book is then made instantly available for sale on TPP Sell;

• Sell: The TPP Sell bookstore allows the publisher to sell books, merchandise, e-books, online

subscriptions, and subscription libraries. TPP Distribute passes the ONIX data and all format fulfillment information to TPP Sell, and books are instantly available on the publisher’s booksite;

• Promote: From the moment files are ready from TPP Publish publishers can begin working

on marketing campaigns – creating portal pages for viral marketing strategies and multiple, simultaneous sales channels;

• Digital Asset Management: TeleScope’s DAM system provides secure storage that is the

foundation for the TPP module suite. It provides the advanced administration, reporting, and workflow capabilities for an end-to-end digital publishing solution. Publisher covers, graphics, and media can be prepared and stored in TPP DAMS – ready for use by any TPP module.

TeleScope Publishing Platform was initially released in 2009, and the company has been diligent in its revisions, including a new release in spring 2010 that provides enhancements for easier book design, automated image management, font management, ePub preview, and imports Microsoft Word manuscripts. The updated TeleScope Publishing Platform 1.2 now includes:

• Font Manager: Upload and manage a library of Font files directly in TPP Publish; • Media Manager: Upload, access and manage rich media and image files for inclusion in e-book or print versions. Media Manager automatically generates renditions of images in a variety of specified formats for immediate use;

• Dynamic Book Designer: Graphical user interface allows for rapid iterative modification and preview of design elements in book design templates;

• ePub Preview: Generate an ePub chapter on-the-fly to quickly evaluate the impact of document design on ePub format presentation;

• Word Import: Import and convert manuscripts in Microsoft Word to a single-source, medianeutral format for output to multiple-e-book formats;

• Page Extent Calculator: Dynamically calculate total page count based on the document design style settings for typesetting and composition tasks.

The Integration versus Rich Functionality Balance An important question publishers need to ask about integration solutions is whether such systems will be rich enough in functionality to support the products the publisher will develop and the ways in which the publisher will sell them. As publishers develop more digital products for more devices and channels, their needs for title information management and related products grow in functional complexity. This has put nearly all publishers who adopt such systems in the business of extending and customizing such products for their use. One specialized STM publisher’s experience is notable. Because of its large catalog (more than 12,000 SKUs) and numerous digital channels, it adopted Oracle E-Business Suite Financials to manage its title information, order entry, inventory management, and portions of its fulfillment and distribution Digital Book Publishing Industry Outlook ©2010 Outsell, Inc. 136

processing. In this STM publisher’s analysis, more specialized systems were too limiting, and the publisher was willing to take on the work of customizing the Oracle Suite to meet its needs. This choice was driven partly by an organizational initiative to consolidate platforms, but it was also driven by functionality and how the publisher saw its business growing in terms of the range of product offerings and the distribution channels. Three years after the publisher made its decision, the publisher has a successful, customized version of the Oracle Suite in use across the organization. North Plains’ TeleScope Publishing Platform, in Figure 43, stands as a leader in publishing process integration, including content ingestion, XML and other formats, e-book transformation, some promoting, selling, and distributing functionality, and a solid DAM foundation. Figure 43. A Glimpse of Integration to Come? North Plains TeleScope Publishing Platform

Source: North Plains

The tension between choosing to customize a general business process integration platform or to build upon publishing-specific systems such as TIM platforms looks likely to continue for some time. Offering from such companies as Firebrand Technology and Klopotek have some market penetration, and there has been progress in expanding some TIM platforms’ capacity to handle e-book-related issues, including, in some instances, e-book production. Typically, the capability expansion is through adding more and more modules, which may or may not be designed to easily support integration with second-party business platforms, such as SAP, Oracle Financials, or Microsoft Dynamics. It is our view that e-book and related digital publishing efforts are still new enough that market clarity is still to come in regard to the best route to integration. In part, we see our conclusion supported by the modest adoption of current specialty publishing integration platforms even before e-books were much of a real business factor. We’re respectful of the argument – heard from a number of publishers we interviewed, and supported by our survey findings – that the culture of book publishing is one where production and business approaches can vary quite widely among publishers, further frustrating the efforts of TIM vendors to provide widely applicable solutions.

As the percentage of publisher revenues continue to grow from e-books, and as distribution and e-commerce models settle out, the drive for better integration of publishing processes will increase. It is too early to tell, we think, if book publishers will adopt TIM systems as the core of their future integration efforts.

Rich Media and Enhanced E-Books The basic model for e-books is pretty well set, especially in trade publishing, where narratives – fiction and non-fiction – fit well into the Kindle-type (Sony and Nook, etc.) e-reader marketplace. Given the growth of apps and software platforms that also allow ePub and other e-book formats to be accessed on PCs, smartphones, and iPads and coming tablets, there is every reason to believe the many sources proclaiming continued strong sales growth. What is far less clear is what rich media and rich interactive titles will do in the marketplace, and the reason for this doubt is a simple one: book publishers – especially in trade – have little understanding as yet about what an “enhanced e-book” is, or of how to make a business out of publishing them. We think that the most likely – or, successful – areas of “enhancement” activity will be:

• Incorporation of social media features tied to the e-books; • Modest additions of rich media; • Resurgence of indexes and other active link-based features. Different Book Publishing Segments, Different Prices, Different Levels of Enhancements The qualification of this view is very much book publishing segment-specific. Education publishing has already a fairly robust history in the use and sale of rich media as part of their content offerings, and STM and other professional publishing has already proved the value of such things as superior search and retrieval in their online publications. Children’s books – with their robust illustrations and audience expecting to being interacted with (albeit mostly by parents and babysitters) – are likely to emerge as another rich media e-book success story, although as a category of trade publishing, the question of price becomes more central to the success or failure of enhanced e-books. The price question intersects with the book publishing segment question: what might sell well for $90 or even $900 to a researcher or lawyer – because the expense of information and related benefits supplied by the professional or STM publisher is offset by the cost of not having it – isn’t the same for trade titles. If you’re publishing a general interest book – a trade title – for $49.95, you’re simply going to sell far fewer units, no matter that it is printed, e-book, or stitched into a tapestry. Multimedia CD-ROMs didn’t sell well for $49-$69, which were common prices simply because the titles were so expensive to produce. While current trade book publishers are understandably worried about Amazon’s successful efforts to produce market expectation of $9.95 per e-book as being too low to drive profits when subsidies end, the right answer will never be that the sky is the limit when it comes to trade titles.

Only 12% of respondents claim to use “significant” amounts of rich media in digital publishing today, as shown in Figure 44. Figure 44. Level of Rich Media Use in Digital Publishing Efforts Today We use little or no rich media within our digital publishing program

43.0%

We use a modest amount of rich media within our digital publishing program

43.0%

We use a significant amount of rich media within our digital publishing program

I don’t know

11.8%

2.2%

Source: Gilbane Group Publishing Survey, July 2010 Question 85 - GB Q "Which level of activity best describes the amount of rich media (images, audio, video, simulations, etc.) currently part of the digital publishing program at your book publishing company?" Base = 93 ©2010 Outsell, Inc. Reproduction strictly prohibited.

While professional and STM publishers have provided interactivity- and media-rich electronic titles for many years, education publishing represents the most active area for enhanced e-books. This too, is price and cost relative: where textbooks and their related materials may easily cost the student a $100 or more, there is room for similar prices for online- or e-book-based alternatives. Furthermore, education publishers have a long history of developing ancillary materials related to their textbooks, whether in terms of tests, worksheets, audio-visual supplement materials, or other typical classroom aids. For education publishers, textbooks have long required enhancements, and the move to digital publishing is a difference of degree, not kind.

Fast forward five years, and over 86% of respondents anticipate using a modest or significant amount of rich media in their digital publishing, as shown in Figure 45. We don’t expect that half of all digital book publishing will involve “significant” rich media inclusion, except possibly via outside linking. Figure 45. Level of Rich Media Use in Digital Publishing in Five Years We will use a significant amount of rich media within our digital publishing program

49.5%

We will use a modest amount of rich media within our digital publishing program

We will use little or no rich media within our digital publishing program

I don’t know

36.3%

9.9%

4.4%

Source: Gilbane Group Publishing Survey, July 2010 Question 86- GB Q "Which level of activity best describes the amount of rich media (images, audio, video, simulations, etc.) that you expect, in f ive years’ time, will be part of the digital publishing program at your book publishing company? " Base = 91 ©2010 Outsell, Inc. Reproduction strictly prohibited.

Past is Prologue: Where Are the Enhanced Titles? With the exception of some strong interactive title publishing taking place within education publishing, and to a lesser degree professional and STM publishing, the most telling fact pointing to the uncertain future of enhanced e-books is the dearth of titles to date. Further strengthening this argument is the fact that the starting date to pay attention to is not the announcement about Blio, or of the iPad going on sale, but a couple of decades back.Yes, there’s little new – conceptually speaking – about multimedia titles. In 1990, Robert Abel founded Synapse Technologies, an early interactive media company, which produced pioneering educational projects for IBM, including Columbus: Discovery, Encounter and Beyond and Evolution/Revolution:The World from 1890-1930. Columbus was known in its day as a standout example of what we now call “expanded e-book.” This title was designed to allow the student or teacher to branch from topic to topic in multimedia content libraries, according to an article in T H E Journal (Technological Horizons In Education), (Vol. 19, 1992), as retrieved through Questia. “We want kids to become explorers, to take a first-person voyage into the period 1200-1600,” Abel is quoted as saying. “They can learn about people, philosophy, science, art, math, and key issues of the age. By moving through self-directed hyperpaths, they can pursue the ideas underlying the facts, and find the ones that interest them.”

And while Abel’s Columbus was a path-breaker, it was hardly singular. Another IBM Business Partner, AND Communications, developed The Illuminated Books and Manuscripts series, which was “designed to bring powerful multimedia-based resources to the analysis and understanding of textual works,” according to the same article. Based on what AND Communications called a “text augmentation” tool, the works “illuminate” five classic works of literature: Shakespeare’s Hamlet, AlfredTennyson’s Ulysses, Martin Luther King’s Letter from Birmingham Jail, John J. Neihardt’s Black Elk Speaks, and the American Declaration of Independence. Figure 46 offers a look at an enhanced Columbus title from 1991. Figure 46. “Columbus: Discovery” Multimedia Title, 1991

Source: Synapse Technologies, Columbus: Discovery, Encounter and Beyond, 1991, developed for IBM Knowledge Systems

The way “text augmentation” is defined, as quoted in the article, is rather illuminating about “enhanced e-books” concepts, too: “The system uses five levels of text augmentation. Together, these levels provide a multi-faceted library of reference tools keyed by ‘hot buttons’ in the text that work like footnotes. When activated, each level will highlight portions of the text as live buttons; using a mouse pointing device, the student or teacher can then click on these buttons to bring up reference support. References are delivered in the most natural possible manner – frequently through documentary footage delivered in brief video clips.” The five levels of filters include:

• Definitions; • Context (cultural and historical references for words and phrases); • Interpretations (multiple oral readings and critical interpretations of sections); • Method (analyses of literary devices and patterns); • Link (universal themes and patterns in the work). Digital Book Publishing Industry Outlook ©2010 Outsell, Inc. 141

There are a lot of other examples of enhanced books from the CD-ROM multimedia era, including The Voyager Company’s Expanded Books, numerous children’s titles turned CD-ROM, professional and STM CD-ROM titles that provided video and simulations, illustrations and images, audio and, even, read-out-loud. Was the problem the media? CD-ROM and its higher capacity DVD and Blue Ray discs are still almost ubiquitous, and especially compared to paper or VHS, a cheaper publishing medium. By 2000, the installed base of multimedia-capable PCs was in the many hundreds of millions, and disc-online hybrids had become a well-established model. It wasn’t the media. There are, of course, examples of enhanced e-books from today, and anyone making the e-book conference rounds has likely seen many of the same titles. A current darling is The Elements: A Visual Exploration by Theodore Gray, published by Black Dog & Leventhal (print edition) and Touch Press (iPad app), and developed for the iPad by Skylark Associates. This title is available for the iPad in the App Store, for $13.99, with the hardcover edition available in bookstores, with a $29.95 MSRP. Figure 47. “The Elements,” a Contemporary Enhanced E-Book

Source: The Elements is an iPad app version of the print book by Theodore Gray published by Black Dog & Leventhal (print edition) and Touch Press (iPad app), and developed for the iPad by Skylark Associates

The Elements, shown in Figure 47, includes over 500 rotatable 3D renderings of every element in the periodic table. The app contains the full text of the print edition as well as integrated access to the WolframAlpha computational knowledge engine. Readers can see multiple 3D samples of each element, learn about its history, atomic properties, and uses, and even find current market prices. Some elements also include video clips of scientific experiments, and the entire app can be viewed with 3D glasses for a deeper three-dimensional effect.Yes, spinning elements. Actually quite a striking title, but then, so is the print edition, albeit you can’t see the backsides of elements and examples, and there is no immediate linking in the hardbound version. Digital Book Publishing Industry Outlook ©2010 Outsell, Inc. 142

What has changed? Certainly, the platforms – iPad and netbooks – are more convenient, and Wi-Fi is a godsend. But as the new millennium hit a decade back, there were somewhere around 900 million installed PCs worldwide, and plenty of people were watching video and playing games and surfing the web on them. It isn’t the platform. It is the content. Getting good quality content in mono-medium (i.e., print) is tough enough, and far from cheap, unless one insists on placing cost relative to rich media costs, in which case, producing text can be a whole lot cheaper than producing video, animation, simulation, illustration, images, audio, music, and so forth. But ask any book publisher if getting content and shaping its quality for a book – print or e-book – is cheap, and any book publisher will let you know that getting content and shaping its quality is pretty much the most expensive part of the publisher’s efforts. Emerging Enhanced E-Book Platforms In our opinion, one of the most interesting enhanced e-book creation and reading platforms is Blio, a joint project of book distribution giant Baker & Taylor and Ray Kurzweil’s company, K-NFB Reading Technologies. Although the capabilities of this platform offer publishers nothing new, the cost and interface for the creation of the Blio version is low and as simple – in theory, anyway – as submitting a print-ready PDF file to Baker & Taylor. The result is an e-book that can highlight words, read out loud (using a synthetic text-to-voice option), and otherwise be a page-turning facsimile to the original print title, and, not surprisingly, the title gets distributed through Baker & Taylor, for the usual distributor percentage. Another benefit is that Blio readers are – or will be shortly – available for standalone readers, PCs, iPads, and whatever other devices look like they would be worthwhile to port over to, given a two-week notice. Among the most interesting Blio-related news comes from Quark, which unveiled Digital Publishing 2.0 in June 2010. Quark has teamed with K-NFB Reading Technology and Baker & Taylor to ensure Digital Publishing 2.0 delivers useful tools for digital content creation, digital content distribution, and the digital e-reading experience for Blio e-readers, in addition to more traditional applications. Quark, which has lost significant market share among book publishers over the years to Adobe InDesign, and the fast move with Blio could prove a strong counterweight to Adobe’s momentum. Don’t expect Quark to solve all problems for book publishers looking to publish enhanced e-books. If the book publisher is going to add a lot of new material – whether embedded, such as video or audio clips, or links to web-based resources, there is a lot to learn, or outside people to pay.

Not only are there lots of different audio and video formats (See Figure 48) – never mind the recording and videography expertise that will be required – but there are a lot of audio and video metadata issues, too. Record labels, and audio users like radio, TV, film, and the web have inconsistent metadata schemes. All of these constituencies need, and to some degree have, different technical, administrative, commercial, descriptive, and rights metadata that may overlap, intersect, or otherwise complicate things. Figure 48. A Sampling of Video Formats

Source: Wikipedia, “Comparison of video resolutions.” (http://en.wikipedia.org/wiki/ File:Vector_Video _Standards2.svg)

Image metadata is similar, both in terms of formats – .jpeg, .tiff, .psd, to name a few – but these also are carried by metadata container formats – Exif/TIFF, XMP, PSIR, IPTC-IIM – each of which has a variety of semantic schemes, and each of which has many metadata properties, and, of course, there are more inconsistencies than commonalities in all of these schemes. Video metadata has PBCore and EBU Core, which focus on archiving; EBU P-Meta, which focuses on video production; SMPTE MXF, which focuses on technical containers for video, including some basic metadata; and IPTC and XMP, which are being adapted to video. And pretty much all of this comes from the broadcast world. Not only are there the content creation and format challenges, but video production can be expensive. Also, if the publisher is dependent on the author or a third-party for creating and/or acquiring video content, there can well be rights issues. Finally, publishers can be challenged to make multimedia— especially video—work readily with their content in different distribution formats.

Publishers that check their technology ambition to concentrate on quality content and user experience will be the publishers who push the concept of enhanced e-books into the success that’s been elusive now for two decades. Social Media as Enhancement Oprah’s reading recommendations may remain the biggest fantasy for book publishers – well, trade book publishers – to ever have appeared, with the promise of blockbuster sales associated with the right mention. Special sales in the book clubs remain, to this day, a factor in a trade book’s P&L. Webbased efforts like Shelfari are making a go of social media focused on reading, Amazon has its Reading Lists, and Facebook its “favorite reads.” In various educational publishing efforts – typically those within an online environment – student-to-student interaction is a built-in feature, including study groups and notes sharing. The Gilbane Group has long seen social media within enterprises, whether in the form of blogs, wikis, tweets, or other forms of collaboration. We see that the social media experience is already establishing itself within e-books, and we believe that social media will emerge as one of the key enhancements to e-books. Such enhancements will support reader-to-reader communication and the development of self-identifying groups sharing mutual interests, and thus, effective marketing and sales channels from publisher to customer. Social media will likely emerge as a central component for e-book promotion and discoverability. Welldesigned and well-supported social media tied to specific e-book titles and to publishing efforts may become a development and sales channel for customized books and e-books, including customerproduced content such as reading group guides, custom editions, sequels, fanfic (fan fiction, derivative work based on published novels and their characters and worlds), blogs, contests, author meetings, and special selections. Copia is an example of how this kind of social media enhancement might take place. Unveiled by DMC Worldwide at CES 2010, Copia describes itself as “an open platform that combines content, social networking, and e-commerce with an array of wireless e-readers to deliver an experience around shared discovery. The Copia platform reinvents the way consumers experience content.” The re-invention of which DMC Worldwide speaks of includes “new way[s] to discover, enjoy, share and purchase books, newspapers, magazines and a wide variety of digital content.” Specifically, the Copia platform includes:

• Social Networking Compatibility: Community profiles are linked to existing Facebook, Twitter, and LinkedIn accounts, enabling users to share content across social media platforms;

• Collaboration Tools: Groups (including, according to DMC Worldwide’s intentions), can highlight,

annotate, and share reading content with other group members, including access to annotations from the entire community;

• Multi-Dimensional Browsing Experience: E-book content can be displayed in various ways for users

to browse and find what’s most relevant; content can be browsed by community rating, tags from users or publishers, notations, popularity, and price;

• Intuitive Search and Display Features: TheCopia.com offers multiple paths to discovery; users can filter search criteria, search results are provided in dynamic content views, and users can toggle between list views to expanded views across multiple content;

• Personalized Home Dashboards: Users connect to others via a home dashboard that displays consumed content, and personalized reading recommendations from friends;

• Unique E-Book Profiles: Books are given community value scores that connect to user ratings

and reviews; social recommendations are powered by various user feedback and a proprietary numerical system;

• Book Clubs Re-Envisioned: Users can create book groups to discuss and share reading experiences; users can also set personal data metrics for reading goals, create milestones, and set challenges among members to further reading as a social experience; Figure 49. A Copia E-Reader, Showing a Reading Community Review Page

Source: Copia

The business model for Copia is interesting, although as yet untested, as TheCopia.com has only recently gone into beta. The company seeks not just consumers for the e-books and community services it offers, but also publishers that wish to integrate the Copia application engine for OEM brands “looking to deliver content across their digital devices including e-readers, note-books, netbooks, tablets and smartphones,” according to the company. Copia includes a hardware play, too, with Copia e-readers that will be available for purchase online and at retail later this year. Interactivity is a Click Away The other e-book enhancement strategy that The Gilbane Group thinks is likely – if less glamorous than Flash video or rotating 3D chunks of Beryllium – is in the provision of links to outside resources. The technology for this is well-understood and easily enough implemented (as this is the underlying architecture of the web – hypertext transfer protocol). And, of course, there is a huge amount of content of every sort – from text to all kinds of rich media – already existing and available on the web.

In other words, embedding links into e-book content is technically simple, and because so much webbased content already exists, the linking to such content is inexpensive, especially compared to the costs of the publisher creating such content itself. There are still costs, of course, including the time and effort of identifying web-based content that is both relevant and desirable to the reader. This sounds pretty much like an editorial operation, right? Indeed, not every link must be external: table of contents, indexes, glossaries, footnotes, and expanded images and other art program elements (tables, figures) are all examples of traditional editorial features that have long been mapped to hypertext applications. There are challenges for publishers going this route, although as a practical matter many publishers – again, more so in education, professional, and STM publishing – have long experience with publishing titles with embedded links. Link maintenance and management is one problem that has not yet been fully solved, and will require some ongoing attention by the publisher. Rights and permissions don’t figure in if links are external, although the law is still somewhat ambiguous if sites are “captured” within the title application itself, or if the link goes to a site that is itself in copyright violation. But such rights checking too falls well within the editor’s traditional purview. The other challenge of note has to do with reading devices, where connectivity is a concern, as is the reading device’s ability to present the type of media being linked to. The original Kindle, for example, offers a connection primarily for downloading distinct e-book titles, and does not have either a robust interface for link-heavy content, or the screen to satisfactorily display a range of images or video. On the other hand, there are internal links that can be active in Kindle, and newer models are promising greater interactivity, although this might wait for ePub 2.1 to be finalized.

A Brief Glimpse into the Future A Blueprint for Book Publishing Transformation: Seven Essential Processes to Re-Invent Publishing has provided analysis about current trends and likely developments in e-book and digital publishing that may prove useful guidance for book publishers seeking to develop their digital publishing programs over the next few years. Some areas of development, like the use of digital printing, are already well along, and some concerns, such as conflicting e-book devices and unsettled formats are more red herrings than significant barriers for book publishers’ moving forward, where the issue of digital workflow and XML format within production processes offer the key to specific and uncertain conversion targets. We would be remiss not to look a further way down the road. In Outsell’s February 2010 CEO Topics report, 2010 – The Year of Reckoning: Five Crucial Technologies for Information Publishing, by Marc Strohlein, Outsell concludes that there are many “disruptive” technologies emerging of special interest to information publishers. In this undertaking, Outsell selected five technologies that it believes information providers need to factor into their business and product planning. These five technologies are:

• Enterprise 2.0. We agree with our Outsell colleagues’ analysis that all five of the featured technologies will be important in one way or another to information providers. In combination with the technologies highlighted in this study, such as XML, these five technologies will form the bedrock for the next generation of content selling, provisioning, and monetization. To this list we add – or redefine for book publishing specifically – the following technologies breakout:

• Integration; • Production flows, including XML; • DAMs, DADs, and distribution; • Devices. Not that there isn’t some overlap with Outsell’s list above; for example, cloud computing and integration can be part and parcel, especially considering the growth of Software as Service (SaaS) options from publishing vendors of content management, production outsourcing, digital asset management and distribution, and e-commerce options, to name only a few. Cloud computing and devices too overlap with mobile computing. While publishers have been experimenting with blogs, wikis, social networks, and the like (collectively Web 2.0) and wondering where the money is, a parallel universe has been evolving in enterprises, dubbed by Andrew McAfee “Enterprise 2.0.” For many publishers, that parallel universe may, in fact, be where the money is. Figure 50. Disruptive Technologies on the Horizon Mobile Computing Search

Cloud Computing Web Analytics and Business Intelligence

Importance

Semantic Tech High

RIA

Enterprise 2.0

Mobile-Cloud Computing

XML Blogs

Singularity

Semantic Web

HTML 5/Silverlight/AIR Location-Based Computing Natural Language Processing Open Source Software Augmented Reality-ARML Dynamic Scripting Languages RDF/SPARQL Microblogs

Micro-Targeted Advertising

Agents Wearable Computers APIs Ontologies Taxonomies 802.11n RSS E-Paper Mash-Ups Visualization 3D/Holographic Displays Cloud-based Gaming E-Readers Netbooks RFID/RFID Dust Virtual Reality/Communities Wikis REST Vertical Search Micro Formats Low Today - 2 Years

2 - 4 Years

5 Years and Out

The Gilbane Group sees SaaS already well underway in the services for book publishers, especially in the e-book distribution and marketing areas. Another important, but only recently emerging SaaS service that bears close watching, is in the area of title information management and ERP alternatives that may prove to be the entry for book publishers realizing significant new efficiencies from their digital publishing migration. The Gilbane Group welcomes the emphasis Outsell places on the total ecosystem in which the device exists in its identification of “Mobile Computing” instead of the focus only on e-readers, netbooks, smartphones, or tablets. Kindles may come and go, and today’s love affair with the iPad could end up yet another footnote in tech history. But as we’ve stressed elsewhere in this study, the progress book publishers are making in bringing content into digital and XML workflows, among other industry developments, will largely offset the potential market-retarding effect of any specific e-reader device failures over the next couple of years and forward. We see Enterprise 2.0 technology as being important to information providers because, as the February 2, 2010 Outsell CEO Topics report put it:

• The tools enable and drive significant changes in the way the knowledge workers do their jobs, most notably around the finding, sharing, and collaborative re-use of information;

• Enterprise 2.0 tools can and will become the gateways for external information to enter organizations;

• The tools evolved naturally on the web and are seeing rapid uptake in business settings, very

much unlike knowledge management tools, which were generally force-fed to users with little success.

Table 10 is from Outsell’s report on five crucial technologies. We would add into cloud computing: e-book distribution and marketing services and some of the new SaaS-based ERP and TIM offerings being made to book publishers. For book publishing, especially, it may make sense to add Apple to this list of big players, both because of the value of the “cloud-connected” devices Apple produces (e.g., iPad), but also because of the apps approach and services such as iBook store. Table 10. Major Cloud Vendors and Services Company

Cloud Service(s)

Description

Google

Google Apps, AppEngine, Google Gears, Google Web Toolkit, Google Gadgets, G Data, GAE Database

Complete stack of applications, tools, and services from the application layer to storage and infrastructure

Microsoft

Azure

Complete stack of applications, tools, and services from the application layer to storage and infrastructure

Amazon

Elastic Computing Cloud (EC2), Simple Storage Service (S3), and SimpleDB

• IaaS: offers computing services on demand • Saas: offers on demand storage for structured and Blob (binary large object) content

Much of the coverage given to the issue of publishing processes integration in earlier sections of the report could have as easily been labeled “Enterprise 2.0,” along with previous discussions of social media’s growing role in book publishing’s success. Of interest in regard to a different sort of integration is the carryover of technologies like “Enterprise 2.0” and “Cloud Computing,” with another of the emerging technologies, “Business Intelligence.” While business intelligence (BI) technology is not “publishing technology”, Outsell believes that the ongoing evolution of BI and web analytic tools will shape the way that enterprises use purchased content, and in turn, will drive requirements for how publishers package and deliver content. There are some direct applications of this emerging technology for some segments of book publishing – specifically professional publishing – that will mean information providers will have to package content that can be embedded into BI applications, co-residing with information from internal enterprise applications. From better integration of transactional elements for content products, to usage and rights tracking and more flexible business models, The Gilbane Group sees business intelligence emerging as a crucial publishing advantage, based on large part in our prediction of advances in metadata tagging of content that includes business rules. But tagging mechanisms – especially for more sophisticated concepts like business rules – remains more of a future development then an immediate need for implementation on the part of publishers. Semantic technology is another of Outsell’s future technologies to pay attention to, and book publishers – especially in the STM segment – have been in the forefront of these efforts for many years. As Strohlein puts it, “Semantic technology covers a broad swath of applications, some more useful than others. It goes beyond descriptive tagging and ‘whatness’ to encoding meaning extracted from content to infer ‘aboutness’.” From search engine optimization and improved support for automated custom publishing, to the potential disintermediation of traditional retail channels by expanding the efficacy of “discoverability” of content, semantic tagging will have a great impact on publishing. The main questions remain, however, what tools and processes need be available, and when will such advances become widely and cost-efficiently implementable? The Gilbane Group has long advocated rich tagging strategies, but even we temper the theory with the practical constraints of addressing who does it, how is it done, and what particular benefits can be derived from it. At some point in the next couple of years or so, these questions will have answers, and the consequences for publishing will be profound.

Blueprint Case Studies Wolters Kluwer Health: Digital – and the Right Partner – First The reputation of Wolters Kluwer Health (WKH) for providing the very highest level of intelligence to life science and healthcare professionals is long established. Professionals and students rely on WKH textbooks, reference products, and journals. The publisher’s bibliographic and reference databases, drug information software, point-of-care tools, web-based information systems, and online continuing education products also support the delivery of health information via interactive formats. Second only to Elsevier in size among scientific, technical, and medical (STM) publishers, WKH’s focus is medicalonly, unlike Elsevier.

Wolters Kluwer Health is best known for its Ovid and Lippincott, Williams & Wilkins brands. Lippincott, Williams & Wilkins, referred to most often simply as LWW, is a book and journals publisher, serving medical, health, and nursing professionals with titles for clinicians and the academic markets, including teaching universities, along with journals for the academic and clinical markets. “There are approximately 280 journals published by LWW,” reports Neil Schmidt, Vice President, Operations. “We also have about 3,000 active book titles.” Wolters Kluwer Health’s other brands include medical and drug reference tools such as Facts & Comparisons and electronic information providers such as Ovid, UpToDate, Medi-Span, and ProVation Medical. A number of WKH’s core publishing programs were leading efforts in electronic publishing decades ago. Ovid, for example, started as an online provider of The National Library of Medicine’s MEDLINE database, but has since grown into a wide range of other databases and other products. Early on, Ovid used – and continues to use – an SGML (Standard Generalized Markup Language) format, as WKH strived to incorporate new imprints and services for its customers. Further enhancing content that must be delivered through fast-expanding channels and in a moving-target of media devices, WKH continues to evolve its product lines. Wolters Kluwer Health, headquartered in Philadelphia, Penn., is part of Wolters Kluwer, a marketleading global information services company that addresses professionals in the areas of legal, business, tax, accounting, finance, audit, risk, compliance, and healthcare. Wolters Kluwer had 2009 annual revenues of $4.8 billion, and employs approximately 19,300 people worldwide, in over 40 countries across Europe, North America, Asia Pacific, and Latin America. Challenge Neil Schmidt points out that the Ovid side of Wolters Kluwer Health is not a publisher, but an aggregator of strictly electronic content. The content is provided by LWW from its books and journals, along with content supplied in electronic form from other publishers. “Currently,” says Schmidt, “Ovid has over 4,000 electronic books on its platform.”

Medical professionals have to purchase a subscription to Ovid. “There are multiple versions of titles, and we’ve been moving toward the media-neutral environment, which means that we create content to be displayed and previewed in the way that the user wants to view it,” Schmidt points out, “including creating content to be hosted on many devices, including Kindle, iPhone, and iPad.” There is also the traditional PDF that a subscriber may wish to download to his or her hard drive, so that it can be read later. “It’s all about the search and user experience that makes searching on Ovid a rich and rewarding experience,” Schmidt says. The VP of Operations’ responsibilities begin at author submission, right through the publication’s production, whether print or electronic. “We get the content ready to be published in the form that it wants to be used in by our customers,” Schmidt says. Wolters Kluwer Health takes the content from the participating publishers and prepares it for display on the Ovid platform. The editorial side takes on title and author acquisitions for books. According to Jabin White, Director of Strategic Content, at Wolters Kluwer Health, Professional & Education, “The front list for WKH is about 150 book titles, and about 80% of these titles are new editions of previously published works. We have many cornerstone titles; one example is the oncology text Principles & Practice of Oncology, or PPO, which started back in the 1970s, and changed the way that cancer is treated.” Wolters Kluwer Health does something digital with all print titles being published, although many are only put on Books at OVID, which had been the online strategy for a few years at WKH. “We’re actually doing other things with electronic publishing now,” says White, although the “default playbook” is to send the titles to Books at OVID. But there is a definite shift from the way WKH had worked in its early days on the web, according to White, in the efforts to identify revenues from digital content, with the company moving some of the P&L responsibilities to new positions that reflect the creation of new digital products. Some of these digital products are for e-reader devices and smartphones, and have WKH rapidly working to convert content into ePub. Part of White’s responsibilities is to build better infrastructure, which means conversion is currently being done, according to him, “after the deal is made,” and executed by a conversion vendor who then sends on the files to whoever had licensed the content. “We’re talking small numbers still,” says White. “We’ve got less than 100 titles in ePub.” Wolters Kluwer Health talks to “all the obvious players who want e-books – Amazon, Apple,” and there are also what White calls “pocket deals” which are more specific to a particular niche. At this point, however, “every one of these outputs is a separate thing,” admits White, but the company is actively working toward building the workflow that will support creating content in LWW XML. It is from the XML format that content is then transformed into ePub, VitalBook (for the VitalSource platform), or any other format that may be required. The journals side of things can be quite different, where there are relationships between WKH and professional societies, with WKH publishing titles for the societies; at least half of all journals operate editorially in this manner. The other half of the journals are proprietary, where WKH is the publisher and editorial driver, but these, like the others, must meet rigorous production deadlines. One of the biggest challenges for WKH is getting production workflows to be more effective, while at the same time supporting the growing list of formats the digital publishing world now demands.

Meeting the Challenge Wolters Kluwer Health uses, within its production process of content creation and preparation for publishing, services from Aptara Corporation. Within the in-house production department, EMC’s Documentum is used to track content through the production cycle, but “it has been customized to fit our business needs in our journal production process,” notes Schmidt. Especially in the journals publishing program, Documentum has been the incumbent control system, and Aptara is linked to Documentum through RSS feeds in order to pass content being worked on by Aptara directly and electronically, complete with e-mail notification generation to the relevant WKH workers. The services Aptara provides Wolters Kluwer Health are full range, from copy-editing to composition, and from metadata tagging to file conversion. “All of our vendors – including Aptara – help us move authors’ content into an XML environment for production,” Schmidt says. The tagging requirements reflect the different specialties of the content and the way WKH intends to serve that content to the market. “Ovid has a proprietary SGML tagging format that it uses, and Aptara adapts well to the changing digital requirements of the publishing world. Aptara just did a nice little suite of projects for our pathology network in our e-journals program, in the ePub format. They can handle most mobile and device formats used in the market today.” Digital-First, XML-Early In regard to WKH books, conversion is usually done as one-off instances, says White, and his team will send to Aptara what they have for the title. “If the title is from after May 2009, we have XML,” White says, “but if it is before, then it can be a crap shoot. We sometimes send PDF, we’ve got Quark files… it is nasty.” For many publishers, e-book format confusion can seem like a barrier, but WKH shrugs off this concern. “I’m still naïve enough to go for the ‘Big Enchilada,’ that is, going for XML-first content creation and management,” says White, referring to the content workflow ideal that has content itself being created in XML, as opposed to the more common real-world implementation – sometimes called “XML-early” – where content is created in whatever authoring tool the content creators use (such as the ubiquitous Microsoft Word), but then is converted to XML format as early in the editorial and production process as possible. “If you take the example of Aptara,” says Schmidt, “we just give them the content and have them prepare it for whatever formats we want. They have the technology and capability to handle it. It makes sense to use them because they are the ones taking the content, composing it, copy-editing it from the beginning, and putting it in electronic format right from the point of author submission.” These sort of capabilities from outsource vendors have only been widely available over the last couple of years, Schmidt points out, and it has made all the difference. “We call it ‘digital-first,’ putting content into a digital format as soon as possible, and we’re moving forward with the NLM (National Library of Medicine) XML standard, requiring all our vendors to be in that standard.” Like White, Schmidt would like to think of WKH as being all XML-first, but there are some remaining outliers among the publications. “The majority of our work is already in XML format,” Schmidt says.

The WKH digital publishing culture is still evolving, according to White. OVID’s content is in OVID SGML, but White is rebuilding the process to make the data that feeds into the OVID book engine and on to the various customer-facing solution sites flow through more easily. “Right now,” says White, “if the book content is going to a solution site, we’re doing a post-compositor XML conversion, and then sending it to OVID.” Since last May [2009], White has been enforcing conversion into the LWW DTD, and then to the OVID Document Type Definition, or DTD. “Now we have a little more richness and we’re trying to put in some systems to allow us to do that more easily,” says White. The new systems include RSuite CMS, from Really Strategies, and White’s group is working on an XML repository to hold title files. Mapping the Metadata At WKH, composition is now completely outsourced, along with other pieces of the editorial and production process to support the changing digital model. “The copy-editing is outsourced, and we’re pretty lean in what used to be called ‘developmental editing.’ Those responsible for this area in-house are now called product managers,” reports White. “Those guys basically outsource a lot, and their role now is more one of ‘traffic cop’ internally, and they have a network of freelancers for the developmental editing type work, the copy-editing is all outsourced.” White also describes four-person design groups that do templates. They’ll do a sample chapter and send that over to the compositor, who does the actual composition and page building. It is all external, artwork, medical illustration; it is all freelance, supervised by the design group internally.” “One thing that is demonstrative of some of the issues that we face,” says White, “is that every title has a different story in terms of collecting the metadata,” and he thinks that currently this is more difficult than it should be. White says, “The content itself is kind of the easy part, comparatively – you send the PDFs to the vendors, and they take care of the rest – but we had these Excel spreadsheets that we were passing around for collecting the metadata in the flavor that CourseSmart wanted, and then different metadata for the ePub titles, and these weren’t necessarily the same. So finding the right people to fill in the right fields was as much of a pain as finding the content itself.” This is an area where applying RSuite CMS will have the most impact, thinks White. “Having a bulletproof system that has everything we need in terms of content and metadata,” from which it can be sent out, is the overall objective of the new implementation. “I’ve said this hundreds of times,” remarks White, “but it is as much about the people and the processes as it is about the [software] systems.” The types of metadata include ONIX, which WKH “does struggle with,” according to White, but the group is also pursuing a Firebrand Technologies initiative to address this. “CourseSmart wants specific information – copyright, image permission, full-text location, book cover display handling, yes/no fields regarding other display options on that licensee’s site – things like that. These questions aren’t that difficult. The difficulty is finding the person internally who has the answer,” complains White. “First Bob has to have the spreadsheet, and then Bob’s got to send it to Sally, who has to answer this other question, and without infrastructure everything takes longer than you think.” Step one in solving these problems, White maintains, is having a place to collect and store the metadata. He sees the solution in a central repository for the metadata that anyone who needs to contribute can access, with the proper permissions. White uses the DeVita textbook [PPO] as an example. “Here’s Blueprint Case Studies ©2010 Outsell, Inc. 154

the DeVita, Ninth Edition, and it is stored here, and I need this person to fill out this piece of metadata, and I need that person to fill out that piece of metadata,” White explains. “I need to send both of these people to the same place, not an Excel spreadsheet as an attachment to an e-mail.” The current process gets even clumsier as it is repeated for every output WKH deals in, such as CourseSmart, VitalSource, ePub, or others. “It is a little bit about the commonality of metadata,” says White, “but more about not getting in our own way because of a lack of systems.” White points out that there are what he calls “nuances” or differences in the required information that is dependent on output formats. The other half of this problem, even if a common metadata standard did exist, is, according to White, the tremendous amount of work required internally, because WKH does not have a mature system for handling metadata collection. “We’re custom building every piece of metadata that is required,” says White. “My goal is to get everything we have into a centralized, controlled location,” declares White. Wolters Kluwer Health, he points out, also uses Semedica, from Silverchair, for the semantic enrichment so central to medical publishing. “That’s it, soup to nuts,” remarks White, “RSuite CMS, repository, semantic enrichment. It’s not rocket science.” Lessons Learned Today, for most publishers, it remains “a pain,” White believes, to get the files needed for e-book or other forms of digital publishing, and so costs may remain too high for e-book publishing to make economic sense. “I’m not particularly involved in [P&L] decisions for e-books,” admits White, “but those making these decisions are of the mind that we have to be there, but it is not, ‘Damn the costs!’” White sees this as part of the motivation for the systems-level work he champions, in terms of building the infrastructure needed. “The unspoken thing is that I’m going to be reducing these costs,” he says, reiterating the barrier that backlist title files present, along with the challenges of dealing with the many output formats these files must take on. Within WKH, non-strategic processes are outsourced using six outsource editorial production vendors to help the publisher be prepared for the digital transformation the market demands. “There are not enough strong vendors out there to handle the various requirements of journals publishing,” Schmidt believes. The advantage in cost savings is one important reason why companies like WKH outsource publication production, but there are also the technology benefits of doing so. “Aptara has a platform that converts content and tags it for loading into various production platforms. They’ve made a huge investment in their technology,” remarks Schmidt. What does digital publishing contribute to revenue at WKH? “If you’re talking about Ovid,” reports Schmidt, “then we are all electronic. That is now becoming a requirement of journal publishing as well, and we are transforming to meet those requirements. Ovid has been doing this for 20 years, and the expectation is to do more with technology to drive growth.” WKH has been migrating to digital for quite some time, and the growth prospects are proven. Says Schmidt, “This is not the Google world. You are a professional, you want deep precision searching that delivers the right answers. This is critical in the health care industry: ease of use deep vertical search; getting the right answer at the right time, the first time.” If you are a researcher or medical practitioner, Schmidt points out, and you’re looking for cutting edge information, you want peer-reviewed content with a basis in solid research. Blueprint Case Studies ©2010 Outsell, Inc. 155

“WKH has recognized this convergence of old and new, and we’ve taken steps to ensure content is delivered in the way our readers and researchers need to consume it,” says Schmidt. “The journals business is farther along than books in the e-transition, but the important thing is that we’ve taken what is considered a traditional publisher and have begun the transformation to digital publishing in a media neutral environment,” he remarks. Will print ever go away? “None of us believe that,” says Schmidt, “but digital has changed our world.” Gilbane Conclusions Wolters Kluwer Health presents a great example of the state of digital publishing. One of the early users of SGML, with Ovid, this huge publishing company is facing the issue of new digital formats such as ePub and new revenue opportunities afforded by partnering with the right service providers, such as Aptara. One of the most important goals WKH has pursued is to bring XML into the editorial and production process as early as possible, and has done so through the use of Aptara’s manuscript conversion processes. By outsourcing much of its publishing processes, WKH builds its production workflow capabilities while keeping its core competencies of being a premier publishing house. Efforts are underway at WKH to further rationalize the various demanding workflows reflecting different product types and delivery formats, and it remains to be seen how the implementation of Really Strategies’ RSuite CMS publishing content management platform and XML repositories will affect the current advantages WKH enjoys with vendors like Aptara. That Aptara’s technology engines are likely to continue to drive efficient conversion of publication formats, and that WKH’s expansion and control of metadata management is likely to drive new content products and market opportunities, suggests that the prospect of ongoing mutual benefit in the customer/vendor relationship is strong. Featured Vendor Aptara works with the world’s largest corporations and their content, delivering significant cost, quality, and speed advantages using pioneering multi-channel, fast-publishing technologies. Aptara frees content for distribution in any format to any medium – from e-reader devices and smartphones to tablets, PCs, and print. Aptara brings over 20 years of experience in publishing supply-chain innovation. Employing content technologies and a global team of over 4,000 professionals, Aptara provides unique, cost-effective content production solutions to meet the increased consumer demand for digital information. Services areas include digital publishing, editorial and composition, content technologies, and e-learning solutions. Digital publishing solutions offered by Aptara provide a wide-range of services, including what the company calls “lean publishing production,” which helps leading trade, professional, and educational publishers, corporations, and government organizations improve time-to-market, lower production costs, and grow readership and new revenue streams that result from the ease of repurposing content. Editorial and composition services are part of the digital publishing solutions, and services in their own right, reflecting Aptara’s long history as an editorial and production partner to publishers. As experts in LaTeX, QuarkXPress, InDesign, 3B2, and FrameMaker, Aptara provides front-end XML designs (XMLPublish) that present simultaneous delivery of high-quality content in both print and digital formats. Illustration rendering, scanning, and correction in Adobe Illustrator, Photoshop, Macromedia Freehand, DeltaGraph, and other graphic applications are integrated tightly with XML conversion workflows. Blueprint Case Studies ©2010 Outsell, Inc. 156

Other key offerings for book publishers include:

• E-book production; • XML workflow and DTD consulting; • Multi-channel publishing technology; • Publishing process outsourcing; • Project management; • Composition; • Copy-editing, proofreading, and quality assurance. Aptara’s content technology solutions reflect the company’s deep experience in publishing, allowing publishers to manage huge content volumes and new digital channels by designing, engineering, and deploying optimized content workflow. With Aptara’s participation, organizations intelligently deploy technologies to create, capture, convert, process, publish, monetize, and manage their content assets.

Corporate Headquarters 3110 Fairview Park Drive Suite 900 Falls Church, VA 22042 +1.703.352.0001 http://www.aptaracorp.com

McGraw-Hill Higher Education: Going All Out Digital Starts with XML-Early Education With revenue at almost $6 billion and a net income of $730 million, The McGraw-Hill Companies have been a leader in providing trusted information and analysis for well over a century.

A major part of The McGraw-Hill Companies and its 21,649 employees, McGraw-Hill Education [MHE] is a global education company that spans the full spectrum of lifelong learning from early childhood development to professional development. With offices in 33 countries and materials in 65 languages, the company partners with schools and universities around the world. Through both textbooks and advanced digital platforms, the company provides students and professionals with the instructional framework and pedagogy to learn effectively and achieve better results. One of four main divisions of MHE is McGraw-Hill Higher Education [MHHE], which serves the growing demand for postsecondary instruction. In addition to publishing some of the world’s most respected textbooks, it has developed McGraw-Hill Connect and other digital learning platforms that customize learning around the needs of individual students. The company believes, from its most recent annual report, that “the digitization of education is the opportunity of the century for personalizing and improving learning for students, regardless of distance and time.” McGraw-Hill Higher Education has put its belief in digital into practice, and today offers college students new editions of McGraw-Hill LearnSmart, the company’s all-digital, adaptive study program that tailors study materials around students’ individual needs. For college faculty, the company has launched McGraw-Hill Create for digital custom publishing. Using this web-based platform, instructors can build custom course materials from a selection of nearly 4,000 McGraw-Hill books and thousands of articles, case studies, and other resources. In addition to Create, the Connect platform provides a powerful online learning assignment and assessment solution. McGraw-Hill conducted in-depth research to create a new learning experience that meets the needs of students and instructors today. The result is a reinvented learning experience rich in information, visually engaging, and easily accessible to both instructors and students. Challenge Christian Kaefer is the Director of Content Strategies for McGraw-Hill Higher Education. The position, he notes, is much more focused on the content development area than IT. “McGraw-Hill Higher Education typically publishes between 800 and 900 core textbook titles each year,” says Kaefer, not counting ancillary or supplemental material. McGraw-Hill Higher Education spans the complete spectrum of disciplines, but the focus is across the four areas of business/economics, science/engineering/math, humanities/social sciences/languages, and career.

Kaefer has only recently moved into his new position, but in the 10 years prior, he focused on content models and metadata models across the various education divisions at McGraw-Hill. Now, specifically for MHHE, Kaefer is the key driver for XML workflows and the continuing development of content models, and is involved with authoring and composition tools and services, quality assurance, and archiving. “In my new position,” Kaefer says, “I’m really focusing on working with production to continue to remove the separation between print and digital products and move towards a content production environment where we see print and digital simultaneously.” While there are always exceptions, notes Kaefer, “generally speaking – and assuming that all the licensing and digital rights are in place – most of our textbooks will end up as a digital product.” McGraw-Hill Higher Education is a member of the CourseSmart consortium, and Kaefer points out that by agreement MHHE is required to have all textbooks available on CourseSmart. “This is a simple e-book process,” Kaefer says, “where we provide the PDF and an XML-based table of contents.” Today, Kaefer says, referring to how book jobs are delivered to printers, “everything is print-ready PDF.” McGraw-Hill Higher Education produces “the various flavors of PDF,” as Kaefer puts it, along with ePub formats that are supported by various devices. Kaefer also notes that the publisher is careful to select the right content for the simpler e-reader devices that are black and white text-only, with small screens. “Certainly, when you look at the Science, Engineering, Math space,” says Kaefer, “or once you get into textbooks that have a lot of color, readers like the Kindle just don’t work.” Kaefer says the iPad seems like a “great opportunity,” and he lauds the move toward big screen, color capability, whether in the iPad or other devices that are emerging. “Those types of devices are the ones we’re focusing on for the future, from an educational publishing perspective,” noting that color and bigger screen sizes are “key drivers for us.” People are experimenting with device configurations, Kaefer says. “It is an interesting time. Everyone is making guesses and taking whacks at it, to see what works.” Moving to “XML-Early” “Within the educational publishing world today,” remarks Kaefer, “I think that ‘XML-early’ is the most dominant approach being used in editorial and production workflows. Certainly, for us this is the case, because it is difficult to ask the authors to work in XML, for many reasons.” However, Kaefer admits that there can be problems with XML-early because of challenges around tools like Adobe’s InDesign, and its limited ability to manage the XML well, especially depending on what type of publication is being produced. A colleague of Kaefer, Mark Tully, works as Director of Architecture for McGraw-Hill Education. “My team supports the content creation process and the applications that facilitate that for the business,” Tully remarks. “The applications include digital asset libraries, including rich media for some of the more traditional book content – most of the content captured for the Higher Education publishing efforts.” Tully’s team also supports the publishing workflow tool that is currently in use, and is part of the effort to create the next generation of these applications. As an application architect in the digital publishing and enterprise content management team, Tully, over the last year or so, has been focused

on refining the current content creation workflow, mostly for MHE. “The tool we had been using wasn’t performing to our expectations and we started looking for a replacement,” Tully says. “During this search we realized that there was a real opportunity to bring a larger portion of the workflow into one, or a series of integrated systems to achieve greater cost savings, better quality of product, and faster time to market.” Tully found that the other departments within McGraw-Hill Education came to very similar conclusions, which have driven MHHE’s XML-early goals. One thing that has become increasingly important is multi-channel distribution. “In order to do this, you’d need to create XML up front,” says Tully. “That’s not easy to do with InDesign.” Tully’s experience is that trying to do this automatically, after the fact, doesn’t provide quality output and includes too much manual work and QA. “Our thought process is that we need to create the XML up-front. In doing so, you can reduce the amount of QA that goes on in the background and get some cost savings as well.” Meeting the Challenge McGraw-Hill Higher Education uses a full-range of outsourcing to support its XML-early initiatives, which depend on many factors. “We have an author who writes the manuscript, and then from there it goes to a full service vendor for the balance of the production process,” says Kaefer. “Other models include any number of variations, balancing the need to outsource certain production aspects while keeping some in house.” “Within Higher Education, Aptara is one of our content technology vendors,” says Kaefer. “With efficient platforms and procedures for taking in and handing off work, they do a lot of digital product development and creation work for us, as well as composition. Aptara is a primary player in helping MHHE achieve XML-early, by converting content into XML format after the editing and copy-editing work is complete, and before composition.” “Today, manuscripts come to us in various formats,” explains Kaefer, “from paper to PDF, and anything in between.” MHHE manages the editing and copy-editing work, and then sends the copyedited manuscript to a composition vendor such as Aptara, who then takes the manuscript and creates it in XML. “At the point that the manuscript becomes XML, it validates against our DTD. DTDs may be old school, but what the hey,” laughs Kaefer, “I like DTDs and they meet our needs.” Because Aptara optimizes its own workflows to accommodate XML-first or XML-early in its processes, Kaefer notes that the content can get poured into InDesign, and, after a number of revision cycles, the XML can be extracted back out. Working with the other MHE efforts, Tully tried Microsoft Word, but discovered that the combination of tools that they were using with Microsoft Word was somewhat limiting. “They [editors and production] came back to us with their experiences with blogs and WordPress, with which they’d had great success, especially the web editor, and the wiki features and the whole Web 2.0 feel. They asked if we could do something similar for the book creation process,” says Tully.

Thinking Logically Tully describes a “light bulb moment” when his team identified the thing that is common across all titles and components: the concept of a lesson. “There’s some version of the same content across the editions, even while there may be additional content for the digital products [such as rich media]. While something written for the student edition, for example, might not be able to be re-purposed word-forword for a website, it can be re-purposed with minimum effort,” Tully says. By turning their traditional editorial and production process on its side and creating content for all the editions at once, it forced the editorial and production teams to approach the content logically, with greater re-use the result. Instead of using Microsoft Word, Tully’s team has started providing a rich text editor in a template that reflects book processes and elements like chapters, and where the editors put, for example, the title in one section of the template and the main body in another part, and so forth. “We had previously assumed that the editorial and production people would never go for that, but now they are saying it is great. Not only does this approach work for them, but it is beneficial in that it gives us the XML we need and the ability to create content once and be able to distribute it through multiple channels,” Tully notes. The template approach captures metadata automatically, and is designed to take away much of the heavy tagging demands, while providing the ability to place tags inline. Another advantage of this approach, especially with McGraw-Hill Education’s School Group, is that much of this work is outsourced, and this editorial platform is used to capture the structure – and instructions – for the outsourced authoring that happens. When an external freelance author is writing his or her content, the web interface shows two panes, one with the blank template, the other with the instructions from the editorial team on how to approach the content for the section or chapter. “We’re still proving this approach out,” says Tully, “but the editorial team has been very enthusiastic.” Lessons Learned Kaefer sees MHHE developing more digital products as they move forward. “We are not necessarily going to create more formats to support the number of growing devices,” he says, believing that the multitude of devices will converge around a limited number of standards that will be widely supported. “What we are doing is looking at our content and no longer talking about it as textbook content, but as core content and asking ourselves what can be created out of it. The textbook is just one spoke on the larger wheel,” content that is used to create more products for the student and the instructor. “This is where I see continuous growth and activity creating digital products, which will be the primary distribution type,” Kaefer reports. Kaefer points to McGraw Hill’s new Create product as an early example of how new digital products will come about. “The Create product allows you, at a granular level, to customize what today is still called a ‘textbook,’ but we already call it a ‘project,’ because we allow the instructor to not only select from more traditional materials, but build something new that may include non-textbook components, and deliver to the instructor something way beyond just a customized textbook,” he says. Create aims to deliver a complete customized experience.

The Create offering at McGraw-Hill, among other developments, has helped drive interest in print on demand (POD) and other digital printing solutions across the company. Kaefer notes that POD has worked for quite a while for simple text, but sees only recent developments in the prices and technological capabilities to carry off small press runs of titles that require high-fidelity images or other complex components. “On POD or short run, there has been a big differentiation in cost between black and white and color,” Kaefer notes. Within McGraw Hill, a lot of effort has been undertaken with print vendors to make more digital printing options available. “Today, within Create, you can have a custom book with as few as 25 copies requested, in color, at a price point that is very palatable to everybody,” Kaefer notes. “This is something that people will continue to drive toward: they want highly customized, low run products.” For a print version of a Create project, what is delivered to the digital printer vendor is a set of PDF files that are the result of what the instructor selected, melded into a print-ready PDF. The Create platform also serves MHHE’s own needs to keep titles in print or handle out-of-stock problems. “Create is a platform that allows us to print otherwise out of print titles that an instructor orders,” says Kaefer, “because we still have the content in our repositories.” One of the current challenges in digital publishing, according to Kaefer, is content synchronization. “The thought is that because content is digital it should be easy to maintain and update,” says Kaefer. The reality, he argues, is that most big publishers do not have large, closed-loop publishing systems, meaning that changes made at the core content level don’t necessarily get distributed across all the publisher’s digital products. Even though the source content might reside on a publisher’s servers, different digital products, such as e-book formats, may be created by various vendors, and these vendors may not be fully tied into the publisher’s publishing system. “When we make a change at that core content level, there is no system in place to make sure that all those usages of that core content are automatically updated,” explains Kaefer. “This challenge is partly technology, partly workflow, partly business process, and that is a big hurdle.” Tully says that adding metadata is a top priority. “In the relative scheme of things, it’s a known problem that is easily solved as opposed to some of the other challenges. We don’t talk about it a lot, but it’s going to be an important part of what we are doing. In terms of using metadata effectively to create new products or revenue streams, I’m looking to metadata to associate content with state standards.” Rich media – images, video, audio, etc. – are recognized as media that give titles greater flexibility, and are another priority for Tully’s team. “You can make the pages more engaging. It is a significant driver for the titles partly because you can update digital media/web-based media on the fly. As a result you get a better product at a much lower cost,” Tully says. Gilbane Conclusions McGraw-Hill Education is impressive in its use of XML, especially when looking at the efforts within MHHE to bring all editorial and production processes into an “XML-early” environment. Its partnership with outsourced vendors has been instrumental in this progress. McGraw-Hill Education has been using XML for about seven years, and less than 30% of its titles are in XML. Mark Tully’s efforts to build and implement rich XML editorial interfaces will be effective in raising the percentage of content in XML.

McGraw-Hill Education’s ongoing progress with XML-early, whether in-house or through outsourcing, will be a critical prerequisite for developing tighter integration between core XML content and the various digital transformations in editions and products. Without such integration, the prospects for lowering the cost of both new product development and quality assurance will be constrained, as well as new revenue growth. Indeed, integrating XML content repositories more fully into content creation, production, and distribution processes will be the crucial element for MHE’s next leap forward into digital products. Featured Vendor Aptara works with the world’s largest corporations and their content, delivering significant cost, quality, and speed advantages using pioneering multi-channel, fast-publishing technologies. Aptara frees content for distribution in any format to any medium – from e-reader devices and smartphones to tablets, PCs, and print. Aptara brings over 20 years of experience in publishing supply-chain innovation. Employing content technologies and a global team of over 4,000 professionals, Aptara provides unique, cost-effective content production solutions to meet the increased consumer demand for digital information. Services areas include digital publishing, editorial and composition, content technologies, and e-learning solutions. Digital publishing solutions offered by Aptara provide a wide-range of services, including what the company calls “lean publishing production,” which helps leading trade, professional, and educational publishers, corporations, and government organizations improve time-to-market, lower production costs, and grow readership and new revenue streams that result from the ease of repurposing content. Editorial and composition services are part of the digital publishing solutions, and services in their own right, reflecting Aptara’s long history as an editorial and production partner to publishers. As experts in LaTeX, QuarkXPress, InDesign, 3B2, and FrameMaker, Aptara provides front-end XML designs (XMLPublish) that present simultaneous delivery of high-quality content in both print and digital formats. Illustration rendering, scanning, and correction in Adobe Illustrator, Photoshop, Macromedia Freehand, DeltaGraph, and other graphic applications are integrated tightly with XML conversion workflows. Other key offerings for book publishers include:

Aptara’s content technology solutions reflect the company’s deep experience in publishing, allowing publishers to manage huge content volumes and new digital channels by designing, engineering, and deploying optimized content workflow. With Aptara’s participation, organizations intelligently deploy technologies to create, capture, convert, process, publish, monetize, and manage their content assets.

Corporate Headquarters 3110 Fairview Park Drive Suite 900 Falls Church, VA 22042 +1.703.352.0001 http://www.aptaracorp.com

John Wiley & Sons: When Digital Means Print John Wiley & Sons traces its history back to 1807, when Charles Wiley, then 25 years old, opened a small printing shop at 6 Reade Street in lower Manhattan, New York City. Wiley has seen vigorous growth and dramatic change since the early 1990s. In financial terms, revenues increased from less than $300 million in FY1990 to over $1.6 billion in FY2008, with more than 5,100 employees.

The names of publishers and imprints acquired over the last two decades are a veritable Who’s Who of the publishing industry across almost all key segments. Today, Wiley is made up of three divisions: Scientific, Technical, Medical, and Scholarly (STMS), Professional/Trade (P/T), and Wiley Higher Education (WHE). Wiley’s Scientific, Technical, Medical, and Scholarly business, also known as Wiley-Blackwell, serves the world’s research and scholarly communities, and is the largest publisher for professional and scholarly societies. Wiley-Blackwell’s programs encompass journals, books, major reference works, databases, and laboratory manuals, offered in print and electronically. Through Wiley InterScience, the division provides online access to a broad range of STMS content through licensing agreements. The second division is the Professional/Trade (P/T) business that serves professionals and consumers alike, producing books, subscription content, and information services in all media, in targeted categories. Wiley’s P/T portfolio of global brands includes For Dummies, Frommer’s, Betty Crocker, Pillsbury, CliffsNotes, Webster’s New World, J.K. Lasser, Jossey-Bass, Pfeiffer, and Sybex. Subject areas include business, technology, architecture, professional culinary, psychology, education, travel, health, religion, consumer reference, pets, and general interest. Wiley Higher Education, Wiley’s third division, serves undergraduate, graduate, and advanced placement students, lifelong learners, and, in Australia, secondary school students. This division publishes educational materials in all media, notably through WileyPLUS, their integrated online suite of teaching and learning resources. The higher education-oriented part of Wiley has programs targeting the sciences, engineering, computer science, mathematics, business and accounting, statistics, geography, hospitality and the culinary arts, education, psychology, and modern languages. Wiley’s increasingly direct digital relationships with customers lets the publisher better see how users interact with its content, providing valuable feedback that guides the divisions in developing better products and solutions, helping push developments in digital publishing forward for all. Challenge One of the most interesting applications of digital publishing at Wiley may at first seem less glamorous than other of the publisher’s digital efforts, but the numbers tell the tale. Like every other book publisher, John Wiley & Sons faces significant print-related costs and logistical challenges. For new

books destined for high print runs, unit prices for a title and the gross margin result can be just fine, but as a publisher controlling well over 75,000 titles, Wiley has tough decisions to make about titles with low stock numbers that don’t sell high numbers. As digital printing technologies began to emerge from their early years as expensive solutions that offered limited quality, Wiley investigated what the improving digital printers could do for it. Lynn Terhune, Global Digital Print Administrator for Corporate at John Wiley & Sons, found herself wrestling with meeting many challenges, including:

• Out of print titles; • Lost orders and revenue due to low stock; • Back order cancellations; • Reprint decisions on low-selling titles aborted due to prohibitive offset print costs; • Minimum quantity reprint decisions; • Growing pressures on distribution center space requirements. “In my opinion, one of the many things that people in the industry are tripping over right now is the distinction between digital publishing in print and digital publishing in electronics and where they can and will end up cohabitating in the future,” says Terhune. “I represent digital publishing for Wiley on the print side.” Terhune coordinates with all of the Wiley divisions – Higher Ed, Professional and Trade, and STMS – in her role as the manager of Wiley’s Global Demand Print [GDP] Program. “Our US program is essentially what people today think of as POD [Print-on-Demand], but we wanted to name it something different because it is more than just POD,” notes Terhune. She is involved with all of the Wiley locations, which, in addition to a number of editorial offices, include several distribution centers in the US, as well as in the UK, Canada, Australia, and Singapore. Terhune works with inventory and manufacturing managers in each of the three Wiley divisions on a day-to-day basis. As Administrator for GDP, her responsibilities include continuous refining of criteria for title inclusion in the program, as well as evaluating the associated costs and vendors digital print providers. “My role is to represent Wiley with the vendors overall, negotiating any pricing, and make visits to the manufacturing facilities. Attending equipment and trade shows and trying to keep up with this digital printing revolution is in Wiley’s best interest. It helps us to better advise internally and hold discussions about equipment with our vendors,” Terhune says. Meeting the Challenge “Most of our digital print vendors – whether for POD, meaning drop ship, or ultra-short run [USR] – have HP Indigo equipment,” Terhune observes. “We’re HP’s customer’s customer.” Lightning Source has been using the HP Indigo portfolio of equipment to manufacture covers for Wiley for years, notes Terhune, naming one of their well-used digital print providers.

HP Indigo digital printing platforms’ dominance in the market – especially HP Indigo presses used primarily for color books and cover jobs, as well as high quality and short run mono books – is such that if Terhune is evaluating a new vendor and that vendor doesn’t have any HP Indigo equipment, or if they are not producing the covers on an HP Indigo press, then that piques her interest. “I like to know what equipment they are running and it’s always good to see samples,” she says. “The HP Indigo for book cover manufacturing is a known quantity. I’ve seen hundreds of samples, and we have not had any issues – except one specifically that I recall. We have produced over 1 million covers off HP Indigos in just the last two fiscal years and I am extremely pleased with the consistency of the color and quality.” Terhune notes that HP and Océ North America are a strong combination in the industry, with HP for covers and Océ for text. Systematically Managing Books “We have a proprietary book project management system at Wiley. It interacts with our ordering system for our distribution and fulfillment,” says Terhune. Wiley made the decision to accommodate the POD program within its book systems because they knew early on that taking as many manual transactions out of the process was key. It did not want to incur the same transactional costs for printing one book as for 10,000. Much of the process leading up to choosing a title for Wiley’s Global Demand Print Program can be done by an inventory manager or assistant simply by inputting an ISBN into the system to bring up the title’s parameters. Basic title criteria in place in the system include the following:

• Trim size • Page count • Text presswork • Cover colors / special effects • Binding style • Halftones • Prior sales units “The system will warn the user that there is a piece of the title that does not fit the vendor’s manufacturing capabilities. A perfect example of a system warning is page count minimums and maximums,” describes Terhune. This “criteria evaluation” goes on behind the scene, and then once through that part of the process, there are other screens through which the user can look at unit costs, adjust retail pricing, approve the gross margin, and send metadata – including information that would normally be found on a purchase order – to the selected digital print providers. This element of Wiley’s book system also tracks the title assets, such as text file and cover file. The transmittal of the print order is automated as a B2B electronic communication to the vendor and back to Wiley & Sons as needed. “All of our orders go through standard EDI [electronic data interchange] language,” notes Terhune. Once the title is live, any order from a customer – whether direct through Wiley.com or other of the publisher’s many channels – is split off for fulfillment. GDP titles route directly to the digital print provider, where the title is printed and drop-shipped directly to the customer. Blueprint Case Studies ©2010 Outsell, Inc. 167

“Right now, Wiley has approximately 12,500 titles in our Global Demand Print program,” says Terhune. “It is a mixture of Wiley-owned US and UK titles. In the US we operate in a true-POD system, where the title is drop-shipped to the customer, and we also participate in Amazon’s and Ingram Content’s distribution programs.” The UK follows the ultra short run model, where Wiley consolidates the orders and pulls product back to the European Distribution Center for distribution to our customers. Both models are appropriate for their markets and we use the same files and the same vendors (or their UK partners) to gain efficiencies. “Each Wiley division has their own specific needs based on their product and customer mix. Each group handles and manages their inventory differently,” says Terhune. “All the inventory managers have been working with me on this program for years. They know the criteria and vendor capabilities, but each division bases it [the digital print decision] on sales differently. A Professional and Trade book will look at titles that are selling between 500 and 750 units a year to include in the program, whereas another Wiley title with different physical characteristics and a different price point won’t meet the same criteria. Seeing the File Format Forest In terms of file formats for John Wiley & Sons titles, just remember the history of desktop publishing, Terhune suggests, and you’ll have a good idea of what Wiley can face. “Our recent title files are stored in our digital repository, and these files are accessible and easy to get to our vendors,” she notes, “but keep in mind Wiley has been growing for quite a while, acquiring other publishers. So we often require older files that we obtain from the previous print vendors that are not necessarily in perfect shape for our current digital print providers.” There have been plenty of times when a book file was not available or usable, and Terhune had to secure the physical copy internally, or, on occasion, end up ordering a used copy, and send it out to one of their vendors to scan. “What we are looking for is a vendor that can take our metadata, take our text file and cover file, and make minor corrections to the text or cover file – there might be a price change, there may be a barcode update,” says Terhune. An example of a common change requirement done with all of Wiley’s backlist titles going into the GDP program, is taking ‘Printed in the US’ or ‘Printed in the UK’ off of the copyright page, in order to distribute in print across different countries. One likely avenue toward a better solution to Wiley’s need to make small changes in GDP title files may be the outsourcing route, where a number of companies with long publishing experience such as composition are now adding digital asset distribution services to their portfolios. “We tried working with a digital asset delivery company about two years, ago, but they didn’t have the bandwidth to set up the system for us,” Terhune notes. The unsuccessful effort did pay dividends, according to Terhune. “We did document our workflow and write a very detailed use case, and we are now back in the process of reviewing other vendors.” Lessons Learned Making changes to existing titles in-house would probably have held the digital program back, Terhune believes, and thinks that one result would have been many more titles going out of print. “Over the last twelve years, we’ve had to put band-aids on things just to keep the program moving forward,” Terhune notes, “from living through digital printing being seen as terrible quality, to now being completely accepted, especially because the economy is driving it that way. Of course there have been leaps forward in quality improvement.”

Some digital printers are expanding their graphics and pre-press capabilities. “If there is a small reprint correction, sometimes a manager will email [the digital printing vendor] customer service and ask, ‘Can you make this change on page 46?’,” Terhune notes. “Some of our vendors will do that, while others require a complete file swap-out replacement, where we make the change and post the new PDF.” A digital printer typically doesn’t want to deal with small changes, or managing different files. Terhune expects progress in small changes for GDP titles to continue, however, and takes heart from a recent conversation with one vendor who talked of their efforts to build programming to check and accept any kind of file and do any kind of correction. Terhune reports, “They are writing workflow and gateways to check for any kind of possibility because they don’t want to turn any business away. The digital printing industry is getting so competitive.” Much of the work needed to impose corrections and ingest title files is very similar to pre-press workflow, including changes and approvals. “For many years our program focused on titles that few cared about, and that we were just keeping in print,” says Terhune. Managers became comfortable with not seeing proofs or waiting to give approval on POD titles; when the aim was simply keeping an existing title available for sale – titles that have already been produced – there wouldn’t be a lot of call for quality assurance. From the very beginning of the GDP program we would not allow any major reprint corrections, but, says Terhune, that is really changing as digital print capabilities and quantities increase. Another anticipated change by Terhune: “I haven’t had a major issue in file versioning yet, but I think that as the quantities [of titles in the digital print program] grow, it could open that possibility.” POD Benefits Pile Up “All the publishers want to get is the best quality product out of the vendors and to their customers as possible,” says Terhune, but there have been some other very significant benefits for Wiley from the GDP program. Terhune’s list of POD/USR benefits for the publisher includes:

• Additional sales revenue: content kept available and in print; • Not having to tell an author the work is going out-of-print; • No minimum quantity reprints; • Reduced distribution center space requirements; • No POs to cut and no individual invoices to issue; • No estimates for individual titles and no vendors to follow-up with on specific orders; • No bound book dates to watch; • Minimal inventory to monitor and no more out of stock situations due to exact quantity supplied; • Improved customer service; • Improved cash flow; • Reprint requests replaced by largely automated processes;

• Product supplied in a timely manner; • Time to market reduced due to file sharing; • No more film flat storage charges; • Reduction in shipping costs and inter-company freight; • In the US market, POD titles are not returnable. Terhune also has impressive numbers that reflect an often-overlooked GDP benefit, which is title sales uplift that can occur because of improved title visibility and exposure from the distribution channels. One example she cites is the Comprehensive Intellectual Capital Management: Step-by-Step, by Nermien Al-Ali, which published in February 2003, with a first printing of 2,000 units, of which around 900 were written-off and destroyed. The title went into the GDP program in December of 2005, and has sold 178 units in the past three fiscal years. Another example is a Spanish title, Milenio: Mil años de literatura española, by Bárbara Mujica, published in August 2001, and conventionally printed and reprinted in 2005. The book saw slow sales in 2006, when it was placed in the GDP program, and has enjoyed a sales uplift of 2,414 units for the past 3 years (FY), along with 468 comp copies; the best news: sales in 2008 (FY) have been 600 units greater than in all of 2006. The numbers of units sold through the GPD program have seen very strong growth trends over the last three years, and FY 2010 looks to be on target to outstrip FY 2009’s total of 579,005 units. Flexible Printing and Custom Printing “One of the things that I would like to do and to have more resources for is to offer our customers more E+P [electronic and print] options, where, if the customer is buying an electronic book, that customer can easily click on a button to by a print version too,” states Terhune. She notes that these kinds of offerings aren’t prevalent yet, but hopes they are coming. On the custom side of digital printing, Wiley does have a robust program called Wiley Custom Select, and most material involved in this program is printed digitally, but not as part of the GDP effort. “The whole ‘chunking’ idea has been talked about a lot, but it just seems to be a nightmare of royalties and tagging,” says Terhune. “I don’t think that it is that far along in Wiley, but then maybe it is on the custom side and I’m just not close enough to it.” She wonders at what cost a publisher might face to go back to existing titles and tag them to accommodate the granularity required. “Cost is a big issue,” Terhune notes. “I am not close enough to the Custom side of the business to know what the current challenges are, but I know that the whole ‘chunking’ idea has been discussed. It just seems to be a nightmare with royalties and tagging,” says Terhune. She wonders at what cost a publisher might face to go back to existing titles and tag them to accommodate the granularity required. “Cost is a big issue,” Terhune notes.

Figuring Costs… and Savings Cost savings related to digital printing hasn’t been an easy thing to quantify within Wiley, says Terhune, in part because of the traditional way Wiley has looked at costs. “Costs have been looked at through both the gross margin approval process and through the inventory accounting system. The inventory accounting system only holds the unit cost – paper, printing, and binding,” Terhune explains. “Publishers are still looking at titles and comparing unit cost to unit cost.” She notes that updated financial modeling is needed to account for additional contributions like non-returnability, obsolescence, and distribution cost reduction or for savings from logistical demands of “storage, pack, and ship,” which don’t get quantified. “We’ve been trying to keep our unit costs for digital printing down. The way we launched the digital printing program – because we knew that the unit costs were going to de different – is that we launched it outside the gross margin process and outside our inventory accounting system, just to get it up and active and not to have any one publisher hurt by that higher cost,” Terhune says. Now that the company has more competitive digital print costs, Wiley pulled the program back into the standard gross margin process. “As part of our Corporate Citizenship initiative, we started quantifying how much shipping and freight we are saving, and how much CO2 reduction we experience because we have [title] files in the US and the UK that we are printing more locally,” reports Terhune. “We’ve been surprised by the numbers in the US about how much CO2 we’re reducing because of file sharing and due to shipping direct to customer, instead of from vendor to Wiley DC [distribution center] to wholesaler to bookstore to customer.” Gilbane Conclusions Digital printing is the unsung hero of the digital book publishing revolution. The questions of cost savings through digital printing remain difficult to answer, especially when taking into account that cost reductions in some departments may come from adding tasks – and costs – to other areas within the publisher, such as operations for order monitoring. But as digital printing becomes a standard practice for book publishers, and publishers adjust accounting systems to include it, we expect that the intuitive sense of cost-savings and additional revenue gains many have for POD will be strongly and unquestionably proven. The quality of digitally printed books can be astounding these days, although there remain plenty of pitfalls to avoid, such as not undertaking adequate quality assurances if a book required scanning to make the digital file. We don’t expect that every publisher will pursue the benefits of digital printing for their backlist as strenuously as Wiley has with the GDP program. Nevertheless, we see many areas for additional digital printing’s growth, including more first printings for many books that aren’t aimed at blockbuster status; arguably, the present economics of digital printing make first print runs competitive in the low-to-mid thousands of units. Other opportunities for digital printing already being pursued by some publishers include many variations of custom publishing, as well as education and professional ancillary and supplement materials, and for print-optional journals. Simple logistical benefits from digital printing can accrue, such as using POD as a stop-gap measure before an offset reprint is finished. As Wiley’s GDP program shows, the real question isn’t how much cost-savings digital print can offer book publishers, but how many different ways digital printing can both improve cost savings and add to the publisher’s bottom line. Blueprint Case Studies ©2010 Outsell, Inc. 171

Featured Vendor Stanford University classmates Bill Hewlett and Dave Packard founded HP in 1939, and today HP is a technology company that operates in more than 170 countries around the world. HP provides infrastructure and business offerings that span from handheld devices to some of the world’s most powerful supercomputer installations. The Graphic Arts division of HP integrates printing and IT functions to deliver a solution that offers operational simplicity, reliability, and manageability. Indigo, founded by Benny Landa in 1977, has brought 17 years of continuing innovation to the printing industry, through the invention of digital color presses, based on Indigo’s unique, offset-quality ElectroInk (LEP) technology. In 2002 Indigo was acquired by HP to form a Division in its Graphic Arts group, which provides a portfolio of leading solutions to the printing industry.

Whether incorporating HP printing technology into existing workflows, or starting from the ground up, companies can take advantage of HP’s broad portfolio of powerful digital printing solutions that lower production costs by virtually eliminating set-up costs and changeover times and accommodate printing peaks and tight deadlines. HP’s portfolio of digital presses offer breakthrough prices and performance for printing high-value books, journals, magazines and newspapers by providing high-volume, fullcolor, 100-percent customized content at full press speed. HP’s Graphic Arts group brings leading quality and productivity, while delivering innovative solutions for demanding commercial clients. North America Hewlett-Packard Company 1001 Summit Boulevard Mailstop 401 Atlanta, GA 30319 USA Tel: +1 800 289 5986 Fax: +1 404 648 2054 Europe, Middle East, and Africa Hewlett-Packard Company Avenue Céramique 241 6221 KX Maastricht The Netherlands Tel: +31 88 750 1723 Fax: +31 88 750 1715

Asia Pacific Hewlett-Packard Company 138 Depot Road Singapore 109683 Tel: +65 6727 0777 Fax: +65 6276 3160 Latin America Hewlett-Packard Company 5200 Blue Lagoon Drive Suite 950 Miami, FL 33126 USA Tel: +305 267 4220 Fax: +305 265 5550 informahpindigo@hp.com Israel Hewlett-Packard Company Kiryat Weizmann P.O. Box 150 Rehovot 76101 Israel Tel: +972 8 938 1818 Fax: +972 8 938 1338

Blueprint Case Studies ÂŠ2010 Outsell, Inc. 173

Hachette Book Group: Sticking to Standardization and Best Practices Hachette Book Group, a leader in the publishing industry, can trace its history back to the founding of Little, Brown and Company in 1837. The company is owned by Hachette Livre, second largest publisher in the world and a subsidiary of Lagardère, a French media and communications firm. Hachette Book Group was formed in 2006, after Hachette Livre acquired Time Warner Book Group from Time Warner. HBG publishes under the divisions of Little, Brown and Company, Little Brown Books forYoung Readers, Grand Central Publishing, FaithWords, Center Street, Orbit, and Hachette Digital.

Hachette Book Group publishes approximately 650 adult books, 150 young adult and children’s books, and 100 audio book titles each year. The company has had a record number of books on the New York Times bestseller list. HBG also provides distribution, fulfillment, and sales services to third-party publishers such as Harry N. Abrams and Chronicle Books. Hachette Book Group is headquartered in New York with offices in Boston, Toronto, Nashville, Tennessee, and Lebanon, Indiana. Challenge Matthew Bennett is Executive Director of Product Management for HBG. From planning through production, Bennett looks across the entire publishing process from an IT perspective. Internal and external systems used by HBG fall into his realm of responsibility and include things such as title management, business intelligence, marketing tools, online reader widgets, and digital asset management (DAM). North Plains’ TeleScope digital asset management platform is one of the systems that falls under Bennett’s umbrella. Hachette has been using the North Plains DAM product for several years and is now expanding the use of that product line to include the TeleScope Publishing Platform (TPP). Sixty to seventy percent of HBG’s adult trade titles go straight into ePub, the only e-book format the publisher produces, and these e-books are created at the same time as the print editions. Hachette’s audiobooks, however, are not currently managed within the North Plains DAM system. “It’s becoming more feasible to do so,” says Bennett, “but the bottom line is that most of the audio production companies are still working directly onto CD and not sending the raw digital files for us to ingest into a DAM. Those uncompressed files are very large, so you have storage constraints as well.” Bennett notes that HBG has been using the North Plains TeleScope distribution tools to “distribute some of our art and cover images to our trading partners, like Amazon, through the ONIX process, the industry standard for distributing metadata and images.” For distribution of book content, though, HBG uses LibreDigital, which also provides marketing components, such as online ‘look inside the book’ type of widgets and other marketing services that help promote e-book content out onto the web.

“There are other benefits to our partnering with LibreDigital, which also has core competencies in backlist data conversion, OCR, scanning – digitizing physical content – and it was a faster ramp to get up and running with LibreDigital,” says Bennett. “LibreDigital has the industry relationships and the broad distribution channels already. If we were to do it ourselves we’d have to fully manage the process, which is no small task for the distribution of our content.” One example of steep learning curves with dealing with the retail supply chain is asset transmission failure, explains Bennett. “You have to have the reporting and you have to know which accounts aren’t receiving what they are supposed to, and at this point, this is all handled by LibreDigital.” “North Plains certainly has some technology components that we can consider using for digital asset distribution,” says Bennett, but HBG continues to use an outside service for content distribution to the major e-book retailers, rather than develop that capability in-house. “This arrangement works well for us.” Everything is subject to change, of course. “Dynamics in publishing are changing so rapidly,” notes Bennett. The ePub titles are sold through retailers that LibreDigital distributed to, such as Amazon. Digital rights management (DRM) isn’t part of the Hachette e-book production process. Like many other trade publishers today, DRM responsibility falls to the retailers, where Adobe’s Content Server-based DRM, according to Bennett, has emerged as an industry standard model. Making the Buy vs. Build Bet “A few years ago, everything just started to happen together. Everyone realized that e-books would probably be here to stay, and we started to look at our infrastructure,” recalls Bennett. Like other book publishers, Hachette began to wrestle with the question of how best to integrate various publishing platforms and processes. Bennett notes that “This is something we ask ourselves quite often: Is publishing so unique?” But Bennett feels that publishing does include some very specific processes, and that a number of these have not been handled well, in standard solutions, like SAP. “There are some very specific processes within publishing that haven’t been dealt with well.” One example of bookspecific needs includes handling 100% return models that trade publishers like HBG work under. Bennett says that HBG often tends to build its own solutions because in some areas “our business is very simple, so it makes sense to do that. Where it gets complicated, there are no very good industry solutions that address our needs. It’s always the buy vs. build analysis and typically the build comes out ahead because we do have a lot of institutional knowledge.” Meeting the Challenge Still, Bennett knows that there is a tension in the buy-versus-build struggle, where the challenge of building or adopting vendors’ platforms has no easy resolution, even with specific publishing-centric solutions such as those found in Firebrand Technologies or Klopotek, to name just two examples. “A publisher does many things a certain way and then has to adapt existing platforms,” says Bennett. When it comes to internal process tools, as Bennett calls them, HBG usually leans toward building its own, since designing and building the system isn’t the “hard part.” For specialized or commoditized services like business intelligence and digital asset management, however, HBG will “buy best in breed around those things.” The costs, says Bennett, are typically about the same. “It’s just a matter of figuring out where you want to expend your energy,” he says. Blueprint Case Studies ©2010 Outsell, Inc. 175

In addition to Bennett’s efforts to define and deliver on best practices for integration of publishing processes, he also sees a great value in publishing turning to XML as early in the editorial and production stage as possible. Focus on Best Practices for Integration The publisher has integrated its important systems, although Bennett acknowledges that different publishers can have a different focus to some degree. “Here at HBG, we have put a lot of time and energy into integrating our metadata. For us, it’s very important that we have systems of record for our content and the metadata associated with it,” says Bennett, who notes that keeping systems like TeleScope and its home-built title management platform in sync is a top priority. That’s not to say that Hachette doesn’t focus on integration among other systems such as title management, enterprise resource planning (ERP), and warehouse management; they do. “We certainly do integrate between our title management and ERP systems and our warehouse management system,” Bennett reports. “We wouldn’t be in business if we didn’t, but integration is a tough thing to quantify because it can be accomplished in a number of ways that are not always transparent to the business.” Bennett maintains that HBG has strong integration across all systems. “We enter data once for every one of our fields. We don’t have multiple re-keying of data across our processes, and that’s important to us.” Everyone at HBG must use the same systems, observes Bennett, and he knows that the business users may be giving up some freedom and flexibility in doing so. “The company has made a global decision to standardize,” says Bennett. That standardization flows through the integration of data and the business; its operation and culture. HBG has stood behind this decision, and Bennett, for one, has “seen a lot of positive come from it.” When Time Warner acquired Little, Brown, Bennett notes, referring to some of the major acquisition activities that later helped form HBG, the two large publishers had their own warehouse and title management systems. “It took quite some time to unravel them, to move everyone over and to change the processes and culture, and it was challenging” says Bennett. Bennett points to the work of CEO David Young coming in and standardizing the new publishing entity in title management. “He really believes in the IT best practices around data entry, data management, single source, etc.,” reports Bennett. “He’s stood behind it.” Furthering XML-First With the exception of children’s books, all of Hachette’s content is created in XML before it’s composed and printed. “We use an exclusively XML-first process,” asserts Bennett. HBG’s authors, unbeknownst to them in most cases, basically provide the XML by using XML-based word processors like OpenOffice or Microsoft Word, following to a greater or lesser degree style guides supplied by the publisher. “Anybody can save as or export XML,” says Bennett, “We’re just using the existing tools available to us.” Of course there’s still work to be done here, Bennett admits, and cleaning the source XML prior to export is a necessary part of the production process. This must be done so that the XML can “flow into the rest of our process correctly,” explains Bennett. “It’s just a matter of us mapping the tags to our systems. There’s always some work that has to go on to correctly tag words, phrases, or passages in our books.”

In the end, HBG produces “core XML content” that it can convert to ePub, POD, or flow into InDesign to create print PDFs or some other format. Lessons Learned Bennett considers XML standards, such as DocBook, and the development of those specific to publishing to be “the kind of thing that evolves as it’s needed.” And unfortunately, it’s difficult for industry standards organizations to keep up with that evolution. “You could spend a lot of time sitting around thinking about what you might need,” points out Bennett, and “half the time you get it right … or you can build what you need when you need it.” Digital Printing: No Sweat “We do POD titles,” says Bennett. “It’s more of a production activity than an IT activity.” HBG uses a variety of POD vendors, including TextStream (formerly Replica Books) and Lightning Source. Essentially, all HBG has to do when ordering digital printing is to provide the vendor a title in a standard format—print PDF—along with a pre-defined set of specifications of trim size, paper, and other and related production definitions. “[POD] is becoming increasingly easier as we create all of our content in XML and publish out to ePub. We can use that same XML file to create print PDFs and whatever specs are required,” notes Bennett. Bennett doesn’t have an exact sense of how big POD is becoming at Hachette, but he knows that there are a number of titles that Hachette otherwise doesn’t continue to print, but keeps on the POD list. A Single System of Record As for metadata and tracking associated with titles, HBG employs a simple solution. They have a “single, home-grown, title management system” that is used by all of its publishers and publishing units. “In a nutshell,” says Bennett, “that’s our single system of record for all metadata. All title metadata is entered through it. Our ONIX feed is generated from it. It’s really as simple as that.” Everyone at HBG is working on this standardized system that uses required fields that must be filled in before proceeding through the process. Title management is an example of an internal system that HBG decided to build in-house. “We went the custom route,” explains Bennett, because of all the reasons mentioned earlier, “culture being at the top of the list.” It goes back to the way various processes have been done in the past and how they continue to be done now, and to Bennett, it can seem that every publisher is different. “It gets very complicated,” Bennett reflects. Gilbane Conclusions Standardizing the publishing processes and strictly enforcing best practices surrounding standardization is something that has worked well for HBG. In many cases, acquisitions of imprints and the systems that go along with the acquired titles give rise to difficult implementation challenges and barriers to interoperability among publishing workflows. HBG has been successful in unraveling those issues and changing the processes and the culture.

Hachette chose to expend a lot of energy moving toward standard processes. The company has adopted packaged software solutions, such as TeleScope, to meet some of its needs.Yet, HBG has also built and uses a home-grown title management system that supports its processes. All told, HBG finds itself in a very good place at the moment, thanks to these systems of record that it has created and continues to stand behind, especially in regard to effective – and efficient – management of metadata across all its titles, for print and digital. HBG’s experience with XML content in its workflows is interesting, and in no little part because of its refreshingly simple view of getting to XML. Only a couple of years back, HBG took what the author provided in whatever was the author’s format of choice, and then took on an additional full stage of process to convert the content to XML, a situation in which many book publishers still find themselves. The challenge to get to XML has lessened greater in just the last two years, with OpenOffice and Microsoft Word now basically being used as XML-based word processors that allow editorial and production at HBG to extract XML from the source. The level of XML-first application is expected to expand the automation of editorial and production processes even further. Featured Vendor North Plains, founded in 1994, provides digital and media asset management, and end-to-end publishing solutions. The company offers centralized digital asset management (DAM) software for the production, management, distribution, and archiving of digital media, content, and metadata. North Plains’ TeleScope platforms, hosted or installed, offer solutions for digital asset management, marketing content management, broadcast automation, video-on-demand, publishing automation and e-learning. The TeleScope suite of products include: Publishing Platform, Enterprise, Professional, Studio, and OnDemand. The TeleScope Publishing Platform (TPP) is an integrated, end-to-end publishing solution that enables publishers to manage the entire digital publishing process. The TPP provides modular, scalable and flexible design options, allowing publishers to address specific business and workflow challenges upon which they would like to improve. Some of the benefits the TPP offers publishers include:

• Providing a complete solution, eliminating integration efforts with other products and services; • Streamlining processes for content creation, collaboration, management, and distribution; • Providing secure and centralized access to entire digital libraries; • Reducing production costs and time-to-market; • Uncovering and capitalizing on new distribution channels; • Providing secure environments for selling e-content; • Supporting e-reader and other consumable formats. Blueprint Case Studies ©2010 Outsell, Inc. 178

North Plains also offers training, customer services, and professional publishing services such as project delivery and digitization programs, including e-book production. The company serves corporate marketing departments, advertising and marketing services companies, media and entertainment companies, print and publishing companies, and educational and nonprofit institutions.

Corporate Headquarters North Plains Systems Inc. 510 Front Street West, 4th Floor Toronto, ON M5V 3H3 Canada 416-345-1900 http://www.northplains.com/

Blueprint Case Studies ÂŠ2010 Outsell, Inc. 179

Appendix A: Blueprint Study Methodology Book publishers of all stripes are struggling to generate money from backlists and current content, even as digital markets may threaten existing print-based business models. It is no longer a question whether publishers should embrace the internet, digital publishing, e-commerce, consumers, and social media, but rather the question is how best to do it. The Gilbane Group’s goal was to develop a thoroughly researched assessment of the current state of digital publishing adoption and implementation by focusing on four key questions:

• What innovative applications or services are in place today that have created significant value to publishing organizations?

• How are successful organizations measuring the effectiveness of their publishing technology initiatives?

• What impediments are organizations and their partners facing in adopting new technologies and best practices in order to transform to a more competitive publishing company?

• What role can vendors, solution partners, integrators, and other firms play in helping organizations?

We worked in partnership with the sponsors of our multi-client study to develop and validate answers to these questions using a combination of quantitative and qualitative methods, and relied on our sponsors to arrange introductions to their key reference accounts – customers who have deployed innovative solutions using their platforms, tools, services, and applications. We investigated, in a systematic manner, how our sponsors’ content platforms, tools, services, and applications are being deployed. We began by cataloging the capabilities of our sponsors’ content technologies – assembled from a review of product data sheets and interviews with key product marketing managers. We then interviewed both the technical and business leads for projects within the reference accounts. We used the questionnaire that we’ve developed to enable us to characterize the size, scope of deployments, and outcomes, together with open-ended questions through which we gathered an experiential assessment of the projects. We gather sufficient qualitative information from the reference accounts to develop comparative case studies. Finally, we compared and contrasted the business and technology drivers among the multiple deployments across a range of organizations. Based on our wide-ranging industry expertise, our insights into industry trends, and what we learned through these interviews, we mapped the technology landscape for content-centric solutions and document our analysis. In addition, we identified the key business drivers and critical success factors demonstrated by the vendor-nominated customers.

We supplemented the overall analysis with a series of case studies, describing how various reference accounts approached and solved business problems by deploying tools, applications, and solutions. We wrote the case studies using a predefined template and included The Gilbane Group summary of the strengths, competitive capabilities, and lessons learned. We developed a web-based survey aimed at high- and mid-level book publishing professionals for quantitative perspectives on the state of digital publishing across all seven publishing processes described in this study. See Appendix B for a discussion of survey results.

Appendix A: Blueprint Study Methodology ÂŠ2010 Outsell, Inc. 181

Appendix B: Survey Results The analyst team for A Blueprint for Book Publishing Transformation: Seven Essential Processes to ReInvent Publishing developed a research mechanism in the form of a web-based survey, which was visited by 1,273 individuals, with 208 participating, and 105 completions at the time the data was pulled. Since each question of the survey stands alone, we’ve used for analysis, when appropriate, the larger number of answers, not just those who completed all answers. Comparisons of the same questions between the smaller group (those having completed the entire survey) and the larger group showed no significant differences, but we feel that the larger pool of respondents makes the results that much more reliable. The survey’s targets included those responding to the survey posting to the following groups:

• The Gilbane Group clients and prospect contacts drawn from among the analysts, via direct e-mail invitation;

• The Gilbane Group blog and Twitter postings about the survey; • The membership of the Book Industry Study Group (BISG), our research partner in the study, via BISG Bulletin posting;

• LinkedIn professional groups posting, including Book Publishing Professionals; Content Strategy; Digital Conversion (DigiConv); E-books, E-book Readers, Digital Books and Digital Content Publishing; POD - Print On Demand Publishing; Publishing Brainstorm; Tools of Change for Publishing; STM Publishing Group; Publishing Professionals; and several others.

In addition, there were a number of re-blogging and re-tweets, as well as various conference announcements, including Gilbane San Francisco and BISG MIP. The basic structure of the survey was an introductory section, seven sections that reflect, per section, one or another of the seven publishing processes as defined by the Blueprint study, and a concluding section investigating a variety of goals and barriers to digital publishing. Respondents were directed to one of the seven process tracks depending on the specific process they noted as reflecting their main area of involvement within their book publishing company. Other logic branching was used so that respondents would not have to see questions that their earlier answers indicated was not of relevance to them.

The survey began with a qualifying description for the desired respondent, as follows: Please note: This survey is for high- and mid-level book publishing professionals. If this does not describe you, please do not take this survey. Thank you for participating in The Gilbane Group (a division of Outsell, Inc.) web-based survey of book publishing professionals. This survey is one of the research mechanisms for our upcoming study A Blueprint for Book Publishing Transformation: Seven Essential Processes to Re-Invent Publishing. The study will be published in June 2010, and all participants in this survey will have full access to the full-length study through The Gilbane Group website. This survey, which will take most participants between 12-to-18 minutes to complete, seeks to gain a clearer picture of e-book and related digital publishing efforts underway among the full spectrum of book publishers. Furthermore, the analyst team at The Gilbane Group seeks to identify a number of “pain points” or barriers encountered by book publishers when it comes to developing or expanding digital publishing programs, including areas such as royalties, digital format choices, and distribution problems.Broadly speaking, A Blueprint for Book Publishing Transformation: Seven Essential Systems to Re-Invent Publishing is a professional education effort, and its utility will rely, in large part, on the active and open participation of the book professionals on the front lines of the digital transformation of books. This message proved successful in its intention to support appropriate qualified participation, according to our interpretation of view/participate numbers, with only about 25% of visitors to the introduction message going on to participate in the survey. Subsequent drop-out analysis shows questions throughout the survey being evenly represented as drop-out points right through until near the very end, suggesting that there were no particularly troublesome questions causing respondent kick-out. We believe, rather, that it was the time demand of the survey that probably led to people stopping before all questions were considered. Indeed, the average completion time was 18 minutes, on the high side of our time estimate. We knew this time requirement was demanding of participants, but the drop-out analysis shows that many of those participating answers most questions, providing this survey with a very significant number of respondents. Appendix B: Survey Results provides additional background about the survey for readers wishing to understand the basis for statistical validity and to judge soundness of the findings. Furthermore, this appendix provides the results of specific questions that may not otherwise be specifically cited in the body of the Blueprint study, along with our interpretation and analysis.

Introductory Section of Survey The introductory section sought to capture the following information:

• Type of respondent; • Type of book publishing company (segment); • Size of book publishing company (print titles); • Size of book publishing company (e-book titles); • Type of digital publishing undertaken at the book publishing company; • Level of use of digital rights management (DRM) by the book publishing company; • Role of respondent within book publishing company; • Publishing process involvement of the respondent. The intents of this section were several. First, we hoped to gain deeper insight on how book publishing views its level of activity in regard to e-books and digital publishing more broadly, and specifically to capture some sense of which segments of book publishing were providing respondents. The other, very practical purpose was to force self-identification by the respondents in terms of the publishing process.

Publishing Processes Sections At the close of the first section of the survey, respondents were either directed to one of the seven publishing processes sections, or, if the respondent noted that he or she was not directly involved in digital publishing at his or her book publishing company, to the concluding section of the survey. The seven publishing processes were as follows:

• Planning; • Editorial and production; • Rights and royalties; • Manufacturing; • Marketing and promotion; • Sales and licensing; • Distribution and fulfillment. Most of the respondents self-selected, shown in Figure 51, as either planning or editorial and production, at 34% and 29%, respectively, while the third largest category was “Other.” Text entries revealed that the “Other” category was mostly planning and editorial and production by other names. Promotion and marketing was the actual third process category represented in significant numbers. The respondent numbers for publishing processes “Rights and Royalties,” “Manufacturing,” “Sales and Licensing,” and “Distribution and Fulfillment” were too low to provide a statistically significant result, and except where such topics were addressed within the introduction section or the concluding section discussing goals and barriers, the results are not reported or used. We are not surprised that planning and editorial and production provided the lion’s share of respondents. Our thinking is as follows: Most book publishing professionals currently involved in e-book efforts come from these two processes;

• Rights and Royalties and Sales and Licensing book publishing professionals, outside of these aspects in planning and editorial and production, are back-office focused;

• Manufacturing is a very print-centric process, while e-books and digital publishing generally are content transform processes similar to other production responsibilities;

• Promotion and Marketing processes, were fairly well-represented among the respondents, but, judging from the “Other” text entries, identify more with editorial processes;

• Distribution and Fulfillment processes are, in these early days of e-book and digital publishing, largely being handled by supply chain partners.

Figure 51. Respondents’ Self-Identification with Specific Publishing Process Publishing program planning

33.7%

Editorial and production

28.4%

Promotion and marketing Sales and licensing Rights and royalties

11.6% 3.2% 2.1%

Manufacturing

1.1%

Distribution and fulfillment

1.1%

Other

18.9%

Source: Gilbane Group Publishing Survey, July 2010 Question 7 "Which one of the following book publishing processes best describes your involvement within the book publishing company?" Base = 95 ©2010 Outsell, Inc. Reproduction strictly prohibited.

As Figure 52 shows, the majority of respondents come from small- and mid-size publishers; at 17%, big book publishers (1,000+ titles) are fairly well-represented. Figure 52. Respondents’ Identification of Size of E-Book List Less than 50

39.5%

Less than 200

19.8%

Less than 500 Less than 1,000 More than 1,000

16.8% 6.6% 17.4%

Source: Gilbane Group Publishing Survey, July 2010 Question 2 "How many print titles did your company (include all imprints) publish in 2009? " Base = 167 ©2010 Outsell, Inc. Reproduction strictly prohibited.

Planning Processes CEO, other C-level, or Publisher make up about half of the Planning processes respondents, but it is interesting to note that “Director or Manager of Digital Publishing” itself is strongly represented, as shown in Figure 53. This suggests several things to us:

• Interest is high regarding e-books and digital publishing, even at large book publishing companies, but also across different levels of book publishing professionals;

• The strong showing for “Director or Manager of Digital Publishing” suggests many large book publishing companies responded to the survey.

Figure 53. Position Title Breakout for Planning CFO, CTO, CMO or other C-level executive

20.4%

Publisher

18.4%

Director or Manager of Digital Publishing

18.4%

CEO or President

10.2%

Editorial Director

6.1%

Acquisitions or Senior Editor

4.1%

Product Director or Manager

4.1%

Information or Systems Architect

4.1%

Business Analyst

2.0%

Marketing Director

2.0%

Other

10.2%

We were curious to try to quantify title information management, royalty, and ERP systems, and we found many we expected, but “I don’t know” and “Other” were the big winners, with “none” and “custom systems” the main entries filled in. We kept hearing about Microsoft Office being used as planning platform, and now we believe it, as this was selected by about half of the respondents. The other half use a variety of custom-developed and general ERP (e.g., SAP, Oracle, Great Plains, Microsoft Dynamics ERP) or title information management (TIM) platforms, along with custom-developed software from title planning purposes. The question of publishing business platforms we sought to answer, but the survey – supported by what we heard through our many interviews – shows that the book publishing industry has no well- and clearly-established tools sets as yet. We were very interested to learn when digital publishing is being planned by book publishers, and we did learn that a healthy majority of book publishers are now thinking about digital titles very early in the planning processes, akin to how book publishers have always treated print projects. Twothirds of respondents report that digital publishing titles are being considered right from planning and acquisition, which suggests to us that book publishers are moving away from an early reactive stance regarding e-books. (Question: “Are digital editions considered at the stage of title planning and acquisition?”) Appendix B: Survey Results ©2010 Outsell, Inc. 187

We also wanted to learn if the planning for digital publishing was now part of the planning cycle of the print editions. While this could be construed as countering the previous question, the answer actually re-enforces the state of digital publishing being already well-integrated with the overall publishing program at many book publishers. Still, close to half of book publishers responding to the survey sometimes or always handle digital editions post-print edition. Book publishers are planning digital versions right along with the print titles, but how many are now planning only digital titles? A little more than a quarter of book publishing respondents noted that digital-only titles are published, but about 75% reported that digital-only titles are rarely or never undertaken. We expect to see more digital-only publishing in the years ahead, but wonder how much of the current digital-only publishing today is from the education publishing segment, with online materials. Editorial and Production Processes Publishers, VP or other senior positions in editorial or production, and senior-level editors and directors and managers of digital production, were among the respondent categories scoring big, shown in Figure 54. Figure 54. Position Title Breakout for Editorial and Production CFO, CTO, CMO or other C-level executive

20.4%

Publisher

18.4%

Director or Manager of Digital Publishing

18.4%

CEO or President

10.2%

Editorial Director

6.1%

Acquisitions or Senior Editor

4.1%

Product Director or Manager

4.1%

Information or Systems Architect

4.1%

Business Analyst

2.0%

Marketing Director

2.0%

Other

10.2%

Source: Gilbane Group Publishing Survey, July 2010 Question 16 - EDPR "Which one position best def ines your role within your company? (Check only one)" Base = 27 ÂŠ2010 Outsell, Inc. Reproduction strictly prohibited.

Digital asset management (DAM) is a good idea, but not, apparently, a well-established one among book publishers. Only about 40% of respondents claim DAM usage at their book publishing company, but almost 30% still rely on file management, and only about 10% use content management systems to control asset access, which is less than half the number using custom solutions.

Appendix B: Survey Results ÂŠ2010 Outsell, Inc. 188

DAM’s day is yet to come, it would seem, and if more evidence is needed, those who admitted to DAM use cited MediaBank, from Wave Corporation, as the leader, but it was equal to “Other”; Documentum (EMC) and OpenText tied with “I don’t know,” and the many rest almost didn’t register at all. Custom systems developed in-house, file management platforms, and a little bit of content management systems seem to be how the majority of book publishers’ editorial and production processes handle production asset management of storage, organization, workflow, and revision control. Book publishers across all segments have been using outsource services for many years, especially as staffing budget constraints became unavoidable. The outsourcing and off-shoring service sectors have greatly expanded, and for print-related activity, the activity spans most parts of the editorial and production processes. Less than 3% of respondents noted that their companies don’t use outsource services at all, and project management stays in-house to some great degree, and quality assurance even more so. Book publishers use outside services for e-books less than for print, but the big exception is for “title/document conversion,” not surprisingly, since conversion represents something of a blackbox technology that individual book publishers aren’t likely to keep current and developing as well as specialist outsource services. Another factor to consider is that some supply chain partners to book publishers handle e-book transformation for the publishers, in effect cutting out the outsource vendors.

Trans-Publishing Processes: Goals and Barriers to Digital Publishing In the final section of the survey, we set ambitious goals, including:

• Current thinking about e-book and digital publishing, and to see if these are seen by book publishers to be two distinct endeavors;

• Book publishers’ own sense of activity regarding e-books and digital publishing and their expectations regarding growth of e-books and digital publishing activity;

• Barriers or “pain points” to e-books and digital publishing activity as identified by book publishers;

• Expectations and business drivers for e-books and digital publishing activity as identified by book publishers.

There are two main conclusions to draw from revenue-sizing answers about current conditions. The first is that revenue from both e-books specifically and digital publishing generally remains modest, with about 80% of respondents reporting that their book publishing company makes 15% or less from the digital efforts today, and 34% bringing in 5% or less revenue. However, 41% of publishers’ revenue from digital publishing to account for 25% or more of gross revenues in five years’ time. The second finding is that the “e-book-specific” and more general “digital publishing” breakouts by revenue share are very similar, suggesting that most respondents don’t perceive significant differences between e-books and digital publishing. We suspect that the small shift toward improved revenue shares from digital publishing may represent education publishers, of whom a number of very large publishers have moved into online learning environments in big ways, with non-e-book types of digital publishing, adding to the overall revenue picture. But, really, that is just a guess. (See Figures 2, 3, and 4 for graphs showing results on “e-book-specific” gross revenue shares.) Is the small shift toward higher revenue shown in Figure 55 reflecting higher education publishing’s growth in online learning environments, or professional and STM online content offerings? Makes sense, but it is only a theory.

Figure 55. Digital Publishing Gross Revenue Percentages Today There is no revenue from digital publishing activities

23.4%

Less than 5% of gross revenues are from digital publishing activities

33.6%

Less than 15% of gross revenues are from digital publishing activities

13.1%

Less than 25% of gross revenues are from digital publishing activities

6.5%

More than 25% of gross revenues are from digital publishing activities

12.1%

I don’t know

11.2%

Source: Gilbane Group Publishing Survey, July 2010 Question 69 - GB Q "What is the current level of activity, measured as a percentage of overall gross revenue, of overall digital publishing activities at your book publisher?" Base = 107 ©2010 Outsell, Inc. Reproduction strictly prohibited.

Like the current snapshot of e-book and digital publishing revenue, the same questions asked about what will be the revenue contribution in five years, shows pretty similar responses for e-book-specific and digital publishing general versions. When it comes to digital publishing five years into the future, almost without exception book publishers expect some revenue, and over 40% expect at least a quarter of their company’s gross revenue to come from digital publishing, shown in Figure 56. Figure 56. Digital Publishing Gross Revenue Percentage Projections in Five Years There is no revenue from digital publishing activities Less than 5% of gross revenues are from digital publishing activities

1.9% 7.7%

Less than 15% of gross revenues are from digital publishing activities

24.0%

Less than 25% of gross revenues are from digital publishing activities

16.3%

More than 25% of gross revenues are from digital publishing activities I don’t know

41.3% 8.7%

Source: Gilbane Group Publishing Survey, July 2010 Question 71 - GB Q "What is the predicted level of activity, measured as a percentage of overall gross revenue, of overall digital publishing activities at your book publisher in f ive years’ time?" Base = 104 ©2010 Outsell, Inc. Reproduction strictly prohibited.

Appendix C: Blueprint Sponsors and Vision Statements Aptara: Driving Digital Innovation in Publishing Aptara helps content publishers harness the rapid emergence of new media for a competitive advantage. For more than 20 years, our content development capabilities and technology innovations have helped publishers move to world-class digital content production for highly efficient multichannel publishing.

Taking source content from any format and transforming it for distribution through any medium – from e-readers and smart phones, to tablets, PCs, and print – Aptara continues to help leading global enterprises unlock new top-line revenue growth in an evolving digital- and mobile-centric content marketplace. As a progressive industry advocate and thought-leader, Aptara’s deep relationships with major publishers, distributors, and device manufacturers are driving innovation across the content production and publishing industries. Aptara Address: 3110 Fairview Park Drive, Suite 900, Falls Church, VA 22042 URL: www.aptaracorp.com Phone: 703-352-0001 Business Description: Aptara is a worldwide company that operates four divisions of an electronic content transformation service. It delivers technologically advanced and integrated content transformation solutions that enable customers to uncover new digital revenue opportunities and turn static data into digital content. Aptara provides book and journal services, conversion and technology services to publishers, information aggregators, professional societies, government agencies, universities, libraries, and major corporations. Aptara converts paper, microfilm, and early-generation electronic content into updated formats. Target Publishing Processes: Editorial and Production; Distribution and Fulfillment

BISG: Informing and Empowering the Book Industry Book Industry Study Group is creating a more informed, empowered and efficient book industry supply chain for both physical and digital products.

BISG is committed to the development of effective industry-wide standards, best practices, research, and events that enhance relationships between trading partners. BISGâ&#x20AC;&#x2122;s vision is to become the book industry leadership organization in a time of great transformation by helping to build and support a new industry network enabling new opportunities for profitable growth. Book Industry Study Group (BISG) Address: 370 Lexington Ave., Suite 900, New York, NY 10017 URL: www.bisg.org E-mail: info@bisg.org Phone: 646-336-7141 Business Description: The Book Industry Study Group (BISG) is the leading US book trade association for supply chain standards, research, and best practices. For over 30 years, BISG has been working on behalf of its diverse membership of publishers, retailers, manufacturers, distributors, wholesalers, librarians, and others involved in both print and digital publishing to create a more informed, empowered, and efficient book industry supply chain for both physical and digital products. BISG actively promotes book industry standards and best practices while providing a unique forum for industry professional to collectively address issues affecting the efficiency and effectiveness of the US book trade.

Appendix C: Blueprint Sponsors and Vision Statements ÂŠ2010 Outsell, Inc. 193

Hewlett-Packard Company: Imaging and Printing Business Hewlett-Packard’s Imaging and Printing Business leads the publishing industry through a transforming market, and supports industry players in capturing new business opportunities in a changing world. We leverage our innovation and leadership culture to drive our customers’ business growth and market development, through solutions addressing the needs of all industry players, including publishers and printers, distributors and retailers, authors and readers.

In an age when the publishing industry is undergoing major changes, new challenges and opportunities emerge for all industry players. These drive digital book printing as one of the key strategies adopted by industry players to improve turnover and profitability. Digital printing is instrumental in addressing the increasing impact of traditional industry inefficiencies, such as returns, inventory, and excessive printing, while also mitigating their environmental impact. It enables industry players to leverage emerging needs, such as meeting market demand for fast lead-time and for broad title availability – capturing the long-tail opportunity. And it facilitates capturing new business opportunities, such as custom publishing, personalized books, and more.

HP Indigo W7200 Digital Press

Catering to these needs, HP has established a best in class portfolio of digital book printing solutions. Innovative, revolutionary HP technologies, based on HP Inkjet and Indigo ElectroInk technologies, are the core of end-to-end printing solutions that integrate best of breed partner solutions. These endto-end solutions are the platform facilitating and driving book publishing in the digital age, providing books with publishing industry quality and digital printing versatility. Establishing strategic partnerships with our customers is the vehicle driving joint business growth for our customers, their customers and us. We custom tailor solutions to the business and operational needs of our customers and their customers, enveloped and supported by the wider HP’s technology innovation, software and IT infrastructure. We work closely with our customers to continue to address the evolving business needs and to tap market opportunities.

HP T300 Color Inkjet Web Press

Our solutions have already been adopted as a key growth engine by publishing market leaders – publishers and printers alike. Industry leaders and game changers have identified HP as their partner for growth, delivering quality output with strong business partnership. Continuing to support our customers in their business growth, we increasingly drive market development in a transforming publishing world. – Glen Hopkins, VP/GM Printing Technology Platforms, Global Media & Solutions Business, Hewlett-Packard Hewlett-Packard Company (HP) Address: 3000 Hanover Street, Palo Alto, CA 94304 URL: www.hp.com Phone: 650-857-1501 Business Description: Hewlett-Packard Company (HP) is a global provider of products, technologies, software, solutions, and services to individual consumers, small- and medium-sized businesses (SMBs), and large enterprises, including customers in the government, health and education sectors. The Company’s offerings span multi-vendor customer services, including infrastructure technology and business process outsourcing, technology support and maintenance, application development and support services, and consulting and integration services; enterprise information technology infrastructure, including enterprise storage and server technology, networking products and resources, and software that optimizes business technology investments; personal computing and other access devices, and imaging and printing-related products and services. Target publishing process: Manufacturing

MarkLogic: Revolutionizing the Way Today’s Enterprises Consolidate, Discover, and Distribute Information Founded in 2003, the company is led by pioneers in search engine technologies, database management systems, and business intelligence, who saw that traditional ways of managing information using relational databases and search applications were no longer sufficient. The increasing volume and variety of information that enterprises have to manage required a radically new approach. Hence, the development of the company’s groundbreaking product, MarkLogic Server.

Based on patented innovations, MarkLogic Server enables customers in industries including media, government and financial services to develop and deploy rich information applications at a fraction of the time and cost as compared with conventional approaches. MarkLogic is headquartered in San Carlos, California with field offices in New York, Washington, London, Boston, Austin, and Frankfurt. The company is privately held with investors Sequoia Capital and Tenaya Capital. For more information, to download a trial version, or to read the award-winning Kellblog, written by MarkLogic CEO Dave Kellogg, go to www.marklogic.com. MarkLogic Address: 999 Skyway Road, Suite 200, San Carlos, CA 94070 URL: www.marklogic.com Phone: 650-655-2300 Business Description: Mark Logic Corporation provides information access and delivery solutions for the acceleration and creation of content applications. It offers MarkLogic Server, an XML server to store, manage, enrich, search, navigate, and deliver content; and MarkLogic toolkits for the integration of Microsoft Office PowerPoint, Word, Excel, and SharePoint. The company also provides consulting services, such as digital asset distribution, custom publishing, vertical content delivery, training, and support services. Target Publishing Processes: Editorial and Production, Distribution and Fulfillment

North Plains Systems Corporation

North Plains Systems Corporation Address: 510 Front Street West, 4th Floor, Toronto, ON M5V 3H3, Canada URL: www.northplains.com E-mail: contact@northplains.com Phone: 416-345-1900 Business Description: North Plains provides digital asset management solutions. It offers solutions for the production, management, distribution, and archiving of media content. The company's TeleScope application platform offers on-demand solutions for digital asset management, marketing content management, broadcast automation, video-on-demand, publishing automation, and e-learning. It also offers professional services, training, and customer services. The company serves corporate marketing departments, advertising and marketing services companies, media and entertainment companies, print and publishing companies, and educational and nonprofit institutions. Target Publishing Processes: Editorial and Production, Distribution and Fulfillment

Appendix C: Blueprint Sponsors and Vision Statements ÂŠ2010 Outsell, Inc. 197

Océ North America, Production Printing Systems: Delivering Productivity across the Enterprise As the offset-to-digital migration redefines the book publishing industry and publishers and printers transform the supply chain, Océ has become a leader in the digital book printing market. With Océ technology, books can be printed on demand as orders come in based on a sell-then-print model or in shorter runs – before orders are placed – minimizing risks of overprinting, returns, and remaindering.

Of the top 20 digital book manufacturers, more than half have Océ solutions as part of their digital platforms, using Océ continuous feed and cutsheet digital systems to print millions of books per year. Today, the list continues to grow as book printers and publishers realize that they can put a digital business model in place quickly to generate tremendous returns. And for more and more book printers, the company helping them drive efficiency is Océ, offering unparalleled workflow advantages and the resources they need to expand market opportunities. Océ digital book solutions encompass everything from end-to-end digital book factories that accept plain paper at one end and produce fully finished books at the other to single-system continuous feed and cutsheet printers that produce book blocks for near-line or offline finishing. With Océ PRISMA® pre-press and workflow software, book printers can receive and accept jobs over the web, intranet, network, or via e-mail or CDs. They can scan hard copy originals, eliminate hard copy proofs, guarantee front-to-back registration, combine and edit multiple PDF files, impose pages on the fly, and accept print files from non-Océ workflows and printers. From job ticketing to pre-press document preparation, Océ PRISMA software simplifies book production, enabling better control, efficiency and quality. And when it comes to finishing, whether a book printer opts for cutsheet or continuous feed technology and perfect binding or any other type of binding, Océ can configure a solution that makes the best use of their investment. Océ focuses its extensive experience, resources, and assets on integrating the components customers need to streamline their document production, management and printing requirements. Our organization proudly combines a heritage of highly robust products and leadership in production printing with a long-standing focus on innovation, scalability, field-upgradeability, investment protection and environmental stewardship. Based in Boca Raton, Florida, the Océ Production Printing Systems division provides production-class solutions for graphic arts print providers, direct mail facilities, service bureaus and production print facilities in complex corporate and commercial markets. Océ hardware, software, and professional services deliver the rock-solid reliability, application versatility, and cost-effective performance that define production class. These key advantages, together with an unparalleled emphasis on customer satisfaction, a “built-to-last” approach and continuing innovation set Océ apart as an undisputed leader in the digital book printing and publishing industry. Appendix C: Blueprint Sponsors and Vision Statements ©2010 Outsell, Inc. 198

Océ North America Production Printing Systems Address: 5600 Broken Sound Boulevard, Boca Raton, FL 33487 URL: www.oceusa.com Phone: 800-523-5444 Business Description: Océ Printing Systems provides digital production printing and document management solutions. It engages in the production, sale, and service of printers. The company offers transaction documents solutions, as well as digital publishing services of manuals, books, and newspapers. The company's solutions are based on its advanced software applications that deliver documents and data over internal networks and the internet to printing devices and archives locally and throughout the world. Supporting the workflow solutions are Océ digital printers and scanners, considered to be among the most reliable and productive in the world. Océ also offers a wide range of display graphics, consulting, and outsourcing solutions. Target Publishing Processes: Manufacturing

Really Strategies, Inc.: Eliminating Barriers for Publishers to Create and Deliver Content to the World Market For 10 years, Really Strategies has worked with publishers to bring strategy, content, and technology together. We began as a niche consulting group working with STM publishers, providing XML/DTD/ metadata modeling services, content management analysis, workflow re-engineering, and project and program management services. At the turn of the century we recognized XML as the primary building block for publishers to streamline the management, production, and delivery of content. But itâ&#x20AC;&#x2122;s not only the technology that enables change; it is also the people and processes that manage technology, which is critical for success. By focusing on publishers needs, Really Strategies has been able to serve a broad range of publishers, media companies, government organizations, and technical publishers. All trying to improve efficiencies and eliminating barriers to publishing and delivering content to the world market.

Having built a series of custom content management systems (CMS) for customers, we recognized there was no product on the market dedicated to the specific needs of publishers. So we built one. RSuite is the only content management system built specifically and exclusively for publishers. RSuite is designed to manage any content (XML, Word files, PDF, images, etc.) and provide publishers a view of that content via reporting, workflow, search, and many other features. Publishers have traditionally struggled with the ability to store and find both in-progress and finished products; however, with RSuiteâ&#x20AC;&#x2122;s browse and search capabilities, publishers are able to re-use and repurpose content for new product development and licensing opportunities. RSuite allows a publisher to address the pain points within its publishing process quickly by leveraging the robust workflow which includes both automated (out-of-the-box) action handlers and manual review tasks. Workflows can be quickly setup and updated to shorten time-to-market activities. Because of the flexibility of design and ease of extending RSuite, many publishers have integrated best-in-class third party editorial and composition tools to meet their end-to-end publishing system needs.

Appendix C: Blueprint Sponsors and Vision Statements ÂŠ2010 Outsell, Inc. 200

In June 2009 Really Strategies acquired DocZone, a SaaS XML CMS for technical publishers. Technical publishers traditionally need to create and manage a series of specifications, training documents, and marketing material. Having a centralized end-to-end publishing platform has allowed the technical publishers to focus on the content rather than managing the technology that managed their content. Today DocZone serves many Fortune 1000 companies to efficiently manage their technical publishing program. DocZone has provided a flexible toolset while being able to adapt to varying publishing needs of technical publishers. Inherent in the technical publishing process is the need to publish to many output formats (e.g., HTML, PDF, ePub) which is an automated step within DocZone and is a byproduct of the publishing process rather than an afterthought and difficult workflow step. Ease of use is the theme behind DocZone and any technical publisher can be up and running in days. DocZone has proven to eliminate barriers to allow technical publishers to create and deliver content more efficiently to the world market. – Barry Bealer, CEO and Co-Founder Really Strategies, Inc. Address: 2570 Boulevard of the Generals, Suite 213, Audubon, PA 19403 URL: www.reallysi.com E-mail: info@reallysi.com Phone: 610-631-6770 Business Description: Really Strategies, Inc. helps publishers, media companies, and other content-centric companies to plan and implement content solutions and systems. It helps to bring strategy, content, and technology together to analyze, architect, and implement appropriate tools and technologies. The company’s solutions and services include XML editorial tools, XML repositories, content management systems, and editorial and production systems, as well as workflow reengineering, technology evaluation, DTD and schema development, functional and technical requirements development, and electronic product development strategy. It also offers consulting and software as a service services, as well as RSuite CMS, a content management system that facilitates the creation, management, re-use, and distribution of XML, media files, and other document formats. Target Publishing Processes: Editorial and Production, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory Adobe Address: 345 Park Avenue, San Jose, CA 95110 URL: www.adobe.com Phone: 408-536-6000, 800-833-6687 Business Description: Adobe Systems Incorporated (Adobe) is a diversified software company. The Company offers a line of creative, business, web, and mobile software and services used by creative professionals, knowledge workers, consumers, original equipment manufacturers, developers, and enterprises for creating, managing, delivering, and engaging with content and experiences across multiple operating systems, devices, and media. It distributes its products through a network of distributors, value-added resellers (VARs), systems integrators, independent software vendors (ISVs), and OEMs, direct to end users and through its own website at www.adobe.com. It also licenses its technology to hardware manufacturers, software developers, and service providers, and offers integrated software solutions to businesses of all sizes. Target Publishing Processes: Editorial and Production, Rights and Royalties, Distribution and Fulfillment Aequor Technologies, Inc. Address: 33 Wood Ave S, Ste 500, Iselin, NJ 08830 URL: www.aequor.com E-mail: info@aequor.com Phone: 732-494-4999 Business Description: Aequor Technologies, Inc. provides information technology consulting services. It offers software application services, such as software development, maintenance and support, re-engineering and migration, software testing, and application integration services. The company also provides technology practices, including open source, digital media, and security and compliance practice; and ecommerce services, such as B-to-B, website personalization, content management, electronic bill presentment and payment, web-enablement of legacy applications, systems re-engineering, systems migration and upgradation, and business intelligence/data warehousing services. In addition, it offers contact management and technical evaluation services, as well as engagement models. Target markets include media and publishing, banking and financial services, insurance, life science and healthcare, manufacturing, public sector and government, telecom, and retail. Target Publishing Processes: Editorial and Production, Rights and Royalties, Distribution and Fulfillment Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 202

Amazon.com Address: 1200 12th Avenue South Suite 1200, Seattle, WA 98144-2734 URL: www.amazon.com Phone: 206-266-1000 Business Description: Amazon.com, Inc. operates as an online retailer in North America and internationally. The company operates various retail websites including amazon.com, amazon.co.uk, amazon.de, amazon.fr, amazon.co.jp, amazon.ca, and amazon.cn. Its product categories include books; movies, music, and games; digital downloads; electronics and computers; home and garden; toys, kids, and baby; grocery; apparel, shoes, and jewelry; health and beauty; sports and outdoors; and tools, auto, and industrial. The company serves its consumer customers through its retail websites and focuses on selection, price, and convenience. It also offers programs that enable seller customers to sell their products on its websites and their own branded websites. In addition, the company serves developer customers through Amazon Web Services, which provides access to technology infrastructure that developers can use to enable virtually any type of business. Further, it manufactures and sells the Kindle e-reader. Additionally, the company offers co-branded credit card programs, fulfillment, and other marketing and promotional services, such as online advertising. Target Publishing Processes: Promotion and Marketing, Manufacturing, Distribution and Fulfillment Appingo Address: 333 Moody Street, Suite 201, Waltham, MA 02453 URL: www.appingo.com E-mail: info@appingo.com Phone: 781-547-5980 Business Description: Appingo offers complete production service for publishers. Appingo's services include project management, technical composition, information graphics, photo research, rights finalization, and comprehensive publishing services. It also produces journals and directories, teacher supplements, workbooks, and instructional materials of all kinds. Its vast experience in publishing includes work on college textbooks, kindergarten through twelfth grade primers and ancillary materials, custom magazines, and professional journals. Target Publishing Processes: Editorial and Production, Rights and Royalties

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 203

Apple Address: 1 Infinite Loop, Cupertino, CA 95014 URL: www.apple.com E-mail: media.help@apple.com Phone: 408-996-1010 Business Description: Apple Inc., together with subsidiaries, designs, manufactures, and markets personal computers, mobile communication devices, and portable digital music and video players, as well as sells various related software, services, peripherals, and networking solutions. The company sells its products worldwide through its online stores, retail stores, direct sales force, third-party wholesalers, resellers, and valueadded resellers. In addition, it sells various third-party Macintosh, iPhone, and iPod compatible products, including application software, printers, storage devices, speakers, headphones, and various other accessories and peripherals through its online and retail stores, and digital content and applications through the iTunes Store. Target Publishing Processes: Distribution and Fulfillment Aptara Address: 3110 Fairview Park Drive, Suite 900, Falls Church, VA 22042 URL: www.aptaracorp.com Phone: 703-352-0001 Business Description: Aptara is a worldwide company that operates four divisions of an electronic content transformation service. It delivers technologically advanced and integrated content transformation solutions that enable customers to uncover new digital revenue opportunities and turn static data into digital content. Aptara provides book and journal services, conversion and technology services to publishers, information aggregators, professional societies, government agencies, universities, libraries, and major corporations. Aptara converts paper, microfilm, and early-generation electronic content into updated formats. Target Publishing Processes: Editorial and Production; Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 204

Argosy Publishing Address: 109 Oak St Ste 3, Newton, MA 02464-1493 URL: www.argosypublishing.com E-mail: sales@argosypublishing.com Phone: 617-527-9999 Business Description: Argosy Publishing is engaged in typesetting for the printing trade, commercial art, and graphic design and publishing and printing of books. Target Publishing Processes: Editorial and Production, Distribution and Fulfillment Attributor Address: 1775 Woodside Road, Suite 100, Redwood City, CA 94061 URL: www.attributor.com Phone: 888-300-9114 Business Description: Attributor, Inc. provides a web-wide content tracking and monetization platform that enables publishers to build value with their content wherever it appears on the internet. It offers text monitoring, which is used to identify new sales leads and revenue-sharing opportunities, monitor licensed uses, derive links, and better search engine placement; image monitoring and monetization that finds copies of the client images across the web and discover new syndication opportunities; and video monitoring that supports various types of content, including text, images, and video. The company also offers TrueAudience, a technology that enables publishers to quantify the audience viewing publisher content off their destination site. Target markets include publishers and distributors of digital content. Target Publishing Processes: Sales and Licensing

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 205

Atypon Systems, Inc. Address: 5201 Great America Parkway, Suite 510, Santa Clara, CA 95054 URL: www.atypon.com Phone: 408-988-1240 Business Description: Atypon Systems, Inc. provides software, hosting, and systems development solutions to the information industry. Its products include Atypon Premium, a hosted e-publishing solution that helps clients in managing the process of delivering and managing content online; Atypon Link, a hosting and delivery platform that offers an outsourced e-publishing service for publishers; and PDFplus, which embeds reference links within PDFs, and enables information providers to offer users the linking functionality of HTML. The company also offers eRights suite of products, which includes RightAccess that provides authentication, authorization, product segmentation, and delegated administration features for various types of digital goods and services; and RightCommerce, which allows companies to implement multiple pricing models and reach customers at various stages of the sales cycle. Target markets include commercial information providers, not-for-profit information providers, and university presses. Target Publishing Processes: Rights and Royalties, Promotion and Marketing, Distribution and Fulfillment Author Solutions, Inc. (ASI) Address: 1663 Liberty Drive Suite 200, Bloomington, IN 47403 URL: www.authorsolutions.com Phone: 812-339-6000 Business Description: Author Solutions, Inc. operates as a book publishing company. It helps authors to publish, promote, and sell their books. The company also develops a publishing services platform that provides small and medium-sized publishers the flexibility and speed-to-market advantages. Its platform includes an automated front office with publishing rules baked in, integrate production workflow, file management, accounting, a website with shopping cart, and CRM capability. The company also provides author marketing products and services, including publicity, media relations, online services, and live event opportunities. Target Publishing Processes: Planning, Editorial and Production, Rights and Royalties, Manufacturing, Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 206

Autonomy Interwoven Address: 160 East Tasman Drive, San Jose, CA 95134 URL: www.interwoven.com Phone: 408-774-2000 Business Description: Autonomy Interwoven provides enterprise content management solutions for business and enables organizations to unify people, content and processes to minimize business risk and sustain lower costs of ownership. It delivers industry-specific solutions that reduce business process cycle time from initial collaboration through design, production, sales, marketing, legal review, IT, and service. Target Publishing Processes: Editorial and Production AVATAR Address: 1 Westferry Circus, Canary Wharf, London E14 4HD UK URL: www.avatar-software.com E-mail: avatar@littlejohnllp.com Phone: 020 7516 2200 Business Description: AVATAR is a fully integrated, module based business management system, specifically designed to meet the evolving needs of publishers and distributors. It has been developed and is supported by Littlejohn, one of the UK's top 30 firms of chartered accountants, based in London. Target Publishing Processes: Rights and Royalties

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 207

Aysling Digital Media Solutions Address: 1327 Jones Dr #107, Ann Arbor, MI 48105 URL: www.aysling.com E-mail: support@aysling.com Phone: 888-702-0082 Business Description: Aysling brings the latest technology to clients through WoodWing's Enterprise content publishing platform, Dataplan’s Planning Suite, and Drupal’s open-source WCM system. This allows both traditional and non-traditional publishers to plan, create, and deliver content to their audience faster, more efficiently, and with less expense. Target Publishing Processes: Editorial and Production Azurn/Value Chain International Limited Address: 6/1632 High Street, Glen Iris, Victoria 3146, Australia URL: www.value-chain.biz Phone: 61 3 9885 3822 Business Description: Value Chain International Limited provides business enterprise information management services. It offers publishers and companies with digital content to collect, collate, aggregate, add value, repurpose, and distribute information; integrates product information distributed in functional groups; address account aggregation and management challenges using XML and web services standards; product catalogues available through multiple channels, such as ecommerce sites, procurement systems, and print media; helps educators communicate, collaborate, aggregate, report, and develop a secure and transparent learning environment; and automates the aggregation, management, and distribution of media and metadata. Target Publishing Processes: Editorial and Production, Manufacturing, Sales and Licensing, Distribution and Fulfillment

Baker & Taylor, Inc. (Blio) Address: 2550 West Tyvola Road Suite 300, Charlotte, NC 28217 URL: www.btol.com E-mail: info@btol.com Phone: 800-775-1800 Business Description: Baker & Taylor, Inc. distributes books, videos, and music products to libraries, institutions, and retailers. It offers acquisition, audiovisual, before on-sale shipping, collection development, continuation, customized library, information, MARC, Spanish language, bookstore, Internet retail, merchandising, ordering, and web hosting services. The company also produces publications that are information sources for making purchasing decisions. Target Publishing Processes: Distribution and Fulfillment Barnes & Noble, Inc. Address: 122 Fifth Avenue, 2nd Floor, New York, NY 10011 URL: www.barnesandnobleinc.com Phone: 212-633-3300 Business Description: Barnes & Noble, Inc. operates as a bookseller in the US. Barnes & Noble, Inc. conducts the online part of its business through barnesandnoble.com LLC. Target Publishing Processes: Sales and Licensing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 209

Blackboard Inc. Address: 1899 L Street, N.W., Washington, DC 20036 URL: www.blackboard.com Phone: 202-463-4860 Business Description: Blackboard Inc. is a provider of enterprise software applications and related services to the education industry. Its various software applications are delivered in its four product lines: Blackboard Learn, Blackboard Transact, Blackboard Connect, and Blackboard Mobile. Blackboard Learn, the Company’s web-based teaching and learning platform, is the new version of Blackboard Academic Suite. Blackboard Transact is the successor to the Blackboard Commerce Suite, and can be used for on and off-campus commerce management, online e-commerce and payment management, meal plan administration, vending, and laundry services. Blackboard Connect is the Company’s alert and notification platform for its communications and notification system solutions. Target Publishing Processes: Distribution and Fulfillment Blue Toad Address: 6236 Kingspointe Parkway, Suite 10, Orlando, FL 32819 URL: www.bluetoad.com E-mail: sales@bluetoad.com Phone: 407-992-8744 Business Description: BlueToad, Inc. is an online digital publication company. The company converts print PDF files into enhanced online digital publications that use flash-based, page-flip technology to simulate the look and feel of traditional paper publications. Target Publishing Processes: Editorial and Production, Distribution and Fulfillment

Blurb Address: 580 California, Suite 300, San Francisco, CA 94104 URL: www.blurb.com Phone: 415-362-2067 Business Description: Blurb, Inc. provides a book publishing and marketing platform for bloggers, artists, marketers, photographers, travelers, entrepreneurs, and poets. It offers BookSmart, a bookmaking software designed for Mac or PC users to publish their books. The company also provides bookstore and online marketing tools that enable authors to read, make, share, sell, and promote their books. Target Publishing Processes: Editorial and Production, Rights and Royalties, Manufacturing, Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment Book Manager (Scott Moore Ltd.) Address: The Cottage, Back Street, Gislingham, Eye, Suffolk, IP23 8JH, UK URL: www.scottmoore.co.uk/products.html Phone: 01449 782001 Business Description: Scott Moore Ltd has been supplying computer systems to the book trade since 1988. BookManager is a flexible and powerful solution for retail, trade, and mail order. Target Publishing Processes: Rights and Royalties, Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment BookDaily.com (ArcaMax Publishing) Address: 729 Thimble Shoals Blvd, Suite 1-B, Newport News, VA 23606 URL: www.bookdaily.com (www.arcamax.com) Phone: 757-596-9731 Business Description: BookDaily.com is owned and operated by ArcaMax Publishing, Inc., provider of internet e-zine services; and internet marketing and advertising services. Target Publishing Processes: Promotion and Marketing Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 211

Book Industry Study Group (BISG) Address: 370 Lexington Ave., Suite 900, New York, NY 10017 URL: www.bisg.org E-mail: info@bisg.org Phone: 646-336-7141 Business Description: The Book Industry Study Group (BISG) is the leading US book trade association for supply chain standards, research, and best practices. For over 30 years, BISG has been working on behalf of its diverse membership of publishers, retailers, manufacturers, distributors, wholesalers, librarians, and others involved in both print and digital publishing to create a more informed, empowered, and efficient book industry supply chain for both physical and digital products. BISG actively promotes book industry standards and best practices while providing a unique forum for industry professional to collectively address issues affecting the efficiency and effectiveness of the US book trade. BookNet Canada Address: 215 Spadina Avenue, Suite 310, Toronto, Ontario, M5T 2C7 URL: www.booknetcanada.ca Phone: 416-362-5057 Business Description: BookNet Canada is a not-for-profit agency serving Canadian publishers, distributors, and booksellers. BookNet runs B2B trading services, sets technology standards, performs market research, and manages book sales reporting data. Target Publishing Processes: Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 212

R.R. Bowker LLC. Address: 630 Central Ave., New Providence, NJ 07974 URL: www.bowker.com Phone: 888-269-5372 Business Description: As an US ISBN and SAN agency, R.R. Bowker is one of the world's leading companies that maintains title, publisher, and bibliographic information. It serves public, academic, research, and government libraries. The company also offers a range of reference and reporting products and services. R.R. Bowker provides supply chain services for publishers and booksellers. It offers products under the AquaBrowser, Books In Print, Pubnet, PubEasy, and PubTrack brands. Target Publishing Processes: Sales and Licensing, Distribution and Fulfillment Bradbury Phillips International Ltd. Address: 29 Aubert Park, London, N5 1TP, UK URL: www.bradburyphillips.co.uk E-mail: info@bradburyphillips.co.uk Phone: 020 3340 3913 Business Description: Bradbury Phillips International is the publisher of the Bradbury Phillips Rights Management, Permissions, Agents’ Accounts, and Authors’ Royalties software. Target Publishing Processes: Rights and Royalties

Canto Address: 221 Main Street, Suite 460, San Francisco, CA 94105 URL: www.canto.com E-mail: info@canto.com Phone: 415-495-6545 Business Description: Canto Software, Inc. develops and delivers digital asset management solutions. The company designs and develops Canto Cumulus, a digital asset management software that allows work groups to find, share, and publish files. Additionally, it provides brand management workflow working solutions under the BrandAssistant brand name. Target Publishing Processes: Editorial and Production, Manufacturing Censhare Address: Paul-Gerhardt-Allee 50, 81245 MĂźnchen, Germany URL: www.censhare.com E-mail: info@censhare.com Phone: 49 89 568236-0 Business Description: Censhare AG is primarily engaged in publishing of software and other software consultancy and supply. The company provides information and process management solutions. Target Publishing Processes: Editorial and Production

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 214

Chicago Distribution Services/BiblioVault Address: Chicago, IL 60628 URL: www.bibliovault.org, www.chicagodistributioncenter.org E-mail: dcollins@press.uchicago.edu Phone: 800-621-2736, 773-702-7020 Business Description: BiblioVault operates under the umbrella of Chicago Distribution Services. BiblioVault helps scholarly publishers preserve and extend the value of their books, providing long-term secure storage of digital book files for member presses, as well as a wide range of scanning, printing, transfer, conversion, and distribution services. Target Publishing Processes: Production, Manufacturing, Sales and Licensing, Distribution and Fulfillment codeMantra Address: 600 W Germantown Pike, Plymouth Meeting, PA 19462 URL: www.codemantra.com E-mail: cminfo@codemantra.com Phone: 610-940-1700 Business Description: CodeMantra provides data and content management solutions. Target Publishing Processes: Editorial and Production, Manufacturing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 215

Cognizant Address: 500 Frank W.Burr Blvd., Teaneck, NJ 07666 URL: www.cognizant.com E-mail: inquiry@cognizant.com Phone: 201-801-0233 Business Description: Cognizant Technology Solutions Corporation is a provider of custom information technology consulting and technology services, and outsourcing services. Its IT consulting and technology services include business and knowledge process consulting; IT strategy consulting; technology consulting; application design, development, integration, and re-engineering, such as complex custom systems development, data warehousing/business intelligence, customer relationship management (CRM) system implementation, and enterprise resource planning (ERP) system implementation; and software testing services. The companyâ&#x20AC;&#x2122;s outsourcing services comprise application maintenance, including custom application, CRM, and ERP maintenance; IT infrastructure outsourcing; and business and knowledge process outsourcing. Target Publishing Processes: Promotion and Marketing, Distribution and Fulfillment Connotate Address: 100 Albany Street, 2nd fl; New Brunswick, NJ 08901 URL: www.connotate.com Phone: 732-296-8844 Business Description: Connotate Technologies Inc. provides business intelligence solutions to collect and transform information from the web and enterprises into user-empowered on-demand applications and actionable intelligence. The company offers Agent Community GEN2, an information access, analysis, and automation platform that provides enterprise users with tools for idea generation, personalized monitoring, precision harvesting, data mash up, integration, and automation. Its products include Data Edition, a solution for mining, extracting, aggregating, and normalizing data from structured or unstructured sources, including XML, HTML, databases, and PDF files; Intelligence Edition, a solution that enables informed decision-making through real-time business, competitive, and market intelligence; and On Demand Library that provides a collection of user-generated agent applications. The company also helps its clients in creating customized intelligent agents that monitor, mine, extract, mash up, and aggregate data from the web and enterprise sources. Target Publishing Processes: Editorial and Production

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 216

Content Data Solutions Address: One Progress Drive, Horsham, PA 19044-8014 URL: www.contentdsi.com E-mail: marketing@contentdsi.com Phone: 800-872-2828 Business Description: Content Data Solutions, Inc. operates as a software and systems integration company. It provides content management, publishing solutions, and services. The company produces print and web directories from a single source, develops a subscription-based website, catalogs publications, creates web and CD/DVD training manuals, and develops digital asset management system. Its services include pre-press, data conversion and preparations, web design/hosting, CD/DVD development, digital publishing, and records management solutions. Target Publishing Processes: Editorial and Production, Manufacturing, Distribution and Fulfillment Copia (DMC Worldwide) Address: 105 Madison Avenue, New York, NY 10016 URL: www.thecopia.com E-mail: info@dmcww.com Phone: 212-889-0200 Business Description: Copia, developed by DMC Worldwide, is a social e-reading experience, combining marketplace, community, collaboration, social networking, and e-reading devices. Target Publishing Processes: Editorial and Production, Manufacturing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 217

Copyright Clearance Center Address: 222 Rosewood Drive, Danvers, MA 01923 URL: www.copyright.com E-mail: info@copyright.com Phone: 978-750-8400 Business Description: Copyright Clearance Center, Inc. provides copyright licensing solutions for the academic institutions and corporations. It provides content licensing and permission, annual licensing, pay-per-use permission, corporate licensing and permission, academic licensing and permission, international licensing and permission, and rights holder licensing and permissions services. Target Publishing Processes: Sales and Licensing, Rights and Royalties Cybergraphix Address: 383 State Route 511, Nova, OH 44859 URL: www.cybergraphix.com Phone: 419-652-2200 Business Description: Cybergraphix, Inc. offers web development, multimedia, and document management solutions. The company offers digital signage, video editing and conversion, document imaging, programming, digital video disc and compact disc duplication and authoring, and animation services. Target Publishing Processes: Manufacturing

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 218

CyberWolf, Inc. (ACUMEN Book) Address: 1596 Pacheco, Suite 203, Santa Fe, NM, 87505 URL: www.cyberwolf.com E-mail: sales@acumenbook.com Phone: 505-983-6463 Business Description: CyberWolf provides technology solutions to publishers. Products include: ACUMEN Book business management system; PowerWeb Book e-commerce platform; and the CyberWolf Download Service. Target Publishing Processes: Planning, Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment Data Conversion Laboratory, Inc. Address: 61-18 190th St., 2nd Floor, Fresh Meadows, NY 11365 URL: www.dclab.com Phone: 718-357-8700 Business Description: Data Conversion Laboratory, Inc. provides content conversion services to publishers, industry, government, libraries, and documentation developers. It prepares and converts content for electronic distribution and web by converting it to structured formats like XML, SGML, OeB, and HTML. The company offers paper and PDF sources to SGML/XML, proprietary and non-proprietary electronic source data formats to SGML/XML, SGML to SGML, SGML to XML, DTD's and schemas, structural and content-based DTD, and simultaneous conversion to multiple DTDs and schemas services, as well as QA and process review services for in-house systems, and legacy conversions and software for recurring data streams. Target Publishing Processes: Editorial and Production, Manufacturing

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 219

Delphax Technologies, Inc. Address: 6100 West 110th Street, Bloomington, IN 55438 URL: www.delphax.com E-mail: info@delphax.com Phone: 952-939-9000 Business Description: Delphax Technologies, Inc. engages in the design, manufacture, sale, and servicing of digital print production systems, and related spare parts and supplies. It provides digital printing solutions that can personalize, encode, print, and collate documents for publishing, direct mail, legal, financial, security, forms, and other commercial printing applications. Delphax Technologies also provides the CR series system, which accommodates a range of substrates from ultra lightweight paper to heavy stock, to publishers, direct mailers, and transaction document printers; the Imaggia II series that contains sheetfed digital presses; and finishing systems, which support post-printing activities, such as batching, stacking, slitting, cutting, folding, and binding. In addition, it offers various pre-press software and hardware solutions for use with its printing equipment, which provides the data integration tools necessary to manage the print production process. Target Publishing Processes: Manufacturing diacriTech Address: 661 Boylston Street, 2nd Floor, Boston, MA 02116 URL: www.diacritech.com Phone: 617-600-3366 Business Description: diacriTech, LLC provides book, journal, and multimedia publishing services for publishers in North America, Europe, Asia, and Australia. Its portfolio includes mathematics, school, science and medical, and technical books. It offers publishing services, such as project management, page composition, illustrations/art, editorial, copyediting, language translation, cover and interior design, and indexing. The company also provides XML and data conversion services, as well as data capture services from manuscripts, database, print, PDF, and other media. In addition, it offers business process outsourcing services, such as data entry, forms processing, document management solutions, conference and medical transcription, data validation, web mining, outbound call center, order processing, and billing; and consulting services. Target Publishing Processes: Editorial and Production

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 220

DMC Worldwide (Copia) Address: 105 Madison Avenue, New York, NY 10016 URL: www.dmcww.com E-mail: info@dmcww.com Phone: 212.889.0200 Business Description: DMC Worldwide develops, manufactures, and distributes consumer electronics products. The company provides end-to-end business solutions including product development, sales channel marketing, and supply chain management. DMC Worldwide develops Copia, a social e-reading experience, combining marketplace, community, collaboration, social networking, and e-reading devices. Target Publishing Processes: Promotion and Marketing, Distribution and Fulfillment DNAML Pty Limited Address: Suite 4, 4th Floor, 189 Kent Street, Sydney, NSW 2000, Australia URL: www.dnaml.com Phone: 61 2 8248 5111 Business Description: DNAML Pty Limited, a software-development company, specializes in e-publishing solutions. It offers DeskTop Author, an electronic publishing software that allows to create and/or sell page turning electronic publications; DNL e-book Security and Distribution System for publishers, authors, distributors, and retailers; and Desktop Communicator, an electronic catalog software that allows to create and distribute updatable eCatalogs, digital brochures, personalized newsletters, and membership alerts. The company also offers products in the field of electronic publishing, based around its document-authoring systems, publishing conversion tools, distribution solutions, and reseller systems. Target Publishing Processes: Editorial and Production, Manufacturing

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 221

E-BookServices (EDX Electronics) Address: EDX Electronics (P) Ltd., 14, Main Patel Road, West Patel Nagar; New Delhi 110 008, India URL: www.e-bookservices.com Phone: 91 98 100 50809 Business Description: E-BookServices, an outsourcing company that specializes in preparing digital content, provides multilingual publishing-related services to publishers, authors, and translation agencies. The company provides multi-lingual typesetting, OCR and scanning, multi-lingual DTP, XML coding/tagging, format conversion, e-Book creation, and text extraction for translation. Target Publishing Processes: Editorial and Production, Manufacturing, Distribution and Fulfillment Eastman Kodak Address: 343 State Street, Rochester, NY 14650 URL: www.kodak.com Phone: 585-724-4000 Business Description: Eastman Kodak Company provides imaging technology products and services to the photographic and graphic communications markets worldwide. It operates in three segments: Consumer Digital Imaging Group (CDG); Film, Photofinishing, and Entertainment Group (FPEG); and Graphic Communications Group (GCG). The CDG segment offers consumer digital capture and devices. The FPEG segment comprises traditional photographic products and services. The GCG segment provides digital and traditional prepress equipment and consumables and imaging services. Target Publishing Processes: Manufacturing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 222

Easypress Address: The Surrey Technology Centre, 40 Occam Road, The Surrey Research Park, Guildford, Surrey, GU2 7YG UK URL: www.easypress.com Phone: 44 1483 685 250 Business Description: Easypress Technologies Limited develops and sells cross-media publishing software that enables publishers to create, manage, and publish content in multiple media. The company offers Atomik Xport, a solution that enables to convert QuarkXPress content into extensible markup language (XML) format; Atomik Roundtrip, which facilitates users to import XML into QuarkXPress and re-export it; EasyEPUB, an online service or an enterprise application that enables publishers to create e-books; and Atomik XML Publisher, a solution that facilitates the user to transfer content to and from QuarkXPress documents in XML format. It also provides Atomik Dynamic Publisher, an online collaborative document and workflow management system that enables remote clients and internal editors to collaborate with their document designers within an integrated web-based environment; Atomik Quantum Publisher, which takes publishing to the next level allowing Adobe InDesign documents, books, brochures, and magazines to exist in various print and digital formats, as well as reflects changes in the Adobe InDesign document in the alternative delivery platform; and Atomik Import that enables QuarkXPress users to create print document from XML content. In addition, the company offers a range of consultancy services in the areas of cross-media publishing and integrating print publishing into XML workflows; and provides software maintenance services and customized training packages. Target Publishing Processes: Editorial and Production EasyRoyalties URL: www.easyroyaltiesusa.com Business Description: Royalty software from Easy Royalties is a product of JDC Software Ltd. and is distributed in the United States and Canada by Kensai International Ltd. It is an affordable and powerful software solution for small to mid-sized publishers, designed to meet the needs of publishers that have complex royalty accounting requirements or are just beginning to distribute digital content. Target Publishing Processes: Rights and Royalties

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 223

e-book Architects Address: 1002 Red Cliff Dr., Austin, TX 78758-5125 URL: www.e-bookarchitects.com Phone: 512-939-3466 Business Description: e-book Architects is a full-service e-book conversion, consulting, and services company serving the needs of authors and publishers. Target Publishing Processes: Editorial and Production ebooks Corporation Address: 62 Bayview Terrace, Claremont, Western Australia URL: www.ebooks.com Phone: 61 8 9385 5851 Business Description: eBooks Corp. distributes commercial e-books from book publishers. It operates ebooks.com, an e-book store, which sells popular, professional, and academic digital books from various publishers. The company also provides a growing collection of scholarly and professional texts to institutions and companies internationally. In addition, the company provides marketing and fulfillment services to book publishers and retailers. Target Publishing Processes: Distribution and Fulfillment, Promotion and Marketing, Sales and Licensing

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 224

ebrary Address: 318 Cambridge Ave., Palo Alto, CA 94306 URL: www.ebrary.com E-mail: info@ebrary.com Phone: 866-4-EBRARY Business Description: ebrary, Inc. provides e-content and technology services. It offers Title Preview, a software-as-a-service (SaaS) marketing tool that enables publishers, aggregators, corporations, societies, distributors, and individuals to market their digital content and increase leads. The company helps libraries, publishers, and other organizations to disseminate information to end-users by improving research and document interaction. Its platform is used to archive, manage, and share digital content, such as theses and dissertations, reports, historical books, manuscripts, and other documents in PDF. The company's platform is integrated with existing websites of publishers, as well as helps publishers to sell e-books online through various business models, including subscriptions, perpetual ownerships, and microtransactions. It also offers On-Demand Libraries, which allow customer relationship management and SaaS providers to package their services with custom and branded collections of relevant e-books; and a subscription database. In addition, the company offers ClickOne that satisfies the SEC's summary prospectus rules; and a subscription database in medical technology. Target Publishing Processes: Manufacturing, Sales and Licensing, Distribution and Fulfillment Eclipse Address: 4th Floor, 21 Perrymount Road, Haywards Heath, West Sussex, RH16 3TP UK URL: www.eclgrp.com/businessdynamics/ E-mail: sales@eclgrp.com Phone: 0203 058 1000 Business Description: The Eclipse Business Dynamics Royalty and Rights Management System (ERRMS) integrates seamlessly with Microsoft Dynamics GP. The system is an automated, end-to-end royalty accounting program that includes flexible reporting solutions and an excellent audit trail to clearly demonstrate regulatory compliance and reassure rights-holders of royalty accounting accuracy. Target Publishing Processes: Rights and Royalties

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 225

Edwards Brothers Address: 2500 South State Street, Ann Arbor, MI 48104 URL: www.edwardsbrothers.com Phone: 734-769-1004 Business Description: Edwards Brothers, Inc. manufactures and supplies books and journals in the United States and the United Kingdom. It specializes in short, medium, and ultra-short runs for publishers, authors, scholarly societies, industrial firms, and universities. The company offers prepress, printing, and bindery services. It also provides printing services for catalog and commercial documentation markets. Target Publishing Processes: Manufacturing, Distribution and Fulfillment Ehaus Address: G16 Shepherds Building, Rockley Road, London W14 0DA UK URL: www.ehaus.co.uk E-mail: support@ehaus.co.uk Phone: 44 020 3393 8290 Business Description: Ehaus is an independent web design and development company, offering web design and development services, content management systems, and online e-commerce shopping systems. Target Publishing Processes: Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 226

Endeca Address: 101 Main Street, Cambridge, MA 02142 URL: www.endeca.com E-mail: sales@endeca.com Phone: 617-674-6000 Business Description: Endeca Technologies, Inc. offers information access software. The companyâ&#x20AC;&#x2122;s information access platform aids information-based problem solving in various business processes, including e-commerce, marketing-campaign analysis, product design and parts reuse, knowledge management, and customer service. The company also offers intranet and knowledge management, enterprise search, website search, analytics, sales and marketing, customer service, online retail, B2B ecommerce, and online media solutions. In addition, it offers consulting, education, and support services. The company serves retail, manufacturing and distribution, media and publishing, financial services, healthcare and life sciences, hospitality, and professional services industries, as well as the public sector. Target Publishing Processes: Promotion and Marketing, Distribution and Fulfillment ePublishing, Inc. Address: 720 North Franklin, Suite 401, Chicago, IL, 60654 URL: www.epublishing.com E-mail: service@ePublishing.com Phone: 312.768.6800 Business Description: ePublishing is a Platform Developer and Internet Professional Services Company. The company offers web development, web design, and hosted solutions for businesses, publishers, and media companies. Target Publishing Processes: Editorial and Production, Promotion and Marketing, Sales and Licensing

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 227

Ether Books Ltd. Address: Woodlands, Churchland Lane, Sedlescombe, Battle, East Sussex TN33 0PF UK URL: www.etherbooks.co.uk E-mail: info@etherbooks.co.uk Phone: 44 142 487 1658 Business Description: Ether Books publishes directly to mobile phones. Target Publishing Processes: Distribution and Fulfillment Exeter Premedia Services Address: 154/40, Eldams Road, Teynampet, Chennai 600018, Tamil Nadu, India URL: www.exeterpremedia.com E-mail: info@exeterpremedia.com Phone: 91-44-23452921 / 23452922 Business Description: Exeter premedia services provides high technology services and media support solutions to a full range of publishing and media clients. Exeter offers a composite SGML/XML service to book and journal publishers and provides a complete set of prepress, e-publication, and project management services to corporations and commercial printing enterprises. Target Publishing Processes: Editorial and Production, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 228

FastPencil Address: 3131 Bascom Avenue Suite 150, Campbell, CA 95008 URL: www.fastpencil.com E-mail: support@fastpencil.com Phone: 831-332-5816 Business Description: FastPencil, Inc. operates a social self-publishing platform that allows authors to write, share, publish, and sell their books. It provides design, custom cover, interior page review, custom interior book design, editorial review, copy editing, line editing, content editing, and publishing services. The company offers Color Book Creator, a platform for projects, such as children's books, cookbooks, comic books, and coffee table books. Its platform also enables the authors to access friends, readers, and partners to share knowledge, chat, and gather feedback from reviewers and editors, as well as to collaborate with other authors. Target Publishing Processes: Editorial and Production, Promotion and Marketing, Distribution and Fulfillment Firebrand Technologies/NetGalley Address: 44 Merrimac St., Newburyport MA 01950-2574 URL: www.firebrandtech.com Phone: 800-779-7345 Business Description: Firebrand Technologies develops software and technology solutions for the publishing community, including consumer trade book publishers, academic and educational publishers, journal publishers, audio publishers, distributors, trade partners, industry representatives, and other service providers Target Publishing Processes: Planning, Rights and Royalties, Promotion and Marketing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 229

Flat World Knowledge Address: 1 Bridge Street, Suite 105, Irvington, NY 10533 URL: www.flatworldknowledge.com Phone: 877-257-9243 Business Description: Flat World Knowledge provides free, open, online books. The company has recently signed two deals with college bookstores: one with Barnes & Noble College Bookstores, which operates 639 college bookstores across the US, and the other with NACS Media Solutions (a subsidiary of NACS, the National Association of College Stores). In addition to distribution and purchase arrangements, the NACS agreement also includes several pilots of POD services. Flat World Knowledge will provide bookstores with digital files of its college textbooks which, since Flat World textbooks are openlylicensed, instructors can remix, reorder, add, and remove content. The bookstore can then print and bind the textbooks as high-quality paperback books. Target Publishing Processes: Distribution and Fulfillment Focus Information Technology Services Ltd. Address: Unit B205, Faircharm Trading Estate, 8-12 Creekside; London, SE8 3DX UK URL: www.focusservices.co.uk E-mail: info@focusservices.co.uk Phone: 0208 469 4000 Business Description: Focus IT Services is a software developer for the book industry. The company develops software applications designed to help companies manage their accounting procedures more efficiently. These products cut across a sub-section of the trade industry such as warehouse distributors, publishers, government offices, hotels etc. Target Publishing Processes: Planning

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 230

Follett Digital Resources Address: 1391 Corporate Drive, McHenry, IL 60050 URL: www.follettsoftware.com Phone: 800-323-3397 Business Description: Follett Digital Resources, part of Follett Software Company, helps districts of all sizes track and use information and resources more efficiently. The company provides software and services for publishers and educators. Target Publishing Processes: Editorial and Production, Manufacturing, Distribution and Fulfillment FYI Business Solutions Address: 3799 US Highway 46 East, Parsippany, NJ 07054 URL: www.fyisolutions.com E-mail: info@fyisolutions.com Phone: 973.331.9050 Business Description: FYI Systems, Inc. operates as an information technology professional services company. It offers business intelligence solutions, including performance management, data warehousing and data marts, reporting and analytics, and enterprise planning; and business process management solutions, including requirements management, process analysis, process execution, and process improvement. The company also provides project governance solutions, including project, and portfolio and resource management; quality and process management; project assessment and audits; methodologies and practices; and project management office solutions. In addition, FYI Systems, Inc. offers e-business solutions and application management services. Target Publishing Processes: Planning, Editorial and Production, Rights and Royalties, Manufacturing, Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 231

Gather.com Address: Gather Inc., 234 Congress Street, 4th Floor, Boston, MA 02110 URL: www.gather.com Phone: 617-720-4000 Business Description: Gather, Inc. operates a social networking site for adults. It enables users to share thoughts, conversations, video, information, pictures, ideas, and audio. Target Publishing Processes: Promotion and Marketing Gibson Publishing Connections Address: PO Box 1029, Saint-Lazare, QC J7T 2Z7 Canada URL: www.gibsonpublishingconnections.ca Phone: 866-458-2264 Business Description: Gibson Publishing Connections provides services and practical advice to Canadian publishers seeking to enter this digital market. Target Publishing Processes: Distribution and Fulfillment Global Turnkey Systems SEE: Klopotek

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 232

Google Books (Google Enterprise) Address: 1600 Amphitheatre Parkway, Mountain View, CA 94043 URL: www.google.com, books.google.com Phone: 650-253-0000 Business Description: Google Inc., a technology company, maintains an index of websites and other online content for users, advertisers, Google network members, and other content providers. It helps users to obtain instant access to relevant information from its online index. Its products and services include Google Books, a service that searches the full text of books stored in its digital database. The company also offers Google Enterprise product line comprising Google Apps that provides hosted communication and collaboration tools. Target Publishing Processes: Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment HCL America, Inc. Address: 330 Potrero Avenue, Sunnyvale, CA 94085 URL: www.hcltech.com Phone: 408-733-0480 Business Description: HCL America, Inc. provides consulting and information technology (IT) services in North America. The company provides application services in the areas of customer relationship management, enterprise resource planning, supply chain management, IT infrastructure, and business process outsourcing. It also specializes in digital signal processing, embedded systems, engineering, enterprise tools, middleware, product data management, security, storage networking, systems software, verification and validation, voice over internet protocol, and wireless technology services. Target Publishing Processes: Editorial and Production, Manufacturing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 233

Hewlett-Packard Company (HP) Address: 3000 Hanover Street, Palo Alto, CA 94304 URL: www.hp.com Phone: 650-857-1501 Business Description: Hewlett-Packard Company (HP) is a global provider of products, technologies, software, solutions, and services to individual consumers, small- and medium-sized businesses (SMBs), and large enterprises, including customers in the government, health, and education sectors. The Companyâ&#x20AC;&#x2122;s offerings span multi-vendor customer services, including infrastructure technology and business process outsourcing, technology support and maintenance, application development and support services, and consulting and integration services; enterprise information technology infrastructure, including enterprise storage and server technology, networking products and resources, and software that optimizes business technology investments; personal computing and other access devices, and imaging and printing-related products and services. Target publishing process: Manufacturing HTC Global Services Address: 3270 West Big Beaver Road, Troy, MI 48084 URL: www.htcinc.com E-mail: contact@htcinc.com Phone: 248-786-2500 Business Description: HTC Global Services, Inc. provides information technology (IT) solutions. It offers application development and maintenance, application re-engineering and migration, enterprise application integration, testing, enterprise content management, business intelligence, and IT infrastructure management services. The company also provides Process and Project Management Automation, a solution that automates project management activities from project inception to project closure; EGrAMS, an enterprise wide grants management solution that manages grants management activities to help grantor organizations; docuSTACK, a document management solution, which manages the document lifecycle from capture through management, including storage, delivery, and archival; CampusERP, a web-based comprehensive campus management system that integrates data across various departments of institutes, colleges, and universities; and eBAP, which is an integrated component-based solution to automate, monitor, and control functions of organizations. Target Publishing Processes: Planning, Editorial and Production

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 234

iFactory Address: 33 Farnsworth St., 4th flr, Boston, MA 02210 URL: www.ifactory.com E-mail: sales@ifactory.com Phone: 617-426-8600 Business Description: iFactory offers a range of website design, development, and engineering services. The agency provides various search engine optimization and positioning solutions. iFactory also offers commercial and online multimedia services. It provides a variety of brand strategy and development solutions. The agency offers research, documentation, prototyping and testing services. Target Publishing Processes: Editorial and Production, Manufacturing, Distribution and Fulfillment Impelsys, Inc. Address: 55 Broad Street, 16th Floor, New York, NY 10004 URL: www.impelsys.com E-mail: info@impelsys.com Phone: 212-239-4138 Business Description: Impelsys, Inc. provides online content delivery technologies and services to the publishing industry. It offers iPlatform portals that are used to bring books, journals, and any other printed material online; VirtualPages, which is an online and offline reader used to monetize publisher’s existing printed content by building new digital versions; iPublishCentral that enables publishers to market, distribute, and deliver their content online; and iDAMS, which is a digital asset management system (DAMS) that enables storing, searching, and retrieving digital assets through a common platform. The company also provides SmartCD, which is a platform-independent solution for delivering books, journals, and learning resources through compact discs; solutions to provide electronic samples to teachers and schools; and PDA solutions that offer materials on mobile devices. In addition, it offers multimedia, e-learning, content conversion, custom software development, and maintenance and support services. The company’s portals are used as e-commerce, online book, and journal portals, as well as online databases. Target Publishing Processes: Editorial and Production, Distribution and Fulfillment

InfoPrint Solutions Co. Address: 6300 Diagonal Highway, Boulder, CO 80301 URL: www.infoprint.com Phone: 877-646-3677 Business Description: InfoPrint Solutions Company, LLC provides output solutions for business customers. The company provides automated document factory, optimization, productivity, and print on-demand solutions, as well as TRANSPROMO that enables the fusion of transactional documents and promotional marketing. In addition, it offers commercial printing, distribution, transaction output, and manufacturing industry solutions, as well as intelligent mail barcode implementation services. Further, the company provides conversion center services, distributed print management services, AFP2WEB technologies, and document composition consulting solutions, as well as solutions for managing books and manuals print on demand jobs. Target Publishing Processes: Manufacturing Infosys Address: 630 Fifth Ave., Rockefeller Center, Suite 1600, New York, NY 10111 URL: www.infosys.com E-mail: askus@infosys.com Phone: 646-254-3100 Business Description: Infosys Technologies Limited provides information technology (IT) and consulting services worldwide. It offers IT services, such as application, architecture, independent validation and testing, information management, infrastructure, packaged application, SOA, systems integration, and knowledge services; product engineering services, manufacturing process and plant solutions, and product lifecycle management services; and consulting services in the areas of information and technology strategies, product innovation, next generation commerce, process excellence, and learning and complex change. Target Publishing Processes: Editorial and Production, Manufacturing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 236

Ingram Content Group (Ingram Digital) Address: 1 Ingram Blvd., La Vergne, TN 37086 URL: www.ingramcontent.com, www.ingramdigital.com E-mail: inquiry@ingramcontent.com Phone: 615-793-5000 Business Description: Ingram Content Group Inc., through its subsidiaries engages in distribution of books. Ingram Digital, Ltd. operates as a distributor and supplier of content management, distribution and hosting solutions for publishers, retailers, libraries, and institutions. Target Publishing Processes: Distribution and Fulfillment Innodata Isogen Address: Three University Plaza, Hackensack, NJ 07601 URL: www.innodata-isogen.com E-mail: info@innodata-isogen.com Phone: 201-371-8000 Business Description: Innodata Isogen, Inc. provides knowledge process outsourcing (KPO), and publishing and related information technology (IT) services in the United States and worldwide. The companyâ&#x20AC;&#x2122;s services help organizations create, manage, and maintain their products. Its publishing services include activities, such as digitization, conversion, composition, data modeling, and XML encoding. These services also include conversion of books to e-book-ready formats. Target Publishing Processes: Editorial and Production, Manufacturing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 237

InstaBook Corporation Address: 12300 NW 56th Ave., Gainesville, FL 32653 URL: instabook.net Phone: 352-332-1311 Business Description: InstaBook Corp. has developed InstaBook, a Print On Demand technology. The company is primarily engaged in printing, or in printing and binding, books and pamphlets. Target Publishing Processes: Manufacturing, Distribution and Fulfillment International Business Systems (IBS) (BookMaster) Address: 90 Blue Ravine Road, Folsom, CA 95630 URL: www.ibsus.com E-mail: info@ibsus.com Phone: 916-985-3900 Business Description: International Business Systems US supplies business application software and professional consulting services for supply chain execution. In addition, the company specializes in the development of Bookmaster software solutions for the publishing and book distribution industry. Target Publishing Processes: Planning, Editorial and Production, Rights and Royalties, Manufacturing, Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment IPRO Business Systems Address: 9630 N. 25th Ave., Suite 450, Phoenix, AZ 85021 URL: www.ipubtech.com Phone: 866-897-4782 Business Description: IPRO Business Systems develops and distributes iPUB, business software for publishers. Target Publishing Processes: Planning, Editorial and Production, Rights and Royalties, Manufacturing, Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 238

Jacquette Consulting Address: 710 Providence Road, Loman Hall, Malvern, PA 19355 URL: www.jacquette.com Phone: 610-644-4485 Business Description: Jacquette Consulting is an information technology (IT) services company that specializes in developing innovative software applications in scientific and high-technology settings. Target Publishing Processes: Editorial and Production Jouve Address: 11, Boulevard SĂŠbastopol, CS 70004, 75036 Paris Cedex 01, France URL: www.jouve.com Phone: 33 01 44 76 54 34 Business Description: Jouve offers editorial services. Its services include capturing information, editorial management of publications, publication from paper to the internet, and typesetting and composition. The company also offers printing and Internet services, including audits and consulting, info graphics and ergonomics, design and development, third-party applicative maintenance, and web hosting. Target Publishing Processes: Editorial and Production, Manufacturing, Distribution and Fulfillment K4 SEE: MEI

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 239

Klopotek North America/Global Turnkey Systems Address: 2001 Route 46, suite 203, Parsippany, NJ 07054 URL: www.klopotek.com, www.gtsystems.com E-mail: info@klopotek.com Phone: 973-331-1010 Business Description: Klopotek offers business software and solutions to publishers. Global Turnkey Systems develops enterprise resource planning (ERP) solutions for the publishing industry. It is designed specifically for publishers of subscriptions, books, e-information products, and other fulfillment-oriented needs. Target Publishing Processes: Planning, Editorial and Production, Rights and Royalties, Manufacturing, Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment knk Business Software AG Address: Beselerallee 67, 24105 Kiel Germany URL: www.knkpublishingsoftware.com Phone: 49-431-57972-0 Business Description: knk Business Software AG is a developer of business software for publishing houses. knkPublishing offers seamless integration with Microsoft Dynamics. Target Publishing Processes: Planning, Editorial and Production, Manufacturing

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 240

LibreDigital Address: 1835-B Kramer Lane, Suite 150, Austin, TX 78758 URL: www.libredigital.com E-mail: ask_us@libredigital.com, sales@libredigital.com Phone: 866-981-6755 Business Description: LibreDigital, Inc., a digital media services company, develops interactive digital technology solutions for the publishers of books, newspapers, and magazines in the United States and internationally. It offers LibreDigital Internet Digital Warehouse, a hosted platform that uses SaaS/ASP concepts for ingesting, managing, documenting, usage-tracking, and delivering book content, e-books, and audio books; LibreDigital BookBuild that enables publishers to provide readers with “Mashups” or custom books made from content compiled from various book titles and sources; and NewsStand Digital eEditions that provide replicas of print editions in the electronic form. The company also provides iBrowse solution, which helps newspaper and magazine publishers serve and engage with digital consumers. In addition, it offers conversion, storage, and secured distribution solutions for digital content through digital stores and new e-book devices for publishers that serve readers through print, online, and mobile platforms; and Reader Daily Edition, which offers consumers the ability to purchase a single paper or subscribe to their favorite publication, as well as have it delivered wirelessly each day. Further, the company provides consulting services, including project management, online marketing consulting, interface design, workflow design, system testing, and custom development services. It serves publishers in trade, STM, and academic publishing and university presses, as well as newspaper clients. Target Publishing Processes: Distribution and Fulfillment Librios Address: Librios Ltd, 20 Lochaline Street, London W6 9sh, UK URL: www.librios.com E-mail: info@librios.com Phone: 020 3355 0202 Business Description: Librios Ltd serves the information and reference publishing industry, providing operational streamlining and increased re-use options from a fully integrated back-office CMS. Target Publishing Processes: Editorial and Production

Lulu.com (Lulu Enterprises) Address: 3101 Hillsborough Street, Raleigh, NC 26707 URL: www.lulu.com Phone: 919-447-3290 Business Description: Lulu Enterprises, Inc. operates a marketplace for digital content on the internet. Its marketplace contains publications created by people internationally. It enables the creators of books, video, periodicals, multimedia, and other content to publish their work themselves with editorial and copyright control. The company empowers these individuals and corporations to create products to sell directly to their customers and the rest of the Lulu.com marketplace. Target Publishing Processes: Rights and Royalties, Manufacturing, Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment Macmillan Publishing Solutions (MPS Ltd) Address: 4 Crinan Street, London, Greater London, N1 9XW UK URL: www.macmillansolutions.com E-mail: info@macmillansolutions.com Phone: 44 20 7833 4000 Business Description: Macmillan Publishing Solutions provides publishing services to international publishing and media companies. It offers web development, business process applications, and hosting and maintenance services; application development, testing and maintenance for VISTA systems, reporting and documenting, and staffing support; project management, and strategic and organizational IT management; and graphic creation services, conversion solutions for libraries and corporations, XML solutions, composition applications and processes, editorial services and graphics production, directory compilation and production, and advertisement creation. Target Publishing Processes: Editorial and Production, Manufacturing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 242

Malloy Incorporated Address: 5411 Jackson Rd., Ann Arbor, MI 48103 URL: www.malloy.com Phone: 800-722-3231 Business Description: Malloy Incorporated, a book printing company, provides manufacturing services for hard and soft cover books to publishers. Target Publishing Processes: Manufacturing MarkLogic Address: 999 Skyway Road, Suite 200, San Carlos, CA 94070 URL: www.marklogic.com Phone: 650-655-2300 Business Description: Mark Logic Corporation provides information access and delivery solutions for the acceleration and creation of content applications. It offers MarkLogic Server, an XML server to store, manage, enrich, search, navigate, and deliver content; and MarkLogic toolkits for the integration of Microsoft Office PowerPoint, Word, Excel, and SharePoint. The company also provides consulting services, such as digital asset distribution, custom publishing, vertical content delivery, training, and support services. Target Publishing Processes: Editorial and Production, Distribution and Fulfillment Mediaspectrum Address: 15 New England Executive Park, Burlington, MA 01803 URL: www.mediaspectrum.net E-mail: info@mediaspectrum.net Phone: 781-685-4648 Business Description: Mediaspectrum, Inc. provides advertisement sales, supply chain management, and production automation solutions for media companies, advertising agencies, and web engines. It also provides a print and Web content management solution and a solution for addressing various aspects of multichannel advertising and editorial content management. Target Publishing Processes: Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 243

MEI (Managing Editor, Inc.) Address: 610 Old York Rd., Suite 250, Jenkintown, PA 19046 URL: www.maned.com E-mail: info@maned.com Phone: 800-638-1214 Business Description: MEI (Managing Editor, Inc.) develops software solutions to produce magazines, newspapers, books, web pages, catalogs, and business proposals for the publishing industry. It also provides K4 publishing system, an editorial system which integrates Adobe InDesign and Adobe InCopy in an editorial workflow system; and Ad Tracking solution that combines a spreadsheet interface and off-the-shelf pagination software to manage various components of advertising production. Target Publishing Processes: Planning, Editorial and Production MetaComet Systems, Inc. Address: 29 College Street, South Hadley, MA 01075 URL: www.metacomet.com Phone: 413-536-5989 Business Description: MetaComent Systems, Inc. provides royalty solutions to the publishing, entertainment, and licensing industries. The company offers Royalty Tracker software as a web-hosted, in-house or outsourced solution. Target Publishing Processes: Rights and Royalties

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 244

Morse Data Corp. Address: 16 Pierce Street, Dover, NH 03820 URL: www.morsedata.com E-mail: sales@morsedata.com Phone: 888-667-7332 Business Description: Morse Data develops InOrder, an enterprise management system for national and international businesses in the multi-client fulfillment, publishing, direct marketing, multi-channel merchant, and internet retailing industries. Target Publishing Processes: Sales and Licensing, Distribution and Fulfillment NetLibrary Address: 4888 Pearl East Circle, Suite 103, Boulder, CO 80301 URL: www.netlibrary.com Phone: 303-544-9692 Business Description: NetLibrary, Inc. provides electronic books (e-books). It offers an information and retrieval system for accessing the full text of reference, scholarly, and professional books. NetLibrary develops, archives, hosts, and securely distributes e-books and print-ready files through a variety of channels, including academic, corporate, public, and school libraries. Target Publishing Processes: Manufacturing, Sales and Licensing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 245

NetRead Address: 80 S. Jackson, Ste. 302, Seattle, WA 98104 URL: www.netread.com E-mail: info@netread.com Phone: 206-973-7555 Business Description: NetRead.com is an online resource for the publishing community. NetRead has become a leader in innovative marketing tools, such as the EventCaster and JacketCaster. JacketCaster is a web-based system that allows publishers and distributors to take control of their catalog and how it appears in the market. Target Publishing Processes: Promotion and Marketing, Distribution and Fulfillment New ProImage America, Inc. Address: 103 Carnegie Center, Suite 300, Princeton, NJ 08540 URL: www.newsway.com E-mail: pia@newsway.com Phone: 609-844-7576 Business Description: New ProImage Ltd. develops browser-based digital workflow, production tracking, color image processing, and ink optimization solutions for newspaper and printing industries. It offers NewsWay, which controls and manages workflow from front-end systems; MediaWay, a publishing system that combines content creation and management with layout and editorial workflows; Oncolor eco, which analyzes PDF files and determines the exact amount of ink needed to produce; and NewsWay Lite for the requirements of smaller newspaper and its printing operations. Target Publishing Processes: Editorial and Production, Manufacturing

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 246

Nielsen Book Address: 3rd Floor, Midas House, 62 Goldsworth Road, Woking, Surrey GU21 6LQ UK URL: www.nielsenbookdata.co.uk Phone: 44 01483 712 200 Business Description: The Nielsen Company, one of the worldâ&#x20AC;&#x2122;s largest publishing and information companies, provides marketing information, audience measurement, and business media products and services. Nielsen Book collects book information from over 70 countries and works leading data providers to ensure a consistent and comprehensive global database of title records available. The BookData service is a primary source of product data (used by retailers, internet sites, libraries and specialist services). Target Publishing Processes: Sales and Licensing North Plains Systems Corporation Address: 510 Front Street West, 4th Floor, Toronto, ON M5V 3H3, Canada URL: www.northplains.com E-mail: contact@northplains.com Phone: 416-345-1900 Business Description: North Plains provides digital asset management solutions. It offers solutions for the production, management, distribution, and archiving of media content. The company's TeleScope application platform offers on-demand solutions for digital asset management, marketing content management, broadcast automation, video-on-demand, publishing automation, and e-learning. It also offers professional services, training, and customer services. The company serves corporate marketing departments, advertising and marketing services companies, media and entertainment companies, print and publishing companies, and educational and nonprofit institutions. Target Publishing Processes: Editorial and Production, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 247

Nipson Address: 1375 East Irving Park Road, Itasca, IL 60143 URL: www.nipson.com E-mail: info@nipson.com Phone: 847 357 9210 Business Description: Nipson develops, produces, and markets digital printing systems and related consumables for black and white continuous variable data printing. The company also provides system design and integration, workflow consultation, application development, and pre and post equipment services. Target Publishing Processes: Manufacturing Nstein (Open Text Corporation) Address: 75 Queen St., Suite 4400, Montreal QC H3C 2N6 Canada URL: www.nstein.com, www.opentext.com E-mail: info@nstein.com Phone: 877-678-3461 Business Description: Nstein, part of Open Text, is a global leader in Enterprise Content Management (ECM). The company develops and markets multilingual online publishing solutions for newspaper, magazine, and digital content provider markets. Nstein offers WCM, DAM, PMD and text mining engine solutions. The company also provides linguistic, information technology and globalization services. Target Publishing Processes: Editorial and Production, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 248

Nuxeo Address: 55 Cambridge Street, Burlington, MA 01803 URL: www.nuxeo.com E-mail: contact@nuxeo.com Phone: 781-328-0520 Business Description: Nuxeo develops and delivers enterprise content management (ECM) software solutions based on Java EE 5 technologies. The open source ECM offerings include the foundation platform, Nuxeo EP, and a set of packaged applications built from this extensible platform. Nuxeo also provides professional services, including support, consultancy, development, training, and certification services. Target Publishing Processes: Planning, Editorial and Production Océ North America Production Printing Systems Address: 5600 Broken Sound Boulevard, Boca Raton, FL 33487 URL: www.oceusa.com Phone: 800-523-5444 Business Description: Océ Printing Systems provides digital production printing and document management solutions. It engages in the production, sale, and service of printers. The company offers transaction documents solutions, as well as digital publishing services of manuals, books, and newspapers. The company's solutions are based on its advanced software applications that deliver documents and data over internal networks and the internet to printing devices and archives locally and throughout the world. Supporting the workflow solutions are Océ digital printers and scanners, considered to be among the most reliable and productive in the world. Océ also offers a wide range of display graphics, consulting, and outsourcing solutions. Target Publishing Processes: Manufacturing

On Demand Books Address: 584 Broadway, Suite 1100, New York, NY 10012 URL: www.ondemandbooks.com E-mail: info@ondemandbooks.com Phone: 212-966-2222 Business Description: On Demand Books is engaged in printing by the lithographic process. The company developed The Espresso Book Machine, a fully integrated patented book making machine, which can automatically print, bind and trim on demand at point of sale perfect bound library quality paperback books with 4-color cover indistinguishable from their factory made versions. Target Publishing Processes: Manufacturing, Distribution and Fulfillment ONIXEDIT Address: GPG Solutions, C. P. 6, Salaberry-de-Valleyfield, QC, Canada, J6S 4V5 URL: www.onixedit.com Phone: 514-829-5640 Business Description: ONIXEDIT is title management software for publishers, based on the ONIX standard. Target Publishing Processes: Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 250

Open Book Systems, Inc. (OBS) Address: 37-J Whistlestop Mall, Rockport, Massachusetts 01966 URL: www.obs-us.com E-mail: info@obs.com Phone: 978-546-7346 Business Description: Open Book Systems, Inc. is an independent publishing services company. OBS helps publishers, educational institutions, and government organizations develop custom publishing strategies. Target Publishing Processes: Planning, Editorial and Production, Rights and Royalties, Manufacturing, Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment Open Road Integrated Media Address: 233 Spring St, 4th Floor, New York, NY 10013 URL: openroadmedia.com Phone: 212-691-0900 Business Description: Open Road is a digital content company that publishes and markets e-books by creating connections between authors and their audiences across multiple platforms. Target Publishing Processes: Rights and Royalties, Manufacturing, Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 251

Open Text Digital Media Address: 700 King Farm Boulevard, Suite 600, Rockville, MD 20850 URL: digitalmedia.opentext.com Phone: 301-548-4000 Business Description: Open Text Digital Media Group provides digital asset management solutions for the media and entertainment industry. The company also provides professional, learning, hosted solution support, and post-implementation strategy services. Target Publishing Processes: Editorial and Production, Distribution and Fulfillment Oracle (Sophoi) Address: 500 Oracle Parkway, Redwood Shores, CA 94065 URL: www.oracle.com/sophoi/index.html Phone: 800-633-0925 Business Description: Oracle has acquired Sophoi, Inc., a provider of Intellectual Property Rights and Royalty Management software. Sophoi applications automate content rights, royalties, and sales functions, and provide a scalable enterprise software solution that is built for the specific needs associated with the production and distribution of content by media and entertainment companies.The Sophoi software is immediately available as Oracle Media Intellectual Property Management. Target Publishing Processes: Rights and Royalties

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 252

ORCA Address: 450 Park Ave. South, Floor 9, New York, NY, 10016 URL: orcaone.com E-mail: info@orcaone.com Phone: 646-794-1364 Business Description: ORCA (short for Open Real-Time Currency Application) is an open source electronic payments processing platform and transactions solution. ORCA was created for digital and social media companies that include: payment transaction processing, loyalty and rewards programs, virtual currency management, and pre-ordering. ORCA's open-API enables companies to control the look and feel of transactions, as well as the usage of real and virtual currency, and send marketing messages without third party interference. Target Publishing Processes: Sales and Licensing, Promotion and Marketing OverDrive Address: Valley Tech Center â&#x20AC;&#x201C; Suite N, 8555 Sweet Valley Drive, Cleveland, OH 44125 URL: www.overdrive.com E-mail: sales@overdrive.com Phone: 216-573-6886 Business Description: OverDrive, Inc. provides technology infrastructure for distributing premium digital content. The company delivers secure management, protection, and downloading services for publishers and enterprises, libraries, schools, retailers, and distributors. It provides download media with various titles, including e-books, audio books, music, and video; and customizable reports. Target Publishing Processes: Editorial and Production, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 253

Perseus Books Group Address: 387 Park Avenue South, New York, NY 10016 URL: www.perseusbooks.com Phone: 212-340-8164 Business Description: The Perseus Books Group provides sales, marketing, and distribution services to independent publishers. The company acts as a representative of its publisher-clients to the book trade, including bookstores, chains, wholesalers, libraries, and specialty markets. Target Publishing Processes: Planning, Manufacturing, Promotion and Marketing, Rights and Royalties, Sales and Licensing, Distribution and Fulfillment Pheedo Address: 469 Ninth Street, Suite 210, Oakland, CA 94607 URL: www.pheedo.com Phone: 510-923-9250 Business Description: Pheedo, Inc. operates as a blog newsfeed advertiser. It offers advertising services through distributed content for publishers and advertisers. The company provides FeedPowered, an advertising platform that converts RSS feeds into updating advertising. Target Publishing Processes: Promotion and Marketing

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 254

PocketBook E-Reader Address: Brain Plaza International, LLC, 202 Admiralty Loop, Staten Island, NY 10309 URL: www.pocketbookreader.com E-mail: info@pocketbookreader.com Phone: 914-374-5067 Business Description: PocketBook E-Reader devices: 301, 302, 360. Target Publishing Processes: Distribution and Fulfillment Publishing Technology Address: Oxford, UK, Unipart House, Garsington Road, Oxford OX4 2GQ UK URL: www.publishingtechnology.com E-mail: info@publishingtechnology.com Phone: 44 1865 397800 Business Description: Publishing Technology supplies technology and related services to the publishing industry. It offers administration platforms for publishers, internet-based electronic hosting and delivery services for publishers of research, as well as delivers internet-based search and access services for libraries and individual users of that material. Target Publishing Processes: Editorial and Production, Manufacturing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 255

Qualcomm MEMS Technologies Address: 5775 Morehouse Drive, San Diego, CA 92121 URL: www.qualcomm.com/qmt/ Phone: 858-587-1121 Business Description: Qualcomm MEMS Technologies, Inc. engages in the development and commercialization of iMoD technology for mobile products. Its iMoD technology, based on a Micro-Electro-Mechanical-Systems structure combined with thin film optics, is a display technology that delivers display images with lower power consumption. Target Publishing Processes: Distribution and Fulfillment Quark Address: 1800 Grant St., Denver, CO 80203 URL: www.quark.com Phone: 800-676-4575 Business Description: Quark, Inc., a software company, engages in the design, development, production, and collaboration of desktop and dynamic publishing software, and enterprise solutions for individuals and businesses. The companyâ&#x20AC;&#x2122;s solutions include dynamic publishing solution, publishing software that combines layout with automated publishing to deliver communications in various types of media, including print, web, and mobile and electronic devices. Target Publishing Processes: Editorial and Production

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 256

Questia Media, Inc. Address: 24 East Greenway Plaza, Suite 1050, Houston, TX 77046 URL: www.questiamedia.com Phone: 713-358-2500 Business Description: Questia Media, Inc. operates Questia, an online library. Questia’s features include copyright-cleared books, text books, journals, magazines, and newspaper articles, as well as a reference set with dictionary, encyclopedia, and thesaurus; and digital productivity tools for highlighting text, taking notes, and generating footnotes and bibliographies. The company’s Questia School is a collection of online text books that support inquiry and research for secondary school students, K-12 faculty, and their library/information community. Target Publishing Processes: Manufacturing, Sales and Licensing, Distribution and Fulfillment ReadHowYouWant Address: PO Box 38, Strawberry Hills, NSW, Australia, 2016 URL: www.readhowyouwant.com E-mail: info@readhowyouwant.com Phone: 61 2 9310 2288 Business Description: ReadHowYouWant develops conversion technology that reformats existing books into high quality, alternative formats. Target Publishing Processes: Editorial and Production, Manufacturing

REAL Software Systems LLC Address: 21255 Burbank Boulevard; Suite 220, Woodland Hills, CA 91367 URL: www.realsoftwaresystems.com Phone: 818-313-8000 Business Description: REAL Software Systems, LLC provides software solutions for the management of royalty, rights, and revenue sharing contracts. Its products include Alliant Royalties, a software solution for intellectual property-oriented industries; and Alliant participants for participants and managements. The company also provides consulting, support, and development services. Target Publishing Processes: Rights and Royalties Really Strategies, Inc. Address: 2570 Boulevard of the Generals, Suite 213, Audubon, PA 19403 URL: www.reallysi.com E-mail: info@reallysi.com Phone: 610-631-6770 Business Description: Really Strategies, Inc. helps publishers, media companies, and other content-centric companies to plan and implement content solutions and systems. It helps to bring strategy, content, and technology together to analyze, architect, and implement appropriate tools and technologies. The companyâ&#x20AC;&#x2122;s solutions and services include XML editorial tools, XML repositories, content management systems, and editorial and production systems, as well as workflow reengineering, technology evaluation, DTD and schema development, functional and technical requirements development, and electronic product development strategy. It also offers consulting and software as a service services, as well as RSuite CMS, a content management system that facilitates the creation, management, re-use, and distribution of XML, media files, and other document formats. Target Publishing Processes: Editorial and Production, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 258

RightsLine, Inc. Address: 2644 30th St, Suite 101, Santa Monica, CA 90405 URL: www.rightsline.com E-mail: info@rightsline.com Phone: 877-388-1155 Business Description: RightsLine Software, Inc. provides application software that merges business rights management with online sales and licensing. The company’s enterprise software suite enables companies to identify and organize their business rights, simplify the process of searching for assets, and automate the sales and licensing process. Target Publishing Processes: Rights and Royalties, Sales and Licensing RoyaltyShare Address: 5465 Morehouse Drive, Suite 165, San Diego, CA 92121-4764 URL: www.royaltyshare.com Phone: 858-784-5400 Business Description: RoyaltyShare’s Digital Advantage for e-books builds upon the company’s years of experience serving record labels and distributors in the music industry. The Digital Advantage platform is now available for book publishers to meet the needs of the emerging market for e-books, downloadable audiobooks, and print-on-demand. The platform currently supports the revenue data feeds from over 30 digital retailers and distributors worldwide, supporting both the agency model and retail model, including Amazon (Kindle, Audible, Create Space and AmazonMP3), Apple (iBookStore, AppStore, and iTunes), Barnes & Noble, Sony, Ingram Digital, Ingram Lightning Source, Overdrive, and others. Target Publishing Processes: Rights and Royalties

RR Donnelley Address: 111 South Wacker Drive, Chicago, IL 60606-4301 URL: www.rrdonnelley.com Phone: 312-326-8000 Business Description: RR Donnelley operates as an integrated communications provider offering pre-media, printing, logistics, and business process outsourcing products and services to its clients in the private and public sector worldwide. The company operates primarily in the commercial print portion of the printing industry, with related product and service offerings designed to offer customers solutions for communicating their messages to target audiences. Target Publishing Processes: Manufacturing, Distribution and Fulfillment S4Carlisle Publishing Services Address: 4242 Chavenelle Road, Dubuque, IA 52002 URL: www.s4carlisle.com E-mail: sales@s4carlisle.com Phone: 563-557-1500 Business Description: S4Carlisle Publishing Services Pvt Ltd. provides typesetting and e-Publishing services. It offers Data Capture and Data Conversion, e-books, Illustrations, and Copyediting services. Target Publishing Processes: Editorial and Production, Manufacturing

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 260

Safari Books Online Address: 1003 Gravenstein Highway North, Sebastopol, CA 95472 URL: www.safaribooksonline.com Phone: 707-827-7000 Business Description: Safari Books Online LLC, an electronic reference library, provides an on-demand reference and learning platform containing business and technical reference resources. It offers a collection of technology books, manuscripts, short topics, articles, and instructional video in a searchable online database. Target Publishing Processes: Editorial and Production, Distribution and Fulfillment Schilling A/S Address: Baldersbækvej 24 –26; DK-2635 Ishøj , Denmark URL: www.schilling-ltd.co.uk Phone: 45 70279900 Business Description: Schilling specializes in software solutions for the publishing industry. The company provides solutions for the entire e-process, from strategic advising through the development of e-business solutions and infrastructure to the build-up of competence and implementation. Target Publishing Processes: Planning

Scientific Publishing Services (SPS) Address: No. 6 & 7, 5th Street, Dr. R.K. Salai, Mylapore, Chennai, Tamil Nadu, India - 600 004 URL: www.sps.co.in E-mail: info@sps.co.in Phone: 91 44 4219 7750 Business Description: SPS provides typesetting and prepress services for science, technical, and medical publishers. It provides data conversion, XML, copy editing, graphic production, e-deliverable, pre-media, composition, preflight, design, and IT enabled services. The company also offers remote database management; and business process outsourcing services in finance and marketing that include royalties accounting, marketing expense management, license control, accounts receivable, and accounts payable services. Target Publishing Processes: Editorial and Production Scribd Address: 211 Sutter Street Second Floor, San Francisco, CA 94108 URL: www.scribd.com Business Description: Scribd, Inc. operates as a social publishing company for readers, authors, and publishers. It enables users to publish, discover, and discuss original writings and documents. The company provides a forum for community-based development projects, libraries, plugins, extensions, scripts, and resources; and a suite of print options. Target Publishing Processes: Promotion and Marketing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 262

ScrollMotion Address: 237 W. 35th St., Suite 902, New York, NY 10001 URL: www.scrollmotion.com E-mail: info@ScrollMotion.com Phone: 212-608-9146 Business Description: ScrollMotion Inc. develops mobile applications. It offers Iceberg, an electronic reader application for iPhone. The company provides iPhone applications for branded content in the Apple App Store. Target Publishing Processes: Distribution and Fulfillment Semantico Address: Lees House, 21-23 Dyke Road, Brighton, BN1 3FE, East Sussex UK URL: www.semantico.com Phone: 44 1273 722222 Business Description: Semantico provides publishing solutions and consultancy services to publishers. The companyâ&#x20AC;&#x2122;s products and services support clients throughout the digital publishing life-cycle. Target Publishing Processes: Editorial and Production, Promotion and Marketing

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 263

SharedBook Address: 140 Broadway, Suite 3020, New York, NY 10005 URL: www.sharedbook.com/biz/ E-mail: info@sharedbook.com Phone: 888-212-3121 Business Description: SharedBook enables companies and consumers to dynamically produce personalized and customized books and documents with its patented publishing and annotation platform. The company specializes in integrating and publishing data from a variety of sources through its own proprietary creation tools. Target Publishing Processes: Editorial and Production, Promotion and Marketing Silverchair Address: 316 E. Main Street, Suite 110, Charlottesville, VA 22902 URL: www.silverchair.com Phone: 434-296-6333 Business Description: Silverchair engages in the design and development of online semantic publishing platforms for scientific, technical, and medical (STM) information. The company builds platforms, including Silverchair Content Manager, a semantic web application that offers STM content publishers a platform for content delivery within the semantic web. Target Publishing Processes: Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 264

SkillSoft Address: 107 Northeastern Blvd., Nashua, NH 03062 URL: www.skillsoft.com E-mail: Information@SkillSoft.com Phone: 603-324-3000 Business Description: SkillSoft provides on-demand e-learning and performance support solutions for enterprises, government, education, and small and medium-sized businesses worldwide. Target Publishing Processes: Manufacturing, Distribution and Fulfillment Smashwords, Inc. Address: 15951 Los Gatos Blvd., Ste 16, Los Gatos, CA 95032 URL: www.smashwords.com Phone: 408-395-3600 Business Description: Smashwords, Inc. operates as an e-book publishing and distribution platform for e-book authors, publishers, and readers. It enables publishers to publish and distribute their novels, short fiction, poetry, personal memoirs, monographs, non-fiction, research reports, essays, or other written forms. The company provides author pages with bios, headshots, and lists of works; embedded YouTube videos for video book trailers and virtual author events; reviews from readers; e-book downloads in various e-book formats; and a coupon code generator for custom promotions. It enables authors and publishers to publish, distribute, and sell their e-books online to various audience in the United States and internationally. The company distributes its products through online retailers and mobile e-reading apps. Target Publishing Processes: Distribution and Fulfillment, Sales and Licensing

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 265

SPi-BPO Address: 5409 Maryland Way, Gateway Plaza, Suite 310, Brentwood, TN 37027 URL: www.spi-bpo.com Phone: 615-301-8420 Business Description: SPi Global Solutions is a Knowledge Process Outsourcing and Customer Interaction service provider. The company provides a variety of business process outsourcing (BPO) services. Target Publishing Processes: Editorial and Production, Manufacturing, Distribution and Fulfillment Sterling Commerce Address: 4600 Lakehurst Court, PO Box 8000, Dublin, OH 43016-2000 URL: www.sterlingcommerce.com Phone: 800-876-9772 Business Description: Sterling Commerce, Inc., a software company, provides integration solutions and supply chain applications that optimize and transform customer's business collaboration networks. Target Publishing Processes: Distribution and Fulfillment Texterity, Inc. Address: 144 Turnpike Road, Southborough, MA 01772 URL: www.texterity.com Phone: 800-455-5450 Business Description: Texterity, Inc. provides digital publishing solutions. It offers Coverleaf, a virtual online newsstand. The company also provides browser-based technology, search and clipping, and strategic consultative services to drive circulation and advertisement revenue, mobile delivery, SEO, audit-compliant reporting, social networking, and website integration. Target Publishing Processes: Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 266

Thatâ&#x20AC;&#x2122;s Rights! Address: JDC Software, 29 Harley Street, London W1G 9QR, UK URL: www.thatsrights.com E-mail: info@thatsrights.com Phone: 44 207 681 2014 Business Description: The That's Rights! family of products are developed by Jeux de Couleur Limited (JDC Software), providers of efficient solutions for the publishing industry. An affordable rights solution for small publishers. Integrates with Easy Royalties. Target Publishing Processes: Rights and Royalties The Media Services Group Address: 2510 W. Dunlap Ave., #250, Phoenix, AZ 85021 URL: www.msgl.com Phone: 800-234-4674 Business Description: The Media Services Group provides software and services to the publishing industry, including advertising management, circulation fulfillment, book publishing, exhibition and event management, directories and membership management. Target Publishing Processes: Planning, Editorial and Production, Manufacturing, Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 267

The Siroky Group, Inc. Address: Thornhill Square, 300 John Street, Suite 506, Thornhill, Ontario, Canada, L3T 5W4 URL: www.sirokygroup.com E-mail: info@sirokygroup.com Phone: 1-888-4SIROKY Business Description: The Siroky Group provides technical and management consulting. Target Publishing Processes: Rights and Royalties, Distribution and Fulfillment Tizra Address: 9 Catalpa Rd., Providence, RI 02906 URL: www.tizra.com Phone: 401-935-5317 Business Description: Tizra, Inc. provides online information distribution products. It offers Tizra Publisher, an on-demand Web application that enables non-technical personnel to create websites for document distribution, archiving, and management applications. Target Publishing Processes: Editorial and Production, Distribution and Fulfillment Trilogy Publishing Address: Aries House, 43 Selkirk Street, Cheltenham, Gloucestershire, GL52 2HJ UK URL: www.trilogypublishing.com E-mail: publishing@trilogygroup.com Phone: 44 01242 222 132 Business Description: Trilogy Publishingâ&#x20AC;&#x2122;s core activities are IT Services, Publishing, Mail Order, and Environmental based software solutions. Target Publishing Processes: Planning

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 268

Typéfi Systems Pty. Ltd. Address: 40 E Main St, Ste 163, Newark, DE 19711 URL: www.typefi.com E-mail: mail@typefi.com Phone: 215-253-3692 Business Description: Typéfi Systems, Inc. develops and distributes automation solutions for travel, trade, and commercial publishing, marketing, advertising, communication, training, custom publishing, financial services, and technical documentation industries. Target Publishing Processes: Editorial and Production Vasont Systems Address: 315 Busser Road, Emigsville, PA 17318 URL: www.vasont.com Phone: 717-764-9720 Business Description: Vasont Systems, Inc. offers content management software and data services for dynamic publishing. The Vasont content management system enables organizations to manage and store multilingual content as a single source for maximum reuse and multi-channel delivery. Target Publishing Processes: Editorial and Production Virtusales Address: Hove Technology Center, St. Joseph's Close, Brighton & Hove, BN3 7ES UK URL: www.virtusales.com E-mail: info@virtusales.com Phone: 44 0845 458 4020 Business Description: Virtusales provides global software solutions to the publishing and media industries. Products include Biblio3 and BiblioLite Publishing Systems and BiblioDAM Digital Asset Management system. Target Publishing Processes: Planning, Editorial and Production

Vitrium Systems Address: 502-1168 Hamilton Street, Vancouver, BC, Canada V6B 2S2 URL: www.vitrium.com Phone: 866-403-1500 Business Description: Vitrium Systems Inc. provides software for electronic document control and analytics. The company offers docmetrics, a web-based system for content-based lead generation; Protectedpdf, a document rights management and monitoring solution for PDF that allows publishers of electronic content to protect their intellectual property from unauthorized access and distribution; and PDFSalesLeads, a web-based application that allows publishers to capture qualified sales leads through interactive forms embedded within documents. Target Publishing Processes: Distribution and Fulfillment Vook Address: 1100 Marina Village Parkway, Suite 102, Alameda, CA 94501 URL: www.vook.com E-mail: matthew@vook.com Business Description: Vook, Inc. offers a platform that provides content from writers, and professionally shot and edited videos by filmmakers. Its platform enables to read books, watch videos, and connect with authors and friends through social media. The company offers vook, a digital book, which blends a book with video, links to the internet, and social media for a new storytelling experience. Its products are offered in a web-based or a mobile application format. Target Publishing Processes: Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 270

WAVE Corporation Address: 1250 Commerce Park Drive, Suite 100, Longwood, FL 32779 URL: www.wavecorp.com E-mail: sales@wavecorp.com Phone: 407-585-0250 Business Description: WAVE actively develops several software products that are focused on managing data for effective publishing to increase profit margins, generate new revenue, and prepare for future business opportunities. Target Publishing Processes: Editorial and Production World Color Address: 999 de Maisonneuve Blvd West, Suite 1100, Montreal (Quebec) H3A 3L4 Canada URL: www.worldcolor.com Phone: 800-567-7070 Business Description: World Color Press Inc. operates in the commercial printing segment of the printing industry in North America and Latin America. It provides marketing solutions, publishing services, and pre-media and logistics services to retailers, branded goods companies, catalogers. The company engages in the production of retail inserts, catalogues, direct mails, magazines, books, and directories. It also provides pre-media services, including a range of film and digital preparation services, from creative services and color separation to all-digital pre-media, as well as digital photography and digital archiving. World Color Press, Inc. will soon be acquired by Quad/Graphics, Inc. Target Publishing Processes: Manufacturing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 271

Xerox Corporation Address: 45 Glover Avenue, P.O. Box 4505, Norwalk, CT 06856-4505 URL: www.xerox.com Phone: 800-334-6200 Business Description: Xerox Corporation engages in the production and sale of document systems and services for businesses. It offers a range of color, and black-and-white multifunction devices; and printers, copier fax products, and document related software solutions. The company also provides business process and information technology outsourcing services comprising claims reimbursement and electronic toll transactions to customer call centers and HR benefits management, as well as supports and supplies toner, paper, and ink products. Target Publishing Processes: Manufacturing Xinet Address: 2560 Ninth St., Suite 312, Berkeley, CA 94710 URL: www.xinet.com E-mail: sales@xinet.com Phone: 510-845-0555 Business Description: Xinet, Inc. operates as a developer and publisher of digital asset management and production workflow software. It offers Xinet WebNative Suite, an integrated database that streamlines the collection, access, production, distribution, and archiving of graphic media for advertising, publishing, and corporate communications. Target Publishing Processes: Editorial and Production

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 272

Xythos Address: 655 Montgomery Street, 16th Floor, San Francisco, CA 94111 URL: www.xythos.com E-mail: info@xythos.com Phone: 888-4XYTHOS Business Description: Xythos Software, Inc. develops secure document management and collaboration software for academic and research institutions. The company focuses on offering online services and products to users at commercial, education, and government organizations for managing and sharing content throughout its lifecycle. Target Publishing Processes: Editorial and Production YUDU Media Address: 42 - 44 York Street, Clitheroe, Lancashire BB7, UK 01200 420 868 URL: www.yudu.com E-mail: yuduquery@yudu.com Phone: 0870 760 9258 Business Description: Yudu Media Limited operates as an ePublishing library and marketplace to read, publish, buy, sell, and share digital content. It offers a library of digital content. The company also enables users to upload and publish documents, audio, and images, as well as to sell content. In addition, it enables users to create interest groups and join other people's group to share passions, experiences, and knowledge with likeminded users. The company provides YUDU Plus, which enables users to sell digital content online; YUDU Publishing Pro, a digital publishing solution for professional publishing houses; and SmartADS, a digital advertising solution for publishers to monetize their online magazines and e-books. Target Publishing Processes: Rights and Royalties, Manufacturing, Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 273

Zinio Address: 114 Sansome Street, 10th Floor, San Francisco, CA 94104 URL: www.zinio.com Phone: 415-494-2700 Business Description: Zinio, LLC operates as an online publishing and distribution services company. It offers digital and interactive publishing products and services; production services; and marketing programs, such as customer acquisition, retention and cross-promotion, e-commerce engines, and circulation and fulfillment services. The company focuses on digital magazine and book publishing, publisher growth services, retail services, research and development, and interactive media. It also provides online media search and customer acquisition, partner and affiliate marketing, e-mail and database marketing, and special event marketing programs. Target Publishing Processes: Editorial and Production, Distribution and Fulfillment Zipadi Technologies, LLC Address: 1099 West South Jordan Parkway, South Jordan, Utah 84096 URL: www.zipadi.com Phone: 877-553-0073 Business Description: Zipadi is a do-it-yourself digital publishing and e-business software-as-a-service platform. The platform uses an open API in order to integrate internal systems and other existing applications with the Zipadi digital publishing system. Zipadi is designed to help businesses that rely on printed materials leverage their existing investments in offline creative assets. Target Publishing Processes: Planning, Editorial and Production, Rights and Royalties, Manufacturing, Promotion and Marketing, Sales and Licensing, Distribution and Fulfillment

Appendix D: Digital Book Publishing Industry Directory ÂŠ2010 Outsell, Inc. 274

Appendix E: The “Blueprint” Team The research team for A Blueprint for Book Publishing Transformation: Seven Essential Systems to ReInvent Publishing was led by David R. Guenette and included Bill Trippe, Mary Laplante, and Karen Golden. David R. Guenette is Senior Analyst at The Gilbane Group, covering the connected content market with strategic technology and business development research, analysis, and editorial content, with special focus on digital rights management and the editorial process within electronic publishing. David has over 30 years publishing experience, including as acquisition and developmental editor in educational, trade, and professional resource books, and in top editorial positions for magazines and multimedia. Bill Trippe is Vice President and Lead Analyst, Content Strategies, and leads The Gilbane Group’s Publishing Strategies and Technologies Practice, and the XML Technologies and Content Strategies Practice, helping enterprises leverage XML to better create, manage, and deliver information. Bill also covers trends and technologies in the content management industry and develops tutorials on XML and content management. Bill Trippe has more than 20 years of technical and management experience in content management, XML, and related technologies, working with publishers who are typically converting extensive legacy databases and systems into more contemporary technology. Mary Laplante is Vice President and Lead Analyst. Mary has 24 years of experience in standards, publishing, software marketing, and research and consulting. As Vice President at The Gilbane Group, she oversees Gilbane’s consulting practice, manages research projects, contributes editorial content, and participates in Gilbane conferences and other industry events. As Senior Analyst, she is active in Gilbane’s globalization, XML, and software-as-a-service coverage. Mary is the report’s project management lead. Karen Golden is Senior Analyst at The Gilbane Group with more than 16 years of experience in analytics and content management in the web, intranet, e-publishing, and multimedia environments. Karen’s current work includes user experience analysis at Harvard Business School (HBS) where she provides custom report development, support, and training for current web marketing, and analytics tools. Karen has served as project manager for educational web and digital products for PBS Kids and National Geographic, and her areas of expertise include XML, SGML, DTD development, web analytics, content analysis and management, and search development and management.

Gilbane Group gratefully acknowledges the support of the sponsors of the research informing this report. This work would not have been possible without them. Please see the Blueprint Sponsors and Vision Statements section of the report for detailed descriptions of these search suppliers and their offers.

David R. Guenette Senior Analyst david@gilbane.com Bill Trippe VP and Lead Analyst bill@gilbane.com Karen Golden Senior Analyst karen@gilbane.com

At Outsell, independence and objectivity are at the core of our business and our values. Read our Ethics & Integrity Policy Outsell is committed to minimizing our impact on the environment and acting in a sustainable way. Read our Green Policy Outsell is the only research and advisory firm focused on the publishing and information industries. Our international team provides independent, fact-based analysis and actionable advice about competitors, markets, operational benchmarks, and best practices, so our clients thrive and grow in today’s fast-changing digital and global environment. Call +1 617.497.9443

Call +1 650.342.6060

Call +44 (0)20 8090 6590

Fax +1 617.497.5256

Fax +1 650.342.7135

Fax +44 (0)20 7031 8101

763 Massachusetts Avenue

330 Primrose Road, Suite 510

25 Floral Street

Cambridge, Massachusetts 02139

Burlingame, California 94010

London WC2E 9DS

info@outsellinc.com www.outsellinc.com