Selling Ebooks in Retail Stores

For the last 20 months we have been developing our Enthrill Books retail system, to bring ebooks to retail. In that time we have generated a few technologies, sold one of our patents and launched our product.

The system includes an online deployment system, manufacturing (printing, QA and testing), logistics (warehousing & shipping) and customer service. In the development of this we were able to create an answer for cross-platform DRM and cross-platform deployment of digital assets, consumers of mass retail stores will demand this.

We were not the first to sell ebooks in bookstores, Symtio did this in 2008-2010 and from the publishers that I spoke with, it worked pretty good considering that the market was just lightly peppered with reading devices. They sold the company just as the iPad, and the ebook phenomenon broke open in the spring of 2010. From what I can tell, their focus was primarily religious book stores in the Central US market. Great idea, great execution but too small of a market and far too soon.

When we looked at this idea of selling ebook gift cards in stores, we knew it had to be built on volume and as such we needed some big volume stores on side to build the program overall. We have the support of some of the best retail companies in the business with stores in the US and Canada. In addition to a market more readily saturated with reading devices, there is a growing need for ebook gifting, so our timing is perfect. We have approached our program with a long term vision, creating a new sales eco-system for publishers and retailers.

We launched in June and have a great deal of data to pour through and analyze, some success stories, some not so much - but that was to be expected. Our retail audits and research has helped to identify areas of opportunity and best practices as we roll out to more and more stores. I look forward to presenting these findings to our partners over the next few weeks and months.

One of the joys of bringing this program to retail has been the fact that we've been able to include independent bookstores as part of our consumer offering. In addition to selling ebook gift cards in store, independent bookstores are now able to participate in digital sales online through our POIT (Point Of Interest Tracking) system. In fact, all retailers that sell our products can earn money from online sales that were initiated at their store. When we announced our program in May of 2011, bookstore owners actually hugged me, how cool is that? We created a way of rewarding stores for sales initiated through merchandising our product!

Through the POIT system, we can associate the physical store with the consumer, so that when they make a purchase online through the connection that was made, that particular bookseller gets credit for the online sale. This of course has application beyond books and will no doubt be huge. We sold the patent on this cool feature to fund our development, but have license to use it in the ebooks category. The creation and development of this patent came from a need to not compete with the stores we are partnering with - our goal is to ensure that every sale made through our system is credited to a specific retailer.

And, we know we're onto something, because there's a company launching today in retail stores in the US, doing something similar on the ebook gift card front. It will be interesting to see how their launch goes. This means we now have a competitor; we were very happy to learn this. Not only does it validate our assumptions on a market for what we are doing, but it means there are two of us growing this new category within stores and with consumers. This is no small feat.

We've put together a great (understatement) team of pros to take us to the next level and are looking forward to the next phase in our journey as we expand across Canada and into the US.

Blogging

I used to really enjoy writing. Hmm, never really looked at myself as a writer, not seriously. The truth is though, that I looked forward to finding something interesting to dissect, praise, laugh about, at, with - all through my blog. But, the last year has truly been one of the most challenging (and exciting) times in my life and I haven't been able to find the time for my bi-weekly sit down with a coffee and my thoughts.

Just as well, as most writing, I found out from the print world, gets recycled and turned into pulp for another writer to take a stab at it. I suppose the blog is just a way for me to archive my thoughts before they hit the shredder.

Launching a new business while still running an existing one - what the hell was I thinking?

Luckily, we're part way through the launch of Enthrill's retail ebook gift card program and we've learned so much! I firmly believe this is going to be one hell of a great product/company - at every turn, we've planned for success and built to scale. The past couple of months we've ramped up our staff, surrounding ourselves with some incredible people that will take our concept to the next level. Hoping this talented group of book and technology lovers can obsess over our product the way that I have for the past 20 months.

Who knows, maybe I can get back to writing the occasional blog? I'd like that.

Note - I took the photo at the distribution centre that sends out the Enthrill ebook retail cards to retail stores in Western Canada.

New York State of Mind

I look forward to traveling to New York, it's one of my favourite places to visit in the entire world. I love the energy, the pace, the fact that everyone is going somewhere. I love the fact that every time you turn around you see something familiar, so many movies and television shows are set in New York City, something you really notice after visiting.

I visited New York for the first time ever in May of 2010, been there several times since and will be back again and again. New York is always moving at the speed of light and I feel right at home with the hustle and bustle. It's I'm now accustomed to, in a weird way the pace is almost calming, relaxing in that everyone is moving at the speed I've been operating at these days.

Digital Book World in January is what's brought me here this time. Aside from the conference, I will be meeting with several publishing houses to acquire content for Enthrill's exciting new ebook retail program. Looking forward to this, the publishing industry is filled with many smart and passionate people.

So, two for two. I get to go to New York and meet with people I really enjoy and respect, circumstance and luck has put me in front of some of the most important people in the industry.

The past year has been one of complete focus. Laser focus. I began working on Enthrill Distribution full time, after months of planning, researching and exploration into the market we are to disrupt.

What provided some complication was the fact that I already had a full time job running Francomedia, my digital/creative firm. But, I wasn't too worried about taking time away from the company I built over the past 8 years, my staff is fantastic and fully capable of creating great work without me standing over their shoulders. I'm very proud of my team, they have been so patient with this change in our operation, I'm thankful for this.

So, for the last 8 months I went from being busy to being so busy that mere words can't describe it. This short-term pain is necessary though, and as unpleasant as it is at times - coming home after the kids have gone to bed, working weekends and holidays - we are introducing something to the market that will benefit a great many people. Our program is important and timely, in fact, some in the industry have called it 'necessary' some have called us 'white knights' and 'game changers'. I suppose these types of comments set a certain expectation, this drives me even further to ensure its success.

The next few weeks are going to be critical, we've got a new office, we're scaling up on staff, we're going a million miles an hour getting ready for launch. If you've ever done a retail launch, you know what's involved, if you haven't just know it's a lot of work. We've got a good team, we have to. And, I'm confident in our team, in our concept and in our product.

My next posting on Enthrill will include some details on our product, how we're launching and maybe even some pictures. These are exciting times for everyone involved with Enthrill.

Perhaps when this is all over and I'm visiting New York purely for pleasure, I will find the pace unsettling. Nah, I doubt it. I'll always love New York, as is.

Ebooks for the Masses

Everyone remembers the Betamax vs. VHS format war, but do you remember the player piano format war? How about the rail gauge format war? In nearly every innovation since the beginning of time there have been a handful of contenders ready to bring a new way of doing things to market. And in each case, a victor has emerged and this has not always been based on the best option, but the most readily available, simplest to produce or the first to market.

In many cases it has been industry itself that has decided on the winner of these contests, few times has the consumer been the decider. Whether decided by an industry group or business owners themselves, one thing is clear, the winner has always been selected with the consumers' best interest in mind. 'Best interest' is wide open for interpretation here, keeping in mind the context of business owners, just use your imagination, OK?

VHS won over Betamax because of several reasons really; it was easier to produce (cheaper), it allowed for more content on each tape and JVC was faster at licensing to other manufacturers than their counterparts at Sony. Some argue that Betamax was a better product, in today's reality, who cares? Nobody uses either now, tape format got us from 1975 to 1995 quite effectively no matter which format it was on.

What gets chosen as a format, is not nearly as important as the decision of the format itself. Anytime there are multiple formats, there is a fragmentation in the market, content makers are forced to spend extra efforts and money to produce and market multiple formats in multiple channels and consumers are confused or corralled.

When a format is chosen, a robust multi-device environment is created where content producers are eager to supply content because it can scale quickly and they can focus their efforts on a single manufacturing/promotional method rather than two (or more).

VHS beget DVD, DVD beget Blu-Ray and Blu-Ray beget the cloud. What's next? I don't much care. I've been buying my favourite content in every container so far, I've already budgeted to purchase another few more before my days are done. Heck, I don't even have to own it now thanks to Netflix. I'll rent it over and over again.

So, if the format wars have taught us anything it's that there's a mass audience that can be served if one format can be decided by an industry. The video industry is used to changing formats every couple of years, they have a protocol in place, a bi-weekly meeting on the newest format, they make their selection without much fuss. I'm simplifying this, but not too many industries have experienced this much change ever. Well, except for maybe the music industry, but those changes have been a little more spaced apart - going from vinyl to 8-track to cassette to CD to cloud.

With all of this knowledge on format wars, all of the learnings from similar industries and lots of business cases to draw from, why is the book industry so fragmented when making it's third format change in 500 years? The publishing industry is ripe with smart people, passionate about what they do and keen on advancement into the digital space. It's hard to figure out until you add one thing to the mix: The consumer. Not just the consumer, but the choices they are given and who is reaching them and where.

Now, in publishing there's not so much a format war but rather a go to market war. There are two formats, sure, but they are not so different - and either can be made to work on any device. So, it's not the format per se. It's what a singular format can provide in the way of a catalyst for the industry to go to market. We don't need a single file format, we need a single delivery format to the customer - a device agnostic approach that can scale with mass adoption, this can work with the existing file formats. In fact, the format doesn't much matter, it's irrelevant.

In nearly every format war that has anything to do with media content, decisions were made to provide the broadest appeal to the largest audience - to provide quick scale and mass adoption. You see, in the past, the retailer controlled the consumer and the retailer was hands off on the development of the product. The retailer was between the device manufacturers, the content producers and the consumer acting as a filter/flood gate and discovery point for products. This was a good mix, this is how things have been done for decades.

Right now, publishers are going to market through online retail or device specific deployment methods. Where are the brick and mortar booksellers in all of this? For centuries they have proven to be the best form of discovery and sales for books - B&M retailers are good at selling books, that's their job... and they sell a lot of them. Imagine what they could do if they were given the tools to sell ebooks.

It's 2011, almost 2012. We're not communicating with our minds or driving flying cars yet, but there is a distinct change from what we remember the role of the retailer to be. Retailers are becoming less and less utilized and doted on in today's marketplace by content producers. The consumer can now go direct to purchase content. "Dear Louis CK, here is my $5 cheque, please forward me a copy of your latest video." In today's model, the retailer can be bypassed, they are irrelevant in the eyes of some. This sounds like a utopia for content producers, but utopia also sounds like dystopia, which is not good (I looked it up). Which in the foreseeable future, is really what is being created.

I'm not criticizing Louis CK, he's a brilliant and funny comedian. He did a great job in creating buzz and getting people interested, the buzz and interest created discovery, discovery lead people to buy his video. A great story on many fronts, especially for DRM - when given the choice people will pay for content rather than steal it.

And, I'm not criticizing consumers for going direct to the source for content at all - I think it's great, that is... if consumers know what they want. In many cases, they don't. And, this is the major change in our paradigm right now - and many don't even realize it's happening. We are losing our points of discovery.

You see, where things really begin to break down with purchasing direct is in the discovery - consumers don't know they want until they see it or 'discover' it. They can only buy it direct if they know it's there. For years, consumers relied on good old brick and mortar retail stores to help them discover content. It was the act of shopping that exposed them to new titles, new releases, remainders, backlist, new authors, new genres and new ideas.

Shopping direct via online or through a reading device removes discovery from the consumer, they are unable to discover anything beyond the display of 4 or 5 titles on their tiny e-ink window. What's more is their curation is self induced by their own keywords. With each word they search, they are narrowing the field of discovery to the point where choice is a misnomer.

Good old brick and mortar stores allow humans to use all of their senses to discover, by touch, sight, feel, smell and taste (although, the latter is not preferred in most established shops). The act of discovery is aided by retails insatiable need to outdo one another with lavish displays and effective merchandising. The entire act of merchandising has been finely honed for the last 200 years to aid in discovery - to entice the purchase of products.

Retail shops are masters of merchandising for the sole purpose of discovery. This is their job; to make content attractive to a mass audience.

I've been told that large publishers can publish out 500+ titles in a year. How exactly will all of these titles be discovered once brick and mortar stores are eliminated from the equation? How can you effectively merchandise online? Sure, you can feature a title, perhaps even up to 10 titles can be featured through the sales window of a device. Ten spots for how many publishers? Publishing how many books? As a creative person, I've never been brilliant at math, but I'm sure the outcome of this equation isn't complimentary to the bottom line for any publisher.

What's worse is that consumers are locked into purchasing through a retail environment provided by the device they've happened to choose. "Device specific deployment is akin to selling milk to someone based on the model of refrigerator they have."

If you want to sell milk to a mass audience, you need to ask people if they’re thirsty, not ask what kind of fridge they have.

Trapping one’s self with a single device/platform serves the needs of few and alienates many – how does the consumer select the best provider? How, as a publisher, do you reach a mass audience? How do you encourage discovery on 500+ titles a year?

As we see today, content makers (publishers) are held hostage by the device makers, allowing the latter to dictate format, sales terms and pricing. In the end, consumers are left with little choice in the matter and little to choose from. Device makers have content makers at their mercy; pushing them into areas they don’t have expertise in (yet).

Without content, devices are useless. Content makers ultimately have the control.

What consumers need, what publishers need, what the retail industry needs... is one powerful voice pushing for content over device. Don't lock customers into an environment where they've got no choice. If you want an ebook, you should be able to buy it from anywhere and put it on whatever device you want. A device agnostic format and the ability to buy ebooks anywhere (online or in a retail store) puts the control back into the hands of the publishers and out of the device specific realms.

To target a mass consumer base, this is what needs to happen.

These are my observations as I prepare to launch ebooks into traditional brick and mortar stores. We have built a bullet proof system that deploys content to any device - allowing consumers to decide where to purchase content and what device to put it on. Mass retail stores that will be selling our ebook cards will once again provide merchandising services to the book industry, creating discovery amongst their many thousands of patrons each and every week.

An Incredible Year!

Wow - what a year! This has been, by far, the busiest I have ever been, and the busiest that Francomedia, my boutique creative company, has been... and if that wasn't busy enough, I went and co-founded another company, Enthrill Entertainment.

As I look back at 2010 and what was accomplished, I truly am amazed.

We started the year with a trip to Edmonton, Alberta for the Alberta Chambers of Commerce Business Awards, where Francomedia took home the Marketing Award of Distinction - most of our creative team made the journey to the capital city to help accept the award for Francomedia. The gala was fun, getting the trophy and closing down the casino with my staff was even more fun!

Winning this award was a real feather in the cap, as it is very prestigious. We were honored to be a part of it and especially to take home the hardware. The best part of it was we won for work we did for ourselves and every one of our team was involved in the creations that lead to the win.

Enthrill Entertainment was made official sometime in the spring, we formed it as a publishing company and hit the ground running. Without a clue as to how a publishing company works, we made a few mistakes along the way, but we learned we could do something that none of the publishers could do - write, produce and publish a fully interactive transmedia novel in 8 digital formats and one print version in under 5 months - start to finish. This alone is a unique ability that the established publishers cannot match and may be a big asset for us going forward, especially with current event content as part of our stories. Speed to market.

Creating the publishing industry's first transmedia thriller novel garnered lots of attention in the industry and even won us a Platinum Ava Award in the category of Web/New Media/Creativity. None of this could have been accomplished without such a dedicated team of professionals - my hat is off to everyone that helped pull this together.

Many of the things we created are now just being adopted, for instance - our web site in July had the ability to sell ebooks for every device - you select the device and the web site serves you the correct file - Amazon made a big announcement in October or November that they were doing this. We just thought it made sense so we did it.

Traveling to Edmonton at the start of the year turned out to be the first of many trips in 2010 - I also went to New York, the UK (95% vacation), San Francisco and Banff. This isn't much compared to some of my friends who are on the road over 200 days a year, but for me, this was a lot of travel. I suppose I am spoiled and have gotten accustomed to having people travel to meet with me, not the other way around... but, we're newbies, entering an old industry.

We've got some very ground-breaking ideas for 2011. Some that will launch in February - booksellers all over the world will be using our new system, that we are sure of. After attending the Books in Browsers conference at the Internet Archive in October, I came up with an idea that I believe will save many businesses and catapult ebooks into a whole new world. You will see more of this soon - and read about it in many places very soon. The BIB10 conference was amazing, so many very smart people in one room - they were gracious and open to new ideas, whereas the BEA conference we attended earlier in the year was found to be the complete opposite.

Hearing some of the top minds in the industry discuss the issues being faced resulted in me being up all night thinking and writing - then it came to me. And, it solves other issues facing support businesses and so much more. My only thought was that I couldn't be the first to think of this - after much search over several weeks I couldn't find anything. Anyways, we presented the idea to an independent book store and a publishing support company and both couldn't contain their excitement for the idea. Again... you'll see more on this soon.

This idea has consumed me the last 3 months, which is why I haven't been blogging - I just have nothing to say except for this project... I think of nothing else. So, that explains the last 3 months, what about the month before that?

We went to the UK for a family vacation in August-September which I posted blogs daily and when I returned from our 4 week excursion, I had a lot of catch up to do as well as prepare my presentation for the BIB10 conference, which I completely re-wrote the night before in an attempt to better serve the audience - in retrospect, I think I should have left it alone, it was much more polished. After that, I worked with the Banff Centre on a grant proposal on 21st century story telling - to work with a world class facility like that would be awesome and would allow our team to flex their creative muscle in very different ways.

The rest of my time was used up in negotiating new space for Francomedia, getting work done for our many clients and Enthrill board meetings where we ended up patenting one idea and registering some industrial designs while putting some clarity on what we'll be offering the publishing industry in 2011. Very cool stuff.

So, I have never been so excited to start a year... and can't wait for January to end so that we can present our newest idea to the book industry, move into our new office space and hopefully do some more traveling.