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.

Transmedia Storytelling - our journey

Ah, our next transmedia thriller novel. It's OK, I wasn't doing anything the next couple of years...

We began our second transmedia project - actually, it began a few months back. We're approaching this project a little differently, rather than explain the differences though, I will just explain what we're doing with the understanding that you, the reader, will know that it's different from last time. Except maybe for instances where I say, "we did this the same way last time."

We, oh yes... who are we? We are Enthrill Entertainment.

Here's how it all started...

Jeff Buick, calls me up - "I have the next story - our next transmedia project" - we meet shortly after and he shows us his blueprints for the story at the next board meeting.

The blueprints that Jeff has created are amazing, they show the various characters in vertical columns, as these columns descend, you see how the characters will interact with one another, how their story builds, the plot is plotted and the outcome is a question mark (for us, ...Jeff knows what's there). As a concept, it's a real strong story. As Jeff explains the story, you can visualize the characters in their settings - Jeff is a marvelous storyteller, it's moments like these that you sit back and go, wow!

The board asks questions and is intrigued by the story. A budget is agreed to for research and Jeff is off to spend time in the field, researching the locations where the story takes place. This takes him to London, Prague, Budapest, Pilzen (home of my favourite beer) and Boston. Research takes 6-8 weeks. I was fortunate enough to spend a few days in Boston with Jeff as he scouted locations for characters' homes, workplaces and interviewed locals. This experience gave me so much insight into the depth of research needed to pull together not only a believable story but one that is very, very real.

While research was being conducted, I was assembling the creative team that is to lead the project. From Francomedia, we have Christina Greenway, Dave Kromand, Colin Stange, Ryan Ferrier, Sandor Fekete and Dylan Nadon working alongside the Enthrill team to create an immersive storyworld. Our initial meetings yielded some tremendous ideas - some we will act on immediately, some will be scheduled and some will be dropped for various reasons.

The launch of our book is set for March 2013. This gives us plenty of time to create an interactive and immersive experience for people to engage with characters and elements of the story as well as participate in a large scale event.

Last weekend we reviewed the photos from Jeff's travels, each grouping of photos was associated with a particular character or an event from the story. We saw where the protagonist lives, works, works out, goes for lunch, dinner and drinks as well as some of the streets she walks down. This was the same for nearly every character. As we were going through the photos, you could imagine the character walking down the streets of Boston - it was so real.

I'm always careful about suggesting ideas while the narrative is still being written. I must remind myself that the writer tells the story, it's his creative vision that we are bringing to life. My worry is that by offering up suggestions and ideas during the writing is akin to a committee building a web site - I've seen a few of these disasters. The creative vision must come from one source, the author has fans that have come from his stories - it's his writing and narrative that is at the core of our entire project. Tampering with the foundation of the project risks everything - at what point do we remove the authors name from the book?

Our job as transmedia storytellers is to take the author's vision of the story and embellish, enhance and bring it to life, not to alter or change it. There's a reason we're working with a best-selling author, because he is a gifted storyteller and there's a reason he's working with our group - because we can bring it to life.

That being said, we are currently flushing out character bios, creating in-depth resumes for each and every character so that we can engage actors to portray them online and perhaps in film. We have launched a blog site that will play into the plot of the story - the blog was actually created by a character in the story.

So much of what we do is done in context. For instance, the blog I mentioned above. A character in the story, located in Hungry has launched this blog. How do we approach the design of this blog? What are the characters means for web production? In the timeline of the character, does he hire someone down the road to revamp the blog? What does the blog look like now, what will it look like as the narrative of the story lines up with the storyworld we have created? These are all questions we need to address in developing the characters blog.

Here's how we approached it: The character has little web development means, but enough to grab a template and get it going, after a few months of slowly gathering content on the site, he hires someone to update the look and functionality and it begins to gather content quicker. In this, he acquires a certain piece of content that sets the narrative in motion. The blog cannot look like we did it, it has to look like the character did it.

The design of everything in the storyworld must be within the context of the story and if created by characters must demonstrate and emulate their abilities and sense of style (or lack thereof). This is sometimes dangerous in attracting an audience, if the audience's first introduction to the story is a piece that has been designed by a character of ill means you risk them leaving the storyworld. This is a challenge for transmedia storytellers - how can we get the audience to understand the context in which elements of the storyworld are created?

We've got a lot more planned and I will do my best to update you on our progress throughout our journey.

The Product is the Package

Much has been talked about the publishing industry; the impending downfall of print books, ebook pricing, DRM and so much more, ...so much, that I am reluctant to even add my two cents. Regardless (or irregardless as I sometimes like to say), here is my humble opinion on some of the issues facing the industry.

First, let me clearly state my bias; I am digital publisher with a focus on transmedia storytelling and distributor of digital content. I believe strongly that, barring some global internet shortage, digital is the future of everything... it just needs some sorting out still.

Now, I'm also of the age where I have a massive collection of vinyl, which I still listen to regularly while working in my office (when there's nobody else here). I also have a pretty good collection of first edition print books from each of my favourite authors. So, I have more than an appreciation for analog formats, I still engage with them regularly.

This engagement and tangible experience is why I don’t see print books ever dying. But, I think their sales will decline gradually over the next 5 years as ebooks continue to take off and erode the print market. This will see a rise in exclusive print runs, special editions and fewer and fewer titles seeing any ink at all.

So, what’s the matter with a decline in pulp and an increase in 1’s and 0’s it’s just a trade off, right? Well, no. As this transition takes place, millions of sales dollars are at stake and all traditional publishers are in the same boat. At this time, consumers don’t see ebooks as having the same value as printed books – but it’s the same product, isn’t it? Well, no. Consumers perceive digital assets as having a very low value which is a huge obstacle when selling them something such as an ebook.

I suppose if we can increase a readers’ perception of value we could maintain a price level on ebooks that offers a sustainable environment for publishing as well. Sure, but to do this, we need to really understand what we’re selling and demonstrate to readers a tangible experience worth paying for.

When you break it down, books are nothing more than packaging. No product is. Now, the publisher and author will tell you, ‘the content is what you're buying, not the packaging’. I say this is dead wrong. Most are under the assumption that the packaging is what the content resides in, and while technically that’s true, without the packaging, there’s not much left to sell or for the consumer to connect and engage with other than maybe 95,000 words, and that can be saved as a .txt file.

If 20 years in marketing consumer products and brands has taught me anything, it's that people buy packaging. Sure, some will argue this, including consumers themselves, but in the end this is what it comes down to... people buy packaging.

And, what exactly is packaging?

It's the wrapper, the container, the vessel that the content is presented in. My definition of packaging is a little more vast than that of perhaps a dictionary, or well, you. But, packaging to me includes many things and encompasses everything you are trading your hard earned dollars for. Good product packaging should include some sort of tangible remnant or an artifact of the product and/or allow you to engage with the product, offering you an experience that you associate with that product.

While listening to a good old-fashioned record, I can read the liner notes and marvel at the cover art – this is packaging at it’s best. The better sound quality and this visceral, visual, tangible packaging experience is why artists and record companies are releasing on vinyl again… there’s a premium price attached, but it’s well worth it.

Having just paid $40.00 for the new, beautifully designed Strokes 10 song LP – the packaging was beautiful and the experience of opening it, handling it and engaging with it while it plays is worth every penny spent. Now, as a digital album, it’s $9.99 – same songs, but there’s no further experience or added value… just listenting. It’s priced right. Heck, at .99¢ a song and I’ll probably pick that version up too so I can listen to it in the car.

For 4 times the price, the music publisher has offered me an experience by creating packaging around the digital asset. (and, don’t for a minute think this wasn’t digital first, just as books are typed into a digital environment, then typeset and printed analog in a book, so too is music). The wrapper or packaging of the digital product is where the perceived value is for the consumer.

In the case of the good old print book, the packaging was done in the form of subtle, beautifully designed text, printed on crisp, porous papers that were easy on the eyes but spoke of quality and importance. This was further packaged with stitched eight page signatures and set into a hard back cover, the linen stretched taut, folded and glued with precision - so much so that the average reader didn't give the construction of it a second thought - it just came that way, it was perfectly bound and solid. The linen was hot foil stamped with the title and author's name. Then this is all finished with a gloss-laminated dust-jacket with embossed text and a perforated price tag inside the fold. I think you get the picture, when you fork over $38.00 for this book, it's not for the 95,000 words inside, it's for the packaging.

Without this packaging, what are those words worth?

Surely there is a price to be paid for something that someone has spend so many hours creating. A team of people were involved in the creation of the digital asset, surely their time is worth something. Unfortunate as it is, if the consumer can’t see it they have challenges understanding it’s value.

In the case of ebooks, there is no packaging. Or, rather the packaging that does exist is 'owned' by the digital reader or store front, and that has little to do with the publisher or author. It also has little to do with the reader and the experience with the product is controlled by the retailer or the device, who has varied interests in your experience outside of the text you are reading. In essence, the retailer and devices own the packaging through the digital storefront – your enjoyment and experience is secondary to volume.

So, if this is the case, if it’s true that consumers buy packaging and not the product itself, and what little packaging exists is controlled by the retailer and device, how do you go about pricing something with no packaging, if packaging is what the consumer has been indoctrinated into purchasing?

Consumers expectations sans-packaging are low, which is why digital content has suffered the label of being worth less, but not worthless. They still want the product, they’ll even pay for it, but not at a premium. ‘It's just a digital asset – what can it be worth?’ We've all heard this. Most of us have seen what 95,000 words looks like in a .doc file, some of us have put them there. Take the time spent typing all those words away and what do you have? All you have is text that can be copied and pasted like a funny image on the web, it’s void of value – until you introduce experience and packaging.

The same goes for any digital asset. We need to be inventive to create experiences around digital products to make money with them.

Digital assets are all the same; we used to purchase Lettraset sheets, sometimes hundreds of them for specific client fonts. There was value inherent each time you rubbed out a letter. Fonts used to be packaged – now, you just select a different font from your toolbar. The end product is the same, the experience is different, less valued. Ergo, in the consumers mind, it should be priced less.

In Apple's App Store, the Apps range from free to $899. The device is the packaging, you experience each app though it and the varying degrees at which the software manipulates and displays the data… or slingshots birds. The point is that you are constantly interacting and engaging with this digital asset and that’s the where the perceived value is. This is similar to cloud based apps – maybe you remember when software was packaged in a box with instructions and a CD or two, you may also remember, there was a much higher retail price.

I think you get the point – the product is the package.

Until this issue of packaging gets resolved, publishers have been willing to look at many ways to maintain a price that defies perceived value on the digital asset they call ebooks. They crave a price that is closer to the heavily packaged print book.

Two ways that have been explored by publishers and debated endlessly are DRM and Enhanced ebooks.

Personally, I’m not a fan of DRM, I feel it undermines the trust the author and publisher have with the reader and quite frankly, I’ve paid for my product (or packaging) and I’ll do with it as I please. Jumping through hoops to access content or restricting access to devices does not make for that same carefree enjoyment and experience you get with a physical product. I know why publishers want DRM on their products, but I would rather see them incorporate some ‘packaging’.

I need to applaud the Pottermore project for bringing ‘social DRM’ into the spotlight, a process where the readers personal information is embedded into the product as a way to prevent copy – this is a far less intrusive and acceptable form of protection than anything I have seen so far.

The other method employed by publishers to create more value on their ebook properties is enhanced versions. Enhancements come in various forms, from the inclusion of video or audio and web links or a full on transmedia experience. Enhancement is where I think publishers need to focus their attention. This is as close to ‘packaging’ as you’re going to get in the digital space – creating experiences around the 95,000 words demonstrates value and commands a higher price.

My company has decided to focus on the transmedia storytelling side of things, and with my background in consumer packaging and brand experiences, we should be able to create that elusive engagement with the reader, providing some tangible experience that they will want to explore again and again.

At the end of the day, consumers want to feel good about the purchases they made and purchasing things makes them happy. Packaging is validation of money well spent.



Packaged in this blog, what do you value my 1791 words at?

Save Money on Books! (in Canada)

With the Canadian dollar now eclipsing that of the US dollar in value it's time to capitalize on some opportunities.

Recently I was asked to review a book for one of my favourite marketing people, Guy Kawasaki. When I got to the end, I analyzed the book itself; the cover, the jacket, the feel... and then the price. Whaaaaa??

What astonished me was that on today's bookshelf, it was $6 more in Canadian funds... looking at an older book by the same author it was $11.50 more in Canada. As a Canadian, this has always bothered me, but now that our dollar is worth more, it's time to take advantage of this opportunity.

Here's how it works:

1. Go to the bank and exchange $100 CDN for $101.50 USD.
2. Go to your local bookstore and shop for books.
3. Pay with your newly acquired US currency.
4. You save 15 - 25% on the book and you have more money to spend!

Cool, eh? But it's not that easy, in fact, it doesn't work.

But why? Well, some Canadian book retailers and publishers have been ahead of the curve on this front. Putting stickers over the cover price with a 'Canadian Price' or 'New Price' - in many cases offering a lower price than even the US price.

This is great news for readers, especially Canadian ones, eh? I think so.

The US/Canadian pricing disparity stems from a combination of things, in fact, one top bookseller in Canada posts on their web site the following:

• We buy and sell books in Canadian dollars. We do not profit from a strengthened Canadian dollar.

• A majority of our suppliers are based in the US. These suppliers add an extra charge, sometimes 10-15% more, on items shipped to Canada due to the extra cost of doing business in Canada like freight, minimum wage etc.

Having first hand experience with printing, shipping, warehousing and distributing print books through our last title, I can assure you, there is an enormous cost in shipping and warehousing tied to print books.

I say, good on the Canadian retailers and publishers for recognizing this perceived issue with consumers, doing something about it and communicating it.

So, as a Canadian consumer, thanks to Canadian publishers and retailers, you can save money on books after all. Now get out there and buy some.

PS - For my image, I chose to go with a literal translation of the blog's title today... stock photography filling the role of obvious, once more.