Читать книгу Book Wars - John B. Thompson - Страница 20

Tom is a digital publisher at ‘Mansion House’, a large trade publisher in the UK. He joined the company in 2011, having worked previously at a small avant-garde independent where he pioneered their digital strategy and earned a reputation in the industry as an innovator and cutting-edge thinker about the digital future. Brought in as the digital publisher at a much larger house, Tom was now responsible for thinking creatively about new digital initiatives in order to keep Mansion House at the forefront of new developments. One of the first things he did was to commission a series of short books, 10,000 words each, that would be published as ebooks only – ‘long-form journalism, which I saw as an opportunity area’, explained Tom. These were nonfiction books, mostly dealing with current affairs, that could be published very quickly and priced cheaply – £2.99 at the time, or under $5. They did moderately well – most sold a couple of thousand copies; one, by a well-known author, sold over 5,000. Tom then began to expand the series by finding stuff in the archives of Mansion House, mostly by well-known authors, that could be repackaged as digital shorts, paying a small refresher advance and putting it out as an ebook. Some of these did even better – one sold over 10,000 copies. For nonfiction digital shorts, that was the range in Tom’s experience: a couple of thousand copies at the lower end, 10,000 copies at the upper end. It was viable, provided the advances and refreshers were low, but overall sales were limited and revenues were modest, especially given the low prices.

With fiction, however, it was a different matter. At the same time as Tom was developing his series in long-form journalism, colleagues in one of the commercial divisions of Mansion House were developing plans to release short stories as digital-only ebooks by some of their brand-name fiction writers. The idea was to go to their brand authors whose books sell hundreds of thousands of copies – crime thriller authors, for example – and ask them to write a short story, between 7,500 and 10,000 words, preferably a kind of prequel or spin-off that touches on the theme of their forthcoming book; they would add a preview of the new book that would link to a pre-order. The story would be released a few months before the publication of the new novel and sold at a low price, between 99p and £1.99, marketed to the fans and used as a way to stimulate interest in the forthcoming book. ‘As a type of monetized marketing, it’s an extremely effective strategy’, said Tom. ‘You’ll sell over 100,000 of these stories and you get the pre-order. You see the pre-order numbers triple.’ It’s a win-win situation: you’re generating a significant new revenue stream that wouldn’t have existed in the world of print and, at the same time, you’re priming the pump for the new novel, generating pre-orders that will eventually translate into increased sales of the book.

Other publishing houses carried out similar experiments with digital shorts in the early 2010s, with roughly similar results. Clearly, there was a market for short books published as ebooks only and priced very cheaply – books that, in most cases, simply would not have existed in the world of print, since, at 7,500–10,000 words, they were too short to be published as a printed book in English.² Might this be the basis for a new kind of publishing – a new publishing venture that could be built on the digital short?

This is an idea that had been gestating in the mind of John Tayman since late 2006 and early 2007. John was a writer, not a publisher, and he was frustrated by the fact that a conventional nonfiction book typically took several years to research and write. He had been a magazine editor at an earlier stage of his career, so he was accustomed to keeping a folder of interesting ideas that could be developed, but most of these ideas fell into a kind of literary no man’s land: they were too complicated for a short magazine article but they didn’t merit the time, commitment or extent of a full-length book. John was also a heavy reader, but many of the books he bought and stacked up on his nightstand were books that he never read: reading a book was a seven- or eight- or ten-day commitment, and he simply didn’t have the time to read them all. He began to think: ‘I would like a story that I could digest more quickly than that. I would like a reading experience that maps to the experience that I have when I go to the movies. I want to consume a story – start, middle, finish – in one sitting. That’s when the germ of Byliner started coming up.’

It was too early, however: this was late 2006, early 2007, the Kindle hadn’t been launched and the iPad was still three years off. There was no way of getting short stories of this kind in front of readers – the discovery and distribution systems just didn’t exist. So John put the idea on the back burner while he worked on other things. In November 2007, the Kindle came out, but the Kindle was a closed loop and that didn’t seem like the best way to go. When the first versions of the iPad appeared in early 2010, John decided that the timing was right and he began putting together a prototype. He started talking to authors, friends and investors, secured seed funding and then several phases of additional funding – he brought in almost $11 million of venture capital (VC) funding in total. One of the writers he was talking to said he had a project that was not well served by his book publisher or his magazine publisher and was actually perfect for this thing that lives in between the two. So they put that together and published this title as their first book, before the whole platform had been established. This was Jon Krakauer’s Three Cups of Deceit – a hard-hitting, 22,000-word exposé of the misrepresentations and literary fabrications that pervade Greg Mortenson’s account of self-transformation and philanthropy in his bestselling memoir Three Cups of Tea. The timing couldn’t have been better: the ebook was published a day after a 60 Minutes documentary on Mortenson aired on CBS on 17 April 2011, and it was made available as a free download for 72 hours. In those first 3 days, 75,000 copies were downloaded. This was far in excess of what John had allowed himself to hope for and it augured well for the future of Byliner. With this auspicious start, Byliner was looking like a project that could turn out to be a great success.

For the next year, John and his colleagues worked hard to ramp up Byliner’s output and make sure their books were available through the major ebook retailers, especially Amazon, Apple, Barnes & Noble and Kobo, all of whom opened special sections of their bookstores dedicated to short ebooks that could be read in a single sitting. Byliner pioneered the space of what John preferred to call ‘e-singles’ – short books, between 5,000 and 30,000 words, that could be written quickly and read quickly, published as ebooks only. That was the original concept of the e-single, as John explained: ‘We wanted to allow authors to publish a book that could be on and off their desks as writers in a month or two rather than a year or two, and as a reader, it could be on and off my nightstand in an evening or an afternoon.’ John used the VC funds to take on staff – three people to begin with, two in editorial and operations and one in technology, and then, as they published more books, built out the platform and began to do marketing and other things, the team grew to around twenty people in total. They aimed to publish one book a week, though that proved to be a little too ambitious and they eventually settled into a pattern of one book every ten days to two weeks. Authors were given a straight 50:50 split on net receipts – that is, after 30 per cent of the sale price had been taken by the vendor. They also paid authors an ‘assignment fee’ (a term they preferred to ‘advance’ – ‘we tried not to use traditional publishing nomenclature’) that ranged from 0 to $3–5,000; the highest they ever paid was $20,000, though that was exceptional. ‘We did an extraordinarily good job of acquiring the very best authors and of publishing great books’, said John; ‘I think we had 32 bestsellers in our first year.’ Their authors included many established writers, such as Margaret Atwood, Nick Hornby, Ann Patchett, Jodi Picoult, Chuck Palahniuk, Richard Russo and Amy Tan. They eventually shifted 160,000 copies of Three Cups of Deceit, and they had several titles that outsold this.

In 2011, this innovative new venture in digital publishing seemed to have a bright future with everything going for it. E-singles ‘are the format of our time’, purred technology reporter Laura Owen; they ‘fit perfectly with the curl-up-with-your-iPad phenomenon. They’re long enough that you don’t blow through them in ten minutes, but most can be read in under an hour.’³ But three years after it launched with its stunning debut success, Byliner was in trouble. Sales were static, margins were being squeezed and managers were looking for ways to cut costs. The dream was over. What went wrong?

There were two main factors, in John’s view, that undermined Byliner. On the one hand, the marketplace became flooded with e-singles. A form that Byliner had pioneered was quickly taken up by others and the quantity of e-singles increased exponentially, but much of this escalating output was of rather uneven quality. ‘The signal-to-noise ratio moved in the wrong direction’, and consumers stopped going to those sections of the ebook retailers that were dedicated to e-singles. On the other hand, prices plummeted. Byliner had been pricing their ebooks between $2.99 and $4.99, but there was tremendous pressure in the marketplace, and especially from Amazon, to drive the price of e-singles down to 99¢. ‘When Amazon came out they set hard limits on what you could price at’, explained John. ‘It had to fall between 99¢ and $4.99. We always wanted to price towards the higher end, in part to signal quality and also because we thought our authors didn’t want their work associated with 99¢. We were in continual fights with Amazon about that.’ But it was difficult to resist the downward pressure on prices when so much of what was being published in the e-singles category was priced at 99¢. With the flooding of the market, the decline of consumer activity in the e-singles stores and the intense downward pressure on prices, the numbers just stopped working: ‘You had to move so many units at 99¢ and then, once you’d carved out 30 per cent for the vendors, it just didn’t work.’

It quickly became clear that Byliner needed to find another revenue model – individual transactions at 99¢ with a 30 per cent fee to the vendors simply wasn’t going to generate enough revenue to make this a viable business. So they began experimenting with a subscription model that would give readers access to all its content through its website and mobile apps for a monthly subscription of $5.99. But they didn’t get enough subscribers to make this work. Perhaps it was too early for a subscription model, maybe consumers were not yet accustomed to paying for reading material in this way – ‘I’m still not convinced that there is a viable business model for subscription at that level’, reflected John, ‘but if there is, it’s still two, three, four years away. And so we just sort of flat-lined.’

Byliner’s trajectory was not uncommon for a VC-funded start-up in Silicon Valley. Like most start-ups of this kind, they were going for growth so that they could ‘own’ the category. Profitability was not the key concern in the early stages, either for the senior managers of Byliner or for their financial backers. ‘We were what they call out here “pre-revenue”’, said John, a little facetiously. ‘There wasn’t a tremendous amount of pressure to get to profitability as long as we were showing growth. So as long as the numbers are going up, you just lean into that growth.’ Venture capitalists typically want to see a growth trajectory that suggests either you will hit profitability eventually or you will get acquired. They keep an eye on ‘the burn’ – ‘you know, how much your monthly expenses are, what you’ve got coming in.’ Byliner was generating a seven-digit revenue, ‘but for a VC-funded company those numbers aren’t interesting’. So the VCs were hoping that Byliner would be acquired. ‘And you take VC money, you’re assuming that your exit is going to have a multiple’, continued John. For technology investors in Silicon Valley, the multiples can be as high as 20, 50 or 100 times what they’re putting in, though multiples of that kind are rare. Investors recognize that most of their investments will fail; they’re looking for a return on one in ten investments, and one has to hit at a multiple that will compensate for the losses accrued by the other nine. The VCs who had invested in Byliner soon realized that they weren’t going to be able to exit with a serious multiple, but they hoped nonetheless that they would be able to exit with something – what’s euphemistically described in VC jargon as a soft landing.

In early 2014, Byliner was at a critical juncture. They weren’t generating enough revenue to sustain a viable business at their current level of staffing, and they were unlikely to be able to raise further venture capital given their trajectory of growth. Could they have scaled back, reduced their staff and overheads and restructured the business as a small, boutique publishing operation specializing in e-singles? Possibly. That might have been an option. But scaling back and turning yourself into a boutique business is not part of the script for a VC-funded company – it’s not an option that would be of any interest to their investors. Nor did this option appeal to its founder. He had already devoted four years of his life to pursuing this particular dream and given it everything, so the idea of managing the decline of the business was hardly an attractive prospect. Moreover, he was finding it difficult to hold on to his staff, especially the software engineers. ‘This is such a super-heated growth environment that for anyone who’s on the technology side, there are many better opportunities than trying to eke out a nice little nifty publishing play. It’s hard to get and retain staff, and be honest with staff, because they’re going to lunch with people whose company trajectories are from launch product to hundred-million-dollar acquisition in months, much less years.’ Staff began to leave, and John himself got tired. ‘I’m a writer, and I hadn’t written anything for four years. I found myself running a company and going into the office every day and not being excited about the growth.’ He took a back seat, brought in someone else to run the company and started doing other things. In September 2014, it was announced that Byliner had been sold to Vook, a New York-based company that offers digital publishing services to authors and organizations.⁴ It’s not exactly the exit John would have liked – ‘I would have loved for the team to have a giant exit’, he confessed. But there’s no shame in a soft landing either.

The three-year story of the rise and fall of Byliner suggests that, while there may well be a market for short books published as ebooks only, this market is probably not sufficiently robust to support a standalone publishing operation. The flooding of the market with content and the downward pressure on prices, creating a category where 99¢ has become the norm, have meant that it’s difficult to generate revenue growth and achieve profitability on the basis of publishing e-singles only. Byliner was able to pioneer the development of e-singles with the help of venture capital funding but it never achieved the kind of growth or scale that was meaningful in the VC world of Silicon Valley, and never achieved the kind of profitability that might have enabled it to float off as a boutique indie publisher, even if that option had been open to it. It published some remarkable and successful books in its short life, but the model was unsustainable in the long run.

But maybe Byliner had been too conservative. Maybe you needed to be more radical in the way you were thinking about digital publishing – not just doing ebooks that were shorter than traditional print books, but experimenting in more fundamental ways with the very form of the book, creating ebooks that incorporate the multimedia features that are possible in the digital medium. Maybe another venture with a more radical agenda would stand a greater chance of success – would it?