This post is part of the Entrepreneurship series – sponsored by AcceptPay from American Express, a new online solution that lets you electronically invoice customers and accept online payments-all in one place. Offer more payment options, manage your cash flow and get paid faster with AcceptPay. Learn more here.
Of course, the content of this post consists entirely of the thoughts and opinions of the author.
We talk about the economics and new business models impacting all sorts of industries from software to music to movies to newspapers to video games, but haven’t talked all that much about book publishing. Certainly, we’ve discussed some aspects of ebooks (and the bizarre pricing decisions there), but there’s really been so little that has come across as truly innovative, that I haven’t spent much time digging in. Yes, there are things like Google books and print-on-demand and other such things — but all of those seem mostly focused on just taking the old business and “making it digital,” rather than looking at ways to rethink what the digital world really means for book publishing. There have been some one off cases — with examples of individual authors like Robin Sloan and JC Hutchins doing some interesting experiments as novelists, but nothing larger. And… many people point out that with fiction writers, they just don’t see the same scarcities that we discuss in other industries.
So I’m quite happy to learn about a company that really is experimenting in this space, and doing so in interesting ways. Ross Pruden clued me in to a project called Cursor, started by Richard Nash, that appears to be doing some rather interesting things. The key point is that, rather than just focusing on publishing books, it’s really a community driven platform that produces books as one aspect of the overall experience — and uses a tiered support model, similar to those we’ve discussed in so many other areas:
My business plan is now out with investors–I will spare you the P&L numbers and just offer the broad strokes. Cursor will establish a portfolio of self-reinforcing online membership communities. To start, this includes Red Lemonade, a pop-lit-alt-cult operation, and charmQuark, a sci-fi/fantasy community.
The business will focus on developing the value of the reading and writing ecosystem, including the growth of markets for established authors, as well as engaging readers and supporting emerging writers. Each community will have a publishing imprint, which will make money from authors’ books, sold as digital downloads, conventional print and limited artisanal editions–and will offer authors all the benefits of a digital platform: faster time to market, faster accounting cycles, faster payments to authors. But the greatest opportunity is in the community itself. Each will have tiers of membership, including paid memberships that will offer exclusive access to tools and services, such as rich text editors for members to upload their own writing, peer-to-peer writing groups, recommendation engines, access to established authors online and in person, and editorial or marketing assistance. Members can get both peer-based feedback and professional feedback.
Other revenue opportunities include the provision of electronic distribution services to other publishers; fee-based or revenue-share software modules, especially for online writing workshops or seminars for publishers, literary journals, teaching programs; fee-based linking of writers to suppliers of publishing services, including traditional publishers and agents; corporate sponsorships and site advertising; and events and speaking fees.
Now there are some things in this description that I think are great, and others that I’m not sure will work, but it definitely is a big and interesting vision, that really does seem to get the basic concept of both connecting with fans and giving them a reason to buy, while also looking to build out complementary scarcities. My main concern are (as usual) the attempts to use infinite goods as if they were scarce, but given so many other smart aspects to this program, I get the feeling that after some experimentation, things will shake out in a way that works well.
But, fundamentally, the fact that this whole thing isn’t even set up as a “publishing house with some community features,” but rather as “communities that also publish,” is a very, very smart way of going about things. It’s a recognition of the power of community, enabled by modern communication technology, that gets so incredibly ignored by so many legacy business lines.
Beyond that, Nash is doing some other interesting things that many in the publishing world will consider horrifying — but which really are extremely forward-looking. The reason Ross pointed this out to me is because Nash has decided that, unlike pretty much every other publisher in the world, to purposely limit the length of the contract away from “life-of-copyright.” As he notes, traditionally, when you sign a publishing deal, the publishing house controls the rights until the work hits the public domain (long after you’re dead). Instead? His deals are three years:
No more life-of-the-copyright contracts.
Instead: three year contracts.
Yup, from a contract that locks you in till seventy years after you’re dead, to a three year contract. Renewable annually thereafter. Which means after three years you can walk. Or stay, but stick it to us for better royalties because there’s gonna be a movie. Or stay with us because with all the additional formats and revenue opportunities we’re creating above and beyond what any publisher has to offer, you’re making more money than ever before.
You see, most publishers have accepted they’re not going to make money publishing your book. They’re publishing your book and a bunch of other books like it so they can have exclusive rights over as much intellectual property as possible. Such that if, three or five or nine years down the road, you win the NBA, or the Orange, or there’s a movie, or an Oprah pick, your whole backlist starts to sell but they don’t have to pay you one single extra red percent in royalties.
That’s where their profits come from, from being able to NOT have to renegotiate royalties when your books start selling better than they expected.
I have no idea if Cursor is “the answer.” In fact, I’d bet that it’s not. But it is one answer that’s experimenting in some very interesting and compelling ways. And that’s the key point. There no longer is just one answer to the business model for any particular industry. Each of these industries is learning that business models change rapidly, and the way to succeed is in smart, focused experimentation that is most focused on providing greater value (rather than looking to limit participants). Who knows if Cursor, as an individual experiment, will work. But succeed or fail, it’s an experiment worth watching closely.
Permalink | Comments | Email This Story
Philadelphia-based national automotive aftermarket and service chain Pep Boys has agreed to pay $5 million in civil penalties for importing and selling Chinese motorcycles, recreational vehicles and engines that did not comply with U.S. Environmental Protection Agency requirements. The case is the largest ever brought by the government under the Clean Air Act.
