the multiple long tails opportunity bruce batchelor trelawny consulting group ltd. © 2007, bruce...

The Multiple Long Tails

Opportunity

Bruce BatchelorTrelawny Consulting Group Ltd.

© 2007, Bruce Batchelor

80:20 Long Tail Multiple Long Tails

I’ll explain the coming opportunity by discussing three retailing/distributing models: traditional, new and emerging

Bruce Batchelor [email protected]

mailto:[email protected]

Number ofcopies sold

Ranking1 2 3 4 5 6

Harry Potter 7

#2

#3

A retailer can make a sales bar chart ranking the sales success for each title. [This is called a “powerlaw”.]



1 2 3 4 5 6 7 8 9 …


Ranking

The sales bar chart forms a long “tail” on the right as the number of units sold is very small for those titles



1 2 3 4 5 6 …

Conventional

80:20 Rule


Ranking

Conventionally, retailers concentrated on the 20% of titles that bring 80% of the business, and avoid the other titles. A boutique bookstore carries 10,000 titles; a superstore stocks 130,000 max




130,000th

Best Selling Title

1 2 3 4 5 6 7 8 9 …

The “Long Tail”

Ranking

Amazon.com discovered that 25% of its book sales come from titles in its ‘long tail’, i.e. beyond the 130,000th bestselling title – these are titles which bricks & mortar stores can’t economically keep in stock

See “The Long Tail” article by Chris Anderson, Wired Magazine, October 2004; his book with the same title was published July 2006 by Hyperion



Opportunity – extend the distribution and publicity by using every long tail available

•More editions (adding hardcover & eBook & audio formats)

•Availability of each POD edition can be greatly increased by having books printed/created on demand by distributors/ wholesalers around the world

•Ingram has Lightning Source Inc. in USA, UK and …•Libri has Books on Demand GmbH in Germany•Amazon has BookSurge in USA and … [more locations planned]

•Ingram Digital Ventures, Amazon, Sony, Microsoft and Google are all ramping up eBook and digital marketing and distribution

•Publicity and sales at linked at Google, Yahoo, Live.com, Amazon, Abebooks, etc.


•Audio books can now be home-recorded and edited; can be sold as pure download only; market is growing including Gen X & Y


One Long Tail

Trafford paperback variant distribution

Multiple Long Tails

1

LSI - Ingram USA paperback2

LSI - Ingram UK paperback 3

BoD Germany paperback 4

BookSurge paperback 5

eBook (as PDF) 6

eBook (as download) 7

LSI US & UK hardcover 8

BoD hardcover 9

Audio book (download only) 10

Showing only some tails. Adding a tail will build both awareness and availability – and expands the market


M/S

Paperbackedition

Publicity

– Trafford - printed in Victoria – Google

– Amazon

Trafford 1.0

Example of Trafford Publishing, where I developed the world’s most extensive distribution network. Think of this 1.0 slide as “before Multiple Tail opportunities”.


(manuscript)


M/S

Paperbackedition

Hardcoveredition

eBookedition

Publicity

– Trafford - Victoria

– LSI - US

– LSI - UK

– BoD - Germany

– BookSurge - US

– Ingram Digital – Google BookSearch

– Amazon Search-inside-the-book

– Google

– Amazon Digital books

– Yahoo.com– Amazon Upgrade

Trafford 2.0*

– LSI - other

– BookSurge - other

– LSI - US

– LSI - UK

– BoD - Germany

– Sony eBook

– Windows Live.com

– more …

Potential* implementation of the Multiple Long Tails approach – showing many distribution channels.

– podiobooks.com

Audio bookedition

– iTunes

– Audible.com

– Ingram Digital

– Amazon

– more …

~Worldwide revenues… est. $200M p.a. [Trafford $11M]

•~20 companies are now serving ~100,000 authors… ~25k new titles are released each year

•most companies have printing & distribution done by Ingram’s Lightning Source Inc. (LSI)… USA & UK plants

•others use Anthony Rowe (UK), BoD (Germany), BookSurge (NC, USA), ColorCentric (NY), Trafford (Canada)

•mostly paperbacks, some eBooks, some colour books

•lifetime sales average per title ranges from about 5 (Lulu.com, CafePress.com…) to 200 copies (Trafford, iUniverse, Xlibris, etc.)

How Multiple Long Tails will expand the Print on Demand [POD] publishing service business


•For authors, the preprinting and warehousing costs were eliminated, but publicity and availability are still lacking. Industry niche’s growth stalled, in part due to high costs to recruit more authors and in part due to low book sales

POD 2.0 = using Multiple Long Tails

•Early results have proven that each tail opens a different market which does increase total book sales

•For profitability, both the retailer and the publishing service must keep operating costs at minimum and tail as long as possible.

•More book sales = happy authors = referrals, repeats = more authors = lower advertising costs & increased revenue = growth potential for publishing services, printers, distributors and retailers

•Retailers NEED thousands of titles, so front- and backlist POD titles are ‘in-demand’


•In phase 2.0, publishers can provide wider availability and publicity for books, addressing those two deficiencies in phase 1.0

POD - What opportunities for trade publishers?

•Offer extra/specialty edition at low set-up cost (<$100)

•Print cost examples:

•250 pp paperback = $4.15 US ($4.00 Cdn!)

•Minimum discount to Amazon is 20% so set retail at

$10 to net $3.85.

•250 pp hardcover with jacket = $11.70 so set retail

at $20 to net $4.30

•90¢ + 1.3¢/page; add $6 to $7.55 for hardcover

•Instant UK availability, search-inside publicity, BIP, etc.

•Aiming at Amazon is Aaron Shepard’s strategy to ignore bookstores, take no returns and focus on Amazon and B&N


POD - Lighting Source Inc. / Ingram

eBooks – after 10 years of hype and non-event, what’s happening now?

•About 200,000 units sold per month globally (~$20M annually?)

•Competing formats => re-purposing/conversion costs are high for limited sales

•Yet many vendors and manufacturers are fascinated with the potential

•Digital content aggregators – GLS/CodeMantra and LibreDigital



The race to establish the “iPod for Books” means more and better long tails coming soon

•Sony and Philips [iRex] have introduced devices

•iRex’s device is targeting newspaper subscribers. This illustrates how the winning device may come from another business sector. Think mobile phones, medical, military, games, gaming, porno …

Jeff Paleczny with an iRex at BEA 2006


The race to establish the “iPod for Books” … (cont’d)

•Amazon is reportedly building a prototype book reader device using e-ink. Hey, what is Apple planning?


•Ingram, Amazon, Microsoft and Google will sell downloaded eBooks

•some sales will be for online-only views, some by subscription, some per page … expect healthy royalties for publishers (~50% of retail; or split of advertising)

“Kindle” from www.engadget.com 2006/09/11

•Total marketplace is about $900M

•10% is digital downloads (versus CDs, DVDs and cassettes)

•Largest player is Audible.com - $80M

sells through its own website (mainly as subscriptions) and is

exclusive supplier of content to iTunes

doesn’t have sales to libraries yet (see Overdrive.com)

•Home production is “good enough” and inexpensive

•Podiobooks.com is pioneer in DIY audio books as podcast episodes

some authors are getting over 1,000,000 downloads

this provides publicity (building brand awareness) and boosts

printed and eBook sales

Audio books - what’s all the talking about?



•25% of American listened to an audio book in 2005

•50% of US teens own an MP3 player

•steady >10% annual growth in sales

•big publishers have audio sales bringing in 10% of hardcover sales

•listeners include Gen X and Y, higher income, buy printed books

•distribution as podcasts (free) or downloads (paid) is inexpensive

•could appeal to authors to be own “talent”

Audio books - more noise


Multiple Long Tails Aggregator•Accessing many long tails will become the expectation, raising the bar for all publishing services.


•Submission of the metadata and re-purposed book & cover files to all “tails” is a complex task. There are set-up and annual fees for some of the tails if number of titles is low.

•Smaller publishing houses will use an “aggregator” service to access the tails.

•The aggregator would offer a single portal to publishers, and would re-purpose files for the many tails. The aggregator will negotiate volume pricing, so cost to publisher need not increase to improve distribution.

•The distributors and retailers will welcome having fewer suppliers (lower admin and support costs).

Questions? Suggestions?

Bruce BatchelorPresident, Trelawny Consulting Group [email protected] mobile 250-217-5280

the multiple long tails opportunity bruce batchelor trelawny consulting group ltd. © 2007, bruce...

Documents