Six Lessons We've Learned About Digital Publishing (My BibleTech Presentation Part 2)

Lesson 1: Content is more valuable together than in silos.

Consumers want convenience. They want what the want when they want it. Period. A customer who is loyal to Amazon or Logos is happy when they want a B&H resource and a Tyndale resource and don’t have to go two places to get it. Our content needs to be everywhere, available any way a customer wants to consume it.

We are learning this lesson from Logos. Bob Pritchett made an excellent presentation at Tools of Change where he said, “The margin is in the mystery.” What he meant was that the Logos database is mysterious to the consumer. They know it is deep and rich, inner-connected and constantly growing and being updated and that is worth something. Bob also said, “We publish ebooks. We used to call it Bible software, but we publish ebooks.” The difference is when you sell a $15 print book and turn around to sell the digital edition the consumer expects to get that digital edition for less than the price of the print edition. When the consumer looks at the Logos database they have no frame of reference to determine the value. They can charge hundreds of dollars for libraries of content and the margin is in the mystery. Pretty smart.

Other examples include YouVersion and BibleGateway. A guy in my men’s group recently held up his iPhone and said, “I’ve never read the Scriptures like this before—comparing one translation to another.” The ability to immediately compare translations without lugging around some massive parallel Bible is a great consumer benefit, and it is the new expectation—any translation I want, free. Our Bibles are more valuable to consumers together than on their own.

Lesson 2: There is no “either—or.” You must think, “both—and.”

Digital is a long way from dominating print. It may never dominate print in some categories. Let’s face it: the printed, bound book is an amazing piece of technology. It is portable, economical, durable, user-friendly and intuitive, instantly on, sharable, you can add notes and bookmarks, etc, etc. And, printed books have been around for hundreds of years and will continue to be produced for hundreds more. I am reminded of a conversation I had with a friend recently remembering when digital watches came on the scene and people were concerned that digital clocks would take over and people would forget how to tell time on an analog clock. Today we have both. It is not a matter of analog or digital, print or ebook, brick-and-mortar or online, wholesale or direct, professionally published or self-published (See Scott Sigler’s talk from Tools of Change), it is both-and.

Lesson 3: Connecting directly with consumers is more important than ever.

Consumers are gravitating to, and influenced by, communities more than ever. A publisher’s identity at the consumer level means more today than ever before. Your brand already means something to a community—it already IS a community. There is an opportunity to increase the value of your brand and increase the size of your community by connecting with the people in that community. We need to know our consumers now more than ever before, and as we connect with them we create an opportunity for greater learning and better product development, greater influence, and higher margin sales.

At the same time, we know people are loyal to their communities. People who love Crossway may never join the LifeWay community, and vice versa, but we still want those people to have access to our material, and we want our community to have access to Crossway’s material. (Another example of both-and.)

By connecting directly with consumers digital provides fascinating analytics to inform new decisions. One of the things we are able to see through our Praying God’s Word app are 14 different spiritual strongholds people wrestle with. We can track trends in the seasons and volume at which people are dealing with things like depression, addiction, etc. It becomes one more window to get to know our customers better so we can provide better resources and solutions for them.

Another interesting piece of learning (that seems obvious now but was not as we were racing to market) is connecting with felt needs. We developed two free apps with the intent of driving in-app sales of $.99 content parcels. Praying God’s Word comes free with prayers on one topic and 13 more topics available for $.99 each. If someone were to purchase all of them they would get all the same content from the book and pay about the price of a paperback. We used the same logic for a daily devotional, giving away 30 days free and selling additional 30-day readings for $.99 each. If one were to buy all 12 installments they would pay about the same price as the print edition. Smart huh?

In-app sales of the Praying God’s Word have been through the roof. We are very pleased. In-app sales of the devo are dismal. What did we do wrong?

We didn’t connect with the user’s felt need. We presented the content as days 31-60, 61-90, etc. We repeated the same graphic and didn’t give the consumer any indication that this content would meet a need. The great thing about digital is that we get to do it over and issue updates. We are currently reviewing and categorizing the daily readings by topic so we can present, “Devotions for Intimacy,” “Devotions for Communication,” etc, etc., and we expect a significant increase in in-app sales.

Another fascinating thing to consider is tracking where people are in books. Sync technology allows Amazon to sync the last place you read on your desktop with your Kindle and your phone, so whatever device you’re reading you pick up exactly where you left off. That means Amazon knows exactly what people are reading. As an editor, wouldn’t it be great to know something like 70% of readers never come back to the book after chapter 3? You would know something is wrong with chapter 3 and needs to be fixed. Imagine how we could increase the effectiveness of written communication with that kind of reader feedback.

Lesson 4: Online content represents new revenue, not a threat to old models.

One of the great examples I heard about at the Digital Book World Conference was PoetrySpeaks.com—a site for poets, poetry readers, and poetry publishers. It is a well-defined niche with a strong sense of personal identity and community and they are selling text, audio, and video poetry online. They tracked one publisher’s physical books through retail using Neilsen Bookscan and sales for that publisher increased 55% in the six weeks following posting their content on the site compared to the six weeks prior. Granted, this is very new data, not a very long reporting period, and it is POETRY. You can go from selling 9 copies to 14 copies and it is a 55% increase, but it is still an impressive and important report. In her presentation at TOC, Dominique Raccah, CEO and publisher of Sourcebooks, Inc. and PoetrySpeaks.com, commenting on the need for accurate data also said that, “Transformation is in the margins,” meaning that the change we all feel coming is happening now, in the tiny fractions on the fringes of our business and that information can teach us a lot if we can get accurate data and pay attention to it.

Another example, closer to home for us, is our iPhone app for Praying God’s Word. The app is based on the bestselling book of the same title by Beth Moore. It contains an introduction and Scripture prayers on 14 different topics. Originally, we sold the app for $.99 it came with the general introduction and 30 prayers on the topic of faith. Also available were prayers on the other 13 topics for $.99 each.

Initially there was backlash from customers who thought they were getting ALL the topics for $.99, regardless of how clear we made the description. We decided to experiment with pricing and made the base app and 30 prayers free. Downloads went up 700% and in-app purchases rose as well. We increased brand exposure and the customer base by giving the app away free, and we are converting about 30% of the giveaways to in-app purchases. Is there any other direct marketing strategy with a 30% conversion rate? I hear 1-3% is more typical. But what about print sales? Well, our example is skewed because we released a paperback edition of the book a few months prior to releasing the app but all indications are that print sales are as strong or stronger than ever.

You all are familiar with O’Reilly—publisher of software manuals? They started BookSafariOnline five years ago, at which time about one-third of their business came from digital and two-thirds from print. In five years that split has completely reversed. 70% of their business now comes from digital and 30% print. Granted they have a digitally inclined community, but that is an awesome shift. What are some key factors: they experiment with pricing models, they have included other publishers’ content, they connected directly with their customers and listened to them.

Lesson 5: Capture all the value under the demand curve.

Richard Nash is launching a new digital publishing venture called Cursor and made this point very well on a panel discussing new business models at Digital Book World. His point was that there are people who would pay $25,000 for a private weekend with an author, and thousands who would download a free mobile app, and others who will spend $.99 for a piece of the content. His point was that as a publisher, our job is to capture all the value of the demand curve. Dominique Raccah or Sourcebooks made a similar point at Tools of Change, referring to this idea as the “content continuum.”

In either case, this is a major shift in perspective for traditional publishers. It used to be that publishers were interested in hardcover and paperback rights and would sell off subsidiary rights for video, audio, curriculum, even digital. Publishers are now going to need to exploit all rights in order to capture all the value under the demand curve. Hardcover and paperback does not a book make.

Lesson 6: Enhanced content does not have to mean bells and whistles.

So often when people talk about enhanced ebooks they talk about integrating audio and video and gaming and other bells and whistles, which are all great and we should pursue all of it, but it is not the only way to enhance an ebook. In fact, it may not even be the most valuable way to enhance an ebook. Watching video or listening to audio or playing a game are all very different experiences from reading. Reading engages the mind unlike any other activity. One friend said to me recently that he feared significant decline in reading when the iPad hits the market. “Are people really going to choose to read when they could watch video or play a game?” I actually think the effect will be the opposite. That choice is in front of us right now and you either like to read or you don’t. I actually think tablet devices are a kind of Trojan horse for ebooks. Many people will buy them for video, gaming, computing, etc, and the ease of purchase, portability, attractive user interface, and enhancements that make digital reader a more meaningful experience than reading in print, will actually attract more readers and increase reading.

Peter Meyers made an excellent presentation at Tools of Change called “Book Meets Tablet” where he shared several ideas for enhanced ebooks. One of my favorites was one he called the Col. Fitzwilliam problem. In Pride and Prejudice, the first name of the character Mr. Darcy is Fitzwilliam. There is a different character, Fitzwilliam Darcy’s cousin, Col. Fitzwilliam. Mayer’s idea is to tag every character and pronoun with a brief character bio and relationship profile so with a touch you can be reminded who someone is and their relationship to the story. You could tag settings, locations, etc. You could add notes to have curated content, with one author commenting on another author’s work.

Another one of the apps we created is an eBook+ BibleReader. It contains the complete text of the book, The Love Dare, and the complete text of the HCSB. All Scripture references in the book are linked to bring up a popup with the verse, or the user can set a split screen or tap over to read the verse in context of the complete Bible text. We are working on a similar structure for ePub to create eBook+ files for rendering in any ebook reader.

Come back tomorrow for six practical applications for ways publishers can apply these lessons and innovate together.