The Multiple Long Tails Opportunity Bruce Batchelor Trelawny
The Multiple Long Tails Opportunity Bruce Batchelor Trelawny Consulting Group Ltd. © 2007, Bruce Batchelor
I’ll explain the coming opportunity by discussing three retailing/distributing models: traditional, new and emerging 80: 20 Long Tail Bruce Batchelor bruce. batchelor@gmail. com Multiple Long Tails
A retailer can make a sales bar chart ranking the sales success for each title. [This is called a “powerlaw”. ] Harry Potter 7 #2 #3 Number of copies sold 1 2 3 4 5 6 Ranking Bruce Batchelor bruce. batchelor@gmail. com
The sales bar chart forms a long “tail” on the right as the number of units sold is very small for those titles Number of copies sold 1 2 3 4 5 6 7 8 9… Ranking Bruce Batchelor bruce. batchelor@gmail. com
Conventional 80: 20 Rule Number of copies sold 1 2 3 4 5 6… Ranking Bruce Batchelor bruce. batchelor@gmail. com 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
Amazon. com discovered that 25% of its book sales come from titles in its ‘long tail’, i. e. beyond the 130, 000 th bestselling title – these are titles which bricks & mortar stores can’t economically keep in stock Number of copies sold th g , 000 ellin 130 Best S Title The “Long Tail” 1 2 3 4 5 6 7 8 9… Ranking See “The Long Tail” article by Chris Anderson, Wired Magazine, October 2004; his book with the same title was published July 2006 by Hyperion Bruce Batchelor bruce. batchelor@gmail. com
Opportunity – extend the distribution and publicity by using every long tail available • More editions (adding hardcover & e. Book & 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 Gmb. H in Germany • Amazon has Book. Surge in USA and … [more locations planned] • Publicity and sales at linked at Google, Yahoo, Live. com, Amazon, Abebooks, etc. • Ingram Digital Ventures, Amazon, Sony, Microsoft and Google are all ramping up e. Book and digital marketing and distribution • Audio books can now be home-recorded and edited; can be sold as pure download only; market is growing including Gen X & Y Bruce Batchelor bruce. batchelor@gmail. com
Showing only some tails. Adding a tail will build both awareness and availability – and expands the market One Long Tail Multiple Long Tails 10 Audio book (download only) 9 Bo. D hardcover 8 LSI US & UK hardcover 7 e. Book (as download) 6 e. Book (as PDF) 5 Book. Surge paperback 4 Bo. D Germany paperback 3 LSI - Ingram UK paperback 2 LSI - Ingram USA paperback 1 Trafford paperback variant distribution Bruce Batchelor bruce. batchelor@gmail. com
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”. Trafford 1. 0 M/S Paperback edition – Trafford - printed in Victoria (manuscript) Publicity – Google – Amazon Bruce Batchelor bruce. batchelor@gmail. com
Potential* implementation of the Multiple Long Tails approach – showing many distribution channels. Trafford 2. 0* Paperback edition – Trafford - Victoria – LSI - US – LSI - UK – LSI - other – Bo. D - Germany – Book. Surge - US – Book. Surge - other Hardcover edition – LSI - US – LSI - UK – Bo. D - Germany M/S e. Book edition Audio book edition Publicity – Ingram Digital – i. Tunes – Google – Audible. com – Amazon Digital books – Ingram Digital – Amazon Search-inside-the-book – Amazon Upgrade – Amazon – Yahoo. com – more … – Windows Live. com – Sony e. Book – more … – Google Book. Search – podiobooks. com
How Multiple Long Tails will expand the Print on Demand [POD] publishing service business • ~20 companies are now serving ~100, 000 authors… ~25 k new titles are released each year ~Worldwide revenues… est. $200 M p. a. [Trafford $11 M] • most companies have printing & distribution done by Ingram’s Lightning Source Inc. (LSI)… USA & UK plants • others use Anthony Rowe (UK), Bo. D (Germany), Book. Surge (NC, USA), Color. Centric (NY), Trafford (Canada) • mostly paperbacks, some e. Books, some colour books • lifetime sales average per title ranges from about 5 (Lulu. com, Cafe. Press. com…) to 200 copies (Trafford, i. Universe, Xlibris, etc. ) • 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 Bruce Batchelor bruce. batchelor@gmail. com
POD 2. 0 = using Multiple Long Tails • For profitability, both the retailer and the publishing service must keep operating costs at minimum and tail as long as possible. • Retailers NEED thousands of titles, so front- and backlist POD titles are ‘in-demand’ • Early results have proven that each tail opens a different market which does increase total book sales • More book sales = happy authors = referrals, repeats = more authors = lower advertising costs & increased revenue = growth potential for publishing services, printers, distributors and retailers • In phase 2. 0, publishers can provide wider availability and publicity for books, addressing those two deficiencies in phase 1. 0 Bruce Batchelor bruce. batchelor@gmail. com
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 Bruce Batchelor bruce. batchelor@gmail. com
POD - Lighting Source Inc. / Ingram
e. Books – after 10 years of hype and non-event, what’s happening now? • About 200, 000 units sold per month globally (~$20 M 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/Code. Mantra and Libre. Digital Bruce Batchelor bruce. batchelor@gmail. com
The race to establish the “i. Pod for Books” means more and better long tails coming soon • Sony and Philips [i. Rex] have introduced devices • i. Rex’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 i. Rex at BEA 2006 Bruce Batchelor bruce. batchelor@gmail. com
The race to establish the “i. Pod 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 e. Books “Kindle” from www. engadget. com 2006/09/11 • 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) Bruce Batchelor bruce. batchelor@gmail. com
Audio books - what’s all the talking about? • Total marketplace is about $900 M • 10% is digital downloads (versus CDs, DVDs and cassettes) • Largest player is Audible. com - $80 M üsells through its own website (mainly as subscriptions) and is exclusive supplier of content to i. Tunes üdoesn’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 üsome authors are getting over 1, 000 downloads üthis provides publicity (building brand awareness) and boosts printed and e. Book sales Bruce Batchelor bruce. batchelor@gmail. com
Audio books - more noise • 25% of American listened to an audio book in 2005 • 50% of US teens own an MP 3 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” Bruce Batchelor bruce. batchelor@gmail. com
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 setup 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). Bruce Batchelor bruce. batchelor@gmail. com
Questions? Suggestions? Bruce Batchelor President, Trelawny Consulting Group Ltd. bruce. batchelor@gmail. com 250 -380 -0998 mobile 250 -217 -5280
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