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JILT 1996 (3) - Alexis Weedon

The Electronic book trade and the Internet

Alexis Weedon
University of Luton
[email protected]


Abstract

This paper examines recent experiments in product design, marketing and distribution by traditional book publishers using the Internet. Arguing that the CD-ROM is a transitional format, the paper focuses on contemporary practice in parallel publishing and Net distribution. Through an analysis of current experiments in Internet publishing by book and journal publishers, it examines how the book trade is developing the Net as a promotional and marketing tool rather than exploiting it as a distribution system. The paper argues that only a more fundamental redefinition of publishers' and booksellers' roles will enable the industry to use the potential of the Internet as a delivery medium.

Keywords: Publishing functions, Net publishers, book industry, on-line journals, review trade.

Contents
1. Introduction
2. Distribution systems: conflicting 'cultured' and 'popular' circuits on the Internet
3. Changing the notion of publishing and structure of publishing organisations
4. The impact of competition and convergence
5. Parallel publishing and direct (e)mail
6. Conclusion
7. My thanks to:
References

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Date of publication : 30 September 1996

Citation: Weedon A, (1996) 'The Electronic book trade and the Internet', BILETA '96 Conference Proceedings, 1996 (3) The Journal of Information, Law and Technology (JILT). <http://elj.warwick.ac.uk/elj/jilt/bileta/1996/3weedon/>. New citation as at 1/1/04: <http://www2.warwick.ac.uk/fac/soc/law/elj/jilt/1996_3/special/weedon/>


1. Introduction

Nowadays book publishers are faced with the rapid growth of an alternative system of book promotion and distribution: the Internet. The Internet has the potential to dominate the media industry - to become the main mode of delivery for the printed item - and to push traditional book production and distribution into a secondary position. Such a revolution in distribution and market-building would have a profound effect on the structure of the book trade. Aware of this, British book publishers and book shops are investigating the possibilities of distribution across the Net while their counterparts in the British magazine, journal and newspaper industry are actively experimenting with new formats and modes of delivery ( Outing, 1995 )

Research undertaken in this period of rapid development of the Internet has its own difficulties. Publishers are reticent about stating a fixed policy on Net publishing while the Internet is changing so rapidly, so it is difficult to find a consensus of opinion in the publishing industry. Also any attempt to give an overview of the activities of publishers soon becomes a historical snapshot as more and more publishers enter the Internet marketplace. Therefore a different approach has been taken in this article.

Using evidence gathered from interviews with publishers, responses to e-mail questions and visits to publishers' web sites, on-line bookstores and discussion lists, I will evaluate current strategies in promoting, distributing and marketing books across the Internet and examine how publishers are using CD-ROMs and print publications sold through the existing distribution system - bookshops - to develop their Internet initiatives. The advent of an alternative distribution system in any period raises questions about the origin and adaptability of the current, reigning system. Therefore it is important to discover what aspects of the existing system are being adopted and which businesses are able to adapt and take advantage of the new methods of production and distribution.

2. Distribution systems: conflicting 'cultured' and 'popular' circuits on the Internet

Commentators have noted that the Internet is a 'democratic' media - a communication system which makes small firms global ( Negroponte, 1995 ) and offers popular access to otherwise obscure or esoteric sources. In this context Robert Escarpit's typological distinction between the traditional European book distribution systems gives us an insight into the problems the book trade faces when marketing over the Internet. What he typifies as the 'cultured circuit' is the distribution network that reaches the educated middle classes through the traditional book shop system, whereas the 'popular circuit' sells through outlets such as drug stores and supermarkets (and is associated with the daily and weekly press). Although Escarpit's categorisation was originally made in the 1950s and therefore applies to paper publishers, the distinction has particular relevance to the distribution system now provided by the growth in the commercialisation of the Internet ( Negroponte, 1995 ). Once the province of the military and academia - the 'cultured circuit' - the Internet is becoming a public marketplace and book publishers are increasingly in need of trade models. Last year the percentage of commercial 'hosts' on the Internet overtook the number of educational establishments in the Internet as a whole ( Screen Digest , April 1995). And some of these businesses have met with resistance, particularly to direct advertising over the Net by those who have in the past used the Internet as a non-commercial communication system. In places the Internet has become a site of conflict between the 'cultured' and 'popular' circuit. The current debate generated by scholars pressing for free distribution of 'esoteric' journals is indicative of this tension ( Okerson and O'Donnell, 1995 ). While at the other extreme the commercial pressures on electronic newspapers and magazines are forcing them to look for ways to generate income from what has hitherto largely been free access to electronic versions of their paper product.

It is within this context that the book trade has had to develop new trading models which will satisfy both the industry and the customer. Although distribution of monographs over the Internet has been going on for many years the commercial possibilities have been limited, but this is now changing. Academic initiatives such as Project Gutenberg, Alex and the Oxford Text Archive have established that people do use copyright free full-text books available on the Internet and this has been taken up by the commercial sector. Recently, however, the exponential growth of the interactive World Wide Web sites (WWW) on the Internet and the advent of secure commercial transactions ( Hadjian, 1995 ) has opened up further possibilities and excited many in the business world. The Internet's potential for communication and interaction with customers is seen by some as unique: Jim Clark of Netscape for instance enthusiastically claimed at the Internet World International conference in London, (16-18 May 1995) that 'nothing has ever been like it' and predicted that high street retailers may resist this new mode of delivery. The Internet's ability to allow publishers' free access to customers could cause trouble if it is seen to threaten the traditional distribution system - if high street bookshops perceive the growth of international bookstores on the Internet as a direct threat to their trade. This may seem far in the future, but some bookshop chains are already taking the initiative and developing their own web sites.

The orthodox separation of trade, review and marketing communication channels is not viable over the Internet; publishers advertise to book sellers on their web sites as well as offering the general public access to their lists. Similarly 'discussion sites' such as the Internet Book Information Center (IBIC) offer potential purchasers the opportunity to review and discuss new publications and are also browsed by publishers who can monitor the reception of their recent releases. Such services offer an essential commentary which helps raise awareness of new publications. Traditionally this reflective level has been provided by book supplements in newspapers and the choice lists of the book clubs but the IBIC offers more than these paper equivalents. It has searchable lists of bookstores, publishers, forthcoming books and even a reference shelf of dictionaries and thesauri. Other enterprises on the web such as Booknews and Book-talk provide a forum for visitors to offer their own suggestions and recommendations. Thus 'professional' trade promotion and review circuits overlap with word-of-mouth recommendation giving the both publisher and the purchaser a greater insight into the activities and opinions of the other.

3. Changing the notion of publishing and structure of publishing organisations

The Internet offers publishers a mode of delivery which may ultimately challenge the accepted notion of publishing. Indeed many publishers cautious about the Internet for they believe, as Michael Boswood of Elsevier has said, that 'to make information available in the "come and get it" mode' is not 'synonymous with the act and art of publishing'( Boswood, 1995 ). 'It is one thing to recognise that new mechanisms for communication and dissemination create new publishing possibilities, it is another to suggest that the act of using these capabilities will lead to usurpation of the publishing function'. While Boswood argues that these functions are separate from 'any specific system, technology, or market', the reduction and codification of these functions effectively redefines the publishers' role. For Boswood the essential factors of traditional publishing which can and will survive in the electronic age are that:

  1. [Publishers] take commercial risks, engage in entrepreneurial activities, and invest in ideas, projects, concepts that they think can be successfully published;
  2. they specify packages/formats for the information, ideas, stories whatever they want to sell;
  3. they control the 'editorial' function which has to do with the certification, verification, authorization, security, and presentation of the material;
  4. they acquire, protect and license and sometimes sell copyrights;
  5. they make distribution arrangements ( Boswood, 1995 )

Another professional publisher and author Joost Kist has argued that, faced with the challenges of electronic publishing, publishers should focus on their traditional proactive role in the publishing cycle - building up specialist lists and editorial expertise in a specific area, creating and expanding markets ( Kist, 1992 ). Underlying Boswood's and Kist's concern with the impact of the new technologies is the fear that the author will lose faith in the publisher who fails to meet the challenge of these technologies and protect his/her income. All of these traditional functions - packaging, copyright protection, editorial control and delivery - are under threat from a technology which permits the author to copy, format and distribute his/her own work with little capital investment.

The new media has the potential to alter both the editorial role of the publisher and his/her role as protector of the text through redefining our notions of author and reader. The implications of this for our understanding of writing and literary production have been discussed elsewhere (e.g. Bolter, 1990 ) but the consequences for the professional publisher have rarely been acknowledged. The publishers' role as mediator and interpreter of the desires of the market becomes, on the Internet, a response to individual feedback. Karen Fuhrman of the On-line bookstore says in her Web site introduction:

thanks to the unique property of reciprocity of distributed online publications, the readers' suggestions can be incorporated into the core text. So, in distributed publishing, the production cycle proves just that, a continuing cycle, rather than a finite process of producing a 'contained' text from writing through to printing (Fuhrman, 1994)

One example of this in action is an interactive book published by the architectural publisher Ellipsis. Evolutionary Architecture is on a WWW site which allows readers to comment on and revise words and images in the 'text', and thus become involved in editorial and publishing process themselves ( Tatam, 1995 ). But the publisher, in Boswood's words, still 'control[s] the "editorial" function ... [the] authorization, security, and presentation of the material'. Thus the notion of the publisher as protector of the texts and guarantor of bibliographic integrity is transformed even within a dynamic process of text editing and publication. However, contrary to Boswood's disassociation of publishing functions from the specific media, in this instance - and arguably for most Internet publishing - the way in which the text is edited, validated and protected is unique to the delivery technology. Thus digitalisation challenges traditional notions of constructing, authenticating and protecting texts and thus the editorial and other publishing functions. It is therefore essential that publishers identify their unique areas of expertise within the context of the media industry as a whole.

4. The impact of competition and convergence

The danger of failing to recognise the transferable values of publishing is that publishers and booksellers will not be able to adapt to a new and highly competitive marketplace. In this respect the main fear of the older publishers is not that they will fail as a business and be ousted by the small multimedia publishers, but that they will be taken over by larger multimedia corporations, such as Time Warner, against whose financial dominance they can offer no resistance and that book publishers and booksellers will loose their privileged place in the market and their unique cultural status.

One way in which publishers are protecting themselves against this threat is to become 'content providers' - relying on their commissioning and editorial expertise and their copyright capital and leaving distribution and delivery to others. It is a move many are anxious to make as they feel they should and must compete in this new arena and yet lack the level of investment in the technology to create and run their own Internet sites. The practical consequences of this is a move to a digital process. One international book publisher interviewed said that in order to publish in multiple formats they were, like many journal publishers, SGML encoding and tagging their copyright material with a content label. The speed of the development of interface technology has made many publishers adopt a similar strategy but there is an added cost and additional time delay in doing this. The advantage is that an intermediate, standard format for archiving digital material enables publishers to design and repackage content to respond to new interfaces.

Digital process is not all that is needed, structural change within the publishing organisation is also necessary. Michael Boswood claimed there are 'no structural reasons to prevent publishers from making choices' about how best to deliver their product ( Boswood, 1995 ). However, the response of many paper publishers to electronic publication has been to set up a small team who act as a 'service' department giving advice to the people in the main business on creating an electronic version of the original printed item. This causes little disturbance to the existing structure of the organisation but fails to meet the real needs of electronic production and becomes problematic as issues over the design ownership, responsibility and accounting procedures remain unresolved.

In the case of the Oxford University Press the specialisms required by each division are different and have their own pedagogical issues, so they have diversified the responsibility for electronic publishing. This has caused little disturbance to the overall structure of the organisation but yet has enabled the separate divisions to focus on their own individual EP requirements. Of the four divisions Arts and Reference have their own lexicographical needs which lend themselves to the CD-ROM. The science and journals division are responsible for the WWW site and e-journals and the security of the gateway. The English Language Teaching (ELT) division has an electronic publishing department which 'acts collaboratively with other departments within the Division, creating electronic materials linked to existing print titles, but remaining a profit centre within its own right' (Murison-Bowie interview, 1995). The initial explicit strategy in 1987-8 was to recruit the skills needed for audio-visual publication and disk based software. Like other multimedia developers the ELT EP department works in project-specific task-groups with the author or editor. However the work force remains a small proportion of the overall staff (c14). Although modern technology enables organisations to work together across continents, and the Press employ external designers and developers in many parts of the world, they have found that 'there is still value in the geographically close working relationship'. Oxford is a centre of publishing activity in Britain and a number of developers and software houses have grown up in its environs.

Decisions on the level of resourcing behind new ventures such as Internet publishing will undoubtedly be revised as the response to web sites and sales from them are measured. At the moment the number of staff appears to be quite low: Penguin USA have five staff out of a workforce of c1000 working on their electronic publications, Reed Australia have four. But if the EP staff do not have a cost centre in their own right and have no means of calculating the pecuniary benefit of electronic publishing for other media it is hardy surprising that companies are reluctant to do more. Some companies, however, do perceive the benefit of the niche market. The ten year old publishing company, Addison-Wesley, have one full-time editor on electronic production and five in paper publications. They began in print and have found marketing on the Internet a profitable venture - perhaps because they print computer books and have found a synergy between the content and the delivery method. Smaller firms such as the new 'virtual' companies like Sapphire in the USA who are one-person bands subcontracting work when necessary. In comparison the magazine/e-zine industry has expanded its payroll as the revenue has increased for income from advertising, subscription or 'links' to other web-sites and is easily quantifiable. For instance Hot-wired, the Internet partner of Wired magazine, started with 25 staff, but by June 1995 they had 40 and the number was growing as advertising revenue permitted. The allocation of staff to web-site or electronic publishing development could be on the Time Inc. scheme which has 20 full-time editorial and art staff working on the web site who work closely with editors from the publications they host. Certainly these are models book publishers ought to consider and they show their need for new financial estimating systems.

Book shops have also recognised the potential threat to sales. The big chains have taken steps to offer a comparable service to the Internet bookstores with searching facilities, an improved ordering service and a environment where purchasers can browse the products on display (though these too are prone to software crashes as is the Internet). For instance W.H. Smiths' move in November 1994 to have their Bookfinder order system installed in all their stores by Christmas meant that their customers had a swifter ordering service directly linked to their warehouses. Their 48-hour target delivery time was competitive with the current Internet ordering/postal delivery service and parallel developments by Dillons (Bookbank) and Whitaker's (TeleOrdering) will offer shoppers access to publishers' stock records, potentially cutting this delivery time. Similarly the opening of multimedia 'learning' departments in Blackwells in Oxford and at John Smiths & Sons in Glasgow towards the end of 1994 was a first step to allowing customers to play and evaluate CD-ROMs before they buy them. More recently high street booksellers have begun offering time on-line and creating their own web sites. Internet access is provided by Dillons' Cyber.st@tion in the basement of their Gower Street shop in London and at John Smith & Son in Glasgow. Though at the moment (July 1995) Dillions' web site is under construction, John Smiths' site is up and running with lists new of titles bibliographic services and a (fax) order form. These new moves by the high-street book chains show that they are also using the new communication technologies to improve service. Thus when Philip Blenkinsop observed that 'ultimately, we may be able to manage without bookstore middlemen' he was referring to the potential of the new teleordering systems for high-street book shops not to publishers on the Internet ( Blenkinsop, 1994 ). Yet the tendency towards closer and more direct access to publishers is evident in both the traditional and Internet distribution systems.

5. Parallel publishing and direct (e)mail

The failure of many European print publishers to explore the new media has been of concern to both industry leaders and governments who have taken action to remedy the situation (for example the joint European Union/International Electronic Publishing Research Centre study to analysed the opportunities for publishers. Other pilot projects have examined the feasibility of Individualised Electronic Newspapers [IEN] and document distribution [DIDOS]). The European Union commissioned a 'Stimulation of Publishers' study (abbreviated, rather inappropriately, to STOP) which reported that:

The structure of many publishing houses tends to militate against the exploitation of a publication across several media. For example, calculation systems that demand cost recovery and return on investment from the printed version alone tend to rule out projects which are viable if published in parallel but not if costed on the printed version alone. This leads to missed opportunities. ( Schmidt et al, 1995 )

The study concluded that 'many publishers ... apparently do not see any urgent need to get into new media products' (p.216) and that publishers were reluctant to take decisions on levels of investment and commitment to the new media while the market for them is still unknown. The survey recommended that research was undertaken in conjunction with publishers to test feasible business models.

Journal publishers in particular have been experimenting with different delivery and revenue models both alone and in groups (on, for example the TULIP project in the USA and the current Superjournal project in Britain). Two publishers who have taken judgements on their level of investment in the new media without knowledge of the returns on electronic publication, and made decisions on questions of security of on-line access, availability to customers and mode of delivery are Oxford University Press (who did not take part in the STOP survey) and Chapman and Hall. They have both launched on-line journals in parallel with their existing print publication. The Oxford University Press are seeking to get a revenue balance across line and are funding their research by putting a premium on the price of the printed journal for on-line access. Chapman and Hall are doing the same by adding 5% to the subscription price of the on-line version. Both selected a large volume scientific journal as their flagship experiment. The OUP's Nucleic Acid Research journal runs to 6,000 pages per year, it is published every month and contains high proportion of visual material. As 95% of copy submitted is in electronic form it is particularly suitable for multiple format publication. So they are experimenting with publishing the journal in 3 formats: a monthly paper version, a CD quarterly, and on-line version accessed through their web site which now includes digital video. To evaluate its appeal they are monitoring how frequently the on-line journal is accessed and how far the users are going into the articles and back issues on the web site. Similarly Chapman and Hall's Journal of Materials Science is in a double columned text with maths formulae and line and photographic illustration. The added value of the on-line version is the additional data - e.g. the source data for the graphs - which the publishers can append to the text and the on-line version is available four weeks before the print version is published. In both cases the decision to publish electronically has had implications for the whole editorial and production process as full digital process is needed and this has required substantial investment. But it has meant that once the systems have been set up other journals can be put on-line swiftly, thus after the success of their test journals, Chapman and Hall plan to put all 80 of their journals on-line by Easter 1996.

Parallel publishing paper and CD-ROM editions of a book requires different design and marketing techniques to parallel publishing a paper and on-line journal issue, although there are similarities in the convergence of visual design traditions. Chapman and Hall solved the question of how to display the electronic text by making the article an 'interactive page' and keeping the traditional column layout. The layout and navigation is similar to DTP packages where the user navigates round the page, zooming in and magnifying selected graphics or text. On the other hand Nucleic Acid Research was designed for the web browser and fits the web screen with hypertextual links to footnotes, figures, graphics, and video. Both publishers have retained control the 'editorial function', 'authentication' and 'presentation' of the material perhaps because of the more relaxed attitude of the academic author over copyright of data compared to the commercial copyright holder. (Although one of the publishers' difficulties has been to persuade the academic author that s/he will get recognition and citation when publishing electronically.) Copyright is an obstacle in the path of publishers who seek to apply a similar strategy to mass-market publications.

The scholarly journals above have been experimenting with the 'browser' and 'subscriber' models aimed at a pre-existing market likely to be on-line. These models are derived from different notions of the publisher's function in the packaging and distribution of the text. Nucleic Acid Research is obtainable through a WWW browser, although users have the choice to have the full text sent to them by e-mail or anonymous ftp. Journal of Materials Science on the other hand has to be viewed using Adobe Acrobat reader, and users are directed to the Adobe site to obtain the software. An e-mailed edition of a journal retains the importance of periodicity and the 'packaging' of a print edition or issue. And distribution by e-mail allows publishers to customise their product by selectively publishing articles from a database or directly mailing articles over the Internet, whereas a web site publication, where readers must visit the site to read the journal, emphasises the publisher as owner of the text. The payment methods adopted for each form of publication reinforce this distinction. By accounting the costs across the line rather than calculating the profitability of the individual format, scholarly publishers are effectively funding the development of the electronic product from the profits of the paper version. This fits with the notion of the publisher as the 'content provider' and suggests that as academic publishers they are willing to support less profitable formats where they can publish quality material in quantity. However, other publishers have resisted the 'come and get it' mode of publication on the web and have preferred to deliver an issue of an article or book to a customer's e-mail or fax address and receive payment for each item. This fits with the notion of 'publishing' as a distributive activity.

6. Conclusion

Many aspects of the existing book distribution system have been adapted and transferred onto the Internet. The publisher-wholesaler/distributor-retailer chain is still in evidence on the Internet where publishers' post lists with their distributor's addresses and bookstores display a 'shop window' range of imprints. Similarly the announcement and review business, so crucial to the book trades' status, has its parallel in the discussion lists and bulletin boards on the Net. Even the book clubs' distribution by postal mail, avoiding high street intermediaries, has been adapted and used by Internet bookstores who generally take orders electronically but send the books by post. Nevertheless, the Internet offers publishers an unique opportunity to be in touch with their customers whether they use such feedback for market research, product development or direct sales. And the emerging industry model is that of a communication/marketing service - where the individual response feeds back and reinforces the highly targeted distribution of material. Yet book distribution over the Internet is changing the structure of the industry by challenging national policies over the importation of books, copyright and protective pricing agreements.

Nevertheless bibliocentric attitudes still dominate the development of the new media in book publishing houses. This may be dangerous for the industry as digital technologies challenge traditional notions about the stability, preservation and protection of the text and thus editorial and other publishing functions. The future lies with the 'content providers' who must trade on their existing strengths and recruit medium specific editorial skills. Thus publishers need to redefine their role within the broader spectrum of skills in the media industry. And the business practices of other media - including newspaper, software and broadcast media - offer a range of alternative practices which may help publishers develop the book trade on the Internet.

©Copyright reserved by the author. This is an extract from an article in Convergence : The Journal of Research into New Media Technologies 2:1 (Spring) 1996 reprinted by kind permission of the editors. Journal subscription details available from John Libbey Media, University of Luton, 75 Castle Street, Luton Tel: 01582 743297. Fax 01582 743298.

7. My thanks to:

Michael Boswood, Managing Director, Elsevier Science Ltd. [email protected]

Fiona Cairns, Commissioning Editor, Routledge Reference

J. Hansen, Penguin Books USA Inc. [email protected]

Michael R. Prolman, President, Sapphire Press, [email protected]

Simon Murison-Bowie, Electronic Publishing Director, Oxford University Press

Jonathan Roper, Electronic Publisher, Reed Books Australia

Michael Stout, SMJ, Oxford University Press

Gian Trotta, Communications Editor, Pathfinder, Time Inc.

Marcus Zens, Product manager Electronic Publishing, Addison-Wesley, [email protected]

References

Blenkinsop, Philip (1994), 'Why JR Hartley should try WH Smith', The Independent 2 28 November 1994 , p.21.

Blunden, Brian (1995), 'Introduction and EP business overview', in The Electronic Publishing Business and its Market, Leatherhead: PIRA, 1995 p.34

Bolter, Jay David (1990), Writing Spaces: the computer, hypertext, and the history of writing , Hillsdale, N. J. : Lawrence Erlbaum, 1990.

Boswood, Michael (1995), 'This House believes the present generation of publishers is doomed', British Computer Society Debate, 8 June 1995

Escarpit, R (1971), Sociology of Literature, 2nd edn., trans Earnest Pick. London: Frank Cass & Co. Ltd., 1971.

Fuhrman. Karen (1994), On-line Bookstore web page, 10 December 1994.

Hadjian, Ani (1995), 'Hackers Find a Chink in Netscape's Armor', Fortune, no. 21, 30 October 1995, pp.12-13.

Kist, Joost (1992), 'The Publishing House of the Future', Logos 3 March 1992 p.153-158

Negroponte, Nicholas (1995), Being Digital. London: Hodder & Stoughton, 1995, launch, 6 April 1995.

Okerson, Ann Shumelda, and James J. O'Donnell (eds.) (1995), The Scholarly Journal at the Crossroads: A Subversive Proposal for Electronic Publishing , Office of Scientific & Academic Publishing, 1995.

Outing, Steve (1995), On-line Newspapers . NY: Jupiter Communications, 1995.

Schmidt, Jurgen et al (1995). 'Stimulation of publishers. The new media learning material business: entry options for educational and training publishers', in The Electronic Publishing Business and its Market, Leatherhead: PIRA, 1995. p.274

Screen Digest (April 1995) p.82.

Tatam, James (1995), 'Learning to drive on the Information Superhighway', The Bookseller, 24 March 1995, p.33

Internet sources

[email protected] and [email protected] both are owned by Paul Raulerson

Chapman and Hall, Journal of Materials Science, http://www.thomson.com:8866/jm/default.html

Dillion's Cyber.st@tion, London, http://www.dillons.co.uk/books/computing/cyber_st

John Smith & Son, Glasgow http://www.johnsmith.co.uk

Online Bookstore, http://www.obs-us.com/

Oxford University Press, Nucleic Acid Research, http://www.oup.co.uk/oup/smj/journals/ed/titles/nar/

Time Warner, http://pathfinder.com/welcome/.

 


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