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June 08 2012

Publishing News: Wattpad raises $17.3 million in series B funding

Here are a few stories that caught my eye this week in the publishing space.

Wattpad raises $17.3 for its storytelling community

Wattpad LogoBookExpo America (BEA) took place this week in New York City. One of the big announcements made at the show was Wattpad's newly raised $17.3 million in financing in a series B funding round led by Khosla Ventures. Wattpad is a social ereading and storytelling platform that connects writers with readers, and according to a story at GigaOm, the company vision is to establish the platform as the YouTube of writing. Andrew Chung, a partner at Khosla Ventures and a new board member at Wattpad, told GigaOm in an interview:

"You're able to upload a story chapter by chapter, folks are able to comment on that chapter, and they can provide encouragement to the writer and actually signal where they'd like the story to go, which creates a type of engagement that's impossible in an offline context. There’s a very strong parallel to the way that YouTube was able to do that for amateur or user-generated video content."

Liz Gannes at All Things Digital took a look at Wattpad's explosive growth, reporting that the platform now hosts five million stories and has about 500,000 added each month. Gannes also highlights the popularity of the site with readers, noting that "a book by teen author Jordan Lynde (a.k.a. XxSkater2Girl16xX on Wattpad) about a relationship between a teacher and a student, has been read nearly 20 million times."

The future of publishing has a busy schedule.
Stay up to date with Tools of Change for Publishing events, publications, research and resources. Visit us at oreilly.com/toc.


Publishers are reducing themselves to book packagers

The BEA show this week also inspired insight. Brett Sandusky took a look at the notions swirling about digital publishing. He argues that publishers have been fooling themselves with the idea that "digital is free and easy," that you can take your existing content, simply change the format and rake in the money. He writes:

"While our processes have arguably improved and modernized, the fact remains: viable digital business models require more than afterthought. Simply converting content and making it available for sale is a recipe for disaster. This prevailing free and easy digital model is actually harmful to our businesses."

Sandusky says the real money in digital is in distribution. He called for a curated distribution experience and emphasized the importance of owning the customer experience:

"Right now, we take so much time to polish our content and our products, and then we just throw them away. All this content curation we're doing (or at the very least talking about) makes no sense at all if we simply hand over the UX ownership to retailers and their locked devices. In fact, not owning the whole customer experience with regards to digital has basically reduced us to little more than book packagers for our retail partners. And, we're not even getting paid for it."

The real take-away from BEA, he says, is that it's time to start focusing on the customer, to "[pay] attention to every touch point, every interaction, every experience and make sure we own it." His post is a must-read this week.

A look at the state we are in

Jeremy Greenfield over at the Wall Street Journal's MarketWatch put together a sort of State of the Publishing Industry post this week, looking at how ebooks are effecting change. He offers a nice roundup of the DOJ lawsuit, the B&N venture with Microsoft, trends in venture capital and important startup entrants to the publishing space, and a look at how children are responding to ebooks (PDF). Greenfield also talks about Pottermore and how J.K. Rowling's moves to set up her own store and sell the Harry Potter ebooks directly to consumers — without DRM — is affecting the industry. He highlights two important points:

  1. "In the first month, she sold $5 million worth of e-books through her own store, Pottermore. ... Pottermore's success has renewed speculation that it's possible for publishers to develop direct-sales channels."
  2. "When Pottermore opened, it sold its e-books without digital rights management (DRM) software that is meant to prevent piracy. This move ran counter to what most book publishers currently do. ... When Pottermore launched, piracy initially spiked, said [Pottermore Chief Executive Charlie Redmayne]. But a backlash from anti-DRM advocates as well as appreciative fans resulted in an overall 25% drop in piracy of Harry Potter e-books."

You can read Greenfield's entire roundup here.

Related:


May 21 2012

Social reading should focus on common interests rather than friend status

This post is part of the TOC podcast series. You can also subscribe to the free TOC podcast through iTunes.


Social reading is gaining momentum. There are quite a few startups involved in this space, and most of them simply assume your Facebook friends share the same reading interests you do. ReadSocial is different. In this TOC interview, we hear from ReadSocial co-founder Travis Alber (@screenkapture) on why they're building their platform without tying it to your social graph.

Key points from the full video interview (below) include:

  • Adding conversations into your content — The reading experience needs to flow smoothly, but the reader should have the opportunity to dive into deeper discussions with others along the way without leaving the book environment. [Discussed at 00:39.]
  • Publishers play a role, too — Note that Travis talks about publishers as well as readers here. You can't just have a "build it and they will come" mentality with social reading. Publishers need to take the initiative and add value by inserting comments, managing groups, etc. [Discussed at 2:00.]
  • An open source platform — Open systems are always better than closed ones, and it's great to see that ReadSocial is an open source product. [Discussed at 3:47.]
  • Analytics built in — As publishers we want to learn more about our customers and their reading habits, what they liked in the book, what they skipped over, etc. ReadSocial provides those insights. [Discussed at 4:00.]
  • Hashtags determine what groups you're part of — This functionality gives ReadSocial the flexibility not found in other platforms. It also allows you to be part of just one or many different groups reading the same book. The emphasis here is on common interests rather than a friend status within Facebook, for example. [Discussed at 8:37.]
  • ReadSocial offers API access as well — The entire ReadSocial platform is accessible via API's, which could lead to all sorts of new and innovative applications. [Discussed at 17:00.]

You can view the entire interview in the following video.

The future of publishing has a busy schedule.
Stay up to date with Tools of Change for Publishing events, publications, research and resources. Visit us at oreilly.com/toc.

Related:


May 18 2012

Publishing News: No dismissal for Apple, Macmillan and Penguin

gavel.pngThis week brought a couple of important updates in the lawsuits against Apple, Macmillan and Penguin. First, the antitrust lawsuit filed by 16 States' Attorneys General saw 17 more states jump in, and several new details came to light as previously redacted content was made public in the amended complaint. Laura Hazard Owen takes a look at the highlights over at PaidContent, including how the Big Five got holdout publisher Six to get on board:

"E-mails to Barnes & Noble: Once five publishers and Apple had enacted agency pricing, the complaint says the five publishers 'worked together to force' Random House to adopt it as well. On March 4, 2010, in an exchange also identified in the DOJ's filing, Penguin CEO David Shanks sent Barnes & Noble's then-CEO Steve Riggio an e-mail reading in part, 'Random House has chosen to stay on their current model and will allow retailers to sell at whatever price they wish ... I would hope that [Barnes & Noble] would be equally brutal to Publishers who have thrown in with your competition with obvious disdain for your welfare ... I hope you make Random House hurt like Amazon is doing to people who are looking out for the overall welfare of the publishing industry.'"

Jane Litte over at Dear Author has a thorough analysis of the amended complaint as well, and also covers the second important lawsuit update of the week: U.S. District Judge Denise Cote denied Apple, Penguin, and Macmillan's motion to dismiss the civil class action lawsuit. Litte offers highlights and analysis of both the amended complaint in the states' lawsuit and from Judge Cote's opinion. She says the emphasis on "windowing" — holding back ebook versions of hardcover books in order to sell more of the higher priced editions — is "genius of the DOJ/States' Attorneys General to argue because it sets a pattern of concerted behavior regarding price controls." Litte concludes:

"I think that the defendants (Apple, Penguin and Macmillan) have two options here. Settle now or take their slim chances to jury where I am convinced they will lose and hope that the 2nd Circuit slaps down Judge Cote's per se finding on appeal."

Litte's post is a must-read this week. She also will talk more about the DOJ/States' Attorneys General lawsuits with Kat Meyer on today's Follow the Reader discussion at 4 p.m. eastern on Twitter. You can join in at #followreader.

The future of publishing has a busy schedule.
Stay up to date with Tools of Change for Publishing events, publications, research and resources. Visit us at oreilly.com/toc.

The anti-piracy holy grail?

What if piracy on the Internet could be shut down? That's what Russian-based startup Pirate Pay is aiming to accomplish. The company, which was partially funded by a $100,000 investment from the Microsoft Seed Financing Fund, is targeting its technology at file sharing on BitTorrent. TorrentFreak reports:

"[Pirate Pay] has developed a technology [that] allows them to attack existing BitTorrent swarms, making it impossible for people to share files ... The company doesn't reveal how it works, but they appear to be flooding clients with fake information, masquerading as legitimate peers."

Company CEO Andrei Klimenko talked a bit more in-depth in an interview at Russia Beyond the Headlines:

"It was not so hard to do from inside an I.S.P.'s network. But to turn the technology into global service, we had to convince all I.S.P.s to acquire our solution. This is, what someone could call, mission impossible. So to create a global service, we had to find the way to do it from the cloud. So we needed money for development."

That's where Microsoft came in. In the interview, Klimenko describes the success of the group's first project, protecting the film "Vysotsky. Thanks to God I'm Alive" after its release in December:

"We used a number of servers to make a connection to each and every p2p client that distributed this film. Then Pirate Pay sent specific traffic to confuse these clients about the real I.P. addresses of other clients and to make them disconnect from each other. Not all the goals were reached. But nearly 50,000 users did not complete their downloads."

Whether or not the technology will continue to work in the long term is questionable. The BBC reports: "[University of Cambridge security researcher Richard Clayton], who blogs about such issues, said peer-to-peer networks would eventually adapt, sharing information about 'bogus' peers such as those reportedly utilised by companies like Pirate Pay."

"News you read is different than news you say you read"

In a post at at AdAge Digital, Steve Rubel mused this week on digital media, social sharing and news consumption. Inspired after an executive briefing at Fairfax Media's headquarters in Sydney, he writes:

"'News you read is different than news you say you read,' said Darren Burden, general manager-news and digital publishing for Fairfax, one of Australia's largest companies. The former is driven by what you want or need to know, and the latter by what you want your friends to think.

"Just like that, Burden nailed the psychology that drives subconscious and routine behaviors in the digital age. The media get it. They know that as social networks become a primary pathway to content, news that's crafted to find you must indeed be different from news that's intended for you to find.

"Few companies can execute both styles equally well, however, and the result is a stylistic continental divide as newsrooms tilt toward one or the other."

Rubel's analysis of how various brands are wrestling with the issue is an interesting read. He concludes that content producers are going to need to be "adept in both styles to create the resonance required to stand out in an age with too much content and not enough time."

Related:

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