By Andy Richardson, CEO of Influential Software
The year 2012 may well go down in the publishing annals as the year of the start-up. Barely a week passes without news of another ingenious method of supplying consumers with content. The force of innovation, creativity and above all optimism, is a breath of fresh air in an industry so regularly touted as flagging, beleaguered and generally in decline.
Take Bookboard for example. A start-up formed by a pair of former Adobe executives, Bookboard streams access to a library of children’s ebooks, hosting content from a range of publishers. Parents create accounts for their children, who can choose from a selection of digital picture books. As books are read, more become available. Bookboard titles are un-enhanced, without interactive features other than an ability to enlarge text, which the company says is intentional, to leave the focus on the reading experience.
Bookboard launched free as a free site with 300 titles whilst it runs a beta test phase, and it will eventually charge a monthly fee. A digital subscription service, it is more closely aligned to Netflix or Spotify than any recognizable publishing model.
Many start-ups would like to be the ebook equivalent to Netflix. Charging a monthly fee for unlimited access to streamed content is a proven formula for success. And for that very reason it is also an exceptionally enticing investment proposition to venture capitalists, through which many of these publishing start-ups are funded. Investors are gambling on a fundamental alteration in the way readers consume content. They want a clear return on investment, and publishers, working with new models, must secure their investments as soundly as they can in tandem with the task of securing consumer appeal.
Understandably, the process of embedding and growing any new model is a challenging and time-consuming process. To this end, start-up publishing initiatives must commit to investing in their digital and information systems as a means of ensuring the longevity, professionalism and ultimate success of their companies. In fact, the commitment to workable systems is a prudent means of securing initial financial investment in the first place.
For example, in the case of many start-ups, publishers’ author contracts may not include clauses that allow for the correct type of access to their titles. Publishers are making sure they obtain the digital rights for these books, but digital rights often disregard streaming or subscription model options. It is therefore unclear how authors will be paid when their books are accessed. Each start-up must therefore create an individual payment scheme, and these vary massively. Bookboard pay royalties based on the number of pages read and the success of content within the platform. Moreover, different publishers may well secure different licensing agreements on a case by case basis. Other start-ups instead pay authors standardised royalties on all revenue generated from their books regardless of format.
It seems clear to me that, working with two very different schemas, one traditional royalty payment system would be ineffective. To operate efficiently within the industry, and to be taken as a credible company from the offset, back office systems must perform faultlessly. Of course, with any new business there will be an element of fluidity during the bedding-in stage, but this only strengthens the case for tailored IT solutions, built to meet the exact needs of a company, which can be altered as and when it is necessary to build robust, reliable foundations upon which a business can depend and grow. By eliminating an area of considerable risk, tailored IT systems shore up the worth of a business, whilst powering present and forthcoming activity.
Start-up activity brings with it a new age of excitement for the publishing world. New influences are integrating within the sector, bringing new interests in burgeoning areas such as social reading. There’s the possibility for growth like never before. Investors provide a means to embrace these changes, but they want to see their money used wisely. A system which is perfectly built to meet the demands of the business model it supports, whilst initially an outlay, safeguards the efficient working of the system going forward. Furthermore, the system in itself brings a physical reality to a business — it provides a mechanism around which the concept sits — in fact it takes a concept and makes it a viable business. And a real, viable business with clear reporting mechanisms and structures is in turn far more venture capitalist friendly.