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More Potter at Pottermore

Harry Potter is back.  Just as the final movie is being readied for release, the next chapter in the saga will shortly be unveiled.  Not just a new chapter in the most successful children’s series ever written (in fact, Pottermore revisits the old stories), but rather a new stage in the most effective character management programme of our times.

Pottermore – launched online yesterday by JK Rowling – is attracting attention for all sorts of reasons:

This will be the first new Potter material from JKR since the final book was published, four long years ago.  In classic Harry Potter style, details are being slowly and carefully leaked prior to a release date which is being staged from July (when followers start to gather for what should be a textbook piece of online CRM), to eBook release in October.  Essentially, it’s a two-pronged strategy – eBook publication, and the availability online of extra material which will provide readers with more background to the stories.

The seven Potter books will be released in eBook-compatible formats one at a time, controlling the arrival of new content on to the market and maximising the sales and circulation of each element.  This is reminiscent of the control applied to other hyper-valuable media properties, like Star Wars or the Beatles.

The content will formatted to an exceptionally high quality, with Rowling personally controlling all output.  The eBook releases are coming direct from the author, with publishers Bloomsbury enjoying a small cut, but retailers like Amazon or Waterstone’s excluded.  Content will be compatible with all key eReader formats.  Pottermore CEO Rod Henwood told The Bookseller“We want to make sure anyone who buys [the eBook] can read it on any device. We are talking to the Kindles, the Apples, the Googles, Barnes & Noble, to make sure they are compatible.  We set the pricing, we maintain the policy of making them available to as many readers as possible.  We can guarantee people everywhere are getting the same experience and at the same time.”  The Pottermore site will also direct readers looking for physical books to the territory-specific publisher.

All of this drops a large and elegant bomb into the endless cycle of digital publishing conferences, but it underlines the difference between what can be achieved with globally successful properties like Harry Potter, and what a typical author or publisher might be able to deliver.  The Pottermore content will be expensive to create, but there is a guaranteed fanbase of many millions and an author who can afford to ensure she only permits products or new channels that are worthy of her creation.

Other marquee names could make a high-concept work – the conspiracy theories of Dan Brown, or Terry Pratchett’s Discworld, have the fantastical content and fanatical fanbase to support such ventures.  Critically too, these are series authors – there is a lot of existing content, and compelling recurring characters, around which an online world and comprehensive eBook offer could be built.

But this is not a new dawn in publishing; it’s a signpost for one of the many disparate directions that “book publishing” will take.  Philip Jones writes entertainingly here about the “smash hit” Nursery Rhymes app that was developed at a cost of £60,000, and has so far sold 37,339 copies for a total of £24,048.

Pottermore is exciting, because it will show us what can be done where money is no object, imagination can run free, and millions of followers are waiting to sign up.  It’s a future, for those at the top of the heap, but it reminds us that the future will be more diffuse than anyone – perhaps even at Amazon – can yet imagine.

More Pottermore opinions can be read here:

http://paidcontent.org/article/419-three-ways-pottermore.com-could-change-book-publishing/

http://gigaom.com/2011/06/23/harry-potter-and-the-amazing-exploding-book-industry/

http://www.wired.co.uk/news/archive/2011-06/23/harry-potter-e-books-drm?page=2

http://www.guardian.co.uk/books/2011/jun/23/pottermore-website-jk-rowling-harry-potter

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Rapture at Waterstone’s

The world hasn’t ended, but at Waterstone’s the older order departeth, and a land of milk and honey is promised for the future.

Of course, the Alexander Mamut deal hasn’t been finalised yet, so Waterstone’s staffers have pulled on their purple tee-shirts again this morning, but a slight sense of unreality surrounds the aftermath of Friday’s announcement.

James Daunt is a discreet man – there has tended not to be an over-oiled Daunt crowd at the Nibbies, banging tables and bellowing their approbation at award winners.  His JP Morgan/London’s-favourite-bookshop CV is mightily impressive – he’s known for being someone who quietly gets on with what he wants to do.  A brief interview with The Bookseller paints a picture of a man with greater patience and depth than many retail leaders.  Stockholding (and, one imagines, range breadth) will improve, and the purple shirts and canned music may be going away, but Daunt is choosing his words carefully:

“It may be that some [branches] prove irredeemable—the real question is: is there room on our high streets for 300 stores and I believe there is.”

These are brave and bullish words in the face of the current pace of change.  Wealthy and educated London has been much better insulated from the changes to the trade than any other part of the country – witness Foyle’s expansion and Hatchard’s ability to stick to their knitting in the midst of the HMV whirlwind.

However, shops will close – must close.  Archie Norman reminded the retail trade earlier this year that a strong retailer is churning its portfolio through good times and bad, and that lopping off the worst 10% of stores should be a constant activity for any chain.  With 300 stores, Waterstone’s will have at least 50 that are in sight of lease-ends, plus many more that are acknowledged to be duplicates, poorly located, poorly configured, or just tatty and run-down.

Clearly there is going to be a new strategic direction at Waterstone’s, and the break with HMV and “chain practices” will be marked.  But what kind of owner will Alexander Mamut be?  Foreign ownership of well-loved British companies can follow many courses.  Three recent examples are the shamelessness of Kraft at Cadbury; the hard words and rigorous work ethic of Tata at Jaguar-Land Rover and Corus; and the cash-splashing trophy chasing of Roman Abramovich at Chelsea FC.  Unless Mamut is prepared to follow the Abramovich model, cuts and changes will have to be made, as the commercial environment for bricks and mortar bookshops continues to get more difficult.

Amazon has today announced the appointment of Larry Kirshbaum, former CEO of the Time-Warner Book Group, to the new position of Publisher.  They have launched two specialised ebook imprints in the last couple of weeks, Thomas & Mercer (crime and thrillers) and Montlake (romance – you have to love those “heritage” names, with shades of Lymeswold).  Amazon is moving faster than it ever has before to redefine the book industry from author to user; it’s massively weakened bricks and mortar in the US and the UK, and is moving closer to my spoofy take on the future of publishing from a couple of weeks back.

What to do, then, with those 300 bookshops?  Or 200 bookshops, or 100 bookshops?  This is Waterstone’s one golden opportunity to get it right, and I believe it has to retreat from no-holds-barred competition at the pulpier end of the market, and recreate “proper” bookshops.  Perhaps this is fools’ gold, in light of Amazon’s actions, but head-on competition with supermarkets and WHS, slashing prices on Katie Prices, is not the future for this chain.

Consider Harry Potter.  HP3 (Azkaban) was probably the last book in the series on which specialist chains made money.  After that, we had four more books generating vast, instant revenues, but sold at or near to purchase price, with the unique on-costs of midnight parties and other paraphernalia.  Potter releases sucked the oxygen from the rest of the children’s book market for 2-3 weeks around release, and  a greater proportion of sales went to supermarkets (often sold at or below cost, but mitigated by a full trolley of groceries) and Amazon with each new title.  Harry Potter was wonderful in so many ways, but for specialist retailers, it turned into a mugs’ game.

Many indies, however, stood aloof, and sold Potter at or near RRP.  Total sales may have been 20 units for a store, but the P&L benefit of, say, £150, was better than any multiple (and better yet if the indie bought their stock from Asda…).  I suspect that this is the route Waterstone’s will have to follow in the future – honest pricing for people who love books and love bookshops; get off a dependence on celebrity biography, celebrity cookery and celebrity fiction on wafer-thin margins, and sell fewer, better, more profitable books instead.  Sales will be lower, shop numbers fewer, but – assuming the race to digital plateaus, and the printed book doesn’t just become a collectors’ novelty – sustainable.  (Personally, I’d also be lobbying to eliminate RRP, but that may just be me.)

And digital?  Very, very difficult.  But Barnes & Noble is potentially changing hands, and this is an opportunity to create a shared (but country-specific) online and digital platform, with a reader (the Nook) that users rate highly.  That’s easy to write, tougher to deliver – but with Amazon, Apple and Google all thinking global, booksellers have to do the same.  And perhaps foreign ownership could provide the spur.


Harry Potter, John, Paul, George & Ringo

Here’s the thing:

From FutureBook, the Bookseller’s digital blog:  http://futurebook.net/content/digital-rights-and-harry-potter-e-books.

Yes, JKR held on to her digital rights back in the 20th century, when her relationships with Bloomsbury, Scholastic and Warner came together.  Now, e-editions are becoming an indispensible part of any author’s armoury.  Lawyers are haggling about the meaning of rights agreements originally framed when the internet was a twinkle in Al Gore’s eye.  JK Rowling’s digital settlement will pave the way for many other valuable  properties to establish themselves on the digital landscape.  £100m is the figure being bandied about, a nice, round number.

There can be no doubt that JKR and her representatives (and in due course, no doubt, many good causes) will earn handsomely from the resolution of the Potter rights over the years to come.  The movies are coming to an end, and the books are settling into the golden tapestry of children’s literature. 

However, the Guardian is off the mark when it describes the series as “the most eagerly awaited ebooks of them all”.  Unless the price is giveaway-low (can’t see that happening), the books will join the eBook backlist.  Because, right now, everyone who wants to read the Harry Potter cannon has probably already done so (notwithstanding the annual cadre of nine year olds coming into the system).

Those of us who were on the retail front line will recall that, in Potter’s heyday (ie book 4 through to book 7), sales over the first 72 hours were unprecedentedly spectacular, but then fell quickly away.  By week 3 after release, the new Harry Potter had becomes just another book (except that the store probably had too many copies on-hand).

What was extraordinary about Harry Potter wasn’t just the scale of the series’ popularity –  Dan Brown or Michael Crichton saw all of  that – but the speed at which the books sold.  When the paperbacks were published – particularly late in the series – sales were still high by trade standards, but the arrival of the HP PB instore didn’t make a material change to total store sales in publication week.

Which brings us to the Beatles.  After years of wrangling, Apple Corps and Apple Computer finally parked their differences at the end of last year, and the Fabs’ catalogue  was at last available on iTunes.  Pundits the world over anticipated a re-run of their 4/4/1964 domination of the Billboard Top 5.  It didn’t happen.  There was no vast, untapped demand for Beatle music – making legitimate copies of  the CDs one already owned, or downloading illegal free tracks, had sufficed for most people.  Of course, millions of Beatle tracks were sold, but Hey Jude topped out at something like number 28 (someone can put me right on this), and the rest followed in the van.  Lady Gaga and Adele are creating the new tunes that customers want to buy in huge volumes, and it’s likely that, in 20 years time, the Beatles will be outselling any of today’s big hits.  

But the Beatles’ days of sweeping the board are over – like Harry Potter (and indeed like Beatrix Potter), they’re a cornerstone of backlist sales.   The resolution of  the HP digital rights will be a landmark, but I’d be surprised if it proved to be an instant goldmine as well.