The expected (feared ?) news is out : Amazon has embraced the « all you can eat » subscription model. Kindle Unlimited (KU) is on everybody's mind, lips and pens. Movies have been Netflixed, music has been Spotified and, now, books are following the same path. In a recent post, 24Symbols co-founder Justo Hidalgo is urging publishers to recognize that subscription services do bring tremendous value to the publishing ecosystem. In the midst of the Amazon/Hachette battle, the KU announcement has at least one merit. It raises lots of comments, arguments and counterarguments : Will KU make the publishing industry KO ? Is is good news or bad news and for whom ? Do « all you can eat » subscription services have a bright future ?
Well, as always, nothing is neither totally white or black nor totally new or old. Nothing is either bad or good. It all depends. KU or not, the devil still lies in the details. Subscription, streaming, advertising as paying third party are indeed hardly new concepts. Think of radio, TV etc... They have been around for quite a while. The only difference is that Internet gives them a new lease of life that may or may not be disruptive. To avoid hasty conclusions on these potentially disruptive effects , a step back and a wider perspective are needed. The following lines try to achieve this. They are the output of my business musings and ruminations after almost 14 years of book streaming and subscription. This is one specific (biased?) angle, but hopefully a good one to start with.
How does (should) subscription really work ? : Data, pricing and money talk
Download the rest Download Streaming_Subscription
Cyberlibris lance Territoire Numérique:
C'est cette CLEF qu'au travers de ses services numériques Cyberlibris souhaite proposer à chacun des acteurs concernés des territoires : conseils régionaux, conseils généraux, mairies, communautés de communes, centres régionaux du livre, éditeurs, libraires, bibliothèques, écoles, collèges, lycées, enseignement supérieur, entreprises....
Cette CLEF a pour vocation de renforcer l'attractivité numérique des territoires sous toutes ses dimensions culturelles, sociales, éducatives et économiques.
C'est l'histoire d'un professeur de management qui devient entrepreneur et qui, douze ans plus tard, lit le récit de son aventure narrée par un autre professeur de management (photo ci-contre) dans la Revue de Management la plus prestigieuse de France (la Revue Française de Gestion).
C'est une belle mise en abyme à laquelle nous ne pouvions pas rester insensibles. Relire son histoire, appuyer sur le bouton "rewind", remonter le temps sont des expériences étranges et enthousiasmantes à la fois.
Etrange, car le regard (académique) de l'autre sur une histoire qu'il n'a pas écrite mais qu'il tente de décoder agit comme un révélateur photographique. C'est une photo dans laquelle les détails fourmillent, détails qui ont parfois fait la différence alors qu'ils n'étaient pas perçus comme tels sur le moment. C'est une photo qui invite comme toute photo du passé à la nostalgie: on y revoit des visages, des lieux, des moments que le temps avait injustement ensevelis.
Enthousiasmante, car l'entrepreneur s'il recherche avant tout la sanction entrepreneuriale de ses pairs et de ses clients n'en est pas moins sensible à l'exigence du regard académique, surtout lorsque, comme Cyberlibris, il opère une partie importante de ses activités commerciales dans le monde académique.
Merci au professeur Laifi pour ce pari académique qui a débuté sous la forme d'une thèse de doctorat : il fallait une bonne dose de bravoure académique et de conviction personnelle pour embrasser un sujet aussi pétri par l'incertitude, pour s'attaquer à une aventure dans laquelle la chance ou la malchance peuvent jouer un rôle aussi fort.
We will soon release two brand new digital libraries shaped according to the model that has made Cyberlibris a successful venture for the last eleven years.
Indeed, soon preschool and kindergarten kids and their teachers will access KoobyVox (but who is Kooby?) a digital library especially designed for them.
Next executives will enjoy ExecVox a digital libray that covers all the managerial fields that shape modern corporations.
Cyberlibris co-founders' vision is thus about to come full circle: The lifelong digital library. Kids, high school students, undergraduate students, graduate students, professionals, families, whatever the stage in life and more importantly wherever on earth, there is a digital library powered by Cyberlibris.
Over all the years, despite lots of skepticism around us, we did not change course. We sticked to the same gospel: Streaming and subscription.So many people told us we had it all wrong ;-) After all these years, it is rather odd to still see so much discussion still going on about e-books downloads, DRM, prices etc...
We chose simplicity.
PS: By the way who is Kooby?
Les arpenteurs de la Terre plate:
Au début de notre ère, les représentations de la Terre contrastaient notablement avec celles qu’on connait aujourd’hui. Les hommes d’alors ne disposaient bien évidemment pas des capacités d’obser- vation actuelles, et les représentations cosmographiques exploitaient les connaissances locales du monde. Hormis en effet les quelques informations globales qu’on savait utiliser à l’époque, comme la position des étoiles, on ne savait observer que ce qui se dessinait aux pieds des arpenteurs et à leur voisinage. Contraint par ces visions locales, le monde était donc assez naturellement plat.
Vinrent ensuite les intuitions, puis les premières observations, puis les premières méthodes techniques, qui permirent de concevoir et caractériser un monde sphérique. De façon assez remarquable, certaines des méthodes utilisées arrivèrent à partir d’un calcul local à estimer avec une précision remarquable le périmètre de la Terre. L’une de ces méthodes est la géodésique d’Eratosthène, qui permit d’estimer à une marge d’erreur minimale le périmètre de la Terre à partir de l’observation des angles des rayons du soleil en deux villes distantes de moins de 1000 km: Syène et Alexandrie. En remarquant la différence d’angle le jour du solstice d’été entre les rayons du soleil et la verticale, à Syène et à Alexandrie, Eratosthène en déduisit facilement une très bonne estimation du périmètre de la Terre.
Les arpenteurs de la bibliothèque numérique "plate":
On sait aujourd’hui que l’information dans laquelle nous baignons héberge des mondes dont la géométrie n’est pas la même que celle du monde Euclidien dans lequel nous vivons. La bibliothèque numérique est l’un de ces mondes, et Amazon fait partie des premiers arpenteurs des collections de livres de très grande taille. Dans ces mondes un peu particuliers, la recherche d’informations cosmographiques a pour objectif principal d’aider les lecteurs. Amazon fournit des recommandations sur la base d’un arpentage local de la bibliothèque virtuelle: les lecteurs qui ont acheté mon livre ont aussi acheté tel ou tel livre. On ne cherche donc pas à voir plus loin que le “nez” des listes de lecture. La première utilité des informations consiste à faciliter la recherche d’ouvrages, la base de données étant justement de très grande taille. Comment construire un outil de recommandation simple et efficace permettant de trouver les quelques livres susceptibles d’intéresser un lecteur, au coeur d’une montagne de livres accessibles ?
La solution exploitée par Amazon consiste à ne surtout pas s’éloigner du lecteur, et à arpenter localement la bibliothèque, en utilisant comme base du déplacement l’ensemble des comportements de lecture des lecteurs. Pour dépasser la simple proximité géographique - mais statique - de l’étagère physique, reproductible à l’identique dans la bibliothèque numérique en utilisant les classifications ad hoc (par exemple Dewey), Amazon a en effet utilisé la proximité virtuelle des livres dans les habitudes de lecture: on conseille à un lecteur les livres qui sont associés, dans les habitudes de lecture des autres lecteurs, aux livres qu’il a déjà lus. Le gros avantage de cette technique est qu’elle donne un coté dynamique à la recommandation: que les habitudes de lecture changent, et les recommandations changent dans la foulée; qu’un best-seller soit introduit dans la bibliothèque, et les recommandations le captent quasi immédiatement à hauteur de son statut de best-seller.
Ce mode de calcul, tel qu’il est pratiqué, fait toutefois penser à un arpentage très limité de la bibliothèque numérique puisqu’on ne sélectionne que des livres immédiatement voisins des livres lus dans les habitudes de lecture. On ne tient donc pas compte des livres se trouvant à peine un pas plus loin, peut-être très proches des livres déjà lus - voire plus proches encore que certains livres recommandés - . D’une certaine manière, en faisant l’impasse sur les structures géométriques globales de la bibliothèque numérique, cette façon locale de procéder s’apparente à celle des arpenteurs de la Terre plate, et considère donc que la bibliothèque est plate.
On peut bien sûr objecter que les recommandations “à la Amazon” ne nécessitent finalement qu’un arpentage local de ce monde, et pas la capacité d’aller voir un peu plus loin que le bout du nez des listes de lecture. Néanmoins, même à cette échelle, la vision de la bibliothèque qu’en donne Amazon est étriquée, et ses recommandations demeurent approximatives.
L'arpenteur global de la bibliothèque numérique (à suivre :-)
Eric Briys et Richard Nock (Cyberlibris TechFacts - 2011)
Cyberlibris was started ten years ago. Some quick facts about us: Facts
Cyberlibris is a very active player of the e-book and digital libraries arena and has been so for the last ten years. Indeed, we have patiently crafted along with publishers an all you can eat subscription online (streaming) based business model for e-books. We started with the academic world and expanded to "main street" along the way. This has been a long journey indeed and, as it seems from the Internet jargon, we started it on earth and are now in the clouds :-)
Our view has always been that one has to put the reader/user at the forefront. Indeed, the extent to which a given reading ecosystem is complete shapes what you design (or more importantly don't design) and how you design it. For example, in the academic world, communities are already there. You don't have to build them. However, you have to give their members tools, services, opportunities to become more efficient learners and teachers. This is what we have done for instance with ScholarVox www.scholarvox.com, a service dedicated to business schools or ScholarVox Sciences http://sciences.cyberlibris.com , a service dedicated to engineering schools.
The economic model has to be simple and straightforward (I am a former academic and a former dean of the MBA and PhD program at www.hec.fr) so that it becomes a no-brainer for schools. This means that an all you can eat subscription streaming model is what is needed: Schools subscribe on a yearly basis on behalf of students, professors and librarians. In a sense, they (yearly) rent books which they never own as opposed to the physical library where owned books are stored.
But when you think of it, especially in the area of academic publishing (where obsolescence is quite rapid), you never "own" physical books. Yes you do own a book published in a given year. But, you will have to purchase the new edition in 3 year time (otherwise patrons will complain that the library is not up to dtae). As a result, it is as if you were renting the book except that the cash-flow cycle is not the same as a true rent. You pay say $60 one shot for a print copy and $60 again three years after. Ignoring discounting this is a $20 / year rent! Not to mention the fact that you will have one way or the other to get rid of the old copies (because of lack of physical space).
Hence the subscription model is not that remote from the ownership model in that example. It moreover shows that the devil lies in the details: Be careful with too general a (ownership) definition! That is why we have been successful with it and have hundreds of schools and universities subscribing year after year. Let me add for the sake of completeness that all the books are readable online either via PC/Mac or iPad.
At the end of the day, the best metaphor I can offer for what we do is "group insurance" (after having been an academic I went to investment banking, hence the metaphor :-) Indeed, in group insurance, corporations buy a global insurance policy on behalf of their employees. This is usually good for the insurance company because with a large group of people the law of large numbers has a better chance to work and, more importantly, the issue of adverse selection may turn out to be less severe. In other words, those who have more frequent/higher claims are subsidized by those who don't. Hence insurance companies usually don't go bust.
Why is all this relevant to the all you can eat digital library model? Well, schools subscribe a global "insurance" policy (they pay the lump sum annual subscription fee) on behalf of students, professors and librarians. What does this policy cover?: What I call information/knowledge claims. When a keyword is typed, this means that a claim is about to occur. Following the full-text request, relevant books are displayed. As soon as books are opened and read, claims start to aggregate. School users are happy because their needs have been covered.
But for this to be made possible, publishers and authors for that matter have to be compensated. They have to have a share of the global insurance premium that schools have paid to us. Well, this is what we compute on a monthly basis: We pay each publisher according to its percentage share in the total number of consultations across all publishers. By consultation, we understand a book page viewed on screen (one consultation) and a page printed (one additional consultation).
Each month, each publisher receives a detailed royalty (consultations) statement which yields the overall amount to be invoiced and the split of that amount across books. In my insurance parlance, a consultation is indeed a claim. The book collection we carry allows us to match the claims for which we have then to indemnify the publishing houses. Now, the beauty having large academic groups is that heavy readers are somehow subsidized by light readers (just like in insurance companies that don't go bust!)
This begs the ultimate question: How do you price this insurance premium? Well, somehow, using actuarial principles, just like an insurance actuary would do. In insurance, what they call the pure (core) premium is the expected value of the claim, that is, in a nutshell, probability of having a claim x size of the claim. To get to this number, actuaries blend "art and science" in their computations. In our case, we have to figure out what the overall frequency of consultations is going to be given the size of the academic crew. This is where gathering data points is crucial and, in the end, gives you a edge. Because we have been in this business for the last ten years along with more than 300 publishing partners, we have gathered a rich set of data to feed our pricing scheme. And, as always money talks :-)
One last observation is in order as far as academic services are concerned. All schools access the same service: For instance, all business schools access www.scholarvox.com. Indeed, there is no reason why being a professor of finance in Dakar, Senegal should preclude you from seeing what a finance faculty member at a top school in France reads or uses in class. On the contrary! As a result, when you launch a search for finance textbooks to use in your class you are able to filter the results to identify only those that are used for the same purpose by other academics at other institutions. A kind of peer filtering on top of the full text search engine output. Moreover you're no longer limited to one textbook only, what I call the tyranny of the single required text for class which has the unfortunate result that academic publishing is more often than not a zero-sum game, a winner take all proposition. As a professor you can cook a menu for your students, far tastier than a single book. In the course of doing so more books get more chance to make more money.
We have expanded our services from the academic world to the corporate world and to the public libraries sector using the same institutional all you can eat subscription model (also community driven). For instance, public libraries get access to BiblioVox www.bibliovox.com.
Recently, with tablets blossoming everywhere, we have decided to address families at home. I insist on families at home. We don't want to be jack of all trades and master of none. Tablets will sooner or later be part of our homes enabling us to enjoy more of our WiFi home connections. You use both hands when you hold your tablet and no keyboard is keeping you at a distance from the screen. You regain the Gutenberg (cognitive) sensations. Hence, we recently launched Smartlibris www.smartlibris.com that we have for the moment optimized for the iPad.
Smartlibris is predicated on the same all you can eat subscription model. The difference is that the subscription is individual and monthly. We have designed the whole service as a service to the family, to each of its member, mum, dad, the kids. Our objective is not to have all the latest best-sellers. We have given some serious thoughts as to why a digital library makes sense in a family context. This is why we have organized it into three main silos: Knowledge, Evasion, Success.
Knowledge is taken in a broad sense. It covers: Cooking, Do-It-Yourself, Law, Psychology, Architecture, Economics, Personal Finance, Business, History, Gardening, Geography, Maternity, Nutrition, Nature, Sciences, Wine tasting, Religion, Sexuality, Health, Philosophy etc...
Evasion covers: Adventure, Comics, Novels, Kid books, Theater, Poetry, Thriller, Travel guides...
Success covers: Education, Recruitment, Exams, School, College, Tests and quizzes, etc...
We have carefully allocated all the books to the relevant silos and sub-silos. Now, if mum and dad want to prepare a reading shelf for their kids, they can. The family is planning its next holidays: It has full access to hundreds of travel guides (including Michelin, Ulysses, Petit Fûté etc... guides: http://www.smartlibris.com/books/index/categoryID/14#).
The objective is to make Smartlibris a valuable service with high quality content that will cover many aspects of family life and needs. The same way families purchase insurance for their homes, cars etc..., the same way they can purchase this digital library insurance. The difference with the group insurance case is that adverse selection might be stronger: You end up attracting families that read a lot only and this will in turn affect the pricing strategy. Hence the need to find ways to attract large groups of families in one shot to get the full benefit of the law of large (reading) numbers :-)
Pricingwise the same arithmetic as before is at play. Again, numbers indeed don't come out of the blue. They have to be simple and families have to "feel and experience" the return on investment. Furthermore, one shall not forget that book library subscription is not the only (and priority number 1) subscription that families have to pay for: Phone, electricity, water, WiFi, movies, TV, music etc...). Taking a fragmented view misses the budget constraint that all families have to face. Pricing is tantamount aligning planets but never forgetting that all planets have not yet been discovered!
This is a challenging and stimulating exercise and, as already mentioned with the proper metaphor (and tools), it is achievable. Now, will the result appeal to families like it did for schools, well this is the glorious uncertainty of business indeed. The only way to know is to try, observe and learn.
Publishing houses can learn a lot too. Indeed, e-books are more often than not treated as if they were a single homogeneous commodity. They are not. The same strategies (and more) that led the publishing houses to market hard covers, paperbacks, pocket books etc... are available. Take the following example: Assume the latest book of a best-selling author. What about having a pre-release of the book in digital format readable for free (meaning no additional fee), say, for one week in the subscription based library. After a week of availability, the book is only accessible by purchase only. Finally, after a few months, the book is again available in the digital library through the subscription service. This is one of the few ideas one may have. So, even before venturing into what future e-books are going to be (interactive, multimedia etc..), there is ample room for imagination and innovation.
Talking about innovation, there is one valuable lesson that digital libraries teach. Physical "brick and mortar" libraries are a tribute to Euclid, the famous Greek mathematician, the Father of Geometry, and its no less famous axioms. Indeed, between two given books there is one straight shelf only. Two straight shelves never cross each other (otherwise books would fall :-) etc... This is what our eyes can see in, say, public libraries.
As a result, musing in a physical library is highly structured, organized. Books sit on shelves, not any shelves though. These are the shelves that librarian classification have elaborated over years of efforts sorting out books. As a result, a physical library is a tribute to Euclidean geometry whose motto is:
Physical library = Books + Readers
The physical space is structured such that the books affordance is maximized for patrons walking along shelves.
Musing in a digital library is very different. A digital library is a tribute to non-Euclidean geometry and it goes by the following motto:
Digital library = Information
Why? Because this is this very high-dimensional information, our footprints, that we leave behind us (what we read, what we have in our bookshelves, how we organize our bookshelves, what keywords we type in, what tags we choose and so on and so forth), that these days machines can learn to tame and to decipher. This requires a fairly intensive dose of (non-Euclidean) geometric modeling and the appropriate treatment of large set of data that go well beyond the classical (flat and nearby) Amazon recommendation system.
Now if you are willing to take the scientific gamble and struggle with data, matrices, eigenvectors and the whole shabam, you will not be disappointed (and this is precisely what we have done in close collaboration with the Ceregmia lab of the University of French West Indies). Here is an appetizer: This is what we call computing books paths or books musings or book promenades... These are not random promenades. They are computed by trying to learn what the data may have to teach us.
They used to say at the French Railway, "beware, a train may hide another one", urging you to prudence. Here we say "guess what, a book may hide several other books... and several other readers" and we advise you to follow the guide! A picture says it all:
Fig.1: Picture drawn from Cyberlibris library algorithm.
Here the cube contains the whole digital library which means that, on an iPad, you will hold the whole library in your hands, at your fingertip. Not any kind of library though. This is how, given the library users habits, the library should be structured. Now, based on this, one can trace, starting from any single book, promenades that will help you discover other books that you would have had more difficulties discovering otherwise. Note also that this a whole new way to browse the library. We call it a logistical browser.
This is most useful for readers, authors and publishers. At least, we try to make sure that no single book remains orphan for too long. The qualitative dividends of this quantitative effort are many-fold. Promenades are one of them. And, by the way, at the risk of playing to hard with words, many-fold is possible because we view the digital library as book manifolds.
In a nutshell, united digital library users are stronger than isolated users and this strength can be unleashed by machine learning. That's what we mean by innovation. The least we can do for users paying a fee to access the library is to make sure that they get the most out of it given the constraints they face, we all face.
I am of course a biased, though passionate, observer of our services. I talk a lot to our academic users and I do observe my own family using Smartlibris everyday. What I can simply say is that, thanks to users, publishing houses and a significant amount of work, books are accessible in ways they were not before and users do enjoy it.
This is enough for us to wake up every morning and strive for more!