p-Books (No, Not 'Print'): The Next Big Thing in Publishing?

The traditional publishing model has been broken for some time.

There are many reasons to believe that and they vary by one's perspective: readers complain that many 'good' ideas never make it to the shelves because large publishers do not believe them financially or editorially viable enough to produce and promote; authors complain that their share of revenue is typically only 5% - 10% of the retail book price; publishers complain that they cannot make enough margin because big retailers typically take 30% - 75% of the book's cover price; retailers complain because the difficulty of accurately projecting sales levels and the cost of carrying inventory makes it prohibitive to do anything other than sell on a consignment basis.

Many attempts have been made to fix the industry.

Self-publishing has been around for some time. It predates the Internet but services such as Lulu have provided authors with greater speed to market, high quality production and much better economies than before. Online bookselling seems to have been around forever. Brands like Amazon (www.amazon.com) are now almost the generic name for the category. Authors - the well-known and the less so - are collaborating with each other to write and publish books via services like Authors Now!. And of course, e-Books, not so long ago a seemingly good idea unable to gain momentum, have now become almost ubiquitous; this summer Amazon e-Book sales began to outpace hard copy sales by a substantial margin.

These ideas, along with others that have not withstood the test of time, have brought substantial positive change as well as challenge. For example, in theory, authors can publish themselves to a worldwide audience and reap all the financial rewards (see J.K. Rowling's Pottermore) but in practice, very few are able to do it such that the effort is financially rewarding. Readers can now buy and read almost any book on any screen device at much lower prices than before but the book industry is losing some contributing corporate players - and jobs. Witness the recent collapse of Borders in the USA. All is not perfect - nor even well - for many stakeholders.

Enter a new publishing model.

Unbound Books, a UK startup founded by several established industry personalities, has begun crowd-sourcing books.

Inspired by the success of Kickstarter, Unbound enables authors to pitch their ideas directly to readers instead of editors. If enough readers support it within a set number of days, Unbound will publish the book using freelance editorial, production and promotion expertise. If not, readers get their money back. Readers can pledge their support in different denominations. At the first level, they’ll receive an e-Book edition of the book if it is published. Middle levels offer signed, deluxe print copies. At the highest level, readers get invitations to the launch party, lunch with the author, two signed first editions of the book and two e-Book editions. All supporters get their names printed in the back of the book and access to the author’s 'shed,' where they can read updates about the book’s progress, draft chapters and other extras. Unbound shares revenue 50/50 with its authors.

Unbound is only several months old at this point so its long term viability remains to be seen. However, we like the concept because it incorporates a principle we believe in. It essentially attempts to found a product based upon the interests and preferences of the people who will eventually experience it, then engage those people in its design and development and reward them with participation in its success. It's an idea that works in other industries and categories but which the traditional publishing industry has never seemed to grasp.

Has the age of the People Book begun?

A Million Wild Hogs: How to ride a brand through emerging markets

We first saw an Italika motorcycle a couple of years ago on the streets of Merida, Mexico. It looked sharp, if a little small - but for the streets of Merida, small is good. We got the unsubtle link to all things Italiano but didn't get the spelling with a 'k.' We guessed it was a Russian import with a slightly off center attempt at brand association. Good looking product, questionable brand name.

We were wrong - the bike is made in Mexico from Chinese parts and the brand name is probably the least influential of all the components in its marketing. Italika was created just 5 years ago and is produced and marketed by Grupo Elektra, owned and run by Mexican billionaire, Ricardo Salinas. Italika has become the leading motorcycle brand in the country selling one million units since it began, now boasting a 55% market share .

So why the success? Because of product quality? It's OK but it's probably not the best bike in Mexico, not even in its class. That distinction may go to Bajaj, an Indian import. How about price? Well, it's certainly priced well, starting at under $700 USD - but so is Bajaj. Is it promoted well? Pretty well; and in fact it has a little edge on the competition here because it gets a discount on advertising at TV Azteca, Mexico's second largest channel which is also owned by Mr. Salinas.

But it is in placement that Italika really starts to benefit. That's because it is sold, not only through free-standing dealerships but in over a thousand Elektra department store retail outlets, a chain also owned by Mr. Salinas.

And Italika's biggest advantage comes from Mr. Salinas' savvy for people. Because in Mexico, Electra stores are well-loved - not only because of their offerings of furniture and electronics at prices affordable to middle and lower-middle incomes - which is how Mr. Salinas really started the growth of his empire - but because they offer banking, via Banco Azteca which of course Mr. Salinas also owns.

Banco Azteca, despite very humble appearances, provides customer service that most North American banks talk a lot about but really only mean to be conceptual. At Banco Azteca, for example, ordinary customers don't only get to see 'the big green comfy chair' on TV - they can actually sit in it while they wait for the next teller - and then they can buy the chair if they want! Consumers can walk up to the counter and buy and sell silver - real silver, not certificates - immediately and at every branch. And yes, you can trade your jewelery. Heck, Banca Azteca even makes loan decisions by sending loan officers to people's homes for a look rather than on the basis of paper applications.

Best of all, Banca Azteca allows motorcycle buyers to spread that $700 purchase price over two years in weekly payments. Now that's what people like - a way to pay for something they like.

That's people connecting with people. And that's how to ride Italikas - and any other brand - through emerging markets.

Nano Marketing

In 2008-09, almost everybody who had heard about it was shrieking praises for the new car from India's Tata Motors - the Nano. Broadcast, print and blogger wags from Delhi to Denver were using words like 'phenomenal,' 'innovative,' 'game changer,' 'palpable excitement,' etc, etc, - not just to describe the car - but the marketing behind it.

They called it, Lakhtakiya -  'the people's car.'

It was good but small and cheap - about $2000 USD each - and so, raved the marketing folks, would be the marketing campaign. Innovative, effective and inexpensive they said. Frugal engineering built the car. Frugal marketing would sell it. So they elected to use all the innovative stuff. A Bloomberg article at the time explains: "No TV - rather, innovative use of other stuff, like Nano news in papers, Nano breaks on radio, Nano appearing in the form of messages or ticker news on TV, online Nano games, Nano chatrooms on the Net, Nano pop-ups on major websites and Nano conversation on Facebook, Orkut and blogspaces." They even planned to sell the Nano through chain department stores rather than just dealerships.

Sales volume was projected to average 20,000 vehicles per month and Tata built a factory to produce exactly that.

According to a recent article in The Economist as of now, monthly unit sales are currently 3,000  per month and that up from a low point of 509 per month in November 2010. This in India - an emerging market and maybe THE emerging market - with a billion people, 750 million of which are actually thought to be potential buyers.

Let's review the plan:

Product? Check. Frugal engineering hath wrought a beautiful, innovative little car undoubtedly fitting its marketplace.
Price? Check. $2000 each puts it well within reach of the rising middle class but more importantly, that of many poorer citizens.
Place? Check. Certainly there are dealerships and department stores.
Promotion? Check. No TV but lots of innovative other stuff, particularly Web stuff... and a very flashy launch event or two.
People? huh? Are people part of marketing?

Why, yes they are. They are the real stakeholders in the brand. And apparently Tata forgot that. Or at least one important group of them. They educated and enthused their employees, the media, the government, the financial analysts, the retailers - but the 750 million key stakeholders in their brand success - the candidates for actually buying the brand - the poor - their target customers - were unable to learn about the car or see the car or get enthused about the car because they didn't have access to all the innovative media that Tata relied on. You see they live out of the city lights... in the rural areas where Nano-chats and Nano-games, etc., are Nano-known.

The people do not yet know about their car.

Moral: when marketing to the people, do not forget them.

Newly released execuBooks...

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Delivering Happiness (EB535)
A Path to Profits, Passion, and Purpose
By Tony Hsieh

Good Boss Bad Boss (EB529)
How to Be the Best ... and Learn from the Worst
By Robert I. Sutton

Why Teams Win (EB534)
9 Keys to Success in Business, Sport, and Beyond
By Dr. Saul L. Miller