Digital Media Buzz > An Emerging Industry: eBook Brokers

An Emerging Industry: eBook Brokers

By Ron Callari

Digital content distribution as an industry emerged as a result of books moving from the traditional world of publishing to online platforms such as PDFs, eBooks and other ePub formats. Some licensing brokers for eBooks like Ingram Digital grew out of their traditional publishing units that have been in the industry for more than 40 years. Others like Robot Comics emerged within the last few years to solely focus on digital formats for specific genres like graphic novels.

Some of the advantages of digital vs. traditional publishing “is the compressed time from the distributor’s inventory to the online retailer or library’s shelf, [due to] the elimination of shipping, unpacking and shelving for the channel,” according to David Burleigh, director of marketing for OverDrive, a leading global distributor of eBooks and audiobooks.

In the traditional world, “books progressed through a well-defined supply chain from publisher to printer to shipper to wholesaler/distributor to bookstore,” notes Mark Coker, founder of Smashwords, which is both an eBook publisher and distribution platform.  Because the eBook supply chain is nascent and still evolving, Coker sees the industry in a state of still fleshing out its distribution channels. “Some publishers go direct to their customers, others go direct to the retail and others use distribution and aggregation intermediaries such as Smashwords or Ingram Digital,” he says.

With hundreds of mainstream and niche eBook distributors entering the field, the aforementioned firms aggressively distinguish themselves from the competition. OverDrive sees its distinction as providing the best customer support as well as the largest collection of digital content (including eBooks, audiobooks, music and video) for libraries on a single platform. Smashwords focuses exclusively on the independently published eBooks from self-published authors and small independent presses.

Other publishers acting as their own distributors focus on specific genres. While Robot Comics publishes graphic novels and currently works with Apple, Google and Amazon, its deputy director, Dave Baxter, refers to these companies as “marketplaces” or “storefronts” vs. distributors. According to Baxter, “in the digital world, there’s very little distinction between the store and the distributor, often none at all.”

Graphic novels have the inherent challenge of adapting color images to Kindle’s black-and-white-and-shades-of-grey format. Baxter indicates that “few are flexible enough to handle the needs of a graphic novel library and allow them to shine.”

Overdrive’s Burleigh notes that “early on, romance was the clear leader in libraries, probably proportionately more than in print, but other than that, we now see growth across the spectrum of all genres.”

According to Baxter, “due to the percentage of profits taken by the distributors, the limitations imposed by the software they work with, and the lack of direct control over the material display and the ability to market on certain levels, a distributor truly has to prove their worth in order to be literally, worthwhile.” So Baxter and his company continue to search for distributors whose business models are closer to the iPhone app model, but “so far the jury is out,” he says.

Since Amazon presently represents and sells its own library of eBooks exclusively on its Kindle devices, in some respects it can be reviewed as a competitor of eBook distributors. However, according to Overdrive’s Burleigh, he believes, “Amazon has a different business model, so we can’t really compare us to them.”

On the other hand, Smashwords just signed a distribution agreement with Amazon that will one day allow its books to be available in the Amazon Kindle store. As Coker puts it, this makes Amazon, “a competitor and a partner.”

Regarding end users, a recent DMB article highlighted the innovative distribution deals between companies and schools. The Blyth Academy in Toronto was touted as the first high school to purchase the Sony Readers for its student body. Similarly, OverDrive supplies eBooks and audiobooks to several colleges, including McGill University in Montreal, the Virginia Community Colleges in addition to K-12 schools. It also has a similar program for public and corporate libraries.

As far as Sony being a competitor, Coker makes the distinction: “Sony is definitely not a competitor. They’re a distribution partner [they sell our books] and we also help power their Sony Publisher Portal, which makes it easy for authors and publishers to publish their content into the Sony Store.”

With established libraries of their own, one would think that Sony and Barnes & Noble might not need a distributor for their online downloads. However, Burleigh states, that “one of the benefits of working with OverDrive is that it simplifies the process for libraries and retailers to work with a single distributor rather than hundreds of publishers.”

Coker agrees with Burleigh, and adds, “It’s time consuming and expensive for a retailer to enter into and maintain contractual business and technology relationships with hundreds or thousands of small publishers.” This is why he believes that “Sony, B&N and others value working with distributors and aggregators such as Smashwords. With us, they only have to manage one relationship, one technical integration and cut one check.”