Vice President & Lead Analyst Ned May, our Outsell colleague, wrote an excellent Outsell Insights titled “Long Tail Publishers Now Have An Easy Route to Apple’s iBookstore.” The piece covers Apple’s selection of two conversion services for publishers to use to get book titles into the iBookstore. Here’s a key part:

Any publisher looking to get their books on the Apple platform now has an option to have their works converted to the appropriate format by one of two approved firms – Jouve and Innodata Isogen. Further, a publisher can initiate and complete the conversion in a relatively seamless fashion via the Apple iTunes Store site.

Whether these Apple-vetted companies will really offer a more rationalized conversion process than other such services remains to be seen, but May is right that in the controlled universe of the Apple platform, this sure won’t hurt. 

What remains unlikely, at least for the present, is that book content conversion—even under such optimal arrangements—will prove as easy and inexpensive as a publisher might hope. Standards-based ebook formats—ePub, primarily—are not fully standard in the real world, in that various ereader platforms manifest the content in different ways.  Not that this should be a surprise, given the history of technology standards being interpreted flexibly, not to mention the propensity of hardware makers to differentiate from other devices by other manufacturers by adding additional features or capabilities. Apple’s application of the ePub standard falls well within this tradition, although what differentiates the Apple approach from most other efforts is the monotheistic rigor applied: There is but one Apple, and thou shalt not have other platforms… well, you get the point.

And Apple works, it must be said.  The iPad is a nice ereader (among other things), and the Apps store offers the means to sell content of sorts that ePub can’t really handle (as yet, but ePub 3.0 is coming, with enhancements, as it were). Publishers seeking salvation within Apple World are, with the addition of Jouve and Innodata Isogen to the priesthood, one step closer to the promised land. But the reality is that even standard-based ePub format work—the aforementioned Apple-targeted conversion offerings—is hardly going to be simple, easy, or push-button. The $20 dollar conversion fee per title presupposes an existing digital content file so clean and consistently formatted as to be virtually faith-based, but not scientifically likely. There are a lot of quality assurance efforts and other sorts of tweaking any publisher should be budgeting, even in paradise.

There remain many other important issues for book publishers to consider, starting with whether Apple World is enough.  If not, then the Apple offer of easy iBookstore supply of iTunes-based ebook production simply helps ease only one part of a much larger market. Ned May astutely identifies Apple’s ebook conversion partners’ larger hopes, which is that publishers will seek wider ebook platform targets, and, therefore, turn to these same conversion services for help in implementing more basic digital workflow improvement, such as that based on an XML-Early model, which in turn helps the publisher output to a number of present ebook formats, not to mention being better prepared for new or updated and expanded ebook standard formats, across the larger range of ereader-specific display demands.

For Apple, making it easier for book publishers to pursue the Apple ebook devices makes sense, but book publishers need to think long term, and the Apple-controlled system of ebook production and sales is, at present, anyway, a nice short-term solution. Innodata and Jouve are thinking long-term, with their Apple-status providing a very good entrée for selling broader services to publishers.

But as apps and ebooks become more standardized through improvements in base-functionality of ePub and the settling out of ereader device differences, and distribution of both content files and associated marketing content become more rational, publishers may be attracted to more profitable sales channels, and find their Apple-centricity a barrier.  Currently, agency models—touted by Apple, early on—leave 30% of the ebook price with the channel, and this sounds a lot better that traditional publishing wholesale rates that leave 50% of gross revenues on the table. It is true that current channels such as Amazon offer the very important value of supporting the discovery, sale, and download of a title, but as ebook formats and associated bibliographic content work is taken up by the publishers, the real service of existing ebook channels—iBookstore, Amazon, Google eBook, etc.—will become simply transactional (purchase) and file management (download of titles and presentation of bibliographic content) in nature. Such transactional and file management services will be highly automatic, and hence, low-cost to provide, and it is very likely that 30% going to such services will become far too much to pay, with either Amazon and the other currently dominant ebook sales channels competing on margin, or getting beat. 

Sometime soon, as book publishers gain more control over their content workflows, use XML for multiple ebook format production, and better manage bibliographic and other channel-supporting metadata, even 30% margin going to online ebook retailers will be too much. There is an opportunity for content vending sites that gain sufficient revenue only from transactional fees, perhaps in the 5-10% range.

Apple is making iBookstore ebook and apps production easier for publishers, but sticking to the Apple way may make it harder for publishers to succeed more widely in the longer run.