On 26 February 2016, the Federation of European Publishers dedicated the Professional Session of its members’ meeting to innovation in publishing and funding possibilities. FEP briefly presented the Policy Recommendations drafted in the framework of the TISP project, aimed at boosting the integration of ICT and book publishing through a series of suggestions for policies and support actions: several FEP members illustrated their activities as trade associations in support of innovation.
Jef Maes, Head of the Knowledge Centre of Boek.be, the Flemish book sector umbrella organisation, talked about innovation in Flemish publishing. The Knowledge Centre, created in 2008 to do training, research and innovation, shows that innovation is a core domain for Boek.be, as a way to meet the challenges of the digital revolution (the organisation has set up in recent years several service entities, such as the metadata centre Meta4Books, the educational digital content platform for all Flemish publishers Knooppunt, and the collective rights management organisation Librius). The Knowledge Centre tries to stimulate innovation through collaboration between publishers, other creative industries and the ICT sector, with a view to develop new business models. For example:
- The e-book barometer: monitoring the development of the e-book market in Flanders;
- The Publisher of the Future initiative: a 4-year project powered by the Flemish government and in collaboration with iMinds, supporting publishers on research around new transmedia concepts, the starting up of innovative pilots, the development of innovative products and viable business models. After matching 25 publishers and 6 ICT partners, the project closed in December 2015, with mixed results. Among its strengths were the opening of a dialogue between publishers, researchers and technology partners about the future innovation needs in book publishing; the facilitation of potential partnerships between technology companies, publishing houses and other players; the issuing of recommendations, on technological innovation and business modelling, for the entire book publishing sector; and the access provided to publishers and technology companies to the results research that would be very expensive if conducted individually. On the other hand, the project showed that a one-size-fits-all approach does not work, as each publishing segment (trade, educational, academic) has its own specific innovation needs; the research conducted tried to address long term issues, but did not meet the short term expectations of publishers; the levels of digital skills among publishers were quite uneven; and the technological deliveries were rather proofs of concept than mature solutions ready for the market;
- Increasing clustering and collaboration between publishers and audiovisual producers and other sectors through workshops, boot camps, coaching sessions and more.
The Flemish book market has made considerable progress with regard to innovation in different areas:
- Growing integration of serious gaming in the products of educational publishers. Some examples are: Monkey Tales, a series of educational games for children aged 7-12 that helps in the practice of math skills (by publisher Die Keure); Kweetet.be, an online 3D game and exercise platform for primary school children, their parents, teachers and professional tutors to stimulate children to do their homework; Skan, an online multiplayer turn-based geography game for secondary school children aged 12-14; and Bingel, an online learning platform for primary school students and teachers (by publisher Van In, of the Sanoma Group), which can be used both at school and at home;
- Augmented reality projects, such as ‘Alex the astronaut’, a classic read-aloud children’s book combined with augmented reality, developed by Ballon Media and World of Waw;
- The collaboration of comic publishers in an e-comic platform, Yieha, a 2-year programme set up by two publishers (WPG/Standaard Uitgeverij and Ballon Media) to facilitate the creation of digital comics and offer the reader an attractive reading experience on multiple devices;
- And in general the stimulation of a 360° model for publishers, involving books, websites, exhibitions, television programmes, social media and more. An example is the project ‘Birthday’ (by Lannoo Publishing), which yielded a multiple output of book, exhibition, television series, calendar, enriched e-book, website, Facebook page, lectures, and a European tour.
The Knowledge Centre also organised presentations at the Antwerp Book Fair, with spaces and sessions dedicated to the classroom of today and tomorrow (with workshops with children and the presentation of the digital products of Flemish educational publishers), e-reading, demos of digital applications, a gaming hub for educational games, and a touch table to allow people to ‘make your own comic’.
Knooppunt is a single portal for all the digital educational content for secondary school students and their teachers, representing also a convenient single point of contact for the government; it is the result of the collaboration of 6 educational publishers, which allows savings through economies of scale, and where the difference is made by content, not technology. The portal currently has 300,000 active users and offers 700,000 active licences for over 4,250 digital products. Benefits for the users include access to the digital content of multiple educational publishers through a single account, supplementary study tools to enjoy an optimal learning experience, a wealth of diverse, high quality and enriched content, availability of content for any type of device and operating system (interoperability), without additional costs and with one central helpdesk. Publishers in turn benefit from having a secure distribution system for their licensed content, based on shared software, made more affordable through cost sharing and allowing them to offer a very attractive service to their customers. The model mainly relies on sales of paper books, which are complemented by the digital materials.
Mr Maes identified the Knowledge Centre’s most important contribution as bringing people from different sectors together (which for example allows publishers to become aware of certain technological developments) and argued that the public financial support for the initiative allowed attracting the ICT sector to cooperate with publishers at a limited cost, so that in particular small ICT companies could easily discover the potential benefits. He stressed the importance of innovation, which is largely stimulated by cooperation and is a “never-ending story”.
Dorothee Werner, Responsbile for the Business Development and Innovation Officer at the German Publishers and Booksellers Association, focused on innovation at work, explaining that the Business Development department aimed to stimulate innovation within the Association and among its members by developing new formats, new products, new services and connecting stakeholders (publishers, start-ups, institutions, universities, journalists, etc.). She mentioned some examples of research areas the department is dealing with at the moment: the role of Artificial Intelligence, bridging machine learning and human knowledge, finding new business models in the digital age, how collaboration can allow publishers to compete with the internet giants, the role of connectivity and its relationship with business models, how to foster interoperability, the meaning of big data, how to convince people IP protection and innovation go together, what the Internet of Things has to do with publishing.
Mrs Werner then presented two of her association’s current initiatives for stimulating innovation: the acceleration programme Content Driver 2016, meant to win over digital transformers and new business models; and the Solution Hub 4.0 at the Frankfurt Book Fair 2016, providing an experimentation field on big data, AI, IoT and more. Moving on to concrete collaboration opportunities, she explained that publisher associations could convince 2 start-ups to participate in Content Driver and/or participate in the final pitch, and get new input for their members in return, and provide ideas and organise events at the Solution Hub, getting visibility and access to innovative ideas and networks.
More in detail, Content Driver will last from May to October 2016; 30 to 50 applications will be selected, 15 of which will undergo a first stage of evaluation and coaching, followed by a second stage (including investors and mentors) for 5 of them, which will participate in pitching sessions with investors and entrepreneurs from across Europe; one start-up will be selected as winner and awarded funding. Content Drive allows entrepreneurs that invest financially in the programme to receive inspiration (in the form of 30 to 50 new ideas and approaches, business models and contacts with creative people); solutions such as concrete answers to their own company-specific questions and issues, the chance to embed an innovative approach in their whole company by letting a multiplier from the company participate in the programme and support in the innovation process; and a wealth of information about the start-up scene and trends in technology, through participation in an exclusive network of like-minded entrepreneurs. The benefits for start-ups include contacts (with key players of the book sector, marketing and sales departments) for product testing and the access to networks; practical experience in validating business models, developing cases with relevant companies, gaining specific sectoral knowledge and carrying out real sales interviews; funding prospects through possible investments by a member of the jury or by European investors who take part in the final pitch (besides the funding awarded to the winner of the competition); and media exposure. The programme could be widened to reach a European scale.
Solution Hub 4.0 at the Frankfurt Book Fair 2016 will be an international experimentation space for digital solutions and performers as well as a space for showcasing innovation, targeting incubators, accelerators and entrepreneurs; it will offer a networking environment in the fields of technology, innovation and finance, an intersection for innovative young service providers (start-ups), accelerators and decision makers of the book sector and related industries. The Hub will propose several formats: speed dating, events, table sessions, thematic business lunches, etc.
Mrs Werner finally illustrated the experience of Buchhandel.de, the common multi-seller platform used by 900 booksellers across Germany, Austria and Switzerland. Buchhandel.de offers a common catalogue of 3 million titles thanks to VLB (the German Books in Print database); it is a state-of-the-art e-commerce platform (mobile adapted, highly usable) that records high levels of customer satisfaction. Its basic concept is to encourage readers to buy books via local bookshops. There are nonetheless a few open questions: despite a sustained growth: the message “buy through your local bookseller” does not seem to reach the mass market; the commissions for the booksellers, limited by their low margins, do not fully cover the costs of the platform; booksellers see the platform as integration of their strategy but prefer to promote their own web channels; and sometimes booksellers have difficulties in ensuring the same service standards as big web platforms. However, publishers are actively looking for solutions because local book shops are the most important sales channel for them, the backbone of the sector, a bulwark of the diversity of cultural offer and sales channels. Mrs Werner thus proposed the idea of a European project to use the concept to construct a European initiative to foster local book shops.
Martijn David, Secretary General of the Trade Publishers Group at the Dutch Publishers Association, spoke about innovation in the Netherlands, starting with the experience of the association’s Renew the Book project, concluded in December 2015, which aimed to draw innovation from outside the publishing world, connect the publishing sector internationally with aspiring start-ups and in general get new ideas. As a result of the project, 4 of the 5 start-ups selected based on their prototypes (among 56 applicants) are now connected to the publishing industry and the winner (Bookarang, a company that makes book analyses to enhance recommendations) has now deals with major retailers, libraries, etc. A Renew the Book 2.0 will launch in early 2017; the association is seeking more involvement upfront from publishers, more engagement with young people, more ‘outsiders’ for the jury, more sponsoring (possibly at EU level as well).
Mr David identified a series of topics that should receive attention in the near future:
- Data, big data and metadata: these imply a continuous process, with publishers interested in creating more data and metadata and ensure their adoption along the value chain. Some open questions include the role of THEMA as the classification standard of the future and the potential of keywords. Cooperation should involve publishers, booksellers and distributors, of course taking precautions not to incur in anti-competitive behaviour;
- Digital learning: an important field for potential development, it relies on close cooperation between publishers and schools, with the publishers association acting as an intermediary. Publishers thus become enablers of innovation in learning programmes. Privacy is a key issue in this field, as a lot of data are generated about students;
- Reader behaviour insights: the association works closely on this with market research company GfK, carrying out 4 consumer surveys per year (2 general and 2 on specific topics); these are aimed at studying behaviour in reading, purchasing and borrowing books and e-books. More than 35 surveys have been conducted already, and the exercise will continue in the foreseeable future, the rationale being that not just technology is needed to take the sector further, but also belter knowledge of the readers.
Mr David argued the role of the EU should be promoting standards for interoperability and classification, making publishing an inevitable part of innovative Europe and making sure the legal framework enables innovation. He stressed again the importance of knowing the readers and what they want for the future of publishing.
Piero Attanasio, from the Italian PA, talked about innovation plans and the political agenda, stressing the importance to focus on tools rather than rules. Building on lessons learned during the TISP project, he suggested focusing innovation on phases in the value chain rather than specific technologies, looking also at pre- and pro-competitive research and development supporting the creation of open infrastructures to facilitate business. He proposed several possible topics for future joint initiatives, mostly focused on infrastructure, connecting them to current issues on the publishers’ political agenda:
- On accessibility, the legislative framework is evolving with the Marrakesh Treaty and the European Accessibility Act. In this domain, a useful tool would be a European extension of the Italian LIA project, which has greatly enhanced the mainstreaming of accessibility in the e-book value chain: 12,000 accessible e-book titles have been produced in 3 years and the visually impaired can search, buy and read those books just like any other reader.
- On exceptions, while the Commission looks into new legislative proposals, it would be useful to create or develop infrastructure to manage rights information (as a separate function from rights management), based on existing tools like ARROW, the Linked Content Coalition, Rights Data Integration and the Copyright Hub. This would facilitate the work of multiple players in this area, help users get what they want and facilitate businesses in meeting those demands. Such tools would both reinforce the statement that market solutions are better than exceptions and simplify the implementation of certain exceptions. The European Commission should continue supporting projects in this domain, also with a view to facilitating access to legal offers.
- On the dominating role of OTTs and the need for fair competition in the retail market, while the rules on liability of intermediaries are under scrutiny but raise huge controversy, it would help to support the development of user-friendly, interoperable DRM and to conceive a cooperative project on big data, to create infrastructure to share data and analytic capacities. The latter would be based on the concept on transposing the collaborative attitude of the book value chain from data to big data. Again, these areas could benefit from EU funding.
Thierry Baujard, from Media Deals, spoke about developing a financing vision for the publishing sector. Media Deals is a network of private investors focusing on the creative industries: consisting of 60 investors covering early stages of investment, who regularly meet in small groups to look at selected companies from all over Europe, it organises regular investment forums offering coaching for companies and expertise transfer for investors and aims to create a dialogue between local financiers, sectors experts and creative industry companies. They have extensive experience with creative industries (especially games and audiovisual) and projects about access to finance, and they have been involved in several national and EU projects.
Lessons learned from their experiences highlighted the fact that most financial institutions and investors have little knowledge of the creative sector and are thus reluctant to get involved; banks tend to prefer zero-risk loans and usually do not accept IP assets as collateral, and investors used to the ICT sector lack understanding of how creative industries work. Mr Baujard identified the main challenges for investment in the creative industries as professionalisation/transparency, scalability, fragmentation and lack of critical mass and lack of attractive business models. He argued that the best ways to help creative industry companies was to provide business support, help go-to-market activities, contribute to developing financial strategies and business models and facilitating access to financiers. Creating a functional ecosystem for access to finance would entail the identification of local investors/financiers and of expert financiers in the sector, facilitating access to qualitative deal flows across sectors, setting up acceleration models to select companies and developing co financing structures. Mr Baujard reported his experience of an investor forum held at the Frankfurt Book Fair 2015, which revealed a strong interest in the sector by non-expert investors, alimented by the presence of experienced publishing entrepreneurs, but somewhat hampered by a seemingly limited growth potential, lack of detailed market figures, difficulties in understanding the products and unclear investment offers. He recommended doing research on financial needs in the book sector (investments or loans), identifying key financiers and cross-sectors, launching training for non-expert investors, supporting the development of start-ups (around R&D, product development, market access, monetisation and access to finance) and organising pitching events, among others.