Bible software companies should consider UltraViolet model

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David Ames | Forum Activity | Replied: Mon, Dec 16 2013 5:04 AM

alabama24:

How would Logos make money?

Sogol:

The same way they do now. The only difference is that when you buy a resource from Logos your purchase would give you two different licenses (one from the publisher/consortium and one from Logos) instead of just the one license from Logos.

Though it would be invisible to users, a simplified example of your $100 purchase from Logos goes from being:

$75 to the publisher and $25 in Logos markup = one license for Logos

to

$75 = publisher/consortium content license and $25 = Logos platform license

And then $25 to use it in reader AAA and then $25 in reader BBB and then $25 in reader CCC ETC.

[And that would be on top of the $150 we spent on each reader  - Logos, AAA, BBB, CCC, etc,]

[And in that mode Logos would HAVE to start charging for updates]  

[I still Like Step as a reader and have many Step books]

Posts 255
Sogol | Forum Activity | Replied: Mon, Dec 16 2013 5:34 AM

alabama24:

1. Publishers are in the business of making money. The money to be had is in PRINTING the books. You assume there is a desire on the part of publishers to see the adoption of ebooks, but that simply isn't the case. Most publishers believe that Amazon has been ruining their business with the sale of cheap ebooks which have devalued their high profit margin hard back sales.

This is analogous to when it was said that the money in telecom was in VOICE because it is so much more profitable than what is earned from data fees. Over time, it has become clear that we are in an increasingly data driven world and the much higher margin voice revenue stream will be going away. Thus the massive and powerful telecoms like Verizon and AT&T are being forced to shift with consumer preferences.

 

The publishers don't want "a small portion" of a platform fee. They want a big piece. Your model has too many hungry people sitting at the table, waiting to be fed.

I don't think the publishers are out to maximize their cut of the platform fee. I think they are out to maximize their revenue. If they get 0% of the platform fee but bring in more revenue (at a comparable margin, of course), wouldn't that be a more attractive proposition for them?

I don't understand your "if you don't give them what they want, someone else will" argument. Who cares? If you want to read Harry Potter, you want to read Harry Potter. Another publisher can't "give them what they want."  Furthermore, if I ever write a book, I'm going to want to go with a publisher who will pay me. For that to happen, the publisher must have a big piece of the pie!

Yes, in the media world, the content itself (as opposed to the delivery) is the dominant factor behind consumer purchasing decisions. But your assumption is that publishers operating under the legacy model will be able to retain the rights to the desirable content. What if a very well-funded operation using this new model and knowing what delivery channel consumers want decides to sacrifice margin in the short-term in order to gain market share. They could incentivize the content producers with higher payouts and hope to make up the difference in volume. As I understand it, Amazon has even begun to do something similar by offering content producers higher cuts if they publish directly through them for Kindle. And if you spend a nano-second in Silicon Valley it becomes clear that there are hoards of very smart people with significant financial resources looking for every possible opportunity to combine technology and consumer-friendly business models to eat the lunch of nearly every significant business operating with outdated business models.  

I have very little understanding of ultraviolet, but your seeming use of it makes no sense to me. Your argument doesn't follow. The largest seller of music and movies is apples iTunes. Users who purchase an ultraviolet DVD don't get an iTunes copy too.

UltraViolet appears to me to have been a late response to the growing dominance of Netflix, Amazon, and Apple in the delivery of digital video. I think the model would have been much more successful if they had been more proactive here instead of reactive. And the music companies have clearly tried to milk CDs for as long as they could, but Apple now seems firmly in control of music distribution through iTunes. So I guess publishers could once again sit back and try and milk legacy delivery models while powerful and aggressive technology companies eventually end up controlling distribution of content. What I am trying to present here is an alternative that I think would be attractive to everyone involved.

Posts 255
Sogol | Forum Activity | Replied: Mon, Dec 16 2013 5:44 AM

Rosie Perera:

I see your points too, but I think Logos currently takes a much bigger cut than this "platform fee" model would give them (perhaps close to 50% though I don't know what kind of a deal they work out from publisher to publisher; I'm sure it varies), as it's quite a lot of work for them to turn a published work into a Logos resource. Let's suppose a resource is one that we ought to be willing to pay $110 to buy (regardless of how it comes to us). In your model, Logos would get $10 of that, and $100 of it would go to the publisher. Logos couldn't afford to do all the work they do for that little margin per resource sale.

Let's suppose further that in order to stay in business Logos needs to get a minimum of $50 of that $110 product. Under the current negotiated arrangement, Logos sells that product and remits $60 to the publisher, keeping the remainder. Presumably, other companies have similar costs of doing business to Logos, so the "platform fee" would need to be more on the order of $50 for this product for them too. Then anyone who buys this product on more than one platform is going to end up paying $160 for it. Maybe a bit less if some low-end company can push the resource out the door faster by cutting corners.

I think MOST of the difference you're seeing in price of resources between company A and company B is not the different base price from the publisher. If the publishers are good negotiators, they are going to get their $60 for that digital resource no matter which software company is selling it to the user, company A or company B. So what you're seeing is simply that Logos charges more for the work they do of converting it to Logos format than other companies charge for converting it to theirs.

I know I've done a lot of "supposing" here, and I could be completely off base with my numbers, and you might have hit on a model that could work. In other words, even if the publisher's cut is significantly lower than you were estimating, it still would be good if we only had to pay that amount ONCE if we bought the resource from multiple software companies. But I think you'd find that even fewer people would be willing to double pay for ANY resources if the "platform fee" is quite a larger percentage of the cost of the resource than you guessed it was. Which makes this whole suggestion kind of moot. A nice idea, but all the work it would take negotiating to make it happen would be costly and time consuming and for what possible gain to the companies in question. I think they pretty much like the way it works now.

So, if you're right that the labor of Logos or another software company makes up only about 10% of the cost of digital resources, then maybe you're onto something! I do concede I could be way wrong about this all.

I think you're right, Rosie. In the end, the feasibility of this model depends on what the actual numbers look like. Unfortunately, I don't know what they are, and it's quite possible that knowledge of those could easily render this model unattractive for the time being. However, I did at least want to put this idea out there because, even if it doesn't fly under current circumstances, I would hope that the exercise of probing it might yield some helpful thoughts and insights about what new directions Logos could take its business model.

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JT (alabama24) | Forum Activity | Replied: Mon, Dec 16 2013 7:07 AM

Sogol:
This is analogous to when it was said that the money in telecom was in VOICE

In no way is it analogous. The telecom companies were wrong, yes... they were able to get people to pay MORE money with data fees. The same isn't true with ebooks. Over time,  publishers may likely cease printing. That may be 5 years or 500. Who knows. But they make less money on ebooks, and people aren't likely to pay more for them. Your system means less money for the publishers, and for that reason, you're fired. (Sorry, a random Donald Trump's Apprentice reference Stick out tongue). 

Again, I would love to see this come to fruition... but I can't imagine it ever will. By the time anything like this <might> come about, the market (and technology) will be a completely different place.

OSX & iOS | Logs |  Install

Posts 1281
toughski | Forum Activity | Replied: Mon, Dec 16 2013 7:39 AM

alabama24:
The telecom companies were wrong, yes...

so were the music companies, so ARE the book publishers.

Here is an isolated example: as a missionary living overseas we were buying an average of 2 printed books per year (mostly used paperbacks from ebay or Amazon)

Now our household spends an average of $30 per month on Kindle titles alone. Why? instant gratification and free delivery. Imagine the increased sales that publishers have. I think that the biggest myth propagated here is that ebooks bring less revenue to publishers. Lower profit margin? That is debatable, but definitely higher revenues.

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Matthew C Jones | Forum Activity | Replied: Mon, Dec 16 2013 7:46 AM

alabama24:
Again, I would love to see this come to fruition... but I can't imagine it ever will.

With squeals of joy I proclaim my doubt this will ever be adopted by Logos. Party!!!

Logos 7 Collectors Edition

Posts 1281
toughski | Forum Activity | Replied: Mon, Dec 16 2013 8:28 AM

OP, please forgive me for bringing this a little off-topic thought, but:

1. have you considered, that WRITING of books has exploded recently (mainly due to technology)

2. Due to this, there is a growing market for CONDENSED content (similar to Cliff's notes on titles in business and leadership categories)

People are actually paying to read LESS!

but this too is a a point that, ultimately, consumers dictate the terms by voting with their wallets.

despite the iHype, there are more consumers with Kindles or other cheap e-readers, than iPads.

Apple was late to the e-book party and their only shot was an illegal one.

The point that the OP is making, it is BEST to be proactive, rather than being reactive in the Bible software business.

I like Logos' business model. They actually transform regular text and add so much value to it.

Vyrso is on life support, however. The market share is dismal, prices are generally high, selection is low and the added value is nonexistent.

Posts 5240
Dan Francis | Forum Activity | Replied: Mon, Dec 16 2013 6:23 PM

alabama24:
I understand the "wouldn't it be nice" idea. But it isn't realistic. The publishers partner with the various platform holders, but there is NO incentive for the platform holders to work together. 

I understand that fully but one day sooner than later things likely will be digital only with standards enforced to be somewhat cross platform compatible (by legislation likely). The dangerous at that point is Logos might find itself being less needed. Right now I agree you are right no benefit anywhere for anyone.

-Dan

Posts 1281
toughski | Forum Activity | Replied: Mon, Dec 16 2013 7:31 PM

Dan Francis:
Right now I agree you are right no benefit anywhere for anyone.

you guys are so wrong!

Why do you think Amazon rolled out their own version  of this as MatchBook with enthusiastic support of the publishers? Because it makes both of them a ton of money (at the expense of the authors somewhat)  If one bought a dead-tree book through Amazon in the last 18 years(!!!) one has an option of buying the ebook for 2.99 or FREE (depending on the publisher, etc). This is, in essence, two licenses - one for the resource itself, the other for the Kindle platform (it is a little more complicated than that, but in general its true).

What is funny, you don't have to own the book that you bought 18 years ago. It could have been lost, gifted to a friend or sold on eBay long ago. But because Amazon has a record that you bought it, they worked it out with publishers and give you an option of buying the ebook for 2.99 or less.

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Matthew C Jones | Forum Activity | Replied: Mon, Dec 16 2013 9:33 PM

Dan Francis:
I understand that fully but one day sooner than later things likely will be digital only with standards enforced to be somewhat cross platform compatible (by legislation likely). The dangerous at that point is Logos might find itself being less needed. Right now I agree you are right no benefit anywhere for anyone.

Yeah. I can hear it now:

  "If you like your platform, you can keep your platform."    

note: boldface in quote mine

Logos 7 Collectors Edition

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JT (alabama24) | Forum Activity | Replied: Mon, Dec 16 2013 9:53 PM

toughski:
you guys are so wrong!

Why do you think Amazon rolled out their own version  of this as MatchBook with enthusiastic support of the publishers? 

Several thoughts:

  1. I love the MatchBook program. (I love the audible matching program more!)
  2. Not many books are included in the program... Which argues against the latter part of your statement. 
  3. MatchBook is in no way analogous. What would be analogous is if Amazon gave you the Kindle version of a book you purchased 20 years ago from Barnes & Noble. They don't, they won't, and that is the entirety of my argument. 

OSX & iOS | Logs |  Install

Posts 255
Sogol | Forum Activity | Replied: Tue, Dec 17 2013 12:46 AM

alabama24:

Sogol:
This is analogous to when it was said that the money in telecom was in VOICE

In no way is it analogous. The telecom companies were wrong, yes... they were able to get people to pay MORE money with data fees. The same isn't true with ebooks. Over time,  publishers may likely cease printing. That may be 5 years or 500. Who knows. But they make less money on ebooks, and people aren't likely to pay more for them. Your system means less money for the publishers, and for that reason, you're fired. (Sorry, a random Donald Trump's Apprentice reference Stick out tongue). 

Again, I would love to see this come to fruition... but I can't imagine it ever will. By the time anything like this <might> come about, the market (and technology) will be a completely different place.

You've completely missed the point. I'm sure the telcos would have loved it if they could have milked the high margin voice revenue stream for all eternity. The problem was that the marketplace was changing, and despite how massive and powerful they were/are (much bigger than any publishing company, mind you), they had no choice but to spend many, many billions of dollars to build the data infrastructures that the market was demanding. And this spending was for the lower margin data products. The result has been significant margin compression across the board, and yet they still need to make even further capex investments in order to keep pace with what the market demands of them.

An even closer example to what the book publishing houses face can be seen with the newspapers. That industry, which was hugely profitable at one point, has been decimated by the Internet (just take a look at the market cap decline of Gannet over time). There were lots of newspapers that didn't take the Internet threat seriously enough, in no small number of cases because they were quite comfortable with the fat margins they were earning and didn't want to cannibalize their existing models. The result is that many of such publications are either hollow shells of what they once were, or they are gone altogether.

What's my point? History is replete with examples of industries that unsuccessfully tried to maintain high-margin legacy business models long after the marketplace had shifted. You see this pattern again and again in so many industries, but especially in those related to technology and media. I see absolutely no reason why the publishers will be able to buck the trend. In fact, I think they would be one of the last industries I would pick to be able to do so.

It's a virtual economic certainty that in a competitive marketplace, high margin products will face margin compression over time. And this is why companies must constantly innovate and proactively align their product and pricing strategies with where the market is headed. Anything else is a sure-fire recipe for death. So even if the model I suggested did lead to lower revenues for publishers (and I am by no means saying it will), even this doesn't mean that it would be unwise for them to go in that direction. As long as companies are earning returns that exceed their costs of capital, sometimes you have to sacrifice profitability in the near-term in order to stay with the direction of the market. Choose not to give customers what they want and eventually someone else will find a way to do so. 

Now I can't predict what the publishers and Bible software companies will do. All I'm saying is that if the direction of the market does indeed align with the proposal I suggested, then it is anything but irrational for them to move in that direction as well. Of course, you can argue against my thinking on grounds that the proposal I suggested does not present significant value to customers, and thus the marketplace is not headed in that direction. You could also argue that the rental model (similar to Netflix) will become the dominant way that customers gain access to eBooks in the future, and thus questions about license ownership become somewhat irrelevant. However, I am yet to see such an argument for these positions that I find convincing. If you feel you have such an argument, I'd love to hear it.

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JT (alabama24) | Forum Activity | Replied: Tue, Dec 17 2013 4:06 AM

Sogol:

You've completely missed the point.

We'll have to agree to disagree, but I think it's you who has missed the point. There is no viable path for you to purchase an eBook from Barnes & Noble or Kindle and receive a free copy in Logos. It would put Logos out of business... UNLESS Logos changes their business model to charge for the software. Since there is no advantage to publisher, nor an advantage to the reseller (well, at least not to the "big guys"), it won't happen. 

OSX & iOS | Logs |  Install

Posts 228
Stephen | Forum Activity | Replied: Tue, Dec 17 2013 5:09 AM

There already is a common format for ebooks that most software can read. it's called ebooks. If you buy a book from Amazon, B&N or Apple they all come in their property format to keep you in their eco system. If they used a common format for Bible Software resources you would need 1 standard for tagging. All the software companions would have to change their software to read that format and the consortium or publishers would have to do all the tagging. If you took the standard format and had each company do their own tagging you would still be buying the book all over again when you changed software because each company would have to do their own tagging and that is not an was or cheap process.

The reference for movies doesn't work because they all use the same format. Plus I would never buy a movie because of Ultra Violet. It's the movie companies locked down way of trying to get people away from iTunes (they re scared of Apple). It's still a locked down proprietary format and you can only use it where they say. If they really wanted you to have the content available anywhere they wouldn't put DRM on it and allow you to just have the file, but they don't.

I love Logos and made the decision to switch from WordSearch. Did I have to buy some resources again, yes. Was it worth the switch, yes. Would I like to have been able to bring all my resources with, yes, but then I would have much more than WordSearch offered because the shared format would have limited to Logos being basically the same as WordSearch.

I've started buying more Vyrso resources because that way I can have them in my Logos library. While they are still growing Vyrso the one thing I would like to see would be the ability to add PDF or EPUB to Vyrso. I understand that searching would be extremely limited because of not being tagged but it would be nice to have all my reference material in 1 place. I would even be willing to pay a fee to be able to sync non-Logos resources (PDF/EPUB) because I understand they are providing the servers.

Posts 468
BKMitchell | Forum Activity | Replied: Tue, Dec 17 2013 6:10 AM

Bingo! Yes

Stephen:

The reference for movies doesn't work because they all use the same format. Plus I would never buy a movie because of Ultra Violet. It's the movie companies locked down way of trying to get people away from iTunes (they re scared of Apple). It's still a locked down proprietary format

There is another point worth mentioning is the fact that more than often publishers do not provide Bible Software companies with anything more than the right/license to re-produce their works. That means that Logos, Accordance, and others actually spend time and money on data entry as well as their own original tagging. This means that while one may claim the content is the same what is provided is actually a very different edition created by different individuals worth of their pay.

חַפְּשׂוּ בַּתּוֹרָה הֵיטֵב וְאַל תִּסְתַּמְּכוּ עַל דְּבָרַי

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toughski | Forum Activity | Replied: Tue, Dec 17 2013 6:33 AM

alabama24:
Not many books are included in the program... Which argues against the latter part of your statement.

there are 100,000 and they are just starting. Vyrso had just a few when they rolled out...

alabama24:
There is no viable path for you to purchase an eBook from Barnes & Noble or Kindle and receive a free copy in Logos.

you don't read well. The model Sogol is proposing would charge a customer with a plain-text license a platform fee, which would be in Logos' discretion (2.99 - 2999.99 - it is up to Logos)

alabama24:
Since there is no advantage to publisher, nor an advantage to the reseller (well, at least not to the "big guys"), it won't happen. 

can you provide ANY documented proof, other than your subjective opinion or a hearsay to back up your statement?

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Matthew C Jones | Forum Activity | Replied: Tue, Dec 17 2013 6:35 AM

alabama24:
Since there is no advantage to publisher, nor an advantage to the reseller (well, at least not to the "big guys"), it won't happen. 

That pretty much sums it up

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toughski | Forum Activity | Replied: Tue, Dec 17 2013 6:42 AM

BKMitchell:
There is another point worth mentioning is the fact that more than often publishers do not provide Bible Software companies with anything more than the right/license to re-produce their works. That means that Logos, Accordance, and others actually spend time and money on data entry

That is not correct in 99% of resources. According to information that Logos disclosed they heave process-ready electronic files from publishers currently. From scratch data entry is done by Logos mostly for old public domain books that do not exist in electronic format

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toughski | Forum Activity | Replied: Tue, Dec 17 2013 7:15 AM

Super.Tramp:

alabama24:
Since there is no advantage to publisher, nor an advantage to the reseller (well, at least not to the "big guys"), it won't happen. 

That pretty much sums it up

wake up and smell the roses! Just because they are SLOW to get it (similar to the newspaper business that Sogol mentioned), does not mean that there is no advantage to publishers and resellers. You guys sound like a broken record, without any documented proof.

  • FACT - music sales has increased, producing raising revenue for recording industry and resellers once the industry accepted "buy once, play everywhere" philosophy customers demanded
  • FACT - Amazon (reseller) instituted the MatchBook program with SUPPORT from publishers.
  • FACT - Amazon allows a heavily discounted purchase of the audiobook title if a Kindle ebook is purchased - this is also similar to the UV model - they charge around $10-16 (a platform fee if you will) for an audiobook normally selling for $24 and up

where the biggest misunderstanding lies with this post is that nobody is expecting Logos tagging to be the same as Accordance's or WS's, etc. Each company would continue to innovate as before and set pricing for their Value Added services in order to bring customers to their platform. But if I bought a title from A for example, I already paid for 1) license to the publisher and 2) license to A to view such title on their platform. So, a customer thinks, I should at least be able to view a plain text version of the resource in Logos for free or very close to free (since there is virtually no expense for Logos to display plain text resources in their software). The benefit to Logos would be in persuading free customers to upgrade their elsewhere-purchased resources to the Logos platform - they operate under this paradigm right now - giving away "free" software hoping to persuade customers to buy more resources

The opposite would also work in Logos favor - any Logos purchased resource would be eligible to be transferred to Kindle (maybe for a small fee, maybe free). this sure beats manually converting a 500+page resource.

Posts 468
BKMitchell | Forum Activity | Replied: Tue, Dec 17 2013 7:59 AM

toughski:

According to information that Logos disclosed they heave process-ready electronic files from publishers currently.

Very interesting! Would you mind posting the link or was this disclosed to you in a private e-mail. I would love also to read this disclosed information and find out what is meant by "process-ready" files?

It would be interesting to know if works like the follow were as you say provided in electronic format to Logos: 

  1. Gedolah: Manuscrit B. 19a de Leningrad
  2. Massorah spelling in the Hebrew Bible
  3. Qumran Biblical Dead Sea Scrolls Database
  4. A Manual of Hebrew Poetics
  5. The Richter Hebrew Morphology (Yet, to be released)
  6. Hebrew Bible: Andersen-Forbes Phrase Marker Analysis
  7. Andersen-Forbes Hebrew Grammatical Relationships
  8. The Lexham Syntactic Greek New Testament

 

 

חַפְּשׂוּ בַּתּוֹרָה הֵיטֵב וְאַל תִּסְתַּמְּכוּ עַל דְּבָרַי

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