From Pete’s Desk is a blog series by Peter Hudson, co-founder and CEO at BitLit.
“Why isn’t this book available on Shelfie” is by far the most common question I get asked. “Not enough content” is a common theme of the 1-star reviews we get in the app store.
It’s been nearly 3 years since I first picked up a phone and started calling publishers, So, in the spirit of sharing what it’s like to create a new business model for digital books, here are a few of the highs and lows of what it’s taken to get to here…
The graph below shows the percentage of books on an “average” shelf that are from publishers that we’ve signed a deal with. It starts at 0.0% on January 15th 2013, the day I made my first publisher cold call. It took 29 days of calling until a guy named Brett at an indie publisher in Toronto called ChiZine didn’t think what I was pitching sounded completely crazy. From that first deal, it would take over 500 days (and thousands of cold calls) until June 2014 when we hit 1%. One percent means that you’d have to try 100 books before you’d have one that would be eligible for a bundle deal.
Looking back, I understand why everybody I met in the industry told me it would be “impossible to get enough publishers on board”…
We knew that 1% wasn’t good enough. But we also knew that a few bellwether publishers were starting to listen to what we were saying. One-hundred days after we hit 1%, we signed a deal with Sourcebooks that pushed us over 2%. In December 2014, we loaded all of the Project Gutenberg public domain classics into Shelfie and pushed our “Eligible Content” percentage to 5%. It had taken over 700 days (nearly 2 full years) to hit the point where 1 in 20 books had a bundled deal available.
The content acquisition team at Shelfie was now 2 people (Mary Alice and me) working full time. Mary Alice and I booked back to back 30 minute meetings with publishers at Book Expo America in New York, the Frankfurt Book Fair, and the London Book Fair — Sixteen meetings a day for every day of the fair. We never bothered to have a booth, we wouldn’t have had time to stand by it anyway.
Publishers were starting to recognize us (good) and screen our calls (bad). So we bought a 212 phone number and hooked it up to our Asterix VOIP phone system so we could cold call from a Manhattan area code. I have to credit a huge part of our success with publishers to Mary Alice’s relentless follow-up. There have been more than a few publishers who’ve signed our contract and said “I guess you can stop calling me now”…
But in January 2015 we still didn’t have any of the “Big Five” publishers signed up. The Big Five are Penguin Random House, Hachette, HarperCollins, Macmillan, and Simon & Schuster. Combined, these five houses have about 50% of all trade publishing revenue. While it’s numerically possible to get a meaningful percentage of books on Shelfie without signing any of the Big Five, it’d be extremely difficult.
So in early 2015 we began working hard on getting the Big Five on board. We spent a lot of time (and money) flying back and forth to NYC to meet with the big houses. And after weeks negotiating contracts, in April 2015 we brought on board HarperCollins (for backlist titles) and Macmillan (for their sci-fi imprint Tor/Forge). It was day 828 when we crossed into double digits and hit 12.6%.
The news in the industry that not one but two of the Big Five were now working with us meant that over the next few months we were able to secure deals with companies that do digital distribution for groups of small and medium sized publishers. During the summer and fall of 2015 we signed up several hundred new publishers through distribution deals with Vearsa, Ingram, Firebrand, and IPG. At day 1000, we had 15.4%.
Things were going well with the small to medium sized publishers. But we knew that to get to the levels our users expected we needed to have more content from the big houses in NYC. There was only one problem, the rest of the NYC publishers were extremely touchy about the idea of discounting ebooks. They’d all just come out of the DOJ price-fixing antitrust settlements over Apple’s introduction of “agency ebook pricing”, and they were worried that they might raise Amazon’s ire if they offered bundled ebooks at a discount through Shelfie.
Fortunately, unlike ebooks, audiobooks aren’t sold under agency terms, so big publishers have more scope to be experimental with their audio catalogs. With this in mind, in the fall of 2015 we signed a deal with Findaway, a large audiobook distributor based in Ohio, to work together to add audiobook bundling to Shelfie.
In December 2015, we launched audiobooks on Shelfie with titles from Blackstone Audio, HarperCollins Audio, Scholastic Audio, and Hachette Audio. While there was some overlap on titles from HarperCollins that we now have available as both ebooks and audiobooks, the total percentage on which we have a bundle deal on either audio, digital, or both is 24.2%.
It has been 1,076 days since I made my first publisher cold call. We’ve come a long way, and we have a long way still to go. Thanks for all the support and understanding along the way.
Read and enjoy.