Publishing noob

Notes and observations from the world of book publishing

Integration, innovation and the swedes

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This winter has been the worst in my short life when it comes to common colds. I guess this is my fifth so far, this time with fever. I have tried to wash my hands, eat properly and exercise. That is the downside of the otherwise enjoyable finnish winter. While being sick for the past couple of days I had plenty of time to read. So I got my hands on Isaac Asimov‘s Foundation series. I found it interesting that Asimov visioned e- and audio books back in 1952 by describing “bookshelf with cards, which you can then read or listen aloud from a television like machine”. Close enough for me.

Now back to more current issues. The Federation of the Finnish Media Industry announced an innovation competition back in november called ThinkInk.  The target was to innovate new products and services that would benefit the printing industry. I am a keen supporter of so-called open-data and Service Oriented Architecture in general. What I noticed when working in the printing industry, it was not utilized much as it could have been. So my application was about creating a general interface for all the parties that would like to turn their digital content to a printed form. The main idea was that creating an easy and cost-effective API to print service providers. Digital content producers could then monetize their content by selling physical products and print service providers would get some completely new revenue. We will see how it goes in March.

Other interesting things have been happening as well, that is the main reason I have been not updating the blog lately. As all following the scandinavian publishing industry know already, Bonnier has now finalized the acquisition of WSOY. A new Bonnier Books Finland will be formed, which will provide core services like HR, financial services, IT and so on to the actual publishing companies. I will be working there so it is going to be interesting and rather busy year.

iTunes Partner Program for publishers aka iBookstore

I was happened to be involved in the process of acquiring an publisher account for the iBookstore since they are now expanded to Finland as well. And boy it was not was easy. First of all, you cannot use your existing Apple Developer Account, but instead use another one already registered in iTunes. For this I had to use my personal account.

Another woe is the requirement to obtain an U.S. Tax ID called Employer Identification Number or EIN even for foreign entities that have no business in the United States. They use it for the sign-in process and it has nothing do with actual taxes, since all payments will come through Apples subsidiary located in Luxembourg. The process took quite a while, since foreign entities cannot receive the EIN instantly over the phone. Not to mention faxing documents all over, that is so 90s.

This makes it interesting for European publishers, since in Luxembourg e-book taxation is way lower than most of the EU countries. I have wrote about this European taxation issue earlier. Seems like now in things are happening around this issue, since Luxembourg will drop the VAT rate for e-books to 3% and in France it will drop to 8% from the earlier 20%. Amazon.co.uk is registered in Luxembourg, so we might even see this reflecting to the e-book prices. In any case this means better margins for the authors and publishers.

There was also an interesting set of questions presented for the publisher during the registration process. They asked non-binding information about the amount of active titles in the print catalog, how many e-books we have published so far and how many e-books we have not published, even though we have the rights. This was probably just to give  some idea about the publishers potential, but probably also to promote their Apple-approved aggregators who do ePub conversions and so on.

Now after I have registered to the Apple AppStore and iBookstore, I would ask Santa that those backend services would have the same great UX as in Apples consumer devices.

Amazon usability woes

I did some shopping again at the Amazon website and once again I was facing some major and minor usability flaws. I mostly get my books from elsewhere so there might be something between six months to a year between visits. I always secretly hope that they would improve meanwhile, but no.

My biggest complain is the clutter in the layout. For example look at the Books category page. Amazon is probably lying more on brand and all the long time customers know from their heart where all the relevant stuff is, but for a casual visitor like me, it’s very confusing. There a hundreds of links and around twenty or thirty buttons scattered all around.

Generic product category pages. I was trying to check if I could find a proper reading lamp to the bedroom while I was at it. But the Lamps & Fixtures section was so tedious to navigate, so I finally gave up. I pretty much knew what I was looking for, but could not effectively use the search & filtering functions provided.

Non-SEO optimized URLs. Here is the link to the e-book version of The Hunger Games, I think this is kind of self-explanatory.

http://www.amazon.com/The-Hunger-Games-ebook/dp/B002MQYOFW/ref=sr_1_2?s=digital-text&ie=UTF8&qid=1321984314&sr=1-2

Plain text only confirmation emails. The order confirmation emails are boring looking, messy looking and is way too long. Where is the “track your order here” link? Why not make it visually appealing and use it for up and cross-sell?

Maybe I have been harsh on the big boy, because there are some things I actually like. But that is an another topic.

 

Password security through obscurity

Lot of buzz has been around computer security lately. Steam just announced that their forums had been hacked and now in Finland, AnonFinland has released snippets of email addresses, social security numbers and passwords they claim to be legit. The story might go on if they happen to release combination of these lists. I just happened myself to start a better password policy couple of months ago, so I decided to write little about how different services store passwords and how you can get little more security by using simple and free tools. Skip the technical part, if it is not your thing.

About passwords and encryption (technical part)

Traditional way of storing password was plain-text, so anybody who got unauthorized access to the database had all the passwords in their plain sight. Basically it would need zero effort for the attacker to utilize the passwords. This is considered a very bad practise now days as all systems should store all sensitive information in encrypted form.

The next best thing are hashed or one-way-encrypted passwords. Hash is a string of characters, that is formed from your original password through an encryption algorithm. Only this hashed string is used, so the original clear text password is never saved to the database. After you input the password, hash is calculated on the fly and a match is made to the database. If the hashes match, you are granted access. This encryption works in a way that the encrypted password cannot be reversed back to the original password. For example, the MD5 hash of the password “password123” is “482c811da5d5b4bc6d497ffa98491e38”. MD5 is name of one encryption method, SHA being one another.

This method is not secure because now days we have a lot of computational power in our reach. WIth a typical home PC, one can try millions of different passwords per second. So let’s assume you got the database though a security hole, you could try all different passwords, calculate a hash and check them against the database until you find a match. This is called brute-forcing, since it is not a very advanced method. To make brute-forcing even easier, people have created ready-made list of hashes for a large set of different passwords. These are called the “rainbow tables“.

Also the encryption methods themselves have flaws in them. For example MD5 has been proved to have a flaw called “hash collision“, where two different strings would produce an identical hash. This means, if the users password was a certain string, you could as well use the one that creates an identical hash.

One method to get around these flaws is for services to add extra string to your password, one that only the authenticator knows. This is called a “salt”. For example you might add a salt “z9G=p/\jum_Z;mg-y9cPqhfN-” to the user input. So the hash would be created then from the string “password+salt”. If this salt is kept secret and secure, it nullifies most of the brute-force and rainbow table methods mentioned before.

Password essentials

  • Use different password in different services
  • Choose a complex password (long password with special characters or password phrases that are easy to memorize)
  • Use two-factor authentication when possible
  • Change your passwords periodically

I cannot emphasize the first point enough. My Steam account might now have been compromised and they have my credit card information. But because I use different password in different services, at least the crackers cannot get access to any other services with the same password. So my damages are limited.

I can hear a lot people saying that it is just not possible to remember complex password. That is the main reason to reuse the same passwords over different services. One option would be to create easy to remember pass phrases instead of short passwords, which are more secure just with their length. I preferred to store all my passwords in a centralized password management software. It stores all my passwords in an encrypted form and it is unlocked by one “master password”. This master password has to be really secure, so I use a password phrase with combination of special characters. Please note that of course if someone cracked the master password, it would mean access to all the login information I have stored there. You can add two-factor authentication also here, meaning that you could create a separate key file stored only in your memory stick. It would mean that the cracker would need physical access to this file with your username and password. I use KeepassX, but there are lot of different options.

Services that are potential targets for people after personal information, like Facebook and Google (Gmail) offer two-tier authentication. It means that addition to the username and password there is an additional method to prove your identity. This is usually a one time or generated password list (Google) or a text-message authentication (Facebook). This means that if somebody had my Facebook password, they would still need to get access to my mobile phone somehow. Makes the difficulty factor to get access to my account exponentially. I really suggest you to enable the two-factor authentication in Google and Facebook, because it is really is not a nuisance. In both services, you only have to do it when they detect that you are logging in from a new or otherwise unknown computer. You can find the instructions from the Related articles below.

These steps will not make you 100% safe, but I am pretty sure you at least made somebody’s cracking attempts a ten fold harder.

Taxation on ebooks

One thing I completely forgot to mention in the post “Why is Europe lagging behind?” was the complexity of taxation for e-books in the EU. Here in Europe, we have this thing called Value Added Tax. Basically the value added tax is added to the price of the product and then the seller remits the tax back to the government. The difference to sales tax used in the United States is that the in VAT the consumer ends up paying the tax.

For historic and cultural reasons, printed books and newspapers have been granted a lower VAT rate in almost every EU member country. Here in Finland, for newspaper and magazine subscriptions the VAT has been 0%, where books have 9%. Ministry of finance has proposed that the VAT for newspaper and magazine subscription should be set to 9% as of year 2012. Some magazine publishers have to cope with this situation, some by laying off their staff. Google Translation for this finnish news piece is poor, but basically one major finnish magazine publisher has to layoff 80 people out of 500 because of this new increased VAT.

The strangest thing is somehow it has been decided in the EU that an e-book is “an electronically transmitted product”, which means that it is assigned a higher VAT than the printed version of the book. Below are examples of book taxation in some European countries:

Country Printed VAT e-book VAT
Finland 9% 23%
Belgium 6% 21%
France 5.5% 19.6%
Germany 7% 19%
Ireland 0% 21%
Spain 4% 18%
UK 0% 20%

Personally I think it is ridiculous that basically the same product in different delivery method has been punished with higher taxation. Specially in value added taxation, where the buyer ends up paying the difference. No wonder consumers are complaining about the high prices of e-books compared to the printed counterparts.

I have not followed this issue too much lately, but The EU Director General for Education and Culture, Jan Truszczynski, has commented in the march of 2011:

We believe content should be taxed the same way, whether printed or in tablet.

I cannot agree more. Different book publisher organizations here in Europe have said for a long time that is an issue that needs to be tackled.

Just for curiosity I tried to find out information about how this is handled in the United States. Seems like there the problem is not the unfair taxation, but rather than the complexity, since sales tax can vary by county and municipality. So if Europe is lagging behind in e-book adoption, so are the tax rules on electronic products in this new e-commerce era where geographical location should not even matter that much.

I feel lucky that I am an engineer, not a tax accountant.

SOA and the art of coding

There was interesting bit of news that was caught by almost all news sites. It was a Google Developer who accidentally posted a public rant about Google’s architectural designs not in a very nice way. It was supposed to be seen only by co-workers, but as we all know, soon as you post something in the internet, it is stuck there forever. I read the lengthy post and was pretty surprised how Steve Yegge managed at the same time burn bridges also behind him, but probably a few in the front as well. Calling your previous boss (Amazon CEO Jeff Bezos) a terrible leader and taunting your current employer about incompetence does not seem proper behaviour to me. Even though the post was not supposed to be public. But the post mostly contained how both of the big names are incorporating Service Oriented Architecture.

I have to admit, for a while I have been a big fan of Service Oriented Architecture or SOA and agile methods. To put it simply, instead of programs keeping all the logic and functionalities to themselves, in SOA they can be used as interoperable services. These services can be then utilized by any other programs. The benefits are quite obvious, like reuse and easier integration. Where as API is more an interface to a certain tiny function, SOA in its best can define the API of the whole organization.

In Steve’s post, he told how Jeff Bezos back in 2002 decided that all Amazon services should be built on the SOA principle. The execution might not have been perfect, but in the end it offered Amazon a very big competitive edge. Because Amazon already used SOA to provide basic infrastructural services, like computational power, databases and disk space internally, why not also sell it to outside customers as a trendy cloud service? And it has been a huge success. And if you happened to stumble upon the Facebook Developer page, you can see how much they have placed effort on making sure that  apps utilizing those APIs are popping up everywhere.

But if you choose this open path, I have to agree with Steve that you have to be ready to eat your own dog food. The two past posts have been mostly about IT, I promise to come back to book publishing next time!

Growing Up Geek

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Engadget has run this series of post called “Growing Up Geek“, where the editors tell their story about becoming a geek. It has been interesting to read those stories, because they have a lot of resemble to mine. So here it goes.

I was just around five years old (1985) when a local appliance chain in my home town decided to sell “real computers” for a really cheap price. For reasons unknown, by parent decided to get one. Maybe because my mother had worked with hole cards and mainframes in the 70’s. The computer was called “BASIC 2000“, which had a 3,25 MHz processor with 1 kilobytes of memory. Just to give some perspective to non-technical persons, I have a memory stick in my pocket, which can store 32 billion times more information and my iPhone has probably over one million times the calculating power.

The computer’s operating system was only a simple BASIC-interpreter, which meant that only thing you could do was simple  programming. As you can imagine, this was quite hard for a five-year old who could barely read and write. Somehow I managed to copy the code listings that came with the manual. One of them was a racing game, which took few hours to type in and even the smallest  typo could mean that you would lose of hours work. At one moment I had an eureka moment, noticing that the track was repeating itself and I found it hidden somewhere in the code. Then I made the track completely straight to get perfect score. But the learning curve was a bit deep.

Then two years later, Commodore 64 came to the markets in Finland and I got it as a christmas present. It was technical leap. External tape or disk drive, more powerful processor and a separate SID chip to produce sounds. It had the same BASIC interpreter. But the games, oh my god they were amazing. I remember waking up early on weekends to put in the game cassette in, typing LOAD “*”,8,1 and watching the hypnotic loading screens. Eventually you would spend the loading times reading comic books like Donald Duck.

Then around 1990, I got the Commodore Amiga 500. It was another leap in home grade computing. It provided my first experience with a window based user interface, called the Workbench. It had some cool tools for drawing, like Deluxe Paint which resembled Photoshop of the early days. Mostly it was gaming again, but I learned managed to create my tool diskettes with necessary utilities with disk copiers and antivirus tools. Somehow the computer started to feel a useful tool, in which you could write documents, spreadsheets and do creative stuff like music and graphics. I really do not know what happened to Commodore. Maybe I should get this book about it.

Rest of my geekdom is boring PC stuff with some Mac on the side. I was not much of an Apple fan, but the first iPod Touch kind of impressed me. It happened to be today when Steve Jobs passed away. I would say that Apple has clearly been the absolute trendsetter since releasing the first iPod and Mac OS X back in 2001. My guess is that Apple will have some hard times ahead, because lot of the products culminated to Steve Jobs and his visions.

During my 17 years playing around with computers I have also quite radically changed the way I see information technology. Before I would interested in technology itself but now when I see something new, I immediately start to think “what is it good for” or “what useful things you could do with it”. I think that information technology in general should help people to do mundane tasks efficiently to let them concentrate what they are good at, not wasting their valuable time.

Spotify for books

These discussions around subscription based business models have boomed lately. Customers have been already rejoicing around Netflix and Spotify which satisfy all their needs for movies and music for a fixed monthly payment. Personally I just love Spotify. For a mere 15 euros per month, I can listen to good choice of artists as much as I want. They also have put effort for usability, so all the songs are also available in offline mode for my phone. So no pesky DRM’s to hinder my user experience. I would probably go for Netflix too if they were operating here in Finland.

It is quite easy to understand why some people prefer subscription based models. They like predictability of the fixed monthly fees and the fact that in some models you can engorge the products in all-you-can-eat style. It is also pretty convenient, there is no need to whip out that credit card every time you want to do a micro scale transaction. So in another sense, people including myself are insecure, greedy and lazy. And businesses are abusing this fact. For them it also means more predictable business with steadier flow of income and some motivation to actually develop the product. Because buyer can just cancel the subscription if he/she is not happy with the service received. At least I hope it is so.

From here on, lets concentrate on subscription models in publishing. This week it was being rumored that Amazon is probably going to offer a subscription based service for its Prime customers. Also an interesting spanish version of the same idea by 24symbols have just popped up.

Finnish publishing company Otava launched this kind of service “Luekirja” or “Readbook” with a HTML5-based reader earlier this year. This decision to create their own reader  is probably made to avoid Apple/Android app market royalties. Otava has created a pricing model where you can buy one month subscription for 20 euros per month with a limit of three books. Another option is three books for two months for 25 euros. I have not tested out the service for a while, but in the beginning it was filled with technical problems. But kudos to them for at least trying. It would be interesting to know how it has proven to be business wise.

So When you think about media consumption there are tons of subscription based services selling magazines, newspapers, movies and music already out there and doing just great. Now when you think about it, we have had these so-called book clubs for decades here in Finland. Now e-books and online reading devices just make the delivery part now so much more cost-effective.

This is not without implications too, this will need a lot of work on the publishing contracts and how the revenue is trickled down to the author. There has been some nasty comments around Spotify, like Lady Gaga getting played over one million times and getting royalties for 112 euros. As you can imagine, a lot of artists then quickly pulled their songs from the service. But I have not heard such news for a while, but seems like there is still a lot of debate around this subject. I think if done properly and in honest sense, it is possible to create a subscription based model, where all three major participants (service, publisher, author) benefit from it.

I have no doubt in my mind, that there will a Netflix or Spotify for books. But by whom and when, that is the question. Amazon has a pretty good chance, unless they mess it up somehow.

Why on earth to a publishing career?

Then I was offered a job about 7 months ago in a big publishing company. You have been probably heard this saying that men socialize insulting each other, but not really meaning it. Now my friends are asking “why you jumped from other soon to be extinct business to another?”. Just to clarify, before I was working in the printing industry. All though there might be some analogy between those, I think they are facing completely different challenges. In the printing industry, the demand for certain product types are rapidly diminishing and they have to come up with new sources of revenue.

As a person who likes challenges and everything that is new, swap to a publishing company was an obvious choice. I see a lot of this in the publishing industry, as print on demand, e-commerce and e-books make books more widely available, easier to find and buy. This requires new kind set skills from the publisher. I also have a lot of respect for all the work that publishers have done for decades, like marketing people, publishing editors and graphical designers. These services will stay the corner-stone of book publishing in the future, even though media and sales channels might change.

I think Mike Shatzkin said it well by stating:

“Anybody who doesn’t find the publishing business interesting in its time of digital change is simply not paying close enough attention.”

About social reading

Sorry for the long break. I had a pesky finnish summer flu which knocked me out for one week, after that it was time for the notorious finnish mid summer festivities. I will try to catch up.

Few weeks back I took part in a conference which is part of the European audience research network Transforming audiences, transforming societies. This year, it was held by Aalto TAIK Department of Media. What struck me in the first presentation by Philip M. Napoli (blog) was that traditional audience research is not up to date with new media fragmentation that also book publishers are facing now. Although Nielsen and other well-known rating companies have created information systems to handle these new medias, there is still lot of dark spots in the media usage statistics. For publishers, the buzz around an author, title or specific topic could be used in marketing or when making publishing decisions.

Social reading concepts like presented by Kobo Reading Life can give very detailed statistics about each persons reading habits but also enhances the customer loyalty. Some may see this only as Barnes & Nobles way of differentiating Kobo readers from Amazon Kindle. I like my reading un-interrupted, so I had to remove some of the extra functionalities that it provides. Playing video games almost all my life, I found it a bit interesting how they have incorporated things like achievements or badges as a reward from reading. There is an interesting TED presentation by Tom Chatfield about this subject.

Everybody recognizes the buzz around social media and it is not a surprise that publishers are trying to utilize it. I think there is a lot of potential in this, who wouldn’t like to discuss about a book or receive relevant recommendations for their next book to read? I used to have a co-worker with similar taste and she would give recommendations by sending an email directly from one of the biggest nordic online bookstores. I have to admit that the conversation rate for those recommendations was nearly 100%. If you do not have a somebody to do this for you, a lot of new services like BookLikes and the soon available Bookish try to give readers an answer to the never-ending question, what to read next?

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