With more than 600,000 apps in the App Store alone, according to Apple, not to mention e-books for the various e-readers, enhanced e-books, and book-based apps for Android and other platforms, discoverability is critical for publishers of e-books and apps.
Licensing a media brand or merchandise-supported literary property is one way to break through the clutter. “Having a strong brand or a recognized book title helps solve the visibility problem,” explains Michel Kripalani, founder of Oceanhouse Media, a developer of e-book apps based on Dr. Seuss, Berenstain Bears, and other licenses.
Despite the clear benefits, however, being involved with licensed titles can be complicated for publishers, in part because the Hollywood studios and other licensors have in-house digital divisions or existing relationships with digital developers. Where do print publishers fit into their digital strategies?
“We always ask for digital rights, and when we renew, we always ask for an expansion to include digital rights,” says Chris Angelilli, v-p and editor-in-chief, executive director of licensed products, Random House Children’s Books. “It’s on a case-by-case basis whether they grant them. Some are eager to work with us, and some choose to go another way.” Random House has digital publishing rights for all frontlist and backlist titles for eight of its branded properties, including Barbie, Thomas & Friends, and DC Super Friends, as well as for some Sesame Street books.
“We’ve just begun publishing selected licensed titles in the e-book format,” says Lori Benton, v-p, group publisher, Scholastic Trade. “For the most part, the e-book rights were not part of the original contract and we’ve gone back and negotiated for them, and we’re certainly making them part of any new license agreements.” Scholastic currently holds e-rights for Star Wars, Scooby Doo, Chuggington, and Hot Wheels.
What rights licensors are willing to grant their print publishers depends on their overall digital strategy. “As licensors, we have to be in the space whether our publishers are ready or not,” says Jennifer Perry, v-p, worldwide publishing, Sesame Workshop. Sesame began its own subscription e-book store in fall 2009 with Impelsys and has more than 160 standard, audio, animated, and “lite” interactive e-books available there.
It also direct-distributes 30 e-books based on titles from its various publishers to Amazon and Barnes & Noble, has relationships with developers including Callaway and Scrollmotion, and has begun granting digital rights to its print publishers. “When they have a strategy, we will support them,” Perry says. So far, of Sesame Workshop’s 150 publishing licensees, only Random House and Publications International have asked for e-book rights. Random House sells 20 titles from the Step Into Reading and Happy Healthy Monsters series, while PIL introduced its first app last week.
Star Wars licensor Lucasfilm has granted e-publishing rights only to its print publishers so far, focusing first on straight print-to-digital conversions of adult fiction, according to director of publishing Carol Roeder. Random House has digitized all of its Star Wars novels, while Dark Horse is doing the same for its comics; both are releasing print and e-books simultaneously going forward. Scholastic is digitizing its Star Wars middle-grade fiction this year.
Conversely, Nickelodeon is doing all of its digital publishing in-house, directly distributing e-books based on some of its bestselling print titles for the Nook, Kindle Fire, and Apple iBook, as well as original “appbooks,” created with Wave Generation. Appbooks are “more gamified books,” says Steve Youngwood, executive v-p and general manager, digital. “They’re not a reading replacement, but more story-driven game play.”
Beyond Digital Conversion
While licensors have typically granted their print licensees limited rights for e-book conversions—sometimes with narration, music, or sound effects—publishers increasingly want to add animation, interactivity, or original content. Random House asks its licensors for rights to all digital formats, including standard e-books, e-books with audio, enhanced e-books, and apps.
But the lines can be blurry and ever-evolving when it comes to defining an e-book versus a book-based app, enhanced e-book, or game, and conflicts can sometimes arise. “There’s a ton of gray area,” says Graham Farrar, cofounder of zuuka, which holds licenses for the Smurfs, HarperCollins’s Biscuit, and others under its iStorytime brand. “If it’s a straight page-to-pixels translation, where you’re not changing the content but just the delivery mechanism, then it’s pretty clearly publishing. But if it’s a Puss in Boots book with character audio narration, drums, and activities, it becomes a real transmedia experience. To call it a book really stretches the bounds.”
That’s one reason Nickelodeon is handling its e-activity in-house. “It’s all very gray, and we want to be able to manage the grayness ourselves,” Youngwood says. “We can put game-like stuff in the e-books and book-like stuff in the games, and not tread on anyone’s toes.” Meanwhile, Nickelodeon distributes digital video, games, books, and music, all of which work on the same devices and are sold through the same channels. “These are broad-based media consumption devices. You can distribute content in much more integrated ways that you can’t do at physical retail.”
Some developers, such as Oceanhouse, specialize in apps that closely reflect a print book. “Our design is to do a true representation of the book in digital form,” says Kripalani. Ruckus Media Group, on the other hand, positions itself in a separate niche from traditional e-books. The rights granted by its licensors, which include Crayola and Big Idea (VeggieTales), vary. “It’s A to Z in how the deals are structured,” says Lynn Smith, director of new business development. “It depends on how much the licensor is doing or not doing [in e-publishing], and if they have a print partner and what they’re doing in digital.”
To differentiate e-books from e-gaming, meanwhile, developers and publishers focus on the story. “All the interactivity is inherent to the story and propels the story forward,” Smith says.
In addition, any activities not only tie directly to the story but are simple, such as coloring or search-and-find. “They’re not skills-based and they’re not level-based,” says Kristy Cox, DreamWorks Animation’s head of worldwide publishing. “There’s not a competitive aspect, so they don’t overlap with what our gaming team is doing.”
For licensors, communication between its internal teams and external partners is key. “The onus is on us internally to have close ties to our digital division,” says Margie Chan-Yip, Hasbro’s v-p of global publishing. “We have to keep each other abreast of what’s happening from the beginning.” Hasbro has allowed its publishers to extend their print titles into e-books, with Little, Brown introducing titles this fall, Reader’s Digest launching a mix-and-match e-book, and Egmont Digital creating e-books, enhanced digital apps, and e-magazines. Ruckus oversees Hasbro’s enhanced digital storybooks, with nine titles available on the Ruckus Reader and more to be introduced each month.
Toward Incremental Sales
Each digital format attracts different customers, which helps avoid cannibalization. Farrar says zuuka rolled out a Smurfs iPhone app, followed by a standard e-book, Android app, and enhanced e-book. While each format sold slightly less than the one before it, sales of the previous incarnations held steady, suggesting that each attracts a specific audience.
Similarly, Chan-Yip reports that IDW’s digital comics based on Hasbro’s G.I. Joe and Transformers have been growing steadily, but there has been “no attrition from the print product.”
And Youngwood says Nickelodeon’s print book business continues to grow, even as the digital business has taken off in the last year.
The evolution of e-readers and tablets may provide licensors and publishers with a more viable business model than apps, especially on the children’s side. If e-book customers turn out to be less price-sensitive than app customers, e-books could cost-effectively include more interactivity and animation. “With apps, I haven’t been able to see the revenue benefit of offering a product to consumers with more bells and whistles at a higher price point,” she says.
Despite the challenges, licensors and publishers look forward to growing their digital publishing programs together. “Everybody recognizes that there’s an opportunity,” Roeder says. “The proliferation of devices has become so significant that it has become more than just a marketing initiative.”