Transcript: Rules for the Publishing Road

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Interview with Craig Mod
Recorded at Yale Publishing Course 2014, New Haven, CT

For podcast release Monday, August 4, 2014

KENNEALLY: We’re in New Haven at the Yale Publishing Course, speaking with Craig Mod, a writer and startup adviser. And Craig, welcome to Beyond the Book.

MOD: Thank you. Happy to be here.

KENNEALLY: We’re happy to have a discussion with you because we get a chance to talk about the future of book publishing, which we only get to do – well – on a weekly basis in this podcast series. It’s the topic in the industry.

But I wonder whether it’s a good place to start to think about the present and possibly even the past. And there’s a rule in Italian driving which states it doesn’t matter what’s behind you. Does it matter what’s behind us in book publishing?

MOD: Absolutely, yeah. I mean one of the core pieces of what I spoke about here at the publishing course was taking a moment to look back over the last four years. I think we finally have enough context to make meaningful statements about the import of physical books versus digital books.

You know, four years ago, when I first came to this conference, the iPad had just been released. We were very emotional about was this going to displace all physical books or not?

The Kindle had been around for a while, but it was sort of humming over in the background, over on the side. And it was hard to have a rational discussion about what is – you know, where does paper fall in the spectrum of books and how does paper affect our reading experience?

And we’ve now had four years to sort of live with a variety of formidable e-reading devices, so the – obviously the Kindles and then the iPad and the iPad mini and then also the iPhone 5 with the retina display – iPhone 4, iPhone 5 – and, at the same time, also continued to engage printed media.

So to take a moment and look back over the last four years and say, well, what am I doing now and why am I doing that – how am I reading now and why am I reading the ways that I’m reading – I think is really important. And that’s one of the things I was trying to get at at this course.

KENNEALLY: Well, have all those new devices changed reading? And if they’ve changed reading, have publishers changed with that?

MOD: Well, I think the important distinction to make is, when you talk about what’s changed or what you’re reading, you have to be very specific about the type of material.

So in the case of books, are you talking about nonfiction? Are you talking about literary fiction? Are you talking about literary nonfiction? Are you talking about reference material? And I think each of those different genres or types of books definitely falls into a better or worse category for if it works with digital, if it works better with print.

So personally, I, over the last year or so, have found myself moving back almost entirely to print for literary fiction. So I read a lot of literary fiction, and I’ve moved away from Kindle for that. And over the last couple of weeks, in preparing for the course, I asked myself, why have I stopped reading literary fiction on the Kindle?

And I think there’s a number of reasons, but not the least of which is value propositions, so – and what I mean by that is the value proposition of reading on the Kindle is not great enough to beat the experience of reading on paper when it comes to literary fiction for me.

KENNEALLY: You talk about the experience of reading on paper. For somebody who is an adviser to startups and thinking about the digital future rather than, necessarily, the paper past, what is the piece of the experience that you enjoy?

I would happen to agree with you. I think that the pleasure of having a book in your lap, the functionality of the book is tremendous. If it’s nonfiction, sometimes there’s a search engine. It’s the index in the back, right?

So there’s all kinds of things there. You’re not missing anything. But there’s other parts that are in addition to the actual text. You know, the design is more apparent, the east of flipping back and forth. Are those the things you’re talking about or is it something else?

MOD: A little bit. It’s a little more abstract than that. I mean just to be clear, I read on my iPhone for literally hours every day, which is a scary thought.

But I read all of my medium to short form sort of nonfiction, all my news – I devour several articles a day in the New York Times Now app. I love reading on my phone. And on the iPad 2, in certain instances, so for longer form stuff that I put into Pocket – I do almost all of that reading on my iPad.

And that’s almost always saved for plane rides. I happen to be on planes a lot. There’s often not Internet connectivity on the international flights, so I use that to catch up on all my long form reading. And I love it. It feels right. It feels like the right place to be doing that kind of reading.

But for literary fiction, where the purpose of the reading is not to just get information – it’s not – I’m not trying to learn how to do lean analytics for my startup. I’m not trying to go back in history and sort of look at disruption over the last 200 years. I’m looking to have a conversation with the mind of an author.

And I think there is something about doing that in print where, you know, every Kindle book looks identical. Everything – every book I read in the Kindle app is the same. The font is the same. The margins are the same. And not only is it the same, but it’s not very well loved. It isn’t – you know, the Kindle reading experience is not the pinnacle of reading experiences.

And so there’s something about having a physical edition of a piece of literary fiction that that relationship between me and the text, me and the author feels more meaningful in a way that the value proposition of reading on Kindle does not trump that – that meaning or that connection I feel with the author over the text when it’s in paper.

KENNEALLY: Well, I know that, at the beginning of that tablet revolution, there was a lot of discussion around the so-called immersive experience and how immersive was it to be reading on a tablet in contrast with the experience in paper. But it sounds to me like you’re speaking about something that’s beyond immersion and more about being transported.

MOD: Yeah, exactly. Well, and also it speaks to what is the purpose of literary fiction? What is the intent behind the folks that are doing literary fiction, writing literary fiction, producing it? And I think it is a more, in some ways, intimate, rawer form of reading and writing than most other reading and writing out there.

And so to have that total immersion with the book, without the distractions – and then, for me, I like to go back – the hallmark of literary fiction, for me, is being able to go back two, three, four or five times reading the same book over and over and over and over again, being able to pull it off my shelf and thumb through and look at all of my dog-eared pages for the passages that I loved and being able to do that at a whim in a way that the reading experience and the structure of the user experience and the user interface of the Kindle doesn’t really optimize for.

Going back – and I never go back into my read part of my Kindle library and go, oh, what did I read last year? What did I read two years ago? It just – the distance between me and that library feels weirdly far compared to the distance between my in my bedroom and my bookshelf, which is always there – and I’m always looking at the spines on the books.

KENNEALLY: So you spoke about being here four years ago and the focus on devices. And devices matter. Digital matters. But you’re saying today, I think, that reading is what really matters, which sounds like a kind of a duh moment, right?

MOD: Yeah. Well, I mean this is sort of the curve of new technology as new technology emerges. And you sort of have to push everything else away and just say, OK, I’m going to do everything in this tech because I want to understand it – I want to understand the breadth of it.

You know, when a new piece of tech comes out and you dismiss it, you’re doing yourself a disservice. And I think the publishing industry dismissed most of what came out and, in a lot of ways, fell behind a lot of these startups now that are doing sort of more interesting work than the bigger guys are able to pull off.

And so I think, four years ago, the MO for all of us that were interested in reading and technology was use it for everything. Use it for the max. You know, find where – what are the edges of this technology? What are the edges of the experience of reading within this technology?

And then I think, as you do that and you get to those edges, you’re able to pull back a little bit, and you have greater context, and you’re able to speak with more empathy and rationality about why do I like reading certain materials on this device versus that device? Why do I like reading things in print versus reading them digitally?

And I think, in that sort of that short arc when it comes to technology – the short arc of history for a piece of tech like this – I think that empathy and rationality is incredibly important. We’re finally, I feel like, maybe in the last year or so, at a place to have these conversations.

KENNEALLY: Is the book world at the same place with regard to not so much the technology but with the technologist. In other words, where does book publishing stand with regard to Amazon, in your view? Do you think that they have found some kind of comfort in that relationship or are they still focused on beating Amazon or – and if they are doing any of those things, what should they be doing, in your view?

MOD: Well, I think the difficult piece with Amazon is that everyone underestimates what they’ve built. And so Amazon – getting away from if Amazon is good or bad for publishing and just purely looking at it objectively and rationally as a technical company and the amount of tech that they’ve produced around the reading process and around the distribution process, you look at what they’ve done, and they’ve spent the last 10 years optimizing for this.

Everyone also forgets Amazon runs most of the Internet. The Amazon cloud computing services – an article just came out a few days ago saying that it’s one of the fastest growing businesses ever in history. And nobody associates Amazon with that.

So when you talk about Amazon, you have to realize you’re talking about 10 years of incumbent tech buildup. They have a 10-year lead on anyone who’s starting today who’s thinking about building synch services, who’s thinking about building distribution services, who’s thinking about building payment platforms around books – selling books, distributing books.

And so that makes it tough to sort of tease out the emotional response, which is that, oh, Amazon is killing publishing or, from the perspective of the big five, because they have this monopoly stronghold on, effectively, what is the printing press.

You know, the difference between what Gutenberg invented and what Amazon has invented is that, if you looked at – if Amazon had invented – if the printing press – if Gutenberg’s printing press was the equivalent of Amazon, you would look at the printing press and you’d go, oh, I can probably replicate that and, you know, it’s just a couple of sort of dowels and a press – and take an old wine press – a grape press – and we’ll put it together and we’ll make this printing press.

But the fact of the matter is that what we see on the surface of Amazon – the equivalent would be – for the printing press – would be that the printing press actually underground – it goes underground 400 stories and occupies 4,000 football fields underneath whatever the thing is aboveground that we see that we think we can replicate.

And I think that’s the case of Amazon, and that’s what makes Amazon so powerful and also dangerous as a monopoly is that it’s not just that they have some cultural power over saying, oh, we’re going to distribute these books and we’re not going to distribute these books, because they don’t have total distribution power. I mean we can still buy books at Powell’s. We can still buy books at Barnes & Noble online.

But it’s that they’ve invested in what the future of reading looks like in such a way that it’s almost impossible for anyone to catch up to them. And the result of that monopoly – the monopoly on tech – is that we’re seeing less innovation in e-books than we would if they had real competitors, which I don’t think they do.

KENNEALLY: So, if I follow you, the book industry’s view of Amazon is rather like the sailor’s view of the iceberg.

MOD: Speak to that a little.

KENNEALLY: What I mean is the sailor only sees one-tenth, right? Isn’t that the point? And nine-tenths of the iceberg is lying underwater there. So coming up upon it, you really only think of it as something which is far – it’s far greater than what you see it.

MOD: I see. Yes, exactly. Yeah. It’s the tip of the world’s most complicated iceberg. You go under the ocean and there’s a whole universe. It’s almost incomprehensible how complex the iceberg is.

KENNEALLY: In your keynote address, I understand, for the Yale Publishing Course in its week of speaking to the book industry, you contrasted Amazon with a startup that I actually know fairly well – Wattpad. We’ve spoken with Allen Lau a number of times on Beyond the Book.

And tell us more about that. You find some things really worthwhile in what Allen is doing at Wattpad – and illustrative of what others ought to be doing, I think.

MOD: Yeah. No, I’m a big fan of Wattpad for a number of reasons. I think Allen is doing a great job with the product. I think, as a CEO, in terms of the way he’s running the company and the leanness with which he’s running the company and the ethos with which he’s running the company, it’s all top class

I think Allen’s motivation is not beat Amazon. You know, there’s a story – a classic story over the last couple of years where, when Rakuten bought Kobo, Mikitani-san, the CEO of –

KENNEALLY: And tell us – because some won’t know – Rakuten is – if I could put it on a bumper sticker – the Amazon of Japan.

MOD: It’s the Amazon of Japan – yeah. They’ve been around forever, and you can kind of buy anything on it. And so Mikitani-san, the CEO of Rakuten, bought Kobo. And after buying Kobo, he delivered a shirt to the CEO of Kodansha, which is the biggest – it’s effectively the Random House of Japan. And the shirt said beat Amazon on the shirt.

And, to me, that is the worst thing – it’s the laziest thing you can possibly say, because it’s a meaningless platitude. It’s dogmatic. A conversation can’t start from that. It’s so one-sided – it’s so short-sighted as well – that even to think you’re going to beat Amazon is – if that’s where you’re starting from, then you’ve already lost, because you’ve already underestimated the iceberg.

And so, instead of saying beat Amazon, what I think would have been inspiring is if Mikitani-san brought a shirt to the Kodansha CEO that said delight readers.

KENNEALLY: And that’s what I think you feel Wattpad and Allen Lau are doing. They’re thinking about the readers first and thinking about what the readers want out of the experience.

MOD: Absolutely. I mean there’s a couple things that Amazon doesn’t do well, and Amazon doesn’t do social well and it doesn’t do human well. And so Allen, from the get-go – from what I understand – he’s been focused on how do we make a nourishing, positive community for people to come to and write the kind of – do whatever kind of writing they want to do.

And they can do it serially. They can write the whole book on their laptop and then upload it later or in pieces. They can write it live in the Wattpad interface. They can do whatever they want. But first and foremost is that connection between reader and writer.

And I think one of the craziest things about Amazon is, despite the fact that they have all this technology and despite the fact that the Kindle is such a compelling platform in terms of distribution and allowing readers to quickly buy your books as an author, the distance between reader and writer – between author and their readers – is as far as it’s ever been.

And if a reader buys a book on Kindle, as an author you’re in no way closer to that reader than if they bought a print book. That’s insane. That’s absolutely crazy. And Wattpad and Allen’s ethos has always been the reader and the writer should be in the same room having a conversation.

Obviously, there’s a certain scale past which that doesn’t work – and certain writers on Wattpad who have millions of readers can’t have a conversation with all of them. But certainly, in the beginning throes of starting a book and being a writer, to have that kind of intimate conversation with readers, I think, is amazing.

And I love that Wattpad’s optimized for that. And because they’ve optimized for that, a lot of the big five have completely dismissed Wattpad. And despite the fact that Wattpad’s now been around for – since 2006 – so what is that – six, seven, eight years, right – that’s wild that they still feel like a startup. They’ve been around that long.

Their engagement numbers are off the charts – just absolutely bananas. They’ve got more engagement than I think even Facebook at this point – more time spent reading per user on their Website – and, because of that – and because Allen has run it so leanly – when venture capitalists hear about that level of engagement, they want to give Allen money, and they realize the burn rate is so low.

And so Allen and Wattpad raising $45 million in April – you know, if Allen is still running the company as I understood him to be running it a year ago or a year and a half ago, that $45 million can last them a long, long time. And Allen, when he speaks about the future of the company, he speaks about getting to a billion readers – and not just a billion readers, but a billion delighted readers. And that’s just such a wonderful way to frame it.

And so when Mikitani-san says – you know, I think Mikitani-san does a lot of interesting, innovative stuff. And he likes to be abrasive – certainly in the media. And obviously he’s a competent CEO and he’s an incredible CEO, building up Rakuten the way he’s built it up. But I think, when Mikitani-san says something like beat Amazon, it’s a letdown for all of us who want more folks like Allen, who are thinking about delighting readers above sort of so-called beating Amazon.

And in a way, Wattpad has more of a chance of beating Amazon than Kobo ever does.

KENNEALLY: Well, we’re talking with Craig Mod, a writer and startup adviser at the Yale Publishing Course in New Haven. And it’s a long way from New Haven to Tokyo, where I understand you live for most of the year.

And I wonder if you can give us a quick appraisal of the book publishing world from the perspective of Tokyo. Do things look pretty much the same as they do here in New Haven or is the world very different if you’re sitting in Tokyo?

MOD: Print definitely still dominates in Japan. And one of the reasons I love living in Japan is the print culture there is so strong. And the books and magazines that are produced there are still some of the most beautiful in the world. It’s inspiring every time you walk into a bookstore. And I actually live in the neighborhood I live in specifically because it has one of my favorite bookstores in the city. And I’m there almost every day.

But Japan is funny because they were so reluctant to embrace Kindle or iBooks or the iPad. I mean, when the iPad was announced, a lot of Japanese media referred to it as so-called black ship, which is in reference to Commodore Perry coming in and opening the Port of Yokohama, ending the Edo period and starting the Meiji Restoration. It meant folks seeing the iPad as this foreign sort of antibody coming into this culture and ripping apart the publishing culture – forcing it apart.

And Kindle as well – Amazon struggled for years to get Kindle contracts and to get publishers to accept Kindle. And Kindle just launched in Japan a year and a half ago, which is six or seven years after it launched in the States – which is wild. So Japan has a six-year lag on sort of Kindle usage and adoption. And then iBooks just launched 15 months ago – I think March, 2013. So even iBooks was a couple years behind.

So Japan’s been really reluctant to embrace these new technologies. And so that’s another reason why Mikitani sort of saying beat Amazon was depressing is because I think Japan actually has pushed back the technology to such a degree that, in a way, Japan is where America was four years ago in terms of tech adoption, in terms of reading and things like that.

And I have a collection of essays coming out in Japanese in October. And the way I’m framing it is, in a way, it’s four years of writing about books and publishing in the States – in the West. And it’s kind of a time machine.

And so I’m presenting it to Japanese publishers and readers and writers and technologists and startups over there to say, hey, here’s a crib sheet of the last four years of what’s happened in the American publishing industry. And Amazon has kind of won out in this tech monopoly. Here are a few steps to try to mitigate that.

And Japan is in a place, I feel like – for me, it’s a very optimistic place to be in. The print industry does not need to go away. And they’re doing the best print that I know of. And, at the same time, they obviously have a lot of startup acumen, and they can build startups that can go around and do the things that Amazon does poorly.

And I think they have an opportunity that is more difficult here in the States right now to not subvert or beat Amazon, but to delight readers in a way that Amazon can’t.

KENNEALLY: What’s the role of the government in Japan? I don’t know. And I wonder whether that bookstore you love is protected, if you will, by government – or at least legislation – the same way bookstores are in France.

MOD: It’s a good question. I don’t know in great detail the book laws in Japan. But this is something I should be clear on. But I do know that there are discount laws. So, for example, Amazon, I don’t think, is able to discount paperbacks in the same way that they can, obviously, in the States – and very similar to, I think, France and Germany as well. They have similar laws.

KENNEALLY: Well, Craig Mod, a writer and startup adviser here at the Yale Publishing Course – we say thank you and arigato.

MOD: Ah, doitashimashite.

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