ALSOP TO PUBLISHERS: WAKE UP!
By STEWART ALSOP REPORTER ASSOCIATE EILEEN GUNN

(FORTUNE Magazine) – I owe my sister an apology. More than a year ago I left a message on her answering machine, announcing that I was giving a speech called "Authors Are Road Kill on the Information Highway." I thought this was a tickle since I was giving the speech to a bunch of book authors. And since my sister is an author, I was sure she would enjoy the delicious irony.

The week before last, however, she told me that she'd taken my message quite differently. "Imagine if I called you and left a message that pundits were road kill," she said. "How would you feel if punditing was the only thing you knew how to do?" She posed this question with a certain amount of emotion in her voice.

Oops, I thought to myself. Faux pas. I never thought she took me that seriously--she is my older sister, after all.

The conversation that followed that sticky moment is what led to this column:

We talked about how she was trying to use electronic media, both CD-ROMs and the World Wide Web, as a writer. My sister, Elizabeth Winthrop, is an established author of children's books, with more than 40 titles to her name. Indeed, one of my sister's titles, a fantasy called Castle in the Attic, has sold more than a million copies and created something of a cult among schoolteachers and librarians and parents. At this for many years, she is practiced at negotiating the rights for her books to be used in other media, such as audio, film, television, and so forth. But she hasn't actually derived any income from the new media, CD-ROMs for instance.

As I listened to her, I began to see that publishers have missed the point of the World Wide Web. I got the distinct sense that my sister, an individual author with none of the resources of a corporation at her disposal, was much further along in understanding the value of interactive media than most publishing companies. Indeed, it looks and feels as if most book publishers are caught in their own underwear--dealing with significant issues like industry consolidation, declining sales in core markets, and changes in the distribution channel--when there is a remarkable opportunity to use the Web to create a new model for the relationship between author, publisher, and reader. Maybe there is even an opportunity to create a new kind of publishing company, one that produces printed books but uses the Internet to establish a direct relationship with the reader.

There is, of course, Amazon.com, the Seattle company that pioneered the idea that you can use the World Wide Web to provide unusual service to people who like to buy and read books. It's a very cool company, and very successful so far. (It went public recently, and I own shares of it for my own account.) Amazon.com--and other companies like it--raise interesting questions about the nature and role of customer service in reselling products. But they don't do anything to alter or improve the process of writing, editing, and publishing books. (For a different take on Amazon, see Digital Watch, "Why Barnes & Noble May Crush Amazon.")

What my sister wanted was a knowledgeable resource to help her work with these new media. Book publishers, traditionally her ally and partner, have failed to provide that.

Their failure is understandable. If you're in the book-publishing business, it is very, very difficult to see how the World Wide Web is relevant to your business. Authors write books; readers read them. Most authors don't really like spending time with readers, because that's time that they aren't being authors, writing books. Books don't require interactivity--authors write them one way and don't intend to have them modified by readers. And with some exceptions, book publishers do not succeed or fail based on how quickly they can print a book or how well they know the individual book buyers.

The Web, on the other hand, is immediate and interactive. The Web is fast and ephemeral; book publishing is slow and considered. The Web is computer technology; book publishing is paper and printing.

So where's the connection? Sure, book publishers love a bestseller. But given the fact that they're selling to irrational consumers (you and me), and that there's no precise formula for creating a hugely profitable bestseller, they need smaller books to succeed as well. To do that, they must be able to recognize and satisfy the needs of small but devoted groups of customers.

Enter the World Wide Web as a method for building relationships with specific communities. The Web is a tool for reaching out to and maintaining a close relationship with people who are more than random, mass-market customers. The Web is a technology perfect for keeping track of individual interests and for actively feeding those interests. Sounds like a connection to me! Indeed, the very issue that people complain about most vociferously--the concentration of publishers in the hands of a few huge, relatively insensitive media conglomerates--is a problem that would seem to be solved by the existence of the World Wide Web.

As my sister and I kept talking, I began to see clearly how building community goes hand in hand with selling books. One of my best friends is a fourth-grade schoolteacher who had been using Castle in the Attic as a teaching tool for years before she figured out that it was written by my sister. She built lesson plans around the book, generated enthusiasm among her students with an annual project to build their own castle, and held meetings with other teachers to talk about how to take different approaches.

I told my sister that setting up her own Website would allow her to propagate these kinds of activities. She could identify her most enthusiastic readers, establish relationships with them, and create a membership community as a way of building a business around the title. Teachers could share lesson plans through a bulletin board, engage one another in chat rooms, and answer questions from parents. My sister could send out news items about new books in the series. A Website would leverage and build on the enthusiasm for the book.

"That's great," she said, "but I am a writer. I write books. I don't sell books. And I don't make Websites."

Reality intrudes. An author's time needs to be spent writing books. Every commitment she makes to give speeches at schools, to go on promotional tours, or to write magazine articles takes away from the time she can spend writing the next book that will produce her income.

Well, I asked, isn't there any publisher out there who has a reputation for being able to use the Internet to develop book-publishing businesses? None that she'd heard of, even after more than 20 years in the book business. She knows other authors who have tried to set up their own Websites, but they have had to invest significant time without selling enough books to justify the time and expense.

This disconnect suggests that there may be an opportunity here, to create a new kind of book-publishing company, one based on the principles of community building and rapid updating enabled by the World Wide Web. A handful of companies, primarily publishers of computer books, have dabbled with new ways of doing business. One in particular, Ventana Communications (www.vmedia.com), created a new kind of book in 1995. The book comes with a CD-ROM that can be updated when a reader logs on to Ventana's Website. That way, the reader always has the latest information about whatever product or technology the book covers.

Ventana did a good job of linking the book, the CD-ROM, and the Website. And the company allows authors to keep writing--while they work on the next paper edition, the company itself keeps updating the old one online. The first book, which was about surfing the World Wide Web, was obviously a natural topic for this approach.

The only problem is that these links don't seem to have benefited Ventana significantly. That doesn't dampen my enthusiasm, though. I may be biased, but I don't think people care enough about computers and technology to make the effort to go online for updates or to chat about them. I think this new format would work with books that profoundly affect their readers. My teacher friend with Castle in the Attic, say, or individuals affected by the thinking in books with titles like Conversations With God, or cooking enthusiasts who rely on Joy of Cooking but want to share and trade recipes. In other words, the Web can be a real force when the connection between book and reader is strong enough to motivate the reader to do more than just read. All that's needed is a publisher clever enough to exploit this natural opportunity.

Of course, none of this helps my sister, at least not yet. So I guess I can't avoid it anymore: I'm sorry, Elizabeth, that I said what I did about you and your ilk being road kill. I'll try to be more sensitive in the future.

STEWART ALSOP is a partner with New Enterprise Associates, a venture capital firm. Except as noted, neither he nor his partnership has financial interests in the companies mentioned. Alsop may be reached at stewart_alsop@fortunemail.com