Preparing a general overview of crowdfunding platforms I learnt about some initiatives that focus on the book publishing industry. Earlier I was under assumption that a Dutch start-up called ‘Tenpages’ was the only player in this field. So, what is deal? Who is doing what?
Crowdfunding Initiatives in Book Publishing
I have come across four different initiatives. Two of these are Dutch (Tenpages and BookaBook), one is French (Editions du Public) and Authonomy is British.
| Name |
Owner | Short Description | Review | Video |
| TenPages | Valentine van der Lande & Investors | Intermediate helps aspiring authors to get published by traditional book publishers | Tell Fleur | In English |
| Authonomy | HarperCollins Publishers | Online Community. Using the wisdom of the crowd to spot – and sign – the next big bestseller | Blog Nathan Bransford | ? |
| ÉditionsduPublic | A group of six founders | Supporters of would-be authors (literature) may become co-editors who help fund publication of books. | Guardian | In French |
| BookaBook | Andro Bottse and Arthur le Cosquino de Bussy | Readers may become shareholders by buying shares for €15 each. When sufficient shares are sold BookaBook publishes the book. | Blog Kallisti | In English (bad quality) |
As you can tell from the included table you can find information about the separate platforms at different locations. Here I wish to highlight some of the main differences between them.
Via Tenpages authors can upload ten pages of their manuscript hoping to convince enough readers to invest in the manuscript and become a financial supporter. Having found enough investors, TenPages submits the manuscript to one of its partners (publishing houses) to have it published.
Authonomy follows a similar route, but it is different in the fact that supported manuscripts are published by the owner of the platform, HarperCollins, not by partner organisations. The same goes for BookaBook, a somewhat questionable internet based publisher.
When I come to think of it, Authonomy is not a crowdfunding but a crowdsourcing initiative at most. Users are not funding anything. It is a online community of readers and writers that makes excellent use of tools such as ranking and recommendations. According to its FAQ Authonomy is intented to find new, talented writers HarperCollins can sign up for their traditional book publishing programmes. But Authonomy is clearly much bigger than that. Without any question it delivers the publisher many marketing advantages.
The people behind Editions du Public preselect manuscripts and make these available on the platform (if I understood correctly). Next readers can turn into co-editors. This means they help to get it published and financed. Thus, different than Tenpages, it makes a preselection and than hands the publication process over to individuals rather than publishing houses.
Competitors?
Both Authonomy and BookaBook aim for an international audience, that is English-speaking users. As far as I can tell Editions du Public has no intention to make it accessibly to users other than the French.
Currently Tenpages is entirely a Dutch entreprise but it has international ambitions. The Dutch company is seeking partners in different countries. I don’t think it has much to fear from BookaBook or EditionsduPublic (with France as the possible exception). Authonomy might be a different story.
With Authonomy HarperCollins Publishers has taken their fate in their own hands. Even though it doesn’t fall in the same category as Tenpages – being a crowdsourcing community of one publisher rather than a crowdfunding platform that works with several book publishers – they are competitors as they compete for the attention of the same target groups. However, this does not mean TenPages is in trouble. There’s enough room for both. But this situation may change in the future, when other initiatives may enter the scene. Considering the growing attention for crowdfunding and crowdsourcing, I think this day is nearing.
This post could do with crowdsourcing of its own. Do you know more about any of these initiatives? Or maybe you know about a platform I didn’t mention there? Please leave a comment!
Kenneth Lim
March 23, 2011
Hey Fleur,
Thanks for putting together this overview!
Authonomy walks that fine line between crowdsourcing and plain old laziness
– The model is set up in such a way that HarperCollins editors don’t have to review piles of manuscripts, just the best ones each month. While this is one way to separate the wheat from the chaff, it poses challenges in keeping a community engaged. The “talent spotters” who read and vote for manuscripts aren’t rewarded with anything beyond self-gratification and bragging rights.
This is clearly different with the three other platforms. In spite of my critique of TenPages last year, I now admit that they do have a transparent model (although not very well explained but they do have an ROI calculator tool). The terms and conditions for both Editions du Public and BookaBook are rather vague, especially BookaBook’s. BookaBook has a high price per share (€15). At the same time, there’s no clear minimum total investment required. If I buy one €15 share, I have no idea whether I’ve funded 1% of the project or 10% of the project. To me, that’s weird and makes investing a complete crapshoot.
I agree with you that these platforms can co-exist and that there’s room for other players.
A peer/expert review-type platform like Authonomy is likely to be reserved for powerhouses that:
- Have a large and active enough user community;
- Can employ experts; and
- Can fund and execute ideas.
Crowdfunding initiatives look promising, but for a platform to be attractive—and thus sustainable—I think these are the guiding principles:
1) Low Threshold: TenPages did a good job here by keeping the investment amount per share at a very manageable €5. The other two are considerably higher. If I compare the Guardian’s review of Editions du Public to the current rules, it appears that Editions du Public lowered its required number of shares per manuscript from 2,000 to 1,000. A high threshold will act more like a barrier (while you’re actually trying to encourage participation) and will impede progress (and time-to-market!).
2) Investor Clarity: I touched on this earlier and I realize these business models are tough to figure out, but people need to see what they’re paying for and how their investment will pay off. BookaBook’s vague model seems to play more off greed than (business) sense.
3) Return on Investment: This is the reality check and a good measure of feasibility. While I understand that there’s a lot of sympathy involved in sponsoring a book project, I can’t help to still calculate an investor’s break-even point. The revenue shares for investors are 10%, 25% and 20% for TenPages, Editions du Public and BookaBook respectively. Based on a retail price of €20 (excl. VAT), the number of copies that need to be sold to break even are: 3,750 for TenPages; 2,200 for Editions du Public; and 2,625 for BookaBook. Here’s where a relatively low revenue share and a high number of total shares comes back to bite TenPages investors in the ass: the required investment is lower, but the risk of a net loss is higher.
I appreciate that these crowdfunding platforms exist to provide both a service and an opportunity to (aspiring) authors. I also appreciate that these platforms are businesses that need to generate cash flow and an income. At the same time, I’d like to close with this thought:
The biggest threat crowdfunding platforms face isn’t competitive platforms (e.g. Kickstarter) that offer (more or less) the same service. Instead, it’s the market entrant that doesn’t necessarily have to generate an income out of offering such a service (e.g. Google or Facebook).
Back atcha
telfleur
March 23, 2011
Kenneth, many thanks for your insightful comments! Great how you focus on the business case!
I too think that many of these initiatives have great difficulty in turning it into a profitable business. The companies will need to seek out ancillary revenues, say Tenpages selling additional editing or marketing services to the creators. This is not only necessary to find new earnings but also to keep potential ‘free’ competitors at bay. Added value and all… Then, what about the investors? Well, according to the Marketing Director of Indie GoGo is about 20-40% of the total sum by people you don’t know. The rest is donated by people you know – your friends, family… A representative of another crowdfunding initiative even has stated that 90-80% is funded by one’s own network. This is important to keep in mind, because it tells you that investors are not (only) in it for the money but also because they care about the creator/creation. (See how the eyes of the marketer now start to shine – the thought of a pool of loyal, paying supporters!!) For sure this mechanism is at work when it is about causes, ideas and possibly book concepts. In other words, I doubt if book investors really expect a return of investment…
Many thanks again, best, Fleur
Kenneth Lim
March 23, 2011
I agree that most book investors aren’t in it for the money (the stakes are too low for serious money-making). A sizeable portion of the funding will always come from an artist’s personal network.
The economics shouldn’t be viewed as a way for people to make a quick buck. Rather, a healthy ROI model lowers barriers and incentivizes participation from “strangers”
Valentine
March 23, 2011
@Fleur, thans for the great outline. I think it will be useful to many people interested in new publication methods. Kenneth, thanks for your clarifying comments as well.
I have only got one small remark to add: royalty percentage doesn’t indicate everything, because it is easy to give high royalty’s but if only 500 books are sold, you’re better off getting 10% of a good print run. I expect the books that get published through TenPages.com to be able to realize substantially higher print runs than e.g. with self/online publishing, so the nett revenues should become more interesting. Also worth remarking is the fact that many ‘investors’ do not only (or even: mainly) join for the potential revenues, but also to be involved with the publishing process, help the writer, be mentioned in the book, get invited for the launching party etc.
Hope that clarifies a bit more, and as I said: good, extensive analysis!
Valentine (TenPages.com)
Gael Policano Rossi (@gael3D)
February 14, 2012
I’m a Latin-American author and I¿m currently fundraising for the reissue of my book on this crowd funding platform http://idea.me/proyecto/85/vosiyo-reprintme!3?siteLang=en_US
Thank you for your time! ♥