Will Apple's NYC Event Reveal iTextbooks?

Using iBookstore On iPad

The rumor mill is hard at work today following the news that Apple (NSDQ: AAPL) will hold an iBookstore-related event in New York City toward the end of January. What could that announcement be?

For starters, it seems unlikely that Apple will simply announce a self-publishing platform. That’s because the company already offers one. But what about a publishing platform for interactive textbooks?

The blog Good EReader said this morning that “sources close to the matter” tell it Apple is “launching a new digital self-publishing platform to get people’s content into the iBookstore.” But Mark Coker, CEO of self-publishing platform Smashwords, pointed out to me that Apple already offers the ability to sell self-published books directly through the iBookstore, via iTunes Connect. This program offers less hand-holding than those offered by Amazon (NSDQ: AMZN) and Barnes & Noble (NYSE: BKS), however: Users have to have their e-books ready as EPUB files with ISBNs, and Apple says on its website that “if you are not sure how to create digital editions of your titles, or if you have other operational or financial needs, it may be best to work with an aggregator. Aggregators are experts in ePub conversion, formatting, marketing, promotion, and price optimization.” Apple supports seven aggregators, including Smashwords, and according to Coker, the way they work with these aggregators is unique:

All of the aggregators are subject to ongoing audits where Apple scrutinizes every aspect of our business for our ability to serve their publishers, and if any of us don’t make the cut we’re dropped from the program….No other retailer has such a rigorous qualification process for authorized aggregators. Unlike others, Apple actively encourages authors and publishers to deliver books through their aggregators. Apple realizes that they’re going to earn a 30% commission whether they source the book from an aggregator or from their own platform, and books sourced from aggregators are more profitable for Apple because they can be sourced at lower cost (no need to invest millions of long term dollars to maintain and staff their own platform) and greater scalability than from one’s own platform.

It’s clearly in Coker’s best interest to promote Apple’s use of aggregators for self-publishing e-books, because he is one. It’s possible that Apple could beef up its current direct self-publishing options by starting to offer services that it’s left to its aggregators up to now. But assuming the company doesn’t want to start offering more hand-holding for e-books in general, what else might this event reveal?

Clayton Morris says it “will focus on iTunes University and Apple in education,” that the initiative “has been in the making for years” (and that Steve Jobs was “intimately involved with this project before his passing” and “gave a hat tip to the textbook side of this project in the Isaacson biography”). And MacRumors says that “Apple last month filmed a series of short interviews with textbook industry executives. The interviews are said to have been of the type that would be used in one of Apple’s promotional overview videos for a new product or service,” though there’s no proof that these interviews were intended for the upcoming NYC event.

Combine these rumors and you get…something along the lines of a self-publishing platform for digital, multimedia-heavy textbooks. Blogger Mike Cane thinks Apple will reveal a beefed-up self-publishing option that lets users incorporate e-book enhancements like audio and video. He sees this being used for graphic novels, but a multimedia self-publishing platform could focus instead on interactive textbooks (though it might be open to other types of books too).

That would certainly be a service that Barnes & Noble and Amazon don’t offer. (Amazon rents and sells textbooks for Kindle, and KDP users can self-publish books with images but not with audio or video or other interactive enhancements.) And this service has the advantage of not competing directly with big-six publishers (remember, Apple originally offered big publishers agency pricing as a way to entice them to sell their books in the iBookstore) and general trade books.

Numerous startups have focused on digital textbooks, iPad textbooks and so on–some with publisher backing–but no clear winner has emerged in that space. Apple enters the field with major name recognition, a book publisher-friendly reputation and a large student user base. Combine these factors, and placing your money on an iTextbooks-related event seems like a good bet.

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