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ZolaBooks plans to be one-stop shop for e-reading

By Kevin Nance,

Withphysical books being overtaken in the marketplace by their digital counterparts, dozens of companies are scrambling to secure their share of attention — and revenue — in the lucrative e-book market.

Much of the battle is being waged by retailers competing with proprietary e-reading technologies such as Amazon’s Kindle, Barnes & Noble’s Nook, Apple’s iPad and iPhone and Kobo’s range of e-reading apps and devices. Another corner of the playing field is curation — the process of recommending books, usually with the help of algorithms that identify titles similar to the ones you’ve already browsed or purchased; online booksellers such as Amazon and BN.com are finding their turf encroached upon by non-retailers such as Goodreads.

Then there’s the parallel world of book-related discussion on Facebook, Twitter, Tumblr and other social-networking sites (not to mention blogs and the digital arms of traditional print media such as newspapers and magazines), most of them competing for hits and advertising dollars.

Joining the literary scrum this month is ZolaBooks.com, a venture whose strategy is to combine all three of the e-book world’s major market functions — retailing, curation and social-networking — in an ambitious bid to become a one-stop destination for book lovers on the Web.

“So far, no one has translated what readers do in the real world — drawing on a wide network of friends, institutions and trusted tastemakers — in an online environment,” says Zola chief executive Joe Regal, a former New York literary agent who co-founded the site a year ago with Michael Strong, a key architect of Sotheby’s online. “Our question was: What do people want to do in terms of seeking out and buying books, and how do we help them do that online?

“We know that people want to network with their friends around books, and so we’re creating the first social network that only does books. We also know that people are influenced by tastemakers who can lead them to the next good book to read. There are a lot of places to get that information, but nobody’s put them all together in one place — a place where, by the way, you can also buy the book.”

Consumers will be guided by Zola’s trademarked “curation engine” that uses rating and purchase-based algorithms along with expert input from book critics, bloggers, authors, publishers and booksellers, whom they can “follow” a la Twitter. “If you read a book that you like and then see that Ron Charles of The Washington Post gave it a good review, then you can follow Ron Charles to see what else he recommends,” Regal says. “If you’re a fan of crime novels, and notice that [the owner of the Mysterious Bookshop in New York] Otto Penzler blogs about those books, you can follow him. Or you might follow the recommendations of your local indie bookseller, or your local library or NPR.”

Previewable in beta form, Zola plans a soft launch Wednesday, offering e-book exclusives including “Making Mavericks,” a memoir by the Northern California surfing legend Richard “Frosty” Hesson (a movie version starring Gerard Butler opens Oct. 26), and Gordon Dahlquist’s “The Chemickal Marriage,” the conclusion of a fantasy trilogy. Subsequent exclusives will include the first e-book edition of Audrey Niffenegger’s mega-selling “The Time Traveler’s Wife,” with a new chapter by the author, who is also a Zola investor.

E-books from hundreds of publishers, including the Big Six (Hachette Book Group, HarperCollins, Macmillan, Penguin Group, Random House and Simon & Schuster), are scheduled to be available in a phased rollout over the next few weeks. (E-books sold on Zola will be the same as those from other e-retailers, and will be priced roughly the same, with bestsellers costing an average of just over $11.)

Usable on all devices

Another keystone of Zola’s strategy is to sidestep the proprietary e-reader problem — which forces readers to choose a particular device — by marketing digital books that can be read on all e-readers, not just one.

The Zola reader will work as an HTML5 applet on all Web-enabled devices; the reader uses cloud technology to store the e-books, which can be downloaded onto any device. Apps will be available for the iPad and other tablets and devices, but the reading experience will be essentially the same.

When customers decide to change devices, they won’t have to re-purchase the book, he adds. Customers just log onto Zola and upload the book to the new device, which opens on the last page read on the previous device.

Along the way, Zola — funded by about 20 investors, mostly from the book industry and named for the 19th-century French novelist known for his socially progressive politics — gives its customers an easy way to help keep independent bookstores from following major chains such as Borders into extinction. In return for in-store promotion, Zola provides the bookstores with home pages (“storefronts,” in Zola-speak), then forks over 60 percent of the net profit from every book sold there. Zola users can even “declare allegiance” to their favorite indie stores, funneling most of the profit from their e-book purchases back to their own neighborhoods.

Unlike IndieCommerce, the American Booksellers Association’s non-exclusive e-retailing program originally partnered with Google (and more recently with Kobo), membership in Zola is free to booksellers.

“There’s no downside that I can see so far,” says Katie Fransen, the book buyer at One More Page Books in Arlington. “We’ve been looking to get into the e-book market, but it costs quite a bit of money to use IndieCommerce [$175 per month]. The key thing is that people are going to have to get used to a new platform.”

Revenue model

With that kind of profit-sharing, how can Zola earn revenue? “With scalable technology, social marketing and no physical infrastructure to support — retail space, etc. — we can be profitable on slimmer margins than traditional bricks-and-mortar stores,” Regal says.

Zola has been embraced by many publishers, some of whom — including Macmillan, which has publicly feuded with Amazon over e-book pricing — regard it as a way to preserve traditional book-distribution channels while expanding the market for digital books.

“Joe comes from our community, and he’s trying to create a site that’s a combination of Goodreads and Amazon, a destination site where people can buy books and also hang out and exchange ideas,” says Morgan Entrekin, president and publisher of Grove/Atlantic. “I also love the fact that he’s offering independent booksellers a way to get into the e-book business, because whatever we can do to keep independent bookstores around, I’m in favor of.

“It’s important to have a diversity of distribution channels, but what we’ve been seeing is a concentration of those channels in just a few places. They can do great things, but I think it would be unhealthy, and maybe dangerous, if Amazon or Barnes & Noble or Google or Apple had complete control of the e-book market.”

Zola’s path forward has been complicated by Kobo’s announcement in August of a new partnership with the ABA, though Regal is untroubled. “We are delighted that the ABA has partnered with Kobo to provide a device to stores who want to sell devices,” he says. “Because Zola books can be read on all Web-enabled devices — Kobo devices as well as devices many readers already own, such as iPads, Nooks and Kindles — this is great news for everyone.

“We also think that while a lot of stores believe a device is their salvation, the future is all about tablets. That’s where the numbers are, and the iPad mini is coming this season, and Google’s Nexus is looking like a winner. So the job is to convince the stores who want devices that having a partner whose services cross all devices is the way to go.”

Hurdles to success

A more serious snag in Zola’s business plan was the Justice Department’s ongoing lawsuit against Apple and several major publishers over alleged collusion in the pricing of e-books, which had the effect of delaying retailing agreements between Zola and the three publishers (Hachette, HarperCollins and Simon & Schuster) who settled with Justice. Those agreements are still being negotiated, which led Zola to scrap a big-bang launch in favor of a phased rollout.

“We realized that there’s no need to wait for a moment when we have 100 percent of all e-books — we can roll them in as we go,” Regal says. “I personally love the idea of sudden transformation, from nothing to something, but the steadier, more patient approach of gradual growth might be smarter. I do feel extremely confident that we’ll offer the vast majority of e-books from most publishers by the end of this year.”

Nance is a freelance writer.

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