Entitle builds a bookshelf in the mobile universe, and North Carolina

By Dan Raile , written on April 15, 2014

From The News Desk

Entitle CEO Bryan Batten is an unlikely librarian. Gangly, tan and sea-worn, the Wilmington, N.C., native might seem more at home on the pro surf circuit than in back room meetings with New York publishing house executives or Silicon Valley investors. But as Entitle, his digital book subscription company, closes in on 200,000 available titles, Batten might be the most important biblio-curator in the land.

Entitle is one of a handful of recent entrants applying a subscription model to the digital book space. New York-based Oyster and San Francisco-based Scribd popped up at about the same time. But Entitle, which, headquartered half a mile from the beach in Wilmington and with just eight employees, is well positioned to take the lead in the field.

Last year it garnered a $5.3 million Series A round of funding, from a single unnamed investor. And it leapt ahead of competitors by being the first to secure deals with two of the ‘Big Five’ (Simon & Schuster and HarperCollins; and Batten says deals are close with two of the holdouts). Recently, Entitle lowered its entry-level pricing to $9.99 for two books per month. Users can also choose plans offering three or four books per month.

It appears that the storied New York publishing houses have decided to throw in their lot with this scrappy underdog, and smaller publishing distributors have followed suit. This is probably due as much to the straits in which the publishers find themselves as it is to the quality of Batten’s product or his easygoing charm.

Times are increasingly tough for the publishing industry, as the staid business models that calcified around the printing press have shaken loose. It’s been three years since Borders declared chapter 11 bankruptcy, leaving a network of commercial caverns across the American retail landscape.

Last year, the Big Six became the Big Five when Random House merged with Penguin. All of these publishers were party to a class action lawsuit in which they were accused of colluding with Apple to fix prices in its iBookstore. Last summer, the Big Five collectively paid out $162.25 million to iTunes users as a result of that suit, while Apple continues to appeal.

And early this month, Barnes and Noble, the nation’s largest, if not only, remaining nationwide chain of brick-and-mortar bookstores, lost the backing of Liberty Group, which had held nearly 17% of the company, plunging its shares and leaving the bookseller on the brink.

Over all of these changes looms Amazon, the sworn enemy of the publishers and booksellers alike, the ecommerce colossus that has been disrupting the hell out of the sector from its earliest days, and lowering the value of their products.

Apple’s 2010 launch of the iBookstore had been the great hope for the publishers in their quest to beat back the Amazonian giant, and the details of the class action suit suggest they were a bit too eager in that regard. Now Entitle and the other subscription services represent a second front in that battle.

Despite this, Batten holds no personal animus against Amazon. “Jeff Bezos is literally a genius,” he says, “I’ve read everything I can about him.”

Batten has also paid special attention to the subscription-model success of Netflix. Early in the development of Entitle, he decided a recommendation system would be its key component. Toward that end, he cherry-picked a group of algorithm ninjas who placed highly as members of ‘the Ensemble’ during the Netflix Prize challenge, the open competition Netflix held between 2006 and 2009 that offered a $100,000 award for beating its own user ratings algorithm.

Entitle’s system has the interesting advantage that it can scan the complete texts of books in its library to deliver more nuanced recommendations (ah, so you like mid-century spy novels rich in architectural descriptions with sudden changes of perspective) whereas Netflix is restricted to judging its content more or less by its cover.

When Batten and I met last Wednesday afternoon in San Francisco, we managed to chat for roughly an hour without using the phrase “the Netflix of eBooks.” The comparison is apt, but it raises the question of whether Americans will consume digital books in the same way they do movies and television.

While many cultural observers lament the decline of effective literacy and of book reading in general, Batten is optimistic. He says that the bulk of Entitle’s readers are aged between 25 and 44. And much like with Netflix, the recommendation system directs readers to books they might love but may not have otherwise encountered.

Entitle offers publishers a way to connect to new readers, and especially the most rapacious ones. Users get to keep the books they download forever, though the files retain industry-standard DRM copy protection, similar to those applied to mp3’s in the iTunes store, which prevent non-monetised sharing. Batten says he would rather do away with this, but it’s a firm condition of the deals with publishers.

In Batten’s vision of the future, paper and digital book consumption reach parity levels soon (“There will always be paper. The number one thing we hear from people who aren’t interested in Entitle is that they just love the smell of books.”), readership increases, publishers maintain their position as curators, gatekeepers and conferrers of that je ne sais quoi of literary legitimacy. ‘Author’ continues to be a compensated calling.

Lest you dismiss this as bumpkin naivete, remember that some of the world’s largest English-language publishing houses agree with him. And the time may be ripe for the world of digital books and books in general to turn a corner, as tablet and mobile phone saturation rises. Entitle’s books are readable on iOS, Android, Kindle Fire, and all other e-readers with the exception of Amazon’s (regular) Kindle.

Batten would like to drop an anchor for a new phase of economic development in Wilmington, a port town near the border with South Carolina. While it is not a traditional entrepreneurial powder keg, it has launched some major international powerhouses – Michael Jordan is from there, as was Woodrow Wilson.

And, since 1898, Wilmington has had the distinction of being the site of the only successful coup d’etat in United State’s history. If Batten has his way it could carry that footnote twice over.

To sum up: video killed the radio star. Netflix killed the video store. Amazon nearly killed the publishing world, until a plucky southern surfer took a page from Netflix’ playbook and revived a dust-bound industry, if all goes to plan.

[image via wikimedia]