MORRISVILLE — Where others see obstacles Bob Young sees opportunities.

Thus the “red hatter” marketer and evangelical believer in Linux who helped create a company called Red Hat is taking the same process to his new enterprise, LuLu.

Seeking to capitalize on the continuing consolidation in the music and book publishing industries, Young is opening up LuLu to authors and musicians who can’t crack – or don’t even want to try cracking — the big time.

“We are looking at this the same way Marc Ewing and I looked at software with Red Hat Linux,” Young says, referring to his Red Hat co-founder and Linux code guru. “The amount of consolidation that was going on in software was a good thing for the shareholders of those companies, but it was not a good thing for consumers.

“The more consolidation you get, the prices tend to go up, and the number of choices tends to go down. What we’re seeing in the recording industry, the textbook, book, film and music industry is massive consolidation. The creator — where an author or journalist — has fewer and fewer options to bring their music or book to market.”

Into the breach steps LuLu.

Getting ‘published’

Young announced this week that LuLu Enterprises is morphing into a larger site for publishing of all kinds — music, books, even online photo albums. He’s trying to take advantage of the continued consolidation in the publishing and entertainment industry to give fledgling authors, musicians, photographers and artists new ways of getting “published.”

At the same time, he also wants to see these creators keep more of the profits their intellectual power creates.

“We are creating a peer-to-peer publishing network,” says Young, his voice as excitable and enthusiastic as ever. “It enables authors or musicians or photographers to bring their works to the marketplace directly without having to ask the permission of one of the major publishers.

“We want to let the authors in this world know that LuLu is up and running. It’s functional, easy to use, and it has a growing number of users — from authors of textbooks to poetry.”

Young stepped away from his duties at Red Hat and launched LuLu last year. He’s done a number of things with the new company, from putting on a “Tech Circus” — a new spin on trade shows — to digital online publishing. Now he’s expanding LuLu into a multimedia-publishing house with a variety of additional services, such as layout and design of books to linking authors to publishers who can print a “real” book one at a time or hundreds of a time.

And he’s set up LuLu in such a way that the creators keep all rights to their property. LuLu earns certain fees for services. Most of the money goes to the artist, which is hardly the case with the publishing houses and music industry.

Choice, choice, choice

Young also cites the lack of choice for authors who may have a great idea but little chance of convincing a publisher to buy an idea.

“If you want to write an Economics 101 textbook, there are six textbook publishers in the country, all of whom have their own Economics 101 textbooks,” he says. “You have this limited supply of textbooks, which tends to drive up costs.

“On the one hand, there is a large demand for the textbooks. On the other hand, there are a large number of people capable of writing the textbooks. In the middle is the publishing industry which is acting as a bottleneck for the suppliers of the knowledge and the consumers of knowledge.”

A “perfect medium” to erase the bottleneck and help all involved outside of the major publishers is “a peer-to-peer network,” he says.

Another upside for authors and musicians beyond getting published is the opportunity to truly cash in if a book or CD becomes a good seller.

“You listen to musicians these days and the bulk of them say they have to sell 250,000 records before they make any money from a major record label by the time the label takes out marketing costs and all its other costs,” Young says. “If you publish and sell your own recording, for every copy you sell or every concert you have, you earn 80 percent.

“Why bother with a major record label? Even if you only sell one tenth as many records, you make 10 times the money!”

LuLu is going to make its money by providing services, including the selling of ISBN numbers which are necessary to get books listed in libraries. But Young also says LuLu has a chance to create quite a stir in publishing.

“If we are successful, we are going to re-invent the publishing business,” he says. “One thing we are not is a publisher. We do not make the author or artist sign any publishing agreements or any form of exclusivity. The control of the artist’s work belongs to the author. We are simply the marketplace to help them bring their work to market.”

He also says LuLu is not an online auction site. “eBay sells things,” he explains. “We sell content.”

Young is sure to stress that LuLu does not intend to be a threat to publishers but a boost. In fact, he sees authors starting with LuLu and then working with the publishing houses and recording labels as they generate traction and a following.

“We’re almost like a farm system,” he says, using a sports analogy for minor leagues.

And he is encouraged by the number of people already expressing interest in what LuLu offers.

“We’re adding 10 new books a day,” Young says. “We think this is just a drop in the bucket on where we should be. Our technology is actually getting quite mature, and we are getting a better understanding of what authors and consumers needs.”

Oh, LuLu also offers a nice hat for sale as well. Gone is Young’s trademark red hat. In its place is a baseball cap branded “LuLu.”


Rick Smith is managing editor of Local Tech Wire.