Sunday, July 19, 2009

Dominique Raccah responds to WSJ piece

Dominique Raccah, Publisher and CEO of Sourcebooks, wrote the following post in response to last week's Wall Street Journal piece. This post originally appeared at BookSquare, and is being published here with Dominique's permission.

What are words worth, I wonder?
by Dominique Raccah, Publisher and CEO of Sourcebooks

Given responses to the Wall Street Journal article on Monday, I thought it might be useful to explain some of the thinking that went into the decision to delay the ebook release of our very hot upcoming children’s book, Bran Hambric.

And that includes this background: We need a sustainable author/publisher model, and it’s probably not the model of old. But the new music model of low-priced content and sales of concerts and ancillaries is probably not a viable model for book publishing. Authors, unlike musicians, don’t typically have paid live performances (and t-shirt sales are usually few). They have words. And we need to have a real conversation about what those words are worth (and that’s what the pricing issue is actually about) and how do we keep them worth enough to support authors, authorship and publishers. And yes, we can (and I suspect will) have a conversation about whether that last piece is worth supporting and at what level.

But here’s the thinking:

  • I agree wholeheartedly that digital formats should be readily available, immediately (you can see from other decisions we’ve made how important digital is to us).
  • We are being told (repeatedly) that ebooks are inherently less valuable—they are not physical; they are not easily ported; they can disappear at any time; etc. The value issues of ebooks are not issues that can be solved by a single publisher.
  • Eretailers are suggesting that the “right” price point for an ebook is maximally $9.99. And they are proselytizing the price $9.99.
  • We can’t control what retailers charge for books or ebooks. The choices book publishers have are:
    - To make the product available, and when
    - To have a relationship with that retailer
    So that’s the fundamental decision we get to make. It’s not, what’s the right price for this author…or for a book that he’s worked 10 years on (yes, Michael Malone’s new hardcover The Four Corners of the Sky is also not available as an ebook)…it’s just do we make it available and when?
  • Formats have windows. We know when we (book publishers) put out different formats in the lifecycle of a book. So we shouldn’t be releasing ebooks at the same time that we release a hardcover book. We should be releasing ebooks when we release the trade paper or mass market of the hardcover and can then price appropriately to that. To me the decision is analogous to a new release in movie theatres; we don’t expect that movie to be immediately available on DVD.
  • There are some who say, digital and print don’t cannibalize and you’re going to miss sales. But isn’t this the same as people (myself included) who say I’ll wait until it comes out in paperback or I’ll wait to see the DVD? And don’t those people sometimes forget and not buy or rent? So yes, there’s a risk that sales will be missed, but isn’t that a risk that has always existed in format choices?
  • If you continue with the lifecycle concept, the vast majority of the books we (Sourcebooks) publish will release in e-formats at the same time as p-formats because we are primarily a trade and mass paperback publisher. And in fact our xml workflow structures towards simultaneous release in multiple ebook/ereader formats.

I would also argue that music is absolutely not the right model to compare books and book publishing to. And newspapers are even less appropriate. However, that’s a really long conversation, and I’m a publisher not a pundit. We should make the choices that are right for our authors and their readers.

We are at the beginning of model building. If hot frontlist titles are to be available in e-formats, they need to be priced by the publisher, at a reasonable discount from the hardcover retail price (to take into account the devaluation of eformats). I am totally open to that. But that’s not an option currently available. I think people may be willing to pay the premium to have the new new thing, or they may want to wait until the price falls with the trade paper edition, at which point the e-book price should be adjusted and $9.99 may make perfect sense.

I agree with Kassia that it’s dangerous to expect consumers to play by the rules of last year’s business model. I’ve taken action in this one situation and I certainly wonder if there are other options that are neither mine nor the $9.99 option. And I also agree that we need to experiment, and I see our industry beginning to do that. But this pricing and release-date situation doesn’t feel like an experiment. This actually seems more like a dictate that could have enormous ramifications, perhaps not today, perhaps not tomorrow, but certainly long-term on the future of authors and books. And I think all I’m saying is, let’s think about this. It’s too important. As a publisher, we have to be strategic, book by book (and it’s important to remember that we’re talking about 1 book; Sourcebooks has 850 ebooks available). These are big decisions for our authors and ourselves. So in situations where the e-format release could hurt the author’s launch, what if we were to wait?

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