My work day started and ended (and twice in the middle) with people asking me if I heard the story from the Wall Street Journal that Simon & Schuster CEO Carolyn Reidy announced they are planning to delay the ebook release of some of their new titles three to four months after the hardcover release, taking a stand against discount ebook pricing, and Hachette is doing the same. Before I went to bed I read the news that Harper Collins is also falling in line.It is important not to lose sight of the fact that Simon & Schuster is talking about doing this with 35 out of 2000 titles they publish in a year. This strategy is for blockbuster releases, not for most books.
Last summer I applauded Dominique Raccah (in this post) for taking a similar, bold, and (at the time) unpopular stand, and starting this conversation when the WSJ reported that Sourcebooks would delay the ebook release of one of their major Fall titles. I'm becoming less convinced of the viability of this strategy.
Did you read the quote from Hachette Book Group CEO David Young?
"We're doing this to preserve our industry," Mr. Young said. "I can't sit back and watch years of building authors sold off at bargain-basement prices. It's about the future of the business."
Preserve our industry? Years of building authors? For a company as progressive as Hachette on the digital front, it sounds to me like Young is more concerned about the past than the "future of the business." This feels more like grasping at the stream to pull the water back into the bucket, but it may be too late. Compare these actions and statements to the position Amazon took three years ago selling digital books, often at a loss, to prime their pump into the digital market. They actually encouraged publishers to set their digital list price to match highest priced available print edition to increase the value of their $9.99 price point. Publishers were happy to oblige since Amazon pays publishers a percentage of the digital list price. The higher the list price, the more the publisher makes and Amazon potentially loses. This is tempered somewhat by distribution agreement clauses stating that digital list prices will be consistent across retailers, so publishers can't drive up the list price for Amazon and lower it for Sony, B&N, eBooks.com, etc.
Unfortunately, industry leaders are now telling digital book consumers that they are not important. They are attempting to roll back the swell Amazon has been stirring up for three years. They want to band together to cling to old practices before the market grows large enough to be deemed significant. Yet, regardless of the desire to preserve our old business model, the real power is in the hands of the market--the reader, the consumer. Consumers don't care about "preserving our industry" or protecting the "years of building an author." Consumers of all goods and services today expect to get what they want, when they want it, for the best price they can get it. Period.
The strategy of delaying ebook releases may actually harm the industry more than it will help. The digital market may be small, but they are also voracious readers, active consumers of digital and print books, technically savvy, and vocal. Do we really want to piss them off? Seems to me that denying this group access to the most popular titles is simply going to promote piracy. (Note: Piracy, IMHO, is really only an issue for the blockbuster titles anyway. It is word-of-mouth marketing for the rest of us.)
Rather than denying consumers access to the most popular titles in the digital editions they want, why not take advantage of the flexibility the digital market provides? Big ticket publishers could offer prerelease digital editions before hardcover and actually charge a premium for it. Publishers can also offset high priced new release ebooks with sale priced and even free backlist. And, publishers should adjust the price of a title through its life cycle. Why should a digital edition be $9.99 if a mass market paperback is available for $6.99?
I know that publishers cannot dictate the selling price a retailer sets for its books but if retailers like Amazon and Barnes & Noble aren't willing to honor a publisher's premium list price, pull it. That is another benefit of the digital market. You can change prices, and even turn things on and off with a "flip of a switch." And, there's no reason a publisher can't sell digital editions direct from their own Web sites. If it is a premium, prerelease edition of a blockbuster title, consumers will find it.
At B&H we are actively exploring and experimenting with fluid pricing strategies. We are also embracing the real challenge of using the power of technology to enrich and connect content, readers, and authors to add value consumers are willing to pay for beyond a $9.99 read.
That's the way I see it, today anyway.
13 comments:
Thank You very much for your recent article.
I am a voracious reader and a Kindle owner. It seems like everyday I am running into another article or another Publishing executive informing me that my purchase of over 100 books in the past nine months is ..
DESTROYING PUBLISHING!
and that their authors must be protected from me and my consumption of their product.
It is a puzzle to me. I thought that as a buyer of literary products I would perhaps be ... valued. Courted. Appreciated?
Another Kindle owner and voracious reader. I've purchased a lot more books since buying my Kindle. It's sad to me that publishers refuse to get creative and embrace the changing climate.
I think they will shoot themselves in the foot with this strategy. Take the delay in the release of Under the Dome--after the meh reviews of the book, I lost interest in reading it and canceled my ebook pre-order. While they would have never gotten my money for a hardback because I'm only purchasing ebooks, now they won't even get the money I would have spent on the electronic version.
My $10 may not matter a lot to them now, but as ereaders increase in popularity it may in the future as the money adds up.
Anon & VR - thanks for your comments. I'd be curious to know your thoughts on fluid pricing. Are there authors for whom you'd pay a premium to get their book before print is available. What's the most you've paid for a digital book? What do you wish you could get for your ebooks today?
Allow me to ask that last question differently: What do you wish your ebooks would do? Connect with other readers? Connect with the author? Search for related works?
I have to admit, I was pretty skeptical about the whole ebook industry when I first heard about it and thought I would not want anything to do with it.
I look forward to my time alone, kicked back with a good glass of scotch and a Michener novel. The thought of scolling down a screen instead of flipping through the pages seemed a bit impersonal, but I've recently realized how handy they can come in while travelig to and from job sites or meetings when I don't have to do the driving.
I wish now that they could have been available back in my days on the submarine. They would have come in handy during those long months out at sea and having very limited space for bringing personal belongings. You just can't get enough books into a seabag along with your necessaties to last a whole sea patrol.
Although, at least for me, ebooks could never replace the real thing, it's nice to have them available when needed.
If they could only somehow get that "old book" smell to be released from the screen, I may be converted.
I have to admit, I was skeptical about the ebook industy when I first heard about it. I thought it would never work. People are too tied to their computers and laptops now, who the heck wants to quiet time staring at yet another computer screen.
I look forward to my time alone with a nice glass of scotch and a Michener novel and getting lost in another world for a few hours. The thought of scolling down a screen instead of flipping through the pages seemed a bit impersonal. And there's no smell! You completely lose that great smell of birch or aspen that releases more and more from the pages the older the book becomes.
But today, in my current position, I sometimes spend time in the passenger seat of a vehicle traveling to and from jobsites or business meetings and having a Kindle would be quite handy on long trips.
Thinking back, I now wish this could have been available back in my days on the submarine. Having very limited space for personal belongings, I could have had a few thousands books under my bunk at any given time. You just can't get enough books into a seabag along with your necessaties to last a whole sea patrol.
So although, at least for me, ebooks could never replace the real thing, I am sold on thier value.
If they could just somhow figure out a way to get the smell of pulp to be released from the screen, I may be converted.
Thanks for the dialogue, Paul. I really enjoyed your post and found some of the options you discussed interesting.
I'm not sure about fluid pricing because rightly or wrongly there is a perception by the reader that an electronic book SHOULD be less than a paper book because there is no actual printing costs. I have not paid more than $9.99 for an ebook, but I might be tempted to go a little higher (10.99 to 12.99 or so) if it was released BEFORE the paper release AND it was a favorite author. I say that because with 25-30% off coupons offered by bookstores, I'd be wary of paying more for my ebook than I could spend at a store with a coupon, even though I rarely purchase paper books anymore.
There would have to be something more than just early release to entice me to pay a premium price. If you were to add "extras" to the ebook (insight from the author, codes to unlock additional features found on the internet or something like that, like they do with DVDs today) I would be more willing to pay a higher price.
As far as what I wish ebooks would do--I don't expect them to "do" anything different than an actual hard copy of a book to do. But maybe a virtual book club forum where readers could connect with each other or the author could be a neat option.
If one considers the "content" of the book as having value, then the cost to manufacture it is irrelevant. Price the e-book above the discounted hard copy for the time the hard copy is not yet out for sale. Drop the e-book to something less than the actual book store price if you feel the value is less when the hard copy is released, then again when the demand drops off until you are selling the tail because all the other sources are no longer available to the publisher. He cannot count used books because he gains no income from them. The e-book still has more value than a paperback with the cover missing or a hard cover that is water damaged or otherwise not sellable in the store. Rather than piss and moan and shoot themselves in the foot, they should be taking advantage of this new medium and making money from it.
Some great points in this NYT article (http://bit.ly/64Uicp), my favorite being:
Let’s say you unwrap your holiday presents and see a fancy Kindle, Sony Reader or Barnes & Noble Nook. Just what you’ve always wanted! You turn on your new device, navigate to a wireless bookstore and search for Don DeLillo’s new novel. Instead of a simple click and download right from your armchair, you’re told it’s only available in hardcover for the next four months.
Are you really going to put down your new book reader, get in your car, drive to the store and buy the hardcover? Probably not. Instead, you’ll click the ‘back’ button and search for something else to read in the digital bookstore.
The problem is that if publishers sit idly by while major retailers train the public that the value of a digital copy of a book is $9.99, and that becomes the reality, we have a problem. When a couple of players - Apple, Amazon, Google control the marketplace (and it will look something like that) - you can be guaranteed that they are not going to choose to lose money on every sale forever. You can do the math as well as anybody. Take your current discount to Amazon off of $9.99 instead of the DLP. Subtract the author's royalties which they are certainly entitled to. What do you have left to pay acquisition editors, publicists, marketers, sales people, customer service, designers, etc., etc.? A whole lot less than you do if you sold that book as a HC.
Paul - its not about whether these readers should have the same access. It is about the fact that the retail players are taking us down a path that eventually leads to a publishing model that is not viable - shall we say it...profitable. Publishing is already very low profit but if it is unprofitable, it goes away.
You are an editor at heart. What happens if authors bypass publishers and self-publish? What does the quality look like in that world? In a world without publishers, where are the next great writers discovered? What about marketing? Is it enough to have an author connected through social media pushing his/her content? I have recent experience to say that is not enough. If there is not the money available to market great new writers, can their voices break through the noise of every other piece of media competing for attention?
Your idea about selling on the website is a good one. Its certainly been batted around.
Don't get me wrong - I don't think that eBooks are worth $25 unless it is a specialized product. There aren't printing costs involved nor are their traditional distribution costs or returns. All of these things should be factored into a price to the consumer that is MUCH more reasonable than a traditional HC price. HOWEVER, $9.99 is not a viable price.
I get that people are not a fan the strategy these publishers are employing, but in a world where vertical price fixing is not legal, publishers have two options: make it available to retailers or don't. Within those limitations, you have to make choices that you believe are best for your authors, for your employees, and for your future.
Food for thought. -CB
You say:
"if retailers like Amazon and Barnes & Noble aren't willing to honor a publisher's premium list price, pull it."
Is that exactly what's going on? A+B&N refuse to honor the publisher's pricing request, so the publishers are pulling the books. But instead of pulling them completely, they are merely delaying their entry to this market.
What's the fuss?
CB-
Thanks for the comment. You are on to something. Following your example to a time when digital is primary and print is secondary, what do we need publishers for anyway? That is exactly the question publishers need to be asking themselves.
At best, delaying ebooks is a stop-gap measure, and one likely to alienate an audience growing in size and importance, but I do "get it" for blockbuster titles.
Still, the market simply does not care about the viability of $9.99. Rather than forcing people to wait or pay more for a format they don't want (which isn't going to happen), publishers need to become more efficient and creative because you are absolutely right, the future will not support the past's business model--paying acquisition editors, publicists, marketers, sales people, customer service, designers, etc. I can imagine a scenario removing at least three, maybe four of those roles. But the point is that publishing, as an industry, needs to find a new paradigm in an online world where nothing stands between an author with an idea and an audience willing to pay for it.
I imagine we will continue to see a handful of major publishers continue to publish a handful of blockbusters and market them through a handful of retailers. (People like things that are popular.)
Beyond that, we are going to see an even greater glut of content hitting the market. Publishers will move toward facilitating "self-publishing," keeping the lights on by selling the services of copy editing, design, typesetting, digital and print-on-demand distribution, taking a smaller piece of thousands more works while creating a farm league of authors and titles from which any one may break out and get moved up to the bigs where development editing, marketing, and packaging is reserved for the middle and top tier titles.
The growing glut of content will keep downward pressure on price points. And yes, overall quality will suffer, yet, great writing may stand out even more.
Publishers won't be discovering new voices. Consumers will. Publishers will facilitate the flow of content. Retailers will facilitate the aggregation of consumers.
Marketing is one area where publishers can specialize, primarily through their relationships with retailers, or their ability to aggregate consumers themselves, to bring real value to the equation.
For the self-published author, yes, social media and selling books through the major aggregators like Amazon, Apple, and Google probably is enough for them to reach their niche and possibly get discovered by a larger audience, but I'm inclined agree that effective marketing is going to require more than social media.
This is one possible view of the future anyway.
Thanks for representing the other perspective and keeping the conversation going.
Anonymous December 15, 2009 9:36 PM
Point taken.
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