Posts Tagged ‘Pricing’

Digital Book World speakers share eBook strategies and models

Back in September, Macmillan CEO John Sargent reported that pirated versions of 90% of Macmillan’s frontlist titles could be found online, stirring much conversation about what, if anything, the book publishing industry can do about piracy.

Timing of eBook releases, pricing and digital rights management are all topics that will be discussed at Digital Book World. The new conference on publishing and digital change will take place January 26-27, 2010 at the Sheraton Hotel and Towers in New York City, and will offer consumer book publishers information and insights to enable them to craft strategies for adapting to, and embracing, digital change.

On the first day of Digital Book World, Brian Napack, President of Macmillan, will deliver a call to arms for publishers to fight what Macmillan sees as a mortal threat: piracy in the eBook space. In Digital Book Piracy: It’s Here. Let’s Deal with It, Napack will describe Macmillan’s view of what each publisher can do and what the industry should do to fight a problem, which, in his company’s view, could threaten the underpinnings of publishing as a commercial enterprise.

“There’s a big difference of opinion among digital thinkers about the impact of piracy and what can be done about it, but there’s not a lot of dispute in the big publishing houses that it is a threat to the core model of selling quality content,” says Mike Shatzkin, CEO of The Idea Logical Company and Digital Book World’s Conference Chair. “We’re delighted that Brian is willing to address this question head-on.”

“One of the new models being entertained by a number of fledgling enterprises and entrepreneurs is an ‘eBooks first’ strategy,” adds Shatzkin. “We recruited Raelene Gorlinsky to come talk about Ellora’s Cave, because they launched that strategy ten years ago and have been growing ever since.”

Gorlinsky, the Publisher at Ellora’s Cave, has plenty of experience in the eBook world. She will do a Q&A with Shatzkin on the second day of the conference reviewing the history of the “eBook first” company. During Ellora’s Cave: A Case History of a Different Publishing Model, Gorlinsky will describe Ellora’s Cave’s beginnings publishing PDFs for romance readers. She’ll share some of their very unusual practices such as delaying release of print editions to allow plenty of time for selling the eBook first; printing their books in their warehouse on demand; and paying royalty rates on a scale and frequency that would make conventional publishers squirm.

Join your peers at Digital Book World on January 26-27, 2010 at the Sheraton New York Hotel & Towers in New York City.

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By Ryan Chapman, Internet Marketing Manager, Macmillan

A lot of the discussion about eBooks tends to frame the format in absolutist and misleading terms.

“It will destroy print.”

“It will devalue the book.”

We shouldn’t make the mistake of assuming a growing new format will upend the entire industry (remember the fear concerning audiobooks?). The format will dictate the content and this makes for one of the most exciting shifts in the industry since the rise of mass-market paperbacks.

I bring up mass-markets as an analogy and a precedent. Could you imagine pitching the concept to publishers? “It’s a smaller trim size, printed on cheap paper, and we’ll charge a third of the hardcover price. Yes, hardcovers are beautiful objects, but we think there’s a big opportunity here in treating our books as disposable commodities.”

I wouldn’t be surprised if industry pessimists back then expressed the same fears of cannibalized sales and devalued content that they do now regarding eBooks.

Mass-markets defined their own readership (at airports and supermarkets) and genres (commercial and genre fiction); you don’t see biographies or political nonfiction in this format. Of the current top 20 bestsellers on the New York TimesPaperback Mass-Market Fiction list, 8 have never been published in hardcover (disregarding the large-print hardcovers for Snow Angels and Hot on Her Heels).

The eBook format is no different. After the digital transition, we’ll find that certain books fit an eBook audience, while others are meant for print. Personally, this year I purchased hardcovers that I would never buy as an eBook (Thomas Pynchon’s Inherent Vice), and vice versa (Steve Knopper’s Appetite for Self-Destruction).

Of course there will be overlap. Of course there will be outliers. It’s foolish to think this will be cut and dry on either side.

Thankfully, the publishing industry will be able to weather this transition with greater ease than at previous inflection points. Returning to our analogy, a mass-market pilot program for a major publisher would have required a significant amount of capital for market research and R&D. Not anymore. A lot of traditional market research tools have become affordable (if not free) in their digital forms. Creating consumer surveys, testing book covers, sampling book fairs (for the YA market), etc. Publishers leveraging their direct-to-consumer channels will gain unprecedented reader data at much less cost than in the past.

In the digital transition, we’ll stumble and fall more than once. Harlequin felt this recently with the warm reception for their Carina Press announcement, and the cold shoulder Harlequin Horizons received a week later. But now we can “fail fast forward,” informed with real-time reader response to determine what readers want and in which formats.

The data will most certainly run counter to our guesswork and opinions.

Bowker’s Kelly Gallagher has noted eBook consumption favors fiction over nonfiction at a rate disproportionate to print. (We’ll learn more during his Digital Book World presentation, “Today’s eBook Consumer: A Look at First-Round Data from BISG’s On-Going Survey of Consumer Attitudes Toward eBook Reading.”) Is this significant of eBook habits overall, or merely the behavior of the early adopter community? How much of this is determined by the device?

Reading on a dedicated ereader is different than reading on the iPhone or PC; this too will determine purchasing behavior in the coming year. e.g.: I can embed links to YouTube videos and relevant URLs in my ePub, which, for the right title, makes it a more attractive media property on the iPhone than the Kindle.

Just as 40% of New York Times mass-market bestsellers have never seen the traditional hardcover format, I predict that by this time next year we’ll see a trade title flourish as an eBook, with little or no print support. I’m not talking about Stephenie Meyer selling 10K copies of the Twilight iPhone app, but a word-of-mouth hit operating solely within this new market. Maybe it’ll be a thriller encouraging readers to seek out YouTube content; or an extremely topical work of satire pushed to market at twice the speed a printed book can be crashed.

We know all change is disruptive, and in an industry with thin profit margins that can be scary as hell. It may get worse before it gets better.

Whatever happens, though, I find it’s a thrilling time to be in publishing.

Ryan Chapman works for Macmillan as an internet marketing manager. In January he’ll transition to working exclusively with Farrar, Straus and Giroux. You can follow him on Twitter at @chapmanchapman or on his blog.

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A free webinar, presented by Digital Book World.

“In the social realm, there’s nothing better than true engagement between customers and brands (through the employees that represent them).”

Shiv Singh, VP and Global Social Media Lead for Razorfish

No conversation about publishing’s future and the importance of engaging readers directly is complete if it doesn’t include the perspective of the independent bookseller — our partners, curators and, most importantly, community organizers.

Indie Booksellers and the Digital Transition: Opportunity Knocks?“, a free webinar from Digital Book World, will address the challenges and opportunities ahead for independent booksellers, and what a digital future means for them.

  • Is it possible to compete with Barnes & Noble, Amazon, and Wal-Mart?
  • What effect will publishers selling direct to consumers have?
  • Where do POD and ebooks fit in the picture?
  • How can social media be used to build a community, online and in-store?

Debbie Stier, SVP/Assoc. Publisher for HarperStudio and Dir. of Digital Marketing for HarperCollins will moderate a lively conversation with out panel of independent booksellers: Stephanie Anderson, WORD (Brooklyn), Patrick Brown, Vromans (Pasadena, CA), and Bridget Warren, Vertigo Books (College Park, MD)

Indie Booksellers and the Digital Transition: Opportunity Knocks?” will be held on Wednesday, December 9th @ 1 pm EST // 10am PST.


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Digital Book World addresses pricing issues, new business models, and strategies for moving forward

“While I take a back seat to no one in arguing that publishers owe it to readers to provide books in all formats at reasonable prices… and that the customer ultimately drives the business, it’s important to remember that publishers have another set of customers who are in play and upon whom they are equally dependent,” says Don Linn, Former Owner/CEO of Consortium Book Sales & Distribution and partner in Quartet Books. “Those customers are called authors and creators and we need to balance their economic realities with those of readers.”

The impact of pricing on midlist authors, the workhorses of most publishers’ backlists, is the topic of discussion in Linn’s op-ed, Caught in the Middle: Publishing’s Other Customers.

“We need these writers and a significant component of a publishers’ role is to sustain, encourage and build their careers,” Linn explains. “When content’s price and value is pushed below a sustainable level for publishers, these writers will suffer.”

Linn – a publishing veteran who recently founded and quickly disbanded his epublishing initiative, Quartet Press – will be moderating a provocative panel discussion, “New Business Models: Changing the Commercial Rules of Publishing“, at the upcoming Digital Book World Conference, January 26-17, 2010 in New York City. Panelists will include Diane Naughton, HarperCollins; Richard Nash, Cursor; Eoin Purcell, Green Lamp Media; and Chris Morrow, Northshire Bookstore.

Digital Book World will also address the pricing issue head with Ebook Pricing: What They Should Cost, and Why, bringing together Tim McCall, Penguin Group USA; Michael Tamblyn, Shortcovers; and Kassia Kroszer, BookSquare to discuss how publishers should approach the subject of eBook pricing as well as how much control they actually have. In Back-Loaded Book Deals: No (and Low) Advance Contracts, Profit-Sharing and Other Innovative Business Models speakers Roger Cooper, Perseus Vanguard; Robert Miller, HarperStudio; and Susan Ginsburg, Writer’s House will discuss their own new models and how the terms can represent a win-win… and when they don’t.

Find a schedule-at-a glance and learn more about Digital Book World programs and events and register by November 20 for a discounted early rate to the Conference at or follow @digibookworld on Twitter or join the Digital Book World group on LinkedIn.

NOTE: Early registration ends November 20th.

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By Don Linn, former owner/CEO of Consortium Book Sales & Distribution

One of the matters much on my mind recently has been retail book prices for both electronic and print editions. I’ve been knocking the subject around for several months, partially due to the ongoing clamor for free or cheap long-form content (spotlighted most brightly by Chris Anderson’s FREE), partially due to an aborted personal foray into digital publishing, and most recently due to the retail price war currently underway among Amazon, Wal-Mart, Target, Sears and others, where prices of hardcover bestsellers (not remainders) have been pushed below $9.00.

That’s below the retailers’ purchase price in most instances and is clearly unsustainable over time (if not illegal, as the ABA has alleged).

Many have cheered lower prices as a way to grow readership and entice readers to purchase more books (both E and P). After all, readers are getting great deals and publishers (so far) are still getting paid on standard discount schedules. Others have taken a more nuanced look and have written about the consequences of sharply lower prices and ‘de-valuing’ content over time. Bob Miller, Publisher at Harper Studio, describes brilliantly the ‘roadkill’ attendant to deep-deep discounting in “How Much Should Books Cost?

While I take a back seat to no one in arguing that publishers owe it to readers to provide books in all formats at reasonable prices (e.g., in most cases maintaining print prices on digital books is borderline insulting) and that the customer ultimately drives the business, it’s important to remember that publishers have another set of customers who are in play and upon whom they are equally dependent.

Those customers are called authors and creators and we need to balance their economic realities with those of readers.

Let’s be clear. In most cases, the days of monstrous advances are over. Publishers can’t afford them and the few superstar authors who can command them will at some point recognize their ability to self-publish and distribute far more profitably (and quickly) than their current publishers can. Stephen King is a brand. Nora Roberts is a brand. They don’t need a publisher’s imprimatur or antiquated logistics to sell truckloads of books. Those folks will be fine.

By the same token, writers who do not rely exclusively on income to pay the bills can also self-publish. Tools and services are readily available and mostly easy to use so that the aphorism, “We’re all publishers,” is true. Some will use self-publishing as a stepping stone to more traditional publishing. Others will master it and create work comparable to the best traditional publishing has to offer. A thousand flowers will bloom.

The publishers’ author/customers I worry about are those who fall between these two groups. They are the people who write for a living and who bring us the workhorse books in their categories (from literary fiction to genre fiction to all manner of non-fiction). Their advances have historically been relatively low and their sales relatively modest. They write for major publishers and independents. They write books that backlist and, in a small but very important number, they write really important books that either break out commercially, or say something significant that might not otherwise get said.

We need these writers and a significant component of a publishers’ role is to sustain, encourage and build their careers. When content’s price and value is pushed below a sustainable level for publishers, these writers will suffer. They will be forced to make the economic choice to write less to finance their careers. It’s not enough to say glibly that ‘writers have to write so they will’ or that self-publishing will be their salvation.

When content’s value drops, self-published content’s value drops as well.

We can develop new advance and royalty schemes, profit sharing payments for authors and other ways to carve up receipts from book sales among booksellers, publishers, agents, and creators. MacMillan this week announced a new boilerplate contract pushing author royalties on digital publications still lower. The sad truth is, from the author’s perspective, if the per unit receipts are low enough, it almost doesn’t matter what the split works out to be.

Kirk Biglione wrote recently on another topic that (I paraphrase) ‘in a digital world consumers get what they want.’ At the moment, it seems readers only want lower prices. My hope is that deep-discounting retailers will recognize that books aren’t a product that can be readily substituted with lower-cost imports like many of the products they stock. My further hope is that consumers who demand ever-lower pricing on intellectual property will begin to think beyond the next book they want to buy.

At this moment, I’m not optimistic about either.

Don Linn has a sordid past as a mergers and acquisitions investment banker; cotton and catfish farmer in deepest Mississippi; book distributor (as owner/CEO of Consortium Book Sales & Distribution); publisher (The Taunton Press); serial entrepreneur and general ne’er-do-well. He was a founder of the late Quartet Press and is currently an investor in OR Books, while consulting with and advising other publishing entities. He’s a graduate of Harvard Business School and Vanderbilt University, and is endlessly fascinated with the convergence of technologies with media and the opportunities and business models arising from their collision.

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