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Publishers should focus on customers, not formats

Last week I covered John Blake’s idea of delaying e-books in order to save print bookstores. On FutureBook, Rhian Davies has also responded with an interesting post referencing Theodore Levitt’s paper on “Marketing Myopia”—the source (or at least popularizer) of that anecdote we often hear about railroads thinking they were in the railroad business when they were really in the transportation business.

Thirty-six years ago, Levitt pointed out that industries needed to focus on the customer, rather than the product, and some industries still haven’t learned that lesson even today.

Today we have the ereader, be it Kindle or other device.  Like the technology in other areas of our lives it has the capacity to grow and not to diminish.  Dependency will be created.  And, it creates another format, or delivery package, for a book.  Where the status quo of ‘hardback followed by paperback’ remains – although suffering – this is a product of history, surely?  Is relegating the ebook to paperback status also clinging to the past and not meeting current customer needs?

He brings up the example of a reader who asked when the e-book version of a book he reviewed would be available, and the publisher advised it would come out with the paperback. He wondered whether the reader would even remember wanting that book in a few months when it became available. (I know I’ve had the experience of being interested enough in a book to place a hold on it at the library, and by the time the hold came through a couple of months later being completely unable to remember the book at all until I read the blurb.)

He also talks about a bookstore, Goldsboro Books, that has taken advantage of a hardback-collector market niche and done so well it has been able to expand in a time when most independent bookstores are contracting. But the reason it is doing that is not because “serious readers” want hardcovers, but because some readers want hardcovers, and the store is catering to them. There are other niches of readers who want paperbacks and e-books, and selling to all of them at once would work just as well.


Vive la France: Three French publishers sue Google for illegal scanning

Three French publishers are suing Google for €9.8 million (aka million) for scanning its books without their permission, according to a Bloomberg News report. Reporter Heather Smith says, “Editions Albin Michel SA, Editions Gallimard SA and Flammarion claimed Google has scanned 9,797 copyright-protected works for its digital library. The publishers are seeking compensation of 10,000 euros per book, Google said today.”

Another report, from Britain’s book trade mag The Bookseller, confirms the €9.8 million figure, but, unlike Bloomberg, the news feed of Wall Street, it gets the math right: it’s €1,000 per book, not €10,000. Of course, The Bookseller bizarrely credits itself for breaking the story, saying “a publishing source told The Bookseller” all about it. Later, it admits that source was, er, well, a magazine, the French equivalent of The Bookseller in fact, Livres Hebdo (which, in addition to being inaccessible to those who don’t speak French, is inaccessible to non-subscribers).

Bloomberg, you’ll note above, strangely cites Google as the source, even though it too says later in its article that Livres Hebdo broke the story.

But who needs accuracy? or fair sourcing? or rhetorical questions? Here’s the gist of the story, from The Bookseller:

Listings obtained in May 2009 from the US judge in charge of the Google Book Settlement, Denny Chin, show that Google had digitised 4,302 books from Gallimard’s backlist, 2,950 from Flammarion’s and 2,545 from Albin Michel’s. The total number of titles cited excludes those scanned since then and those of the publishers’ subsidiaries, another publishing source said.

The €1,000 per title in damages mirrors the December 2009 court award to the La Martinière group, which sued Google for the same reason, the source said. The French Publishers Association (Syndicat National de l’Edition, SNE) and the French Writers Union (Société des Gens de Lettres, SGDL) joined La Martinière in the litigation. A verdict in Google’s appeal is still awaited.


Three more French publishers sue Google for scanning books


The Bookseller is reporting that Albin Michel, Flammarion and Gallimard are suing Google for the scanning of almost 10,000 books without permission.  They are demanding €1,000 per title in damages, bringing the total to nearly €9.8m.

The €1,000 per title in damages mirrors the December 2009 court award to the La Martinière group, which sued Google for the same reason, the source said. The French Publishers Association (Syndicat National de l’Edition, SNE) and the French Writers Union (Société des Gens de Lettres, SGDL) joined La Martinière in the litigation. A verdict in Google’s appeal is still awaited.

At the 2010 Paris Book Fair, Gallimard c.e.o. Antoine Gallimard had announced that the three publishers would take legal action against Google. “It was high time to show Google that it can no longer violate authors’ rights, at least in France,” added the second source.


HarperCollins ceo says ebooks will hurt publishers revenues


HarperCollins ceo, Victoria Barnsley, says that the 7% drop in the retail value of paperback fiction this year is “almost entirely” dut to the sale of ebooks, even though the combined sale of ebooks and print books has increased.

In an article in The Bookseller she says:

“The signs are that consumers expect e-books to be priced considerably lower than physical books. There’s no easier way to drive an e-book up the charts than by massive price reductions,” she said. Whereas in a bricks and mortar environment other factors, like the look and feel of books and recommendations from booksellers, can influence choice, most of these factors are stripped away in an online environment, Barnsley argued. “So, not surprisingly, brand and price become the deciding factors.”

At what level the price of e-books will stabilise, the consumer will decide, she added. “And only then will we know if there is a viable e-book business.”


Random House exec expects e-book sales growth to 15% in 2012, insists publishers are embracing change

ianhudsonThe Bookseller reports that in an address to the World e-Reading Congress, Random House’s deputy chairman Ian Hudson said that he expects e-book sales to exceed 8% of trade publishers’ sales in 2011, and possibly to reach 15% next year. He also reported that e-book sales in 2011 were so far outstripping 2010’s by a factor of 10 overall, though some titles sell better electronically than others.

Hudson argued that traditional publishers are still going to be necessary into the e-publishing future because certain things such as editing will always be necessary to produce a readable book, and publishers are where the greatest concentration of expertise in that preparation process can be found. And he suggested fears that publishers may not be ready for the digital revolution are overblown:

"I’ve seen many bloggers, journalists and industry observers question publishers’ appetite, readiness for change and their desire to grasp the opportunities that digital offers them. But to those people I would say, don’t confuse our love of books and passion for their physical format with any suggestion that we’re not embracing change."

He said that publishers were innovating in the e-book space, and should continue to do so. He also saw a continued role in the future for retailers, including independent bookstores who could fill niches that open in the market as chains consolidate.

Of course, even as Hudson insists that publishers such as Random House are “embracing change,” they are also resisting it. As Paul mentioned earlier, Random House is imposing agency pricing on its UK e-book sales. Many observers consider agency pricing to be at least in part an attempt to protect paper sales by making e-book editions less attractive.


Yudu claims to let magazine publishers bypass app store fees

Reuters reports on a company called Yudu that will supposedly allow magazine publishers to evade the 30% commission on iPhone and iPad media, by allowing publishers to sell issues direct from their websites that can then be downloaded directly onto the device.

Yudu claims that Apple has approved its service as complying with app store terms and conditions. I find myself a little skeptical, however. First off, I don’t think Apple is going to go through all the hoopla of imposing a “thou shalt sell through in-app purchase” rule not to enforce it. Second, Apple has not proven itself shy in the past about inventing new terms and conditions on the spur of the moment, or selectively enforcing the ones it does have in unexpected ways.

Unless I’m completely misjudging what it is Yudu does, I wouldn’t expect it to last longer than it takes Apple to notice it—for example, by seeing an article in Reuters about a company that claims it can let publishers avoid the 30% commission.

(Found via Gizmodo.)


Borders CEO lashes out at publishers and the company’s hometown for its problems

Borders CEO Mike Edwards gave an interview to the company’s hometown newspaper yesterday, the Ann Arbor News, in which he reveals that the company that has yet to present a reorganization plan to the court has a new scheme for pulling out of bankruptcy: attacking publishers.

Edwards essentially tells reporter Nathan Bomey that Borders is in the position it’s in because the publishers it owes tens of millions of dollars to won’t assume even greater debt — i.e., won’t go back to previous terms and start shipping them books without cash upfront. This, despite the fact that the company’s own ownership famously refused to put more money into it themselves.

Publishers’ response to Borders’ predicament has been “disappointing,” says Edwards (in response to a whoppingly one-sided — or perhaps just blazingly ignorant — question, “Are you suprised the publishers haven’t been as cooperative as you would have hoped?”). “If all the pieces have to come together, the terms commitment then drives the financial sponsorship. If so, then we have a business model that we can create a plan of reorganization around, get approval from the courts and emerge.”In other words, because the publishers won’t do what we want them to, no one will help, so none of this is Borders’ fault.

Indeed, Bomey says Edwards claimed “the company would’ve closed 110 stores, instead of nearly 230, if publishers had agreed to concessions in January.”

But not to worry. Edwards says he’s about to present publishers with a new plan that is a “shared risk scenario” — as if Borders had anything further to risk, and publishers are being unfair if they don’t risk the loss of even more money — that is, by the way, a “‘Hail Mary’ pass.”

How enticing.

Of course, it’s not just the publishers screwing Borders. The town where it was established and headquarter for decades, and has announced it is leaving after laying off hundreds of staffers, hasn’t been any help either. “I wouldn’t say there’s been huge outreach from the community to save Borders here,” says Edwards. “I’ve done business in a lot of cities and I have not experienced this, which is a less than positive approach with a company that’s in trouble.”


UK publishers and libraries in talks over e-book lending

The Bookseller reports that some serious discussion is going on in the UK between publishers and librarians over rules for e-book lending at libraries. Back in October we reported on the UK Publishers Association setting down restrictive ground rules to prevent library users from downloading e-books outside of library facilities—a move that would eliminate one of the biggest advantages e-books have. (It turned out that these restrictions had apparently been brought on by people from China “joining British libraries and plundering their virtual collections for free.”)

At the moment, some British publishers do permit library lending (via e-book lending distributor Overdrive), others do not, and HarperCollins is “not ruling out” the same sort of 26-loan limit that its US division has imposed. Some UK librarians have said they would really like to be able to offer the sort of Kindle-based lending that Amazon recently announced for US libraries.

The place e-books have in UK libraries is complicated by the fact that the Public Lending Right—the UK government-funded system that pays authors whenever a library lends one of their books—has not yet been extended to e-books. (In fact, the PLR was a target for elimination in the UK’s latest round of budgetary discussions. It survived, though not without cuts.) So if someone “checks out” an e-book, the author is not paid, whereas he would be if they checked out a printed book.

It remains to be seen just what place e-books will end up having in libraries as printed books diminish, but these talks could be important in determining how they go over the next few years.


Publishers need to interact more meaningfully with readers

crowd_at_Frankfurt_fair-300x217I’ve brought up a number of times the idea that publishers need to do more to connect with the general audience. On Publishing Perspectives, Amanda DeMarco writes that the same holds true in Germany—even at industry events that are open to the public.

DeMarco writes about the Leipzig Book Fair, an open-to-the-public event that had 163,000 visitors this year. She feels publishers missed a great opportunity to inform interested members of the general public about some of the issues that are facing publishers today concerning the migration of books to e-books, online vs. brick-and-mortar sales, and other matters. Surveys show that readers have different points of view from publishers on a number of matters, but publishers don’t seem to be willing to reach out and engage with them.

Even when the representatives of publishing are hanging around in the same room as the general public, some of them can’t seem to be bothered to make the effort to communicate.

A young acquaintance of mine stopped by the Suhrkamp stand to express his interest in an internship. The response: he could find everything on the internet. Now, I know Suhrkamp gets lots of internship-queries, and statistically it may be unlikely that this young man will end up there, but it is highly likely that he is and may continue to be a dedicated Suhrkamp reader.

If you had a flesh-and-blood person with a sixty-year purchasing life-span ahead of him standing in front of you expressing enthusiastic interest in your brand would you tell him, “It’s all on the internet”? I guarantee that if the Suhrkamp guy had taken two minutes to tell my acquaintance something interesting and personal, he would remember that, and he might even tell his friends about it.

In a companion piece on Publishing Perspectives, Edward Nawotka notes:

[It] cannot be disputed that publishing is a business that increasingly needs to engage with the reading public in meaningful ways. Yes, publishers are now on Facebook and Twitter, but it’s often done with a corporate facade and is, ultimately, a marketing effort and a poor substitute for actual person-to-person interaction. In the US, especially, book publishers often have little or no presence at the many local book fairs and festivals that take place around the country, where interaction with the public is largely ceded to booksellers.

I suppose there is a lot of institutional inertia around, and industry professionals—especially the older ones—may simply have the way their industry has worked in the past too deeply ingrained to change easily. But given how much more power consumers are coming into now, for good or ill—just twenty years ago, you couldn’t imagine how easy it would become to download an author or publisher’s entire output off the Internet without paying for it, for just one example—you’d think they would try to make a little more effort.


Valve increases digital sales with innovative promotion; can publishers learn from this example?

Even though this is an e-book blog, from time to time I poke my nose over into the world of computer gaming to point out some parallels. You could say that Internet game distribution is a sort of first cousin of the e-book, as they share a lot of commonalities. They’re both about telling stories—in books, you read the stories, but in games you experience them.

More importantly, both started out as strictly physical means of media distribution—dead trees for books, dead dinosaur discs for games—but have moved into the digital forum where they’re more vulnerable to bit-copying piracy. The book publishing industry has been in a bit of a tizzy about this, but Valve, one of the leaders in digital game distribution through its Steam platform, has been looking at it as more of an opportunity.

I’ve already mentioned the way Valve’s sales entice pirates away from piracy, and how its multi-platform stance adds value to its products from a customer point of view, but Valve is just as canny about marketing, too. I touched on its Portal 2 ARG (Alternate Reality Game) way back when it started by retroactively dropping hints into Portal 1, but they did something even cleverer recently when they got together with a bunch of independent game developers to hatch up a cross-promotion scheme that would boost not only Portal 2 but their own games as well. Ars Technica has a great article looking at the promotion from the point of view of one of those publishers.

The idea was that the game developers would come up with additional levels for their games incorporating the GLaDOS character from Portal, and the games would be bundled together into a sale bundle (called the “Potato Sack” bundle, an in-joke referring to an element from Portal 2). What’s more, it would tie into the ARG: Playing the indie games would contribute to moving up the release of Portal 2 by a few days.

Gamers who unlocked a specific achievement from each game received the Valve Complete Pack, a bundle of every game Valve has ever made—and the ability to give any duplicates of games they already had to friends. The bundle is a 0 value, but since it was provided digitally there were no media costs involved in giving it away.

For the new content, Valve was happy to turn over one of its most popular characters: GLaDOS, as well as the voice actor who brought the character to life. The pressure was on to create something that did justice to the concept, and the work was described as being "some of the toughest work done all year, possibly in years," but it also proved highly rewarding. "The amazing thing is how cool Valve was about this. With most publishers, you have to sign ten pages of paperwork just to sit down and have a drink with them," [Leo Jaitley of developer Dejobaan Games] explained. "Valve sat us down, pointed out the fact that there were no hidden cameras, lawyers, or NDAs, and showed us what they were thinking. They had us play through what existed of Portal 2, and then just had us go crazy."

And in return for their participation, the indie developers experienced a rather nice sales payout. “Jaitley likened it to being able to keep a roof over their heads while forcing them to wait on the sports cars,” the Ars Technica article notes.

The Ars Technica article concludes with, “The only question: what could possibly be done to top this?” And that’s a question that anyone who sells digital, piracy-prone media should be asking themselves. Valve is thinking outside of the box (which you’d think should be easy, given that digital content doesn’t have to be packaged in a box!), pleasing fans and developers alike.

What kinds of similar promotions could e-book publishers be doing?

Well, bundles for starters. Valve regularly drops sale bundles, often of independent games. The Potato Sack Pack was a rather noteworthy (and huge) example, but smaller bundles of half a dozen games often make their appearance—and it also has individual every-game-from-one-developer bundles like the Valve Complete Pack mentioned above.

Why don’t we see publishers bundling all the books in a series together as packages? Well, actually we do, to an extent—Baen did it when they picked up the Liaden and Kencyr series a few years ago—but the agency publishers haven’t been doing that. There are some series out there that are positively huge, and extremely well-liked. 

For instance, Rex Stout wrote 33 novels and 39 short stories in the Nero Wolfe series. I imagine plenty of fans would be happy to pay 0, maybe even 0, to get a bundle containing an e-book of every one of those if it represented a savings over the cost of buying each book individually. People who might never have bought that many Wolfe novels at piecemeal prices might well be happy to drop a lump sum if it meant they could get their hands on everything. (Of course, such bundles are already circulating for nothing in peer-to-peer, thanks to the work of scanners.)

Regardless, publishers really should be looking at the things that pioneering e-sellers like Valve are doing. Computer gaming may be even more piracy-ridden than e-books, but Valve isn’t just sitting around complaining—it’s giving customers more reasons to buy. If only publishers would do the same.

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