Jan 20 2013
1) Nook Media will be fully divested from Barnes & Noble. Currently the media arm is a subsidiary. Pearson owns 5% with the option of purchasing 5% more. Microsoft owns close to 17%. By the end of 2013, Microsoft will own close to 30% and Pearson will own at least 10%, if not more. B&N will hold a majority interest of 51%.
2) B&N’s retail space devoted to books will continue to shrink. B&N has a strong consumer brand, but it will need to move away from selling books in order to survive as a retailer. Other large retailers have house brands. In the article about Target announcing it would price match any online price in the store, the analysts pointed to Target’s strong house label. Amazon, also, has its own products, both in electronics and in books. B&N has a line of published books but not a strong house brand. Therefore, B&N to compete will need to create a) house brand products including books and outside of books and b) start selling more non book goods. Given that B&N tends not to discount most of its stock, it would need to sell higher end items.
3) Goodreads will be purchased by Random House & Penguin. Goodreads is one of the fastest growing reader communities on the internet. Pearson bought Author Solutions in July of 2012 and buying Goodreads, a reader community would make sense as more publishers are trying to sell direct to consumer. Goodreads has a store like function even though it is rarely used. (Only DRM free books can be sold through Goodreads). There is a lot of data that could be mined from the Goodreads backend.
The other purchaser of Goodreads could be Kobo. Kobo already uses Goodreads to source the review section of its website. With the added revenue of Ratuken, Kobo would have the money to buy Goodreads and bake it into the Kobo reading devices. Open a book on the Kobo device and it makes an automatic entry in your Goodreads account. Make a note and it will post to a Goodread’s status update.
4) Subscriptions will be offered by Random House & Penguin. Between the two, they might own 50% of the backlist of books published. The subscription offerings might be quite high (and I expect that they will be) but it will be offered. Another option from RH & Penguin are rentals. If RH/Penguin does this, then expect more subscriptions.
5) More mergers. Simon & Schuster and HarperCollins are likely to either be merged or acquired. One might be sold in pieces. Perhaps Disney would buy HarperCollins if the price was right or maybe Abrams Books (who publishes the Diary of Wimpy Kids books). Holtzbrinck is large enough that it might buy smaller publishers like Bloomsbury.
6) Ebook growth will be flat. I estimated that the ebook market for fiction books would be 50% and while I was wrong, I wasn’t that far off. Toward the second half of 2012, ebooks represented about 40% of fiction sales. I suspect that it will be at least 50% by the end of 2013, but once it hits 50%, it will stabilize. At some point, I think that the percentage of books purchased will be 70/30 ebooks and print but actual dollars spent might be 60/40 due to the higher revenue that print books bring in.
7) More self published “imprints”. There have been a few authors who banded together to co brand their books in order to elevate sales amongst the other members of the “brand”. I’ve heard that these haven’t been super successful, but the cross promotional efforts look attractive.
8) Romance covers will become less focused on the man titty. With the success of 50Shades, the hold the man titty covers have had on romances for more than 20 years has eroded. In 2013, you will see less flesh on the covers in an effort to convince non romance readers that these books can be read in public. Kristen Ashley’s much anticipated On the Wind has a boot on the cover.
9) There will be more author events. John Green, a young adult author, sold out Carnegie Hall in NYC with his brother, Hank Green. The two have a huge following on YouTube with almost a million subscribers. HarperCollins has experimented with this by having author teas and lunches for a cost, generally $30 to $40. While few authors will be able to replicate the Green brothers’ draw, the lure of additional money via appearance fees will increase the number of author appearances. For big musical artists the primary source of income isn’t album sales but touring. Based on the Green success, the music business model, there will be more publishers and authors who will launch book “shows.”
10) Amazon predictions. Kindle prices will fall below $50. Amazon may offer a free Kindle with an Amazon Prime membership or an eink reader with the purchase of a Tablet. Amazon will increase the periods of exclusivity in exchange for the higher royalty rate or increased visibility on the Amazon site. More authors will take advantage of this despite the fact that it will give Amazon greater power over them.
Some other predictions:
- DRM will hang on despite my belief that removing DRM would be a way publishers can compete directly against Amazon.
- The margins on short fiction is attractive to authors and publishers. Serials and singles will increase but because this sort of fiction also can frustrate readers, there will be a portion of the readership that will demand and gravitate toward longer fiction.
- 40% of the NYT bestseller books for 2013 will be self published titles.