Dear Author » publishing industry

Thursday Midday Links: Is Barnes&Noble Targeted for Takeover

Jane — Thu, 14 Jan 2010 18:00:22 +0000

A friend sent me this link to a fanfiction author who completed a 100,000 word novel. She never thought she could accomplish such a task but now that she has, she is energized and is thinking about actual publication of future work. The comment thread is what is so interesting because the participants discuss the pros and cons of different publishing methods.

Sarah Weinman writes about the increasing ownership of Barnes and Noble stock by minority shareholder, Aletheia Research & Management. Aletheia combined with another minority shareholder are closing in on the percentage owned by current Chairman Leonard Riggio:

Together, Yucaipa and Aletheia’s stake in Barnes & Noble is approximately 30%, still smaller than Riggio’s. But since the two companies appear to be forging ties on A&P initiatives, it seems like a good bet they may do the same thing for B&N — and two heads might serve better than one to find a way around the poison pill measure.

Melville House Publishing is holding a roundtable discussion (my characterization) of the future of publishing with authors because authors are the least heard voices in the future of publishing (per Melville House). I would love to hear what authors think should be done to make tomorrow’s publishing industry as vibrant as it was previously. In fact, if there are authors that read this blog that have a guest opinion that they would like to share, I would love to post it, even if I disagree with it (because that’s what the comments are for!).

Guy LeCharles Gonzalez has an interesting post about experimentation on the business end of publishing:

Much of the public debate around e-books hinges on the personal benchmarking of tech fetishists, and sniping pundits with no skin in the game. There are many fundamental business issues that need to be addressed related to e-books -’ rights, royalties, pricing, distribution, marketing -’ and it’s up to publishers, agents and authors to figure them out together and not be distracted by every new shiny object the technology companies come up with.

I love reading Guy’s thoughts. He’s not an ebook evangelist but I don’t hold that against him. ;) He’s a thoughtful person who has a long history in publishing.

I don’t disagree with Guy that there are a contractual issues surrounding rights that will need to be addressed in the future (not the least of which is international rights so that our international friends have the same ability to read books as we in the US do) but I do disagree that ebook debate hinges on the “personal benchmarking of tech fetishists.” I see a lot of debate surrounding windowing, enhanced ebooks, pricing, and DRM and all of those things are not the purview of just tech fetishists but those who are passionately in love with reading. I also wonder why Guy thinks that romance is the exception to the market adoption of ebooks.

Two French authors are airing their grievances about plagiarism in the literary press. Camille Laurens accused Marie Darrieussecq of plagiarizing Laurens’ memoir. The authors shared an editor and Laurens was dropped after the plagiarism accusation. Fast forward two years. Darrieussecq published a study of writers accused of plagiarism (no word on whether she interviewed Cassie Edwards or Janet Dailey but I doubt it) and Laurens is releasing a novel “a story about an author who is dropped by her editor after accusing a rival of plagiarism, and then finds it difficult to continue writing.”

Monday Midday Links: Lisa Valdez’s Patience Gets a Firm Release Date

Jane — Mon, 21 Dec 2009 17:09:18 +0000

The UK focused publishing site, The Bookseller, had an article that suggests the delay of ebooks could only strengthen Amazon instead of weakening it.

UK trade insider warned deferral was dangerous. “It is never a good response to say to a consumer: "We know you want this but we are not going to let you have it.’ It encourages filesharing and piracy.” The insider added the move encouraged Amazon “to price more aggressively or buy digital rights direct”.

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From the Sunday New York Times:

But this doesn’t mean that every reader is contributing to the bottom line. Only 40 percent of books that are read are paid for, and only 28 percent are purchased new, said Peter Hildick-Smith of the Codex Group, a consultant to the publishing industry. The rest are shared, borrowed, given away -’ or stolen.

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Marcus Dohle, CEO of Random House, says that 2009 was much better than 2008 but calls the 2010 year “uncertain.” The money quote for me was this:

"The Random House digital future is a core focus of our company’s overall strategy," Dohle observed

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Karen Scott has fallen in love with Julia Spencer Fleming’s writing (and who can blame her). Scott asks whether the average romance readers really do read outside the genre (I’ve got some thoughts about the “average” romance reader) and why we worry about what books fit within the romance genre label.

Karen, if you like these books, I highly recommend the PJ Tracy series. I know these are fairly popular in the UK and wish the US readers would catch on. Keishon, my go to gal for all things mystery/thriller, recommend this series to me. There is a new PJ Tracy book coming in 2010. I can’t wait.

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Speaking of books coming out in 2010, Lisa Valdez sent an email notice to her web subscribers that Mark Matthew and Patience’s story, Patience, is going to be released on April 6, 2010. I received confirmation from Berkley that is indeed the release date. The only preorder Amazon link is currently the Kindle version.

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This is a fascinating, although detail lite, interview with Skip Prichard of Ingram. I think it does highlight how technology can create increased efficiencies for publishers in ecommerce settings by reducing warehouse inventories.

Thursday Midday Links:

Jane — Thu, 17 Dec 2009 18:00:40 +0000

MediaBistro held an ebook summit for the past few days and there were some interesting tidbits released. One of the overriding themes of the summit was that the $9.99 price point was not sustainable. One panel suggested that ads were the best possible way for publishers of content (magazines and books) to offer a low price. I really, really dislike the idea of ads in fiction books.

The coverage of the eBook Summit was really interesting and I have some thoughts about Jane Friedman’s Open Road Media company that I’ll share on Sunday.

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LA Weekly has an in depth article on gay romance. While I appreciate the coverage, I’m really frustrated by the concept that all gay romance fiction is hypersexualized and nothing more than porn.

(The first house to take the plunge, Running Press, sent out its initial raft of books just this year.) In many ways the growing popularity of gay romance represents nothing less than a tectonic shift in a culture that says women don’t (and shouldn’t) consume porn. Hot and steamy gay-romance literature is to women what Internet porn is to men: They get off on it, mostly in secret, and keep coming back for more.

My understanding was that the Running Press books that were initially released contained very restrained sexual scenes.

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Publishing Perspectives has a fascinating interview with Disney’s Jeanne Mosure, Senior Vice President, Group Publisher, Disney Publishing Worldwide. Mosure talks about why Disney chose to go with the subscription model (single books weren’t viable and they didn’t want to compete with the physical retail market) and the differences between kids and teens (teens want ebooks).

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Bowker released the findings of a new study which included facts that reflect not only the contracting economy but also the wide variety of home entertainment choices available to the consumer. According to Bowker, one in three Americans are buying fewer books due to the economy. More readers are swapping or buying used, particularly the female readers. Only a tiny percentage of consumers turn to books as a less expensive alternative to other forms of entertainment. (2.6%). The biggest danger to the fiction publishing industry is the decline in readership and other forms of entertainment such as video games, movies, music, and yes, social media.

Why Ebook Delays Won’t Save Trade Publishing

Jane — Sun, 13 Dec 2009 10:00:31 +0000

Hardcovers are the lifeblood of the trade publishing industry. Without hardcovers, the trade publishing industry will die.

David Young, CEO Hachette Book Group: “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.” (Via WSJ)

Facts. Trade publishing is referred to as such because books are sold to booksellers or wholesale distributors or “the trade”. According to Association of American Publishers report of 2008 (pdf), adult hardcovers accounted for $2,436,070 in net sales. Adult trade paperbacks were $2,435,070. The total trade net sales were $8,079,423. Therefore, adult hardcovers were 30% of the overall books considered to be “trade”. Adult trade paperbacks, however, were 29% of overall net trade sales. Juvenile book sales round out the remainder of the trade category.

In the tabulated statistics, mass markets accounted for $1,075,5666 in net sales but isn’t considered part of “trade publishing.”

Adult hardcovers make up a good portion of the big six conglomerates. One concern is that ebooks at the reduced price of $9.99 won’t be able to replace the revenue generated by hardcover sales. Problematically, is that hardcover sales have been declining for some time and before Amazon unveiled the $9.99 ebook price point. Trade paperbacks have become increasingly more profitable.

While Harlequin might not specialize in trade publishing, it was profitable relying primarily on volume sales of mass market and category books. Harlequin accounted for $418 million in net sales according to Business of Consumer Publishing 2006.

Hardcovers sell the best and at the highest prices in a physical retail market. Ebooks push down the price of hardcovers.

Facts. As of 2008, Amazon overtook Barnes & Noble as the largest bookseller in the U.S. Amazon Media took in $5.35 billion (books, music, DVDs) compared to Barnes&Noble which took in $4.68 billion. Barnes & Noble points to the backlist as comprising the majority of their business. (same link).

In 2007, Nielson reported that the number one purchase online were books and that 41% of internet users had bought books online. Bowker reported in May of 2009 that internet is the number 1 retail channel for books at 23% of the market followed by retail chains at 21% of the market.

Further, the majority of big book sales, the ones that are considered the “hits” like Edward Kennedy’s memoir or Dan Brown or Sarah Palin’s books, are sold at discounters like Sam’s, Wal-Mart, Costco, and Target. Very few hardcovers are purchased by consumers at non discounted prices. Thus the downward trend of pricing has been occurring for some time now by the publishers’ biggest accounts.

If ebooks are not available for the most popular hardcovers, adoption of ebooks will slow, some ebook readers will buy the physical copy, and those ebook readers that are left over are so statistically small as to not make a difference.

Facts. Ebook adoption has been rising steadily since the early 2000s. Because ebook sales are not broken out by category, we don’t know exactly how much of the trade market that ebooks comprise. 5% of Dan Brown’s The Lost Symbol were reportedly in ebook form. We do know that the ebook market is nearly doubling every month. The ebook market developed because consumers are becoming larger consumers of digital media. Every other form of entertainment can be had in digital format from music to movies to games. Consumers are now expecting every form of entertainment to be “on demand”. It is consumer demand that is driving adoption of ebooks not the availability of content. According to Rentrack, video on demand is up 14% this year.

Supposition. Based upon anecdotal evidence such as commenters here, it is unlikely that those who prefer to read ebooks will buy a physical copy of a book. Most likely those readers will buy either a different book, not buy a book, or will purchase some other form of on demand entertainment.

Truth. It is true the ebook readers are statistically small. Assuming that ebooks account for 5% of the overall sales of one book, ebook readers are only a tiny segment of the overall market. However, when hardcover sales are down by 15% as the CEO of HarperCollins noted, 5% can be meaningful on the balance sheet.

Print book sales are subsidizing ebook sales.

Facts. Currently this is untrue. While ebooks are not without expense, the publication costs of a book have largely been absorbed during the print book process. The editing, copyediting, cover art, and publicity are all part of the print book profit and loss statement. The production costs of the ebook include formatting and DRM. If ebooks were so costly as to require subsidies by print sales, it is unlikely that publishers would offer higher royalties for ebooks.

Ebooks are simply another format of book and can be subject to windowing.

Windowing is a term used by the trade to refer to periods of time in which it will sell one particular format. In movies, the windows are theatre release, DVD release, PPV (sometimes that comes first, premium channels and then regular tv. The traditional window for hardcover is 6 months followed by a trade paperback or a mass market release. Of course, the mass market doesn’t always come to fruition if the sales of the hardcover are limp.

Three of the big six US publishers are trying to create varying windows for ebook releases depending on the book itself, and I suppose, the success of a particular book. If a hardcover is selling well, there is no need to push out the ebook. For example, the Edward Kennedy memoir has been selling so well in hardcover that the publisher will not release a paperback until 2011. The ebook version is delayed indefinitely. According to Publishers Marketplace, the Kennedy book will be available in eform later this month. (PM, paid link)

Publishers will be experimenting with ebook releases, pushing back ebooks 3 weeks to 4 months on a whole variety of books. HarperCollins is looking at delayed releases for 5 to 10 books per month. Simon & Schuster will delay ebook releases for 35 books in early 2010.

Ironically, as publishers look to expand the publishing windows, there is a move toward day and date release in the movie industry. The movie Twilight was released in both DVD and on demand on the same day:

As the entertainment biz inevitably moves toward a day when discs will give way to product delivered directly to TVs and computers, the business is poised somewhat uneasily on a tightrope. Summit and some majors like the day and date VOD and DVD release strategy; others are worried it will cut into DVD sales.

But that didn’t happen with “Twilight”: The March release became — and still is — the year’s top home entertainment title. Almost 8.5 million copies have been sold on disc or via download on sites such as iTunes, while rentals have exceeded 14 million transactions on all formats, with VOD accounting for a healthy portion of that.

My other problem with windowing for ebooks is that publishers do not market books the same way that movies are marketed. Movies are marketed constantly throughout the various window period, from theatre release to TV showing. Books are not marketed in this way. Books are marketed, primarily, by appearing in bookstores and having buzz. Occasionally, a big book will engender a TV commercial or print ads. It is rare that a book is marketed both at the time of its hardcover release and its paperback release.

For an ebook, there is no “in store” advertising. When the ebook shows up in the online store, 3 weeks to 4 months or longer after all the hardcover publicity buzz has been spent, there is nothing to signal that the book is for sale. It is a forgotten title. At least with a paperback, it might show up on the new release table. If you’ve ever browsed a “new release” list at an online retailer, you’ll understand that finding a newly released ebook is very hit or miss. Those ebooks that are windowed are largely going to be lost sales.

It’s far better to do day and date release with pricing tiers and capture the sale versus windowing releases based on format. Those readers who are anxious to read can purchase the book in the format (paper v. print) she desires while the publisher maximizes profit through price discrimination.

Hardcovers are to Theatre release what ebooks are to DVD release.

Consumers don’t think like this. There is an event like quality about attending the movies. It is a shared experience and one that cannot be replicated at home very easily. Hardcovers provide no additional benefit over ebooks other than possibly being more durable. The other benefits of a print book such as sharing and resale are elements more akin to those that run with a DVD versus a theatrical experience.

It’s all about Amazon.

Mike Shatkzin posits that these delayed ebooks are really an effort to wrest power away from Amazon. If this is true, I find it terribly short sighted. I’m inclined to agree with Mike Cane who believes the book fight will come down to an epic one between Google and Apple. Already Google and Apple are sparring over music and online ad companies. Google is developing its own phone. Amazon and Barnes & Noble might have the Kindle and nook respectively but they are also making sure that there is an iPhone, PC, and Mac app.

According to Bowker (see aforementioned link), 48% of people who read ebooks read on their desktop and laptop. In the 2008 RWA reader survey, over half of romance readers read ebooks on multifunction devices including cell phones, laptops, desktops. Netbook sales are increasing while laptop sales are declining. Next year and in the ensuing years, we will be treated to a number of low cost multifunction devices like tablets and that will provide book reading platforms. (As a side note, here is an interesting article about how market leaders in the computing industry were able to catch the disruption of netbooks instead of being displaced by insurgents. It’s interesting because ebooks appear to pose a significant disruption in traditional publishing.).

The Reader As the Customer

I think one of the most fascinating things that I’ve learned in 2009 is that the reader is not the customer of the publisher. It is the trade. It is the reseller. Because we readers are not the customers, publishers don’t make consumer based decisions. They make reseller based decisions. Because the publisher is geared toward selling to the trade rather than the consumer, we readers are often bemused by their behavior. Understanding this goes a long way in explaining Carolyn Reidy’s acknowledgment that some people will be disappointed in the delayed release of ebooks while simultaneously recognizing that ebook readers are the most devoted of the reading population.

I have not bought into the idea that in order for there to be a robust publishing market that the big six publishers or the current marketplace has to survive intact. I do believe that hardcovers are likely on their way out as the dominant force in the industry. There may very well be a contraction in the market. I can see at least two of the big six publishing conglomerates sold off or broken up in the next few years. Random House and Simon & Schuster have had dismal financial news for the past few years. However, even if large publishing conglomerates reduce their number, publishing as a whole can still be a vibrant and lucrative market. The question is, of course, who will be the market leaders of this evolving industry. My opinion? It’s the publishers who start to recognize that in this new market, the customer is the reader and not the trade.

Thursday Midday Links: FTC, one more time

Jane — Thu, 08 Oct 2009 19:57:21 +0000

I’ve seen some people say that I should just wait and see about how the FTC decides to interpret its new regulations. I’ve seen some people reassure me that it wouldn’t apply to Dear Author or it wouldn’t apply to me commenting on other blogs or Twitter or Facebook. I’ve seen other people argue that the FTC isn’t going after bloggers so there is nothing to be concerned about. Let me try to articulate why I am going to strictly comply with the FTC guidelines.

Simply because there is a chance I won’t be targeted doesn’t mean that there is zero chance I will be targeted. I don’t think I’ll ever be audited by the IRS but that doesn’t give me free reign to ignore the IRS rules and regulations, even if I don’t agree with them.
Even though the regulations do not go in effect until December 1 does not mean that they will change. It took two years to get this revision after periods of public commenting and voting.
I am bound by my oath to uphold the laws of the land. Until the regulation by the FTC is ruled in a court of law as unconstitutionally broad, it is my duty to follow the law. In a court of law, regulations are deemed presumptively accurate interpretation of the law and if there are two competing interpretations (one that includes bloggers and one that does not) then the agency (FTC)’s rules are binding.
The FTC regulations govern deception and truth in advertising. Truthfulness is at the core of a lawyer’s legal duty. My law license could be in jeopardy from a reprimand, suspension or revocation if I was ever found to be violating a rule on deceptive practices.
Ultimately, even though the rule may not be enforced against me does not allow me to disregard the law. Further, I believe that is what kind of character you would expect from us here at Dear Author.

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Despite the success of Dan Brown’s book, book sales are depressed.

And over all, according to BookScan, book sales were down about 4 percent compared with the same week last year, suggesting that neither of those titles or any of the other big fall books from heavyweights like Mitch Albom, Pat Conroy, E. L. Doctorow and Audrey Niffenegger were helping booksellers to overcome the sludgy economy.

Audrey Niffenegger was famously awarded a $5 million contract for her book, A Fearful Symmetry, a book that managed to only sell 23,000 copies according to Bookscan in the last week.

This decline in sales has shown itself in Barnes and Noble quarterly results. More at Publishers Weekly.

Total sales in the retail group fell 3% for the second quarter, which began August 2 and will close October 31, to $665 million, and comp-store sales were down 4.1% (sales are through October 3). Barnes & Noble.com had a good period, with sales up 8%. Sales in the quarter included sales of The Lost Symbol, which B&N said broke one-day sales records for an adult fiction title. B&N expects comp sales to be down 1% to 3% in the retail group for the entire second quarter and to decline 2% to 4% for the full fiscal year, which will end May 1, 2010 (B&N changed its fiscal year following the completion of the B&N College deal).

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Are ad supported books coming closer to being a reality? Maybe if HotPrints takes off. HotPrints charges zero dollars for a photobook. Instead, they send you a bunch of tear out ads with your photobook (none are printed by your pictures). The limit is one per month, but it’s free. Even the shipping.

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Galley Cat suggests that part of the decline in publishing is the wrong headed focus on the white literary crowd as the mainstay of publishing. The U.S. Census Bureau displays the growing number of minorities in the U.S. and Galley Cat questions whether publishing is missing the mark by not including more multicultural protagonists.

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I’ve been in love with the vintage covers that Harlequin has been showing us and the titles went on sale this week. I admit to being reluctant to try one so I was glad when Keishon announced that she had bought one. Her review of I’ll Bury My Dead by James Headley Chase makes me glad that I hesitated over a purchase.

So how did I like this novel? I didn’t. This story was a chore to read. I tried in vain to engage myself but it just wasn’t hap pen ing. Why wasn’t I hooked into the story? Can’t answer that. Weren’t the char ac ters engag ing? Not really. I read hard boiled mys ter ies all the time and this one bored me to tears. I’ve even read some of Ed McBain’s stuff from the same era and his books hold up much bet ter than this.

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Hold on to your wallets, international readers. Amazon has pinkie swore to abide by terrotorial rights in the sale of its ebooks. Territorial rights confer the right of a publisher to sell a certain book in a certain geographical locale. Currently Random House is not on board with Amazon over some kind of contractual dispute and none of those books will be available. Oh well. It’s not like the UKers or Europeans or Aussies or New Zealanders need books to go with their shiny new device, right?