Category Archives: publishing business

Whither Soft Skull?

Where's Soft Skull headed now that Denise Oswald has taken over for Richard Nash? Over at The Quarterly Conversation I talk to her about the press's future, which, Oswald says, will definitely include translations.

Utah and Louisiana Start Down the Slippery Slope to Censorship

Congratulations to the citizens of Utah and Louisiana. You are one step closer to having the power to decide which books are appropriate for minors and which books are not:

There is a disturbing new trend in censorship legislation. Bills have been introduced in Utah and Louisiana this year that give private citizens the right to sue booksellers and other retailers for committing an “unfair” trade practice by selling “offensive” material to a minor. The defendants in these lawsuits would have to hire a lawyer to defend them and could be forced to pay thousands of dollars if they lost.

Why Amazon Should Be Taxed in All 50 States

Over the weekend I noted the immeasurably sad news that Black Oak Books has become the latest Berkeley institution to be killed by Bush's economy.

To be fair, in this case our ongoing economic nightmare was given a big assist by Amazon. As I've discussed ad nauseum on this blog, Amazon's incredibly efficient business model makes it hard for other bookstores to compete on things like price and availability.

To the extent that Amazon competes fair and square, however, this is a sad but ultimately completely appropriate part of our economic system. That said, there is at least one huge way in which Amazon is being given an unfair advantage over its bricks-and-mortar rivals: taxation.

In fact, as Black Oak owner Gary Cornell notes:

Cornell said the final blow came when California decided not to tax Amazon sales. New York recently passed a law that taxes book sales on Amazon.com, and a similar bill was introduced in the California Legislature, but it failed.

“That was the final kiss of death,” he said. “People would come in and browse. A lot of them were buying or not buying from us, but on Amazon books were heavily discounted, and it saved them another 10 percent in sales tax.”

It's of course entirely ridiculous that Amazon would be taxed in a state like New York and not in California. It makes even less sense when you consider that California is in a sea of debt right now, yet it chooses not to tax online businesses like Amazon, which in large part are killing the bricks-and-mortar, tax-paying businesses still operating in California.

Barnes & Noble Recommends: It Works

Barnes and Noble CEO Steve Riggio claims that B&N Recommends is a major factor in sale of books selected for the program:

He also had some interesting comments about the Barnes & Noble Recommends program saying that selected titles "often garner 30, 40% as much as 50% market share in initial weeks on sale," meaning that B&N is responsible for a large chunk of the overall sales of those titles, and furthermore B&N finds "that those books go onto the bestseller lists of other national, local and regional booksellers."

Google Gives Libraries Price Oversight

NYT:

In a move that could blunt some of the criticism of Google for its settlement of a lawsuit over its book-scanning project, the company signed an agreement with the University of Michigan that would give some libraries a degree of oversight over the prices Google could charge for its vast digital library. . . .

Under Google’s plan for the collection, public libraries will get free access to the full texts for their patrons at one computer, and universities will be able to buy subscriptions to make the service generally available, with rates based on their student enrollment.

The new agreement, which Google hopes other libraries will endorse, lets the University of Michigan object if it thinks the prices Google charges libraries for access to its digital collection are too high, a major concern of some librarians. Any pricing dispute would be resolved through arbitration.

A Crime Novelist Experiments With The Kindle

Bryan Gilmer generated some instant publicity for his novel Felonious Jazz by radically discounting the Kindle edition:

My Kindle edition went live last Monday at $7.99, so I announced it on a couple of Kindle message boards online. By Wednesday, I'd sold one copy. One! Message board replies said, "If you want us to try a new author, give us a really low price. It'll generate sales and reviews." So I marked it down to $1.99 Thursday morning and posted the price change on the same boards. What happened next was remarkable:

As of 5 p.m. Friday – about 36 hours later – Felonious Jazz was the No. 1 selling hard-boiled mystery on the Amazon Kindle Store and the 17th best-selling title in Mysteries & Thrillers . . .

 If you look at the book now, you'll see that the price is back up to $4.99.

It's interesting to see what some guy could do more or less by accident . . . there's clearly some potential here for a savvy publisher to figure out a way to exploit the Kindle version, at least until we're deluged by a tidal wave of $1.99 ebooks.

Amazon Is Losing Money on Each $9.99 Ebook

Kindle-pencil Publishers Weekly confirms something I've long suspected:

Currently, publishers make as much money on Kindle editions as print editions, since Amazon, the largest e-book retailer, pays the same discount for e-book editions as it does for print—off the same list price, whether bound book or e-book. (An Amazon spokesperson would not comment on the discount issue, but a number of publishers confirmed that Amazon pays the standard discount—which is, with some fluctuation among houses, about 50% off list price—for Kindle editions.)

Amazon, which sets the price for everything it sells, is, as many people interviewed point out, losing money on a majority of Kindle editions. Although the price point for Kindle editions varies, the dominant one for hardcover bestsellers is $9.99, a price one publisher called “a killer.” (The e-tailer is pricing some of its Kindle bestsellers even more aggressively, with titles like Stephenie Meyer's New Moon, currently #4 on the Kindle bestseller list, at $6.04.) At $9.99 Amazon is selling its Kindle editions at, generally, a 60% discount; Amazon sells its print bestsellers at, on average, a 45% discount. The reigning price point in the Sony e-book store, with variations, is $11.99.

This is obviously a move to build up market share for the Kindle, something I suppose Amazon is in a position to do since it is one of the few book retailers to actually be in the black at this time. This also means that $9.99 ebooks are untenable over the long run, unless publishers choose to give Amazon a steeper discount in the future.

As Publishers Weekly notes, if this tactic works then eventually Amazon won't have to rely on publishers to give the discounts it wants–it will be in a dominant enough position to demand whatever pricing it prefers. So, in other words: hope that competitors manage to capture a sizable portion of the market.

For more info, readers should see my interview with Ted Striphas, where we touch on Amazon's already dominant market position and what that might mean.

Incidentally, I finally saw my first real-life Kindle on public transit earlier this week. I also saw five people with non-electronic books, myself included.

Too Bad the Recession Is Worldwide

El-codigo-da-vinci The Mail & Guardian reports that U.S. and U.K. publishers bowing beneath recession at home are using the great popularity of English-language books worldwide to sell in other markets:

The US market was worth about$24.3-billion in 2008 while sales in Britain were about £3-billion. Last year, book sales by volume in the US dropped 6% on 2007, although in value terms the drop was 2.5%. In Britain the volume of books was down 4% and value down 6%.

In contrast, overseas English language markets are booming. India is the world's third largest English language book market and has been growing at about 10% a year for several years. Research by UK Trade & Investment (UKT&I), which is using the Book Fair to encourage British publishers to export more, and the Publishers Association estimates that the market was worth about £1.25-billion in 2007, with publishers estimating that about half that amount was English language.

Although it doesn't sound like the overseas markets are getting the best that Anglo-American publishing has to offer. Random House is, of course, preparing to plaster Dan Brown everywhere, and beyond Brown things look bleak:

Tastes differ across these markets, according to publishers. In China "books about earning money and making a family healthier just sell forever", according to Jo Lusby, general manager of Penguin in the country.

The publisher has also done well with Elizabeth Gilbert's account of the spiritual gap year she took to recover from her divorce, entitled Eat, Pray, Love.

In South Africa the market has experienced something of a publishing sensation in recent years with the boarding school antics of Spud and his gang — the Crazy Eight — helping to expand the book reading populace. The first tome has already sold well more than 125 000 copies since its publication four years ago and while that may not sound like much there are only about 800 000 general book buyers in the country's population of just less than 50-million people.

Its just the popularity of this kind of stuff in overseas markets that contributes to the lopsided translation rates of the rest of the world versus the U.S./U.K.

Flat Is the New Up

PW reports on BISG’s Making Information Pay conference. Interesting stuff:

The publishing industry, along with the rest of the economy, is being dramatically transformed by the recession, speakers at BISG’s Making Information Pay conference agreed. Trends that were already occurring–moving from a mass market marketplace to a long tail market and going from an industrial-based economy to knowledge-based are accelerating because of the recession, said Leigh Watson Healy, chief analyst at Outsell. While “flat is the new up,” has become a cliché, it is today’s headline, Healy said.

And later on:

Top threats include free content available on the Internet as well as the proliferation of free of really cheap books sold online. The decline of review mediums, especially for libraries, is also a major concern as is the continued assault on operating margins.

Of course, with the increasing proliferation of online book reviews, not all is in decline.

Newspapers Making a Kindle-Killer?

Electronic-newspaper It's no secret that newspapes have hastened their own downfall with poor decisions and some ridiculous, even illegal ideas (like massive price collusion).

But, they might now be getting into the act. The Wall Street Journal reports that they're exploring a Kindle knock-off designed to read newspapers and magazines:

Hearst Corp., which publishes the San Francisco Chronicle and Houston Chronicle as well as magazines including Cosmopolitan, is backing a venture with FirstPaper LLC to create a software platform that will support digital downloads of newspapers and magazines. The startup venture is expected to result in devices that will have a bigger screen and have the ability to show ads. 

Gannett Co.'s USA Today and Pearson PLC's Financial Times are among newspapers that have signed up with Plastic Logic Ltd., a startup that is readying a reading tablet, the size of a letter-sized sheet of paper, that can displays books, periodicals and work documents. The device, which uses digital ink technology from E Ink Corp., the same firm behind the Kindle, is slated to be rolled out by early next year, and will offer publishers the chance to include ads.

The article also mentions that Apple and News Corp are each exploring their own versions of such a device. 

To the extent that these will offer plausible competition to Amazon, I'm all for it. Not that we've seen Amazon do anything too bothersome yet, but it doesn't help anyone (except Amazon shareholders) to have one company run off with the lion's share of the e-reader market.

And in many ways, an e-reader that focuses on periodicals makes a lot more sense than one that focuses on books.

It's also interesting to see that for all Jeff Bezos's touting of Kindle sales figures, the periodical circulation via Kindle is abysmally low:

The Wall Street Journal — the second-most-popular newspaper for the Kindle after the New York Times — has more than 15,000 subscribers, according to a spokeswoman for the paper, compared to its paid circulation of more than two million daily. Fortune magazine has roughly 5,000 subscribers, according a person familiar with the matter, while the magazine has an average print circulation of nearly 866,000.

I think the basic message here is: hold onto your money for now. The e-reader market is going to see a lot of change over the next few years, and unless you absolutely need one right away you'll probably end up getting something better suited to you, and cheaper, once things have time to develop some.

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