Archive for May, 2009

POD: what was ‘weird’ and scorned has become the new ‘mainstream’

Tuesday, May 19th, 2009

Back in 1995, when I launched Trafford Publishing as a service to publish books and business documents for government agencies, businesses and individual authors, nearly everyone in the book industry scoffed at the idea of print-on-demand [POD] publishing. The concept was looked upon as either not feasible, or improper, or both. Funny how life moves on, eh? Today, some 14 years later, Bowker (who keep the Books-in-Print database and assign ISBNs in the US) announced a major milestone: for 2008, new POD titles surpassed new non-POD titles. Below is their media release — and note that Bowker still hasn’t got its own head around the new reality, and are separating new titles into “books” and “On Demand and short-run books”, as if the former term wasn’t inclusive of the latter term. Those elitist sentiments take a long time to die out (maybe it will take another 14 years?).

NEW PROVIDENCE, NJ — (Marketwire) — 05/19/09 — Bowker, the global leader in bibliographic information management solutions, today released statistics on U.S. book publishing for 2008, compiled from its Books In Print® database. Based on preliminary figures from U.S. publishers, Bowker is projecting that U.S. title output in 2008 decreased by 3.2%, with 275,232 new titles and editions, down from the 284,370 that were published in 2007.

Despite this decline in traditional book publishing, there was another extraordinary year of growth in the reported number of “On Demand” and short-run books produced in 2008. Bowker projects that 285,394 On Demand books were produced last year, a staggering 132% increase over last year’s final total of 123,276 titles. This is the second consecutive year of triple-digit growth in the On Demand segment, which in 2008 was 462% above levels seen as recently as 2006.

thanks, cheers,

Bruce

New eReader will go head-to-head with Kindle, Sony Reader

Thursday, May 14th, 2009

Today a new entrant into the eBook reader game: Interead announced the Cool-er, which is a direct competitor to the Kindle 2 and will sell for about $250. CEO Neil Jones is an English entrepreneur who seems to have done his homework:

  • there are more titles available available at his own eBook store (www.coolerbooks.com) than at Amazon’s Kindle store — 260,000 versus 250,000
  • this eReader supports PDF and many other formats
  • it isn’t tied into Amazon itself; rather it is plug-and-play with any PC or Mac
  • it looks, well … cooler! with many colours and iPod-like styling.

Competition could quickly kill the Kindle. Here’s why…
In the USA, and likely many other countries, it is illegal for a manufacturer to provide its goods to one retailer (or group of retailers) at a lower price than to similar retailers. So a publisher who provides its eBook content for $3.00 or $3.50 to Amazon — presuming a retail price of $10 — must provide that same title at the same wholesale price to Interead’s www.coolerbooks.com store, and to www.smashwords.com, etc. Amazon is betting heavily that it can keep its 65% to 70% margin. It wants to offer discounts on that $10 to attract customers and build repeat customers — hoping to dominate the marketplace. So the $10 eBook might be “on sale” for perhaps $7.50, with the publisher still getting the pre-agreed $3.00. What Amazon is doing is getting publishers to subsidize its discounts, by not paying publishers a fair wholesale price in the first place. This strategy worked very well for Amazon with printed books — Amazon has grown to be the biggest retailer for printed books now. Amazon extracted lower wholesale prices from publishers for years, claiming it was a different type of retailer than bricks-and-mortar stores, so it could legally get a different wholesale price. But the strategy won’t work for eBooks, I predict.

Interead and Smashwords, and other entrants, don’t have to presume to take 65% or 70% of the selling price — smashwords only takes 15%! They can get the eBook content from publishers at the same price as Amazon does, since they are clearly the same type of merchant. So on that supposedly $10 retail priced eBook in the above example, smashwords would pay to the publisher the same $3.00, and could offer the book at $3.53 as its “regular price”! How long will Kindle and Sony customers pay more for their device, and more for their content, when there are convenient alternatives?

Some folks thought we had to wait for Apple to enter this market niche for Amazon and Sony to be given a serious shake-up. Seems the pressure is already building.

Keep tuned …

thanks, cheers,

Bruce

Slide shows on the state of, and hopes for, the book publishing industry

Tuesday, May 12th, 2009

Hey, here is a link to nine slide shows presented by consultants and executives on May 7th at the Book Industry Study Group [BISG] event called Making Information Pay 2009. Lots of statistics and an overall gloomy outlook. I note that only one consultant cited ending returnability as an important strategic move for publishers.

http://www.slideshare.net/event/making-information-pay-2009/slideshows

thanks, cheers,

Bruce

Thoughts on Kindle DX and other mistakes on the road to eBook proliferation

Friday, May 8th, 2009

Jeff Bezos from Amazon has revealed the next version of the Kindle, called the Kindle DX. I’ll take a moment to got down my initial thoughts about the device and Amazon’s greedy plans …

On the plus side, this model will have a bigger screen that appears to be about 5.75″ by 7.75″. The new design and the graphics at the presentation are so much better than the previous work that it appears Bezos finally decided to hire a real industrial designer and ad agency (the previous work must have been done by a relative or neighbor’s kid, or Bezos himself).

Another plus will be Kindle DX’s ability to show PDFs.

On the minus side: no color and no video. No cell phone or PDA. Not a notebook PC. High price tag for a proprietary product.

The biggest minus — and this will be the knock-out punch to Jeff’s world-domination ambitions — is the financial model being used. Amazon is simply being way tooooo greedy. Here’s why, examining the three main areas: trade books, newspapers and textbooks …

Consider that Bezos has no content of his own. No stories, no news, no lessons. He needs others to provide it. He is bullying book publishers to provide their content and receive only 35% of the list price. Amazon gets 65%! Amazon already has its development and manufacturing costs paid by the user who will pay a hefty $489 US for the Kindle DX. Amazon getting between 20% and 25% would be more reasonable for eBooks. [Within the book trade, a bricks-and-mortar retailer typically gets between 40% to 45% of the retail price, and has to handle and display the physical books, pay rent, have sales staff, heat the building, etc., etc. Selling eBooks is comparatively expense-free.]

Bezos has extended his overly greedy plans into two new areas: newspaper subscriptions and textbooks. For newspaper subscriptions, he is keeping 70% of the annual subscription revenues! The newspaper would only get 30%! Ouch! A few newspapers are desperate for any revenue, and have agreed to trying this, although only “outside their normal print circulation area.” The agreements are apparently non-exclusive, so the newspapers can make better deals with other device makers to come.

For textbooks, Bezos is grandly announcing the participation of three large publishers and some name universities. Yet the size of the trials will be very small (50 students at one university), and the titles offered will be few. One must remember that, even though textbook publishers feel threatened by the fledgling free textbooks movement, this is one segment of the publishing industry that still makes billions selling books the old way — in print, through college bookstores. College bookstores only get 15% to 20% of the retail price. Yes, the publisher gets 80% to 85% of the $125.00 to $150.00 a student pays for those required texts, for printed copies sold through college bookstores! How keen will those publishers be to get only 30% or 35% from Kindle sales of their prime titles? Not very, I expect. And a recently completed study in the UK revealed that the students participating in a year-long trial hated using DRM-protected e-textbooks. Students also hated having to pay essentially the same amount for an e-textbook as the printed version — which is what Bezos is planning to charge. Hate is a strong word to use in a research study, yet that was how the students’ reactions were recorded. Why the universities are participating at all is puzzling to me, since Amazon would dearly love to gobble up all the universities’ own bookstores’ sales for the printed versions of textbooks as well.

The reality is that content producers are united about very little, except in their opposition to and fear of any one retailer controlling the revenue split — especially when Amazon is going so far beyond historical business margins. Amazon can only dictate the terms if, and as long as, it CONTROLS the eBook distribution channel, as Apple did for a while with iPods and the Apple Store. The problem for Amazon is that it won’t control eBook distribution. Competing devices will also be available this summer — that’s why Bezos made his early announcement, trying to get a publicity jump on potential competitors. Sony, Plastic Logic, and likely Apple, will have large-screen tablet/readers — likely with many features missing from the Kindle DX — and the manufacturers will certainly negotiate a more content-provider-friendly margin with all the trade publishers, newspapers and textbook publishers.

One company to watch is Smashwords.com. Mark Coker’s start-up eBook store is setting aside a magnificent 85%(!) of the retail price for the content producer. And he is committed to having versions of the content available in multiple formats, so you can read it on a Kindle, PC screen, cell phone… any of the existing and coming devices. Mark’s business model is the complete opposite to Bezos’ screw-the-content-provider approach. As long as entrepreneurs like Mark are willing to offer an alternative to the monopolize-the-distribution-channel-and-screw-the-content-providers model, Amazon’s domination plans, and its Kindle DX, are doomed to fail.

thanks, cheers,

Bruce