Thursday, March 06, 2008

Publishing 2.0?

Yesterday, the Association of American Publishers (AAP) held its annual meeting in New York.

First lady Laura Bush was recognized as an advocate for books. The, a British website, took a jab at President Bush by quoting a line from his wife's statement:

"You're responsible for the greatest love affairs of my life: books, of course," guest of honor Laura Bush, the reason for all the fuss, confided. "I'll always remember my first cruise with Katherine Anne Porter on the Ship of Fools . . . "

Conference speakers included Borders' CEO George Jones, Amazon's Steve Kessel, and retired Simon & Schuster CEO Jack Romanos.

Several people who attended the meeting pointed out that Amazon is still being coy about releasing any info on the number of sales of their new Kindle e-reader. Publishers Weekly (PW) said:

Amazon’s Kessel offered no numbers on the sale of Kindles, only noting that the company is “working hard” get the e-reader back in stock. While Amazon is shipping readers every week, “demand is still outstripping supply,” Kessel said . . .

With its purchase of Audible set to close soon, Kessel said Amazon “has no fixed position” on selling spokenword audio with or without DRM. He said Amazon moved away from DRM in music sales because that’s what customers want, and said that at the end of the day customers’ preferences will determine how spokenword audio is sold.

Michael Cader of Publishers Marketplace quoted Jack Romanos as saying, "'I would urge the industry to be very cautious' in lifting DRM from digital audio files, noting 'I was actually opposed [to] it'. . . Romanos called the changing landscape electronic landscape 'a wide open game' and commented, 'publishers that have sort of sat back, myself included, and waited for it to come to us, need to take control' of how that world evolves."

Amen, brother.

The major publishers have yet to realize is that they are going to have a hard time sticking to their traditional royalty rates and book prices when it comes to e-books. When selling digital books, they no longer incur printing, shipping and warehousing costs. Why shouldn't those savings be shared with authors and readers? Believe me, both groups are well aware of the current market prices and royalties offered by e-publishers.

Tim O'Reilly started talking about Web 2.0 nearly five years ago. In the next five years, we are going to see Publishing 2.0. Digitization and the Internet will democratize the industry in the same way Gutenberg's press did 570 years ago during what I would call Publishing 1.0.

Publishers are no longer the sole owners of the means of distribution. As readers become increasingly comfortable reading digital downloads, more and more authors will seek e-publishing. Why accept a 15% royalty rate on an e-book from a major print publisher when they can get 35% from another e-publisher? Major publishers lose their advantage when they shift venues. They are going to need to bring something more to the table: perhaps increased mid-list advertising and promotion.

Jim Milliot of PW commented that Steve Kessel "defended Amazon’s decision to sell most e-books at $9.99--a price that makes them lower than most print editions."

Gayle Feldman of The Bookseller said "Publishers privately raised concerns about territorial rights on Kindle content, and wondered how much money Amazon was losing by sticking to a USD9.99 price point."

Okay, we all know that Kessel is trying to grow his Kindle market. Right now he's pricing bestsellers at $9.99 to entice buyers to fork over $399 for the e-reader. Still, e-books should be priced differently from hardbound books, in the same way paperbacks are.

Even though the major publishers are setting up digital sites to sell books via downloads, they seem to have forgotten that a free market finds its own level. They need to start thinking outside of the box that says they are in charge. Once they go digital, they are entering the wild and wooly world of the Internet where they have to compete with everyone else.

1 comment:

Rob Preece/ said...

Hi Maya,

It's true that electronic publishing does save some costs. For the big publishers, though, paper costs are not that high a percentage of total costs and the fear of losing sales of high-margin hardbacks, as well as the fear of being blackballed from the major retailers, has constrained the big pubishers.

Small publishers (like my own) often do offer dramatically lower prices for eBooks, reflecting the fact that we can't get the volume discounts we could if we printed thousands of copies.

I agree that over time, there should be an increased spread between paper prices and eBook prices. I also agree that smaller publishers often offer a significantly higher royalty rate than do the big boys.

Rob Preece