I have been writing a lot about the role of the independent bookseller in the brave new world of e-books. A lot of people have been talking about this, usually with sad-countenanced head-shaking and hand-wringing. And it is true that indies are facing and will continue to face enormous challenges. Recently I wrote an article in Publishers Weekly reprinted in this blog trying to provide some hope in this situation. But it was pretty speculative. Today I am going to interview Len Vlahos, who is Chief Operating Officer of the American Booksellers Association, the trade association that represents over 1400 independent bookstores operating in more than 1700 locations nationwide. We are going to talk about the future of indie stores, their challenges and their opportunities, in the age of the e-book.
Andy: Len, I assume that the ABA is not just sitting back and ceding the terrain of the e-book to Amazon and Apple. What is ABA doing to bring the Indies into the game?
Len: ABA offers members an e-commerce product called IndieCommerce. Through this service, members can have a turnkey website with a great search engine, shopping cart, and robust content management tools. The sites exist at the store’s URL and with the store’s brand. A few examples:
We’ve partnered with both Google and Ingram to allow our members to offer e-books for sale to their customers in four different formats – Adobe (works with Sony eReader, Nook, Kobo), Palm/iPhone (works with iPad, iPhone, other smart phones), Microsoft (with the Microsoft Reader), and Google (works with most devices other than Kindle). Some of the Ingram titles are already live. Google will be live before the end of the year. Between these two aggregators, the 200 + IndieCommerce sites will have a robust catalog of titles, and will offer a competitive experience relative to the rest of the market place.
Andy: I pointed out in my article that the new model for e-book pricing is for the publisher to set the price of the book. It seems that Amazon.com has always succeeded in gaining market share by price completion. Can you describe the new plan. Is it going to help Indies?
Len: In the traditional (often called “wholesale”) model of publishing, publishers set a suggested retail price for a book and then sell that book to a retailer at a discount. The retailer then sets its own retail price and sells that book to a consumer. Under this model, chains and big Internet retailers have been selling popular titles — in both conventional editions and digital editions — at significantly below-cost pricing and with loss leader marketing in what appears to be a blatant attempt to acquire market share and to concentrate power in a small number of mostly online retailers.
Under the new and developing “Agency” Model, a publisher sets a retail price for a specific book and engages an agent — typically a retailer — to facilitate the sale of that book to a consumer, at that price. In this model, the retailer is bound by the price set by the publisher. To date, this model exists only for digital content. The retail price set by the publisher reflects production costs — acquisition, editing, marketing, printing, binding, shipping, etc. — which vary significantly from book to book.
The artificially low prices at which e-books have been sold are threats to any profitable business model for writing, publishing, and selling books. They offer consumers only a fleeting bargain while enacting serious long-term losses. Ultimately such below-cost pricing is very likely to drain the resources publishers need to discover, develop, compensate, and successfully publish new authors, a loss of diversity that ABA believes will have very bad long-term effects on many fronts.
ABA strongly favors the “Agency” Model for the sale of digital content. The benefit of the Agency Model to our members — independently owned bookstores — is obvious. It’s an essential defense against predatory pricing, and it allows for a wide diversity of retailers in the marketplace. It also helps to ensure the continued distribution of books by smaller, independent publishers with a variety of viewpoints, ultimately benefiting consumers by showcasing not just discounted bestsellers, but a wide selection of writers. Finally, it will help prevent the concentration of power within the hands of a few megastores and chains. Such a narrowing of options would significantly harm consumers and our society.
Andy: Do you see any other models for e-book distribution on the horizon that also would offer opportunities to independents?
Len: A long-range goal would be to partner with a technology company to use geo-locating software to allow a customer in an indie store to download an e-book to her smartphone from within the store, and then have the bookseller be credited with that sale. This is down the road a bit, but should be possible. It opens up interesting opportunities.
Andy: It is a little unclear to me how indies can provide a kind of convenient channel for downloading the e-books. One of the nice things about e-books, as they are being sold by the big guys, is the seamless way the book buyer can order books without getting off his tush.
Len: With Google in particular, we will provide just as seamless a solution if you’re using your iPad, Android, or other tablet or smartphone. You can sit on your couch in your PJs at three in the morning, or sit in the airline frequent flyer lounge, and search for, purchase, download, and read your e-books, all from one device.
Andy: And do you visualize independents as selling e-readers as well? At the very least, that seems like a way of showing that indies are serious about being in the e-book business.
Len: This is trickier, as we’ve yet to identify the right device partner, but we’re still looking.
Andy: You might as well prognosticate about the future. Everyone else is, after all. Are e-books going to spell the end of the traditional book? How are independents positioned to benefit from the trends?
Len: ABA firmly believes that print books are here for the long haul. But to think that e-books are not already impacting print book sales would be a bit of a stretch. The focus of our channel must be on serving our customers how, when, and where they want to be served, and to sell the right book to the right customer in the format of that customer’s choice. That’s what we’re trying to empower our members to do.
Andy: Thanks, Len. I just clicked on my favorite bookstore, Book Passage; and I see that they are, in fact, selling e-books for immediate download in Adobe and Palm format. So I urge you all out there with e-book readers to go to their website and start downloading.