Posts Tagged ‘ebooks’

Buy E-book Downloads from your Independent Bookstore — Now!

November 20, 2010

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:

 

http://www.politics-prose.com/

http://www.bookwormofedwards.com/

http://www.bookpassage.com/

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.

iPad versus Kindle (and Nook)

May 28, 2010

There is a terrific article in the current issue of The New York Review of Books. The article is by Sue Halpern  and is called “The iPad Revolution“. It is a very good comparison of iPad and Kindle and the relative differences in the approaches of Apple and Amazon. Bottom line is that neither of them are perfect. (We already know that). But  it is the best thing I have read on this issue so far.

Bulletin: New Book Technology

April 20, 2010

Here is something very funny coming out of Canada.

Introducing the new Bio-Optic Organized Knowledge device, trade-named *BOOK*.
*BOOK* is a revolutionary breakthrough in technology: no wires, no electric circuits, no batteries, nothing to be connected or switched on. It’s so easy to use, even a child can operate it.
Compact and portable, it can be used anywhere — even sitting in an armchair by the fire — yet it is powerful enough to hold as much information as a CD-ROM disc.
Here’s how it works: *BOOK* is constructed of sequentially numbered sheets of paper (recyclable), each capable of holding thousands of bits of information. The pages are locked together with a custom-fit device called a binder which keeps the sheets in their correct sequence.
Opaque Paper Technology (OPT) allows manufacturers to use both sides of the sheet, doubling the information density and cutting costs. Each sheet is scanned optically, registering information directly into your brain. A flick of the finger takes you to the next sheet.
*BOOK* never crashes or requires rebooting, though, like other devices, it can become damaged if coffee is spilled on it.
The “browse” feature allows you to move instantly to any sheet, and move forward or backward as you wish. Many come with an “index” feature, which pin-points the exact location of any selected information for instant retrieval.
An optional “*BOOK*mark” accessory allows you to open *BOOK* to the exact place you left it in a previous session — even if the *BOOK* has been closed. *BOOK*marks fit universal design standards; thus, a single *BOOK*mark can be used in *BOOK*s by various manufacturers.
Portable, durable, and affordable, *BOOK* is being hailed as a precursor of a new entertainment wave. *BOOK*’s appeal seems so certain that thousands of content creators have committed to the platform and investors are reportedly flocking to invest. Look for a flood of new titles soon.

Credit to Peter Waldock of North 49 Books, Toronto Ontario.

http://www.north49books.com/

Book Banning at Amazon.com

January 31, 2010

I woke up this morning to the astonishing news that Amazon.com has stopped selling all titles from Macmillan , the sixth largest publisher in America.  I learned  about this first on Frances Dinkelspiel’s blog, Ghost Word.   Frances is a Macmillan author.

According to an article in The New York Times Amazon’s action was related to Macmillan’s decision to adopt new terms  for the sale of e-books to retailers based on the structure that is being implemented by Apple for its i-pad.  Under the new Apple model, publishers will have the ability to set the final retail price of an e-book  at  $12.99 to $14.99 for new titles. Amazon has been selling them at a loss for $9.99.  Macmillan CEO, John Sargent today wrote a letter to Macmillan authors explaining the dispute.

One can only hope and one must assume that Amazon’s decision is temporary and an act of saber-rattling. But the episode should be a clarion call for us to consider some very large issues about the dangers of monopoly power and how it can compromise the free dissemination of ideas.

A specter is haunting the world of books. From Amazon’s beginnings in the late 1990’s, the company has pursued a strategy of monopoly power. American consumers have embraced Amazon because of its outstanding “customer-centric” technology, its breathtaking selection, and its pricing. But this has not come without a cost. Amazon has gained a stranglehold on  the sale of books online and has attenuated the ability  of community-based bookstores, chains and independents, to survive at all.  With the interdiction of the Macmillan titles, they are now reaping the grapes of wrath.

There are a lot of legal subtleties associated with this issue. Whether a manufacturer (the publisher) can dictate the final selling price of a product to a retailer is an important anti-trust question that won’t be resolved by blogging. But the manifest power of Amazon to effectively cut off  a book publisher’s access into the largest channel of book sales,  the Internet, should give us  pause.

What is this dispute all about?  What’s at stake here?  We have made several recent blog entries on the implications of the e-book revolution. E-books are currently a small niche market for trade books, still less than 4%. But their market share is growing exponentially. Currently electronic book readers are the hottest products in consumer electronics.  It is altogether likely that the book business, not unlike the music business, will reach a kind of tipping point in which e-books will become the standard and paper-based books will become the niche.

Not surprisingly, Amazon jumped on board early. It developed  and marketed the Kindle, an excellent product. Very quickly Kindle became the shorthand word for “book reader”, just as Amazon became the shorthand word for “Internet retailer”. Also, not surprisingly, Amazon has designed the entire system to give it effective monopoly power over the distribution of e-books.

Kindle technology only allows downloading from Amazon and requires that any book purchase will be made through Amazon only.  Amazon has priced the books aggressively. Most new e-books are being sold as Kindle downloads for $9.99. This is a considerable discount from the costs of new hardbacks. Their retail price is typically $25-30. Hardback  discounted prices on Amazon are $15-18. Amazon purchases e-books for about $12.50, a price similar to the  cost for non-e-books. Amazon sells them as loss leaders. This strategy has sought and has succeeded in allowing Amazon to dominate the e-book market.

Publishers have problems with this.  They feel, and I agree with them, that by pricing  books so low, it will inevitably cause the book buyer to devalue books as a commodity. They will come to feel that a book is only “worth” $9.99. With customer pressure to make this price the de facto “list” price and with Amazon’s market power, the  publishers will have to change their business model to accommodate the new reality and begin selling books to Amazon for  something closer to $5 per book instead of $12.50. Good for the consumer, right? Wrong.

We have spoken in an earlier blog entry about the unfortunate tendency of Internet Culture to devalue the worth of intellectual work.  But there are costs to producing books, just as there are costs to producing any product. E books have no manufacturing costs, but there continues to be marketing, publicity, editing, and…yes…sometimes this seems like an afterthought….creating.

And so it all comes down to the irreducible and irrefutable fact that books cost money. And publishers will not be able to produce books or pay the writers a decent royalty  in return for revenue of  $5 per book. Certainly the literary “tea-partiers” will tell you that publishers are dinosaurs, that the essence of the Internet is “disintermediation” and that the future is with authors selling direct to the reader. That most of these books are being “mediated” through Amazon is a detail often overlooked. But let’s leave that for now.

Self publishing is a worthy endeavor and has brought many fine books to the market that would have otherwise died. But it is a bit of a quagmire of unfiltered material. It is a little hard to separate the dross from the gold.  This  fits in quite well with the Internet Culture of  Wikipedia (see previous blog entry)  in which everyone is an expert.

The emerging business models for the e-book, Apple and Amazon alike, are bad news for authors. Any way you calculate it, author’s are going to suffer reduced royalties. The publishers will realize huge cost savings with the e-book if the price of the book is comparable to  paper-based books. With e-books, there are no manufacturing costs, warehousing costs, shipping costs, packaging costs, and, crucially, no returns. Since the e-book is non-transferable, publishers will not lose sales from book borrowing or from the used book business. How this will all affect libraries is still unclear to me.

But authors are being asked to reduce their  percentage royalties for e-books. And the reduced retail price, both under the Amazon and the Apple model, will drive consumers away from physical books very rapidly and will force authors to take a smaller percentage of a dramatically smaller pie.

I am very worried.

UPDATE: AMAZON RESPONDS.

At 2 PM today, Amazon posted an announcement on their website addressing the issue of Macmillan. It is as follows:

“Dear Customers:

Macmillan, one of the “big six” publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.

We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books. Amazon customers will at that point decide for themselves whether they believe it’s reasonable to pay $14.99 for a bestselling e-book. We don’t believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced e-books as an alternative.

Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!

Thank you for being a customer.”

This is typical and predictable public relations strategy of Amazon. It has all the elements of  a Zen-like, or more accurately, a  Hegelian position wherein Amazon seeks to weave contradictory forces into a new and higher synthesis. Coincidentally, it sends some less than Zen-like messages. 1)Amazon can’t stop  selling Macmillan books indefinitely, but we can surely display our power to intimidate.  2) Other publishers, take note. and 3) Publishers have monopolies. Amazon just has customers. 4)We just want to help our customers buy books cheaper.

This is a cynical, manipulative, deceptive, and self-serving response.