Lurking in a seemingly not related post about how the iconic Apple product is slowly becoming less important to Apple, is a great few lines about the nature of the music business and, more generally, the content business at a meta level:
One could argue that trying to charge a little extra and make more profit is more trouble than it’s worth for Google or Apple (or even profit-hungry Amazon) – better to offer it at cost or thereabouts to enhance the value of the broader platform, which is where the real money comes from (advertising and devices respectively).
The same thing is happening in books and video – content is a condition of entry to the platform game that you provide at cost. This obviously makes life pretty tough for startups – it’s hard to try to build your own ebook store or download-to-own music store right now when any device your customers might use probably already has an at-cost service built-in. The one place this might be different is in video, since in that business it is actually possible to have unique content – but of course this is very expensive.
via iPod eclipse — Benedict Evans.
These issues are of concern to everyone in the content business, from authors to publishers. That doesn’t mean we’ll be impacted equally!
Lovely piece by Jude Rogers in The Bookseller that illustrates exactly how much the industry has changed over the last decade or so. Really worth considering:
Take what happened to us in 2007. Before then, we would hand-deliver 340 copies of every issue of Smoke to Malcolm Hopkins, the wonderful magazine buyer at Borders Oxford Street. He shelved them well, and every one would sell—a good return for both parties. But then we received a letter from Borders head office saying that, in future, branches would not accept deliveries direct from publishers; we would need to use a “recognised distributor” instead. Malcolm left, and the last issue we’d hand-delivered was left in the storeroom; over half came back as returns.
This was at a time when our sales were increasing elsewhere. And what a grim irony it was that Borders went bust not long after its approach became so impersonal.
via Tough deal | The Bookseller.
Interesting analysis by Baldur Bjarnason (@fakebaldur), of course, the mistake he makes is to assume the ebook market is in anyway different to any other market:
Your suppliers have no concern for the viability of your business and are quite willing to ruin it for little to no personal gain. Your competitors have corporate parents who are willing to run the ebook retail unit either at a loss or break-even and that’s without taking their substantial R&D investments into account, most of which are focused on developing or protecting vertically integrated silos, not innovations that actually benefit the customer.
In short, it’s a sector that desperately needs new, competent, and innovative entrants but is too irrational to sustain any sane business development or investment.
via Caught between madmen and mercenaries | Studio Tendra.
I have two questions about this that have only occurred to me having read this yesterday;
1) If the book trade is so badly impacted in New Zealand and ebooks are growing so rapidly, why is the sales team being retained, surely they’d be about the first to lose their usefulness?
2) The implication of this story (although it isn’t in fact stated) is that local authors are not holding their own against outside authors, why is that and what are the implications for other smaller English language territories?
HACHETTE New Zealand, the local arm of the global publisher whose titles include biographies of Richie McCaw and Mark Todd, is to cease publishing locally with the loss of 12 jobs including its long-serving management team.
The New Zealand company, which publishes locally under the Hodder Moa imprint, will continue as a marketing and sales office for the group’s international titles and New Zealand backlist, according to a statement from Malcolm Edwards, chairman for Hachette Australia and New Zealand.
Local finance, administration and IT functions will be relocated to Australia and publishing will cease in New Zealand after the completion of its 2013 programme.
The New Zealand publishing business has shrunk largely because of “the increased sourcing of books from overseas, at the expenses of the local trade, and the rapid growth of e-books,” Mr Edwards said.
via Book publisher Hachette closes down in NZ | Herald Sun.
During the 2008–2012 period, trade sales overall rose a total of 14.2%, with the increase due entirely to the introduction of e-books. During the period, sales of print trade books fell 8.4%, from $13.1 billion to just over $12 billion in 2012. The BookStats figures document the important role adult fiction has played in the growth of e-books. In 2012, e-book sales in the segment rose 42%, to $1.8 billion, while sales of adult nonfiction increased 22%. Within the trade category, children’s/young adult had the strongest gain, with sales jumping 117%, from $215.9 million to $469.2 million.
via BEA 2013: The E-book Boom Years.