B&N

Go Read This | Been Down So Long | PWxyz

Seems a bit negative on the whole, but it’s a useful thought experiment:

Other impacts are inevitable, but harder to perceive in clear definition. Successful self-published authors like Howey, who did well by ultimately selling print rights to a Big 5 publisher while retaining digital rights, are less likely to see any benefit in prestige or marketing when there is diminished gain from a rapidly diminishing retail presence. The appeal for authors to sell rights only for finite term duration, another Howey recommendation, are likely to increase. And ultimately, that means that Big Trade publishers are going to have fewer titles to work with; my agent lunch-partner describes the difference as going from 800 big titles a year to 200 – regardless of the actual numbers, it’s the level of impact that’s important.

via Been Down So Long | PWxyz.

Go Read This | Print as the future of Barnes & Noble | DearAuthor

A good piece, the unspoken element here is that the B&N described here is a much smaller B&N in terms of store and probably in terms of store size as well:

Instead B&N should pour that money into the development of a low cost, high efficiency print on demand machine. The current print on demand technology requires the installation of a behemoth device that currently costs about $100,000.  Have you paid attention to the posts about 3D printing? 3D printers cost about $10,000 and can print out guns, exoskeletons, and even small planes. How is it that it requires ten times the cost to produce something made of glue and paper?
Barnes & Noble’s future is in providing quality physical objects to in store customers.

via Print as the future of Barnes & Noble.

Go Read This | Tesco’s Blinkbox sees festive sales rise 245% | The Drum

From Tesco's published infographic

From Tesco’s published infographic

So Tesco has sold 400,000 tablets in just three months. The company says it is planning a new edition of its HUDL device and that it could have sold even more tablets before Christmas had they had them in stock. It’s interesting in the context of books and my recent post on Barnes & Noble’s Nook troubles that all of these sales took place without an ebook offering to bolster or encourage buyers (Blinkbox books is to launch in 2014, but is not yet live), cementing the very clear evidence that ebooks are not the biggest motivator for tablets (nor were they ever). Some impressive data on increased sales from Blinkbox itself too:

Tesco’s TV and movie streaming service Blinkbox saw sales spike by a massive 245 per cent year-on-year over the festive period…

New Year’s Day was the biggest day ever for the service with sales up by 266 per cent year-on-year, while mobile sales have increased by 674 per cent and smart TV sales by 465 per cent.

Ahead of Christmas, Tesco launched its own Hudl budget tablet and reported sales of 400,000 in the three months to December. The supermarket brand now plans to launch a second edition of the device later in the year.

via Tesco’s Blinkbox sees record festive sales with rise of 245% while mobile sales rocket by 674% | The Drum.

Some Thoughts On B&N’s Nook problem

The news from B&N’s Nook division is bad:

The NOOK segment (including digital content, devices and accessories), had revenues of $125 million for the nine-week holiday period, decreasing 60.5% as compared to a year ago.  Device and accessories sales were $88.7 million for the holiday period, a decrease of 66.7% from a year ago, due to lower unit selling volume and lower average selling prices.  Digital content sales were $36.5 million for the holiday period, a decline of 27.3% compared to a year ago due to lower device unit sales and lower average selling prices.

via Barnes & Noble Booksellers.

I’ve got more sympathy for B&N than some, indeed I think we should be thanking it for spending so much of its investors money to discover some important things for us.

For a time it seemed to me that Nook was a success. Perhaps that was naive of me, but it seemed like a good match, dedicated book people selling digital content to dedicated book readers. The lurch towards tablets was probably not a good one, prompted as it was by the iPad and the Kindle Fire, it might have seemed like a fabulous strategy, but in truth (but sadly in retrospect) it was too expensive and too long a game for B&N to ever win against its much better funded and positions rivals.

The big question for B&N is whether there is a profitable ebook and digital content business to be pulled from the mess of Nook. The shocking drop in digital content sells in the holiday period is blamed on two things, lower device sales and lower average selling prices.

Taking those one by one the device sales driving content sales suggests two things which would be clear to anyone looking in on Nook. For too long, the digital content side of the business has been a slave to the device side. Too little effort has been made to open content sales to those without devices, too little effort on gaining ground on smartphones and tablets other than Nooks.

If the digital content side is to thrive then B&N will have to encourage readers to buy Nook content everywhere and anywhere they can connect to the web regardless of device and to do so more easily than they currently can (which probably means rethinking the company’s current DRM strategy). In some ways the failure of the tablets (and note, I laud even what might be termed a failure here. B&N has still sold a LOT of devices) probably makes this a likely development anyway. Hopefully it will be a rapid one too.

The second issue is a bigger one in many ways. Average selling price is falling across the ebook space (or, at least, it would appear to be). Only increased unit sales will make up for that. However, if B&N is suffering more from this problem than others, not even unit sales will suffice to push it along.

What’s more, if unit sales don’t increase in line with the market, B&N will begin losing market share (if it hasn’t already). It’ll have to either increase its stock of exclusive content (which sounds like an impossible task given Amazon’s attractiveness in this area) or get market share back through converting customers of one platform to Nook readers, or grow quicker than the market as a whole, or by slowing down the flood of exclusive titles that Amazon is building somehow enabling them to capture some of that value.

I’ve written several times about the value of the KDP platform for Amazon and how valuable such a platform could be to the other ebook retailers yet how each of them in their own way has relatively closed policies with regard to them. Since I first wrote about this back in 2011, only Kobo has opened up in a real way. We are seeing the power of Amazon’s foresight in this space now. The giant added 200,000 exclusive ebooks through KDP in 2013, a perfectly avoidable situation.

B&N succeeded in selling nearly $4,000,000 worth of digital content a week in the holiday season, which is nothing to sniff at. I just hope it can push harder and increase they sales in 2014 opening up to wider audiences and starting to challenge Amazon’s exclusivity advantage with self published authors, that would be good for the wider industry as well as for itself.

Go Read This | 2014 Publishing Predictions

Jane Little’s 2014 predictions list is wide-ranging and fascinating throughout. One point that I believe warrants mention is below and relates to online communities. One curious feature of the list is that Amazon seems to have got there already with a few points. Perhaps there is a danger of us all-seeing the future of books the same way Amazon see it. That would be unhealthy. In any case, there’s so much in there you’d be best reading it yourself.

Penguin and Random will buy a large reading community.  Right now other than streamlined distribution services, the merger hasn’t resulted in much of a change. Each publisher has its own sales, marketing, editing, and acquisition teams. But data about readers is more important than ever and so is the issue of discovery. Traditional publishers need a community of readers already built. They don’t have the time to create it from the bottom up and their efforts like Bookish and Book Country have been failures.  Their best option is to buy Wattpad or Scribd and given that Wattpad is venture capitalist-backed, Wattpad is the more viable candidate.

via 2014 Publishing Predictions.

On Amazon Publishing

It’s big news that Larry Kirshbaum is leaving Amazon Publishing, it’s just not so big as it appears, especially as the retailing giant is going nowhere, and its Kindle project is as strong as ever. That also doesn’t mean that Amazon Publishing will have an easy ride in the years ahead. Laura Hazard Owen sums up some of it nicely:

Nonetheless, at least seventy percent of the books sold in the U.S. are still print, so Amazon’s inability to get its titles into bookstores was a huge strike against the vision that it would be able to compete directly against general trade publishers on big fiction and nonfiction titles. And just because many have argued that the traditional book publishing industry’s business model is outdated didn’t mean that Amazon would be able to completely upend the way the industry does business in New York in two years.

via Amazon Publishing reportedly retreating in NYC. Thank or blame Barnes & Noble — Tech News and Analysis.

This recalls to me one of the three things I identified a bricks and mortar bookshops’ advantages in their struggle against Amazon and online retail for a talk at a booksellers gathering last year:

Physicality: being a place is an underestimated thing as is its almost completely ignored sister point Proximity: the idea that a bookshop is often a local place that is NEAR the reader or the customer. Where is Amazon? I wonder how many Irish people know that the company has a customer service centre in Cork and an engineering office in Dublin? Or indeed how helpful either fact is when you want something nearby?

The other two points I figured went in bookshops favour are Knowledge and Sympathy, tools and advantages that Amazon itself possess to some extent, but which are greatly added to by the physicality and proximity of bookshops.

I would expect Amazon to respond in three ways to this set back:

  1. Push its niche imprints more aggressively than ever because those imprints have massive advantages in specific verticals and can deliver real benefits to authors and readers.
  2. Work to convert more readers to digital or online book purchases (booksellers have made themselves Amazon’s true enemies now whereas in the past they were simply the hapless victims of Amazon’s usage of new distribution and sales systems).
  3. Find a new way to market for its printed books. This might be seen as a slight contradiction of 2, because it might require working with bookshops, but it would be a sensible strategy for Amazon to find SOME way to get books in front of people in large numbers. Several avenues suggest themselves; somehow convincing a chain or a group of indies to take them, selling the retail print rights to the best market offer (I’m sure bidders would emerge), doing a deal with retailers of other products with good footfall and a desirable audience (this might work), or simply hiring out empty retail space on short leases for book big launches (expensive but interesting potential, especially around peak season releases).

It’s very clear that Amazon has taken a defeat of some kind, frustrated by its competitors and by circumstances. I don’t expect that will end the company’s drive into publishing, it has created a much too valuable commodity with its platform to retrench at this point, but it will clearly require a rethink and a retool before the company can move forward again against the big fish in New York.

That would not make me happy if I was an executive in those same houses though, it would make me even more nervous. This reversal does nothing to counteract Amazon Publishing’s attractiveness to niche authors and the KDP Platforms dominance of digital self-publishing. Publishers will need to think and act smart if they are to take advantage of this Amazon misstep.

Go Read This | Tesco tablet expected on 23 September

Tesco-LogoIt has been clear for some time that probably only full-scale retailers have the capacity to respond to Amazon, Google, Apple and other digital giants. They have the advantages of scale, access to capital, direct customer interaction and customer inertia working in their favour.

Of course, those advantages are threatened by online retailers like Amazon and by the shift to digital consumption of media. It makes sense then that really forward-looking retailers will attempt to move into the digital distribution and retail space. Many of them have been offering online grocery shopping effectively for some time, long before Amazon or other newer entrants. Tesco has been making what look like smart moves in digital media for a while. It will be intriguing to see if this forthcoming tablet play works.

Success, however, cannot be measured by units sold alone. A good sign of it working would be of the company sells lots of tablets AND signs lots of people up to its digital content services. At the kind of price point the articles on the tablet are talking about, content sales and customer acquisition for the digital services are the goal in the short and medium term.

The question that arises for me is what’s the longer term play for Tesco? How can it build on success in the UK (if it materializes) and can it compete with the giants even if it does succeed in the UK. The costs of such competition can be quite hefty, as B&N has learnt to its cost:

Tesco might be able to hit the £99 price using a cashback-style promotion, Wood suggests: “I can see Tesco using substantial discounts on other services such as bundled media from Blinkbox, or vouchers for discounts on petrol or groceries through its ClubCard loyalty scheme.”

The tablet would take on competitors from the likes of Apple, Google and Amazon, and will be tailored to online shopping and video viewing – both areas where Tesco is looking to capitalise on its position.

via Tesco tablet expected on 23 September – and may be very low-priced | Technology | The Guardian.