Bookshops

Go Read This | The future of bookstores is the key to understanding the future of publishing – The Shatzkin Files Pt. II

I’ve already linked to this, but it warrants a second link. If you want to understand the basic problems facing book publishers in 2014, then read this post. In it, replace the large publishers and niche players that Mike refers to with small general players and consider how the trends and realities he discusses endanger them. It’s both illuminating and unsettling:

But that’s today when the online-offline division may be near 50-50 overall and is 75-25 for certain niches. If those numbers become 75-25 and 90-10 over the next five years, the bookstore market really won’t matter that much to most authors anymore. Whether through self-publishing or through some fledgling publisher that doesn’t have today’s big publisher capabilities but also doesn’t have their cost structure, authors will feel that the big organizations are less necessary than they are now to help them realize their potential.

via The future of bookstores is the key to understanding the future of publishing – The Shatzkin Files.

When Mike talks about the challenge publishers will face in retaining authors, I’m struck by how his thoughts reflect those I wrote back in 2006 (Authors Will Drive Change) early in my blogging about this ongoing shift we’re all a part of:

What’s more you can package your content in any variety of ways. Make a podcast or your poetry and push it on iTunes. Act out your play and upload it to YouTube or your preferred location. It is easy to do it all now and to do it well. Maybe the cost of a decent designer or video editor will take a summer to save for or a winter of being cold avoiding buying new jumpers but the costs are so achievable it is exceptional.

The point is that publishing is no longer just about books and even more it is no longer about waiting for a publisher to decide your work is good enough for print.

Options abound and as more and more writers realise that they will take advantage of it. E-books will push this change even more. There is no reason why authors’ royalties should be the same on e-books as they are for paper books and in many ways there is no reason why the authors cannot sell e-books themselves rather than through a publisher. Why should you sell a paper publisher your digital rights when there is no need?

Of course the real growth in power for authors is with two groups; the super successful authors who already command high advances and special treatment, and those who were never going to be published anyway. In both cases options abound for changing the current model.

Where things are less easy to decide is the mid-list. Here, as bookstores fail and ebook sales gravitate towards the winners and the margins, there may be difficult years ahead for those who fall into either the average writer space or the average sales space.

None of that solves the headaches publishers face!

Go Read This | The future of bookstores is the key to understanding the future of publishing – The Shatzkin Files

Mike is smart, very smart this paragraph nails the problems of booksellers and publishers too:

One distracting fact for analysts considering this question has been the apparent slowdown in the growth of ebook sales, suggesting that there are persistent print readers who just won’t make the switch. The encouraging fact is distracting because it is incomplete as far as predicting the future of shelf space at retail, which is the existential question for the publishers, wholesalers, and bookstores (and, therefore, by extension, for legacy authors too). We need to know about changes in the division of those sales between online and offline to really have a complete picture. If ebook takeup slows down but the online buying shift doesn’t, the bookstores are still going to feel pain.

via The future of bookstores is the key to understanding the future of publishing – The Shatzkin Files.

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.

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.

With MatchBook Amazon Pushes The Envelope, Again!

Amazon.com  Kindle MatchBookWith the jam made, I can finally sit down and write about MatchBook. Amazon has gotten very good at releasing solutions to problems within publishing that many people have been talking about for some time but mostly (see comments below) doing nothing about. You’d have to wonder if the industry in general (and I include myself here) will get tired of allowing them set the pace of this digital transition and start working with start-ups to change that dynamic?

My initial response to the announcement of Amazon’s new  product was summed up in the tweet below and I think it still holds though I stress two things:

  • I expect the price points to grow in number (to the higher side) and
  • I expect most publishers to see sense and come on board (there’ll be rights to consider)

But it’s worth working through those points and explaining them.

Incremental revenue
The great thing about MatchBook is that in essence it’s making money for old rope. Customers who avail of it already bought the IP in the book they are “upgrading” and are paying simply to format shift. They’ve no real reason to do this, they are unlikely to do so at full price but a discounted price may well prompt them to buy increasing the overall revenue from that customer for that piece of IP and increasing revenues for Amazon, the publisher and the author. No one in the current chain loses anything in such a transaction (bookstores were never in the transaction to begin with). Sure complications arise where rights have been reverted, but authors can make print and ebooks available again, and here’s a great reason to do just that! This is driving revenue per customer and per title smartly.

E&P bundling & Reason to shift to Digital
Taking these together as they make sense that way! Lots of folks seem to think E&P bundling is a good idea. I’m not sold on the value for me, and I’ll still buy mainly digitally only. But for wavering print buyers, E&P bundling makes a digital transition completely risk free encouraging them to try digital and maybe, just maybe converting them in the process. That’s good for Amazon. It’s okay news for publishers who at some point in the process will begin to wish all their readers were digital ones to enable them to kill costly print runs! For authors it’s neither one nor the other.

Reason to switch to Amazon
This one is clever. So suppose you are a digital buyer from Amazon (or indeed anywhere) and your print purchases are mainly gifts or illustrated and you normally by them from local bookshops, MatchBook is a real incentive to shift those purchases to Amazon just to get your hands on the digital editions for a limited fee. And, if you are a print buyer who buys anywhere but Amazon, this encourages you to shift to Amazon or your print to ensure you can (if you want to) get a cheap eBook version!

Incentive to digitize
Most interestingly to me is that by opening up the hitherto closed incremental revenue option, Amazon is encouraging publishers and authors to make old books available both in print and as ebooks. This drives increased selection for Amazon making it better and more effective at its core goal (in this market of selling books in whatever format). The lure of potential sales will see more ebooks published especially for backlist titles that might once have had decent print sales an area that might see an uptick too.

Objections
I had a long twitter discussion with Tom Bonnick from Nosy Crow about MatchBook the other day and he’s posted a blog about it here

I think it’s fair to say that much of his case is based in this piece (though he might disagree so I’ll leave it for him to respond if I’m wrong):

Conventional wisdom is that Amazon have been pinning their hopes on eBooks as the key area which might one day make them a profit (they’re certainly not making any money on sales of Kindle devices, which operate on absolutely wafer-thin margins). Yet MatchBook seems to fundamentally devalue that core product: it treats eBooks as commodities with no inherent worth; as products that can be given away for nothing as promotional tools. Even if the norm is for a $2.99 pricetag, rather than a straight giveaway, the inescapable conclusion is that the e-format is nothing more than an adjunct to print.

Tom’s logic assumes that Amazon is committed to digital sales (which, while currently true, may not always be so) and only digital when clearly, so long as a customer spends on Amazon, it largely doesn’t matter hugely to the company what format the customer buys content in. Amazon’s strategy then could be simply to improve the value of its ecosystem in its entirety to book readers and encourage them to upgrade from one format purchases to two format purchases driving incremental revenues per sale and per customer and per customer lifetime. If Amazon can gain customers from a bricks & mortar outfits because of this development and it can also drive increased revenues per existing customer then this could really grow its business.

A second key section in Tom’s post is this one:

who will want to continue paying the full price for eBooks as standalone products (which they have, at long last, managed to establish themselves as being) if they’re available for little or nothing when you buy the print edition? And what will MatchBook do to the general assumption about what eBooks “ought” to cost? What will that shift in buyer behaviour do to Amazon’s bottom line, I wonder?

The answer is that just as many people will be unmoved by the offer of a cheap upgrade from print (those who never intend to shift to digital and are not in any kind of wavering camp likely to be attracted to such offers), many (like me) see absolutely no use for print in most circumstances. In fact I view print as a nuisance for most of my reading (though I see it as incredible for several other circumstances). That Tom does not see this suggests he sees print as always having value, but in truth, often it does not have any value at all and so people like me will pay the full price for ebooks because they don’t need or want print.

Tom’s final concern is about bookshops. Actually Tom sees a potential upside of bookshops can get themselves into the bundling game:

But I think this could be a great opportunity for high street retail, rather than a death knell. If bookshops can get in on the act and start offering bundling as well, they may well be in a better position to take advantage of it. For a start, bookshops’ core products are print, rather than e-books, and so unlike Amazon, they won’t be undermining their own health by giving away the e-format. They’re also in a great position to be able to up-sell to customers: there’s no competition between an engaged and enthusiastic bookseller and a website algorithm. And if bookshops can build the right infrastructure, they might be able to offer customers e-editions in non-proprietary formats for more than one sort of device, rather than just the Kindle edition.

While, as you might imagine, I’m not sold on his logic for the benefits, I do see how bundling and up-selling (and I’d say not just up-selling of ebooks, but experiences and more) to print customers offers some potential for book shops. However, as I cautioned earlier, some print buyers simply have no interest in ebooks, arguably (though I may be mistaken) print buyers in local bookstores are probably the most resistant to them, making ebooks perhaps not the right up-sell for them!

On the other hand, Amazon’s very existence is a problem for the bookshops so MatchBook will not really change the nature of the problem, merely perhaps the keenness with which it is felt.

All things considered, I don’t see a negative for MatchBook from Amazon’s perspective drives forward where most others just have yet to push too hard. It may actually help drive adoption of E&P bundling and grow revenues for everyone (except bookshops!).

Go Read This | An Industry Pining for Bookstores | The Scholarly Kitchen

A fine post about bookstores, print and emerging ecosystems (I’ve written about before about this new emerging value web) by Joe Esposito over on The Scholarly Kitchen:

Trade publishers pine for bookstores.  Part of this is nostalgia, but part of this is an awareness that their businesses were built for one ecosystem and another one is evolving before their eyes.  People may clamor for print (which would reinforce the publishers’ historical position), but the marketplace is increasingly becoming reluctant to provide it.

The simple truth is that with one exception, every link in the value chain must be profitable or the entire chain breaks.  Bookstores are breaking and are taking the entire chain along with it.  Amazon’s hands are outstretched to receive the new customers, to play its dominant role in the new ecosystem.

The one exception?  Authors.  Most authors don’t now and have never been able to live on the proceeds of their work.  A few do, and do so spectacularly.  That spectacle draws authors in:  it’s not the prospect of a good and interesting job but the chance to win the lottery that makes a writer out of a normal human being.  When we express regret at the passing of the old print paradigm, don’t shed a tear for the authors.  Our sympathies should be with the booksellers, who held it all together.

via An Industry Pining for Bookstores | The Scholarly Kitchen.

Go Read This | Bookshop numbers halved in seven years, says research | The Bookseller

Interesting to see the long term trend impact of online sales on bookstores:

According to a study by Experian for The Telegraph newspaper, there are 1,878 bookshops left on the high street today, including independents and Waterstones stores, whereas in 2005 there were 4,000. Separate research by analysts at Mintel suggests UK consumers spent £261 million on e-books in 2012, nearly twice the £138 million spent in 2011, while physical book sales fell from £3.3 billion last year to £3.1 billion this year.

via Bookshop numbers halved in seven years, says research | The Bookseller.