epublishing

The Three Most Important Lessons We Can Learn From Barnes & Noble’s Nook Setback

We should be really grateful to Barnes & Noble. The company just spent the last five years driving hard into a new space, consumer devices, and while it encountered much success, over the last quarter or two that success has crumbled away and has resulted in what some might consider an embarrassing and costly mess when many of its competitors in the tablet space have seen soaring sales.

Yet, despite those failings, there are several lessons that are applicable to all players in the publishing industry ones Barnes & Noble has learned at great cost and the rest of us can learn from.

1) Don’t overestimate your addressable audience

In retrospect it now looks like Barnes & Noble’s great success (and its ongoing success, let’s face it, it is still selling many hundreds of thousands of tablets!) was just a very spectacular penetration of the bulk of its available customer base or addressable audience, those already friendly to B&N and its products and willing to convert from print to digital book reading, the bookish digitants if you will.

The company clearly managed to persuade some, but not many of the non-reading (or light reading) early adopting market in its first year of offering tablets, but as more competition come on stream its ability to do that has collapsed. Barnes & Noble simply didn’t have the chops to sell to people beyond its target audience. This wasn’t apparent when the market was smaller and so it seemed like Barnes & Noble had really made a significant advance. That impression was plainly incorrect.

The bookish digitants are sated (at least for now) and the non-converted non-bookish digitants are not going to trust B&N over Apple or Amazon or someone else with a track record in consumer electronics or technology.

That’s an important lesson for anyone involved in a brand extension as dramatic and bold as the one Barnes & Noble tried to pull off. Be exceptionally careful to track monitor and understand the true size of your audience. If you take an ambitious view of what that audience is, be sure that ambitious view isn’t based on a hope! Listen to what your sales tracking is actually telling you about your customers. Don’t mistake early enthusiasm and success with a small group for evidence of wider adoption unless behind the raw figures you are actually reaching beyond your base.

Publishers need to be realistic too about just how big an audience they can reach and not over-invest in product or projects that ultimately won’t deliver results.

2) Books are not driving the tablet market

Oh I know this is hardly a revelation but it is an important thing to note, after all, we KNOW that books drove the adoption of dedicated ereaders. It’s particularly important because tablets seem to be making dedicated ereaders generally less attractive, certainly to those who don’t read many books and seemingly to those who do read lots of books. Not just that, this shift to tablets by a wider public hasn’t been driven by the tablets sold by booksellers. How else can we explain the massive fall off in sales for tablets sold by Barnes & Noble while the market for tablets exploded?

The reality is that even dedicated readers find the logic of buying a tablet that features any number of entertainment forms, email and web access more compelling than a dedicated ereader. Euro for Euro, Dollar for Dollar, Pound for Pound, it just makes more sense to buy a tablet than it does to buy an ereader for the majority of buyers.

Which means that the space dedicated to books on-screen is dropping dramatically as a percentage of the market. It means that book readers are faced with myriad choices of entertainment forms when they fire up their tablets or smartphones and books, face competition in its rawest form. At least the competition on a dedicated ereader was between books. Now it’s between movies, radio, tv, video, gaming, books, web browsing, magazines and pretty much anything that can be made function on a tablet or smartphone.

I’m not personally all that hopeful that reading will win this competition as often as it might need to, certainly not as hopeful as others seem to be.

3) In digital and online, there are huge surprises in store for us

I’m thinking and writing about this with respect to the book publishing and retailing industry, but it holds true for most other industries too. A year ago, it seemed to me and to others that Barnes & Noble had a nice thing going, that they were successfully making the transition from a bricks and mortar, print bound bookseller to something different, now we know that even if that is the case, the path will be a rocky one.

The key lesson I take from that is that we are still guessing when it comes to the power of the web and digital to transform our industry. I’ve felt very forcefully over the last two years especially that most big publishers feel like they have the digital problem solved, or are well on track to get there. They are seeing increased ebook sales and profits from ebook sales, authors are largely playing ball and while they still resent the scale of some of the technology companies they must work with to succeed in the digital space, they more or less have it down.

The truth is something very different. Potential banana skins abound From simple things like Amazon’s patent for reselling ebook licences (bound to have an impact on ebook sales especially of lead titles if it were ever to be put into practice) or like discovering that despite having a great product your brand just doesn’t resonate with consumers beyond your core audience and hence you lose a bundle of cash trying to sell them tablets or realizing that your main competitor is not the rival publisher of literary novels or commercial non-fiction but a game in which trajectory considerations are a more important aspect of gameplay than would normally be considered cool and various music video fads from Gangnam Style to Harlem Shake.

There are several other lessons we can take from the whole tale but these three strike me as the most salient and long-term of them all.

Eoin

In Search Of The Number

There is a number I’d like to know, if I knew it, I think it would help me explain some things that currently seem inexplicable to some and unclear to me.

I know the number exists because I can phrase questions to which the number is the answer (maybe numbers is more accurate, but it’s got less impact). Those questions can be expressed two ways:

– the first; at what £/$/€ spend does a primarily print book reader become a primarily ebook reader?

– the second; at what number of books read does a primarily print book reader become a primarily ebook reader?

It has a follow on question:

– Which indicator is more reliable, ie: is a reader more likely to shift formats because they become comfortable reading ebooks or because they have managed to spend a certain amount of money on ebooks?

I strongly suspect that the answer to the follow on question is that a reader shifts when they become comfortable reading which happens after X (where X is the number) ebooks read. That point obviously changes for different types of readers and is probably very individual. However, there’ll be an average number of books, an average I guarantee that Amazon knows, that B&N certainly knows and that Kobo, Apple, Google and Sony know (or suspect).

If I’m right, and it is about making a print reader comfortable with ebook reading, then conversion is a case of making the offer compelling enough until the formerly print dedicated reader has shifted format without really realizing it.

When you think like that, and you think about 20p ebooks, which seems to have confounded and angered so much of the industry (though to me, just lacked a clear logic that I was aware of, it HAD to have a logic, even if the logic was wrong) they start to make an awful lot of sense. Once you’ve converted the print reader to ebooks (and especially if you shift them to your ecosystem) there’ll be loads of time to drive up the revenue you earn from that consumer. The lost revenue before they convert is simply customer acquisition cost.

See why the number is important to know?
Eoin

Go Read This | The Numbers Game

And this post is the reason why two things WILL happen:

1) Authors and Agents WILL carve ebook right out, retain them and self publish them, or else publishers will lose print rights and right now that’s a big loss

2) Publishers will lose big name authors

When I got off the phone with my friend, she was still worried and not quite ready to jump into self-pubbing. This is understandable. She has no personal data to fall back on. I have 2 years of self-pubbing experience, and when I started I didnt expect it to become my main source of income. It also took me over a year, even with the data, to come to the conclusion that signing with a traditional publisher is a bad idea.

But now Im convinced. Signing with a traditional publisher, even being offered $200k per book, is a VERY BAD IDEA.

And I believe these numbers back me up.

via A Newbies Guide to Publishing: The Numbers Game.

Go Read This | A Newbie’s Guide to Publishing: Resolutions for Writers 2011

The whole piece is VERY worthwhile. But I was struck by this piece for a few reasons.

  1. It shows just how obsessed you need to be with price, jackets, descriptions and meta data to succeed in the
  2. How hard you work to be an overnight sensation like Konrath, who even now is pretty much an unknown outside of restricted circles!
  3. JUST how lucrative the self publishing aspect of Konrath’s publishing now is.

For the very first time, the writer can conduct their own real-world experiments. By trying different things, learning from mistakes, and constantly tweaking and improving, we have more power than ever before to find our readers.

A lot of folks know how much money I’m making. But how many know:

I’ve changed or tweaked cover art 45 times.

I’ve reformatted my books five times each.

I’ve changed product descriptions over 80 times.

I’ve changed prices on each book two or three times.

Unlike the traditional publishing world, where published books are static, self-publishing is dynamic. If something isn’t selling as well as you’d like, you can change it. The work doesn’t end when you upload your ebook to Kindle. The work is never-ending, and vigilance is mandatory.

Self-publishing is a wonderful opportunity to learn and to grow. This means you MUST try new things.

via A Newbie’s Guide to Publishing: Resolutions for Writers 2011.

GO READ THIS | Gifting Comes To Kindle

Amazon has just announced that you can now give Kindle ebooks as gifts to anyone with an email address. This is kind of amazing and represents a huge shift in the ebook ecosystem. Given that kindle ebooks can be read on nearly any platform that allows app downloads (PC, MAC, iPhone, iPad, iPod Touch, Blackberry, etc.) you’ll never have to worry about what platform someone is one, a small download will resolve the issue:

Kindle is the most gifted item in the history of Amazon.com and millions of people around the world are reading Kindle Books on Kindle devices and free Kindle apps. Beginning today, just in time for the holiday season, customers can give Kindle Books as gifts to anyone with an e-mail address–no Kindle required. Kindle Books can be read on Kindle devices and free Kindle reading apps for iPad, iPod touch, iPhone, Mac, PC, BlackBerry and Android-based devices. For more information or to give a Kindle Book as a gift, go to http://www.amazon.com/givekindlebooks.

“We are thrilled to make it easier than ever for our customers to give their favorite Kindle book to a friend or family member as a gift,” said Russ Grandinetti, Vice President, Amazon Kindle. “We’re making this functionality available in time for the holidays to offer an easy, stress free holiday shopping option for anyone – not just Kindle owners.”

To give a Kindle Book as a gift, customers simply choose a book in the Kindle Store, select “Give as a Gift” and send their gift to anyone with an email address. Notifications of Kindle Books gifts are delivered instantly via e-mail and the recipient redeems the gift in the Kindle Store to read on any Kindle or free Kindle app.

via Amazon Media Room: News Release.

Go Read This | Ugly rumours | theBookseller.com

Sara Lloyd is great and to an extent, she is on the money with this column.  The problem is that she’s only right to the degree that we accept the current model is permanent.

We still have an eye to the future, of course. We still ask each other: “So . . . what do you think is the Next Big Thing?” We still geek out and ponder the impact of HTML5 on epub. We feel the need to prepare for that, but we’re feeling better and better equipped to do so.

The fear factor is abating. A sense of “business as usual, but different” is descending. Books are not being killed off. We’re simply adjusting to an additional format. Of course, this is exactly the time that we should all give ourselves a great big poke in the ribs, sit up straight and pay attention.

I tend to think it isn’t and while the book is in no danger (although it will certainly change and adapt and morph), publishers very much are. Which is why it’s nice to see here last lines:

Necessity is the mother of invention, but relaxation is the mother of a short sharp shock, so let’s not rest on our laurels. Not yet. Not for a long time

via Ugly rumours | theBookseller.com.

Go Read This | The Asymmetry of Waste in the Age of Abundance — A Reversal of Scarcity’s Balance « The Scholarly Kitchen

Great piece on scarcity, abundance, content and strategy, or at least the thinking necessary to get there!

The asymmetry of choice in the age of scarcity allowed providers to define the available choices. Now, consumers choose from a myriad of sources and versions. Any asymmetry they may experience in the future could be the asymmetry-of-choice — controls they impose for their own convenience, not for the convenience of producers. This creates uncertain demand for providers, and the move toward a more efficiently utilized information environment will have huge effects on all our familiar aggregations, packages, and delays.

The Asymmetry of Waste in the Age of Abundance — A Reversal of Scarcity’s Balance « The Scholarly Kitchen.