Readers

Go Read This | Smashwords: Farewell Sony Reader Store

More n the end of Sony’s eReading efforts in the US and it’s impact of Smashword, which in the very words of Mark Coker makes clear why this, although notable, is not that huge a deal:

Sony’s devices and ebook store predated Amazon’s, so when the history books of the indie author revolution are written I hope historians give Sony the credit they deserve as a true pioneer.  My sentiments and appreciation for Sony and their awesome people aside, the impact on Smashwords authors today will be minimal.  The Sony store, as most authors know, is one of the smaller retailers in the Smashwords distribution network.  To put this in perspective, on a typical month, less than 2% of our authors’ monthly sales come from Sony.

via Smashwords: Farewell Sony Reader Store.

Making Frenemies: Kobo, Easons & Ebooks In Ireland

20131030_192630Easons, which once had ambitions to launch its own ereader, has joined forces with Kobo. The deal will see Easons selling Kobo devices in its 60 stores and has attracted little negative comment unlike Waterstones deal with Amazon last year. In fact it seems, so far, to have been pretty universally welcomed in the Irish trade.

Easons has, despite the aforementioned ambitions, chosen the path of least expense with regard to making its ebook offering credible and coherent. That meant, although its e-store concept was attractive, it was selling several different brands of device and its ebook platform was off the shelf and was not always as smooth as possible. What’s more its options were somewhat limited. Tesco has been selling Kindle ereaders since before last Christmas at prices well under €100 and Amazon has spent hundreds f millions making those devices and the ecosystem surrounding them, very user-friendly. The Waterstones Kindle match-up has sat oddly with the trade, the deal has also put Kindle ereaders and tablets in front of readers in many places. So Easons has been faced by deep pocketed rivals and the most likely platform partner already pretty much wrapped up with rivals.

We don’t yet know how successful this move to partner with Kobo will be. Easons is still offering Sony ereaders from its website (on 2nd November) and Kobo’s ebook offering not yet live through the retailer’s website either. Even so, Kobo has launched a new consumer facing ebook site for Ireland which will surely power Easons ebook store when the partnerships rolls out properly. The site’s not perfect yet, for instance, I can’t yet find out where to but one of the company’s tablets in Ireland yet, but that’s an easily resolved issue.

Irish facing stores are a rarity in the ebook space, on Kindle, users must choose between buying their ebooks from Amazon.com or Amazon.co.uk. While the process is fine and workable, it still presents pricing challenges and means picking out Irish bestsellers can be hard. Apple offers an Irish facing ebook store but there’s every indicator that sales through the store have been relatively low.

The bigger question for me is what will all this mean for ebooks in Ireland. The last year or so has seen most Irish publishers begin to take ebooks very seriously with some publishers quietly indicating that digital sales are no accounting for double-digit percentages of units sold (though often a lower percentage of revenue given the disparity in price). The best indications I’ve seen suggest that while fiction is the leader, there are some fine performances  in non-fiction too and that backlist is proving its worth yet again.

“One in five books sold on Easons.com are ebooks”

Interestingly, Conor Whelan, Easons MD, said at the launch of the Kobo/Easons partnership (which took place at the launch of Kobo’s new Irish offices, itself during the Dublin Web Summit) that: “One in five books sold on Easons.com are ebooks” a fact that sailed over many people’s heads, but struck me as a very nice nugget of information. It indicates that Easons is doing much better at selling ebooks on its own than we might previously have imagined, thus suggesting the Kobo partnership might really drive ebook take up and sales in Ireland if it can connect with readers.

I’m intrigued that the offering will include more that just the ereaders. Kobo’s tablet offering is really quiet good (in the non-iPad league that is) and at €149.99, the Kobo Arc 7 will provide Easons with a reason to get non-readers in the door that the ereaders on their own simply will not. In fact at that kind of price point, the tablet may well be the most attractive part of the device line up.

Kobo has found a strong partner to grow mind-share and market share in Easons. It does have a very large presence on the high streets of Ireland as well as an impressive brand and awareness in Irish readers mindsets. The company also runs highly successful media campaigns in the run-up to Christmas and ereaders and tablets will be a leading gift category yet again in 2013 and ebooks still have lots of room for growth in Ireland.

The problem is that Kindle is dominant and massively so, and will not be pushed aside  easily. It will require a by a determined new brand and dogged execution both on the device side of things (which means hoping Easons can deliver) and on the ebook sales and promotion side of things (which means work for Kobo and its staff).  It does seem to me though that even if Kobo only manages to build a secure second player position, it could be to both its and Easons advantage. It the companies can make it work, we might begin to see the kinds of percentages that the US & UK have been seeing over the last year or 25-30% units being sold in digital form.

Here’s hoping!

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.

Amazon & Goodreads

There’s been a lot said about Amazon’s latest move, the decision to buy Goodreads.

While I agree that Amazon has made a very sensible move in acquiring the company, it seems to be a far more strategic and defensive acquisition than anything else. The real value of the deal is in what it prevents rather than in what it enables.

All the talk about the data gained seems a little misplaced to me. Amazon, after all, has considerably more and better data on readers and via Kindle is getting even more as time goes on. Where Goodreads has only the expressed opinions and posted libraries of its users, Amazon has real sales and purchases and, increasingly, real reading data on readers not to mention reader class, book and book class level. No-one else comes close to that.

What the purchase does do though is prevent a valuable commodity from becoming a weakness in the future in the hands of a rival. In fact, almost all of Amazon’s acquisitions in the book space have been quite successful at keeping reader preferences and expressed opinion data at the global or non-publisher specific level from the hands of others. In many ways its minority interest in LibraryThing prevents a publisher from getting involved there too (I like LibraryThing and have a lifetime account).

So Amazon has gained a little but prevented a lot by removing yet another data-set from the hands of its rivals, whether it takes advantage of this data-set or not, it at least ensures that its rivals are considerably less data empowered than it itself is.

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

On Publishing Mergers & Strategy

I have been mulling the Penguin Random House deal for some time now. In fact, I wrote most of this post about ten days ago or longer. I’ll be honest enough to admit that my failure to post my thoughts was as much due to work commitments as it was to a conscious decision, even so it has been useful to wait (as is often the case, we too often underestimate the value of inaction).

I’m glad I waited because it’s quite remarkable what you can discern when you stay out of the flow of an issue. Firstly it meant this post comes in the wake of Peter McCarthy’s wonderful piece When Elephants Mate: Thoughts on the Potential Penguin Random House which explores the merger in wonderfully telling detail and is a must for the interested. Secondly, it comes in the wake of this piece of news News Corp., CBS in Talks Over Merging Book Businesses. Both pieces have been useful in underlining my thinking.

I’ve felt, watching and reading the reactions of tweeters, journalists and thinkers, that there have been three clear waves of response to the news. The first wave of response was mostly surprise (not without some humour and a considerable degree of fun as people contemplated names for the possible merged outfit (my own was definitely Random Penguin). Some discussion pondered the sheer scale of the entity, the number of imprints, staff, buildings  books and authors it would encompass. Best described as the shock and awe stage I think.

The second wave echoed with fear; fear of the powerful combination that the first wave only began to consider, fear of reduced options for writers, agents and readers, and a fear of the changes this new entity would bring to an industry that seems of late to be in constant flux. The fear and loathing stage seems an apt description for this stage.

The third, more considered wave, saw discussion of the merits of the merger in terms of what it equipped the larger entity to do, the power shift relative to digital interlopers and other publishers not to mention the chances for success. In general this wave of discussion was an attempt to put the events in context, consider the implications and look to the future. The dealing with reality stage I pegged it.

To most of those discussions I felt I had little extra to add. One area however seems to have been curiously overlooked in the discussion to date, the fact that we are seeing two very different strategies in action here and strategies that are making value judgements on entire industries. And what are they?

Well the first is a clear strategic decision to move out (and definitively so) of the trade publishing industry. That’s what Perason has done. Make no mistake about it, it wanted shot of trade publishing, and saving the prize of the Penguin brand for use in other areas where it might be useful (like its educational publishing segments) it got shot of it (intriguingly it is also rumoured to be keen to sell the FT though those rumours seem to have been put to bed more recently). What interests me is that Pearson isn’t out of publishing, just trade publishing. So it made a decision based on its read of  its abilities, its resources and its weaknesses. Probably the likelihood of future profits and the environment of the sector had a large bearing too.

Pearson’s takeaway from that analysis was that even with the most recognisable brand in trade publishing, they’d rather be out of the game, than in it. When you let that sink in, the fear and loathing stage doesn’t seem so unreasonable.

Of course, in counterpoint, Bertelsmann made a very different decision indeed. Penguin Random House is now a Bertelsmann beast, majority owned by the company and, I suspect, likely to be wholly owned by it at some point. Bertelsmann has doubled down on trade publishing. As if to confirm the company’s strategic decision it purchased the remaining stake in Random House Mondadori. Bertelsmann sees value in trade publishing, so much value it has gone to the trouble of building the largest English language trade publisher in the world.

It begs the question, “Which one of these huge companies is correct?”

Of course, it doesn’t necessarily have to be a zero sum game. Both parties could well have made the correct decision for their own enterprises and simply assessed their abilities and their desired return on capital very differently. As we line up for the follow on round of mergers that the dealing with reality wave has suggested is likely and recent reports indicate are indeed in the works, we should be looking at what strategy the parents of these trade publishing giants are pursuing and how that will impact the shape of things to come.

We are living in interesting times, or whatever that means!

Amazon Steals Everyone’s Thunder Again (But Quietly)

Fascinatingly clever (if predictable in many ways) move from Amazon to extend the reach of its Kindle Owners’ Lending Library (KOLL) to the UK, Germany and France. By doing so it demonstrates very clearly that it is Amazon who is really driving the pace of development in ebook adoption and ebook retail. What’s more, it is making clear that its rivals are struggling to match its services to authors and readers within their own ecosystems. As the focus of ebook growth moves rapidly beyond the USA (has moved already in truth), Amazon is making the case for giving it exclusivity even more compelling.

Amazon.com, Inc. today announced that the Kindle Owners’ Lending Library is coming to the UK, Germany and France later this month, bringing Kindle owners with a Prime membership over 200,000 books to borrow for free as frequently as a book a month, with no due dates. Independent authors and publishers using Kindle Direct Publishing KDP who enroll their books in KDP Select can be included in the Kindle Owners’ Lending Library in the UK, Germany and France, as well as the US. With the new lending libraries launching this month, the KDP Select fund has been increased by $100,000 to $700,000 in October, with a larger increase anticipated in November. Authors will earn money every time their book is borrowed from any of the lending libraries – in September, authors earned $2.29 per borrow, which is more than many KDP books earn per sale.

via Amazon Media Room: Press Releases.

What amazes me the most about this move is just how dangerous it is for the ebook retailing rivals who have yet to open their doors to self-published content. In reality only Kobo has a fully functional platform for self publishing authors beyond the USA (Apple does too, but only to the extent that those who have a nice Mac can access their iBookstore, but not everyone has a Mac).

Nook’s platform is US only, though the talk is that this will change soon, the longer B&N & Microsoft exclude non-US citizens from the service, the longer Amazon has to lock in exclusive content for three months at a time. It’s not that the content individually is necessarily compelling, but given the wide field of talent in question, some is sure to be winning material, even if much of it isn’t great. The trick is, of course, that Amazon is armed with the tools to sort, grade and sift through this mass of titles and to promote, suggest and even work with the best (or just the most saleable, let’s not forget that the goal is money-making not literature spreading).

I’ve talked before about how important authors are to the success of an epublishing platform and ecosystem. Sometimes I think the retailers agree with me on this, other times I think they only pay lip service to the idea. Perhaps that’s a lingering snobbery regarding self publishing authors (which is foolish, idiotic and wrong-headed in an age when some of the biggest writers are rapidly moving towards self publishing, are already self publishing or have emerged from the self publishing space). Perhaps it is a desire to avoid dealing with so many small accounts and the headaches of customer service and platform development that entails. Who knows, but the longer these ecosystems remain closed shops to direct author engagement the larger a lead they allow Amazon to build up on them.

Every author Amazon signs up for KOLL is three months of exclusive sales for Amazon, three months lost revenue for their rivals. More importantly it is three months of sales data and analysis for Amazon that no-one else will have. That’s especially important when a title is loaded into KDP & KOLL for the first time, before getting a look in elsewhere. What will happen when one of those sign ups turns out to be the next EL James? What will happen is that Amazon will sign that author up directly, before the KOLL period ends and the game, for that author, is up for the other platforms.

It is not just dangerous to rival retailers though. If Amazon succeeds in convincing enough authors that KDP & KOLL are the way forward and along with them, exclusivity, companies like Smashwords and other aggregators of self published content will be put in the position of having to justify their offering. As long as a vibrant market for content persists of course (and despite this move, we do have a vibrant market for content) everyone has room to move and grow.

So yes, this move is illuminating, it suggests that Amazon is still the pace setter and is capable of moving faster and more aggressively than anyone else (still, after five years). Kobo has started something of a price war for self published authors though, by offering a higher royalty to authors who use their self publishing platform. If this keeps self publishing writers committed to an non-exclusive policy then it will have been a wise move. I’m sure it is a smart response from a smart company, even if it is one that admits to a certain weakness in terms of the capability of their platform, but then competition doesn’t (and indeed shouldn’t) always mean matching your rivals move, but finding clever and novel ways to best them where your strengths lie.

What that in mind, Kobo and other Amazon rivals would do well to pay attention to Baldur Bjarnason‘s piece on FutureBook about how Ebook publishing platforms are a joke, pay attention that is and offer some of the services he mentions to self publishers asap.