UK

Go Read This | 10 Things You May Not Know About Ebook Prices — LuzmeLuzme

Fascinating piece on ebook prices in the UK versus ebook prices in the US. Makes you wonder whether it was a good thing for Irish publishers that Irish Kindle readers were offered the chance to switch to Amazon.co.uk rather than Amazon.com for their ebook purchases:

In the UK, there is usually a fierce price war going on between Amazon and some new entrant; currently it is Sainsburys, previously it was Sony and Nook. But there is usually someone trying to buy market share by discounting the price. Previously we had the 20p offer from Sony, now 99p seems more common.

via 10 Things You May Not Know About Ebook Prices — LuzmeLuzme.

Go Read This | Hardie Grant buys Quadrille | The Bookseller

Interesting move by Hardie Grant. in buying Quadrille it’s acquired one of those interesting properties that has book solid print viability (lovely books) and decent prospects of digital expansion via online niches:

Hardie Grant, set up in 1997, employs 150 staff across offices in Melbourne, Sydney and London. In London, it has a staff of seven, selling Australian books into the UK as well as commissioning new titles. The company previously distributed Quadrille’s titles in Australia.

Stephen King, m.d. at Hardie Grant Books UK said: “We’ve been in the UK now for four years, and are very interested in expanding our reach in international markets. Quadrille is a great fit for us—one of their Carluccio books was the first title we distributed in Australia in our early days.”

Cathie said: “Hardie Grant have been Quadrille’s distributor in Australia for many years, and are already close colleagues of the company, so we are delighted to have found a like-minded, independent partner to take the company forward in its illustrated books and stationery publishing and strengthen its presence in the digital arena.”

via Hardie Grant buys Quadrille | The Bookseller.

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.

Go Read This | International restructure for Holtzbrinck | The Bookseller

Very interesting indeed!

From 2nd July, the company is to operate through three divisions. Global Trade, managed by Sargent, will encompass all the consumer book publishing operations of the Group, including all the US, German, UK and Australian houses. Thomas will have management of a Global Science and Education division, consisting of Nature Publishing Group, Macmillan Education, Macmillan Higher Education and Palgrave Macmillan, also to include Digital Science, Digital Education and Macmillan New Ventures.

via International restructure for Holtzbrinck | The Bookseller.

The Future Of Publishing In Microcosm | The Increasing Internationalization Of Irish Publishing

Yesterday I was a little unfair to Easons for the pronouncements of the company’s spokesperson and the tone of the article on its ebook strategy which suggested the company was about to embark on a  mission to build a rival platform to B&N and Amazon, something that would surely have been a valiant, if doomed, effort.

When I thought about it for the rest of the day though it got me thinking about just how much ebooks are changing the profile of book publishing and bookselling and how quickly that is happening. For instance I am almost certain of two things about the Irish ebook market:

1) That foreign based platforms and retailers account for the majority of sales (Amazon, Apple, Kobo, Sony etc)

2) That like in the print world UK publishers (and their local imprints) publish the majority of ebooks bought in Ireland both in terms of units and revenue

I’m also close to certain about a third item, but without evidence I cannot prove it, here it goes anyway:

3) That US-based publishers sell more units (and I don’t doubt generate more revenue) from ebooks in Ireland than domestic Irish publishers do and are perhaps second only to the UK publishers (and their Irish imprints)

The first and the last points there are pretty radical statements. The first represents a huge change to the Irish experience of the book industry. Right now in print terms, most books bought by Irish consumers are sold to them by Irish retailers, Easons the principle one but others like Dubray, The Book Centres, Kenny’s, O’Mahony’s, Hughes & Hughes and many many others. That is despite the growth of physical sales through Amazon and the internationally owned (except for Dunnes Stores) supermarket chains. The wholesale and distribution businesses are also heavily Irish owned (with some British presence, increasingly on the Library supply side of things).

The Difference Digital Makes

But the situation is dramatically different on the ebook side of the house. Easons is the only ebook retailer of note in the Irish context (others should shout out if I’ve unfairly missed them out). On the ebook distribution side, EpubDirect are the only (and admittedly impressive) crew actually making a go of that business and even they don’t make up for the fact that the majority of ebooks sold in Ireland will have been distributed through other channels.

You can argue the toss over why this is the case but several factors loom large:

1) Irish publishers have been slow to digitize their content (though they are getting there now)

2) Irish retailers have been slow to embrace the web (except for a few notable exceptions) and slower to embrace eCommerce (again a  few notable exceptions aside) and, finally, even slower again to embrace ebook retailing

3) The costs of developing ebook platforms, ebook retailing sites and ebook distribution systems are high, the Irish market is small, while it might have been possible to forecast the potential to gain customers outside of the island, it is a difficult result to actually achieve (which makes EpubDirect’s success all the more impressive) which mitigates against anyone investing in them

In terms of sales, while UK publishers and their Irish based imprints have come to dominate the book trade, significant numbers of books published by Irish houses continue to sell in print form and account for anything between 15-25% of the trade. With ebooks however, sales from publishers whose books would not traditionally have been made available in Irish territory is increasingly likely. For instance a US published book that does well but might not get a print deal outside of the US has as much (if not more) opportunity to sell in Ireland as any other ebook, the key is whether it is high in bestseller/popular lists or promoted by the retailer for some reason

The only ebook store that really seems to cater specifically for the Irish ebook market is Apple’s iTunes so when Irish publishers do start to make content available they have to fight against ALL the published content there is, not just all the domestically published content and all the UK published content as they do in the print world. Further the people making decisions about ebook merchandising are rarely based in Ireland as once they were (or indeed still are in the print world) and therefore open to some discussion or indeed charm (not inconsiderable amounts of which the Irish are possessed).  You see the problem.

The Outside Context Problem

The Irish publishing industry is fast running into what might be described as some fashion of an ‘Outside Context Problem‘ wherein the new arrivals on the scene are vastly superior in terms of abilities, vastly superior in terms of resources and possessed of superior technology. While some of the participants in the market might grasp the nature of the problem and respond as effectively as they can, the truth is that the disparity in attributes makes success unlikely and the new threat is very much an existential one.

Which sounds very dramatic but think of it this way. The Irish consumer market for trade books is around €150 million a year and 15 million units all in. Suppose only 30% shifts digital over time or €45 million and 4.5 million units. That would leave only €105 million up for grabs for Irish retailers in print form and 10.5 million units. The impact on stores, book publishers and other market participants would be pretty dramatic. There would be closures and job losses and the industry would be considerably weaker. And that’s just the impact on the retail side of the trade. The impact on the publishing side of the trade is unknowable, but there is little doubt that it would be significant and would probably be negative for the domestic publishers (see my earlier paragraph on why). The UK publishers will probably cede sales to US-based publishers, especially if US publishers seek to enforce global ebook rights deals on authors.

We are probably headed in the direction of 30% digital pretty quickly. If we even approach the kind of conversion to digital sales that seems to be happening in the US or even the UK, we can expect that 30% figure to be a reality by 2015. By then the Irish industry will have changed radically and will become almost unstoppably more international not just in terms of the books that sell her, but also in terms of those who sell them. US publishers will probably be the second biggest publishers of ebooks bought by Irish readers (if not the first having overtaken the UK).

There’s interesting evidence of this too from the other side of the fence. The AAP reported that ‘total eBook net sales revenue [for US publisher] for 2011 was $21.5 million, a gain of 332.6% over 2010; this represents 3.4 million eBook units sold in 2011, up 303.3%.’

Frustratingly the APP did not share details for Ireland (those were contained in the full report but not as a single territory, rather as part of a larger group of English language territories) so we don’t know how well those publishers are doing here. Still, we can assume that they did well relative to the size of the market.

What’s more, Ireland and the story of change in the publishing industry really acts as a microcosm for the rest of the English language publishing industry (indeed it acts as a microcosm for any small market which shares a language with a much larger market be it French or German or Spanish or Chinese).

In some ways the whole industry is encountering the ‘Outside Context Problem’ I mentioned earlier as software and technology firms move into a traditionally physical business, but for larger companies, responding can be easier because of their scale and their resources make for a wider context as it were. It’s the small markets where the combination of these larger players and the changes in technology make for such a difficult problem.

Beautiful day here in Dublin!
Eoin

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Interestingly (or maybe just interesting for me) I wrote some time ago about the impact of divergent rates of digital growth on small markets, and in many ways this post is all about that impact. The increasing internationalization of the Irish publishing industry is driven by the very issue I highlighted: Divergent Growth Rates In Digital.

The Growth Of The UK Ebook Market

Really fascinating glimpse of the development of the UK ebook business from BML/Bowker (as a teaser for their annual conference in March):

The survey also looks at how the e-book industry fares by genre. The adult fiction market saw spectacular e-book growth in 2011, up from 2.8% of purchases in the four weeks ending 26th December 2010 to 12.5% in the four weeks to 27th November 2011. But again, as e-books are being bought for lower prices, they accounted for only 7.1% of adult fiction spending in the latest period

via Bowker – British Book Buyers are Switching to “e” from Print and Spending Less.

Let’s start with the increase. From 2.8% of purchases to 12.5% of purchases that an increase of 346%.

Not bad going, especially when you consider the report doesn’t include the key Christmas period. That’s the same period by the way that saw Hachette, HarperCollins and Random House each sell over 100,000 ebooks on Christmas Day alone.

That suggests strongly that the 500% increase suggested by at least one UK publisher and referenced by The Bookseller’s Philip Jones in the excellent Futurebook email newsletter:

Were e-book sales in the UK worth £105m in 2011? That was the figure implied by Hachette UK when it stated last week that its e-book sales of £21m amounted to a 20% share of the UK e-book market. Hachette added that its own e-book sales had grown by “nearly 500%”.

We do not know if Hachette’s figure was stated at invoiced or published prices, and whether it included audio-book downloads and/or app sales, but either way it seems unlikely that Hachette’s own e-book growth will not have been reflected in the wider e-book market, meaning a second year of growth at 500%.

Jones has much much more of value in that newsletter this week so I encourage you to go read it. As Jones points out, if that £105m is correct and the market grows at a similar pace in 2012, that would bring digital sales to £500m and around 30% of the market! Pretty impressive growth.

Of course as I pointed our earlier this month, as ebook sales increase the have to overcome larger hurdles to show such large percentage gains. I’m not sure 2012 will deliver that in the UK, but it sure will be fun to find out if it can.

Eoin

Digital Growth At Quercus, And Beyond

There has been some grumbling (I’ve a note coming on that later) about the slow pace of digital take up in the US in the last few days and weeks. I’ve a feeling that has as much to do with the now higher benchmarks the digital market is growing from.

By which I mean if the ebook market is worth $1 million then to double it need only increase by $1 million however when the market is $100 million it needs to increase by $100 million to double and when it is a $1 billion it must grow by a full $1 billion in order to double. Needless to say whereas $1 million in increased sales is hard to find, $1 billion is considerably harder.

On top of that, there is a real need to break analysis into markets to account for different market conditions. The UK is not the US and Ireland is not the UK. What’s more a UK publisher must react to UK market conditions. This has echoes of some of my thoughts about different rates of digital change from 2010. For instance, the UK is in the midst of a huge shift to digital BUT that shift has really happened over the last few months. 1.3 million ereaders were sold over the Christmas period and the UK market has as a consequence flourished since December.

Which makes the Quercus numbers all the more interesting. In 2011 digital sales accounted for 11% of their revenue, but grew 270% in December 2011 when compared to December 2010 promising a nice digital year in 2012.

We continue to benefit from our significant investments in digital publishing and marketing, website development and social networking. For the year as a whole, Quercus generated approximately 11% of its income from digital revenues, while the growth in ownership of eReading devices over the Christmas period contributed to an increase in eBook sales of 270% in comparison with the previous December.

via Quercus Christmas trading update | Quercus Books.

It’s entirely possible that many of those ereaders will remain idle, many will fall out of use, but enough will remain active to shift yet more readers who were once print dedicated into either digital dedicated reading or hybrid print/digital status. If those readers are heavy readers (as I suspect they will primarily be, after all why give someone who reads one book a year an ereader?) that will shift considerable numbers of digital units in 2012.

So the UK situation is very different to the US situation. We should avoid blanket statements.
Eoin