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Finally, a Breakthrough for EbooksóLet the Library Deluge Begin!
By
Volume 39, Number 1 - January/February 2015

The widest possible distribution in whatever format readers prefer

Managing the print/digital workflow balance, and new experiments, with existing staff and no new resourcesPublishing frontlist in simultaneous print and e-formats; producing frontlist titles in formats that can be adapted to new platformsFinding business models that will support further digital development and experimentation, without impairing the rest of the publishing programs

According to the latest 2014 Book Industry Study Group (BISG) report (bisg.org/news/researchshows-80-publishers-believe-subscription-inevitable-responses-vary-market-sector), 80% of publishers believe subscription is inevitable, but responses vary by market sector. Publishers also overwhelmingly agree that subscriptions will have a positive impact on their revenue in the next 5 years. However, their expectations vary widely depending on their sector and market. The survey reports, “Professional and higher ed publishers are most likely to consider subscriptions inevitable, followed by scholarly publishers and then trade … Consumers already accustomed to subscription for music, movies, or news and information will expect similar benefits from book subscription services …”

Sanfilippo reminds us that the Big Five have “been in this business longer than the critical authors and pundits and know a suicidal sales model and platform when they see one. Just because something is new and different, that doesn’t mean it makes sense from a business perspective. I, too, am all for experimenting, but I think the caution the Big Five are showing isn’t because they’re Luddites or lack vision, it’s because they’re good at what they do and know the market and its players better than authors and pundits.” The book business is booming. In 2013, the Association of American Publishers estimated that nearly 2.6 billion books were purchased in the U.S. (“US Publishing Industry Annual Survey Reports $27 Billion in Net Revenue, 2.6 Billion Units for 2013,” June 26, 2014; publishers.org/press/138). The recent Institute of Museum and Library Services report, “Public Libraries in the United States Survey” (imls.gov/research/public_libraries_in_the_us_fy_2011_report.aspx), found that in 2011—the last year of available data—an estimated 2.44 billion materials were borrowed from American libraries, and “for every 100 e-books available, an additional 345 items circulated, and for each additional program offered, there was an increase of 61.2 items circulated.” Pew recently reported that for young adults, 76% read at least one book in 2013; for adults, the mean was 12 books (“A Snapshot of Reading in America in 2013,” K. Zickuhr and L. Rainie, Jan. 16, 2014; pewinternet.org/2014/01/16/a-snapshot-of-reading-in-america-in-2013). Library professionals, along with publishers, authors, and distributors, clearly have “skin” in this game and much to gain or loss at the same time

Amazon

Today we are in the midst of an often confusing—and generally very private—battle about the cost of books and how book revenues should be split among authors, publishers, and retailers. The company most often at the center of the storm, Amazon, is trying through whatever means to exact its preferred pricing terms from major publishers. Amazon has created a consumer retail juggernaut in the past 20 years, serving a dizzying array of goods at prices intended to attract and then keep customers. Both savvy and serious, Amazon foresees an evolving market that is easily distracted and cost-conscious.

Amazon’s Kindle senior vice president Russell Grandinetti recently noted that “books don’t just compete against books. Books compete against Candy Crush, Twitter, Facebook, streaming movies, newspapers you can read for free. It’s a new world” (“Amazon, a Friendly Giant as Long as It’s Fed,” David Streitfeld, July 12, 2014; nytimes.com/2014/07/13/technology/amazon-a-friendly-giant-as-long-as-its-fed.html?_r=1). In the same article, author Streitfeld notes: “Amazon has been reported to be seeking a new concession from publishers: If a customer orders a book and it is not immediately available, it wants the right to print the volume itself.” Also in July, Amazon began negotiations with Simon & Schuster.

However, even many authors are unhappy with the retail giant’s tactics, e.g., no preorders and slow delivery. Nearly 1,000 of them signed a letter of protest about Amazon and formed Authors United. Authors United wrote a full-page letter that was published in The New York Times on Aug. 10, 2014. The letter noted in part:

Many of us have supported Amazon since it was a struggling start-up. Our books launched Amazon on the road to selling everything and becoming one of the world’s largest corporations. We have made Amazon many millions of dollars and over the years have contributed so much, free of charge, to the company by way of cooperation, joint promotions, reviews and blogs. This is no way to treat a business partner. Nor is it the right way to treat your friends. Without taking sides on the contractual dispute between Hachette and Amazon, we encourage Amazon in the strongest possible terms to stop harming the livelihood of the authors on whom it has built its business. None of us, neither readers nor authors, benefit when books are taken hostage.

All this comes at a time when, despite continually rising revenues, Amazon’s actual profits are very weak. Investors have been highly impressed by the staggering revenues Amazon brings in—in the second quarter of 2014, Amazon’s revenue was $19.34 billion—yet the profits were meager; the company stock lost 27 cents a share. The company continues to innovate—even studying the use of drones—and has expanded same-day delivery to six more cities. But the balance between innovation and profitability may find the company losing some of its shine on Wall Street.

In an unusual move, Amazon officials posted a comment about the pricing issue on the Kindle forum (amazon.com/forum/kindle/ref=cm_cd_tfp_ef_tft_tp?_encoding=UTF8&cdForum=Fx1D7SY3BVSESG&cdThread=Tx3J0JKSSUIRCMT), noting:

[Amazon’s] key objective is lower ebook prices. Many ebooks are being released at $14.99 and even $19.99. That is unjustifiably high for an ebook. With an ebook, there’s no printing, no over-printing, no need to forecast, no returns, no lost sales due to out-of-stock, no warehousing costs, no transportation costs, and there is no secondary market—ebooks cannot be resold as used books. Ebooks can be and should be less expensive.

However, as the recent European court decision held (translate.google.com/translate?hl=en&sl=nl&u=http://uitspraken.rechtspraak.nl/inziendocument%3Fid%3DECLI:NL:RBAMS:2014:4360&prev=/search%3Fq%3Decli: %2Bnl:%2Brbams:%2B2014:4360%26espv%3D2%26biw%3D1920%26bih%3D1075), ebooks can be bought and sold on secondary markets, just as print copies can. This would assume the technological formats used would support such transfers. It will be interesting to see this all played out in other jurisdictions.

“For the independent and self-published author, the promise of a lower cost for a reader to access their work, coupled with the ability to still make profit, is healthy and may afford even better exposure for niche authors,” explains self-published author Tracy Atkins. “That is where Kindle Unlimited and Oyster can be a real boon for self-published authors, as the added exposure and low risk for the consumer means more eyes on their work and expanded audiences in a crowded marketplace.”

Apple recently acquired BookLamp (booklamp.org), an innovative book discovery system with an advanced book recommendation algorithm that can parse out selections based on themes, writing styles, characters, and other criteria. With this acquisition, perhaps Apple is ready to take on ebooks again, challenging Amazon’s current dominance. GoodeReader blogger Mercy Pilkington notes there is a renewed focus on Apple selling titles through its iBooks platform. “With agreements already in place with publishers and even Smashwords, and with the iOS8 update coming this fall that is supposed to make book purchasing even more streamlined, incorporating a search feature for right-fit books makes a lot of sense. Of course,” Pilkington admits, “Apple could just as easily have plans for the BookLamp technology—say in the area of app discovery—that doesn’t have much to do with bookselling.”





Nancy K.Herther is the anthropology/sociology librarian at University of Minnesota Libraries, Twin Cities Campus.

 

Comments? Contact the editors at editors@onlinesearcher.net

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