Sunday, June 19, 2011
Are You Selling Your eBooks Via An Honesty Box?
Imagine you have 100 ebooks and each has to be handed over to not one reselle,r but potentially many. Each reseller stores the files on their system and effectively sells copies of the file to their customers and can also sell them through other resellers to their clients. The files sold may be complete download sales and could if I have granted these could be sold as separate chapters. Some could be sold online as direct rentals, or under subscription. Some may be loaned by ‘libraries’. Revenue could be subject to an agency model on a ‘fixed price’ , or net sales as per a wholesaler terms. Whatever, the model, whatever the channel, whatever the price you only effectively learn what has been sold long after the event.
Now ask your CFO if they are happy giving the company assets to all resellers and then waiting, for them to tell you what they have sold and to pay you what some call as being ‘on consignment’ in a print world and via an ‘honesty box’ in the digital world. The difference is that in the print world you can count the units out the door and the stock in hand. In a digital world you merely hand over one copy of which many copies are made and sold, hopefully many times.
We are not questioning the integrity of any reseller service, we are merely pointing out that the digital ebook world is built on a lots of trust and not a lot of counter balances. Some aggregators do provide some statistics of sales online, others you wait for the sales report to tell you the facts after the event. In all cases money sits in cash flows waiting for yesterday’s financial processing to grind into action.
Now spare a thought for the author who is one link up the chain and has to wait until his royalty statement is produced to find out what sold and the royalties earned. It often can’t be done any sooner as it has ‘to be processed and consolidated with the old print royalty system’. We would suggest that authors may be a bit more digitally responsive with transparency and speedier in not instant reward. Some would suggest that they first have to earn out any advance on front list but on back list, we shouldn’t have the same block and maybe we should be thinking how and why rather than why not?
Digital is different but we spend far too much time dreaming up the sizzle and worrying about the formats and standards and selling and often very little focusing on how we could collect cash faster and more transparently. The next thing we will have is a new audit service to pour over the figures to validate that they are accurate or not and of course incur yet more cost to offset. The obvious candidates for this would be the likes of Nielson and Bowker.
We are living in a world of instant cash transactions, where a credit transaction made anywhere in the world can be see by all, where information is real time. We subject the ebooks to DRM authentication which automatically can validate licences in flight and the likes of Adobe can authenticate every encrypted licence of an ebook using their DRM solution in real time, yet we can’t appear to see sales and collect cash on payment. It somewhat ironic that it could be argued that Adobe today has better sales data on the transactions they licence, than the publishers! There should be no digital returns and what disputes may occur, can always be dealt with retrospectively. So why has the standards and processes not been delivered to provide live and transparent reporting of sales transactions in a standard manner. We bet its coming but not soon and probably at the same speed that the returns issue did in print.
Perhaps we have been so obsessed with readers, platforms, formats, aggregators, pricing and DRM we have forgotten to close the loop? Perhaps we shouldn’t be thinking about ‘messages’ as much as instant processes.