Today we read two different but insightful views on the current digital book arena one that looks from a fresh perspective at the ‘Great Book Bank Robbery’ (Google Book Settlement) from Erik Sherman at Bnet.com titled ‘An End Run Around Authors' Contracts and Copyright,’ and the other, from Joseph J. Esposito, CEO of Gaintchair.com, posted at
‘The Scholarly Kitchen’ and titled, ‘Platform Wars Come to the Book Business.’
Joe claims that the 3 technology giants; Amazon, Apple, and Google, ‘are now implicating the book business in their attempt to establish a technical platform. These are big players — and, more importantly, smart players — for whom books are the equivalent of software applications. The idea is simple — get enough books running on your platform, and everyone will want to have access to that platform. The risk for publishers, if not the likelihood, is that they will become collateral damage.’
Joe recounts his experience at Encyclopaedia Britannica when it was embroiled with a war with Microsoft and its ‘Encarta.’
He offers his thoughts on Apple pricing, ‘If Apple could have gotten publishers to price the books lower, they would. Indeed, how about free? Free is a good price. It will expose the brand, and don’t you want to participate in the future of the digital world?’
On Amazon’s strategy, ‘ lock consumers into its e-commerce platform… monopolize their (best customers) online book purchases … if aggressive pricing means that the entire bricks-and-mortar supply chain goes up in smoke, who cares .’
On Google, ‘Google, as the index to the Web, occupies a privileged position. As more content comes online, the need to look things up in that index grows. This means more advertising to be sold on the many Google services. The Web is a rising tide lifting the fleet of Google’s many boats.’
Joe makes a strong case as to why Google through their approach could be the one to watch, ‘Google wins twice — from the sale of Google Editions and also from the sale of marketing services that publishers will invest in to drive Web traffic to the various sites, including the publishers’ own, that sell Google Editions… the more e-books that are displayed through a Web browser, the better it is for Google. This does not mean that Google Editions are not in publishers’ interest… What is not in publishers’ interest is being in a situation where there is no escape from the platform wars fought by others.’
Which brings us to the article by Erik Sherman in Bnet.com. Erik claims, contary to ourselves, that the orphans aren’t the prize in the Google settlement and that, ‘Suddenly, a scanned version of the book becomes an e-title, and the publisher walks around the limitations of an existing contract with the author. Through the power of the settlement, authors would find that they were locked into arrangements with publishers that they never made. Publishers can now get a piece of the electronic pie, even if they didn’t negotiate for it…So the publishers can use Google as an outlet to offset Amazon’s power, and Google becomes a favored reseller because it can electronically sell book titles when a normal e-book version isn’t available.'
As we all try to predict the future it is often wise to understand today and explore all the angles. We may not agree with them all or on everything they say, but what is clear, is that the agenda is now being driven by Amazon, Google, Adobe and Apple and there are many wars and skirmishes ahead. Ironically we found these parting words from Joe interesting to ponder, ‘ why it is that people outside the book industry developed the first major online bookstore, the first sexy e-reading device, and the premier search index to books.’
To read Joseph J. Esposito at The Scholarly Kitchen, ‘http://scholarlykitchen.sspnet.org/2010/02/23/platform-wars-come-to-the-book-business/
To read Erik Sherman at Bnet.com titled ‘An End Run Around Authors' Contracts and Copyright,’
Showing posts with label Joseph J. Esposito. Show all posts
Showing posts with label Joseph J. Esposito. Show all posts
Tuesday, February 23, 2010
Monday, August 24, 2009
Joseph Esposito's Concentric Publishing Circles
Today we read what we believe is a very interesting viewpoint from our friend and US publishing consultant, Joseph J. Esposito and immediately ask and received his kind permission to share his thoughts with you. A lively discussion on ebook pricing and releases has ensued within the community ever since Sourcebooks said that they would hold back the ebook of ‘Bran Hambric’ until after the hardcover had had its sales opportunity. Joe’s view:
‘There are many things that are taken into account in setting prices, formats, venues, etc., just as consumers have a wide range of choices. This is simply to say that the environment is competitive. Over-the-top example: Someone who wants to buy Robert Darnton, offered at $20, is not likely to buy Danielle Steel, offered at $10, at least not on the basis of price alone. But if Darnton were $200, the needle begins to move for some portion of Darnton's prospective readers. At $1,000 it moves further. But there is no price at which Steel takes ALL of Darnton's readership. (Darnton, for those outside the US literary world, is a distinguished historian and now head of the Harvard library. If you don't know who Steel is . . . . ) All of this was true before there were digital books; what ebooks does is create greater options and complexity (including pirate sites).
For a publisher, a useful metaphor is to think of the market as concentric circles. At the inner circle (for a particular book) is the hard core readership that will put up with any indignity, any price or format, to get that book. My daughter was in this category for the Harry Potter novels, my son for Lord of the Rings. (For me, say, Italo Calvino, and when I was a kid, it was all Asimov all the time.) At the next circle out from the center, the consumer exercises some discretion ("I will wait for the paperback"). Move another ring out, and there is more discretion ("I'll only purchase this if it comes in the Kindle format"). Any publisher can make up their own typology to define each circle--in effect, an algorithm covering price, format, options, timeliness, alternatives, etc. And this typology gets adjusted for every book.
When someone says, that they will only purchase something if it is in a specific ebook format and costs under ten bucks, to a publisher that prospective customer is in an outer ring. The question for a publisher is how to maximize the return across ALL the rings, which means that some rings compete with the others (aka cannibalization). For Grisham the inner rings are potent; for O'Reilly books perhaps the outer rings are more important. And in five years the relative weighting of the rings (the formats, etc.) may be very different. Indeed, the weightings are changing as we speak.
The reason that legacy publishers with legacy brands pay unequal attention to legacy formats and legacy channels of distribution, is that the legacy world is still generating more money than the world of new media for certain kinds of books. Again, that is changing every day. A smart publisher has to play the game with skill; there will always be catcalls from the bleachers. Mike Shatzkin's idea of debut pricing is one way to play this game. If you are a customer out in the outer circles, you won't like this. But it is not a publisher's job to make you happy. A publisher's job is to make shareholders happy (and to abide by applicable law, including contractual commitments to authors). Part of the skill is in not hurting the people in the outer ring too much as revenue is extracted from the circles as a whole.’
The problem is that there are no silver bullets to digital book pricing and what works for one will not work for all. Perhaps the concentric circles are more like Venn diagrams in their appearance. In the end, we believe that we live in a consumer centric driven market and pricing and availability of content, in whatever form, will be ultimately driven by them.
‘There are many things that are taken into account in setting prices, formats, venues, etc., just as consumers have a wide range of choices. This is simply to say that the environment is competitive. Over-the-top example: Someone who wants to buy Robert Darnton, offered at $20, is not likely to buy Danielle Steel, offered at $10, at least not on the basis of price alone. But if Darnton were $200, the needle begins to move for some portion of Darnton's prospective readers. At $1,000 it moves further. But there is no price at which Steel takes ALL of Darnton's readership. (Darnton, for those outside the US literary world, is a distinguished historian and now head of the Harvard library. If you don't know who Steel is . . . . ) All of this was true before there were digital books; what ebooks does is create greater options and complexity (including pirate sites).
For a publisher, a useful metaphor is to think of the market as concentric circles. At the inner circle (for a particular book) is the hard core readership that will put up with any indignity, any price or format, to get that book. My daughter was in this category for the Harry Potter novels, my son for Lord of the Rings. (For me, say, Italo Calvino, and when I was a kid, it was all Asimov all the time.) At the next circle out from the center, the consumer exercises some discretion ("I will wait for the paperback"). Move another ring out, and there is more discretion ("I'll only purchase this if it comes in the Kindle format"). Any publisher can make up their own typology to define each circle--in effect, an algorithm covering price, format, options, timeliness, alternatives, etc. And this typology gets adjusted for every book.
When someone says, that they will only purchase something if it is in a specific ebook format and costs under ten bucks, to a publisher that prospective customer is in an outer ring. The question for a publisher is how to maximize the return across ALL the rings, which means that some rings compete with the others (aka cannibalization). For Grisham the inner rings are potent; for O'Reilly books perhaps the outer rings are more important. And in five years the relative weighting of the rings (the formats, etc.) may be very different. Indeed, the weightings are changing as we speak.
The reason that legacy publishers with legacy brands pay unequal attention to legacy formats and legacy channels of distribution, is that the legacy world is still generating more money than the world of new media for certain kinds of books. Again, that is changing every day. A smart publisher has to play the game with skill; there will always be catcalls from the bleachers. Mike Shatzkin's idea of debut pricing is one way to play this game. If you are a customer out in the outer circles, you won't like this. But it is not a publisher's job to make you happy. A publisher's job is to make shareholders happy (and to abide by applicable law, including contractual commitments to authors). Part of the skill is in not hurting the people in the outer ring too much as revenue is extracted from the circles as a whole.’
The problem is that there are no silver bullets to digital book pricing and what works for one will not work for all. Perhaps the concentric circles are more like Venn diagrams in their appearance. In the end, we believe that we live in a consumer centric driven market and pricing and availability of content, in whatever form, will be ultimately driven by them.
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