Libraries Are Doing It For Themselves

It has always been a mystery why some who were always to be regarded as being too small to compete digitally by themselves did not take the consortia and collaboration route to self determination. Instead they were often happy to sit on the edge and watch as others ate their lunch or entered into deals were they effectively gave away their customers, or even their transactions for what appears to be chump change in commission. Publishers, retailers and libraries often forgot what they did best and rolled over digitally, even Waterstones rolled over, admitted their were bereft of digital competency and welcomed Amazon in through the back door

Now we are starting to see some smart publishing initiatives which can make a difference. Faber’s Factory offers small to medium publishers the benefits of a digital consortia, Bloombury online offers other publisher the ability to share their digital shelves but libraries and retailer who would appear to be those that are most a threat have often failed to grasp the digital nettle.

It seems an age since Overdrive took to the road in the US to show off their digital capabilities and enlist the libraries into their universe. The model was easy for libraries to adopt and merely involved them handing over their digital lending to Overdrive. Where once they owned their books they now simply white labelled them on demand. However some library organisations in the US are now making bold but logical and long overdue strides to take control of their ebook environment.  The Douglas County Libraries in Colorado are being followed by the San Mateo-based Califa Group, which is the largest library network in California and Kansas State Library. The objective is to create their own library and striking a deal with Smashwords for outright ownership of its top-selling titles and with  Boopsie to provide mobile apps for the platform. The Califa deal with Smashwords will enable them to purchase some 10,000 of the their top titles for around $3 a title and host these on their own Adobe Content Server. There is no reason why the server could not host compliant files from any other source and in doing so build their own digital facility which could easily expand even be linked with others. Publishers who today are sticking their heads into the sand on digital lending or inventing that infamous ‘26 loans and re-buy’ rules should be wary that this model could soon snowball and leave them with a bad PR nightmare. In contrast, it is being claimed that some small publishers sensing an opportunity to be seen are even prepared to give the book free to the library as a show of support, whilst others said that they would sell to the library at a price below retail.

The interesting twist that Smashwords offers is the ability for the libraries to offer self publishing facilities to their patrons. This is an interesting added value which could provide the community with a two way hub and also reverse feed Smashwords would could then in turn feed its retail Barnes & Noble, Kobo, Apple, Sony etc.

So at a time when the public library is under threat some are showing that they have the vision to move forward and even raise funding in difficult times to start to redefine the library in the digital arena. Libraries have a great potential future but are not going to achieve it by standing still and trying to defend yesterday. By staking out a place and acting collectively they may not only redefine their future, strike up meaningful partnerships that are two way and importantly present the community with a new focus. 

'Obscurity is a greater threat to writers than piracy'

In 'Litopia After Dark', panellist Nic Alderton gave us a great quote 'Obscurity is a greater threat to writers than piracy'.For all authors, connecting with their audience and getting exposure remain the greatest challenge. They constantly chase and seek avenues which will expose their work to the widest audience.

Amazon are one of the few true innovators and one of the best executors within the book industry today. They learn fast, think laterally and act and importantly understand both the drivers for consumers and also authors.

We like many remember the days when many questioned if Amazon could make it into the twenty-first century. We ourselves saw a company with a positive cash flow, growing market share and a global brand that had no bookselling competitor of any real standing. Amazon has expanded its business offer and become the only true publishing vertical and the rest is as they say - is history.

Today, we read a local report in the Grimsby Telegraph, which normally would not pass the ‘so what test,’ but which today is worth noting. The report is not about a local celebrity, or a famous local author, but about Sarah Griffiths, of Scartho Avenue, Grimsby and who writes under the pseudonym Saffina Desforges. Her novel, ‘Sugar And Spice’, which she and co-authored with Mark Williams was self published in November last year.

The book was inspired by the arrest of serial killer and child molester, Robert Black. Not an easy subject to cover and is set against the UK’s criminal justice system. Black was a man who begged a Judge to give him a longer sentence, because he knew he would harm another child if released without treatment.

The point is, that in the 2 months since publication, the book has climbed 46 in Amazon's top 50 thrillers and number 2 in the serial killers chart. She now has a top London literary agent chasing her and traditional success beckons. The Kindle Edition is on sale today for just 71p. Yes, a very appealing cheap price that is a low risk read for any new author. The book is also available in other formats from Smashwords.com.

Amazon's recent figures show a staggering 12.95 billion sales in the last quarter or the like for like growth of 36%. We have to remind ourselves that at their core, they still have a huge affinity to books. Many have reported their claim that their Kindle books sales have now eclipsed paperbacks sales. This in itself marks a significant milestone not just for Amazon but for books and the industry. What is very salient is their reference to them being not ebooks as such, but Kindle books. When we realise that Amazon is not just in the US, but has true global reach and brand recognition, one wonders just how far they can go in dominating the industry for many years to come.

Many will point to Google and suggest bookselling competition is here, but their core is different, their motivation is different and they are not vertical in publishing but very much at the distribution end of the value chain today.

The likes of Smashwords and Amazon are defining digital bookselling and offering all authors the greatest opportunity to overcome the threat of obscurity.

eBook Pricing Remians 'A Dog's Dinner' - All Over The Floor

Mark Coker the founder of Smashwords wrote a provocative piece in the Hugffington Post this week entitled ‘Why we need $4 Books’. This raised once more the emotive issue of pricing and sent many to the barricades to defend their respective positions.

Mark’s position is that most books are too expensive which puts their future at risk as they compete with cheaper alternative media. He suggests co-operation across the chain should bring down the cost and rejuvenate the market. He says much more in the support of his theory and suggests that the ebook is a low cost format and therefore the ‘white knight’ riding over the hill to save us all from obsolescence.

What is disturbing is that there is a great difference between geographies, sectors and even title to title and by applying a general brush Cocker hits accord with some and is dismissed by others as naive. The process from manuscript to production, costs money and irrespective of the balance of the renditions sold, each in fact share a great deal of cost. Many cross subsidize each rendition and also factor into the cost used, remaindered, white sales and punts. To say that ebooks cost little, so give them away as mass market paperback, may be right for pulp fiction, but is not for all genre or even all fiction.

The argument that low price generates volume is also questionable. Low cost offers volume by taking market share not necessarily growing the market. If the market is growing only marginally today then it’s fair to assume that Amazon’s growth has come more from taking market share than market growth. The argument the low price creates growth is very questionable and it is usually down to other factors such as availability, accessibility, consumer demand. Price is only part of the mix and it isn’t a driver by itself.

So who controls price today? In the markets without regulation RRP (recommended retail price) is set by the publisher and from this discount determines the price bought with the price sold free to be set be the seller. So using this model we have to ask who sets Mark’s ambitious $4 price point. Is it the RRP, the wholesale price or is it down the retailer? Then we have the inconsistency of tax and we soon have a minefield. We also need to ask what the author thinks and what the impact this has on their royalties.

In a nutshell the article continues to reinforce the view that epricing is all over the floor.

The ePrice is not Right

The news this week that Sony want UK ebook pricing to come down demonstrates that the issue of ebook pricing has many vested interests. We can’t assume that these perspectives are shared and in many cases are in fact pulling in different directions.

What is clear is that there is no standard epricing approach. Most publishers choose to align the digital price to the recommended retail price (RRP) of the physical rendition, but even here there is inconsistency. Do they choose the hardback, the paperback or start with the hardback and then flip it to the paperback when it is released? Go they hold back its release and release it alongside the paperback? If the price remains aligned to the physical rendition does this mean that when a reprint is produced with a higher RRP the ebook price rises too? Audiobook pricing has long stood by itself and has not been aligned to the physical rendition, so why do it to ebooks? The big question remains - How does the consumer feel about different pricing for what is exactly the same product?

Some believe that a staggered release similar to that used in the film industry is the best way of avoiding the cannibalising of hardback sales. This may work for a few but the content isn’t any different and the experience is much the same and deliberately denying consumers access is an open invitation to the digital pirates who plague the film industry and feed off this staggered release policy.

Some argue that the publishers have given away control of price but others would suggest they never really had it and their only action was to raise prices to offset discounts but maintain margin.

We must also remember that audio books and ebooks incur tax. In the UK physical books are tax free or zero rate whilst digital is at full rate 15%. In other countries the rates differ between the physical digital renditions and across Europe there is little standardisation on VAT. An ebook to a Dublin reseller will not cost the same as it does to a London reseller, but they may well sell for the same price. As all books are sold VAT inclusive, the consumer is often unaware of the tax incurred and only sees the price paid. However, unlike other products, here we have an identical product where VAT is charged differently based on whether its digital or physical. We all see the stupidity, but we must not assume that cash strapped governments will level them at the lower rate.

Then we have the retailers who want to create a price incentive and some big players are prepared to discount at a loss. We have ebook device manufacturers who like Sony only understand volume sales and want cheap books so they can sell more devices.
Finally, we must also not forget the author who is struggling to establish a living based on royalties that can appear to be a moving target. If the ebook becomes a cheap rendition how will the author be rewarded? Where do they want the price to be set?

We already have royalty contractual issues on ebooks. Should these remain as a fixed percentage of RRP, should it be a % of net receipts, should digital be fee based, should they be treated as special sales?

Its understandable to reduce the price of ebooks, to sell them at a fixed price point, even give them away as promotional leaders but the author must be included in the mix. Today we read that Smashwords, a self publishing operator is to supply B&N with their titles. They publish some 2,600 titles per year and give the author 82% of the sale. Is it now time for more authors to wake up and smell the self-publishing coffee?

What we believe is important is that each perspective is understood, but that the industry is not seduced by new entrants with different drivers and works to bring some sanity to this new market opportunity that will enable it to grow whilst rewarding everyone who adds value.