How to Save the Book Publishing Industry

You know, as a former English student (undergrad, and then on to grad) I gotta say that you're spot on here.

This post is probably the most succinct "how to save publishing" post I've seen in quite some time.

You're right. Totally.

I totally agree with this.

Having just finished my degree in web development, I (and I'm sure many of my friends) are probably some of the people who are most open to consuming media in an electronic form (along with any young person today). However as stated it is so important to not just make the ebooks available online but to make them available at the proper price, taking into consideration all the benefits of electronic distribution.

While I was very open to purchasing the books that I required for my degree in ebook format I was shocked time after time when I looked up the price of the ebook and compared it to the print format. They were both very nearly the same price. This just made me more likely to torrent the book than buy the printed edition. In my case the ebook was sometimes more useful due to the ability to do full text search etc.

If the ebooks were say £5 each it would be a no brainer. Say I needed 5 books per year or semester. At current prices that would be about 5*20 = £100 which is a big enough amount for a student. Whereas at £5 per ebook the amount is a mere 5*5 = £25. To a student £25 would be a great deal and certainly not require too much consideration.

Now I understand that reference books and educational texts may be required to be more expensive than the prices quoted in the article to account for the skills of the author. But the maths still holds up even at up to £10 per book.

Unfortunately I can't see any of this happening. I am hoping that despite what Steve Jobs says that Apple does create a stylish ebook reader. I would definitely buy that and I think that it alone could encourage a few more young people to read. Especially if it had features like immediate word definitions.

I agree. I'll still probably buy hard cover books. I like turning pages, and measuring progress by width.

I think it's hardware not a software issue as folks like Bob Stein at Voyager were working on ebooks going back to the days of HyperCard. The Kindle is great in theory, but it has a very unintuitive hardware interface unlike an iPod. A reader needs to be ultra thin and light like a MacBook Air yet have a 300 dpi easy to read non-glare screen. It's only a matter of time but we just aren't there yet. When that success does happen it will have to be a platform that makes the Kindle look like a Newton.

By the way Bob Stein is still doing some interesting work in this area:

http://www.futureofthebook.org/

I guess you're not taking into consideration one little detail, The $359.00 cost of the kindle and that you don't need any device to read books.

We just need to educate people better so they actually want to read.

Books are facing a lot of competition with other technologies many coming from the web.

I for one read so much from the web everyday that I hardly have anytime or strenghts to read the last 3 books that I bought.

I suppose that eventually kindle-like devices will be all over the place, just like ipods, maybe then your proposal will make sense.

I suppose creating a kindle has a tremendous CO2 footprint (plus once its dead, it won't be as recyclable as paper), so it might not be as eco-friendly as you propose in the end.

Henry, I agree digital books could help save the publishing industry, while benefiting authors and readers alike.

Earlier this month I launched Smashwords, a new digital publishing service that allows indie authors to publish a DRM-free, multi-format ebook at the price of their choosing. Smashwords pays authors 85% of the net proceeds from the sale of their works. Net proceeds to author = (sales price minus PayPal payment processing fees)*.85.

This means if an author has a book they might otherwise publish as a $7.95 mass market paperback at a 5% royalty, they can price their ebook on Smashwords for two dollars and make triple the per unit amount of selling a print book through a traditional publisher.

This turns traditional authorship, publishing and pricing models upside down. With 85% of the net purchase price going to the authors, authors can charge consumers significantly less for their books than would otherwise be possible through traditional print publishing channels, while making greater per-unit profit on each book. When costs to the consumer drop, there is a fundamental change to the demand side of the equation. This will create a virtuous cycle of lower prices for consumers which will increase consumer demand, and increased profit to authors thanks to increased consumer demand and higher per-unit profits for each book sold. It’s a win-win for authors and readers.

As you note, publishers can take advantage of the same dynamics by pricing their digital books lower than print prices. The challenge to publishers, however, is they need to provide greater value to authors otherwise many authors may begin aspiring to follow the indie self-published route. NPR had a great piece Thursday that summarized the dilemna faced by publishers - http://marketplace.publicradio.org/display/web/2008/05/29/book_publishing/

In order for digital books to take off, however, we need to see continued advances in reading devices such as the Kindle, lower hardware prices (AMZN lowered the Kindle's price this week), abandonment of DRM, and more low-cost digital book content. It'll also take several more years for word to get out about ebooks. Most book buyers still don't know about the ebook option.

Luckily, Amazon.com's heavy promotion of the Kindle will introduce hundreds of thousands of book buyers - possibly millions - to the joy of digital books in the next few years.

Mark Coker
Founder
Smashwords
www.smashwords.com

Who still pays for books? They are free already! Just go to scribd.com and see the Youtube business model applied to books.

I hope that Viacom win their case against Youtube, and that sites like scribd.com will be heavily affected by this. :-)

You're all wrong. The Kindle is a gimmick for Investment Bankers to focus their attention on and away from the 99.9999% of the business that actually pays the bills. Reminds me of when the Gap screwed up because of one single extra long scarf. Books have and will always remain more popular than ebooks.

The model is certainly interesting. However I doubt that you can save the printing industry or show tremendous growth over the next decade or so.
Just look in the NYC subway and watch some young and older kids play the PSP or watch videos on their mobile. Books are "just" books and it doesn't matter how you package them. It won't make much of a difference. In today's time people just have too many other more engaging options than reading a book, that take 50 hrs to read.

Henry,

I think you are right. The current book price means a book is for someone really want to read it inside out, while your suggested price will allow someone to browse through a book or keep it for reference later.

I am sure what you propose will happen, but only after a ebook someone buy can be freely read in any electronic devices, not just one such as Kindle. How many people would have bought songs in MP3 format if it could had only been played on Apple iPOD?

I think, but haven't been able to confirm, that Amazon is paying a much higher wholesale rate than Mahaney assumes.

Henry --

Where did you get your percentages for your supposed Kindle economics to the publisher? They don't even remotely match any understanding I have of how Amazon plans to share the revenue stream. Of course, Amazon is very secretive about all this, so nobody but publishers who've signed up know for sure, and they are required by contract not to tell.

Similarly, why do you assume it will cost less to market books on the kindle?

Of course, your figures for the splits on hardcover books are also wrong, but not as far wrong.

Overall, your figures seem completely imaginary. Seems to me that you picked numbers out of a hat to fit your argument, rather than figuring out real numbers and real implications.

Whether or not you are right about low prices stimulating demand, your proposed P&L is pure fiction. And it even fails Aristotle's test -- it isn't even a plausible impossibility.

I should add that I'm a big fan of both electronic books (been working on them since the 80s, and now get nearly 20% of my publishing revenue from my own company's electronic library, Safari Books Online (http://safari.oreilly.com)) and of lower prices (including many books distributed for free (see http://openbooks.oreilly.com), so I'm not skeptical of the idea that we're an industry in transition. But I think it's really important to base arguments on reality, not hype.

As a good test case -- many of our books are used heavily for reference, not for reading cover to cover -- so you'd think that free access via Google Book Search (where all of them can be found) would greatly stimulate usage of those free books, since a search can often satisfy a user query. Yet that is not the case, precisely because those books are still competing with all the other content on the web.

The biggest challenges publishers face is to rethink what kind of products work online, and why. What job do their products do? How can that job be rethought so that online actually makes it better than the print version? If you're a fantasy book publisher, maybe World of Warcraft has more to teach you than Kindle, for example. If you're a reference book publisher, maybe you should learn from professional services like WestLaw.

Who needs your products, and how badly? If the audience is limited, high prices might be the answer? If the product is a commodity that needs to stand out from the crowd, getting viral distribution by fans, free might be the answer.

I fully disagree.

http://moreinfothanbrains.wordpress.com/page/2/

and this one

http://moreinfothanbrains.wordpress.com/2008/01/15/you-dont-even-remember-divx-do-you-mr-amazon/

I think you're right Henry, except for one thing...the publishers are toast in this model. I don't see how they'll be able to command 60% of the revenue ($3) when there's nothing to prevent authors and retailers from dealing direct. The traditional role of a publisher is to promote the book and get it distributed to bookstores. However, that model will likely be replaced by one where the author uploads his work directly to Amazon and then puts his web 2.0 hat on to promote it. Editors too will be replaced by online collaboration (John Battelle has done a nice job of this).

Anyway, I thought it was a terrific post. I would just love to understand why you attributed a 60% take to the publisher.

Tim O-Reilly said: "Amazon is very secretive about all this, so nobody but publishers who've signed up know for sure, and they are required by contract not to tell."

Not sure where you came up with that idea, Tim. Amazon posts the T&Cs clearly on the public FAQs of the DTP section of their website (including information on pricing and royalties):


Using Kindle right now is, IMO, a no-brainer. I can convert our printer-ready PDF files to a Kindle HTML package in very little time (plus a bit of time for proofing for any coding errors). That is my total investment. I just upload it, add the bibliographic data and set a price. Preview the result. Click the Publish link.

Done.

The only real trick is getting Amazon to properly link the print edition page to the Kindle edition page.

Marketing? As always, that's the trick. However, we have done just about zero marketing for seven our Kindle editions and keep selling them, anyway. Can't wait to see what happens when I launch our actual campaign for these things!

Henry,

The issue with the Kindle and all electronic publishing is that it obviates the need for a publisher. Book publishers are distributors. The only other function they provide is publicity but most successful authors these days bring their own access to publicity in one form or another. That's usually what the big advance is for, the ability to generate publicity.

If electronic publishing could reach a significant size, or the Kindle establish a legitimate installed base, there would be no need for a publisher. Amazon would be your publisher and the author would split revenues with them.

This would be great for writers and readers--just not publishers. The only problem is that Amazon is pursuing this business from the distribution end--channeling everything through their store--instead of the device end.

Although they've done a much better job than Sony, the digital reader needs several more product cycles--and a more open platform so more of your non-commercial reading (PDFs of other reading matter like reports and company documents, etc.) takes place on the Kindle.

Amazon needs to get more serious about the product to light a fire under this business. Where's Kindle 2.0? or 1.1, for that matter?

Does anyone have a more complete reference to where the graph at the bottom of the post comes from? I'd like to read the full content of it.

Henry,

You're spot on that this would increase sales of books. But it wouldn't help as much as you think, because (a) as Marion points out above, the publisher self destructs(which they'll fight to the finish), and (b) ebook is a niche concept.

Eventually, perhaps, book publishers will vanish (just like eventually, music publishers will probably vanish), but it will take longer, I suspect, since emusic is a far better experience than ebooks.

As for ebooks, they need to do a lot more if they're ever to succeed. If they remain just cheap replacements for paper, they're DOA.

What if you could click on a word and get a quick definition or synonym (*without* ads, thank you). What if you could stop reading, get in the car, push a button, and it would immediately turn into an audio book? This is the kind of innovation that's required for ebooks to succeed.

Book publishers are NOT mere distributors.

They're also filters who buy and edit good books (thereby improving them and making sure that the information in them is reliable – or at least they did until they decided to cut costs by not editing properly. But I digress.)

A serious editor has a real craft, and by God you would be amazed by the unedited drafts of some of your favourite books.

As someone who spent 4 1/2 years reading a neverending slush pile, I can promise you that there is a vast, vast, vast amount of badly written crap out there. And if you do away with the publishers there will be a flood of this stuff and no skilled editors to deal with it. Unless they're supposed to work on it in collaboration, for free. Great. Baby/bathwater.

Also, how does Kindle protect the copyright? Unusually, I do think authors should be paid for the work they do, and encryption is there to be broken.

Great idea to fill in the gap for the "must have it now" reader.
Yes, the library system has the book free immediately in hard cover (limited supply with waiting list). For those that can wait, there is the free digital downloadable books, "Play Away" books (iPod like device with audio book already downloaded you can borrow), and audio books (cassette tapes).
Most avid readers (young and young at heart) still love to turn the pages.

I'm getting so sick of chipheads mouthing off about reading and the book industry. What do semi-literate video addicts like Blodget with their nanosecond attention spans care about books anyway? There is no way to convince them that screwing around with a clunky electronic device like a Kindle is not an equivalent experience to reading a printed book or trying to explain why my wife, when she gets a book she really likes ion her Sony eBook--goes out and buys a print copy so she can really enjoy it. And keep it and loan it around among her friends. But maybe the book digitizers can come to grips with this fact: eBooks in various forms have been available for ten years now and they haven't made a dent in tradional book sales. Why? Price? Thousands of great books are available in digital download for free, and yet the uptake among the general reading public is still insignificant. Stores still sell millions of copies of those same classics in print form at $10-$20 each. There is only one conclusion to be drawn and that is that the part of the public who actually read books have a deep cultural attachment to the printed book and they are not going to change just because some widget maker thinks they should. Blodget says that books are a two-pound guilt trip and he resents having to slog through them before you can get another one. I rest my case. Book readers don't load up on books by the dozen to skim like so many web links, we select them with care and are happy to immerse ourselves in them for 20 or 30 hours of intense concentration. We get longer and deeper pleasure from them than movies or concerts or sporting events, so $25 is not so bad a value. There is only time for so many books in anyone's leisure hours, so we don't need or want dozens of the things at once. That is why Blodget's fantasized explosion in sales of cheap books will never occur. I will only buy about 2 books a month no matter what the price. The reason book sales are plateauing is readers are plateauing. People like me who can happily lose themselves in a book for two weeks are being replaced by people like Blodget who equate reading with skimming and start breaking out in hives if they have to follow one train of thought for more than a minute. As this generation gradually takes over, I agree, book sales will decline and there is nothing publishers can do about it except switch to some more interactive form of communication that is more like a video game than a traditional novel. That is well under way and it is where the smart money is headed. Forget about trying to save the publishing industry by turning it into something it isn't.

As someone who has worked in the publishing industry for almost a decade, I can see what you're saying, but I can also see that because you are an outsider to publishing that you really don't know about what's really involved. Here are some points:

1. There is a phenomenal cost in editing and designing a book - even an ebook. Sure, we spare a few thousand on printing, but ultimately, at a price of $1.99 each, a publisher would have to sell tens of thousands of copies before even seeing a mild profit. Keep in mind that the average book in today's marketplace loses money for the publisher (the majority of books barely crack 1000 copies), so basically your technique assures a speedy bankruptcy.

2. Not everyone likes ebooks. For one thing, there's the proprietary software that determines whether a book will be a kindle edition, a Sony reader edition, a mobipocket, etc. etc. There is no platform required for a physical book, only literacy.

3. Contrary to what many outside of publishing think, Amazon is not the publisher's friend. Sure, they are responsible for a lot of sales, but because they have such a stranglehold on the market, they can pretty much demand any sort of a discount they want (for example, the reason why you get books at 30% off is because we have to sell them to Amazon at 50%+ off). Amazon can call the shots, so giving them power gives them a wider margin to squeeze profits from publishers.

The biggest mistake most people make about publishing is assuming that a logical business model will translate flawlessly into the book business. It doesn't.

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I were moved, if I not have also, So I will not believe in too many, sol gold.

However, although I understand that is love, shadow of legend Gold it is necessary to brave.

players acquire last chaos gold, the bravery, intelligence and strength to become the true ruler of Last Chaos.
A powerful graphical engine brings the world of lastchaos gold to life like never before.
With Bump Map Rendering Technology, a technology that enables cheap lastchaos gold.
The Personal Dungeon is a private quest mode where players can go to buy last chaos gold in an arcade style gaming environment.
Players are able to craft various useful items, which they can personally use lastchaos money or trade with other players.

Of course, it will take an interesting feature like this for Archlord to compete in the crowded MMO pay Archlord online Gold to play genre.
Considerable amount of Archlord money content via questing. Music scored by the London Symphony Orchestra.
You have to buy Archlord gold in the game like WoW then pay a monthly fee.
In the two years I made many good friends also spend much money to buy the Archlord gold, but I do not have a little sad.
I made a foreign people who called Tom. I think he was very handsome, because I always in trouble in Archlord Online and he often helped me without any Archlord cheap.

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