E-books Report

A new survey from Nielsen suggests that ebooks continue to make gains in book markets.  The bad news is that some of that seems to be coming from online sales.

The digital formats (ebooks, audiobooks) increased their share of book sales revenues, while traditional print markets saw their share decline to 70%.  The biggest decline was in trade paperbacks, which fell from a third of the market in 2013 to just above a quarter in 2014.  In terms of units sold, ebooks increased their share slightly, to 21% of the market for new books.

 Online retailers (for both print and ebooks) remained the dominant sales channel, although it's share of sales fell slightly, to 35%.  Brick and mortar outlets (bookstore chains, independent bookstores, and other outlets) mostly retained their market shares.  The only big decrease in market share was for bookstore chains.

Diffusion of ebook readers continued apace, with smartphone ownership around 75% of adults, and tablet ownership over 40%.  The graph to the right reports shows the percentage of ebook readers who indicated that they owned a particular device.  Two things are clear from the numbers -- first, that many ebook readers have multiple devices, and second, that market share is variable, and influenced by devices entering and leaving the field.  Last year, for example, saw large increases for Android OS devices (smartphones and tablets). Apple's mobile devices remain the most widely owned, while Amazon's various Kindle devices were the other big branded device.

Source -  E-books Gained, Online Retailers Slipped in 2014, Publishers Weekly

The (Absurdly) High Cost of Textbooks

This morning I explained why I wasn't requiring a textbook (much to their relief) - it's absurd price ($160 in paperback on Amazon, more for the Kindle version). Then I see a link to a good graphic on price increases over time that accompanies a short piece on The Atlantic website.

There's a lot of reasons given for high textbook prices - higher than normal production costs, limited demand, the need for sturdier versions (i.e. hardcover vs. paper) to bear up under studying and note-making.  But most don't hold up in a digital media marketplace.  What does is the forced demand generated from us professors requiring our students to buy them.

Enter the open educational resources (i.e. textbooks & related materials) initiative, as discussed in a recent Slate/Future Tense piece.  The piece discusses the efforts of academic publishers to sue a online open-access "publisher" out of the market.  Not for plagiarism or copyright violation, but for ordering topics/chapters similar to how they're presented in their textbooks. Absurd, right?
(I did a post on the Free Text Movement and some of our efforts here at UTK several weeks ago)

The Slate piece suggests that academic publishers are likely to follow the path of the printed encyclopedia (and the wooly mammoth).  There's  a good chance of that if they follow the strategy of trying to litigate their competition out of the market.  But that's not the only strategy available - several (MIT Press and Oxford University Press most notably) are putting out reasonably priced trade versions for some specialized textbooks, and smaller university presses are testing open-access online publishing.
I'm going to try to write a text for my class, and offer it though our Tennessee Journalism series.  It's more work, but gives us authors the ability to add multimedia and online features, and the advantage of rapid updating, and gives our students cheap alternatives.  (And as a full professor, I'm not as concerned about it qualifying as peer-reviewed research).

Traditional academic publishers could try embracing the opportunities of online and on-demand publishing, rather than trying to retain the old monopolistic business model.  They still have significant value as gatekeepers and guarantors of peer-reviewed quality - and may be able to make up in reduced costs and increased demand most of revenues now based on high per-unit profit margins in shrinking markets.  Just like most traditional media have had to do in recent years.  There's a lot of downside for business models based on litigation, and not much of a long-term future.


Sources -   Why Are College Textbooks So Absurdly Expensive?, The Atlantic
Never Pay Sticker Price for a Textbook Again, Slate/ Future Tense
The college textbook bubble and how the "open educational resources" movement is going up against the textbook cartel,  AEIdeas blog (source for graphic)

The (Free) E-Textbook Movement

Prices for textbooks in the U.S. are, for the most part, outrageous.  Particularly within higher education. The annual costs for books and supplies for college students averages $1200.  The old reasons for high cost given to the public - low press runs and higher print-setting costs (due to use of wider range of symbols and languages) - don't apply in today's publishing world.  Yet even as costs decline, textbook prices have skyrocketed.  Which leaves one primary explanation for continued price increases well above inflation rates - a captive market.  Instructors assign required texts, and students have to buy them - whatever the cost.  So textbook publishers feel they can easily raise prices.  And when the market for used texts boomed, their response was to push up the frequency of revisions to restrict that market challenge.
  The rapid increase in prices for textbooks has had some consequences - a number of universities and colleges (mine included) have adopted policies asking instructors to consider textbook prices when assigning them.  Others (again, mine included) have encouraged development of reading packs and texts for classes, and subsidized their production to keep costs low, and/or have established online book imprints for low-cost or free distribution - a California law will require the development of free online textsbooks for the 50 most popular courses in state colleges and universities.  And I'll note that two major academic publishers, Oxford University Press and MIT Press, have undertaken to make many of their texts available in more affordable trade versions. While all of these approaches have been helpful, textbook prices continue to rise.
  (I recently looked around for a text for a new course I'll be teaching - and the most appropriate text was $160, and the other viable alternative was also over $100.  I'm ancient enough to recall that in college, $100 was usually enough to get the books needed for 4-5 courses per semester.  In grad school it rose to $150; maybe $200 if I also bought the recommended texts.  And I typically spent more at used book stores, building up my library.  But today, I can't justify (at least to myself) asking my students to fork over $160 for a text.)
  The rise of eBooks, including the rapid diffusion of eReaders (and now tablets), has opened the door for digital textbooks.  eBooks have several advantages that textbooks could exploit - they're cheaper to produce and market, the publication process is significantly faster (and allows for near-realtime updating), and can easily include multimedia and links to online resources. Mainstream textbook publishers have slowly tested the market, but tend to keep prices absurdly high (to minimize impact on print markets).  Prices for e-Texts, however, don't need to be high - they are relatively cheap to create (mostly authors' time and effort) and very cheap to distribute.  Apple's pushing to keep textbook costs under $10).  And some of the major eBook retailers (Apple, Amazon), along with the FCC and U.S Dept. of Education, are encouraging the development of affordable online texts.  (We've just started the Tennessee Journalism Series here at UT - four short texts now, with many more in development).

  And now there's the booming OpenSource textbook movement.  Some of the boom is in the form of open-source publishers like Boundless Learning, which uses open-source materials to assemble their own versions of popular textbooks.  Boundless is currently being sued by a group of large academic publishers for allegedly engaging in a "business model of theft."  Some are the results of state and foundation supported efforts, like the California Open Source Textbook Project, CK-12, Merlot, and OpenStax.  Others build from University-sponsored efforts to promote free online access to their courses, like MIT's OpenCourseWare project and the University of Illinois' Open Source Textbook Initiative. At the heart of these efforts is the notion of pulling together and building on existing educational materials, and facilitating their online publication and distribution.
  And then there's people like me and my colleagues at the Tennessee Journalism Series - senior professors who have textbooks in our heads but have dreaded the time and effort involved in getting a book contract from an academic publisher, and then going through the full publication process (and more important, the relatively low rewards for that effort in terms of getting tenure or annual reviews at research universities).  Apple, Amazon, and open-source textbook initiatives have vastly simplified the process - so it's time to open the floodgates.  Besides, for most of it, the reward is in getting our work recognized and used - and high prices in academic publishing (both books and journals) get in the way.  Going open-source can facilitate wider access and use, and thus increased recognition.
  As more and more of us go to open-source, the greater the competition for mainstream texts.  That should at least slow down price inflation, if not create a force for price moderation.  I'll looking forward to the transition.  Now only if I could get those dang books out of my head.

Source  -  Free Textbooks Spell Disruption for College Publishers,  MIT Technology Review

Book Publishers Lose Two (sort of)

In the last couple of months, consortia of major book publishers have experienced some legal setbacks - first with the settlement of the DOJ Antitrust suit against Apple and a group of print houses, and more recently with a ruling in a major "fair use" copyright case against Georgia Tech.

E-Book Pricing

  In April, the U.S. Dept. of Justice filed an Anti-Trust suit against Apple and five major publishing houses (Hachette, HarperCollins, MacMillan, Penquin, and Simon & Schuster), arguing that they colluded in developing a pricing model for ebooks that set prices above market level and prohibited retailer discounting and price competition.  Such actions are clearly in violation of U.S. antitrust law, and when a memo from Steve Jobs surfaced that essentially laid out the model as described, and commented that “the customer pays a little more, but that’s what you [publishers] want anyway”, it was clear that this was going to be a difficult one for Apple and the publishing industry to win.

According to the suit, filed in the Southern District of New York, the five publishers “feared that lower retail prices for e-books might lead eventually to lower wholesale prices for e-books, lower prices for print books, or other consequences the publishers hoped to avoid.” It also speaks of “deflating hardcover prices” and charges that the “Publisher Defendants were especially concerned that Amazon was well positioned to enter the digital publishing business and thereby supplant publishers as intermediaries between authors and consumers.”  

After unilateral efforts to pressure Amazon’s discounting of e-books failed, the publishers “thereafter conspired to raise retail e-book prices and to otherwise limit competition in the sale of e-books.

“This change in business model would not have occurred without the conspiracy among the Defendants,” the Justice Department’s suit charges. What’s more, it alleges a direct horizontalconspiracy between the publishers — not only, as had been suggested, a “hub-and-spoke” conspiracy, with Apple acting as the message-bearer between the publishers.

One other interesting allegation in the suit was the claim that Apple had looked into approaching Amazon about conspiring to divide the spoils of the online content market, with Amazon to be the monopoly provider of ebooks, and Apple to be the monopoly provider of audio and video.  But with Amazon's aggressive moves in streaming audio and video content, Apple decided to pursue a price-fixing strategy with book publishers, one that would also prevent Amazon from engaging in price competition in the ebook market.

  Still, it was a bit of a surprise when almost immediately after filing the suit, the DOJ announced that it had reached a settlement with three of the publishing houses (Apple and the other publishers did not accept those terms at that time).  The terms of the settlement essentially require the publishers to terminate its existing deals with Apple, and any other contracts with distributors or retailers that limit their ability to discount or change prices for e-books.  It also prohibits any arrangements stipulating that the publishers would not provide books to other retailers at lower prices (a key component of the Apple deals).

In particular, the proposed settlement states: “These provisions do not dictate a particular business model, such as agency or wholesale, but prohibit Settling Defendants from forbidding a retailer from competing on price and using some of its commission to offer consumers a better value, either through a promotion or a discount.” Discounts, promotions, and some control over retail pricing must all be at least partially under the retailers’ control, even if the agreement is technically an agency-commission model, rather than a wholesale one.

The settlement does not require or preclude any particular pricing model, or require publishers to abandon the "agency" pricing model (or prices) that publishers sought to impose on e-books, although it does dictate that publishers can't collude to force every potential eBook retailer to accept identical terms or prevent retailer discounting.  Under the agency model, the publisher sets book prices and the contract stipulates that the online retailer pay the publisher a set percentage of that price.  This replaced the old wholesale pricing model of the physical book market, where the publishers set a price for wholesalers (and a recommended retail price), but the retailer is free to set their own price.
  Amazon greeted the settlement positively, indicating that it hoped to return to the old pricing models ($9.99 for most new releases vs. $12.99), and the ability to discount some titles as marketing opportunities presented themselves.

"Fair Use" in Academia

Four years ago, a group of academic publishers sued Georgia State University over their practices in using copyrighted materials in its electronic reserve service.  Academic libraries have long provided reserve services, where a professor would place materials for a class "on reserve" and students could go to the library to read those materials.  As the old reserve system used legal library or instructor copies of works, it was considered to be the equivalent of a very short term loan of materials.

In their lawsuit, the academic publishers argued that Georgia State violated copyright by making electronic copies of materials, and that the ways those copies were made and distributed fell outside of traditional "fair use" exemptions for educational purposes.  In fact, the suit listed 99 specific practices that it considered to be serious violations.  After lengthy litigation, the judge in the case issued a lengthy ruling (350 pages) last month that addressed each of the allegations individually.  The judge found that of the 99 practices, only five were considered to fall outside of fair use.

In good news for academia, the judge took the educational purpose of e-reserves seriously, rather than simply considering the market impact of copying.  The Judge dismissed many of the allegations on the basis that the plaintiffs had not adequately established their copyright stake in the material,  She dismissed their argument that the fair use guidelines in the 1976 Copyright Act automatically applied to e-reserves and online materials, and after examining publishers' balance sheets, concluded that they had not lost significant income due to the alleged infringing activities.  While not applying the specific "Fair Use" guidelines in the 1976 Copyright Act, she did apply the underlying four guiding factors - whether the use was commercial or noncommercial (educational), the nature of the copyrighted work, how much of the work was used, and what impact the use had on the potential market or value of the work.

While there were specific decisions for each of the alleged infringements, the ruling did not specifically address what e-reserve practices were allowable under fair use.  The judge suggested, but did not impose a basic 10% rule, but also indicated that that limit applied primarily for work available for digital license, and where there was the potential to make significant revenues through digital licensing.  One law professor gave his interpretation of the ruling for faculty and academic libraries -

"The operational bottom line for universities is that it's likely to be fair use to assign less than 10 percent of a book, to assign larger portions of a book that is not available for digital licensing, or to assign larger portions of a book that is available for digital licensing but doesn't make significant revenues through licensing."

I'd still propose adopting a couple of Fair Use guidelines I proposed in a 1999 paper, "Reinvigorating Fair Use: A Social Economics Approach."  In it, I suggested that a particular noncommercial usage of a copyrighted work would be considered to be a "Fair Use" if there was a clearly identifiable public or social value emerging from the use, and where either the portion of the work used is unlikely to negatively affect the whole work's value, or where that work is not readily available in the market (out of print, or otherwise not available for that use).

Thoughts

While the book publishing industry essentially "lost" in these two cases, I think that these cases will benefit the industry in the long run.  The book industry is a fairly late arrival to the emerging digital network economy.  They are at that early stage of wondering how these new uses and markets will impact their traditional business models, on the implications for their ability to print and sell physical books, and seeing how to apply legal actions (using copyright) and illegal actions (collusion) to limit new markets and uses, and push readers back into the physical copy world.
  They need to move quickly into the second stage of recognizing that rather than simply harming traditional markets, the digital network economy is creating whole new markets (ebooks, digital licensing) that can be substantial.  And then move on to the third stage, which is recognizing that the cost structures of these new markets are substantially different that those of the traditional markets, and that developing pricing models and strategies on those cost structures (rather than setting price strategies based on the pricing models of the traditional markets) can open up markets and demand substantially.  Specifically, this entails moving from pricing within an economics of scarcity, to pricing for an economics of abundance.
  If the publishing industry can take these losses to heart (rather than to appeals, or trying to figure out how to bypass requirements), this could make it easier for them to see and grasp the potential of new markets and outlets for its content.  The huge potential of ebooks (which is becoming apparent even with the traditional pricing models in place) and the likely smaller, but still significant, market for licensing academic works (in whole or in parts).  The industry reluctance to unbundle academic works (to theoretically protect the value of the whole work) is a major cause of these Fair Use fights.  Universities and academic libraries would likely be willing to license academic content (in toto or in pieces) rather than requiring students to purchase books.  In fact, a number of countries essentially do this by giving educators a compulsory license for copying and other e-reserve type services.
  Anyway, the sooner the book publishing industry gets around to considering how to adopt to the changing media environment, to recognizing that its not in the book business but in the (textual) content business, the sooner its likely to find ways to exploit emerging markets, distribution mechanisms, and information services.  And, quite frankly, the more likely they are to survive as the big publishing houses, rather than lose out to the emerging Amazon and Apple publishing empires.


Sources -  DOJ Files Antitrust Suit Against Apple and 5 Publishers Over E-book Pricing,  Wired.com
DOJ Announces Terms of Settlement With 3 Publishers in E-Book Lawsuit,  Wired.com
Long-Awaited Ruling in Copyright Case Mostly Favors Georgia State U.,  The Chronicle of Higher Education

Opensource for Textbooks

Non-profit publisher OpenStax College is working with Rice University to develop online textbooks for introductory college classes.  The eTexts will be available for use anywhere and OpenStax thinks that their program could save students as much as $90 million over the next five years, and could capture more than ten percent of the intro text market in the U.S.
  One big difference between this program and other open texts is that OpenStax is following the traditional textbook publishing process of peer-review and heavy editing for accuracy and validity.  OpenStax, primarily funded through grants, is using the grant to hire experts to develop each textbook (rather than paying royalties for actual sales), and going through several layers of peer review in the creation of the texts.  They are also willing to incorporate materials from for-profit publishing partners when appropriate, although the costs for those materials will need to be passed on to students.  Within the next few months, introductory texts for sociology and physics classes, with biology, anatomy, and physiology texts available next fall

Students and professors will be able to download PDF versions on their computers or access the information on a mobile device. Paper editions will be sold for the cost of printing. The 600-page, full-color sociology book is expected to sell for $30 for those who want a print version -- those content with digital will pay nothing. Leading introductory sociology texts routinely cost between $60 and $120 new.

As open-source materials, textbooks can be modified by instructors, giving professors the capability to add content, shift sequence, or delete sections.  They also share the Ebook advantages of being instantly updatable, whether correcting typos, expanding chapters, or adding new chapters or supplemental materials.  These are all valuable features for users, but could be a problem for educational publishers who have exploited the captive market of required texts, and regular new editions, to keep prices high.

Taken in connection with Apple's IBooks-textbooks initiative focused on K-12 education, this could signal the start of a major shift in educational publishing industry and the markets for textbooks.

Sources - Rice University announces open-source textbooks,  Inside Higher Ed 
OpenStax College website
iBooks textbooks, Apple in Education 

edit track:  added links for OpenStax College and Apple initiative

Amazon Establishes Digital Publishing House

  After coming to dominate traditional book sales, Amazon has been a key driver in the growth of eBooks, initially working with publishers to consider digital sales, then producing the Kindle eReader, which undercut the limited competition at the time with a reader that offered better performance and a cheaper price.  Amazon has continued with innovative marketing, creating free eReader apps for most platforms, and making arrangements to offer Project Gutenberg's growing collection of public domain works (including many great works of literature) for free.  All these factors have combined to drive eBook sales to the point where Amazon now sells more eBooks that printed books.

  Amazon hasn't stopped there, however.  Instead of limiting its offerings to works from traditional publishers, Amazon created a system for self-publishing - authors could post their work on the Kindle marketplace, bypassing the traditional middlemen of agents and publishers (and their cuts).  This has caused some disruption, with some very successful authors deciding to publish themselves (see this post).
  Amazon's now taken the next step, and established it's own publishing house, announcing that it will publish more than one hundred titles this fall, in both print and digital versions.  It's already had one success with The Hangman's Daughter.  Originally published in German, Amazon bought the rights, had it translated, and has now sold 250,000 digital copies.  Traditional publishers claim that Amazon is actively recruiting top authors, and offering the full range of services and support that agents, publishers, and critics provide.  As such, Amazon is competing directly with the traditional publishing industry.
  While most publishers approached for a story in the NY Times refused to comment on the record, Dennis Loy Johnson of  independent publisher Melville House quipped “Publishers are terrified and don’t know what to do."  Agent and e-publisher Richard Curtis elaborated - “Everyone’s afraid of Amazon.  If you’re a bookstore, Amazon has been in competition with you for some time. If you’re a publisher, one day you wake up and Amazon is competing with you too. And if you’re an agent, Amazon may be stealing your lunch because it is offering authors the opportunity to publish directly and cut you out."
    Amazon's impact on publishing may not be over, either.  There was talk, surrounding Amazon's launch of it's Kindle Fire tablet, that Amazon was trying to establish what would amount to a book subscription service offering Kindle readers access to a wide range of titles for an annual fee (or as part of Amazon Prime).  If realized, such a service could have significant impacts on reading habits and book purchasing.
  Amazon executive Russell Grandinetti responded this way - “The only really necessary people in the publishing process now are the writer and reader... Everyone who stands between those two has both risk and opportunity..”
  The risk is faced by the traditional gatekeepers (publishers, distributors) who used their position to dictate terms, particularly with non-established authors, and grab a larger share of value.  They've lost their control over access to book publishing and the traditional business model that was based on it.  The opportunity is for anyone who can find a way to add value to the author's work.  And there is a lot of opportunity for that, for Amazon, for publishers, and other entrepreneurs as well.

PS - Amazon launched its science fiction, fantasy, and horror imprint, 47 North, last week.  Among scheduled releases are works (and series) from a number of top genre writers, including Dave Duncan, B V Larson, Greg Bear, Neal Stephenson, and Stephen Leather.  The 47 North imprint will join Amazon Publishing's other imprints - AmazonEncore, AmazonCrossing, Powered by Amazon, Montlake Romance, and Thomas & Mercer..

Sources - Amazon Signs Up Authors, Writing Publishers Out of Deal,  NYTimes, posted at CNBC
Amazon's Announcement of 47 North Sci Fi Imprint, e-reads blog
Amazon Publishing website

Edited to include postscript and added sources (19 Oct. 2011)

Amazon works on adding eBook subscription to Prime

According to stories on SlashGear and the Wall Street Journal, Amazon is in the process of negotiating with major publishers for the right to offer a subscription-based ebook service, possibly as part of their current Prime membership benefits.  Similar to the free streaming access to a subset of their digital movies and TV show store that Amazon extended to Prime members, the planned service would give members the right to download and read (or perhaps access and read through the Kindle Cloud app) selections from a selected library of content.  The move from Amazon can be seen as both a way of adding value to its Kindle brand, and competing with emerging "loaner" programs being launched by public libraries and Barnes & Noble (whose plan allows full streaming access to its digital offerings, but only from its stores WiFi feeds.

Reactions from publishers has reportedly been mixed.  Publishers fear that blanket access to titles might limit the value of books.  The huge boom in eReader and eBook sales this year already seems to have the publishing industry in panic mode, and now concerns about libraries loaning newly published ebooks and the potential addition of an Amazon "loaning" pool is fanning the flames.  On the other hand, unlike the library loan programs, Amazon seems willing to pay what's quoted as "substantial" fees for their planned service, and that's something publishers should consider.  Along with the promotional potential, as readers may develop interests in authors or series that could create added demand for related titles.

The stories also suggest that Amazon hopes to have some kind of Prime access plan in place for the coming launch of a Kindle tablet.  The new tablet is expected to run the Android OS, optimized to allow users to benefit from the added value of Amazon's digital content offerings (video, music, text), all obtained through Amazon and stored on the Amazon Cloud service for access anywhere, anytime.

Sources - Amazon Prime ebook subscription in talks for Kindle tablet,  SlashGear
Amazon in Talks to Launch Digital-Book Library, Wall Street Journal - Technology
See the ebooks tag for other posts in this area

Sarah Hoyt on Authors, Agents, and Publishing

Award-winning fiction author Sarah Hoyt recently wrote a post on some of the changes she's seeing in the publishing business.  It's interesting from several perspectives, not the least of which is offering an author's perspective.  And well worth a read in full, including the comments (where she gives added thoughts and advice on getting published).
The post is motivated by her decision to drop her agent, and go without one, at the end of her current contract.  Praising her current agent, her decision is based on changes she's seeing on the agency and publisher side of the book business. First, she noticed that the responses by publishers to work submitted by her agent were "slow and often rude, not just to me but to my agent." As she continues,

"Now publishers don’t seem to care. Mostly they’re publishing bestsellers. It’s the only way they think they can survive the next two or three years."

While bestsellers are good, the foundation for both publishers and agencies are the "midlisters" - established authors with steady sales (often in genre fiction).  They aren't always the most profitable, but their sales tend to be steady, there are a lot more of them, and in aggregate, they generate most of the income for most publishers and agencies.  Letting that segment slip away, whether intentionally or through shifting shrinking resources to other areas, isn't likely to be a good long-term strategy.  Given their perception that the big publishers aren't interested in midlist authors' work, several agencies (including the one she currently works for) are responding by developing their own digital publishing arm.
Its a logical move in digital publishing, Hoyt suggests; agents and agencies already act as first-stage gatekeepers, sifting through submissions from their authors and from those seeking an agent.  They also handle initial editing and much of the promotion for writers and books.  And in digital publishing they can bypass the other major services that traditional print book publishers provide (printing and distribution) as well as avoiding a major risk factor (predicting demand).  Having agents linked to specific publishers, regardless of whether it's in-house or exclusive deals with an external publisher, does have one drawback - without competition, they may not be able to get the best deals for authors.
The problem Hoyt has is that her agency isn't making a straightforward transition to digital publisher - they want to remain agents as well, which will allow them to get two cuts of the revenue stream, first as agent, then as publisher.  In addition, Hoyt argues that her agency is pushing up-front costs.  In her case, it doesn't make a lot of sense.  Especially since the current digital book sales models out there allow authors to make more money self-publishing or through using a micro-press than for going through a traditional publisher. For digital versions anyway, and for those best-selling authors and midlist writers who have built a following and don't really need a lot of marketing.
Until on-demand printing system costs fall to competitive levels, there will be a role for traditional publishers. However, as has happened previously in magazines and television, the dominance of big, general interest, publishers is likely to be replaced by more narrowly targeted and focused imprints that can build a brand and a loyal community of readers.  And if they're smart, those focused imprints will offer established authors digital publishing terms close to those they can get themselves, and save the upfront charges for marketing et al. for the less-established writers that still need to build their brands and fan base.

Sources: "The (Publishing) Times They Are Achanging", madgeniusclub blog
"The (Publishing) Times They Are Achanging", Pajamas Media  (a shorter version cutting details of her dealings with agents).

E-books having an impact

A new report by the Book Industry Study Group (BISG) shows that E-books currently account for 11% of the total book market, with the proportion of print book buyers who also download e-books more than doubling between October 2010 and January 2011 (going from 5% to 13%). Other results included:

• Two-thirds of e-book readers have moved mostly, even exclusively, from print to e-books
• Fiction dominates downloads, with literary fiction, romance, and science fiction each accounting for more than 20% of purchases
• While e-book buyers are buying fewer print books, 44% indicate that they are buying more books, and 34% report higher overall spending on books (print and e-book combined)
• The most influential factors leading to e-book purchase are free samples and low prices
• Publishers are declining as a source for information about upcoming e-books, being replaced by retailers
• Third parties figure heavily on e-book reader device acquisition; a large number indicate receiving their reading device as a gift, and when purchasing one themselves, rely heavily on recommendations from friends.

In this report, BISG focused on e-book readers and their attitudes, behaviors, and characteristics, and identify a subset of readers as "E-book Power Readers" (respondents who said they acquired e-books every week).  The study had some interesting things to say about Power Readers:

• Power buyers account for 18% of e-book readers, but buy 61% of all e-books
• Power buyers have moved from computers to dedicated e-readers and tablets faster than other readers
• Two-thirds of power buyers are women

As a former manager of a used-book store, the dominance of genre fiction in sales (particularly romance and science fiction) is no surprise.  Heavy readers (one or more books per week) often have budget constraints, and turn to cheaper sources for books.  They are also less focused on specific titles or authors, instead reading widely within one or more genres, relying on library borrowings and used bookstores to feed their habit.  From that perspective, the rise of e-books can be seen, at least in part, as a replacement for the library and used bookstores for those readers.  The good news for the publishing industry is that that they didn't get much revenue from those sources anyway; thus what portion of e-book sales that comes from this group of heavy readers (or Power Users) is added revenue.

Source: "Book Worms Consuming More" MediaPost Research Brief

Will Rock Save Books?

Or more aptly, will tell-all memoirs from aging rock stars stir up sales?  Maybe even create an interest in books for a generation focused on audio and visual content?
A few imprints have been paying huge advances to nab old rockers like Keith Richards (reported $7 million advance) and Sammy Hagar (a reported $3 million).  While some have reportedly done well in sales, these bios don't seem to have helped general non-fiction sales - the number of non-fiction titles with sales of 100,000 or more copies dropped 20% last year.  And it isn't clear that these bios are reaching untapped markets, either.

Source: "How rock music is saving books."  Broadcast Newsroom.

E-book now top-selling format

The most recent numbers from the Association of American Publishers show that the E-book ranked as the #1 book format, outselling all other book categories (Hardcover, Paperback, Mass market, etc.).  They reported E-book sales of $90 million last February, triple the level from February 2010.  The AAP report is based on results from 84 publishing houses, 16 of which offer E-books.  Just last summer, Amazon had reported that its e-book sales for the Kindle had eclipsed its hardcover sales, and the addition of Apple's iBooks has helped spur sales, reporting more than 100 million e-books sold in its first year.
Trade publishing houses credit E-Books as generating fresh consumer interest in both new titles and older "backlist" titles (books over a year old).  Many reported that those enjoying a new release will often purchase an author's full backlist.
Tom Allen, AAP President commented, "people love books and publishers actively serve audiences wherever they are... (The public) have made e-Books permanent additions to their lifestyle while maintaining interest in print format books."


Sources:  "E-book sales triple from a year ago, now top-selling book format," LA Times Technology blog
           "E-Books Rank as #1 Format among All Trade Categories for the Month," AAP press release.