Category Archives: Publishers

Amazon Yanks Macmillan Books

Amazon fired the opening salvo in the latest skirmish over eBooks with mega-publisher Macmillan. Macmillan, one of the largest publishers in the world is at odds with Amazon over the pricing of Kindle books, so Amazon deleted all of the “Buy Now” buttons from all Macmillan published titles! I’m sure Amazon can predict the impact this move will have on Macmillan’s sales and think it will hurt enough to bring the publisher back ‘in line’. We’ll see.

Amazon has always artificially deflated the price of Kindle books, to get people to buy Kindles and to read Kindle books on their phones. Until the iPad, publishers had few choices as to other major hubs of online distribution. But I’m sure Macmillan feels they have a place to run. And Amazon has called their bluff.

The average cost per title on the Kindle is $9.99 and the publisher has little say in this. While Apple says publishers will be able to “adjust their own pricing” on the new iPad and upcoming iBooks store. Prices there are expected to be in the $12-$15 range.

For those still reading this, I would like to restate one point that many don’t realize: Amazon is artificially deflating eBook prices. So, even though they sell the Kindle book for $9.99, they are still paying the publisher royalties on the $12-$15 price the publisher wants. So, at this point, the publisher is still able to keep the lights on and pay its people. Macmillan’s complaint is that Amazon is ‘purposefully devaluing the product’. The fear is Amazon will so ingrain the $9.99 price in consumers’ minds that they can then quit subsidizing the pricing, forcing publishers to sell their products at loss at $9.99. So this isn’t a price “set by competition and market conditions” it’s a price set by a huge retailer with huge leverage to control the market and competition. I’m not calling sides here, but this is a very important point.

All I know is that no one wins when retailers pull books off the shelves, for any reason. And should sound as a warning to ALL publishers that they need to open themselves up to sell directly to consumers, at a minimum to offset crazy deals like this one.

Amazon Ready to Battle for Books

It’s less than a week before Steve Jobs takes the stage atop a unicorn showing the world the fabled Apple Tablet (iSlate). And it appears that Amazon thinks there is going to be a real battle for books. In the past two years, Amazon has used its size to bulldoze its way through publishing. But all that is changing, fast.

1. New 70% royalty rate. Amazon has been artificially keeping Kindle book prices at $9.99, to entice readers. Fancy math aside, this just means that Amazon has to pay royalties based on the cover price, not the lower $9.99 price. So the profit is non-existent there. This week Amazon announced, that starting in June, they will increase their payouts to 70%. This should balance out a lot of the math so that publishers can keep the doors open and Amazon can keep the prices low.

2. Kindle to support apps. Amazon is making the Kindle SDK available for download and will open up the devices as app platforms. So, if all things stay constant, third-party folks could make software that readers could install and run, in their Kindle. This is the same model used on the iPhone and other smart phones.

3. Amazon invites other printers back to the party. It’s no secret people can print their own books these days. The secret is finding a great way to sell and distribute those books. For years Amazon let people print their own books and then sell them on Amazon as each being their own publisher. In 2009, Amazon stopped playing nice and told writers that if you want to print your own writings to sell on our site, you have to use our printers… at our prices… everyone else, hit the road. This was a BIG deal and lots of people left the Amazon ecosystem. But now they have backed down and opened the doors to everyone again.

And all of this because the latest twist on the rumor of the hearsay of the tablet is that Apple has been talking to publishers to build enhanced editions of their eBooks to run on the pixi-dust powered Apple Tablet. I just want to know how “enhanced” an eBook has to be to warrant a $1,000 device, multi-functional or not? We’ll see.

What I do know is that consumers win again as competition forces big businesses to be more open and agile.

Bundling eBooks and Digital Products

It is almost 2010 and despite the rose-colored glasses being handed out by the Amazon PR team, eBooks and print-to-digital products still have a ways to go before becoming mainstream and major streams of revenue. This post is also serving to round out some views I’ve passed along via Twitter recently and in reply to V.Sandbrook.

Publishers need to bundle their products. Period. It’s simple and can require very little extra cost (production wise) beyond putting together a printed book. There are too many services and tech solutions to name, so I’m going to put forth just a basic outline of a bundling option that a publisher might offer. Bundling accomplishes two things:

  1. keeps the customer first; it allows the reader to access the content how they prefer
  2. it increases the margin of every book sale, ever so slightly

So, I think publishers should really start to look at their product offerings and seeing if they can’t offer something like the following.

1. Print Book – been around for hundreds of years. Everyone knows the business model. Amazon seems to discount much of publishers’ backlists by 20%-30%. So if possible the publisher should discount their books on their own direct-to-consumer website by 25%.

2. Print Book + Digital Edition – This bundle would be made available on the publisher’s direct-to-consumer site. Basically, you’re selling the printed book and a “smaller file size” version of the pdf you sent to press. So no more work is created, in offering this. A consumer is then faced with the following decision: do I buy the print book for 25%-off and have it delivered to my doorstep in two weeks or do I simply pay cover price for the print book, which is what I would pay in the bookstore, which gets the book delivered in two weeks, but I can also immediately download the pdf and start reading now.

3. Enhanced Digital Edition – This is a $9.99 offer designed to compete with device-dependent eBooks. The publisher would basically be selling their “to press” pdf, but with color photos, a hyper-linked TOC, maybe added audio snippets, an extra “links on the web” section, video, etc. Anything you can add to a current pdf to add value to it, to justify the higher price for a pdf-only download. Your readers deserve it. You have the content. Get it off the edit-room floor and add value to the digital book.

4. Device-Dependent eBooks – these are your Kindle, Nook, Sony eReader, etc. files. They need to be out there and in the catalogs. Let the device makers do the marketing for you. I really think these will come and go, but the amount of infrastructure in place here really makes it a great sales channel for 2010. Most of these are in the $9.99 price range.

5. Mobile Apps – you have to start looking mobile. It doesn’t matter if you publish fiction or non-fiction. There are many ereading devices out there, but many people already have a device they love. And it fits right in their pocket, their phone. The mobile ereaders are getting better and better. So publishers better have a plan in place, if not already in the mobile space, by the end of 2010. Just check out some of the cool things that StanzaKobo,Aldiko and Vook are doing. They all rock. Publishers need to start seeing .epub, .mobi and .prc appearing somewhere in their workflow. The earlier in the publishing process those files appear, the better.

So that’s it. A quick rundown of how a small publisher might offer one book to the world. It’s by no means a definitive list of the possibilities.

But it does only get better. What happens if you have a “hot” book? Imagine if the book hits shelves in March, what would rabid fans or curious consumers pay for a pdf copy one month earlier? Would the same pdf be worth a higher price pre-pub and then a lower price after the book came out? Pretty cool topic for another post on some other day, I think. Not too mention what happens once you invite XML-tagging to the party.

If you have any digital product strategies that are working for you or that you have seen and are a fan of, please share!

Enhancing Magazines and Books

Experimenting. That’s what publishers are doing and it is very cool to think about what the near-future holds. This week I’m playing with two such experiments. One from a magazine publisher, the other from a book publisher.

Enhance Print Media

First, the print magazine. While many magazines are still reeling from economic and industry shifts, Esquire is charging ahead with quirky and innovative (though sometimes clunky) tech/design mash-ups such as an embedded eInk cover and the December 2009 issue featuring “augmented reality”. While, in my mind what the issue holds is not true augmented reality, it is 100% pure print enhancement. To enjoy the enhancements you need to:

  1. Have a computer and webcam.
  2. Buy the magazine.
  3. Download the Esquire reader/viewer software (for Mac and PC)
  4. Install and launch software. Once up you just hold one of the 6 encoded boxes up to the camera.

AR Code

On your screen you can see the image of the page, but the model on the page starts moving and talking. It’s pretty cool. Though much more fun with a webcam not embedded at the top of a laptop monitor. It’s hard to see around the magazine to see the screen, since you have to keep the magazine held up to the camera. If you rotate the page, it’s like changing the channel on a tv. As an example, the printed page has a single shot of a model. But if you hold that page up to the webcam, the model will don winter clothes if the magazine in upright, and Spring clothes if your rotate 90 degrees. Rotate another 90 and he swaps out for Summer, etc.

While these codes certainly unlock more content than a basic QR code it is GREAT that publishers are starting to add things to their products. So if you get a chance, grab a copy of the magazine, play around and imagine what consumers will be enjoying this time next year.

Tomorrow I’ll post about the new Zuiker book I picked up, “Level 26“. It’s a book penned by the guy who created the CSI series and ties in with pre-recorded video to move the story along. We’ll see how that goes.