Rocket Bomber - business

Amazon, the Book Utility Company

filed under , 1 March 2014, 11:07 by

“Therein lies the rub. Publishing on your own website is still just too damn geeky. The siren-call of the silos is backed up with genuinely powerful, easy to use, well-designed tools. I don’t know if independent publishing can ever compete with that. In all likelihood, the independent web will never be able to match the power and reach of the silos. But that won’t stop me (and others) from owning our own words. If nothing else, we can at least demonstrate that the independent path is an option—even if that option requires more effort.”
In dependence : Jeremy Keith, 28 December 2013, Adactio.com

“I made a million dollars last year from self-publishing. I’ve found that, without gatekeepers, I can reach readers much easier. And readers are much more eager to buy me when I control cover, cost, and jacket blurbs, as evidenced by the fact that I’ve made 8x as much as a self-publisher as I did with my legacy contracts.
“Readers don’t care who the publisher is. They don’t care if the work is agented. They care about quality and price, and are able to find books they like without any gatekeepers other than each other and the increasingly adaptive ability for websites like Amazon to understand readers’ tastes.
“As an agent, you could be helping your clients make important decisions about self-publishing. That is, if you are pro-client. That might mean advising them to pass up a bad deal and go solo.”
Questions for Literary Agent David Gernert : Joe Konrath, 24 January 2014, jakonrath.blogspot.com

Neither online sales nor ebooks were original to Amazon, but Amazon has had a lot of success selling their brand to the public and have gained mindshare that in a way is even more important than their market share.

Amazon’s user base makes it a default social media site, smaller than Facebook or Twitter but more important because every Amazon account has a real name, address, and credit card attached — and that’s even before we consider Amazon also knows every shopper’s browsing and buying history.

“One-third of consumers now begin their online shopping expeditions on the site, comparing models, specs, prices and customer reviews for an expansive assortment that spans not just Amazon’s inventory but that of its more than 2 million third-party Marketplace affiliates, which comprise nearly 40 percent of the company’s unit volume. Other features like one-click ordering, tailored product recommendations, a no-hassle return policy and free two-day shipping with a $79 membership in the Amazon Prime program has made it the go-to merchant for more than 200 million regular shoppers worldwide.”
Amazon.com Growth Creating New CE Retail Paradigms, Challenges : Alan Wolf, 2 June 2013, Twice Magazine

“Combine the 2 formats and Amazon may have a market share for some categories of books over 50%. And that market share will continue to grow as more and more books are sold in electronic form, since Amazon’s market share for ebooks is even greater than for print. So we should not be surprised to wake up one day to find that Amazon is responsible for the sale of as much as two-thirds of all the books sold outside of libraries in the U.S. (Note to DOJ: I said ‘wake up’ for a reason.)
“A rival to Amazon will be hard to come by.”
Who Can Rival Amazon? : Joseph Esposito, 22 January 2014, The Scholarly Kitchen

“Amazon has succeeded building an ecommerce and customer relationship platform that customers love. It’s a combination of a superb user interface, extraordinarily skilled analysis of customer data and a genius logistics system.
“The comment in the article about ‘the tools of ecommerce’ being readily available for competitors reflects a lack of understanding about how hard it is to do what Amazon does. Randy Penguin doesn’t have the money or talent to do it. Neither does Apple. (Yes, PG knows Apple sells a bazillion apps and songs each year, but do you really think iTunes is even in the same universe as Amazon’s store?)
“Nobody in the publishing business can displace Amazon at this point and probably forever. The intellectual and technical bandwidth is just not there.”
Commentary on the Scholarly Kitchen post above, at The Passive Voice

“8. It has been happening quietly but it has been happening: we increasingly have two separately-operating book businesses: Amazon’s and everybody else’s. This starts with the numbering system: Amazon uses its own ASINs, rather than depending on everybody else’s ISBNs. It extends to the titles available: Amazon has an untold number, but certainly hundreds of thousands, that it either publishes exclusively or which authors or small presses publish exclusively through them. And it has service offerings from Kindle Owners Lending Library to its recent Matchbook offer to pair ebook and print sales, which range from ‘extremely difficult’ to ‘impossible’ for any other publisher-retailer combination to match. How far can this go? Can Amazon create a closed world which is more profitable for an author or publisher than the whole world that includes everybody else? Or have they already?”
Nine places to look in 2014 to predict the future of publishing : Mike Shatzkin, 1 January 2014, The Shatzkin Files www.idealog.com/blog
“1. What’s going to happen with retail shelf space for books? The market for the kind of narrative reading that comprises the bestseller lists has gone anywhere from half to three-quarters online, ebooks and print combined. The rate of movement has slowed, but it hasn’t stopped. It has now been two full years since Borders shut. Barnes & Noble continues to close stores as leases expire. Independents are, anecdotally, reported to be holding their own, but they’re definitely challenged to deliver on the online component and, so far, the successes have depended on individual entrepreneurs running good local stores, not any formula that is replicable or scalable. When will we see a stable ‘floor’ for bookstores, a sustainable foundation from which year-to-year fluctuations won’t persistently be down? I don’t think it will be in 2014, but it’s the most important bunch of tea leaves to read for some segments of the business.”
ibid.

“There’s this tendency among advocates to compare the absolute worst of the enemy with the perfect, best case scenario on your own side. The crowd that is hostile to self-publishing often likes to compare the worst dinosaur porn (which still sold, though, and made more money than many other titles) to one of those wonderful, Never-Neverland publishing companies that to this day invests massively in editors, doesn’t use exploitative covers, spends its untold riches on making the book’s typography absolutely perfect, has a workflow that spits out beautiful, error-free ebooks with ease, gives every author a personal PR rep, and has a multi-million dollar marketing budget for every title.
Of course self-publishing looks bad when you compare it with a piece of fiction that’s less realistic than the more deranged parts of Alice in Wonderland.
“The reality is that book retail has been steadily deteriorating over the years and publishers themselves have been compromised by decades of cost-cutting. Most book sales are online. Titles today get much less editorial attention than similar titles did years ago. Covers have always been completely disconnected from the book’s actual content.
“In terms of marketing, quality, distribution and design the difference between a competently published book and a competently self-published one is now less than you think. Competent self-publishing is getting easier every year as tools and services improve. Publishers offer less and less as they try to stay competitive through cost cuts and ‘optimisations’. Over time publishers seem to be devolving into self-publishing services that offer little but demand everything.”
Except, except, except : Baldur Bjarnason, 23 January 2014, Studio Tendra

We may already be at the point where Amazon is Too Big To Fight. Not that it can’t be done; I’d be willing to bet most stupid/funny t-shirts are sold from non-Amazon sites and iTunes (which truly and horrifically sucks) still beats Amazon in music sales. Freedom is still possible even under the Eye of Bezos, so long as his attention is elsewhere.

“Amazon is the largest online retailer globally, and it got to be that way because of books. Jeff Bezos started Amazon in 1994 after identifying a market that was poorly managed by traditional stakeholders, and made it more convenient for consumers to access the products they wanted. Early investment in the Kindle platform, consisting of ereading devices, tablets, and apps, took foresight that was lacking in the traditional book industry and helped Amazon come to dominate the ebook market worldwide.”
Comment: How I learned to stop worrying and love Amazon : Anne Treasure, 21 November 2013, sbs.com.au

The Authors Guild Should Embrace Amazon as a Friend to Writers and Readers. Until publishers make these changes, the Authors Guild should be celebrating Amazon for increasing readership, increasing the diversity of published voices, lowering prices for readers while also increasing royalties for writers, and revolutionizing reading in a way that keeps it relevant. Blaming Amazon for the move of goods out of physical stores and onto online stores is ridiculous. This is the inevitable result of the creation of the internet. This is the freedom of shoppers to choose. It was going to happen, no matter what. And here’s something that I doubt has been said before: Thank God it was Amazon.
“Think about it for a moment. It could have been WalMart or Costco or a number of other massive retailers who began shipping books at a discount through an online portal. It could have been a retail giant that sells everything that began to sell books online. Instead, it was an online bookseller who branched out into other products. There is a massive difference. The love of books remains at the heart of Amazon. Those who have worked with the people behind that smiling logo know this. From Jeff Bezos (who married a writer and started out by selling books out of his garage) down to the people I met on the factory floor of the CreateSpace printing facility, I’ve never been around a group who loves books more. The Authors Guild should be championing Amazon for what they’ve done for readers and writers. The pressure for fairer contracts and wages is coming primarily from here. The champion for the status quo and more abuses is coming from the guild of my profession. Dystopian novels can’t satirize this sort of thing without being mocked for being ridiculous.” [emphasis in original]
Bread and Roses : Hugh C. Howey, 24 January 2014, hughhowey.com

To Howey’s point, Bezos may love books; I have no way of confirming or denying that. But my bet is that Bezos loves money more.

“I have seen the future of Amazon.com, and it looks like Wal-Mart. This may come as a surprise to those who are accustomed to thinking of Amazon.com as a bookstore. After all, books are what the company is known for, and Amazon.com promotes itself as ‘Earth’s biggest bookstore.’ But books are just the tip of the iceberg. It’s widely known that founder and CEO Jeff Bezos, when he was starting out, made a list of products that would be well-suited to Web sales. Books topped that list — but they’re clearly not the only things on it. In fact, Amazon.com’s recent acquisition of Junglee Corp. (announced as this column went to press) confirms the bookseller’s intention of getting into a broader retail market: Junglee makes software agents that facilitate online shopping. Why do you think Bezos chose a generic name like ‘Amazon’ anyhow? It’s sheer size that Bezos cares about, not just books.”
No mere bookstore, Amazon.com wants to be an online retail giant : Dylan Tweney, 10 August 1998, Net Prophet [dylan.tweney.com]

[blockquote]

“Amazon had three things going for it in the early days (four, if you count the drive and ambition of Bezos): Books already had a computerized database (since 1986 in fact), books already had a nation-wide distribution network built to service bookstores (Ingram et al., op. cit.), and one of those book warehouses (one of the largest) was just six hours away in Oregon.
“Amazon’s twist on book delivery was the cash conversion cycle: they sell you a book, then they buy it and ship it, then they charge your card, and only at some later date do they lazily get around to paying their source for the book. (standard payment terms on books used to be 90 days – plenty of time to deliver book, claim payment, and then sit on that cash or park it in a short-term CD.)
“Amazon didn’t even need a lot of inventory to launch (they used a garage) because of this neat trick — and of course I know they do things differently now, with distribution centers all over the place and same-day delivery in some markets (integrated verticals are more efficient, and cost effective) — but this is how they built an empire on nothing. Well, not nothing nothing, I mean: Bezos was a former investment banker (presumably not worrying about rent or groceries) and was able to tap his Dad for a quarter million. (well, that’s not quite true: $100,000 came from his dad, the other $145,000 came from his father’s trust fund — the more I dig into this the more it spikes my blood pressure)
“So Amazon was a truly Great idea (though not 100% original) and had some really great implementation — but the ‘great idea’ wasn’t the website or the back-end software or servers, or even the product. Amazon succeeded because of timing, luck, starting with ‘a’ (a big deal in the pre-Google Yahoo Directory days), and most importantly: because of creative accounting. Amazon was not launched by a genius and engineeer who invented something amazing — Amazon was not a new iteration of an old service, computer-aided and internet-enabled, to add value to an older sales model — Amazon was not the obvious and organic outreach of a bookseller determined to reach all readers, no matter how isolated —
“Amazon was the brainchild of a banker, and exists to make money. (Extra points go to Bezos for figuring out how to make money without returning any to his shareholders.)”
[/blockquote]
Let’s Talk About The Business, Then. : Rocket Bomber, 8 May 2013 — minor edits for clarity.

“Back in 1994, Jeff Bezos was a young senior vice president on the rise at a thriving Wall Street hedge fund. But when the explosive growth of the World Wide Web caught his eye, he saw an even bigger opportunity: online commerce. Two years later Bezos, CEO of the Internet bookstore Amazon.com, is one of a crew of young entrepreneurs using cyberspace technology to steal real-world customers from traditional businesses with strong consumer and industrial franchises.”
The Next Big Thing: A Bookstore? Amazon.com is leading a wave of digital shops out to invade established industries. : Michael H. Martin, 9 December 1996, Fortune Magazine archived at money.cnn.com

“Bezos first got the idea to start an Internet enterprise in 1994. While surfing the Internet in search of new ventures for D.E. Shaw & Co. to invest in, he came across the statistic that World Wide Web usage was growing by 2,300 percent a month. Bezos immediately recognized the expansive possibilities of selling online and began exploring the entrepreneurial possibilities of developing an Internet business.
“He drew up a list of 20 potential products he thought might sell well via the Internet, including software, CDs and books. After reviewing the list, books were the obvious choice, primarily because of the sheer number of titles in existence. Bezos realized that while even the largest superstores could stock only a few hundred thousand books, a mere fraction of what is available, a ‘virtual’ bookstore could offer millions of titles. The die was cast. Bezos passed up a fat bonus, packed his wife, MacKenzie, and their dog, Kamala (named after an obscure ‘Star Trek’ character), and headed for Seattle.
“For Bezos, Seattle was the ideal city for his new business. Not only was it home to a tremendous pool of high-tech talent, it was also in close proximity to Ingram Book Group’s Oregon warehouse. While MacKenzie drove, Jeff spent the trip pecking out a business plan on a laptop computer and calling prospective investors on a cell phone. With $1 million raised from family and friends, Bezos rented a house in Seattle and set up his business in the garage.”
Jeff Bezos: The King Of E-Commerce, unattributed and undated (from ’5 years ago’) article at Entrepreneur Magazine’s website [entrepreneur.com]

I Don’t Hate Amazon. No, really. I’m coming to terms with them, and of course, like everyone else, I’m an Amazon customer. [primarily for MP3 music files; iTunes sucks.]

But is Amazon a “savior” of authors and readers, rescuing us from the predations of the Evil Publishing Companies and leading us to the promised land?

“Amazon achieved the position it has in the book ecosystem through a combination of brilliance, execution, natural forces, and some good luck but, above all, focus. It had to take some big chances with pricing and margin to get where it has gotten, but that’s not really necessary anymore. Doing some very logical and natural things, like the new Matchbook program and rolling out more subscription and pricing offerings (like their new ‘Countdown Clock’ discounts for new Kindle titles) will keep their share growing and their competitors scrambling. They will also almost certainly be coming after publishers for more margin (as will their equally dominant counterparts on the store side, Barnes & Noble), but it would seem unlikely that they’ll see the need to extend themselves to sign up authors or build out their ability to distribute print to other people’s stores.

“[T]he good news for publishers is that the business they now have will look less and less appealing compared to other worlds Amazon might conquer. That should save them from having a bulls-eye on their backs, but it will remain a very challenging environment where their biggest customer is the most powerful force in the marketplace and growth outside that customer is harder and harder to achieve. The publishing activities of Amazon will continue to get bigger; the industry of other publishers will continue to get smaller. But we are probably in for a period of slow and steady shifts rather than cataclysms.”
Amazon might lose interest in total hegemony over the book business before they achieve it : Mike Shatzkin, 5 November 2013, The Shatzkin Files www.idealog.com/blog

“I think printed books and eBooks will exist side by side for a long time yet, even as LPs are still around alongside the iPod. And they will definitely come in handy after the zombie apocalypse, because they don’t require batteries. Just be careful with your glasses, Burgess. There’s no adjusting the font size on paper.”
Scott Pearson, 3 November 2013 : Enemy Lines: Dispatches from a Cranky Writer scottmpearson.tumblr.com/

“Still, I don’t think it’s really fair for publishers to blame Amazon for the fact that people like to do their shopping online, and that easily-digitizable content is going to exist mainly in a virtual world rather than the real world. Indeed, there’s an argument that Amazon has saved the publishing industry from going the way of the record labels — that it’s made buying e-books so easy that the number of free pirated versions out there is still tiny. (Amazon has made it easier to find second-hand books, which publishers don’t directly benefit from, but at the same time it’s at the forefront of pushing e-books, which can’t be resold after you’ve bought them. Net-net, let’s call that one a wash.)
“Publishers have always been conservative, and Amazon represents a massive change in their industry. What’s more, the move from small booksellers to B&N to Amazon has been a move where the booksellers have ever-increasing amounts of leverage over the publishers; it’s understandable that the publishers don’t like that. But I just can’t believe that Amazon is, or would ever want to be, an existential threat to the publishing industry.”
Is Amazon bad for publishers? : Felix Salmon, 3 November 2013, Reuters Analysis & Opinion blogs.reuters.com/us/; Felix Salmon blogs.reuters.com/felix-salmon/

“Amazon has always been about disintermediation and squeezing margins. What better way to do so than by cutting out one of the foodchain’s biggest pieces, the publisher. Horror stories have always been told of how certain bestsellers were rejected by editors from multiple publishing houses. And just how much value does the typical publisher add to a book these days? That’s become a very difficult question for publishers to answer, especially in light of all the self-publishing options that offer significantly higher royalty rates. Amazon continues creating new imprints and adding staff. Don’t let flops like Tim Ferris’ latest book throw you off; Bezos always takes the long-term view, so a few high-profile disappointments won’t deter Amazon’s plans.”
Kindle Singles and the future of ebooks : Joe Wikert, 21 October 2013, jwikert.typepad.com

“In an Amazon world, particularly with free Prime shipping, the idea of a shopping trip begins to feel inefficient. If you think of something you need, just pull up Amazon and order it, then get on with more important things in your life. PG routinely orders all sorts of non-book things from Amazon that he formerly bought at various retail stores.
“If you hear about an interesting book (or, more likely, read about one online), why worry about making a mental note to look for it out the next time you visit a bookstore? Just download the sample and check it out at your next break. Watching TV and see someone talking about an interesting book? Pick up your tablet and download a sample or buy the book if it really sounds great.
“Browsing for books is something PG sort of does all the time, not just when he’s visiting a bookstore. For him, serendipity happens constantly and almost everywhere.”
The Absence Of Serendipity, Or, Why I Hate Shopping At Amazon : 22 November 2013, The Passive Voice

The Guardian reported that 98 UK publishers went out of business over the past year, an increase of 42% over the year before

“Indeed, as the paper points out, it is ‘niche academic and educational publishers’ that are ‘particularly vulnerable,’ because their business model is under attack by digital piracy as well as secondhand book sales on sites like Amazon Marketplace. Cork said, ‘The arrival of Amazon has transformed the secondhand book trade from a fairly minor nuisance to a serious threat. Where once you had to trawl the secondhand bookshops if you wanted to get hold of a cheap hardback or academic book, you can now be fairly certain of getting hold of what you want at the click of a button, and the publisher will not make a penny.’
“Another factor, of course, is the explosive growth in sales of ebooks, whose lower price has also helped to undermine publisher’s margins.”
What’s Driving UK Publishers Out of Business? : Dennis Abrams, 8 November 2013, Publishing Perspectives : The Guardian article cited is “Ebooks and discounts drive 98 publishers out of business”, 4 November 2013

“After writing more than 20 books, with major publishers behind them, I have found it increasingly difficult to get new ideas accepted. It is also frustrating as a writer to have a non-fiction book that is up-to-the-minute when ‘completed’, only for it to come out maybe nine months later and seem slightly dated.
“So I have ventured into the self-publishing ebook market with Breaking the Silence: The Films of John Pilger. My original book about the journalist’s documentaries was published by Bloomsbury in 2001, but that was 12 years ago and Pilger is still going strong, with an even greater body of work. Suggestions that the book might be updated have been declined – the general feeling of publishers seems to be that it has ‘been done’.
“In setting about doing the job myself, I soon discovered some major advantages. Once written, an ebook can be published at the click of a computer’s mouse. When I started, Pilger was making his latest documentary, Utopia (in cinemas now and on television and DVD next month), and I have been able to give the book added impact by tying in with its release. How many of the big publishers can do that?”
Fact: Self-publishing my non-fiction as ebooks makes sense : Anthony Hayward, 19 November 2013, The Guardian online, books section http://www.theguardian.com/books

“A friend of mine who is a longtime independent sales rep says that even the successful indies are finding it necessary to sell books and other things — cards, gifts, chotchkes — to survive. The mega-bookstore with 75,000 or 100,000 titles or more was a magnet for customers in the 1970s, 80s, and 90s. It isn’t so much anymore because the multi-million title bookstore is available through anybody’s computer. This is a fact that makes the number of successful stores a weak indicator of the distribution potential available to publishers. If replacement stores carry half the inventory of the ones that go out, we can have a lot of indie retail success stories but still a shrinking ecosystem into which publishers distribute their books.”
The future of bookstores is the key to understanding the future of publishing : Mike Shatzkin, 23 January 2014, The Shatzkin Files www.idealog.com/blog

“And there’s one presumption that seems like a real doozy: Knowing that a large portion of book sales are still in paper, Howey assumes the continued existence of bookstores. These days, that seems like a very shaky assumption. Recently, Jeff Jordan, formerly CEO of OpenTable and now an investor at the firm of Andreesen-Horozwitz, declared that the tipping point for e-commerce, particularly for media, has been reached. This is not a particularly data laden or insightful declaration; his post includes unsurprising monotonic trend lines for digital sales for consumer goods categories. However, Jordan is right to point out the inexorability of this transition: conversion to digital commerce is likely to be a unidirectional phenomenon, because at heart, digital distribution is cheaper.”
Been Down So Long : Peter Brantley, 25 January 2014, PWxyz blogs.publishersweekly.com/blogs/PWxyz/

“Here’s the hard truth about bookstores — and yes, I need to write a long post on this — no bookstore carries every book published that week, let alone that month or that year. When I was travelling last week, I stopped in bookstore after bookstore, from Hudson News to Powell’s to some other indies whose names my tired brain can’t remember, and none of them had one of my favorite mystery author’s latest book. He’s a New York Times bestseller and his book came out the day I left. I had special-ordered a copy, and figured I would regret it, because I’d see it everywhere. Instead, I saw it nowhere.
“That’s pretty common these days. Not even the Times bestsellers are getting physical shelf space.
“Why? Because bookstores now have virtual catalogs, and the authors their customers buy less frequently aren’t on the shelf, but in the virtual catalog.”
The Business Rusch: Pricing Part 2 Or (Discoverability Part 7 Continued) : Kristine Kathryn Rusch, 22 January 2014, kriswrites.com

“This has really been Amazon’s secret sauce from the beginning. The book publishing industry scratched its collective head for years as Jeff Bezos and his crew grew a giant online bookseller without keeping much margin and had Wall Street shovel money at them to grow and invest. The widespread wisdom in publishing in the late 1990s was that Amazon was performing some kind of parlor trick that would shortly come to an end. Instead, they built on their customer base, their tech, and their reputation for service to expand way beyond book retailing. And today they can afford to run a profit-less book retailing and publishing operation (if they want to; I have no evidence that they don’t make profits and don’t claim to know), taking the margin out of the game in a way that would squeeze any competitor trying to make a profit from book retailing.”
Book publishing may not remain a stand-alone industry and book retailing will demonstrate that first : Mike Shatzkin, 29 January 2014, The Shatzkin Files www.idealog.com/blog

Of course, I’m sure I’m just overthinking it.

“In the old days things were much clearer. All you had to do to call yourself a writer was publish a book, which meant you needed someone else to publish it – and someone else to buy it. It may have been a myth that published authors were making money out of writing, but the illusion left the word ‘writer’ meaning at least something. If the cosy settlement that existed for a while between copyright law and the printing press was ‘just a blip’, as Neil Gaiman suggests, if the prospects for making a living out of storytelling are as bleak as the surveys report, then we can’t expect to reserve the term ‘writer’ for authors who have found commercial success.
“Maybe we should just admit defeat. Maybe the digital revolution has simply revealed the tensions in a concept that exploded into meaninglessness long ago. Maybe we should abandon the idea of a class of people who are different, a class of people who are ‘writers’, and just get on with the glorious, messy business of reading and writing.”
Does digital publishing mean the death of the author? : Richard Lea, 23 January 2014, The Guardian online, books section http://www.theguardian.com/books



B&N's Nook as differentiator

filed under , 28 February 2014, 10:13 by

B&N is clinging desperately to Nook.

Not as a hedge against Amazon (a battle that has been lost, I think) or in any sort of attempt to compete with Google, Apple, or Samsung — even with the balls and ego that B&N Chairman Leonard Riggio still has (at 73) I don’t think he’s delusional.

B&N needs Nook as a way to differentiate themselves from books-at-Costco and the remaining independent booksellers, and as a bulwark or backstop against the decades-long slide in reading.


[data from The Consumer Expenditure Survey that I last futzed with back in 2011; no, I’m not going to do a new chart. Per the source, aggregate spending on reading in 2012 was $13.6 Billion, so the trend line holds]

It’s not about competing with Amazon — instead, it’s about retaining the physical book fans.

Having a digital option for their customers, even a piss-poor implementation like Nook, is magnitudes better than not having a digital option. B&N is the largest bookseller (physically, if not in absolute terms anymore) so as the leader, they need to offer something more. Appearances count more than the reality of the situation, and B&N’s target customers are the ones that won’t convert to digital. Even if no one buys the Nooks (and the sales numbers point in that direction), the Nooks are there — given prominent placement in the front of the store — and lend the impression that B&N is doing something about digital and so the I-only-buy-REAL-books-customer feels better about the chain and their physical book purchases.

Many book customers know they’re luddites, and perhaps take some pride and enjoyment from the fact, and from their bookshelves, and from the whole tactile and physical aspects of their hobby — even if, when one is lost in a book, it all fades to the background anyway. This customer may not want an e-reader device, even if they are otherwise technically savvy — but since they are technically savvy, they also appreciate a bookstore that speaks to that part of themselves as well. Yes, I’m cutting an awfully fine distinction here; let me phrase it in the form of a question: Do you buy build-it-yourself furniture from Target and Walmart, or do you drive to Ikea and get something with a fake-Swedish name? Perception of the brand has a lot to do with customer decisions, whether the customers admit it or not.

Every book store occupies a niche — you can be small and artisanal, like the corner bakery serving up cronut knock-offs. You can be warm and neighborly, like the little sandwich shop that has great coffee and nice tables. You can be hip and trendy, like the pizza parlor that always experiments.

Or you can be big. Most of us buy food in a grocery store. The supermarket has a deli, bakery, and pharmacy — and a meat department because no one can go to the local butcher any more, and a produce department because no one even knows what a ‘green grocer’ used to be. We don’t all live within walking distance of a corner cafe or bistro — or indie bookseller — but we all know where the local supermarket is.

Barnes & Noble has to be the book supermarket, and that means departments, and that means DVDs and CDs, board games and jigsaw puzzles, blank books and bookmarks, cheap gift crap that no one buys — and yes, Nook.

[Would B&N do better if they got rid of the crap and just sold books? Gods, yes, I’ve been making that argument for years. But B&N sees more of a future in the crap than in the books, and the idea of being a department store is perhaps anchored deeper in their big-box-DNA than the books themselves are.]

B&N needs Nook, because they need the stage prop, the show of being Amazon’s equal.
I’m not sure if this propaganda effect is worth $60M or $100M or $200 Million a year (~$1.4 Billion to date) but B&N certainly thinks so, and is set to release yet another tablet.



The Fallacy, and the Truth, of "Big Publishing"

filed under , 25 February 2014, 20:35 by

[blockquote]

“In the last 20 years, two multi-billion-dollar bookstore chains rose — and one fell. A hell of a lot has changed in 20 years.
“In 1994, Viacom owned Simon & Schuster and was buying Macmillan USA; now in 2014 Macmillan (via the original UK root) is back in the US book business – but under the imprimatur of privately-held German firm Holzbrinck. Viacom spun off S&S, as the publishing arm of CBS. Hachette Book Group USA (Hachette Livre being the bookish face of French multimedia conglomerate Lagardère) was born in 2006 with the French purchase of Time Warner Books — and more recently Hachette has also added on Disney’s Hyperion. (Hyperion, I’ll remind you, was built by Disney from scratch in 1990.)
“Rounding out “The [old] Big Six” – HarperCollins is only 25 years old, assembled from parts by Rupert Murdoch’s News Corporation over the course of the 1990s. And everyone is shadowed by the Randy Penguin merger: the imprints of Random House already read like a directory of 1947 New York publishing houses; added to Penguin’s haul the new Penguin Random House is set to publish half of all adult trade books (or more). That merger isn’t even a year old yet.”
[/blockquote]
Forbes: Please Hire Someone Who Understands Books, or Math, or Both : Rocket Bomber, 11 February 2014

Up until last year, we used to talk about The Big Six – the six largest US publishers: Random House, Penguin, Hachette, HarperCollins, Simon & Schuster, and Macmillan — In 2013 The Big Six became The Big Five (or alternately, Randy Penguin and the Following Four) after Bertelsmann and Pearson came to an agreement to merge their subsidiaries (incidentally, the two biggest US publishers), Random House and Penguin Putnam.

OK, first: Randy Penguin and the Following Four is a great band name. But more importantly: what [now] gets referred to as The Big Five are just the publishing arms of major international multimedia conglomerates — so far in this post I’ve name-checked Viacom, CBS, Holzbrinck, Lagardère, Time Warner, Disney, News Corp, Bertelsmann, and Pearson — the publishing houses get handed around like poker chips by media giants who [editorializing here] just don’t give a shit about print anymore, but hey, it’s still a multi-billion-dollar industry and everybody else has one “so I guess we need a publishing arm, too”

Publishing is worth (rough numbers) $27 Billion, but that’s only in the very-low-two-digit-billions, so to a Viacom or 21st Century Fox or Time Warner, the whole book thing just isn’t worth futzing with. Each of those entities has—when given half a chance—sold, spun-off, or otherwise dumped a “Big Six” publisher and retained the ‘real’ media assets … in 2013 Disney bought Marvel (technically a publisher) but the $4 Billion price tag was for characters and “IP” and what is now a blockbuster movie studio, not the floundering funny-book business. The year after Disney bought Marvel, you might have noticed they sold off their actual book division, Hyperion, in favor of concentrating solely on ABC/Disney (and soon-to-be Marvel and Lucas) tie-in product. Fox has similarly shed its News Corp skin, taking the TV and Movie studios and leaving the publishing behind. CBS is stuck with S&S only because they were cast aside with them back when Viacom split. Time Warner (which has been Time Warner since 1990) (and which sold off Little, Brown and Time Warner Books in 2006) even has plans to spin-off the Time Inc. magazine distaff branch and soon (mid- to late-2014) the last vestige of dirty, dirty print will be purged from Warner Brothers’ balance sheet — except for Batman and the other ‘DC Entertainment’ characters.

##

From 1989 to 1998, if you mentioned “the Big Six” to someone working in publishing in New York, they’d assume you were talking about accounting (or maybe poetry). The Big *whatever*, as a term, is too recent — and definitions are fluid.

[source: Google Ngram]

“New York Publisher” was (and occasionally still is) the disparagement of choice when talking about corporate inflexibility, but more and more we were actually talking about media giants and corporations, not about publishers per se. The Big Six emerged in the late 90s (note, not a historic and ever-present phenomenon) and were part of the larger media consolidation then taking place between movies, TV, cable… and yes, the internet and video games, too: AOL Time Warner and Vivendi Universal, anyone? Man, the aughts were weird. Book publishing, as ‘ur-content’, got swept up into the whole mess. The fit was often bad.

Books, newspapers, comics and magazines—what we call publishing—are the red-headed stepchildren of media, of note only in context. HBO gets all credit for Game of Thrones, Harry Potter is a Warner Brothers property, Lord of the Rings is New Line Cinema, Walking Dead is an AMC TV show. Marvel Studios had an immaculate conception in 1996, springing forth from nothing, whole and wholly-formed, into a super-hero movie desert and eventually becoming so popular that there were even popular comic book adaptations of the movies.

On the TV side, we also have Justified, Bones, Orange Is the New Black, and House of Cards — and hell: Roots, Shogun, this is nothing new. Masterpiece Theater has the occasional original story (nod to Downton) but for decades its bread-and-butter was literary adaptation.

This is a looooong aside (and trivial, or trivia, or both – you can skip it), but having done the research I had to include it: Two-thirds of all books that hit #1 on the bestseller list for the past century were made into movies — another 10% made the jump to TV, so three-quarters have been adapted.

The exceptions are kind of fun to note:

  • Mr. Britling Sees It Through by H. G. Wells, 1917
  • Strange Fruit by Lillian Smith, 1944 (eventually, an Oscar® nominated short in 1978, but not a feature-length adaptation)
  • The King’s General by Daphne du Maurier, 1946
  • The Source by James A. Michener, 1965
  • Trinity by Leon Uris, 1976
  • Chesapeake by James A. Michener, 1978
  • The Covenant by James A. Michener, 1980
  • The Matarese Circle by Robert Ludlum, 1979 (…is in development hell – though at one time both Tom Cruise and Denzel Washington were attached)
  • The Partner by John Grisham, 1997 (optioned)
  • The Testament by John Grisham, 1999 (optioned)
  • The Litigators by John Grisham 2011 (optioned)

There’s a batch that haven’t been adapted, but we could argue that doesn’t matter because others in the series* have been:

  • The Silmarillion by J. R. R. Tolkien, 1977
  • The Mammoth Hunters by Jean M. Auel, 1985
  • The Cardinal of the Kremlin by Tom Clancy, 1988
  • The Plains of Passage by Jean M. Auel, 1990
  • Desecration by Jerry B. Jenkins and Tim LaHaye, 2001

And the TV movies and mini-series:

  • Wheels by Arthur Hailey (Book 1971, on TV in 1978)
  • Centennial by James A. Michener (1974, TV 1978)
  • Noble House by James Clavell (1981, TV 1988)
  • It by Stephen King (1986, TV 1990)
  • The Tommyknockers by Stephen King (1987, TV 1993)
  • Scarlett by Alexandra Ripley (1991, TV 1994)
  • The Street Lawyer by John Grisham (1998, TV movie 2003)
  • For One More Day by Mitch Albom, (2006, TV movie 2007)

The Talisman by Stephen King and Peter Straub (1984) was being developed as a mini by TNT but never made it to air

Out of the whole list (and for more info on that, I’d direct you to Matt Kahn and his site, where he not only lists the Publisher’s Weekly #1 Bestsellers for each year, he’s also slowly reviewing each and every one) there are only four I couldn’t find more information on:

  • The Brethren by John Grisham 2000
  • The Summons by John Grisham 2002
  • The Broker by John Grisham 2005
  • The Appeal by John Grisham 2008
    …but it’s Grisham, so I’m sure these have been optioned even if it wasn’t internet-link-generating-news at the time.

And of course, there are the pair of bestsellers from the early 1980s: the bestselling book in each of these years were novelizations of movie scripts: E.T., The Extraterrestrial in ’82 (by William Kotzwinkle) and Return of the Jedi in ’83 (by James Kahn). If pressed for a date when publishing died, I’m picking 1982.

My point — yes, I had one — is that books and publishing are, in the corporate view, just the minor leagues. Even big names like Stephen King, John Grisham, and J.K. Rowling are just the ‘farm team’ for the real business, which is making movies and TV. Books are a static property to be strip-mined, not a resource to be conserved — or hell, a vibrant product that can be nurtured and will multiply if given even the slightest bit of care and feeding. The major media companies, and the publishers they’ve hobbled, can’t be bothered.

Amazon gets some credit here. But…

Well, Amazon gets credit for throwing Miracle-Gro® on a field of weeds and wildflowers — the seeds were there already, there was even some minuscule growth — indeed, this was a field that used to be tended by the pulp magazines and rack paperbacks.

[And honestly, I’d feel better about e-books and the new self-publishing Revolution if it were like the pulps of decades past and not a wholly-owned subsidiary of Conglom-o. But that’s my bias…]

##

We talk about Traditional Publishing like it’s a single thing, a single model, or a single company. It’s not. To claim that all publishers are the same is to equate The Big Five with Osprey, Harlequin, Regnery, and Soft Skull. The big “New York” publishers are actually run out of Gütersloh, London, Paris, and Stuttgart — of the two remaining “New York” publishers, one is more concerned with their (Hollywood-based) TV programming and the other’s major asset is financial information firm Dow Jones.

If anything, Amazon has managed to flourish because first, consolidation squeezed the publishing industry practically dry, and then the new corporate owners criminally neglected it.

##

For perspective, check out Publishers Weekly’s list of The World’s 60 Largest Book Publishers, 2013 – which not only is a global list but also incorporates the huge educational/textbook and financial reporting sectors (Reed Elsevier, ThomsonReuters, and Wolters Kluwer are the major players you’ve never heard of, each with about ~$5 Billion in revenue — not gross sales, revenue) — and we really should be talking about Scholastic as one of the [new] Big Six — and Europe and Japan are massive book markets, and the eventual digital book solutions in both might impact the digital book market in the US. Of Course Amazon is a player, but not the only one. (The side battle in Brazil is also of note)

I’d love if some of the “new book” self-publishing evangelists addressed the Fall of Publishing (1982-2006) in their arguments, and perhaps would explain why their new corporate overlord is in any way better than the old ones. It would be one thing if we were advocating for a creators’ collective to advocate rights for all designers/producers/writers against the many companies and web sites who seek to exploit authorship – but instead I only see efforts to pit the new model against the old one for internet ‘points’.

Who owns a kindle ebook? More importantly: what happens to a kindle ebook if Amazon stops hosting it? Prodigy and CompuServe were the shit in 2000, and in practical terms, were also ‘the internet’ for their user base. Amazon seems different (but awfully similar) but once again we’re looking at a walled garden and 2015 in practice isn’t all that different from 1985.

Dollars are great, I need more myself. But if the discussion is about business models and propagation of books, I need more than hagiographies of KDP and some by-the-way statistics based on web-scraping. Let’s talk about the future of publishing, not the panning-for-gold in the effluvia of a commerce-site-cum-social-network. Talk to me about how this all works in 2024, or 2034. Amazon is Fantastic, but can’t be the only player: tell me what’s next, and how to participate.

If your imagination fails at KDP, then your imagination fails. If “big publishing” is what you’re against, then tell me what you are for. Howey, what’s next?



Forbes: Please Hire Someone Who Understands Books, or Math, or Both.

filed under , 11 February 2014, 15:41 by

Forbes just put up Amazon Vs. Book Publishers, By The Numbers – claiming at least on the face to “ignore the overheated rhetoric for the moment and focus on the raw data.”

Fine. But can you hire someone who can do math?

Forbes: “$5.25 billion: Amazon’s current annual revenue from book sales, according to one of Packer’s sources. That means books account for 7% of the company’s $75 billion in total yearly revenue.”

I’d take that one further. Books, at least as has been self-reported by the members of the Association of American Publishers, is a $27 Billion a year industry. To be fair, trade books (publishing minus the textbook market) is only (only) $15 Billion. Amazon is the big, ugly, 500lb. gorilla of the market but two-thirds of books are still being sold elsewhere.

Putting that $5.25 Billion in context and knowing the publisher’s side is at least as important: one could argue that Amazon is only 7% invested in books and the Amazon-Publisher relationship, while publishers are at least 30% invested and growing increasingly worried as that fraction keeps getting bigger. This is the wrong way to think about the numbers (note my use of the phrase “one could argue”) but knowing the relevant percentages is more important than throwing around billions — and does a better job of putting the original New Yorker piece in context.

* Forbes: “19.5%: Amazon’s share of the e-books market. E-books now make up around 30% of all book sales, and Amazon has a 65% share within that category, with Apple and Barnes & Noble accounting for most of the balance.”

edit 14:59 12 Feb 2014: I’m not totally mean spirited. On review, Forbes poster Bercovici did go back and post a correction. The quote above now reads “19.5%: The proportion of all books sold in the U.S. that are Kindle titles. E-books now make up around 30% of all book sales, and Amazon has a 65% share within that category, with Apple and Barnes & Noble accounting for most of the balance.” — I still feel that this is a misreading of the 30%/65% data as Amazon’s Kindle Direct Program operates independently of AAP/mainstream publishing. My other points below are still valid. —M.

Thank you, Jeff Bercovici, Forbes Staff — you have successfully demonstrated you can multiply the integer 30 by 65%.

The number is completely meaningless, but you’ve certainly nailed the arithmetic. What in the hell am I supposed to do with 19.5%? I suppose, if it were described as the percentage of the Total Book Market that Amazon Happens to Sell as Ebooks Rather Than Physical Books, there might be some point in knowing about 19.5% — but this isn’t what the data means.

19.5% is NOT “Amazon’s share of the ebooks market” – a point directly disproved in the very next sentence of the Forbes article, where Amazon’s [estimated] share of the ebook market is listed as 65%.

Also, ebooks are only “around 30% of all book sales” when we restrict ourselves to sales self-reported by the 1200 or so publishers participating in AAP industry reporting, and again, that would be 30% of the $15 Billion in trade books, excluding the other $12 Billion in publishing annually from textbooks, which are still resistant to the widespread ebook adoption we’ve seen in other publishing categories. Of course, Amazon’s books sales would also include their Kindle-exclusive ebooks — a number not reported anywhere and also not part of the AAP’s estimates (the 30%-ebook number we all like to throw around). The stronger one assumes KDP to be, the smaller Amazon’s share of the trade book business—including the AAP’s publishers’ ebooks—but, if anything, a thriving Kindle program is even more worrisome to a publisher.

Just how much of Amazon’s [estimated] $5.25 Billion is ebooks? – more than 30%, I’d bet, since the publishers report 30% and Amazon sells at least as many ebooks as print books, by their own reporting. (or is that bragging?)

Just how much of Amazon’s [estimated] $5.25 Billion in book sales is Amazon’s? – This is a big ol’ question mark, because Amazon isn’t saying. Kindle Direct Publishing and the menagerie of imprints are, if nothing else, a growing fraction of Amazon’s book sales, and could be a significant fraction. How we parse it can make a big difference. If Kindle ebooks, CreateSpace print-on-demand, and Amazon Publishing account for exactly zero of Amazon’s [estimated] $5.25 Billion, that means Amazon really is selling 35% of all adult and juvenile trade books. I’d say the combined-Amazon-book-cheetah is getting close to a billion dollars, though, because the fraction I keep hearing for Amazon’s share is closer to 30%.

Ebook cheerleaders and Amazon partisans keep sharing anecdotal stories about just how great things are on their side of the dome. How much of Amazon’s ebook sales are Kindle native?

I might read the Forbes article and think 19.5%, but now I’m just rubbing it in.

How about used books, also available from Amazon – Are sales on Amazon’s marketplace figured into that $5.25 Billion? They shouldn’t be, as Amazon only collects fees on these transactions and the sales are actually banked by the seller-of-record. While used book sales wouldn’t impact the reported sales from the AAP, they certainly affect the public perception of Amazon as an online “book store” and that means Amazon’s mindshare for books is bigger than $5.25 Billion and the estimated dollar figure for “book” sales is almost certainly off.

George Packer did an excellent job describing how many publishers feel about Amazon. Forbes, in reporting on the article, pulls out some numbers from his article (in a mildly condescending way) for their puff-piece-listicle but adds nothing to the original, or the conversation.

##

I’m not done.

Forbes: “>50%: The decrease in the number of independent bookstores over the past 20 years. There used to be about 4,000 in the U.S.; now there are fewer than 2,000. Amazon’s arrival on the scene is only part of the story here, of course; the decline of the indies started with the debut of big-box stores like B&N and Borders.”

Do you want to go there, Mr. Bercovici? Amazon, Big Boxes, indie bookstores, wow things have changed but from the tone of the Forbes author we get the impression that Amazon’s “part of the story” is supposed to be the largest part. Let me show you how we provide context for a story:

[blockquote]

“The Wasserman piece [“The Amazon Empire: How the Online Colossus Snuffed Out Competitors and Their Next Battle for Publishing” : Steve Wasserman, 3 June 2012, The Nation article reposted at Alternet.org] is a long read, but a good one. Please note that in 1994, if the figures/fractions quoted are correct, then in the year Amazon launched 55% of the total book market was selling outside of bookstores! – we have short memories, it seems, and a long list of assumptions to work through when it comes to book retail. If Amazon were merely displacing book-of-the-month clubs and hoovering up the book retail that (in the 1980s) was happening in grocery stores and newsstands (newsstands! remember those?) then their stratospheric growth has a ready explanation that doesn’t involve the death of book stores. In 1994 the big-box-bookstores were just getting started: Borders & Waldenbooks were still owned by K-Mart (yes) and hadn’t been spun-off yet, that division consisted of 1,102 mall stores and just 75 Big Boxes; B&N had 268 stores alongside 698 (B. Dalton) mall locations. (Remember mall bookstores? I used to buy books there every weekend. The local mall had two bookstores in it. Good times, good times.)”
[/blockquote]
Let’s Talk About The Business, Then. : Rocket Bomber, 8 May 2013. [some edits for clarity; it’s OK, I cleared it with the author]

In the last 20 years, two multi-billion-dollar bookstore chains rose — and one fell. A hell of a lot has changed in 20 years.

In 1994, Viacom owned Simon & Schuster and was buying Macmillan USA; now in 2014 Macmillan (via the original UK root) is back in the US book business – but under the imprimatur of privately-held German firm Holzbrinck. Viacom spun off S&S, as the publishing arm of CBS. Hachette Book Group USA (Hachette Livre being the bookish face of French multimedia conglomerate Lagardère) was born in 2006 with the French purchase of Time Warner Books — and more recently Hachette has also added on Disney’s Hyperion. (Hyperion, I’ll remind you, was built by Disney from scratch in 1990.)

Rounding out “The [old] Big Six” – HarperCollins is only 25 years old, assembled from parts by Rupert Murdoch’s News Corporation over the course of the 1990s. And everyone is shadowed by the Randy Penguin merger: the imprints of Random House already read like a directory of 1947 New York publishing houses; added to Penguin’s haul the new Penguin Random House is set to publish half of all adult trade books (or more). That merger isn’t even a year old yet.

Publishing has gone on, of course: the day-to-day of editors and booksellers is of more immediate import than the boardroom maneuvers and empire building going on behind the scenes, but the corporate shenanigans still matter. It’s not that the publishing world suddenly changed in November of 2007 — a monolithic seeming industry that was already beset by supervolcanoes, tsunamis, and major tectonic shifts also got hit by an asteroid. (If a few bookselling dinosaurs are wandering around looking confused, I think they can be forgiven.)

The way people read has changed; the things people read have changed. Your options in the 1980s consisted of newspapers, magazines, mass market paperbacks, or maybe, rarely, an amateur newsletter or ‘zine — now people read more than ever but we’re staring at a screen, and occasionally it’s the screen we keep in our pocket. You can start your day reading an news aggregation site, follow up with a few expert blogs, churn through email, go back to the blogs (the funny ones), check your email again, waste time on tumblr, twitter, reddit, and then finish up by reading fan fiction in bed before falling asleep. You don’t even need to fire up your old-school-desktop-PC to do any of it, and seemingly, amateurs are in control of all of it. You can spend 14 or 15 hours of every day staring at a screen, reading.

Reading Demand has not changed. In fact, given all the new options, it may be increasing. The ways we meet that demand have adapted to the new tools — primarily the web, which is still the best part of the internet. Like the internal combustion engine revolutionized agriculture and oh-by-the-way also could be used for personal transport, the concoction of url-html-http that we call the web has revolutionized publishing (“the act of making something public”) and we’re still in the very earliest days trying to figure out what the ‘oh-by-the-way’ impact is going to be — on society as a whole, and on our personal lives. In 1914, whether we were riding in a horse-pulled omnibus, a steam-cable trolley, electric street car, or driving ourselves in a horseless carriage — we were still just going about our day. Motels, drive-ins, drive-thrus, the Interstate Highway system, and suburban cul-de-sacs came later.

Book retail, like all non-food retail, will suffer as we make the online & digital shift. The “major book publishers” may stall out as a ‘forgotten’ $15 Billion a year industry — no longer growing but instead, just serving the same niche for decades as we re-align our lives around the new technology. That doesn’t sound that bad to me. I know, ‘If you’re not growing you may as well be dying’ but if there were ever an industry that was readymade for a caretaker role, the stereotype of the quirky local bookshop supplied by small, early 20th century publishers fits perfectly — direct from central casting; a cliché right out of the gate.

Amazon isn’t the only thing to impact publishing and bookselling.

[blockquote]

“Let’s go through that again: In November of 1998, B&N had their own website, 15% of the book market, was looking to buy Ingram — the company supplying Amazon with more than half of their inventory at that point — and was being run by a driven, ruthless bastard whose modus operandi was buying up companies to either consolidate operations or just get bigger. Can I remind you that at that point Riggio had also bought Babbages, Software Etc., and GameStop and had built up this sideline into a chain of 500+ stores?

“This raised all-kinds of antitrust flags, apparently, so it’s no wonder the B&N/Ingram merger didn’t go through. I think when the deal went sour, Riggio took a step back to reappraise strategy. GameStop was spun-off into its own company and Barnes refocused on books. B&N built a massive warehouse of their own, and took up in-house distribution and logistics like a new religion. This quiet and behind-the-scenes stuff isn’t as flashy as mergers or new store openings, but the efficiencies B&N built over the 2000s are part of the reason they’re still open today, after 4 years of recession and shrinking consumer demand.

“Amazon borrowed a billion dollars (no exaggeration: they were carrying $1.4 Billion in debt by 1999) to build up the infrastructure they needed following this close call — 15 years ago the market changed, more distribution and warehousing was brought in-house and verticals were built. You might also be forgiven if you pointed to 1999 as the year Amazon changed strategic focus: from building a website and sales portal to building a business.

“I find it amazing that in 1999, the owner of a physical, brick-and-mortar bookstore chain was precluded from purchasing a book distributor (even when neither was the only player in their individual markets, and on the cusp of market changes already in motion and being trumpeted by both online-sales advocates and voices in the business press) — and the same sort of monopoly-building in 2012 is not just condoned by the state, but is being actively supported so long as some Justice Department lawyer can buy his ebooks for $9.99 instead of $14.

“It is said Amazon has 30% of physical book sales and 60-70% of all e-book sales. 15 years ago, Barnes & Noble was blocked on anti-trust grounds when they had only 15% of the book market. I find this fascinating.

[/blockquote]
Rocket Bomber, ibid.

I wrote that longish piece last year, and George Packer did all my research and a hell of a lot more to write the 12,000 word article that inspired an ongoing, and very relevant conversation about books.

That’s how you cite “raw data” and put things into context, Forbes. It’s fine to pretend that you’re the ‘serious’ one in the room, and that publishers and book partisans are the ones engaging in “overheated rhetoric”. But if you’re going to present to all the world as a business publication: at least do us a favor and learn about the business.

(And get the math right, too, while you’re at it.)



A return to the Great Good Place.

filed under , 29 January 2014, 16:40 by

[blockquote]

“As long as there have been cities, these are the kind of places people have met in,” said Don Mitchell, a professor of urban geography at Syracuse University and the author of “The Right to the City: Social Justice and the Fight for Public Space.” “Whether they have been private property, public property or something in between,” he said, “taking up space is a way to claim a right to be, a right to be visible, to say, ‘We’re part of the city too.’ ”

[/blockquote]
Customers Seeking “Third Places” Give McDonald’s a Second Thought : Jonathan Nettler, 28 January 2014, Planetizen

from the same:
“Climate controlled public places where the elderly, cost-conscious and indigent are welcome to spend a few hours are hard to find.”
(In the absence of big box bookstores, our homeless have to flee to McDonald’s like refugees from some conflict?)

##

The need for a “Third Place” predates the term, but it was first (and best) articulated by Prof. Ray Oldenburg in his 1989 book The Great Good Place, which I first encountered in a 1997 reprint edition back when my professional focus was on bars, pubs and hospitality — not my later (starting ~2001) career as a bookseller. What do really great pubs and bookstores have in common? (besides me?) These business often engender a Sense of Community, of belonging—and often, a sense of ownership—in their customers, a feeling that has nothing to do with the storefront or the economic activity. A stage where the props matter more than the script, and the cast constantly changes, but while on that stage everyone does in fact feel like they are part of an ensemble, a company. [sorry, that was perhaps a shade too poetic]

In the context of bookselling, I blogged about Third Places back in 2009. The internet has changed so much of our daily lives, and revolutionized social interaction (or at least, has claimed to change everything) but when it comes down to it: not a whole hell of a lot has really changed since 1989, when Prof. Oldenburg wrote his book. If anything, we still desperately need social space (now more than ever?) — a need so pressing that we will co-opt a fast food burger joint to serve the cause if necessary.

— but they have to have free wifi. Social is fine and all but the internet trumps everything.

Don Mitchell’s book, The Right to the City, is isbn 9781572308473; the isbn y’all should be popping into Google for Oldenburg is 9781569246818 — from there you can select your merchant-of-choice;

for the lazy you can avail yourselves of these Amazon links from which I will receive a remuneration.

[At the moment there isn’t an ebook version of The Great Good Place; I note a small, smug satisfaction in that fact given the subject matter but I decline further comment]



Marketing gimmicks, scams, and psychology

filed under , 26 January 2014, 21:55 by

First:

Do Not – *DO NOT* – spend any money with either of these turkeys. That’s not why I’m providing the links. There is no affiliate kickback, I’m not advocating either product, and I’m hesitant to directly link to either site because, you know, spam.

But what beautiful spam:

https://www.crisiseducation.com/landing/reports/4foot-farm-blueprint/video/

  • “this video may disappear”
  • “sneaky”, “simple food secrets”, “ancient, but with this special twist”
  • Just enough truth.
  • boogeymen: not just the gov’t (described as and conflated with “Washington”) but also Monsanto. dude.
  • “I’ve uncovered the secret”
  • Personalizing the pitch – “Sam McCoy” introduces himself, and he’s a down-home guy just like you. (from Texas!)
  • “I’ve cut out all the junk and theory” – you mean, the science?
  • “over 206 hours of research and writing” – oh, really? 3 whole weeks of reading? Why did I waste time at college.
  • “7 measly dollars” – wait, who uses ‘measly’ as a word anymore? I bet more than 206 hours of research went into the use of that adjective.
  • “no fluff and no BS” – except the sales pitch, you mean.

The damn thing is a syllabus for a course on psychology in advertising. I could almost do an hour lecture on each slide in the deck, not to mention the delivery.

But wait, there’s more! [sorry, couldn’t help myself.]

I was looking for a way to link/embed this caustic lump without actually benefiting the shill, so I right clicked on the vid; amazingly, the scammer site uses a plug-in video tool and clicking through led me to another 6 minute sales pitch:

http://easyvideosuite.com/launch/

  • oooo… bonus points for an announcer with a Brit accent. (not posh Brit but working-man Brit but I doubt any American can tell you the difference)
  • “This saves you time and will easily integrate to Make You Money”
  • “save hours when you use the platform”
  • oh boy, “online and mobile” – not one but both buzzwords!

These are both so polished, I have to ask: Who is writing these delicious scripts? Does the pitch writer have a website, where I can watch a six minute video on how their “expert team” can “distill your thoughts into a simple, but compelling presentation” “guaranteed to get you both the links, and the sales, you deserve”?

Once again, if you visit either site above (for education or edification) please DO NOT BUY OR SIGN UP FOR ANYTHING. But damn, what a work of art. Appreciate them ironically. Haul out your bingo cards and start clicking off boxes.



Ebook sales projection, 4th update

filed under , 13 January 2014, 15:27 by

Previously:
Original Projection : 1st update September 2012 : 2nd update December 2012 : 3rd update April 2013

With the introduction of the joint AAP/BISG BookStats program, the reporting that used to be available in free press releases is now locked behind a paywall. It still leaks out, in dribs and drabs, but getting numbers to plug into this graph is difficult, to the point where I don’t even want to bother with it.

The other fun fact is that AAP sales numbers are only those from the 1000+ publishers who voluntarily submit their data to the surveys, and as such are not complete. Most glaringly, and a fact noted over and over again by others, the ebook sales numbers do not include Amazon or other self-publishing.


[click for larger]

If you really want to know about the math, click through (up top) to some of the previous updates. [tl;dr the projected sigmoid growth curve is a tanh(t) function which ticks off monthly t-for-time in teeny fractions of π.] Needless to say, the projections I made in 2011 haven’t quite held up to the test of time.

And there’s that chunk, unreported, invisible, of self-published books that make up a small? large? portion of ebook sales each month.

Follow me along through this thought experiment:

What if self-published ebooks had their own growth curve? Separate from the major publishers (and other AAP members) and reflecting a different time frame, adoption rate, and limiting factors. Would this explain “the drop” we noted with glee (or skepticism) this time last year?

I think it does. I think we can even pinpoint the moment this independent market began to grow and while the total numbers were initially small, after a couple of years the “interference” this introduced was enough to move the “official” sales reported by the AAP. On the graph below, check what happened around and after July of 2012:


[click for larger]

Of course, since Amazon holds tight to any actualsales numbers that might illuminate the issue, my guess (educated, inspired, or otherwise) is still just a guess. If anyone at Amazon has the numbers and can see if my projection is close, then of course please contact via email and we can discuss my future employment at your fine company.

For everyone else: I see a market for ebooks currently at $150 Million a month—and slowly growing—for the orthodox publishing companies, and a smaller (related, but separate) self-published ebook market that currently stands at about $75 Million a month and will likely be double that at year’s end. Self-publishing is smaller and will remain smaller than the output of the orthodox publishers until mid 2015. (in ebooks; the impact on print books and text books are still great big question marks and beyond the scope of this little thought exercise.)

So far, I don’t think I’m wrong. Even my first chart 30 months ago wasn’t wrong — I was just waiting for more data. Given the data we now have, I like this version well enough.

What say you? Do you think self-published ebooks are clearing $75 Million a month? What is their growth potential?



Publishing and Payments, recap and redux

filed under , 2 December 2013, 14:21 by

“Lately, two recent trends are taking place in e-book publishing. First, several articles in the past few months indicate that e-book returns have grown among readers. Some readers are abusing Amazon’s generous Kindle book return policy in order to get their money back after purchasing a book.

“While it’s important for Amazon and other online retailers to have a mechanism in place to allow readers to return books — due to publishing errors or technical problems — the idea of reading a book then returning it is a big problem. It hampers self-published author sales and minimizes the purpose of a return policy.”

E-Book Returns and the Problem With the Subscription Model : Kevin Eagan, 2 December 2013, Critical Margins

“Have you ever returned a Kindle ebook? That option might soon be going away, thanks to a petition over at Change.org.

“The petition calls on Amazon to change their customer-friendly Kindle ebook return policy. Even though this petition is only 4 days old it has over 2 thousand signatures from authors and publishers, all of whom want Amazon to now block some types of returns.

“The petitioners don’t see the return policy as reassurance to readers that we can return a poorly written or poorly formatted ebook. Instead they view it as a loophole that is being gamed by serial returnees.

“There is some truth to this idea, but would it surprise you to know that Amazon is a step ahead of serial returnees?”

There’s No Need to Change Amazon’s Kindle eBook Return Policy : Nate Hoffelder, 3 April 2013, The Digital Reader

##

Amazon’s Kindle Publishing programs are not (despite the name) publishing platforms — ebooks are a format, not a publishing platform — blogging software running on a domain you own is a publishing platform, a working knowledge of CSS, HTML, and FTP along with a text editor is a publishing platform. In fact, ebooks are just web pages (right down to the CSS, XHTML, and XML.)

Amazon makes things easier to publish (hey, just like Wordpress) and goes to great lengths to hide the fact that text delivered over an internet connection isn’t a html document, but the real secret sauce is money.

It’s not that Amazon makes it easier to publish: they make it much easier to get paid. …well, until you don’t get paid, at any rate (see the foofaraw over ebook returns, cited above).

Authors using KDP are trading control for convenience. (In a way, authors have always made this devil’s bargain with publishers, but in the past there seemed to be more work done on the publisher side to justify giving up control) (you know, plus money) — Amazon makes money off the transaction, and doesn’t know or care which books are “transacted”, so long as there are plenty of transactions in aggregate. Amazon has the system all set up: manuscripts in one end, downloads out the other, and the rest is accounting. No quality control, no editorial voice, no plagiarism filters, just the bookkeeping.

And yes I know it’s stupid to publish an ebook and ignore Amazon: Amazon is a big damn user base, and right now a lot of ebook affectionados exclusively buy from Amazon (because they’re lazy, perhaps, or more likely because they don’t know better, don’t care, and no one else is offering anything compelling that might persuade them to switch).

Amazon makes payment easy: taking payments from readers, making payments to authors. But processing credit card transactions is a far cry from running a publishing business and the real ‘digital disruption’ in publishing is not Amazon. Digital Disruption in Publishing is Facebook. Twitter. Blogs. Buzzfeed and Huffpo. Napster and Limewire. Torrents, Tor, Pirate Bays and Pirate Parties.

Here’s the conclusion to a piece I wrote 4 months ago:


What we have here is a stalemate: On the one side, we have ebooks. Apparently everyone, even my Mom [true fact], is buying ebooks — and I, the Lone (old-school, physical bookshop) Bookseller Left on the Internet… I’m just a plaintive, fading voice in the e-wilderness, unable to see the e-forest for the e-trees.

I’ve been assured that the digital revolution has already taken place and we’re just taking a decade or two to sort through digital winners and losers, and well: nothing I’ve said or can say will shake your convictions.

[*ahem*]

“To me, it seems like the revolution already occurred back in 1993 and you all missed it. Every argument made for ebooks is also an argument that could be made about web pages: text served up via html and http actually has numerous advantages over .mobi, epub, and pdf (the current ‘e book’ formats available to us).”

The digital revolution already happened. I’m defending one payment structure: distribution and sales of books through bookstores. Ebook partisans are merely defending a different payment structure, Amazon et al. and the “electronic book” — but both models are susceptible to digital disruption.

“Modern” publishing (I’m going to pick 1836) had a good run, 1836-2007 — 172 years. Over the course of that run, corporations lived and died, business models rose and fell, new and cheaper book formats were born, and at the tail-end of that era: the internet came to prominence. We are now 5 years into the “new” publishing model…

Or, we are 5 years into a dead cat bounce. Are “Kindle ebooks” the future, or merely that last gasp of 200 years of publishing business?

I think the current environment has much more in common with the post-Gutenberg early era of newspapers (1605-1700): we are still figuring out what the platform can be used for, what we want to use it for, and how we can use internet publishing to make money. (I’ll remind you again here: Dickens’ first book was serialized in an 1836 magazine.) Straight, non-DRM web distribution is still the disrupting factor that has yet to be felt in Amazon’s KDP biodome, and however enamored one is of Amazon’s ebook payment structure — the payments have nothing to do with books or publishing.

Project Gutenberg predates the Kindle by 37 years, the Internet Archive hosts 4.4 Million ebooks, and facilitates 15 Million downloads each month [hattip] — so, yeah. Amazon’s e- efforts almost seem like a sideline in comparison.

The book is dead. Long live the book.

And before you come at me as obviously wrong [I am, as always, obviously wrong], ask yourself: “Am I about to defend books, digital distribution, or merely the new payment models that have been laid over the old publishing model?

and with that parting shot: I open the floor for discussion.

[…some new emphasis added by me, but since I also wrote the original do I really need to make a note?]



Pricing Models for entertainment.

filed under , 27 October 2013, 20:16 by

There was a time when movie studios were charging $99 to sell a VHS tape:

“There would typically be a two- to three-month delay between the time a movie was available for rental, and when the movie could be purchased by the consumer. In reality, the video was available, but priced for rental shops and film enthusiasts who wanted to own a copy of the film at the earliest opportunity. The pricing was between $70 and $130” [wikipedia]

The era under discussion would be 1985-1995 – after rental became big business, but prior to the introduction of DVD in 1996. So that “$70” in 1995 would be equal to $105 in 2012; “$70” in 1985 is closer to $145. “$130” for the rental-only version would be $200 or more in today’s dollars.
[inflation calculator at westegg.com]

How dare the movie studios charge a rental place $100 or $200 for a movie that has already had a theatrical release when we all know the video tape only costs $1.80 to manufacture! The gall!

##

Of course the consumer didn’t see that price: the investment was borne by the rental place. They did calculations that over the lifetime of the tape, they would be able to rent it out 100 times or more before the tape died; and obviously not every tape was purchased at a premium. And Eventually: the number of customers grew, the market matured, consumers became more informed and more discerning, and actual demand for titles began to set the price.

…Which is why DVD sets for Game of Thrones cost [approximately] two arms, a leg, and the still warm corpse of a Stark. DVDs changed the game anyway: By 1996, Blockbuster was in a position to dictate terms to the studios, rather than the other way around. Additionally, by the late 1990s the movie and TV studios had already figured out that the home market was in many ways more valuable than the first-run showings, and release delays and exclusivity windows shrank alongside the prices. And that was fine, too, for a while [I look back on it as a golden age of sorts for DVD] until online streaming and blu-ray further clouded the picture and led to the current situation (i.e. “a mess”).

There are series that are only streaming digitally where I’d actually prefer to have a DVD set. There are a couple (anime licensed expired) where there used to be a DVD but it’s no longer being manufactured and isn’t online anywhere* and so good luck with ebay, mate.

For those who aren’t anime fans, and who have no sympathy — indeed, no context — I have two words for you: Disney Vault.

##

Pricing nonsense is not new, and if folks didn’t raise a royal fit in 1988 over $100 VHS tapes I don’t see why a library (that is to say: rental-only) copy of an ebook at $89 is a deal breaker. Additionally, if a publisher wants to charge $24.99 for an ebook — as many note, all but free to manufacture, just like those $1.80 cassettes and 17¢ plastic discs with a bit of foil in ‘em — if that particular ebook is brand new and hasn’t earned back it’s advance, editorial overhead, marketing budget, with a pinch of profit besides than there should be no more complaint than the $11.50 we have to pay for a one-time showing of a movie that is eventually going to be in the $4.99 bin.

It’s all business. Movies have costs past the $2,000 or so it takes to make a print and ship it to your local cineplex. We all know this, and happily pay the $11.50 plus $6 for a popcorn to see a ‘first run’ movie in theaters.

Books have costs, too. Sure, a book doesn’t have a $200 million production budget, but a book is much more likely to just sell 5000 copies – not 11 million tickets. And just like movie studios have hits and flops, publishers have bestsellers and… everything else. Just because the scale is smaller doesn’t make the business easier, or even substantially different.

And just like the home video rental business has changed—radically—over the past 25 years, the ebook business will eventually become relatively sane (more or less) given time as well.

This post is technically a link, that (under the old program) I would have tweeted without commentary:

“For years we’ve discussed the ridiculousness of ebook pricing, where some publishers seem to think that sky high prices for ebooks (often higher than physical copies) makes sense, despite the lack of printing, packaging, shipping and inventory costs. And, of course, we won’t even get into the question of the price fixing debacle”

The Good And Bad In Chaotic eBook Pricing : http://www.epublishabook.com/2013/10/25/chaotic-ebook-pricing/ – via the ebookPorn tumblr.

##

* footnote: yes, I know "unavailable anywhere" is a relative term, given the options available to those both morally flexible and technically savvy, and let's leave it at that.



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