The Death of the Book Store...Don’t ask for whom the bell tolls, it’s just the first round....

What we are currently experiencing is adjustment to a revolution, albeit one in a velvet glove. eBooks won't be the demise of the high street book store nor will they replace paper books.  The publishing industry has had problems long before the current rise in eBook popularity and a lot of those problems have been enforced on book shops by the publishing industry who have in turn bounced back some pretty unsustainable business practices. 

I love eBooks and I love paper books, (As long as they come from a sustainable source, are not mass produce in print runs that don't support demand and return to be pulped or used as even more landfill) to say that one will replace the other is not credible.  What we are however seeing is jostling for position.  We may well see one format become the 'Alpha male' as it were, and this may well be the upstart eBook. Publishing needs to look at itself and how it operates.  The demise of the high street book store could just as easily be attributed to publisher greed in selling product at ridiculous prices to supermarkets.  I am all for the democracy of both business and reading, but when consumers expect paper books to be only £1 what message does that send out. If you couple this with the blanket bombing of stores with product from the leading five or six publishers in the country you can quickly see that the whole structure of both publishing and high street retailing is based upon a fragile and vain turnover system which was started in the 19th century.

It is odd that publishing house eager for cheap sales in supermarkets is happy to do this at the expense of the stores which have been the foundation of their growth. We are left in the UK with one dedicated chain of bookstores, Waterstones, and they are trying to turn around some poor trading figures. Publishers have bitched about the high rate of returns they have seen from Waterstones but did they support those myriad of titles, did they create a demand for them or were they sent to their fate on a tide of apathy. Much of publishing has grown complacent and now it is struggling to come to terms with the new order. I believe given enough time Waterstones will get their house in order and return healthy trading figures, whether publishers let them is another thing.

Libraries and the smug majority…

Time to be contentious. The argument in the UK is raging about possible closure of libraries because of spending cuts brought about by the legacies of the recession and the god awful mess that the banking system brought the country to. Everyone is up in arms. People have organised events and stunts where libraries have been cleared of books and we all feel good. We all have that smug sense of worth we have when we buy a copy of The Big Issue.

There is no doubt that libraries form an essential part of our community. For some they are the only connection that people have either with the outside world, the world of art and literature and even the virtual world through the installation of computers with internet access. For others they are a lifeline to finding employment or entertainment or both. None of this I doubt for a second, but what I do doubt is the sincerity of the privileged, and I include myself in this group, to really care. Because if we really cared, libraries would be full, book shelves would be empty and funding would exist to ensure that there was no need to target them in the first place.

I have a library card, I have donated some of our titles to the library but I cannot tell you the last time I used the card. I am as outraged as every right thinking person when I hear that libraries may face the axe, but in all honesty what have the majority of people who are up in arms and so vocal now, actually done to support the system in the past. Yes, it is better to do something now and be vocal, I agree but I can’t stand the holier than thou attitude being flounced around the chattering classes about how dreadful it is and what they are going to do to support it. It is almost as though they are looking for praise for making a stand, but like me I wonder when was the last time they actually used a library.

If we are to be moral champions and guardians of vital community services such as libraries then we have to have the conviction beyond the battle and beyond the possible victories and defeats. We have to support not just the libraries but our communities. If councils want to make cuts let them start at the top and not at the bottom. Chief Executives earning hundreds of thousands of pounds, the minions under them hiding under cover till the storm passes, the actual waste, the cars, the expenses…there is plenty of places the axe can fall before it robs communities of its library, but we know it won’t.

It’s hard for me to truly understand the value of a library now as a person who buys his books, who has turned his back on libraries for his reading pleasure, but what I do know is that they make a difference to many lives. I gained a love of reading from libraries because I could not afford to buy books as a child. I loved the atmosphere, the sense of discovery in finding a new book or author. The fact that I could actually ask for a brand new book to be ordered and then be placed on a list and wait anxiously until the day when a postcard would drop through the letterbox telling me my book was available for collection.

This is why I am against library closures, because I know they make a difference now, as they did when I as a child was an avid user.  However, I feel as though I have betrayed the library service and placed it in this position of jeopardy. The painful truth is, and it is a truth that every person protesting about potential closures must face, is that we cannot be fair weather fighters. We must become long term supporters, true advocates of literacy in the community and we cannot allow ourselves to betray our community once more, nor should we let those who put libraries in this position escape punishment as they have. I no longer want to be a part of the smug majority. This is not an issue about feeling good about yourself, its a time for reflection and honesty about how we have let this situation arise and proving through action that the voice of the community is heard, and that this voice is saying to councils the length and breadth of the country that if you close a library be prepared to be voted out of office. Libraries and their closures should not be a point of political brownie point scoring or party blame. We know who is to blame and it will only be the action of the masses that will stop the closures. Beyond that we have a duty to ensure they are not put in a position of risk again.   

The Perfect Storm

A couple of years ago I blogged that the tree were falling – a metaphor for the impending world financial crisis and the forthcoming wave of gloom, but now as 2011 start it appears that we have all the ingredients connecting to make the perfect storm. A veritable tsunami which is sweeping through publishing. The collapse of trading caused by severe weather is meeting the tailcoat of the world recession (no matter how much those greedy son’s of bitches in banking say that this is not their fault and they deserve their astronomical bonuses) is collecting on one front to meet the closure of public libraries and the uncertainty of digital publishing on the other. To continue mixing my metaphors and borrowing heavily from weather parlance I would say that the outlook for publishing is bleak and unsettled. With only half of January under our belts British Book Shops have gone into receivership (despite a buy-out in 2010, followed by a fresh injection of cash and expansion) HMV stares into the abyss and could take Waterstones closer to the edge as it looks to close 20 stores and make redundancies at its Brentwood HQ. Rising fuel prices is putting the squeeze on business, inflation is on the rise and business rates continue to hike leaving empty stores in the high street as overheads bite into profits and banks (yes, them again) refuse to extend loans to see otherwise sound businesses through extraordinary times.

The culmination of all of this could be catastrophic for book lovers. With the public sector looking set to make libraries the whipping boys of their own dilemma, adding to the misery and desolation of our communities by leaving soulless shells where once stood resplendent hubs of community activity, one wonders where we will be this time next year. The worst case scenario of this perfect storm does not bear thinking about. We are if nothing, resilient and inventive and the truth of the fact is that we can ride through this storm and come out on the other side stronger and with publishing/book selling commanding a position which belies the prophecies of doom. Personally I think it will. eBooks will be a source of growth and enjoyment for readers, offering choice and value. Bookstores will co-exist and libraries while paired down in some instances will remain and wait for an opportunity for growth once more. Oh, and bankers will continue to be in denial that they ever caused a single problem, and bleat, whinge, bitch and threaten to go to Geneva, taking the banking industry with them. God only knows what Switzerland has done to deserve that threat…apart from hoarding Nazi gold…maybe after all they would make good bedfellows.

Every Cloud Has a Silver Lining

The old adage may be true for publishing. With 2011 looking like the onset of the adoption of cloud computing, companies such as Amazon have adapted their platforms to embrace cloud computing in what should be a very positive way for consumers and publishers alike.

With over 28% of Internet users expressing a desire to own a Kindle it is clear that Amazon and it’s eReader are going to be major players for the foreseeable future. So Amazon’s forward thinking about the delivery of eBooks has been refreshing.  With the announcement of its eBook loan scheme coupled with the ability to access your titles over as many machines as you wish, Amazon has taken a positive step forward to dismantling the cumbersome ties of DRM.

The loan scheme in itself is interesting and something which will help increase author fan bases and sales and something that I have only support for when it is launched in the UK, hopefully later this year. Basically Amazon are allowing Kindle account holders to ‘loan’ books from their personal libraries to other Kindle users for a period of 14 days.  During this time the account holder cannot access the title.  I think this is a brilliant idea and something which will increase word of mouth for titles.  Hopefully the scheme will also open up other areas of possibilities for readers too.

The decreasing stranglehold of DRM from the uptake of cloud computing (i.e. the ability of eReaders to access content hosted on remote severs) is also a major positive step forward and one which will reassure consumers that the content they have bought and own will always be accessible to them on as many machines as they have registered with their account. DRM is too prohibitive and draconian to work and only hinders legitimate consumers.  Hopefully 2011 will see and hear the death knell of what is a counter-productive system which serves neither publisher, author or consumer well. 

DRM…Does it Really Matter?

The argument goes on and the longer it does I am coming to the conclusion that DRM may be the idiot child we don’t like to talk about. By this I mean, that the point of DRM is actually misleading the industry. For years those in the pro-DRM corner argue that it wants to protect the rights (intellectual and artistic) of its authors and fight piracy. What are the realities of this stance?

How does DRM stop piracy? In reality it doesn’t. Any person with thirty seconds to spare can find freeware on Google to remove DRM from eBooks. What the real issue here is consumers rights to transfer the product between systems and machines. The industry wants to enforce license control. If a publisher can force a consumer to repurchase as a by-product of this action then ‘all the better’. Yet, how many in the pro-DRM corner can put their hands on their hearts and say they have never copied CD content to an iPod or taped a TV programme or passed a physical book to a friend or resold a book. We never own the content, we merely buy the license to view, read, listen or experience. I wonder if the industry has ever calculated the impact of book sharing against loss of potential sales.

I am not saying that there is not a real threat; and the area this ‘threat’ comes from is a new generation that has grown up seeing the Internet as nothing more than a free shop where digital content is never purchased. How much of the purchasing demographic are represented by these freeloaders is not known but it is significant. This is where the argument is both won and lost for DRM. In trying to shackle this group - who in reality will spend the thirty seconds or so needed to find freeware to break DRM - we are hand tying honest consumers who wish to purchase eBooks but swap them between machines and maybe even friends, in the same way we do with physical books.

It is strange that we have no qualms about people lending books to friends and giving them away once read. I think we will have to adopt the same mentality for eBooks. After all, word of mouth is one of the strongest forms of publicity available. Many pop groups have adopted the same thinking, knowing that they can build a fan base this way and that sales do actually follow. I am not advocating the wholesale piracy of eBooks, far from it; but being pragmatic. The industry needs to come to terms with a solution which is realistic enough to know that those who want to copy digital content (no matter if it is a book, film, news or music) will do so. The vast majority of us are law abiding citizens and realise that if revenue is severely impacted through outright piracy that there will be no money available for new talent to come through.

Where does that put the publisher and the author, both of whom want to ensure that they can sell eBooks at a price which encourages book lovers to purchase digital content? I as a publisher have no qualms with eBooks being swapped between as many machines as the purchaser owns. He/she should also have access to their content for as long as they wish with the ability to re-download as often as required. I do have issues with people copying and reselling content purely for their own financial gain thus depriving the publisher and author of making a fair living.

So, DRM...is it necessary? Can we adopt new methods which encourage file sharing without impacting on revenue? The industry must target the person who sees no wrong on copying content and reselling it and it is here that the law must also protect the industry and the author.

eBooks and the Agency Pricing Model – Getting the Balance right

Wow, this year has passed with the alacrity of an elephant downhill skiing with a force ten gale behind it, blasting it down a near vertical drop.  So far it has been an interesting year, with lots of developments on the digital publishing side of books. 

The current arguments about retailers accepting the ‘agency model’ dominates the current buzzvine in never-neverland or ‘the world of publishing’ as we more commonly know it.  Do publishers have the right to set the prices of their eBooks?  To that question I adamantly say ‘yes’, but only if they are being sensible about the pricing of eBooks.

A couple of months or so back I posted a video talking about the pricing of eBooks and invited the Amazon eBook forum to take part in a discussion about pricing.  As you can imagine things got pretty heated, pretty quickly. At the time I said that if I felt our eBooks were priced to high I would review the situation.  Our eBooks, typically are priced at £4.95 against a price of £7.99 for the paper version.  This debate and the current arguments on pricing has indeed made me review.

I think consumers do have a strong argument that eBooks are overpriced but the argument has to be balanced against many factors, especially for smaller publishers who invariably have higher over-heads.  Out of the sale price comes a cut to the retailer, a cut to the distributor or aggregator, a portion to compile and conversion of the original file (Yes, this is a one-off fee, but still has to be accounted for). Most importantly, the author royalty payment which is between 45 and 50% net at Caffeine Nights has to come out of what is left.  Then there is marketing and promotion to be accounted for before the publisher get his/her reward. 

I agree some costs such as conversion and file production are one-off but many are not and when a retailer takes anywhere upwards of 30% to 60% and the distributor also takes at least a similar figure, there is not much left to pay the author or the publisher.  Small publishers won’t see the sales of the Stieg Larsson’s or James Patterson’s of this world, nowhere near it, but they do provide a valuable service and feed the market with new and up-coming talent.  For this service to continue there has to be a realistic price attributed to eBooks.  This is the question most publishers are struggling with.

eBooks, unlike their paper versions also carry VAT – a cost in the UK which is also due to rise by another 2.5% in January 2011, so 20% of the rrp will go straight to government. Whilst this can be claimed back if you qualify, smaller publishers may not initially do so.

For me, if I set an eBook retail price of £4.99 all of these factors have to be accounted for, but the bonus is that this is still a new channel, a new market which, even though eBooks have been with us for over a decade, is suddenly opening up and becoming viable. So one may argue that it is ‘extra’ revenue.  This is not entirely true, as there has been no real statistics to show the impact against actual physical paper volumes.  Having said that it can be assumed that the majority of eBook sales will be new money. 

Selling through Amazon we (Caffeine Nights) can actually be more competitive and see a decent return even when, like we have with Amazon, decided to reduce our standard eBook price from £4.95 to £3.95 or $7.99 to $5.95.   This is more possible because Amazon also acts as the distributor, thus saving the publisher extra fees.

I do believe it is the right of the publisher to set the rrp but it has to be done to ensure that the consumer is not exploited.  Many consumers have bought Kindles or eBook readers at great cost and don’t want to be blackmailed by publishers. Some leading publishers are selling eBooks at parity with their paper counterparts, this is ripping off the consumer and should be stopped, now. 

For this fledgling industry of eBook publishing to thrive we need competitive pricing but we have to listen to the consumer too.  It is odd how many of these publishers are quite happy on the other hand to give away paperbacks to supermarkets at ridiculously low prices, this is a double insult to the health of the industry as consumers then have an unrealistic expectation of prices and how much it costs to produce a book and many actual book stores are closing through lost sales. One may argue this is being hypocritical but supermarkets are not bookstores, they do not make a living by offering mass choice especially when it comes to books.  In fact they offer the direct opposite, a very limited choice, mostly of mass market titles and general pap.

Publishing is eating itself by being greedy on one hand and simply insane on the other. £1.99 paperbacks, mass pulping, stupid transportation costs and environmental impact because of over production of titles with no discernable market, leaves some publishers with the only option of pulping or giving books away in a supermarket.  All of these things are killing the industry and now the confusion over eBook pricing just confirms that this industry needs to take a long and seriously hard look at itself to avert an impending crisis.  

The Elephant in the Library

A Nielsen report shows 39% of iPad users regularly read books on their machines.  Viewed in context this is a great boost for eBooks even though it means 61% don’t…yet.  There could be a number of reasons holding back a large proportion of these consumers from fully realising the potential of the iPad in terms of an eReader.

Many will have no interest in reading this way instead preferring paper or even reverting to e-Ink machines such as the Kindle. Others probably don’t read…period.  The upshot of these stats though is very encouraging considering Apple shifted 7 million units since the launch earlier of the iPad in 2010.  If nearly 40% are purchasing eBooks regularly then the adoption of eBooks as an everyday media format is secure.

Pricing of eBooks will remain a hot topic to many publishers it is the elephant in the library.  Another recent survey showed that 62% of consumers are not prepared to pay for online content, a figure close to the 61% of iPad owners who are not using their machines to read books. I doubt there is correlation or if there is it would be interesting to know what the reason is that is stopping people either paying for online content or downloading eBooks.

Although eBooks have been with us for well over a decade now, the next two to three years are the vital time to ensure electronic books become established in the psyche of readers and general consumers alike.  How many people will wake up on Christmas morning to an iPad or Kindle and begin the experience of digital reading, and of those how many will receive eBooks as gifts and recognise the value of an eBook in the same sense as if it were a paper or hardback volume?

If we get the pricing right and the consumer recognises the value of an eBook, then the elephant in the library may roar its delight rather than create an obstacle we all want to skirt around.