Mark Terry

Monday, October 26, 2009

E-Publishing's Business Model???

October 26, 2009
This today from Shelf Awareness:

In the can't win department, a Credit Suisse analyst downgraded Barnes & Noble, saying that "the shift to digital from physical books will ultimately hurt traditional brick-and-mortar book sellers," the Associated Press said. (Many had earlier criticized the retailer for not offering an e-reader.) Referring to company's new e-reader, introduced this past week, Gary Balter wrote: "As the math currently works, each sale through a Nook is not just unprofitable but potentially replaces a higher-margin sale at stores."

And Goldman Sachs analyst Matthew Fassler wrote that the move to digital formats "clearly challenges Barnes & Noble's store-based model."

11 Comments:

Blogger Richmond Writer said...

They have coffee shops in their stores. Unfortunately, I don't want to spend $3 on a single cup of coffee and then attempt to read a book with the noise of milk being steamed in the background.

I imagine a lot of people are in the same situation I am. 4 books costs about $100 I can feed a family of five for a week on $150. For the price of 2 books I can take them to the movies and everyone gets to enjoy that money spent not just me.

It's hard to pay $26 for a book when I've been disappointed by so many of them.

5:38 AM  
Blogger Mark Terry said...

Richmond,
So your argument is that books are already overpriced?

6:10 AM  
Blogger Erica Orloff said...

Hi Mark:
You may have seen my Magickeepers publisher, Jabberwocky, make the news because they delay their e-pubbed books (as is HC with the new Sarah Palin lie-fest/memoir she is "writing"). And you know how I feel about the business model as a whole in the "not paying editors" category. So I'm not sure WHAT the answer is, but like everyone, I'm watching.

E

9:50 AM  
Blogger Mark Terry said...

It's a dilemma all publishers are currently fighting, I think. If they don't get into the e-publishing game, they're screwed. It's been threatened for about 10 years now, but it's picking up momentum, so even some Luddites can probably see the handwriting on the, er, monitor.

At the same time, they're going to get slaughtered during the transition to a majority of readers using e-readers because of the price point that's being used to encourage entry. My suspicion is that only the heavily capitalized will survive.

Also, the B&N entry with an e-reader was interesting, since they're a RETAILER. Will Borders and Books-A-Million be next? And can I use a B&N e-reader to buy books from Amazon? (Probably not). If Apple comes out with a tablet computer that you can read books on, can I only buy those books from iTunes?

I can't help but feel that if everything shifts predominantly over to e-books, then chain bookstores like B&N and Borders are doomed because there won't be enough sales of paper books to support a brick-and-mortar store... except for smaller ones. So we could see a resurgence of indie bookstores simply because there's bound to be some people who still want paper books (or who can't or won't afford an e-reader).

9:59 AM  
Blogger LurkerMonkey said...

When was the last time you saw a record store ....?

And for the record, I definitely think hardcovers are overpriced. It's ridiculous to ask someone to spend $24 on a hardcover book, especially when there are so many other options. The industry is nuts with this whole thing: "But it's countless hours of entertainment."

I think POD is the future of print publishing. Eliminating returns will lower the cost structure of print books, so they can be offered at a more reasonable price. I can imagine a future in which Scholastic and HC become almost editorial and marketing co-operatives where editors and publishers award the Scholastic brand to books they back. Printing and distribution won't be obstacles in this future -- but a "Scholastic author" will benefit from the same boost that a major-label artist or director gets.

It's a race to see how quickly POD technology can be adapted to mainstream commercial publishers as e-books continue to gain market share, which I think is totally inevitable. I don't expect my 4-year-old to be raised or educated in a world dominated by print books.

Lately, I've grown more and more excited about this future, even though I don't know what shape it will take. I used to doubt that writers could make money in this future, but I'm beginning to think that writers will be OK after all—we'll just have a very different job description.

10:32 AM  
Blogger Richmond Writer said...

It's that I can't afford them! I have to make decisions for a family budget which means sacrificing the purchase of books in favor of borrowing them at libraries.

Though I have to ask, Aren't children's books priced lower and don't they take just as much time to write, edit, design covers, etc.?

Oh and I like the resurgence of indie bookstores. They don't track your purchases and send you spam e-mails.

12:12 PM  
Blogger Mark Terry said...

Jon,
I thought the Espresso instant publisher was going to really kick ass for bookstores. I would have thought Borders or B&N would have given it a shot already, cleared most of their back stock and put in the books and given it a go. Then you walk in, can still handle a book, read the first page, gawk at the author photo, read the blurbs, check out the cover art, then wander over and say, "Hey, this one!" (Reminds me of Best Buys or Office Max, actually).

But it was apparently slow to catch on, maybe too costly, and now I'm not sure if it'll be able to catch up to the wave that is e-publishing.

I'm reluctant to give up paper books, but I figure it's inevitable.

12:21 PM  
Blogger Aimless Writer said...

I don't know. The B&N around here is always busy. It's like a hang out. When my daughter had a blind date they met there for coffee. They have all kinds of reading, writing, and even knitting clubs on various days and nights. It's like a social place here. And we're 45 mins from NYC. Not exactly the boonies.

7:56 PM  
Blogger Mark Terry said...

Aimless,
But it's probably a little hard to support 40,000 square feet of retail space on the coffee shop alone. You've got to sell some books, too.

1:22 PM  
Blogger Richmond Writer said...

In your Nov 11 post you said you would go broke buying all those books. It irritated me that you said I argued that books are overpriced.

5:44 AM  
Blogger Mark Terry said...

I can be pretty irritating, I don't doubt it. Are books expensive? I don't know. I can buy a hardcover for $25 or so. But I remember when I could buy one for $19.95 or less. Mass market paperbacks are about $7.95 now? Sometimes that seems high. I always like $5 or $6.

But how many books will I have to save on to earn back the price of a $250 Kindle?

Do I think paper books are overpriced? No, not really, although I think that when authors only get about 10% back on the price, there's probably something skewed about the whole thing. Although I'm not 100% clear on what publishers get back, I do know it's not 90%. They've got manufacturing and warehousing costs to deal with. They also have too high an overhead (I mean, really, folks, NYC is NOT a cheap city to live and work in).

But a bigger issue for costs are the way it gets spread around, I think. Publisher. Distributor. Bookstore. UPS does okay and probably does quite well because of the returns policies. Warehouses. Pulpers.

I don't have a lot of sympathy for the publishers currently arguing that they should still be able to price e-books the same as paperbooks because they have other expenses. Well, you don't have distributors, warehouses, UPS, and pulpers to deal with.

I also think readers go through different periods of their lives. It's somewhat related to finances. When I got out of college, I didn't make a ton of money, so I used libraries and used bookstores and bought the occasional mass market paperback. Maybe I got hardcovers for Christmas and my birthday or remaindered. When I made more money, I moved up and started buying more books.

5:58 AM  

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