Monthly Archives: March 2010

January ’10 E-Book Sales Almost Quadruple January ’09

If your head is still spinning after 2009’s triple digit growth rate, you’ll need a clamp to steady your skull when you read that January 2010 e-book sales posted a nearly 370% jump over the same month in 2009, according to the International Digital Publishing Forum and the Association of American Publishers. The numbers are $31,900,000 for January ’10 compared to $8,800,000 for January ’09. January was also the biggest e-sales month ever, and it wasn’t even close. The biggest month to date was December ’09 at $19,100,000.

IDPF reminds us that:

* This data represents United States revenues only
* This data represents only trade e-book sales via wholesale channels. Retail numbers may be as much as double the above figures due to industry wholesale discounts.
* This data represents only data submitted from approx. 12 to 15 trade publishers
* This data does not include library, educational or professional electronic sales
* The numbers reflect the wholesale revenues of publishers
* The definition used for reporting electronic book sales is “All books delivered electronically over the Internet or to hand-held reading devices”

The graph at at the top of the page shows sales through ’09 but do not reflect January 2010.

Richard Curtis

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Amazon Launches Spring Offensive

How would you like to choose between the Amazon rock and the Apple hard place? That’s the position several major publishers are in as both retailers pressure them to choose between conflicting business models.

Scarcely chastened by the damage it self-inflicted after its well publicized quarrel with Macmillan (see Publishing’s Weekend War: 48 Hours that Changed an Industry), Amazon has once again threatened to turn off Buy buttons for some major publishers that don’t accede to their terms of sale. The problem is, all but one of the six major publishers have made deals with Apple, but Apple insists on the condition that “publishers not permit other retailers to sell any e-books for less than what is listed in the iBookstore.”

Something’s – or someone’s – gotta give. You can buy ringside seats for $1500 apiece, or sit up here with us in the peanut gallery.

Read the Times article in full here.

Richard Curtis

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Cory Doctorow Discovers Why Publishers Get 90% and Authors 10%

When Cory Doctorow launched his Publishers Weekly column a few months ago, we wondered what publishers could learn from him as he chronicles his efforts to self-publish a book. Our conclusion? Everything.

However, his latest article suggests that there’s something that he can learn from publishers. It’s that publishing is an exceedingly complex communal enterprise, one that relies on a surprisingly fragile network of interdependencies. As in the famous proverb about losing a war for want of a horseshoe nail, the difference between success and failure of a book may have to do with extraneous factors such as the cost of gasoline or a strike at a paper mill. Some of those factors may seem preposterous, but preposterous or not they can render us totally helpless when they bring the progress of an enterprise to a dead halt.

That seems to be the bitter lesson Doctorow is learning, a lesson that anyone with more than half an hour of experience in the publishing industry knows all too well. An example is typesetting, and Doctorow’s frustration with a delay has him talking to himself. “I completely failed to note that any delays in the typesetting would grind the whole process to a halt. No galleys, no proofs of the printing process, no chances to experiment with the small-scale printing, not until the book is in a print-ready form. Let that be a lesson to you, Doctorow: job one is typesetting, period.”

“All these logistics remind me of why I’m a sole-proprietor freelancer,” he concludes. “I hate managing people. I hate critical paths and project management. And I suck at it. None of this is a surprise. I knew that these details would be the hardest part of the self-publishing job, and it’s been made harder because pretty much everyone is working for free or cheap as a favor, so I can’t call them up and demand results.”

Here’s the thing. Managing people, critical paths, project management are what publishers do. They do it every day, and most of the time they do it very well. But, unlike Doctorow, they seldom get people to work free or cheap as a favor. They have to pay salaries and rent and warehousing and printing and shipping as well as advances and royalties. Which is why, as we stated in our title, publishers get 90% and authors get 10%, and they’re entitled to it.

Yes, there is an alternative – do what Cory Doctorow is doing. But hopefully he has gained some respect for how the other half lives. “Hell,” said Jean-Paul Sartre, “is other people.” But other people do occasionally serve a useful purpose, and publishing books is one of them.

Read his article in full, The Little Things.

Richard Curtis

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File-Share This. Court Judgment Costs Music Downloader $675,000. Book Pirates Next?

One of the most Draconian suggestions for combating book piracy is to go after the people who download books from file-sharing sites. So far print and e-book publishers have refrained from doing so, mostly because it is bad public relations to sue customers. The music industry had no such scruples when, earlier in the decade, it went after music downloaders, taking some 30,000 of them to court.

Just about all of the cases except one were settled.(See Can You be Sued for Downloading a Book?) The one holdout was a fellow named Joel Tenenbaum, who opted not to accept a cheap settlement offer back in 2003, when he was accused of willfully infringing 30 songs by downloading and distributing them on fileshare website KaZaA. Last July a federal jury in Boston ordered him to pay $675,000 to various record companies – that’s $22,500 per song.

“I’m thankful that it wasn’t much bigger, that it wasn’t millions,” he said after the verdict. Well yes, but given that the average settlement was between $3,000 – $12,000, his statement was undoubtedly uttered through a clenched jaw and a stiff upper lip. His attorney says the penalty will bankrupt him.

“Oy Tenenbaum!”punned Ben Sheffner writing about the case for the ArsTechnica website.

The trial was a slam-dunk for the plaintiffs. “Plaintiffs built their case with forensic evidence collected by MediaSentry, which showed that he was sharing over 800 songs from his computer on August 10, 2004,” Sheffner goes on to say. “A subsequent examination of his computer showed that Tenenbaum had used a variety of different peer-to-peer programs, from Napster to KaZaA to AudioGalaxy to iMesh, to obtain music for free, starting in 1999. And he continued to infringe, even after his father warned him in 2002 that he would get sued, even after he received a harshly-worded letter from the plaintiffs’ law firm in 2005, even after he was sued in 2007, and all the way through part of 2008.”

It’s hard to quantify the effects on would-be file-sharers of the suits brought by the Recording Industry Association of America, but it’s safe to assume that the same peer-to-peer network that shared music shared news of the lawsuits as well, and downloaders took their keyboards and sought easier pickings.

Like e-books.

The effect on music downloads, at least KaZaA, was dramatic. Under tremendous legal pressure, the company changed its name to Kazaa and went straight. If you visit their website you’ll see a banner proclaiming “Kazaa is 100% legal and supported by” such record labels as Atlantic, Warner, Sony, EMI and Atlantic.

If book publishers were willing to drop their misgivings about public relations, you might one day see a similar banner hoisted by a book pirate listing Random House, Simon & Schuster, Macmillan, Hachette, Penguin and HarperCollins as supporters.

Richard Curtis

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John Sargent Answers Four Questions

Early in March John Sargent, CEO of Macmillan, issued a policy statement setting the course of his company and its component imprints such as St. Martins Press, Picador, Farrar Straus & Giroux, and Tor Books. He promised more such statements from time to time, and last week posted on the Macmillan website the second of them in which he boiled down to four the questions raised by people commenting on his initial blog.

As we approach Passover we wondered if these were the same four questions traditionally asked by children concerning the meaning of the holiday, which celebrates God’s rescue of the Israelites from Egypt. We thus posted this picture of Charlton Heston as Moses before we realized that the four questions raised by Macmillan’s correspondents were different from those posed at the Seder table. We decided to leave the picture up, however, as we are hopeful that “with a mighty arm and outstretched hand” Sargent will lead his company to the promised land and perhaps drag some Big Six publishing colleagues with him.

The questions are:

1) What is the difference between a “hardcover” and “paperback” e book?

2) Will retailers have flexibility to price books at a discount?

3) How can we trust Macmillan to carry out its pricing pledge?

4) Will we be re-pricing e books that have a $14.00 digital list price while there is a mass market paperback edition available?

For the answers, click here. All together now: “On all other nights…

Sargent promises more commentary soon, “including author royalties…”

We welcome his outreach, look forward keenly to more of his enlightening clarifications, and thank him for his initiative and leadership.

Richard Curtis

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John Sargent Answers Four Questions

Answers to some questions from the comments

Hi out there. I have been reading through the traffic from my last post on e-book pricing and the agency model. Rather than answer you all individually, I’ll take a shot at answering four questions that encompass the general nature of the responses.

1) What is the difference between a “hardcover” and “paperback” e book? In truth…nothing. It is simply a matter of timing.

In traditional publishing we had three formats, each at a different price. They were targeted at specific channels of distribution and were released at different times. There was some discounting by retailers, but historically not much. Then discounting became more aggressive and the channels of distribution for the formats began to blur. Currently some books never appear in paperback, some books only appear in paperback, and some books are in the market simultaneously in hardcover and both paperback formats (at three different price points). The digital edition (in almost all cases at present) doesn’t change in format over time – there is no difference in what is actually being sold. So, how should the digital edition be priced?

Some argue it should be almost free as there is little physical cost of delivery. But the physical cost of the book has never been the greatest component of cost. The authors who create the work need their rightful compensation, and they need editors. The marketing and publicity are no cheaper. And given that the ink on paper aspects of the business are still here, publishers still need warehouses, infrastructure, and all the other legacy costs of the business. Digital sales as a whole are not incremental (though some of them may be).

Some argue it should be the same price as the hardcover. After all the real value is in the ideas and the words, not in the artifact that sits on the shelf. But certainly that artifact is of some value, and the digital edition is more ephemeral than a printed book.

Some argue the digital edition should be tethered to the physical book and should be priced under whatever the cheapest available format that is currently available for sale.This has a solid feeling logic behind it, but I’m not sure it makes sense in the long run given there is no differential in format (if there are three formats availble, why wouldn’t the right price be a bit cheaper than the wieghted average of the available formats)?

In the end, an e book will be priced to reflect the value consumers put on it. We believe at first release an e book is worth more and people will pay more for it. Over time it will become worth less as demand tapers. However, some digital books will retain their value over time just like print books. Some will increase their value over time (many physical books are now only available as trade paperbacks, after they have been out in the cheaper mass market formats). So our digital pricing will vary to reflect the value of the book at the time. But in general, our plan is to price books below ten dollars after there initial sales demand slows (usually within a year).

A very long way of saying, there is no hardcover or paperback e book, but the digital edition will change in price over time to reflect its value to the reader as best we can determine it.

2) Will retailers have flexibility to price books at a discount? No, the sale price will be fixed by Macmillan. Retailers will promote and market books, but we will control the price for the book.

3) How can we trust Macmillan to carry out its pricing pledge? An interesting question in that we have never made a pricing pledge. Historically, e book pricing has been driven by a number of factors, and it may well have appeared to be inconsistent. We never promised to price books in a certain way and have actually never controlled retail prices before now. And many of our decisions on list prices were driven more by our Amazon relationship than by our relationship with consumers. Looking forward, it will be a very fast moving world. I have told you our intent on e book pricing. I cannot guarantee or pledge what price we will be charging in the future. Personally I doubt that typical prices for general interest digital books will break out over $15.00. I also believe the majority of digital books will be priced below $10.00, as most Macmillan books are now and will be on day one of the agency model.

4) Will we be re-pricing e books that have a $14.00 digital list price while there is a mass market paperback edition available? Yes! To a customer price of $9.99 or below.

John Sargent

More next week, including author royalties…

Thanks for listening and writing in your concerns.

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Comic Book Heroes Frozen as Amazon Turns Off Buy Buttons

Amazon has neutered the Buy buttons for all comic book and graphic novel publishers distributed by Diamond Comics Distributors, according to Calvin Reid of Publishers Weekly. But this is not a trade dispute like Amazon vs. Macmillan, but rather “an effort to correct the glitch that caused the wild discounting of graphic novels on Amazon.com,” writes Reid, who adds that “there has been speculation that the glitch was caused by Diamond.”

Frozen in time, space and commerce are such leaders as Marvel, IDW, Dark Horse, Archaia, Image Comics, and Top Shelf. Reid explains that “Amazon has to do an audit to figure out which customers got books and at what prices.”

When will the buttons be turned on again? It will take a superhero who can see into the future. “There is no timetable for when this will be completed,” one source was quoted in Reid’s news story.

Pictured is a sculpture by Mark Newman of Bobby Darke, a.k.a. Iceman, one of the original members of Professor Charles Xavier’s X-Men. Bobby Drake (a.k.a. Iceman).

RC

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Book Ripped Off? Who You Gonna Call? Pirate Sinker!

Tag – You’re it!

That’s the banner that Hank St. James’s brandishes as he hurtles into battle with a book pirate. Only that’s not what he calls them. His name for them is “parasites”.

St. James is a piracy exterminator for hire. For a fee he monitors pirate sites and when he finds a client’s book on one he emails a takedown notice to the bad guys. “Sometimes this entails as many as nine emails to get one book taken down from one site,” he informs me. “They use some sites where they upload too and that site then re-ups to seven or eight other sites automatically.”

He claims a high success rate, about 98% getting links removed within 1-3 days. “I’ve cracked most of the larger ones,” he says.

Like anyone else in the law enforcement field, St. James’s job is fraught with danger. “I have been threatened by one clown in Holland connected with [an underground website] when we had a five day running battle to get one of my authors works removed from his site. I’ve picked up viruses from some sites which my software has caught. Fifteen of those viruses are in quarantine, however, as there apparently is no antidote for the strains that infected my computer. So, the virus software simply isolated the virus.”

Is Pirate Sinker cool and dispassionate? Hardly. “It is very frustrating, anger inducing work,” he says. “Recently, John Simpson had a new book come out and that same day it was on [another underground website] which kinda sent me into a blue rage. These shoplifting parasites have no shame.”

For more information you can reach him at piratesinker@gmail.com .

A number of publishers and organizations like Associated Press and The Financial Times have turned to a company called Attributor. Though not as dashing and glamorous as Pirate Sinker, Attributor boasts solid and respectable chops. “Attributor’s FairShare Guardian is the world’s first web-wide monitoring and enforcement platform,” says the company’s website. One of the its customers is Hachette, publisher of such imprints as Little, Brown and Grand Central Publishing. (See Hachette Hires Anti-Piracy Hammer.)

Richard Curtis

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That Was Fast! Vooks Go Mainstream

If you’re under the impression that vooks, the book/video hybrid, are the e-book equivalent of a garage band, check out John Makinson’s vision for them. Makinson is CEO of Penguin Group, a company that reserves its garage for executive limos. Makinson recently demonstrated before a London conference how his company’s books could spread their digital wings on the iPad. See a video below.

Penguin “will be embedding streaming audio, video and gaming into everything that we do,” he told the conferees. “We’ll be creating a lot of our content as applications.”

Which means they are forsaking epub, which “is designed for narrative text but not this cool stuff that we’re talking about now” and “for the time being at least we’ll be creating a lot of our content as applications.”

When an august publishing personage like John Makinson starts talking about “cool stuff,” you know the revolution has seized the mainstream.

For more about vooks, read If They Asked Me, I Could Write a…Vook?, and for more about ePub, check out What is ePub and Why It’s Important to You?

RC

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