Ex-Random House exec interviewed: ebooks and more

[fjtorres]

http://publishingperspectives.com/20...ut-publishing/


A couple of interesting quotes:

I don’t like to talk about threats; I like to talk about opportunities, which is a big difference. I think everyone spending time talking about threats is wasting a lot of time and a lot of goodwill. The publishing industry is undergoing epochal changes because of the digital technology, but the digital technology is also affording the publishing world many opportunities that are unprecedented. You will see that, in the not too distant future, the profitability of these publishing companies will increase because of the digital technologies: no printing, no binding, no paper investment, no shrinkage, no returns, no inventory obsolescence… You can see already now that in the best publishing houses the profits are going up even in the face of a very difficult marketplace. And in the future it is going to be much more like that. So I look at the digital technologies and the internet as liberating factors that will allow publishers to make a lot of money.

Random House was very much aware of digital technologies and was the first publisher in 1992 or 1993 to decide that they would not sign any new publishing contract unless it contained digital rights. It was early in the game, and we started digitizing a lot of our books. But at the time they were difficult to exploit because there was not an adequate reader on the market. So it was only with the arrival of the Kindle in 2007 that publishers started to exploit their digitized books, but they moved very slowly and it was only after 2008, when the condition of book business became very very bad, that they actually “discovered” the value of digital publishing.

To be an editor nowadays you have to be also a producer: 50% editor and 50% producer. When you look at a book, you look at it in print, in hardcover, in paperback, in a digital format and, eventually, in an enhanced digital form. I think that publishers will have to concentrate in digital technology as it is challenging and continually evolving. In my opinion it also represents the future of publishing.

The price of the eBook should be $9.99 and down, I am convinced of that. Some publishers who have adopted the agency model are pricing them at $12.99 and $14.99 or more, and this is way too high. They might sell a lot of books at that price, but they would sell a hell of a lot more if they would price them at $9.99. One of the things that publishers have to be used to is the power of the internet. A lot of the books that are published digitally on the internet are bought on impulse. Many or even most of those books will never be read by the buyers. Often what matters to book buyers is possession: “I have the book, and eventually I will read it.” In the meantime there is a new book, and another new book, and another, and you buy them!

And finally:

What is your personal view about the new non-traditional publishing companies going into the industry? For example, Amazon, who is becoming a publisher. How do you think these moves will affect the traditional publishing industry?

It will wake them up. It will make them hopefully more aggressive. Free markets cannot be regulated. Competition is stimulating and there will always be winners and losers. I sincerely believe that it will make the publishing industry stronger.

Somebody hire this guy back!

Not sure how much of that is 20-20 hindsight but even as a hindsight he sounds delightfully curmodgeonly and--for an industry insider--contrarian.

I rather favor contrarians.

Edit: The folks on The Passive Voice are having their own discussion on the interview.
http://www.thepassivevoice.com/06/20...hing/#comments

As usual, their comments are worth checking out.

[RDaneel54]

A very informative read. I particularly like how he moderates his own predictions. He sounds like he was a very motivated and practical leader.

[StoryEnthusiast]

It will wake them up. It will make them hopefully more aggressive. Free markets cannot be regulated. Competition is stimulating and there will always be winners and losers. I sincerely believe that it will make the publishing industry stronger.

I just love this statement. How true!

[DiapDealer]

<insert highly dismissive post pointing out the fact that this is an ex-exec with an obvious axe to grind -- and maybe a link or two -- here>

Spoiler:

Not my opinion, of course, but I thought I'd steal a little thunder.

[Synamon]

Do you think the primary role of the best-sellers in the industry will continue in the future?

There will always be best-sellers. My sense is that, if today best-sellers represent 20 to 25% of the publishing house revenue, maybe in the future they will represent less. Because the marketing through the digital media, through the internet, is going to be so vast that we will sell more copies of a lot of more books in the mid-list. So the weight of the best-seller is going to be somewhat less, I think! I am not sure!

Two more factors make me think he's right and bestsellers will be less important going forward: inflated prices of bestsellers make mid-list and indie ebooks more attractive, and backlist out-of-print books will be digitized and compete with new releases.

[Barcey]

With this type of thinking he obviously didn't fit into the cartel.

Thanks for this, great interview.

[fjtorres]

Originally Posted by DiapDealer

<insert highly dismissive post pointing out the fact that this is an ex-exec with an obvious axe to grind -- and maybe a link or two -- here>

Spoiler:

Not my opinion, of course, but I thought I'd steal a little thunder.

...from the usual suspects, huh?
Kaiser Soze incoming!

[fjtorres]

Originally Posted by Synamon

Two more factors make me think he's right and bestsellers will be less important going forward: inflated prices of bestsellers make mid-list and indie ebooks more attractive, and backlist out-of-print books will be digitized and compete with new releases.

That has been my expectation.
We're looking of decades of tried-and-true, one-time bestsellers readily available right beside the "masterpieces" from future "snookies" and "Kardasians".
Effects are unavoidable.
I expect we'll see a feedback loop taking hold: lower "bestseller" launch sales will drive the trad publishers to try to make up the lost money with the lower cost backlist which will undercut the new releases and prompt a bigger backlist which...

"Round and round it goes and only..." ...consumers know how far it goes.

[FizzyWater]

A lot of the books that are published digitally on the internet are bought on impulse. Many or even most of those books will never be read by the buyers. Often what matters to book buyers is possession: “I have the book, and eventually I will read it.” In the meantime there is a new book, and another new book, and another, and you buy them!

OMG, this guy got access to my old Fictionwise account. This was oh, so true for me....before Agency Pricing.

[Catlady]

Originally Posted by DiapDealer

<insert highly dismissive post pointing out the fact that this is an ex-exec with an obvious axe to grind -- and maybe a link or two -- here>

Spoiler:

Not my opinion, of course, but I thought I'd steal a little thunder.

But he has been out of the game for TEN years--that's an eternity in terms of the digital market.

[fjtorres]

Originally Posted by Catlady

But he has been out of the game for TEN years--that's an eternity in terms of the digital market.

Apparently he has spent at least part of that time tracking the industry's disruption. He hasn't missed much. And he has no (apparent) vested interest in the current, collapsing order so *he* can afford to call them as he sees'em. Unlike the folks dependent on the goodwill of the current powers that be.
That's what makes his comments interesting; he's seen the inside of the glass towers.

[Catlady]

Originally Posted by fjtorres

Apparently he has spent at least part of that time tracking the industry's disruption. He hasn't missed much. And he has no (apparent) vested interest in the current, collapsing order so *he* can afford to call them as he sees'em. Unlike the folks dependent on the goodwill of the current powers that be.
That's what makes his comments interesting; he's seen the inside of the glass towers.

Interesting, sure. But no matter how closely he's paid attention in the past ten years, it's different from actually being in the trenches day in and day out.

[DiapDealer]

Executives have trenches? That they go to every day?

[fjtorres]

Originally Posted by Catlady

Interesting, sure. But no matter how closely he's paid attention in the past ten years, it's different from actually being in the trenches day in and day out.

True, if it were an *active* BPH exec saying that it would be big news: right on national TV.

"NY Publishing exec gets drawn and quartered in public!"


I'm sorry, but the way the trad publishers are circling the wagons in public these days *nobody* on their payroll is going to come out and say these things. Even (or especially) if they believe them to be true.

I mean; $9.99 as the *ceiling* for ebook pricing, not the floor? Open competition being good? Amazon establishing the viability of ebooks as a business? The New Publishers showing the way to the future? "Bestsellers" getting marginalized? And lets not get to comparing the BPHs themselves to the Euro crisis debtor nations!

That kind of heresy can only come from outsiders or ex-insiders.
Current insiders would be risking their livilihood saying such things today.

The mood out there is getting dark.
Try this one:
http://kriswrites.com/2012/06/20/the...s-in-the-sand/

[kennyc]

Originally Posted by DiapDealer

Executives have trenches? That they go to every day?

Dude!

They are EXECUTIVE trenches ... gold and silver lined - sparkling and smelling like oleander ... not the mud smelling like **** ones you and I dig.