“We’re in Amazon’s Sights and They’re Going to Kill Us”

[fjtorres]

Originally Posted by gweeks

From information Baen and Baen authors have shared, both make more money from a single ebook purchase than from a mm paperback sale, but less than for a hardcover sale. The bundled purchases are about the same as a paperback sale.

You would have to go dig through the Baen bar for the posts to see the detailed information. Oh, the bundles went up $3 so the ratios might have changed too. I don't remember seeing anything on trade paperback either and I do notice Baen is doing more of them.

Baen is a smallish publisher, distributed by S&S, but not owned by them.

Greg

My fears about BAEN aren't about pricing or margins.
They seem to have those under control.
One of the reasons they have done well with their liberal ebook policies is that ebook releases have helped promote and increase their pbook sales.
My concern is that at some point the ratio of ebook to pbook might get high enough that the percent ebook losses they currently "deprecate" as "shoplifting" stops being trivial and at least some of the authors start asking for/implementing DRM.
Some of their authors do have books moving through more traditional publishers so if Weber, for one, starts seeing more per-unit revenue coming in from the Price-fixed DRM'ed releases at Tor he may look as fondly on their policies...

Hopefully they can keep their liberal policies as ebooks become their primary revenue source (and they have always been more of a paperback house to start with) but there's no telling how the spreadsheets will tally up for the authors.

[Kali Yuga]

Originally Posted by fjtorres

It's how Google works and it's how Tesla works.

Google makes almost all of its income from ads, and they are desperate to find another source of revenue.



Tesla is a new company that hasn't necessarily earned much profit, and doesn't have a huge gas-oriented infrastructure to manage.

Originally Posted by fjtorres

It's how big companies nurture new lines of business; how Microsoft built XBOX, Apple the iOS boxes, McDonalds their coffee business.

Microsoft can't afford to stop making Office and Windows while it developed the Xbox (a process that took years and tremendous amounts of money).

Apple can't afford to stop making desktops and laptops, even though most of their revenue comes now from iPhones.

McDonald's cant afford to stop serving burgers and fries because they added coffee to their lineup.

None of these businesses required them to abandon their previous sources of revenue.

Originally Posted by fjtorres

The only companies that don't do that these days are the old, fading ones. 'Cause that is how they get to be old fading and companies: by doing what they always did, by focusing on the past instead of the future.

Yes, standing still can sweep up almost any company these days.

But the fact is that 9 times out of 10, a company simply cannot afford to sacrifice existing revenue streams or dump expensive infrastructure overnight.

[BlackVoid]

"he thinks Amazon is going to destroy them all."

the sooner the better.

[fjtorres]

Originally Posted by Kali Yuga

Yes, standing still can sweep up almost any company these days.

But the fact is that 9 times out of 10, a company simply cannot afford to sacrifice existing revenue streams or dump expensive infrastructure overnight.

And who said it is a question of one or the other?
It isn't.
It is just a matter of *managing* the transition from one platform and business model to the other. And there are dozens of publishers that are doing just that. Mostly they are small, like Amazon Publishing, but not all are small.
Look to Harlequin and Carina; Harlequin is part of one of the BPHs but they have enough autonomy to call their own shots.
And the way they call them is by going aggressively after ebook business under both the traditional model and the New Publishing model. As Harlequin they sell from Amazon, from Nook, *and* from their own website.As Carina, they run an ebook-first operation. Kinda covers all the bases, no?

There's that old business chestnut that says; "It is better to obsolete your own product (or business model) than to wait for your competitors to do it for you."

Cannibalizing your own business is usually better than sitting around doing nothing. And that is simply the worst-case scenario; the best case scenario is what Microsoft has done three times so far and is preping to do a fourth time; migrate its customer base seamlessly from one platform to another: first, from the DOS CLI to the GUI, then to the NT object-oriented code Base, more recently to 64-bit computing, and now to HTML5-driven coding. You don't survive technology-driven disruptions by ignoring them; you survive them by jumping on the bandwagon.

Smart publishers today are the ones looking to leverage low-overhead ebook-first publishing to go after the market share of the stupid publishers who insist on doing things the 19th century way. And whining.
Musn't forget the whining and recriminations.

Fat lot of good either will do them, but that's easier than actually doing something. In the end it is easier to be a victim than a survivor.

[sbroome]

Who knew running huge businesses was as simple as the internet makes it sound?

[SteveEisenberg]

Originally Posted by fjtorres

the best case scenario is what Microsoft has done three times so far and is preping to do a fourth time

An interesting example.

Microsoft has, decade after decade, copy protected most of its products, while putting lots of effort into combating piracy. For almost twenty years, I've been hearing that protection-free open source software was going to kill off Microsoft, and maybe it will some day. But you're the one suggesting that Microsoft might be model for publishers.

[Andrew H.]

Originally Posted by fjtorres

And who said it is a question of one or the other?
It isn't.
It is just a matter of *managing* the transition from one platform and business model to the other. And there are dozens of publishers that are doing just that. Mostly they are small, like Amazon Publishing, but not all are small.

You are making it sound like a no brainer. It isn't. It is very hard to do, and acting like it's easy just shows that you don't really understand how businesses actually work.

Look to Harlequin and Carina; Harlequin is part of one of the BPHs but they have enough autonomy to call their own shots.
And the way they call them is by going aggressively after ebook business under both the traditional model and the New Publishing model. As Harlequin they sell from Amazon, from Nook, *and* from their own website.

Yes, let's look at Harlequin. H. has had subscription service for customers at least since the 70's. They had direct contact with the customers and shipped directly to them, bypassing the retailer. My grandmother used to subscribe; she'd get a box of Harlequins every month.

So, yeah, if you are a publisher identified with one certain type of book - so identified that people just call them "Harlequins" *and* have a 40 year history of dealing directly with you customers...then you have quite a leg up over most traditional publishers.

How does Random House do this, with their 80,000 new titles per year and no real customer identification or experience in dealing with customers?

As Carina, they run an ebook-first operation. Kinda covers all the bases, no?

There's that old business chestnut that says; "It is better to obsolete your own product (or business model) than to wait for your competitors to do it for you."

Cannibalizing your own business is usually better than sitting around doing nothing. And that is simply the worst-case scenario; the best case scenario is what Microsoft has done three times so far and is preping to do a fourth time; migrate its customer base seamlessly from one platform to another: first, from the DOS CLI to the GUI, then to the NT object-oriented code Base, more recently to 64-bit computing, and now to HTML5-driven coding. You don't survive technology-driven disruptions by ignoring them; you survive them by jumping on the bandwagon.

Except that big publishers *have* done a good job of migrating their paperbooks to e-books. They now produce e-books of almost all of their new fiction, and more and more of their backlist. This wasn't particularly easy to do, and it shows that they have not ignored technological innovations. They haven't ignore them *at all.*

And, yeah, MS has made a lot of changes to its OS over the years. But what it hasn't done is drop its prices.

Smart publishers today are the ones looking to leverage low-overhead ebook-first publishing to go after the market share of the stupid publishers who insist on doing things the 19th century way. And whining.
Musn't forget the whining and recriminations.

Publishers are tripling their e-books sales year-over-year (at least in the US), and e-books account for a small but significant part of their overall profit and revenue.

And contrary to the "dinosaur" rhetoric that is so popular on the internet, in fact they are being relentlessly innovative in trying out new business models to deal with the changing technology represented by e-books.

For example, they very quickly discarded the 19th century wholesale/retail model for e-books and replaced it with an agency model. Demonstrating, among other things, the ability to turn on a dime and take significant risks in doing so. Which seem to have paid off, although it is hard to tell.

And most publishers have also done away with the quaint 19th century custom of selling books to libraries (e-books, anyway), since they apparently feel that technological change makes this way of doing things outdated.

Fat lot of good either will do them, but that's easier than actually doing something. In the end it is easier to be a victim than a survivor.

They've done plenty. I don't necessarily agree with what they've done. But they are not brain dead morons who are unaware of what e-books represent - they have very smart people working for them who have the extra incentive that their livelihood depends on their business succeeding. But change is not easy to manage; it's really hard. Yet they do seem to be doing it, and profiting. They can't just "be like Baen" or "be like Harlequin." That won't work for big publishers who produce multiple genres. What they are doing is being creative, being innovative, and experimenting. I can't fault them for that, even though I hope that it turns out that they need library lending. (I'm skeptical that they do, though, at least for new books.)

But they aren't going to survive by selling all of their books directly to the consumer for $3.

[danskmacabre]

I really miss Borders here in the UK.
I used to go there, browse, then have a snack and coffee in the Starbucks cafe inside the shop.
Then browse for a bit again and maybe buy something. Was nice to browse the shelves and check out what offers they had going and maybe get something really cheap.

I guess it's an end of an era, oh well.

[Jyster]

Originally Posted by xg4bx

a darknet site i checked has had the harry potter books in retail quality since 2007. here we are in february 2012 and legal versions are still nowhere in sight. it seriously gets to the point where all one can ask is "are you bleeping kidding me?" i don't blame the people for pirating them.

The darknet had it way before 2007, I read Harry Potter on my Palm pilot about 2002 or 2003.

I think of the Darknet as a library, download, read and then delete. The darknet usually has better quality copies than the retail copies, which is really sad.

[sabredog]

Originally Posted by Kali Yuga

But the fact is that 9 times out of 10, a company simply cannot afford to sacrifice existing revenue streams or dump expensive infrastructure overnight.

Yet the music and entertainment industry spend hundreds of millions of dollars employing copyright troll lawyers and bribing politicians. The amounts spent to sue individuals for huge amounts, way out of proportion to the net worth of the alleged IP they downloaded, simply do not match what is spent.

If they re-directed that money and spent it on reforming their companies to modernise the distribution methods required in the digital era, then perhaps they might get some sympathy and respect.

What is amazing, that after years of this, publishers are following the others like sheep, never to learn the lessons of the past.

[petermillard]

Originally Posted by danskmacabre

I really miss Borders here in the UK. I used to go there, browse, then have a snack and coffee in the Starbucks cafe inside the shop. Then browse for a bit again and maybe buy something..

Sounds like a good business model for Starbucks, not so good for Borders; maybe you should have snacked less and bought more books...

[danskmacabre]

Originally Posted by petermillard

Sounds like a good business model for Starbucks, not so good for Borders; maybe you should have snacked less and bought more books...

Heh perhaps, but the Starbucks was right in the Borders store, so I assume there was some sort of arrangement that Borders could benefit from with that.

I used to go there to buy Roleplaying game books (Like dungeons and dragons type stuff), but they increasingly reduced their stock of that type of thing, so there was less things I would buy.
Even so that branch of Borders are always pretty busy, so was surprised to see it go.
I guess overall Borders were not doing well.

[petermillard]

Originally Posted by danskmacabre

Heh perhaps, but the Starbucks was right in the Borders store, so I assume there was some sort of arrangement that Borders could benefit from with that.

Maybe, though in the topsy-turvy world of corporate business it wouldn't surprise me if Borders were paying Starbucks to have the coffee shop in their store, instead of say, the local Books Etc...

Even so that branch of Borders are always pretty busy, so was surprised to see it go. I guess overall Borders were not doing well.

I've only ever visited one Borders, and it was plenty busy with people hanging out and browsing - no queues at the till, though <shrug>

[danskmacabre]

Originally Posted by petermillard

Maybe, though in the topsy-turvy world of corporate business it wouldn't surprise me if Borders were paying Starbucks to have the coffee shop in their store, instead of say, the local Books Etc...

You may be right, who knows.

I've only ever visited one Borders, and it was plenty busy with people hanging out and browsing - no queues at the till, though <shrug>

Ironically, since I've owned an ereader for about 6 months now, I haven't bought a single book from a bricks and mortar bookstore. So even if Borders were still around, I probably wouldn't have used them since about August last year.
Previous to that I would have spent a few £100s at bookstores a year.

On top of that what with free Gutenberg books and cheap/free options on Smashwords and a few other places, I don't tend to buy ebooks from the more popular big name authors.
I now tend to read books by lesser known authors which are free or really cheap. So I'm spending less on books now.

I don't bother with Amazon either, as it's specific to the Kindle and I can't be bothered stripping DRM and converting to epub.

[Zackery Arbela]

I think it is an inevitability. Traditional publishers are burdened by legacy costs - bookstores, paper, printers, editorial staff and so on, which drive up the costs of their product. Independent writers working on their own don't have to deal with any of that...of course the downside is that the quality off the product put out by the indies varies widely. Some of it is good, a lot of it is bad.

The market will shake itself out in the end, it always does. Right now we're in the wild west/frontier zone stage of the business. Soon enough a new paradigm will shift into place.