Eoin Purcell raises an interesting question in his blog:

But riddle me this?

Why do they not just sell it direct? The multi-publisher bookstore provides just the platform, they have created an incredible audience and the property is a very, very good one. I cannot understand this decision. Sure the rest of Macmillan also avoids ebook sales listing instead other sellers on their site bit surely the selling of a digital download is not THAT difficult? Is it?

Unlike times past publishers will walk away from a deal rather than give up electronic rights.

If you have, indeed, managed to reserve your electronic rights it doesn’t necessarily mean you can use them. The non-competition clause in most publishing contracts is usually broad enough so that it will prevent an author from publishing electronically even if the author reserves the rights. Agent Kristin says, and I agree with her based on my own legal experience, that very few people bother to read or think about the non-compete clause.

Thanks to Marilynn Byerly for the link.

In an interesting pricing move, Random House will be selling the ebook, on release on January 7, at the same price as the hardback price when it is released on February 4. After the paperback release the ebook price will drop. More details at The Bookseller.

If you are in the New York area, Publishing Point will having a talk by Healy on November 18 in New York City. You can register here. Hopefully I will be able to make this one.

This is from their press release issued today:

All professionally published, and many currently under contract with traditional New York firms such as Random House, Tor Books and Simon & Schuster, the Book View Cafe authors first came together in 2008 to create bookviewcafe.com, a destination website for online fiction. Armed with a century’s worth of experience in all aspects of publishing, members include multiple-award-winning authors like Ursula K. Le Guin and Vonda N. McIntyre, bestsellers like Sarah Smith and Laura Anne Gilman, and new talents like Seanan McGuire.

Once the main site was established, the authors formed Book View Press to take their titles out onto the wider Internet world.

“The e-publishing infrastructure is now firmly in place,” says Project Manager Sarah Zettel. “BVC authors have both content and the experience to take full advantage of it.”

Book View Press titles will be created and edited by the BVC’s members, and made available through the Kindle and Sony eReader stores, as well as at bookviewcafe.com. No outside publishing house will be involved and the profits go directly to the authors.

Book View Press’s first project is an anthology of science fiction titles, ROCKET BOY AND THE GEEK GIRLS, which will include work by SF mega-star Vonda N. McIntyre, best-seller Katherine Kerr, and a host of other notables including Amy Sterling Casil, Irene Radford, Maya Bohnhoff, and C.L. Anderson.

The next project from Book View Press is more ambitious. An entirely original anthology of linked short stories titled THE SHADOW CONSPIRACY. With a release date of December 15, 2009, SHADOW CONSPIRACY is set in an alternate Victorian age filled with airships, and automata where a human’s soul can be stolen and a machine’s soul can be born. As with ROCKET BOY, the project will go straight to the Kindle, the eReader and the iPhone.

“Ebooks give us a fantastic opportunity to bring our best work straight to the readers,” says Zettel. “It’s truly an exciting time to be an author.

Ebook lovers will be getting a special treat this Halloween. On October 31, Gryphonwood Press, along withAustralian-based Blade Red Press, will be giving away their entire catalog of electronic books for free. The giveaway includes popular speculative fiction titles in a variety of sub-genres, as well as thrillers and an anthology of short fiction. “There is something here for every reader,” says Blade Red’s Alan Baxter.

Books will be available through ebook distributor Smashwords in multiple electronic formats, including Kindle-compatible. Thriller author David Wood sees this as an opportunity for authors from both publishing houses to broaden their readerships. “Ebooks are an integral part of the future of publishing, and I’m excited to be a part of this promotion.” Visit the websites at Gryphonwood Press and Blade Red Press for details.

It’s encouraging to see some publishers trying to use ebooks as an innovative method of building sales. Would that some of the big guys were willing to try it as well.

If publishers want to get the prices of ebooks up, why cripple them. As Kirk notes, the perception of an ebooks’ value is what sets pricing. The more features you allow, the more you can charge. But I guess this isn’t understood very well by the powers-that-must-be obeyed.

The survey also found that 68% of respondents said they had read a traditional book in the last month, 39% of of Britishers spent up to £10 on books last month and 13% spent between £10-£25.

I wonder what sort of books the 70% who paid nothing were reading – promotional, classics, pirated?  It’s a figure that certainly needs some more explanation.  If anyone comes across the actual study please let us know.

Editor’s Note

Bowker and AAP sponsored a webinar today on US Consumer Book Buying.  It was incredibly well organized and full of good data.  My notes and comments are included below.

Speakers

• Tina Jordan (AAP)  moderator
• Kelly Gallagher (Bowker) speaker

2009 data, first 6 months, based on what consumer is buying/reading

• 2008 – e-commerce the dominant channel for book sales, beating out brick n mortar
• 2009 – so far, large chain bookstores are back at the top
• Consumer is King and defines the marketplace, we can’t publish like we used to – the old supply/demand model.

3 indicators – impact of economy, competition for leisure time, product selection (genres, formats)

Economy –

• 2001 – 2007 book buying was good, avg. 60% of adult population, but in 2008 with economic crash, only 49% buying books.
• 2009 – long tail and print on demand make more titles available longer.  What impact will eBooks have?
• 64% of book buyers say the economy is having an impact on book buying
• 69% females, 57% males, those making less, not buying as much
• women sharing books and buying used books more often

Time -

• before 1975 there were 8 choices for entertainment/info (books was one) -  in 2009 there are 21 choices (books still there), more choices = less room for reading books, harder to reach users
• online activity taking the lead in activities – over TV, music, reading.  Reading books is in a decline the last 3 years
• more men give up reading for online activity
• even with the best book readers (male/female), online activity is taking more of their time than reading
• age – 65+ spends more time reading than online, but every other age segment is online more than reading
• where can you reach buyers? online is the key
• 21% of fiction book purchases were based on online awareness (heard about it online)
• 55% of heavy/moderate buyers are socializing online – differs based on genre of fiction books, fantasy is largest group

Product Selection -

• trade market: double digit declines in hardcover/paperback and mass market sales, yet ebooks are up 28%
• cost differential in sales – hardcover vs. eBooks $6.25 price difference
• eBooks having biggest impact on the hardcover sales
• eBook units/sales – 2008 less than 1% market share/units – less than 2% overall sales. 2009 1.5% market share/units and 1.2% overall sales – eBooks still small market share, but dollars spent declined (9.99 eBook price impact)
• who is fueling the eBook growth? early adopters of eBook readers.  largest growth segment is those over 50 -183% change in growth
• devices – Sony & Kindle attracting the older age group, PDA/iPhone are attracting younger readers
• iPhone readers are young & affluent (follow the money)
• computer use/downloads are still predominant way to access/read eBooks 40%, Kindle 26%, iPhone 13%, Sony 6%, PDA/mobile – 5%, other 8%.  But if you look at it by genre, like fiction, the Kindle takes the dominant share
• young males might be the next wave of eBook buyers
• juvenile book sales increasing in 2009, fiction too
• YA readers – 72% female, 28% male and females buy more books, but males spend more per unit then females
• not all YA books purchased by YA’s, ranges in all ages 18 – 40 year olds have over 50% of YA sales

Summary

• consumer today wants what they want, when they want it, how they want it
• publishers should take the additional effort to find readers and deliver the content they want
• my two cents – libraries should look at this data too and figure out how to reach our users with the content they want

• Data from – Bowkers Pubtrack Consumer Survey
• bookbuyrinsight- twitter
• www.bookconsumer.com

Just a quick note to say that the technical measures to enforce the geographical restrictions are slowly but surely tightening. The iPhone eReader application just refused to download 2 books that I had purchased (by pretending to be in the USA). It said I was in the wrong location. Curiously I had no problem downloading them to my Mac, form where, in a spirit of perversity, I uploaded them to my Personal Content shelf at Fictionwise, and from there to the iPhone.

However, it does seem that the days of being able to get around this sort of measure are numbered. The FAQ on the FW site still says that less than 10% of their books are protected in this way, but this is woefully short of the truth now. In effect the site is now USA only, and there is nothing much we can do in the rest of the world until the publishers sort themselves out. The local alternatives have a very poor and very expensive selection.

It’s All About the Kindle,

But It Could Render the Organizational Structure

Of the Book Business Meaningless

By Stephen Windwalker

Author and Publisher, Kindle Nation Daily

Back in 1953, after he got his gold watch from H.P. Hood & Sons, my grandfather gave up the life of a milkman and moved from Everett, MA to East Dixfield, ME to semi-retire as proprietor of the East Dixfield General Store & Esso Filling Station. Once a year or so he would fall into a full-tilt gas price war with Sharon’s Chevron station, which was located a few hundred yards down the road. Mr. Sharon would take his price down to 11 cents a gallon. My grandfather would change his sign to read 10.9 cents. Back and forth they would go for days and sooner or later they would each get into single digits.

Gramps tried to explain the economics and marketing principles behind this death-spiral of decreasing prices and increasing losses. He may even have said something about "making it up in volume." But I was in single digits myself, and let’s just say that neither he nor I possessed the language or acumen of a Jeff Bezos. What I can tell you is that these price wars became a pretty big story among the very limited citizenry of East Dixfield. And the same people, as consumers, made out pretty well.

These outcomes of buzz and consumer benefit are similar for the price war that sprang up last week between Amazon and Walmart, which has driven both retailers’ prices down to the $9 range for pre-orders of the November hardcover releases by Stephen King, James Patterson, Sarah Palin and others that will dominate the bestseller lists this holiday season. Because the two mega-retailers have taken their prices far below a key breakeven economic threshold — the wholesale cost of these books — their muscle tussle has the potential, if it lasts more than another day or two, to supersede the Kindle Ascendancy of Dan Brown’s The Lost Symbol as the number one story of 2009 in the book business.

How could this be? How could the number one book business story of 2009 be about something that has nothing to do with the Kindle and ebooks?

It’s simple. This story is all about the Kindle and ebooks.

By establishing and holding $9.99 as the expected bestseller price point for the two million or so people who read Kindle books, Amazon is dramatically changing the culture of pricing expectations among book buyers. When it moved last week to set pre-order bestseller prices a penny above that $9.99 price point, Walmart was directly and explicitly competing with the Kindle Store.

The speed with which Amazon then took up Walmart’s challenge made it clear that Amazon was not surprised, had already prepared its response, and stands ready to throw down whatever is needed in a long-term joust that could bring the entire publishing industry either to its knees or into conformity with the $9.99 Kindle bestseller price point. Amazon is playing a high-level game of market jiujitsu here, in which it had to wait for a competitor’s move before it began pushing hardcover prices into line with those in the Kindle Store. Making the first move to reset hardcover prices would have opened Mr. Bezos’ concern to charges of quasi-monopolistic practices. But now, if the price war creates chaos and destruction throughout the physical or print book trades, the blame can be placed on Walmart and the Kindle will likely remain standing, stronger than ever.

So that’s the huge irony here: the Amazon-Walmart hardcover price war is, at some elemental level, all about the Kindle. In politics, you know that you’ve achieved a critical level of notoriety, for better or worse, if you can be the number one topic of discourse at a meeting when you aren’t even in the room. That’s what’s going on here: the Kindle is the straw that’s stirring the drink, and it’s not even in this particular drink.

But the Kindle connection is not the whole story here. There’s another element that is even more wild and outrageous: at least for now and for these 10 bestsellers, Amazon and Walmart, between them, have totally blown up the organizational structure of the book business as it has existed in the U.S. for decades.

For about half a century, individuals have bought books retail from bookstores, and bookstores and libraries have bought books wholesale from wholesalers and publishers. Depending on order quantities and special offers, this structure has been supported by a fairly logical discount structure in which, using Stephen King’s new hardcover price of $35 for the sake of illustration,

• publishers (P) would offer a discount of 40 to 55 percent to retailers, for a wholesale price of $15.75 to $21;
• wholesalers (W) like Ingram and Baker & Taylor would buy from publishers at a 55 percent discount ($15.75) and offer retailers discounts in the range of 40 to 42 percent ($20.30 to $21) along with the additional convenience of next-day delivery and easier returns;
• retailers (R) might discount as much as 30 percent, for a retail price of $24.50 to $35; and
• online retailers (O) might occasionally deepen discounts to as much as 46 per cent, for an online price as low as $18.90.

As long as the logic of the discount structure meshes with the logic of the supply chain, the organization of the book business, given sufficient consumer demand, is on secure footing. But even before this week’s price war, the lines had already started to get a little fuzzy when O began offering the general public better discounts than R could get from W or, in some cases for small bookstores especially, from P.

Now, with Amazon and Walmart offering this same bestselling Stephen King book to the general public for $9 and $8.99 with a 30-day return policy and free two-day shipping on any order exceeding $25, the organizational structure of the book business is meaningless.

What do I mean by this sweeping assertion? Well, the only economic logic for any supply chain is that the real wholesaler of choice is the supplier that offers the cheapest prices. For these books, that’s no longer Simon & Schuster or Ingram or Baker & Taylor; it’s Amazon or Walmart.

In this utterly disorganized marketplace, what should the thousands of independent bookstores do? Sit back passively and let the Amazon-Walmart contretemps destroy their holiday business? They are already in a weakened state for a variety of reasons, but how can they possibly compete with a $9 price point for bestsellers that cost them $15.75 to $21 wholesale?

Of course, they can’t compete É unless they are willing to engage in some guerilla warfare of their own. How would that work?

First, the indies know that Amazon has to pay $15.75 to Simon & Schuster for every copy of the new Stephen King novel that it sells for $9, which means that Amazon will lose at least $6.75 (plus shipping and handling) on each copy. These losses will amount to millions for Amazon, and in all likelihood Amazon is hoping to raise those $9 prices by a few dollars once the pre-order titles are actually released.

The indies know that they have to pay $15.75 to $21 either to the publisher or to a wholesaler like Ingram or Baker and Taylor for their copies. But why would they do that? They can pre-order the same books from Amazon for $9 a pop, with free shipping on any order over $25.

So let’s connect the dots. If indie booksellers pre-order a million copies of these books from Amazon for $9 in the next few days, they will have ample supplies of the least expensive inventory available anywhere, to anyone, for the likely bestselling books of the season. They will be in a far better position to compete with Amazon or Walmart at any price point from $9 up, and they will have arrived at that position by beating Amazon at its own game and forcing the world’s largest online retailer into at least $6.8 million in losses.

If the indies are serious about fighting back against Amazon, this is exactly what they should do. For that matter, the chains and CostCo and Target and Walmart should do the same. If Amazon wants to sell hardcover bestsellers for $9, the rest of the bookselling sector should find out just how many hardcover bestsellers Amazon can afford to sell for $9. Something, sooner or later, would have to give.

Could such guerilla tactics ever take on such scale that they would drive Amazon out of business?

Not a chance, because when the dust settles, Amazon will still have the Kindle.

Meanwhile, whether you’re one of those consumers who might benefit from this price war, or a library or indie bookseller buyer just trying to get the best prices on these titles, here’s a link to the full list. Ordering with the links you will find there may extract another 72 cents or so from Amazon, and I, true to my indie bookselling roots, will donate 75% of any such proceeds to the American Booksellers Association.

They hope to publish 750 to 1000 titles in their first year. You can find out more here.

So, to summarize: what have I got against Amazon’s Kindle?

1) DRM. (It’s unethical, immoral, fattening, and a royal pain in the ass. To be fair: this also goes for other ebook platforms.)

2) Amazon reserves the right to delete work from your Kindle. (Under circumstances which are now a little clearer and a little tighter, but nevertheless still present.)

3) Censorship.

4) They’re using their monopsony position [link added] to fuck over their suppliers (i.e. the publishers) in a manner that threatens a catastrophic crash in author royalties in the medium term (up to 5 years). NB: as a reader, you may enjoy the short term price benefit, but you’ll pay for it in the long term in reduction of choice.

5) Their actions may start a trans-Atlantic price war between publishers, to the detriment of authors (again, in the medium term).

We desperately need a sane price structure for commercial e-books, a better answer to English language rights licensing, and solutions that make books easier and cheaper for readers to get hold of while enabling authors and editors to continue to earn a living.

But Kindle—as currently sold—ain’t it.

Thanks to Ori Avtalion for the link.