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OPLIN 4Cast #220: Turbulent times for publishers

Posted in 4cast

No doubt about it, libraries are going through some very tough times right now. On top of draconian budget cuts, they have to deal with the latest anti-library antics of Those Dang Publishers. We tend to forget, however, that these are also very tough times for those publishers, as they watch the business models they have relied on for years become obsolete in the march toward new digital media and new distribution methods. For example, they face business pressure to sell their e-books through “agencies,” while at the same time facing legal pressure when they do. In today’s 4cast, we share a potpourri of recent writings that illustrate some of the new stresses on the old publishing industry.

  • Monetizing the book buying experience (Off the Page/Sheila Bounford)  “Of course not everyone behaves on impulse, and consumers do not have an obligation to buy in store. Those from outside the book industry do not necessarily feel a responsibility to support their local shop if the prices there are higher than online. In a recession customers are much more likely to browse, and then go home and buy online to save money. The key questions therefore are how else can physical bookstores monetize what they offer? And, should publishers be much more proactive in supporting them through increased discounts and other measures?”
  • Random House caves on agency e-book pricing (Ars Technica/Jacqui Cheng)  “Under the wholesale model, publishers like Random House would sell a certain number of books to a reseller (such as Amazon) for a set price, then the reseller would set its own price on each book. This works out well for the sale of physical books that have to be shipped, but not so much for e-books, where there are infinite copies. The agency model, by comparison, allows publishers to set their own prices for e-books and give 30 percent of the sale price to the reseller.”
  • EU raids ebook publishers in price fixing investigation (Guardian/Benedicte Page and Leigh Phillips)  “The focus for the price-fixing investigation is understood to be what is called the agency model, which has been adopted by almost all the biggest publishers for their ebook sales. This is distinct from the traditional wholesale model, in which retailers buy the books from the publisher and can then do what they wish with them. Under the agency model, the retailer acts as an agent of the publisher, which itself sets the retail price of the ebooks, with the retailer taking a commission. Publishers see the agency model as crucial because it allows them to trade with Apple, which was already using it for iTunes, and also to control the price at which their ebooks are sold.”
  • Gannett unveils image ‘reset’ (USA Today/David Lieberman)  “[CEO Craig] Dubow said he wants advertisers and others to see that Gannett [news] properties attract local and national audiences via different media, including the Internet, smartphones and tablet computers such as Apple’s iPad. To help make that point, the company’s properties will begin to prominently identify themselves as part of Gannett. In addition, the company will launch a national advertising campaign that includes the tagline, ‘It’s all within reach.'”

Profit fact:
ECKO Publishing provides a handy online tool for publishers to figure their profit on e-books distributed through various agencies, as well as some interesting agency rules publishers must follow.