02/06/08

BEA: Filtered Highlights

We didn’t go to BEA this year (and what with the podcasts and prevailing attitude to conference attendance, I’m not sure we should have done) but reading the following reports, it seems that there was some good electronic-y / webby thinking inspired by the close of the conference.

Admittedly, much of the following reportage seems to have been inspired by the focus on the Kindle - which, given Amazon’s size and monopoly of the market, isn’t that surprising - so it would be good to know about some genuinely novel announcements made there, as well as the more obvious pieces of journalism.

(All link thanks to the ever-wonderful Book2Book. (I can’t imagine that anyone reading this hasn’t subscribed to Book2Book for years)

The first article is “How to Save the Publishing Industry” from Silicon Alley Insider. The basic premise is this:

How can publishers fix their business? Not by killing more trees. By radically retooling the business model.

Hardcover books should cost $25. And publishers should keep printing them–for people who want to buy them. Meanwhile, for everyone else, publishers should publish cheap electronic copies for 20% (or less) of the hardcover price.

$4.99 for a first run bestseller, downloadable to your Kindle, PC, or iPod–or simply readable on the Internet. The retailer keeps $1 or so, the author gets $1 or so, and the publisher takes home about $3. Some of that goes to marketing and some to overhead. And then you’re left with the typical publisher profit of less than $1 (no returns, manufacturing, or distribution costs).

It could be just another loner railing against the industry, but it has attracted some interesting comments, including a rebuttal of the economics by Tim O’Reilly, who says:

As a good test case — many of our books are used heavily for reference, not for reading cover to cover — so you’d think that free access via Google Book Search (where all of them can be found) would greatly stimulate usage of those free books, since a search can often satisfy a user query. Yet that is not the case, precisely because those books are still competing with all the other content on the web.

The biggest challenges publishers face is to rethink what kind of products work online, and why. What job do their products do? How can that job be rethought so that online actually makes it better than the print version? If you’re a fantasy book publisher, maybe World of Warcraft has more to teach you than Kindle, for example. If you’re a reference book publisher, maybe you should learn from professional services like WestLaw.

Who needs your products, and how badly? If the audience is limited, high prices might be the answer? If the product is a commodity that needs to stand out from the crowd, getting viral distribution by fans, free might be the answer.

[Read in full]

Next up we have the New York Times with Electronic Device Stirs Unease at Book Fair:

Much of the talk was focused on the Kindle… which [Bezos] said already accounts for 6 percent of his company’s unit sales of books that are available in both paper and electronic formats.

But excitement about the Kindle, which was introduced in November, also worries some publishing executives, who fear Amazon’s still-growing power as a bookseller. Those executives note that Amazon currently sells most of its Kindle books to customers for a price well below what it pays publishers, and they anticipate that it will not be long before Amazon begins using the Kindle’s popularity as a lever to demand that publishers cut prices.

Then the piece lapses into fairly lazy PR-regurgitation:

Much of the expected growth in electronic books can be tied to the Kindle. When Amazon introduced the product, it sold out of the machines on the first day. The company needed months to adjust its manufacturing capacity and supply chain to be able to keep Kindles in stock, which Mr. Bezos said it has now accomplished.

He said that after buying a Kindle, Amazon customers purchase just as many physical books and two and a half times as many books overall, or three electronic books for every two physical copies.

But:

Some publishing executives dispute that claim. “We don’t see people buying both versions,” Mr. Shanks said. “I think there is almost a one-to-one cannibalization.”

(Mr. Bezos probably did not endear himself to people in the publishing industry fearful about his company’s power when, in response to a question after his speech, he waxed enthusiastic about how his “lottery ticket” wealth from the success of Amazon is allowing him to invest in a project to provide commercial travel to suborbital space.)

[Read in full]

Usually, I wouldn’t post these things other than in the RSS feed (which if you don’t subscribe, contains a daily update of links we find interesting) - but I thought it worth flagging.

Posted by Peter Collingridge in Future of the book, Publishing.