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11 posts from December 2008

Borders, HarperStudio and Returns

Books4 Returns are one of the ugliest aspects of the book publishing business.  A lot of people don't realize that many (not all) bookstores buy from publishers on a totally returnable basis.  It's effectively a consignment relationship and anything that doesn't sell can be sent back to the publisher for full credit.  Returns vary by account, genre and title, but rates are anywhere from 10% to 50% or more.  So once the trees are killed, the books go from printer to publisher to bookstore and all too frequently, back to publisher.

It's an enormous waste, which is why the recent announcement that Borders is going to buy on a non-returnable basis from HarperStudio is worth noting.  In the long run, though, it may be worth nothing.

Why?  When accounts buy on a returnable basis they take comfort knowing they won't be stuck with obsolete inventory.  As a result, they can be more aggressive with initial buys and avoid out-of-stock situations on a potential hits.  A non-returnable buy on that same title is likely to be smaller because the chain buyer doesn't want to risk running into that obsolete inventory situation.

According to the news report, the deal means HarperStudio is giving Borders 10-15% more of a discount than they would in a returnable model.  That's a lot of points.  It would be interesting to calculate the breakeven level between the two models.  If I were the publisher at HaperStudio I'd be sure to track and compare chain and store level orders and sell-thru data for Borders to the same data from the returnable accounts to see whether this pays off.

So if one likely downside is more conservative buys and in-store inventory levels, the upside is more of a commitment to store/chain promotions of HarperStudio titles.  After all, Borders will have a have a great incentive to make these books sell through, no matter how many copies they buy!

Just like any other part of a business transaction, there's an equilibrium point that will be reached by both parties. If HarperStudio decides non-returnability isn't worth this deep of a discount they'll eventually push back.  Right now, though, both parties have decided the elimination of returns is worth 10-15% of additional points.  I'm anxious to see if everyone is truly happy with that range in the long run.

CEO Roundtable at TOC Conference on February 11th

ScreenHunter_03 Dec. 17 10.42We've been working out the details and I'm delighted to announce it's now official: I'm scheduled to host a CEO roundtable discussion at the TOC conference in February.  The title of the session is The Changing Role of the Publisher and the CEO panel consists of:

Clint Greenleaf of the Greenleaf Book Group

Michael Hyatt of Thomas Nelson

Bob Young of Lulu

Here's a summary of what we plan to cover:

The goal of this session is to talk about the evolving landscape of publishing and how the worlds of traditional publishers and self-publishers are converging. Author platform is more important than ever before. How do both types of publishers leverage this? What are each doing to help authors build their platforms? We’ll also talk about the types of capabilities and services traditional publishers need to offer to distinguish themselves from the self-publishing world.

Sounds like fun, don't you think?  And remember, if you haven't already registered for TOC it's not too late.  Use the toc09jwb discount code to save 15% off the conference fees.

Urban Elitist Shares Views on Future of Publishing

Binoculars Kassia Krozser recently pointed to a great post on the Urban Elitist blog where David Nygren speculates on the future of book publishing.  It's a long post but well worth reading in its entirety.  Here are the thoughts that popped into my mind as I studied it:

Nygren says, "print is to read, and electronic is to search and browse and discover."  That was true in the pre-Kindle/Sony Reader era.  Plenty of customers are now reading, searching and browsing on dedicated devices and new generations of these readers will only result in even more e-reading.  He's right to point out that the shift from analog to digital won't happen as fast here as it did in the music world, mostly because print still remains an excellent solution.

I'm even more bullish on print-on-demand (POD) than Nygren is.  As prices come down I think you'll start to see traditional publishers shifting to POD even earlier in the product's lifecycle, perhaps as early as the very first copies.  Imagine the inventory management and write-off headaches that could go away in this model!

Will the "mega publishing conglomerates go by-bye," as Nygren suggests?  They will if they don't adapt, that's for sure.  As author platform continues to grow in importance I find it interesting that the differences between traditional publishers and self-publishers diminish.  Ultimately, traditional publishers need to figure out what services and capabilities they'll offer that self-publishers won't or can't.  This is one of the most fascinating things to keep a close eye on, IMHO.

When you read this part of Nygren's post, what comes to mind?: "Under the new model, publishers will risk relatively little financially but will share a greater portion of the profits with the author."  I don't know about you but my first thought was, "that's not a new already exists and it's called 'self-publishing'."

Nygren spends some time talking about piracy and whether readers will be willing to pay if the same content is available (illegally) from other sources.  I'm not sure this is the keyissue.  Unlike the music biz, I don't believe the book publishing world suffers from rampant piracy.  Sure, there are plenty of sites out there distributing content illegally and some of them get a decent amount of traffic.  The real problem is in all the great free content that's 100% legal and at the top of most Google searches, especially in the how-to and reference spaces.  That's one of the reasons why I hate DRM.  The solution is NOT to lock your customer's content but rather to provide paid content options that are better than the free ones.  (And btw, that's one of the many things I like about my employer's (O'Reilly) approach to DRM -- we sell DRM-free bundles on our website.)

Tools of Change for Publishing Conference

Book spinesMark your calendar.  The next Tools of Change for Publishing Conference (TOC) is slated for February 9-11 in New York.  If you enjoy the subjects covered on my blog then TOC is a "must" show for you.  Check out the full conference schedule to see what I mean.  The topic and speaker list is outstanding.

I was disappointed to miss the first couple of TOCs as I always seemed to run into scheduling conflicts.  This year is different though and I can't wait to attend.

Btw, if you haven't registered yet, use the discount code toc09jwb to knock 15% off the conference fee.  See you in NY!

Amazon's iPhone App

Amazon remembersGot an iPhone?  If so, you need to download the Amazon app.  As you can imagine, this app makes accessing Amazon's website a much nicer experience vs. doing so via the Safari browser.  It provides access to your wish list, one-click purchases, etc., but that's not what makes it special.  The "Amazon Remembers" feature is why you'll want this app.

What's "Amazon Remembers"?  It's a service where you take a picture of a product with your iPhone, send it along to Amazon and (using their Mechanical Turk program) within 24 hours you'll get an e-mail back telling you whether Amazon carries that product and how much it is.  It's a terrific way of making sure you're getting a good deal, all by just pointing and clicking.

I tested the service by snapping a picture of my Kindle.  Within a couple of hours I had a message in my email inbox saying they found my item.  Well, technically speaking, they found the web page on where they'd normally sell my item, if only they had some in stock.

This is a cool service and one I'm sure I'll get a lot of use out of.  As an admitted tightwad, I've never been shy about writing down product names and prices in a store so I can look online for better deals later.  Amazon's iPhone app makes it even easier for me to save a few bucks.

P.S. -- Amazon, nice job coming up with a clever iPhone app.  Now when are you going to add some new cool functionality to the Kindle?  The "Experimental" features are more than a year old and haven't been touched since launch...hint, hint...