Book publishing, disrupted

by Amelia Ables

Given the rise of  e-book sales, it’s interesting to see what’s going on with the major book publishers. Analyst firm PwC estimates that e-book sales will reach $8.2 billion by 2017.

This shows that not only are people using e-books, but that they will more than likely continue to choose them over traditional paper books. “The advantages of e-books are clear,” says New York Times writer Moshin Hamid. “E-books are immediate. While traveling…I can bring along several volumes, weightless and indeed without volume…” Hamid says.

This ease of access shows that books are easier to obtain than ever before, considering that readers can effortlessly download a book onto their e-reader of choice. The challenge that book publishers and brick-and-mortar bookstores face is how to compete in the digital marketplace.

Amazon has done a lot to disrupt the book publishing industry. The greatest way it did, of course, was with the Kindle, which is the best-selling e-reader out there. Furthermore, while book-publishing companies need their best sellers to offset their less successful books, Amazon does not. This ties in with the idea of the long tail. Chris Anderson states that best sellers are not the only books that make money, but that the “misses” make money too. “And because there are so many more of them, that money can add up quickly to a huge new market,” Anderson explains. E-readers give customers more opportunities to happen upon these “misses” or more obscure books that they otherwise would not know about. Anderson’s example of this is Rhapsody adding tracks to its library and each of these tracks finding an audience somewhere.

This same concept can be applied to why Amazon does not need best sellers to offset all the non-best sellers out there.

Non e-book publishers have to worry about things such as distribution and printing costs, which results in e-readers being cheaper than physical books. Another thing Amazon does that greatly affects the brick-and-mortar stores is their price check app. Customers can scan the price of a book in a bookstore and find it cheaper on Amazon’s site. Amazon even decided to take on the Big Six publishers in 2011 by creating a general-interest imprint.

How do the brick-and-mortar stores react to this? Many refuse to carry the titles that Amazon publishes. This is true of Barnes and Noble and of many independent stores. When Amazon created their general-interest imprint, these stores chose not to stock some of the titles, which resulted in the books flopping. That was one victory for other publishers and for physical bookstores. However, the article “How Amazon is disrupting the book business” explains that Amazon customers don’t necessarily browse the site for new book titles, printed or e-book versions. This is mostly done in physical bookstores, after which consumers will purchase the titles through Amazon on their e-reader. But what happens if physical bookstores cease to exist because of digital books? This causes worry that all book sales, physical and digital copies, will drop significantly.

Barnes and Noble came up with a response to Kindle, which was to create Nook. The Nook failed to compete in the realm of e-readers.  Brain Sozzi, chief equities strategist at Belus Capital Advisors, attributed its failure to Barnes and Noble not illustrating the full value of the Nook. Apple and Amazon advertised their tablets not only as readers, but also as browsers, movie streamers, etc., while the Nook was only advertised as a reader. Furthermore, Sozzi states the Nook did not have a place because people saw the Kindle as a less expensive iPad, leaving the Nook “with no foundation to stand on to speak to consumer.,”

In fact, Nook hardware is no longer being made, and they are instead focusing on Nook apps for other types of tablets. Kindle, and Amazon, won this category.

One thing that the Big Six publishers did to combat the e-book problem is work with Apple to create a new model in order to allow them to remain competitive with Amazon. Essentially, they created a scheme that would allow them to set the price everywhere. Amazon eventually gave in and accepted the plan, but the publishers and Apple were sued for collusion by the DOJ, allowing Amazon and Kindle to come out on top.

Another thing publishers have to worry about is that authors, especially big ones with already established careers, will leave them and begin to self-publish. But not just well-known authors are taking this route. Hugh Howey did this with his series Wool after he decided he didn’t want to take on an agent. He self-published and his series became wildly successful on Amazon, both in digital and physical form.

Two publishers, Random House and Penguin, had to merge in order to “double down on the digital publishing industry,” states Seth Fiegerman in an article on the merger.

Even though Random House alone was the largest book publishing company, they said, along with Penguin, that they did not see as much success as they would have liked in the e-book area. Their response to the shifting of the book industry was to come together in order to cut costs, but with the book industry still in flux, only time will tell.

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One thought on “Book publishing, disrupted

  1. It’s a changing time in the book industry. Adjustments must be made and ebook and self-publishing is the new norm. Remember “Who Moved My Cheese?”…self-published book that changed the way people viewed self-published books…J.E. Thompson:

    http://juliusthomwrites.wix.com/stormy-winds

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