Search Results for: label/ebook sales

What Is the Agency Model in Ebook Pricing?

what is the agency pricing model?Q:  What Is the agency model in eBook pricing?

A:  The agency model is when a reseller allows the publisher to set the price charged to its (the reseller’s) customers. The common agency model terms for eBooks have been that the publisher keeps 70% of the proceeds and the reseller earns a 30% commission. This is different from the traditional pricing model in the book publishing industry, where prices have been controlled by the reseller. In the traditional model, publishers sell their books to resellers at a discount of approximately 50% (legal and illegal discount variance is a topic for another day!). Resellers offer the books to consumers at whatever price they choose.

The “agency model” for eBook pricing is back in the news with a deal reached between Simon & Schuster (S&S) and Amazon (confirmed October 21, 2014), which S&S CEO Carolyn Reidy acknowledges is a “version” of the agency pricing model. [Read more…]

Q: How Is the Publishing Industry Impacted By a Struggling Economy?

Q: How is the publishing industry impacted by a struggling economy?

A: I can only answer on the basis of today, and on November 25, 2008 (*), the answer is that the publishing industry has indeed been impacted negatively and at least in equal measure to the overall economy!

Does a bad economy hurt book publishing?

Is book publishing recession proof?

The old axiom was that publishing was recession proof – especially religious publishing. Why? In the overall scheme of the economy (and people’s pocketbooks) books are a relatively inexpensive form of entertainment, best partaken at home, which saves gas and eat-out money. In the case of religious publishing, the prevailing wisdom has been that when the economy is good “people play” but when it’s bad “people pray!”

But in this ongoing subprime-crisis-automaker-melt-down-government-bail-out-required economic downturn in America, sales are not good for retailers or publishers. The list of retail chains reporting same-store declines is as long as the list of … well, uh, retail chains. The only reliable statistics available on the health of independent retailers is the number that are closing on a weekly basis. Iconic flagship book retailer, Barnes & Noble, reports glum 3rd quarter results and 4th quarter projections:

B&N Sales Sink; Sees Gloomy Holiday

by Jim Milliot — Publishers Weekly, 11/20/2008 6:19:00 AM

The news was about as bad as it could be from Barnes & Noble. For the third quarter ended November 1, total sales fell 4.4%, to $1.1 billion, with sales through its bookstores down by the same 4.4%. Same store sales fell 7.4%. Sales at Barnes & Noble.com rose 2%, to $109 million. Moreover, the nation’s largest bookstore chain predicted that–based on the negative sales trend to date–same store sales in the fourth quarter will fall 6% to 9%. Earlier this month, B&N chairman Len Riggio warned employees in a memo that the company was bracing for a terrible holiday season.

Books-A-Million, which is strongest in the Bible Belt fared even worse.

BAM Comps Drop Nearly 10%

by Jim Milliot — Publishers Weekly, 11/21/2008 2:13:00 PM

The drumbeat of bad news from the nation’s bookstore chains continued Friday with Books-A-Million reporting that total revenue dropped 5.7% in the third quarter ended November 1, to $110.9 million. Comparable store sales tumbled 9.9%, the “weakest comparable store sales in many years,” said CEO Sandy Cochran. With the sales decline, BAM’s loss deepened to $2.2 million in the quarter compared to a loss of $555,000 in last year’s third period.

The sales decline was felt in most segments, Cochran said, with bargain books, gifts, and the teen categories among the few areas where business was up. A decline in customer traffic plus a cost conscious consumer where blamed for the poor results. BAM is focused on “controlling costs, managing inventory and preparing for the holiday season,” Cochran said.

While Cochran said the holiday publishing schedule is a good one, she sees few signs indicating that the difficult marketplace will shift anytime soon. For the first nine months of the year, revenue was down 4.8%, to $349.2 million, and the company had a loss of $635,000 compared to earnings of $4.6 million in the same period last year. Comp sales for the nine months were off 8.0%

Perhaps the most dramatic announcement came from the supply side of the industry with the news that literary giant Houghton Mifflin was putting a hold on acquisitions – akin to a fish saying that they might spend a year away from the water.

HMH Places “Temporary” Halt on Acquisitions

By Rachel Deahl — Publishers Weekly, 11/24/2008 12:54:00 PM

It’s been clear for months that it will be a not-so-merry holiday season for publishers, but at least one house has gone so far as to halt acquisitions. PW has learned that Houghton Mifflin Harcourt has asked its editors to stop buying books.

Josef Blumenfeld, v-p of communications for HMH, confirmed that the publisher has “temporarily stopped acquiring manuscripts” across its trade and reference divisions. The directive was given verbally to a handful of executives and, according to Blumenfeld, is “not a permanent change.” Blumenfeld, who hedged on when the ban might be lifted, said that the right project could still go to the editorial review board. He also maintained that the the decision is less about taking drastic measures than conducting good business.

“In this case, it’s a symbol of doing things smarter; it’s not an indicator of the end of literature,” he said. “We have turned off the spigot, but we have a very robust pipeline.” The action by the highly leveraged HMH may also be as much about the company’s need to cut costs in a tight credit market.as about the current economic slowdown.

What’s it mean for you as author or aspiring author?

If your heart is set on publishing with a traditional publishing house of note, the news isn’t great. My own company, Thomas Nelson, in anticipation of emerging economic woes, cut the number of titles being published almost in half as of March 2008. As a publisher I always find it more fun to do books than to not do books, but unquestionably, we were ahead of the curve.

If you are able to see publishing not just in terms of a paper and ink product with a particular logo or name on the spine – and are open to the array of self- and micro-publishing options available today – then this is just one more confirmation to go for it now rather than wait for your deal to sail in!

Q: My Book Has Not Sold Many Copies. Can I Get Rights Reverted Based on Poor Sales?

Q: My book has not sold many copies. Can I get rights reverted based on poor sales?

A. If that is not stipulated in the contract (and it rarely is), then not without some help. Take a look at your publishing agreement to see if there are sales performance requirements written into the terms. But if you don’t find a suitable condition, you can still ask your publisher nicely.

How can I get publishing rights to my book back?

My book didn’t sell many copies – and it’s going downhill from there!

Most publishing agreements have several provisions that allow you to get your publishing rights back.

For example, most agreements have a time frame within which the publisher must publish your work after acquiring it. Eighteen months is not atypical. In other words, a publisher can’t buy your book and just sit on it. Now, if you turned in your manuscript late or it has not yet been made acceptable through the editing process or there are some other extenuating circumstances, they (the publisher) are probably protected from surrendering rights back to you.

Another example of a rights reversion clause is most agreements have an in-print provision. If your book is not available for purchase and you bring it to the publisher’s attention – in writing – with a specific request to rectify this by reprinting the book, the publisher must send the book back to press within a defined period of time or return publishing rights to you. Just to repeat, the onus is usually on you to initiate the process in writing.

This has increasingly become a point of contention between authors and publishers in the digital age. Why? In many agreements, offering a book in a downloadable e-book form is all that is needed for a book to be considered in-print. And further, digital publishing means that the publisher can economically transition from offset printing to print on demand. In other words, your book will technically never be out of print even if nothing much is currently happening in the area of sales and marketing.

Third, a few agreements have qualifiers like a set time period for publishing rights or a minimum number of annualized sales or the requirement that it be included in a printed catalog. If you don’t remember this coming up when you were negotiating a contract, then this probably doesn’t apply to your agreement!

My book was printed on time and is still in print. It just isn’t selling like I thought it would. This is so disappointing.

Even if none of the conditions apply, go ahead and ask to have your publishing rights reverted, but don’t be surprised if the answer is no. Or if the publisher encourages you to do some marketing activities that will help rekindle demand for your book in the marketplace.

Now, if sales of your book have steadily waned to next to nothing, if you have earned out your advance against royalties (or you are willing to pay back unearned advances against royalties), if inventory levels are low (and especially if you’re willing to buy the remaining copies in stock), and if there isn’t sufficient demand to warrant an offset print run (let’s say about 1,500 copies), then your publisher just might shrug his or her shoulders and say sure, you can have your publishing rights back. Often, the publishing agreement specifies that in such cases the publisher will let you have any plates, films, and files free or at publisher’s actual cost to retrieve them. With plates and films basically being obsolete there is usually no or little cost associated with retrieving the electronic files. (Though that doesn’t mean anyone can easily put their hands on the most up-to-date print-ready iteration.)

But again, even if all the circumstances of the previous paragraph are present, many publishers (self included) are loathe to return rights. Why? They (we) have invested a lot of money into publishing your work and as distribution technology changes and morphs into podcasts, e-books, print-on-demand solutions, and more, they don’t want to lose opportunities to recoup their investment through new means of exploiting your work.

And one final question for you to ask yourself. What can you do to promote sales that the publisher hasn’t done or won’t do? If the answer is “a whole lot more” then get busy and drive sales without the manufacturing and inventory hassles. Or, if you have an iron-clad way to sell your own books directly, like a speaking schedule, ask nicely for your rights to be reverted and hope for a yes answer.

Q: How Accurate Are Bestseller Lists?

Q: How accurate are bestseller lists?

A: Not very.

But that doesn’t mean they aren’t important. They are great for publicity and will probably help generate more sales. Many people peruse the various lists to help them determine what to pick up next. They are fabulous for an author’s ego. Admit it, wouldn’t you like to have the tag New York Times Bestselling Author under your name every time you published a book? All it takes is once!

Why aren’t they accurate?

Book publishers don’t use a upc code on the back of their books. Why? There is an ancient custom that book retailers should be able to set their own prices. UPC codes include a price. So traditionally, publishers have used an ISBN number and code. A few use nothing at all. That means a whole new reporting system is needed to gather point-of-purchase data. The biggest collector of this data is Nielson’s BookScan system, which is modeled after the music industry’s SoundScan.

But not all retailers feed their data to BookScan and not all bestseller lists use BookScan anyway. The New York Times has the most prestigious list, which is based on several large chains, a number of independent booksellers, and select mass market accounts. USA Today and the Wall Street Journal employ similar methods of sampling, including judicious use of BookScan. Ditto Publisher’s Weekly. However, many large booksellers – like Sams and a number of other mass market retail chains, schools, Christian bookstores, rack jobbers, e-books, and high volume tabletop display marketers – don’t provide their data to BookScan. The largest Christian retail chain doesn’t even provide its data to the CBA (Christian Booksellers Association) bestseller list. One wouldn’t, of course, expect the lists to account for other ‘special markets’ including direct sales nor organizational and author purchases. The good news is that Amazon and Walmart sales are now included with BookScan – but several of the lists resisted using Amazon’s sales until the last few years.

What percentage of book sales are reflected on bestseller lists? No one knows for sure based on all the above reasons. I’ve heard estimates ranging from 30% to 60%. Anecdotally, one author friend has now sold three million copies of a single book. Of those, 100 thousand have sold in traditional book selling settings and the other 2.9 million have sold direct to consumer, business to business, or through back-of-room sales when he speaks. Those 2.9 million units have never been counted on a bestseller list.

Because bestseller lists do create positive publicity and sales momentum there are more than a few occasions when authors and publishers have attempted to manipulate their book’s placement on the lists. For example, back when it was harder to track single store sales, an author or agent might order the five or ten or twenty or thirty thousand copies of a new book needed for speaking engagements through a single bookstore to ‘force’ a book onto the list. I’m sure this has helped ongoing sales just for the fact that accounts would see the book show up on a list and order more store copies. But point-of-purchase data, at least within a chain, is now sophisticated enough to spot this as an anomaly, not a trend. The New York Times at least used to put a dagger symbol next to books that had large bulk orders. (Do they still do that?)

There is a publisher axiom that says you can get a book on any bestsellers list through marketing but in order for it to stay on the list it has to be a great book that generates word-of-mouth advertising. Longevity of a book on various bestseller lists is almost always an indicator that the book has real ‘legs’. Or, in the case of books that sell hundreds of thousands or even millions of units and never show up on a list, they either need to be great or the author needs to have a great platform for moving product.

So bestseller lists are important indicators of what’s happening in major swathes of the book selling environment but they have information gaps in that environment and don’t even attempt to measure what’s happening in special markets, so they can’t tell the whole story of which books sell most.

Sales Continue to Drop for Print Books

Publisher’s Weekly just reported:

The total unit sales of print books sold through the outlets whose sales are captured by Nielsen BookScan dropped 10.2% in the six month period ended July 3, falling to 307.1 million. Among categories, the biggest decline came in adult fiction with units off 25.7%, while mass market paperback had the steepest decline among formats with units down 26.6% in the period. BookScan totals cover about 75% of the outlets where print books are sold.

Is this yet another signal that the book is dead or should at least be placed on the endangered species list?

As someone who makes a living in the book publishing industry I continue to maintain an optimistic position on the future of the book, in part, because I don’t define the book as a physical object.

I see no reason for hand wringing. Publishers need to keep their focus on what they can control and what matters most: great content. The distribution medium matters but is not paramount. The music industry fought Napster (rightfully) and electronic distribution (wrongly) for most of a decade – and lost control of its own packaging and pricing. I think the book publishing industry has maintained a much healthier point of view toward electronic formats from day one.

I like physical books – actually, love is the better word for it – but I’m not going to lose sleep if we sell more books as electronic editions and kill fewer trees in the process. One of the biggest benefits of selling e-books for publishers is fewer dollars tied up in paper and ink with all the inventory management issues surrounding that. The amount of time it takes to recoup a dollar of the investment that goes into publishing a book is long enough without making the irreversible commitment to a print quantity that may not dovetail with real demand.

Of course many publishers have long built financial models around a certain percentage of their unit sales coming from higher priced hard cover releases. As e-books continue to eat into the number of hardcovers sold, particularly with adult fiction, it changes the proforma dramatically, so I’m not saying this change makes things easier in all ways. Change is hard.

I’m strictly describing what I think is – not proscribing what should be. And no matter how strong Amazon is as a bookseller, I still hope the market will support a robust brick and mortar retail environment. (Borders might not agree that is possible – but we should know if their reorganization is Chapter 11 or Chapter 7 within days – or even hours.)

My personal prediction – more gut than numbers at this point – is that five years from now 35-40% of all books sold will be e-books (digitally distributed), which would mean the majority of books consumed would still be on the ink and paper medium. I also think that projection would leave space for a strong brick and mortar presence for at least Barnes and Noble and some exceptional independents that incorporate an e-book strategy into their overall sales mix.

“The reports of my death are greatly exaggerated,” said Mark Twain after hearing his obituary had been printed in the New York Journal.

The same can be said by and of the book.