E-BOOKS MAY BE one of the fastest growing areas of publishing, with online bookseller Amazon reporting it now sells more digital than print books, but publishers still find the area deeply challenging even as the marketplace explodes, speakers told an e-publishing conference in Dublin last week.
“What publishing was, was a predictable, stable business model,” Rebecca Smart, chief executive of UK publishing group Osprey, says. Selling as well as distributing publications online has turned that model upside down. “In a market where margins are low, there isn’t necessarily room for the [old] business model.”
The importance of e-books to big publishers as well as small is clear, says Patrick Crowley, who works with the conference organiser, ePub Direct, an Irish-based distributor of e-books for publishers like Sony and Amazon.
He notes that HarperCollins has predicted that 50 per cent of its fiction sales will be in e-books within the next 18 months, and that its e-book sales have grown 250 per cent year on year.
Random House, Penguin and Simon Schuster have all recently noted that e-book sales have been central to profits, even in cases where revenue overall was down. And Amazon recently stated that owners of their Kindle e-reading device bought up to four times more books after getting a Kindle.
But print books will remain a strong part of every publisher’s stable, he notes. Sales statistics “point that the future of publishing is a mix of print and digital. They’ll sit side by side”.
To understand who and where customers are, what they do, and where they will be in the coming years, publishers will need to create, use and analyse metadata – publication information such as the title, author, publisher, book length, genre, sales rights, author notes, cover image, the table of contents and many other details – and market analytics.
Metadata is particularly important for an e-book, which has no physical form. “Metadata is the only representation of an e-book in the marketplace,” says Bowker publisher relations representative, Jack Tipping. Publisher data is at the heart of the business model for Bowker, which takes in metadata about a publication for free, and then provides it via Bowker Books in Print to retailers, libraries, schools and elsewhere.
The more precise, detailed and broad the metadata, the easier it is for a customer to find the book they want through retailers or search engines. And the more knowledge that can be gleaned via analytics.
Smart advocates setting up in-house IT systems so that all publication data is entered, and accessed through a single system. Not only is this important for streamlining operations, but it also makes sharing and analysing data easier, as these activities become ever more important.
She says specialist publisher Osprey had a head start in understanding customers. “We know our customers in the way many publishers really don’t. We were selling direct to customers before many others.”
Osprey also understands niche markets, she notes. When they found that 60 per cent of their military history readers also read science fiction and fantasy, they bought Angry Robot, a publisher in that area, and also just launched Strange Chemistry, a young adult science fiction and fantasy imprint.
Metadata is critical, but still lacking, for e-book marketing, says Crowley. “It’s clear that publishing has changed dramatically in the last couple of years”, but the marketing approach has not kept up with those changes. “It’s a big challenge.”
A potential use of analytics is to help publishers decide how to place and price their e-books. Using ePub Direct’s publisher data, Crowley observes that e-book prices are “significantly lower across every genre” in Britain compared to other markets, suggesting that publishers and authors are missing out on potential revenue.
He says that the most effective price point for publishers using ePub Direct for distribution, was $9.99. Books priced above $12 comprised 30 per cent of titles, but only 13 per cent of sales.
Lindsey Mooney, UK vendor manager for e-reader manufacturer and e-book publisher Kobo, agrees that publishers risk undervaluing their e-books and losing revenue. British buyers don’t seem to like items priced at 99p, and are far more willing to buy items that have a higher price, perhaps because of perceived quality.
Kobo, which has partnered with booksellers WH Smith, found its pricing “sweet spot” was £4.99. One advantage of e-books, though, is that retailers can easily change prices if an item isn’t selling, or give a discount on back catalogue books to help promote sales of an author’s upcoming new release, she adds.
Kobo, which has more than 10 million users in 200 countries, carefully analyses its user demographics, she says. “We know what and when people read, when they abandon books, when they buy.”
They have found that most people buy e-books “just before bedtime”, between 7pm and 9pm. A surprise finding was that people who read in the morning, spend more time reading, though they have no idea why.
Like Amazon, Kobo is eager to get people to buy their e-readers, not just their e-books.
“We’re keen to sell devices, because device users buy more, and read more quickly. They are 350 per cent more loyal and worth 30 per cent more to us per year. That’s why we’re continuing to evolve our products.”
It launched three more e-readers last week.
For e-publishers, one successful marketing approach is to utilise the ability of the net to create and support social communities. “Our marketing philosophy is about the tribe. Create a platform, have someone at the heart of the community, and that pulls in authors, which pulls in readers, which pulls in more authors,” Smart says.
Kobo has gone into the social media angle of reading in a big way. Initially just a small trial, its social media involvement now extends to a partnership with Facebook that enables Facebook friends to see what a Kobo user is reading. Readers can also go online to see what other readers are saying about a particular book and to share comments.
Mooney notes that readers have the option to share all, part, or none of their reading on Facebook.
“I don’t share all my books,” she says, jokingly adding: “Actually, the trash – that all remains hidden. But it’s a really great way to discover new books.”
While there are some reliable statistics available for the US and British e-book markets, little is known about the Irish market because publishers and retailers won’t reveal data, says Eoin Purcell, a commissioning editor for Dublin print and e-book publishers New Island.
He thinks Irish publishers have been slower to embrace digital publishing.
“I don’t think we’re lacking in innovation in Ireland, I think we’re lacking in communal action,” he says of the industry here. He worries that Irish publishers may be left behind because “this space is going to change very rapidly in the next few years”.
He says to expect continuous innovation in digital publishing “that will completely upset the game”. Technology means there are low barriers to entry, so publishers need to get used to more competition.
He notes that, in Britain, Tesco is going into the e-book market, signalling further book pricing discounts and narrower publisher margins.
For publishers, the future lies in continuous innovation coupled with self-awareness and market nous. “You have to find where your value lies as a publisher,” Purcell says.
* Amazon says for every 100 print books it sells in the UK, it sells 114 Kindle books. Source: Amazon
* One in five Kindle book buyers doesn’t own a Kindle (using the Kindle app on another device). Source: Amazon
* The average Kindle owner buys four times more books from Amazon after getting a Kindle. Source: Amazon
* Prime time for book-buying is before bedtime (7-9 pm). Source: Kobo
* The “sweet spot” in pricing is between £4.99 and $9.99. Buyers don’t like e-books that are too cheap or expensive. Source: Kobo, Osprey
* Romance, general fiction, mystery/ detective and sci-fi/fantasy genres sell best in e-books for Kobo. Children’s books, cookery and juvenile non-fiction e-books sell least. Source: Kobo
