Tag Archives: Random House

More on the agency model and H-C blowing up library e-books

As you’re probably aware, the last of the major publishers to hold out against the agency model of pricing for e-books has finally given in.  Or maybe I should say sold out.  Random House announced earlier that it would join the other publisher not so affectionately nicknamed the Big Five in adopting the agency model for e-books.  What this means is that the publisher and not the retailer will set the price for e-books.  So, no more shopping for competitive prices.  E-titles will cost the same across the board, no matter which online retailer you use.

Now, it’s been interesting to watch some of the reactions across the web over the last few days to the news.  On the kindle boards, readers were gnashing their teeth at the sudden increase in price for a number of books.  And, folks, we aren’t talking small price jumps.  No, we’re talking increases of multiple dollars.  And we are talking about some very restless and angry customers.   Customers who may decrease the number of their purchases simply because they can’t afford — or won’t pay — as much for an e-book as they will for a mmpb.  More than that, when they see the price of an e-book for a title that has just hit the market and the projected for price for the mmpb that will be out in just a few months AND the mmpb is less than the digital title, well, the natives start doing the war dance.

But what is really telling have been the justifications for the change to the agency model. Random House talks about how this will make more money for them and for their retailers and will even the playing field for the independent booksellers who now sell e-book titles through google books, etc.  But no where have I seen anything about the authors — the creators of the e-book — getting more money.   While I appreciate anything that helps save the indie booksellers, let’s face it — this is simply one last grab at trying to maintain the status quo and not adapt to the changes pounding the industry right now.

There’s one other point I want to address about the above link.  One of the reasons the author of the article cites as being “good” about RH’s adoption of the agency model is “blockbusters everywhere!”  Gee, this wasn’t a problem before Apple opened the iBookstore.  Remember, everyone, we didn’t have the agency model until Apple and Steve Jobs got into the mix.  As for blockbusters everywhere, the only ones left out were those who purchased solely from Apple and, gee, they didn’t have to.  Kindle, Nook and the other major e-readers all have applications for the iPad, iPod touch, etc.  So Apple users weren’t tied to iBookstore.  Also, has anyone noticed how Apple hasn’t offered apps for non-Apple platforms, thereby losing sales?

’nuff said.

As for Harper-Collins and its decision that e-books sold to libraries will basically self-destruct after 26 check-outs, they’re really started a firestorm of protest.  Librarians are up in arms, calling for boycotts of H-C and, in some cases, even the jail-breaking of DRM on H-C e-books.  Why?  Because this decision will wind up costing libraries across the nation who offer e-books to the patrons in one way or another.

The most obvious way is that the libraries will have to contract with OverDrive for more “copies” of each e-book.  Let’s face it, that presents a problem in this day and age when libraries are facing huge budget problems.  Libraries across the nation are being forced to reduce hours, reduce their acquisitions, reduce staff numbers and are having to reduce hours — when they aren’t closing altogether.  Having to find more money in their budgets to buy additional copies of e-books because H-C has applied some magical formula and come up with the number 26 because, supposedly, that’s how many times a print book is checked out before it’s taken out of circulation.  C’mon, guys.  Apples and oranges here.

I don’t know about your libraries, but mine checks out books a lot more than 26 times before it is taken out of circulation.  The exceptions are when the binding breaks down — then it is temporarily removed and the binding is repaired — water damage, etc.  But normal wear and tear doesn’t kill a book that quickly.

But let’s look at it from another side.  Libraries are facing an increasing demand for e-books.  If, suddenly, they can no longer offer books — or if someone has been on a waiting list for months and months for an e-book only to suddenly be told they won’t be getting it because it reached that magical number of 26 checkouts, can you imagine the bad feelings?  Patrons make or break a library.  Angry patrons complaining to city councils can definitely break it.  And all over something libraries have no control over.

But what does H-C have to say about the uproar?  Here is an open letter to libraries about their decision.  H-C recognizes the importance of libraries but — and this is a big but — “Our goal is to continue to sell e-books to libraries, while balancing the challenges and opportunities that the growth of e-books presents to all who are actively engaged in buying, selling, lending, promoting, writing and publishing books.”  In other words, they are more worried about making sure libraries are as humstrung by DRM as is the purchasing public.

But let’s see what else they have to say.  “. . .our goal to make sure that all of our sales channels, in both print and digital formats, remain viable. . . ”  More of the same.  Limit digital in anyway possible to keep the print end alive.  But don’t ask us to change our business model because we won’t.  At least not one moment before we absolutely have to.

“We have serious concerns that our previous e-book policy, selling e-books to libraries in perpetuity, if left unchanged, would undermine the emerging e-book eco-system, hurt the growing e-book channel, place additional pressure on physical bookstores, and in the end lead to a decrease in book sales and royalties paid to authors.”  So, are they going to start putting limits on the number of times a print book can be checked out?  Or, conversely, start paying authors royalties based on the number of times an e-book is checked out?

“Twenty-six circulations can provide a year of availability for titles with the highest demand, and much longer for other titles and core backlist. If a library decides to repurchase an e-book later in the book’s life, the price will be significantly lower as it will be pegged to a paperback price point.” Wow, a whole year.  Possibly only 26 readers and then the title goes POOF.  As for tying the price of repurchasing the title to the paperback price point, well, I sure hope that’s written into the contract now because I seem to remember the publishers that adopted the agency model saying e-book prices would come down when the mmpb came out.  How closely have they stayed to that promise?  Well, let’s just say, I stopped holding my breath a long time ago because the price drops aren’t occurring as quickly or as deeply as represented.

I’ll admit now that I am a big supporter of libraries and I think this is a lousy decision by H-C.  A decision that hurts libraries and their patrons.  More, it hurts the author and even H-C because the decrease in the number of e-titles the libraries offer will lead to a decrease in sales.  People often use the library now to check out authors they haven’t read before.  Or to check the latest book from an author they used to like a great deal but who had disappointed in a book or two.  If they like what they read, they will then go buy books by that author.  The same goes with e-books.  This is a no-win decision for all involved and very short-sighted, imo, on H-C’s part.

For more information on this, check out this article from the Des Moines Register.


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Tuesday Morning

This is an exceptionally busy week here at NRP, so blogging will be sporadic at best.  This is what happens when everyone gets sick the end of the month.  It makes the first week of the next month even more hectic than usual.  But enough of that.  There are a couple of stories that caught my interest browsing the internet that I want to share.

Let’s start with what is probably the biggest news of the week so far.  The last of the major publishing houses to hold out against the agency model has finally given in.  Random House has announced it will be adopting the agency model of pricing starting this month.   In other words, RH will set the price for e-books instead of the retailer.  What this means is that we very well may see an increase in price for their e-titles because Amazon, B&N, etc., will not be able to discount the titles as they have in the past.  Will this mean a slow down in the number of e-books purchased?  Probably not.  It will mean an increase in gnashing of teeth and cursing of publishers on the different discussion boards. While it will — supposedly — even the playing field between the major sites like Amazon and BN and the independent retailers, that remains to be seen. It also remains to be seen if this change will mean a higher margin of profits for the retailers as RH claims.  Note, they don’t say a word about how this will impact the authors — surprised, anyone?

What is truly interesting is that RH is not going to the agency model in the United Kingdom.  It is clear from this link that RH is more worried about how the UK courts will rule on the agency model than it is on how the various investigations into the agency model will turn out here in the US.

Barnes & Noble is looking at its third-quarter postings and trying to figure out how to balance the print and digital side of its business.  They have also announced that they don’t plan, at this time, to close any additional stores beyond the few it has already announced.  In fact, it may actually move into some of the locations being shut down by Borders.  Hopefully, this means they are taking a hard look at their operations and trying to adapt to the changing marketplace.

Finally, here’s a link for “The eBook User’s Bill of Rights” sent to me by one of our authors, Taylor Lunsford.  I have to say, Librarian in Black pretty much hit the nail on the head.  Most publishers need to figure out that readers want to be able to read their e-books on any device and not be hampered by DRM.  They want to be able to loan an e-book like they do a real one and to be able to give it away.  I’m not sure about the resale but, but that’s only because I haven’t taken enough time to really think that one through.  But an e-book is a book as much as a printed book it.  A book is the product that is produced by the author.  The rest is just window dressing.


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Some Random Thoughts and Links

Well, it’s Sunday morning and I’m find myself in a quandary.  I didn’t write the blog early yesterday because, well, I was hoping to find something that wasn’t related to Borders or publishers-doing-stupid-things.  So, here I am on Sunday morning trying to get enough coffee into me to function and figure out what to blog about at the same time.

Let’s start with the obligatory Borders report.  Mark Evans has an interesting list of six reasons why Borders went bankrupt.  While I don’t necessarily agree with what he has to say, he makes some interesting points.  Author Melanie Benjamin talks about where she was and how it affected her when she first learned about the Borders filing.  The bankruptcy trustee has named the unsecured creditors committee.  Included on the committee are publishers and landlords.  This article points out that one of the issues Borders will have to deal with is making sure it is closing the right number of stores AND the right stores under the circumstances.  Also, this committee will have something to say about it.  Add that to this article that seems to confirm my suspicions that there will be more closures in the very near future.

In other news around the publishing world, Random House announced it is offering early retirement to employees over 50 who have been with the company at least 5 years.  This offer expires April 15th.  Of course, they are also quick to say that this is NOT an indication that RH is going to downsize.  I really wished I believed them.  But, in my experience, when companies start offering this sort of a deal, particularly with employees who have not been there for long, it is a sure sign of downsizing in the future.

Barnes & Noble released its third quarter figures for 2010.  It doesn’t surprise me to see that their sales were pushed by digital downloads and tech.  Barnes & Noble has done a lot of things wrong, in my opinion — most importantly having played a large role in driving out the independent booksellers.  But they did two things very right, things Borders should have done.  They embraced the internet and have had a strong online presence for years and they have a branded e-reader that is associated with their name.

On the ongoing front of will we ever get an industry standard in e-book formats,  Japan has made a step in that direction.  It was announced last week that their publishers and electronics companies had adopted EPUB 3.0 as their standard.  Unless I am completely wrong — very possible, of course — it isn’t going to be long before we see two main formats:  EPUB and MOBI.  The other formats will drop by the wayside.  Whether we will see EPUB become the industry standard or if it remains split between the two will be something to be seen over the next 5 years or so.

In other EPUB news, and this does fall under the heading of publishers-doing-stupid-things, comes this.  Harper Collins once again proves, at least to me, that it doesn’t support e-books nor does it support public libraries.  To start, there aren’t that many e-titles available for download from libraries.  Now there will be even fewer.  Why, because of this idiotic decision by HC.  A decision that flies in the face of mainstream publishers’ very frequent cry that e-books aren’t real books.  It is this argument that publishers use to justify DRM, saying that when we pay for an e-book we are only buying a license for it.  But, with the decision to limit the number of times an e-book can be checked out, they are saying it should be treated as if it has the same lifespan as a “real” book.  Can you say, have your cake and eat it too?

Finally there’s this article about the increase in piracy of e-books, specific to this article Kindle e-books.  I think what frustrates me the most about articles like this is the fact that it completely ignores the fact that piracy happens to ALL books, not just those released in digital format.  How quickly they forget about how the last Harry Potter book hit the internet in PDF before it was released in stores.  When’s the last time they brought up the brouhaha that surrounded Stephenie Myer when one of her manuscripts was leaked on the internet AND SHE THREW IT AWAY.  But what really bothers me is how so many of the publishers who rant about e-piracy use the argument about how it is stealing from their authors and yet these same publishers do not give accurate accountings of e-book sales, nor do they give authors a reasonable royalty on e-book sales.

Finally, on a personal note, I want to thank everyone who has supported Naked Reader Press and our authors.  It dawned on me today that we put our first books up for sale just about 6 months ago.  It’s been 6 months of hard work but it has been worth it.  So thanks to everyone who made it possible.

(Cross-posted to Mad Genius Club)

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Industry News

A couple of articles caught my eye today and I thought I’d pass them on.

In a move that tends to reinforce the belief that the EPUB format will become the main digital format for books, Japan’s publishers have decided to go with that format for their e-books.  Specifically, they’ve agreed to adopt the EPUB 3.0 standard.  This strengthens the position of e-readers like the Nook while it is another knock against the Kindle which does not support EPUB documents.  (Note, however, that the article says the Kindle does support this format.  As a Kindle owner, I can only say I wish it did.)

In other news, from the realm of WTF, can this really be happening?, comes this.  Author Karin Calvo-Goller is suing Joseph Weiler, editor of European Journal of International Law, and — if I’m reading the reports correctly — Thomas Weigend for what basically is nothing more than a negative review of her book, The Trial Proceedings of the International Criminal Court. Calvo-Goller is a senior lecturer at the Academic Centre of Law and Business in Israel and Weigend is director of the Cologne Institute of Foreign and International Criminal Law and dean of the faculty of law at the University of Cologne.

Whew, that’s a lot of lawyers and professors all rolled up in one.

Long story short.  Calvo-Goller complains that the review was defamatory and demanded it be removed from the site.  Instead of complying with her demand, Weiler instead offered to post her response to the review.  This response would be available to be read immediately after the review.  Calvo-Goller refused this and filed suit in France.  It is her stance that the review was libelous and would do damage to her reputation and, to support this, provided a positive review from a German reviewer.

From the Cheat Sheet on this topic:  The final absurdity is that the review of her book, The Trial Proceedings of the International Criminal Court, wasn’t even that bad: Though condescending in tone, it praised Calvo-Goller, saying she “meticulously covers all relevant topics,” and faulted her for minor problems like “rehashing the existing legal set-up.”

In news closer to home, Random House announced today it is offering early retirement to employees over 50 who have been with the company at least 5 years.  This offer expires April 15th.  Of course, they are also quick to say that this is NOT an indication that RH is going to downsize.  I really wished I believed them.  But, in my experience, when companies start offering this sort of a deal, particularly with employees who have not been there for long, it is a sure sign of downsizing in the future.

Finally, another short bit on Borders.  This is from Trident Media group chairman Robert Gottlieb, and let’s hope Borders is listening:  “[W]ith the right leadership in place and the right outlook” Borders can emerge from bankruptcy and find success.

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