‘Tis Better to Lose a Sale Than Sell an eBook?

July 14th, 2009 · 24 Comments
by Kassia Krozser

This week’s publishing industry debate started when the Wall Street Journal covered Sourcebooks’ release strategy for Bran Hambric: The Fairfield Curse. The article contained some blunt discussion about why the publisher chose to delay the ebook and why others are doing the same. This peek behind the curtain didn’t sit will with readers, exposing tensions that really do need to be exposed.

As I write this, I am loading my Kindle in anticipation of a cross-country flight. American Airlines apparently wants to charge me for every bag I check (and, whoo hoo!, I got to use my own ink to print advertisements on my boarding pass), so, yeah, I’m doing everything I can to make sure I don’t exceed carry-on size. I don’t have the luxury of packing books for the flight there in my carry-on bag while books for the flight home are stuffed in my checked suitcase.

Three books I wanted to buy aren’t available in Kindle editions. Only one of those is a book I really feel I must have. The others are nice-to-haves. For the authors and publishers, those are lost sales. Robert Gottlieb, literary agent, says “he doesn’t allow any of his authors’ books to be published simultaneously as an e-book when he can prevent it.” (WSJ article, via Publisher’s Lunch due to WSJ paywall)

In the same article, agent Richard Curtis is just as blunt, saying, “We don’t want to undercut the sales and royalty potential of the printed hardcover.” This makes me wonder: does withholding product from the market actually help sales? Are Curtis and Gottlieb assuming the ebook customer will shrug and purchase the print book?

At least they’re being honest about it. They’re worried that ebook sales will negatively impact the potential for this title to hit a bestseller list. They’re worried that the difference between earned digital royalties and lost print royalties is too vast. Apparently, ’tis better to have no sale at all and all that.

Gottlieb compares the hardcover and ebook markets to theatrical and DVD releases. It’s a bad comparison. I’ve used vinyl albums versus cassettes. Others use CDs versus digital downloads. But theatrical versus DVD? The DVD package often contains more content, more entertainment than the theatrical film; the ebook, generally, has less. And the DVD purchase is generally cheaper than the price of seeing a movie in a theater, after you factor in ticket price, food, and beverage. And, of course, you can resell the DVD, loan it to a friend, and/or play it on multiple devices.

I wonder if publishers are paying attention to the rumbling from readers about crazy, unpredictable digital release patterns. Is the ebook release concurrent with print? A week after, two weeks, six months? Think about it: all your marketing efforts are getting customers to the point of sale…and then you lose them. These readers are not saying, “Well, that format isn’t available so I’ll just buy this one.”

Nope, they’re saying, “That format isn’t available so I won’t buy this book at all.”

What Curtis and Gottlieb are suggesting is that the current business model needs to be protected above all else. I would suggest that preparing for shifts in reader behavior now leads to less pain in the future. Is it better to scoop the mass market reader into the hardcover window via digital or is it better to maintain the status quo, relying on those sales to happen at the mass market/trade level?

If the reader is me, it’s definitely the former because other books will capture my attention in those intervening days, weeks months. The longer the gap between reader awareness and ability to purchase, the greater the chance that a book will be forgotten (or, ahem, sunk due to poor word-of-mouth).

I’m not sure what the answers are, and it will only be through experimentation and analysis that some of these answers emerge. I think there’s some danger in expecting consumers to play by the rules of last year’s business model, especially if readers are adopting this technology at an impressive rate (considering digital reader, phone-based, and the ever-popular browser based reading). In fact, I think it’s dangerous to expect readers to buy into your business model at all.

File Under: Non-Traditional Publishing

24 responses so far ↓

  • Karen Templer // Jul 14, 2009 at 9:56 pm

    Well put, Kassia. Apparently it can’t be said often enough: people who want the hardcover will buy the hardcover; people who want the ebook will buy the ebook. If I’m not predisposed to buy something in hardcover, the absence of an electronic version will by no means induce me to do so. By the time the ebook comes out, I’ll either have stewed in my peevishness over its delay, at which point no way am I giving anyone the satisfaction of a purchase, or I’ll have gotten over the impulse to buy it at all (as is so often the case with paperback releases). So, like you said, do they want to sell me one copy or none?

    Conversely, a book I am predisposed to buy in hardcover, I’m going to buy in hardcover even if I also buy it electronically. Last week I was thrilled to find Byatt’s “The Biographer’s Tale” in the Fictionwise store and snapped it right up, even though I already own the US *AND* UK hardcovers. So now they’ve got three sales out of me instead of two. When her next one releases, I’ll buy the hardcover for my Byatt shelf and I’ll also buy the ebook for actual reading. Unless of course the ebook isn’t available at that time, in which case I’ll read the print version and only buy the ebook later if I’m head over heels for the book and dying to read it again. So do they want to sell me two copies or just one?

    It’s such an incredibly self-defeating way of doing business.

  • Martin // Jul 15, 2009 at 3:35 am

    As a retailer of both hardcopy and ebooks, I’d like to add a couple of things here:

    1. The reason publishers are wary is the “Napster scenario”. Even honest book lovers have no compunction about downloading free stuff. But book authors are not mega millionaires like artists in the music industry. They will simply cease to write when their paltry royalty is reduced yet further.

    A huge reduction in published material is one possible result of the ebook thing, and it is one all of us should avoid at all costs.

    2. Why should authors get a lower royalty on electronic sales? The publishers and retailers both incur lower costs, so the royalty should be at least as much as a physical sale. Agents would be failing in their duty if they did not resist a replacement of physical sales by ebook sales.

  • Chris // Jul 15, 2009 at 7:02 am

    Kassia I think you’re absolutely right. In fact, you’re so right that the New York Times took your idea and wrote an article about it themselves!

    The publishers can fear the “Napster scenario” all they want, but the “problem” isn’t going to go away, no matter how much they want it to. The publishers only choice is to get ahead of the problem. The dam’s already busted, sticking your finger in it isn’t going to help, you’re just going to get crushed by the onrushing wave. The music industry didn’t learn this and turned millions of people against them. Turning people off by telling them they can’t have something in the format they want isn’t good public relations and doesn’t result in a shrug of their shoulders and a resigned “Okay, I’ll do it your way” it results in people who avoid your products. The publishing industry needs to get their heads around that. Of course their basic problem is the people who run those companies are, generally, older, and don’t use the technology or understand it. They’re resistant to change. But, they have a choice, either adapt to what their audience wants, or get left behind. It’s that simple.

    There is no way to get around piracy. But, many pirates won’t pay for the material if there’s not an option to get it freely. It’s not a “lost sale” because the sale wasn’t going to occur in the first place. All of these industry group pronouncements that piracy has cost them X dollars in lost sales are absolutely stupid. The studies presuppose that all of the individuals who stole the music, movie, video game, etc. would have bought it if they couldn’t steal it. That is absolutely not true.

    E-books, according to the NYT, are already sold at better profit margins than paper books. Less published material and more e-books would make more money for the publishers because there is no secondary market or sharing of books between friends, and the shipping and printing costs are non-existent. Furthermore, they’d also cut most retailers out of the profits. They’re just not smart enough to realize this yet because the publishing industry, like the RIAA, is led by individuals who are resistant to change.

    I’m all for the authors getting the same royalties regardless of format. Martin, you are right in that agents would be failing their clients if they didn’t resist lower royalties. But that’s a problem for them and their clients to negotiate with the publishers. Stopping e-book publishing isn’t going to happen, it’s just going to cost certain authors sales. According to the NYT, John Grisham, long notoriously against his books appearing in an e-book format, has come around on this issue and his short story collection coming this fall will be published both in paper and e-book format. I haven’t purchased Grisham’s last book partly because I couldn’t get it in Kindle format. (The other part is because apparently it was pretty bad.)

    As you state Kassia, it’s dangerous for a publisher to expect consumers to buy into last year’s business model, because they won’t do it. Any publisher who doesn’t learn this quickly isn’t going to survive long.

  • Rupert Heath // Jul 15, 2009 at 7:18 am

    Publishing is a very reactionary business. And for good reasons, not always readily perceptible to those outside the trade. Over the century and a half it’s taken to hammer out the current business model, many new ideas and examples of what might nowadays be termed ‘blue sky thinking’ have been mooted, only to be abandoned when it’s discovered they simply don’t make any money. This is why publishers are so afraid to innovate – the current model is imperfect, sometimes seemingly to the point of lunacy, but it’s one the publishers know they can use to make money, which is after all what a business needs to do to survive.

    Ebooks pose a problem, since it’s far from clear, however healthy the demand for them is, that they are capable of making the profits book publishers expect (or possibly even need). The current mood among early adopters of ebooks seems to suggest that price must come down (I regularly see $2-$3 price points being quoted as an ideal) and content must improve. Piracy is also a terrible risk; and once that stable door is opened it will never be shut again, not least because publishers have no stomach for the fight. But even leaving piracy aside, if books are going out as $2 ebooks, competing with the original paper publication, that cannot be sustainable – without ebooks carrying advertising, that is (and that’s another whole subject, albeit a very worrying one for the future of publishing).

    One point I’ve never heard anyone mention in this debate is the personal, almost emotional, attitude of those who work in the book trade, especially at the editorial end. Most people who work in the trade love books: not merely reading, but they love what a book is, and what it represents. This may just be my personal opinion (though it’s one based on 15 years of working at the editorial end of trade publishing), but I believe this is largely an aesthetic, physical attachment. So I think there is a reluctance on a fairly basic level to adopt ebooks across the trade, since not many people in the industry really like them or have a personal desire to see them succeed.

    If I am right, it may be that the future of ebook publishing lies elsewhere entirely. New publishers may set up with the funds to make attractive offers to top authors, and start creating and marketing ebooks at the right price point, and with all the presentation and added value which readers want or expect. The fact that no such new publisher has yet arrived, however, is a possible acknowledgment that it’s very hard to make a book publishing business model work except the traditional one.

    Ebooks appear to have exposed a schism between the way in which publishers wish (or need) to do business, and what (some, at least) readers want. How the future plays out in terms of formatting, availability and price will be largely a question of who ends up running the game.

  • Danielle Yockman // Jul 15, 2009 at 8:46 am

    I am a sometime eBook and mostly paperback reader who is transitioning into an all eBook reader. I have one question: Do they still make hardcover books?

  • Factotum // Jul 15, 2009 at 9:34 am

    Trade publishers are a very conservative lot. For an idea of where the market is I think you could do a lot worse than look at Academic/STM publishers, who have embraced e-books (and POD for that matter).

    It’s interesting to note that the Booksellers recent list of the top 50 publishers in the world was dominated by companies from market segments other than “trade”.

    In my opinion the future is a mix of online, digital short run/POD and e-book, with simultaneous release of all formats. I think high quality hard backs in limited edition runs, signed and numbered by the author will appeal to collectors. It’s now possible to produce beautiful digitally printed hardbacks with high quality papers and bindings in runs as low as 100 for the same as a POD paperback . I know single copy hardbacks are out there, but unit cost is expensive and short run digital printing means you really don’t have to cut corners on quality.

    The paperback and e-book should be tailored in terms of format and price to suit the market. E-books could be more expensive than paperbacks if they have additional content. If it’s the same content in e format then I think they should be cheaper, or at least the same price. Paperbacks can stay as they are, as there’s not much wrong with the format as it is. Again with digital SR/POD the quality is now there for paperbacks.

    No book need go unsold nor any sale be missed for want of availability in any format.

    This is all possible, and is even very economical if digital workflows (incorporating XML etc.) we part of the production process from the start. Digital is something that need to be fully incorporated in any publishing organisation, from top to bottom, start to finish. Not just a separate team or a specific set of projects outside the normal publishing program.

    I think often e-books are more expensive as they have been converted from a print pdf. Either that or publishers are just trying to see how much they can get away with pricing.

    Or maybe they just don’t get it.

    There are more opportunities for new publishers with new models right now. I think over the next couple of years we’ll see some very interesting new players emerge, some of which are bound to hit upon a successful formula.

  • Kat // Jul 15, 2009 at 10:29 am

    Fantastic post. This was an issue just the other month with (I KNOW) Janet Evanovich’s latest Stephanie Plum. They waited a week to release the ebook, and there were numerous complaints on Amazon about that one. Did they buy the hardcover instead? NO! It’s like the publishers don’t want to know (or don’t care, which I doubt, because they have to) what the readers need. Turning a blind eye won’t fix the problem. It just leaves room for someone else to come in and swoop up the opportunity to do it instead.

  • Pauline Baird Jones // Jul 15, 2009 at 10:38 am

    Well, I can tell you that publishers and authors lose sales from ME if:

    * I can’t get the book when I want it.
    *If the price of the ebook is higher than/the same as the print book.
    *It’s not in the format I want.

    I may buy three print books a year and I want that to be zero. I have no more space for print books.

    The fact that some publishers/editors might be in love with print books means less than nothing to me.

    I care about what I want as a consumer/reader. And the company that will deliver what I want gets my money. End of story.

  • J L Wilson // Jul 15, 2009 at 10:47 am

    I’m an author whose books come out in digital and print at the same time with one publisher, digital and print later with another, and only digital with another.

    The prices of my digital books are much lower than the print versions, but the royalty for digital is much higher than my royalty on print.

    My digital sales are as much if not more than my print books. I love having 2 venues in which to promote my books. I feel I’m hitting 2 completely different markets.

    As a reader, if it doesn’t come out in digital, I don’t buy it: period. I occasionally return to the book (either on Amazon-Kindle site or Fictionwise) to see if it’s available. If not, I go to a different book on my “wanna read” list. Lack of a digital format is a lost sale with me.

    There are a lot of books out there I want to read. If I can’t get it in the format I want, I’ll move on.

  • Edith // Jul 15, 2009 at 10:51 am

    I am in agreement with Martin, although I’m sure most recording artists are not, in fact, “mega millionaires”. At least musicians have alternate ways of boosting their incomes – through the sale of merchandise and concert tickets. Very few authors can command a paying audience, and their “merch” (t-shirts, buttons, bookmarks) is typically given away as advertising. Piracy is much more painful to an author than to a recording artist.

  • Clive Warner // Jul 15, 2009 at 11:00 am

    MARTIN said: Why should authors get a lower royalty on electronic sales? The publishers and retailers both incur lower costs, so the royalty should be at least as much as a physical sale. Agents would be failing in their duty if they did not resist a replacement of physical sales by ebook sales.

    =============================
    Your first point is perfectly valid. In fact I am working on moving my own small press into EBook publishing too. And since I do not need to go to the hassle of printing etc for an EBook, I intend to give a much higher royalty on EBooks than printed books.
    But your last statement makes no sense at all … none whatsoever.

  • punditius // Jul 15, 2009 at 1:55 pm

    Seems to me that the short answer to Mr. Gottlieb is “put the book out in both formats at the same time and at the same price.” He surely won’t sell fewer books, and he probably will sell more. Then come paperback time, do the same thing.

    I think that there’s a great deal of room for variation in ebook/pbook marketing. I can imagine one kind of book for which the ebook is a paperback equivalent, and publishing the ebook should be delayed to maximize both readership and profit. I can imagine others for which the ebook is the first published, and the hardback delux superfan edition is sold later, in limited edition, for much more money.

    Personally, there are some books I won’t buy in ebook format, and others I won’t buy in hardback format. There are some I’ll pay hardback prices for, no matter what the format, and others I’ll only pay paperback prices for in any format. There are even some I’d buy in hardback form, but only if they came with a free ebook version.

    In short, I don’t think that the emerging market is going to necessarily be one in which the marketing is as uniform as the current regime is.

    One size – or price – or format – or publishingt sequence – simply doesn’t fit all.

  • Delaying Ebook Releases: A Publisher Weighs In | Booksquare // Jul 15, 2009 at 7:35 pm

    [...] you the following post from Dominique Raccah, Publisher and CEO of Sourcebooks. The other day, I wrote an article in response to Sourcebooks’ decision to delay the ebook release of their upcoming title Bran [...]

  • Kassia Krozser // Jul 15, 2009 at 7:42 pm

    I thank everyone for their comments. It’s clearly a topic that needs more discussion. I asked Dominque Raccah if she’d post some comments she made privately, and she agreed. I cannot tell you all how much I appreciate her willingness to speak up. I’ll be coming back with specific responses as time permits (I’m traveling now), but want to point you to this response as food for thought:

    Delaying Ebook Releases: A Publisher Weighs In

  • Joseph Harris // Jul 16, 2009 at 5:59 am

    Lots of interesting personal views, and personal habits. But as I so often find in this discussion people talk apples and oranges and chalk and cheese.

    Publishing is an unmbrella word that covers so many different niches, genres and activities that the idea there is just one answer seems uninformed.

    Yes, of course ebooks are going to grow in importance. In some fields – science fiction is one and erotica may be another – it appears to be very successful both as digital offerings and as ebooks driving print sales.

    On the other hand, if you research US and UK sales, the rise of the print book from new technology such as POD is phenomenal; up some 600 percent in titles since 2002.

    The percentage of book sales verifiably ebook is miniscule at present. And some small publisher sales are not included in print industry income figures.

    When this is compared with the music industry the differences are rearely appreciated. While book buyers have only been exposed to the digital file for a decade, the music listener has been using them in many ways such as the Walkman [remember that?].

    But the music industry too is not a monolith. Pop music is almost completely different to classical, orchestral and shows.

    Even in discussing the decline in pop sales one possibility is never discussed. That pop music just isn’t as popular as it was – especially as the recession begins to bite.

    And the internet, which has probably done more for print books sales than for ebooks, is hardly out of nappies in terms of experience and maturity.

    At a guess the whole digital file market in a couple of decades will be somewhere under 50% of the whole and print books will have held fairly steady as reading in toto grows.

    The social changes that are likely from the technological revolution have not really even started yet, and may not go in the expected directions anyway.

    A very interesting time, as the Chinese say.

  • Miki // Jul 16, 2009 at 10:06 am

    Re: Trade publishers are a very conservative lot. For an idea of where the market is I think you could do a lot worse than look at Academic/STM publishers, who have embraced e-books (and POD for that matter).

    I work at an academic press and I can tell you that most academic presses have NOT embraced ebooks. And here are a couple of reasons why:

    Academic books make up the largest segment of pirated ebook material. There are at least 30 sites that I know of that actively post illegal copies of STM and humanities titles for students. This leads to lost sales for publishers, and also contributes to palgiarism, which is a huge and growing problem.

    Our authors, who are all scholars, need their work in print to qualify for tenure and promotion at their universities. E-books just do not have the street cred yet. If you think publishers are slow to change, try talking to an academic advisory board!

    And scholarly books aren’t “read” in the same way as trade books. Footnotes, endnotes, bibliographies, and appendices just do not function properly on e-readers.

    And, just to head off any criticism about textbook pricing, I’m not talking about textbooks here. I’m talking about scholarly monographs, which at our press, we price as low as we can to ease the burden on students (in the $25-$29 range.)

  • Factotum // Jul 16, 2009 at 2:50 pm

    Hi Miki,

    fair comment. I guess I was generalising to prove a point. I know a lot of STM and Academic publishers in the UK that have embraced e-books.

    I personally think piracy is generally as a result of what the market wants not being available. There’s a lot of evidence to support that.

    I think e-books should be the perfect media for any texts with with footnotes, endnotes bibliographies and appendices. If e-books aren’t using that functionality or delivering it well then that’s another story.

  • Steve Klingaman // Jul 16, 2009 at 3:23 pm

    You make some compelling points, and I respect that you have grabbed the ears of publishers with an in-your-face point of view. One small point: you lose me in implying that buying the DVD is somehow better than the theatrical release. It is a second-tier experience for all but a few. The extra material, while interesting, is not a deal-maker. And, after all, why buy? Rent!

    Question: before e-books, would you have purchased the hard cover edition or waited for the paperback?

  • Hez // Jul 16, 2009 at 5:42 pm

    i couldn’t agree more with kassia…if i go to a bookshop to buy a new book i’m keen to read, only to find it’s available only in expensive hardcover (which i can’t afford, and actually i prefer paperback formats anyway)…i simply wait for the paperback to come out. but i need something to read then and there, so i spend my money on another title. and then by the time that paperback comes out i might have forgotten about it, or borrowed it from the library or somebody else…

  • Friday Link Love 7/17 | Brad’s Reader // Jul 17, 2009 at 8:40 am

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  • Carolyn Jewel // Jul 21, 2009 at 10:52 am

    I buy some hardback books, but not very many. I have to REALLY want the book. For such books, I’d buy the hardback anyway, whether there was a digital version or not.

    For all other books, I just won’t pay that much. I’ll wait for the paperback edition. What I will do, however, and have done, is buy a digital version ($9.99) to read it right away and then ALSO buy the paperback when it comes out (if I liked/loved the book) so my analog collection is complete.

    For me, a digital copy available at first release = 2 sales.

  • Stephanie Chandler // Jul 26, 2009 at 5:21 pm

    Excellent job on this post. I’m an avid consumer of books and I’ll buy in hardcover or paperback (personally, I prefer paperback, but I’ll take what I can get). I’ve held off on buying a Kindle because I read a lot of business books and too many titles aren’t yet available. I have similar grumbles about audio books as I listen to lots of those too. In fact, the main reason I own an iPod is to listen to audio books. Traditional publishers: Pay attention! You’re killing your business by not taking advantage of all the distribution channels.

  • Melissa Newman // Jul 31, 2009 at 12:03 pm

    As a 20-year veteran of the newspaper industry — editor, publisher and other titles, I can tell you that this is a huge mistake — to be worried about scooping oneself is ridiculous. Back in the day when newspapers were the only game in town — the Internet entered and we had no idea what to do. So, we did the most stupid of things — nothing. We refused to have our content online for fear it would hurt newspaper print sales. Inevitably, what you “won’t” do the competition “will.” Newspapers who immediately embraced this new online source for news are for the most part still in business. Those who chose to be selfish and place themselves on “print only island” are perishing – some more quickly than others. Readers are going to read and “they” will choose the medium in which they read. E-publish or perish — just ask anyone in the newspaper right now what they’re worried about and they’ll tell you, their job.

  • Greg Cary // Oct 15, 2010 at 11:35 pm

    Just because a publisher has chosen not to release a book in an e-book format does not mean that a pirated version of an e-book can not be found. I think by not giving buyers the option of purchasing a in an e-book format is only going to make many people who would have otherwise paid for the book chose to simply steal it (lets call it what it is). And once they’ve seen how easy it easy to steal one book, who’s to say that they’ll pay for the next book whether it available from the publisher in an e-book format or not.

    I read the results of a survey in the UK about a year ago regarding piracy (mostly of movies and music). The interesting thing was that the majority of participants of the study who admitted to at least occasionally illegally downloading some copyrighted work stated that they would have purchased it had it been priced reasonably (that word wasn’t specifically defined) and just as available as the pirated version.