Friday, 14 November 2014

The Digital Reader

The Digital Reader

Why Hachette Had to Settle: Revenues Fell 18% in Third Quarter

Posted: 14 Nov 2014 02:18 PM PST

15251223587_b226c4af96[1]Much ink has been spilt over the past day on the subject of Amazon, Hachette, and their new book contract, and while we don’t know who got the better end of the deal there is strong evidence to suggest that Hachette blinked first.

Buried under the news coverage of the new contract was another story which offers insight into Hachette’s motivations. PW reported yesterday that Hachette’s US revenues were down considerably from last year:

Third quarter sales at Hachette Book Group USA fell 18.5% in the period ended September 30, 2014 compared to the third quarter of 2013, parent company Lagardere reported. The decline was attributed to difficult comparisons with last year when the company had an "unusually high" number of bestsellers led by The Longest Ride, Lagardere said. The "difficult situation" with Amazon also impacted sales and HBG also postponed some titles, Lagardere said.

For all of Lagardere Publishing, revenue in the quarter fell 2.9%, to 564 million euros. In addition to softness in the U.S., sales were down in France and the U.K., but rose in Spain/Latin America.

While revenues were down in most of Lagardère’s publishing divisions, the sharpest decline by far happened in the US and was likely due to the ongoing contract dispute with Amazon.

Given the steep decline in revenues and the timing of news, I think it’s clear that Hachette struck a deal before they released the quarterly report, before they had to admit just how big of hit they took from letting the contract lapse earlier this year.

If they had waited until after the quarterly report, I bet Amazon would have turned the screws another notch – or even worse, let the negotiations drag on until after the lucrative holiday season had already begun.

And with S&S already having signed a deal with Amazon, there wasn’t going to be any chance of another major publisher negotiating with Amazon for another 9 months. That’s much longer that Hachette could have afforded to wait.

image by Ida Myrvold

The post Why Hachette Had to Settle: Revenues Fell 18% in Third Quarter appeared first on The Digital Reader.

Penguin UK CEO: Readers Don’t Want Subscriptions

Posted: 14 Nov 2014 09:32 AM PST

tom_weldon[1]Earlier today Tom Weldon of Penguin Random House UK revealed that PRH would not be getting into the subscription ebook market. Speaking at The Bookseller’s Futurebook conference, the CEO for a branch of the world’s largest trade publisher said that:

Weldon said: “We have two problems with subscription. We are not convinced it is what readers want. ‘Eat everything you can’ isn’t a reader’s mindset. In music or film you might want 10,000 songs or films, but I don’t think you want 10,000 books.”

Weldon also said the company did not “understand the business model”, and who made money. But he acknowledged that subscription could work “in certain markets around the world in emerging economies where access to books and bookshops is extremely limited”.

He went on to add that PRH wasn’t planning to become a retailer, either, but that’s the lesser story today than the fact that a senior manager at PRH offered a completely nonsensical reason to avoid the subscription ebook market.

It’s not just that his explanation doesn’t stand up to scrutiny; it’s also nonsense. One doesn’t simply refuse to offer a service because one is “not convinced” that consumers want it.  That is what polls are for, or even better one could always run a pilot test in a small market and let consumers vote with their pocketbooks.

What’s more, polling and market studies aren’t required to answer the question of whether consumers want this type of service; just keeping up on the news will tell you that they do.

  • If consumers don’t want this then why does Amazon keep expanding Kindle Unlimited?
  • If consumers don’t want this then why does Bertelsmann (Macmillan’s parent company) own a couple ebook services?
  • If consumers don’t want this then how has Skoobe stayed in business for the past three years, and why do its publisher parents (Georg von Holtzbrinck and Bertelsmann) continue to invest in its expansion?

That explanation just doesn’t stand up to scrutiny.

The post Penguin UK CEO: Readers Don’t Want Subscriptions appeared first on The Digital Reader.

Could Facebook Replace Amazon as “Earth’s Biggest Bookstore”?

Posted: 14 Nov 2014 07:06 AM PST

SONY DSCYesterday’s news about Amazon burying the Hachette has sparked a lot of discussion about the future of the book industry, including a blue sky piece over at Bloomberg.

Mark Gimen thinks that social networks like Facebook are where you’re going to find the future bookstores. Working from the current state of the news industry, which is depending more and more on Facebook for traffic, he suggests that Facebook could be the next platform for selling books:

The natural evolution of this is that Facebook and any social platforms that succeed it are where books ultimately will be sold. All the barriers to that are quickly falling down. At the beginning of the e-book era, e-books were tied to a specific device, your Kindle. Now they are tied to a retailer, Amazon. It's become more and more clear that neither of those is really necessary. Lots of companies now can easily create the infrastructure to store, sell and deliver books to your app.

Is that a business that will always demand that publishers pay 30 percent of their net to an Apple or an Amazon? Or can you imagine it as a service that publisher's buy for a flat 50 cents a book as they publicize their books on Facebook and sell them directly? Doesn’t take much of a mental workout to imagine that.

I don’t think it’s terribly likely to come to pass, but I’m also not going to dismiss this out of hand.


As I pointed out in July it is already possible to sell stuff on Facebook. There are companies that can help an author set up a store. It costs a lot more than 50 cents per copy, but the costs will go down if the idea of using FB as a sales platform bear fruit.

But even though it is possible to sell ebooks on FB, I don’t see that it becoming common – not unless a major retailer gets behind the idea (and why would they, when it’s someone else’s platform). There’s more to selling a book than just the financial transaction and it involves skills and activities that publishers don’t do very well, including discovery, customer service, promotion, and sales.

It takes a retailer to sell a lot of books, and once you’ve built up the infrastructure and business processes to support bookselling, you might as well launch a website where you can better control the buying experience.

It’s that whole “controlling your own platform” idea that is probably going to keep social networks from being able to replace Amazon as a channel for selling books (that, and DRM).

What do you think?

images by pfalaNicola

The post Could Facebook Replace Amazon as “Earth's Biggest Bookstore”? appeared first on The Digital Reader.

Amazon Rolls Out Update for the Kindle, Adds WordWise, Family Library

Posted: 14 Nov 2014 04:51 PM PST

kindle-2014-angleWhen Amazon launched the new Kindle and Kindle Voyage earlier this year, they promised to release a software update which added a slew of new features.

It’s here.

Amazon has released an update today for the Kindle Voyage, the Kindle (2014), and the second-gen Kindle Paperwhite (but not the Paperwhite released in 2012). I haven’t had a chance to test all of the features, but the changelog says that the updated added:

  • Support for Family LibraryWith Family Library, you can link two Amazon accounts and share books on your Kindle Voyage and other compatible Amazon devices and apps. To learn more, visit About Family Library.
  • Support for Kindle FreeTime UnlimitedKindle FreeTime Unlimited is an optional monthly subscription for Kindle FreeTime that offers thousands of books for children ages three- to eight-years-old.
  • Word Wise – See Hints for Difficult WordsWith Word Wise, you can see simple definitions and synonyms displayed inline above more difficult words while you read. Word Wise makes it easier for readers learning English and kids reading their first chapter books to understand challenging books more quickly.
  • X-Ray ImprovementsExplore the “bones of a book" with an improved timeline and the ability to browse images and filter by Notable Clips.
  • Deeper Goodreads IntegrationGoodreads on Kindle makes it quicker to access and update your reading status and adds the ability to preview and purchase books without leaving Goodreads.
  • Periodical ImprovementsYou can access up to 40 magazine back issues from the cloud on your device. Multiple issues of the same periodical are now collected together.

The update should be pushed out to Kindles over the next few weeks, but if you don’t want to wait you can install it manually. Simply download the update from Amazon, copy it to your Kindle over USB, and then unplug the USB cable. The Kindle should recognize the update and install it (you will need a charged battery, of course).

The post Amazon Rolls Out Update for the Kindle, Adds WordWise, Family Library appeared first on The Digital Reader.

No comments:

Post a Comment