Monthly Archives: March 2011

A federal judge entered a final decision on a lawsuit by authors and publishers against Google protesting Google’s scanning of books still under copyright into Google Books. Basically, Google had settled a class-action suit by setting up a book registry to allocate royalties among copyright owners depending upon how many people viewed them through Google and other factors.

The class action made it possible for Google to settle with all authors and publishers as a group. Unfortunately for Google, Judge Chin ruled that a class action wasn’t appropriate, so, in order to display books still under copyright, Google would have to negotiate with each copyright holder individually – effectively an impossible situation.

Google hasn’t said whether it will appeal or not.

Public domain books – those books whose copyrights have expired – are not affected and will still be available in Google Books.

Paid Content has a detailed analysis.

Excerpts:

Ultimately, the settlement failed because it was too ambitious. Yes, Judge Denny Chin didn’t like a variety of things about the way Google executed the project, but in the end that was secondary. This was just too big for a class-action settlement. The settlement created a books registry and arranged specific revenue splits; it created methods for dealing with “orphan works,” a longstanding copyright problem that, as Chin noted, should be dealt with by Congress. All those things go far beyond simply ending a dispute. The proposed settlement was without precedent in its scope. The settlement had the potential to change the way we all interact with books—to actually change human culture. A class-action settlement just wasn’t the right tool for that serious work. Even for strong supporters of the Google Books project, it’s hard to argue with that logic.

. . . .

Who are the winners and losers here? For the modern e-book market, it’s really status quo. It’s hard to see anyone coming out ahead because this deal fell through, unless you count Google competitors as indirect “winners” in any Google setback. Amazon (NSDQ: AMZN) and Apple (NSDQ: AAPL) have built healthy businesses selling contemporary, in-print e-books. The big money will continue to be in that space, which is unaffected by this settlement. It’s also a market where Google is a new entrant and a small presence, so far.

But even though there aren’t any big winners from this recent decision, there are some parties who lost out. First of all, Google would have been positioned to have a dominant position in the market for in-copyright but out-of-print works, so it has lost something. That’s not a huge or lucrative market, but it’s not insignificant either, and would have seen a fair amount of use by researchers and universities. Speaking of academics, they’re the ones most likely to want full copies of hard-to-find out-of-print books, so they have also clearly lost out here. Finally, authors of some out-of-print books would have seen a new, albeit modest, revenue stream. The “status quo” for them just means that when searchers find their works in Google Book Search, they’ll continue to be directed to used book stores—a solution that’s inconvenient for users and doesn’t get a penny to publishers and authors.

Link to the rest at Paid Content

An ER doctor complains about pricing for iPad publications. When you add Apple’s assumption that it’s entitled to a premium for its hardware to the publishers’ assumption that because it’s new, it should cost more than paper, you have some significant pricing escalation. It even bothers a doctor.

Excerpts:

[T]he statistics of an initial peak of electronic magazine sales on the ipad, then recent decrease, is not surprising. This is because early adopters wanted to see really cool content on their really cool device. And they were willing to pay for it. At least initially.

However, it is insane to pay more for an electronic document than the written version.

. . . .

My concern is that newspaper/magazine publishers will see the lower sales and say that the model of electronic media has failed. It hasn’t. THEIR model is what is failing: which is to say, the model whereby you gouge the early adopters and then drop the price when it becomes clear nobody will buy your product, and then drop the format when it “fails.”

. . . .

For book publishers, it is a similar idea. If you are going to charge me $20 for an electronic book, I want added value. I want video interviews of the author. I want interpretations by critics. I want photos of the setting (a la Dan Brown “extra content” books).

. . . .

If you won’t give me added value, then I want a lower cost. And I mean REALLY lower. I think no electronic book that is merely a pdf of the print copy is worth more than $4.00 a copy.

Link to the rest at Dr. Brenner’s Thoughts on Healthcare

H/T to Bayla Babbles

Carolyn Reidy,  CEO of Simon & Schuster, gave an interview to The Publishing Point, apparently via webcast. She’s not worried about ebooks, self-publishing, ebook royalties or Amazon. Vast expanses of cloudless blue sky stretch in every direction.

Passive Guy usually doesn’t make editorial comments in the middle of excerpts, but he’s going to break his rule for Simon & Schuster.

These are excerpts from notes, apparently taken while watching the webcast, and are not necessarily direct quotes from Ms. Reidy. Notes courtesy of Teleread:

Ebooks are now 15 – 20 % of units – hard to say so early in year and B&N had some reporting problems. Don’t have the percentage in dollars. Expects that sales will about 20% and in 5 years will be 50% and could be higher. In first weeks of any book sales are almost always 50% ebooks. Used to be that fiction was always higher than non-fiction and now fiction has less of a lead. In first weeks sometimes reach 60% ebook in first weeks if book has a lot of reviews.

[PG Comment: Ebooks at 20% of 2011 unit sales is higher than I’ve seen any big publisher reveal so far. Even more significant is the revelation that in the first weeks following release of a book, ebook sales are 50-60% of unit sales. This is giant. This narrow time period is when publishers and bookstores rely on serious hardback sales to primo customers for big profits. The note is unclear, but it seems to say that S&S is seeing the same ebook sales profile for both fiction and nonfiction titles.]

. . . .

Believe that will be more than one internet bookseller – Amazon doesn’t have an exclusive on ebooks any more. Will be a lot more competition on line – niche online booksellers, for example. Their job is to find these sellers, develop these sellers. Consumers don’t go away, but need to find out how to reach them through other channels.

[PG Comment: Wishing and Hoping and Dreaming. Amazon doesn’t have an exclusive on ebooks, but the idea that niche online booksellers are going to be serious competitors is denial to the max. Indie bookstores can work in meatspace, but in cyberspace, if I see a writeup about an interesting book at a “niche online bookseller,” Amazon lowest prices/free shipping are only a click away. Nobody is going to displace Amazon as the 800 pound bluebird in ebook sales soon enough to save S&S from falling through a wormhole into a whole new reality. The folks in Seattle are pushing Kindle prices lower and lower and indie authors on Amazon are pushing ebook prices lower and lower.]

Biggest challenge is for publishers to prove they have a value to authors. Publishers have always done: editing to make the book the best it can be; marketing and finding the readers, this has been the major thing they do for authors; all the back end stuff; give them an advance so they can live while they write.

[PG Comment: “Biggest challenge is for publishers to prove they have a value to authors.” Carolyn, sweetie, real gatekeepers don’t have to prove their value. Their value is obvious and authoritarian – deal with us or don’t deal at all. If you’re having to prove your value, then authors are realizing that the walls are coming down and the gatekeepers are losing their power. The future for the gatekeeping business?  Toast with no jam. I’m amazed she admitted this.]

Think that a lot of big authors have not gone to self-publishing because they want to write and not do all that other stuff. . . . . Many big authors just don’t want to deal with all the stuff that is a pain in the neck to do. All that stuff still has to be done and if not done by the publisher is done by the author.

[PG Comment: “a lot of big authors have not gone to self-publishing because they want to write and not do all that other stuff.” Let’s reword that to “a lot of big authors have not gone to self-publishing yet. . . ”

[“if not done by the publisher is done by the author.” Carolyn, do you know what a big author can afford to do? Hire people to do all that other stuff – book covers, editing, POD, offline marketing, online marketing (Why online? Because that’s the best place to connect with ebook buyers. And ebooks have the fattest margins, even at 99 cents.) A big author could even hire a person to hire all those other people.

[Carolyn, do you know something else? People cost an author way less than publishers do. A big author (or a small author) doesn’t have to pay 90% of the gross revenues a book generates forever to hire people to do that “other stuff.” 90% is how much S&S charges when it pays an author a 10% royalty (blending hardcover, paperback and ebook royalties). 90% only works if you’re a gatekeeper collecting tolls.]

. . . .

Biggest change for me is trying to figure out, as ebook world grows, what to do with the balance with ebook and pbook, especially as physical sales decline. What does this mean financially, from the publishing standpoint (how many e and how many p should be published and what is the mix).

. . . .

Don’t generally talk about royalty rates in public, but authors don’t generally make less money on ebooks when look across all formats. Physical book has a definite life and ebook doesn’t and this has to be taken into account. International sales is a huge upside for publishers and authors because can move them all over the world. As this market evolves their royalty rates will have to change as well.

[PG Comment: Carolyn’s dancin’ and jivin’ like James Brown about ebook royalties. Everybody knows ebook royalties are too low and need to move up a lot. That part about an ebook having an infinite shelf life at no additional cost to S&S is a ginormous reason why the royalties need to go way up. Or, as an alternative, an author can self-pub and move the royalties up to 100%, which is even nicer during that infinite shelf life of an ebook.]

Link to the rest at Teleread

Link to The Publishing Point

You know things are tough in publishing when Scholastic’s children’s division published Harry Potter and The Hunger Games and still had a loss of $9.2 million this year as compared to profit of $6.9 million last year.

They took a $3.5 million writedown of bad debt from the Borders bankruptcy, but that wasn’t the only reason.

Link to the rest at Scholastic Reports Fiscal 2011 Third Quarter Results

Sales are down at Books-A-Million, particularly during the important 4th quarter.

The CEO blames “a dynamic and rapidly changing retail environment for booksellers.” Sort of like Sendai as the tsunami was coming ashore.

Excerpts:

Comparable store sales for the fourth quarter decreased 6.7% when compared with the prior-year fourth quarter.

. . . .

[For the year] Comparable store sales decreased 4.9% when compared with the same period in the prior year.

Another indication of the growing impact of ebooks plus the Amazon effect with both ebook and hardcopy sales.  A lot of smart money is saying that Barnes & Noble isn’t worth buying and its stock is tanking.

Excerpts:

The chain, facing increasing competition as more people buy electronic readers such as Amazon.com Inc.’s Kindle, hired Lazard Ltd. last year to explore a possible sale. Barnes & Noble makes the Nook e-reader, and some potential bidders balked at a purchase because of how long it may take the chain to generate more digital sales, two of the people said.

A few private-equity funds determined Barnes & Noble is relatively unproven in digital sales and would have to compete in that area with companies such as Apple Inc., Amazon.com and Google Inc.

. . . .

Barnes & Noble fell 16 cents, or 1.7 percent, to $9.09 at 9:40 a.m. in New York Stock Exchange composite trading, giving the company a market capitalization of about $550 million. The shares had plunged 50 percent from Feb. 18, the last trading day before the company eliminated its $1 annual dividend, through yesterday.

. . . .

The Kindle has 67 percent of the e-reader market in the U.S., followed by the Nook at 22 percent, according to a February report from Goldman Sachs Group Inc. Amazon also generates 58 percent of e-book sales, followed by Barnes & Noble’s 27 percent and Apple at 9 percent.

Link to the rest at Bloomberg

An indie author’s detailed report describing one year of publishing through Smashwords.

Excerpts:

The first thing I’d like to direct attention to is the wonderful resource Smashwords makes available to anyone who goes to their site – Smashwords Style Guide by Mark Coker, the founder of Smashwords. This free guide walks you through step-by-step on how to format your manuscript in Microsoft Word to get it ready for Smashwords Meatgrinder technology that will spit out your manuscript in all of the formats available to Smashwords. This guide is valuable even if you don’t decide to publish your ebooks through Smashwords because it gets your book ready to look decent on almost any ebook platform.

. . . .

As convenient as Smashwords is, I have run into a few issues, such as my book taking forever to be approved for Smashword’s distribution channels, and my book being denied distribution for reasons that were already resolved. I’ve written the support department on a number of these issues in the past without receiving a reply, although I’ve had Mark Coker email me himself and take care of the issues. As helpful as Mark’s assistance was, I would hope to see the support team reply in a more prompt manner in the future. I know once or twice I was told that they never received my email, but in order to send them a message, you have to fill out a form on their own website, making that a technical issue on their side.

Another big issue I’ve seen more than once – and am currently dealing with again – is the pricing issue between Smashwords and the Sony Reader Store. I changed the price of my books on Smashwords at one point in the past and it took months for the price to change on the Sony site. When I wrote Smashwords support on this issue, I received an email back from Mark Coker explaining to me that he was working to resolve the issue.

Link to the rest at Self-Publishing Review

A mother and reviewer of YA books shares her feelings about sex in books written for Young Adults. This generated a ton of comments.

Excerpt:

I am not a naive person (no matter what the title of this post says).  I know that some teens are having sex.  What I don’t understand is why this means we need to shove sex down their throats at every given opportunity.  They see it on TV, they hear it on the radio, they see it in movies, they are pressured by their boyfriends/girlfriends, they are bombarded with sex in every possible form, so why would I want there to be MORE pressure on them to have sex?  And yes, when they read book after book after book portraying happy 15/16 year old “soul mates” having sex and living happily ever after, it ispressure.  When they read books about girls who just can’t stand being “the only virgin left on the planet” it is pressure.  When they read books about a girl who has sex with a boy so that he won’t do this, that, or the other, (and somehow everything works out magically for her) it is pressure.