In the year of the ebook, what counts and what doesn't....?

I'm writing this blog from the Frankfurt Book Fair.  If you are keeping up-to-date with the press coverage from Frankfurt, it's the "year of the ebook", it's all about the digital marketplace, ebook here, ebook there, ebook everywhere.  Yet for those of us who speak fluent "e" it's quite amusing.  We've spoken ebooks for years.  But it seems ebook sales in libraries don't count.  Ebooks through publisher databases and web portals don't count.  Most of my meetings with academic publishers now report on "p" vs "e" sales and the figures are quite interesting, depending on the depth of the "e" range offered to library ebook vendors, how long they've been active players in the ebook market, pricing of the books and simultaneous release.  Some STM publishers are sitting above 60% "e" sales, however the majority probably sits around 30% and growing at double - or triple - digit figures.  To hear it's the year of the ebook is funny for those of us in library supply.  Because we don't count.

On the library front, the major ebook players are well established - EBL, ebrary, Netlibrary, myilibrary.  How do they feel when they hear about the year of the ebook? Some of them have played in this ebook domain for over a decade.  Their sales are not insignificant.  But they don't count.  They've worked on content acquisition with academic, professional and scholarly publishers for many years.  It must be nice after being in the marketplace for over a decade, in some instances, to hear you are now in the spotlight.  But it's not them that are in the spotlight.  No, No, No.

You see it's all about the trade.  It's about booksellers and how they fit into the equation.  Not the giants - like Amazon (with the Kindle) and Barnes & Noble (with the Nook).  It's about getting fiction and non-fiction titles to the general consumer through other players.  Google Editions will be huge with retailers.  Kobo is growing their marketshare here with the Red Group.  Blio has launched in the US and will come to ANZ next year. Independent booksellers - large and small - can play in the ebook arena as long as they have a website.

But again, we're forgetting there are other players providing back-end service to booksellers - OverDrive, Ebooks Corporation, Gardners in the UK.  The latter advised they have over 100 publishers and 100,000 ebooks in their offer to retailers. They've worked at their strategies for years.  Nice to know their time has come!  I'm sure they count.  Because they supply to the wider book trade.

But let's extend the ramble.  There is one really hot topic in all the noise regarding ebooks.  And it's also to do with counting.  However in this case, it may be counting the loss.  TERRITORIAL RIGHTS FOR EBOOKS.... 

It came up in many of my meetings with publishers with regards to book distribution - not library ebook vendors.  If you are distributing the print product, particularly in the academic and scholarly arena, you have seen library supplier sales change.  Library suppliers work with ebook vendors who provide services that work with a library management system.  Many sales are the "one-sies and two-sies" across an entire range.  Overall it makes an impact to your business.  But library supply, at say 10% of sales, is small.  It's TRADE distribution that's going to hurt. 

Publishers being wowed by ebook vendor arrangements for booksellers - particularly Kobo, Blio and Google Editions - are not always thinking about their agent or distributor on the ground in Australasia.  They are not thinking about cannibilisation of print.  They aren't thinking about inventory, publicity, sales and marketing.  All important roles of the agent.  They aren't always thinking about communications to their sales agents and distributors about the possible effects.  They are going directly to the retailer via the ebook wholesaler - bypassing the normal and traditional book supply chain.

I've discussed it before on this blog, but in the year of the ebook (in the trade, that is, not libraries!), how are we going to carve up the ebook pie.  There isn't enough to go around.  The role of the sales agent/distributor is going to change.  And substantially change. Wholesale terms cannot be applied to both the distributor AND the ebook wholesaler (the Blio's, Kobos etc).  The ebook wholesalers have their terms.  For a distributor, a revenue or commission stream is all that one can really hope for.  How is the publisher going to account for that, what will the percentage look like, and will it be enough to sustain the supply chain we've known and loved all these years (yes, that was sarcasm in case you missed it). 

Publishers are trying to hold onto world ebook rights because carving up the digital world is not what many want to do.  Distributor roles are changing and substantially.  Publishers need to keep in mind they have a sales and marketing partner in the ANZ region who performs a core role with placement of product, raising profiles of authors, publicity, service etc.  There are costs associated with these services.  Offer the books on the ebook platforms that bypass that arrangement and don't communicate that to your agent.  Priceless.  Yes, that will make it the year of the ebook for sure.  With consumer demand growing for ebooks and print sales constantly under threat, how many distributors will walk away from the print altogether?  Publishers need to think about their established business relationships and partnerships in this territory - and find some way to blend it all together in a way that grows the business and recognises the important role a distributor plays.  Because look at the fine print of your contracts - to sign up with all these players selling directly to the retailer is no doubt a contractual breach.  Publishers overseas need to take a good hard look at the ebook supply chain, work out how they are going to play with the ebook vendor to retailers, what the role of the sales agent/book distributor is in all of that, and how to carve up that pie.  There's a new business model out there.  What it looks like I don't know.  But I do know: we all need to make it work and it has to count for something.

A Supply Chain Perspective on ebooks

For the last five years or so, I've attended the International Supply Chain Meeting at the Frankfurt Book Fair. I thoroughly enjoyed the presentation from Peter Kilborn (BIC: Book Industry Communication) on "The Limits of Technology".

Here's just some of the highlights:

"E-book readers will be introduced in the UK later this year, and have already proved popular with American users. From the Barnes & Noble web site, user comments include: ‘I don’t know how I got along without it’, ‘I will never go back to paper again; the future has arrived and it’s great.’"
(The Bookseller, June 2000)

"Simon & Schuster US has unveiled its first ebooks list. It is the latest in a tide of publishers to enter the US e-book market, which is believed to be on the point of explosion"
(The Bookseller, December 2000)

Yes those dates are not a misprint. He was speaking about how slow the industry is to react and how we respond to change overall. We all know e-books are getting A LOT of coverage, but let's try and keep a few things in perspective.

Kelly Gallagher from Bowker also did an interesting presentation on e-book sales. I'm assuming his figures were for the US but in 2008 e-books accounted for 1.5% of all book sales. In the first half of 2009, this went up to 2.2%. Another interesting stat was that for buyers over 50 years of age, e-books are growing at 183%. Sony e-book readers have an average age of 49.8, Kindle 48.9, PDAs 28.0 and the iPhone 37.9. Device presentation was also interesting - 40% were pure downloads to computer. 26.8% were via the Kindle, 13% from iPhone, 6.4% from the Sony e-reader. So beyond computer downloads, Kindle has the market share.

Thought the feedback from the meeting would enhance this blog and will continue to monitor industry alerts for interesting stats and quotes about this growing - and fascinating - market segment.

Roadtesting the Sony ereader

As many of you know, I took the Sony ereader to Frankfurt this year for the Book Fair. It was an interesting experiment, particularly as it was the longest trip to date and I must admit I was a little anxious as I love to read on longer flights and train rides. My luggage to previous international Book Fairs has included at least 3 books and I must admit, I did take a paperback as insurance!

The Sony ereader was fully charged when I left Sydney airport and there were 45 ebooks on the device including the new one from Audrey Niffenegger, Her Fearful Symmetry. I purposely didn't take the charger on board and regretted this half way when the battery started dying in Singapore! As I've flagged previously on this blog, when the back light is used on the Sony, the battery dies quickly. Knowing this flaw, I use it sparingly but needed to because the light in the business lounge at Singapore airport was not good. I continued reading while I waited for my connecting flight and realised the battery was depleting right in front of my eyes! I wasn't happy about it and ended up putting the reader away.

It might interest you to know that most of the marketing material previously stated the battery lasted around 7000 page turns. If that's the case, I should be getting through 4-5 ebooks with no problem. This is not happening and I must admit, it cheeses me off somewhat.

Apart from the battery, the other problem was not being able to use an electronic device for take off and landing. Of course, on an international flight that can mean the last 30 minutes is without reading material. I was grateful for the paperback I threw into my handbag at the last minute, even if it meant my reading was somewhat interrupted.

Oh and I may have flagged this previously when discussing pros and cons of ereaders, but I enjoy soaking in a tub at the end of a long day and getting stuck into a good book while I bathe. Not having a bath at home, I always look forward to one when I travel. I managed to enjoy the experience only once during the whole Book Fair - on my last night. Of course, it's not wise to take the ereader in the bath (!) and again glad to have the paperback on hand.

But back to the story: The reader charged without difficulty once in Frankfurt, and again when I travelled to Regensburg for some personal time. The time off was particularly interesting as I had to field multiple questions about the ereader, all from German locals. Whether it was someone politely interrupting me on the train "Was IST das?!" to people in cafes or restaurants wanting to know more about it, I was fielding questions left, right and centre. Most of the time I handed over the device and let people use the touchscreen to navigate. It was met with a lot of approval, a lot of nods, a lot of sighs, and A LOT of interest overall.

The demographic was interesting - all enquiries were from men! Several were older, one I would hazard a guess would have been retired, and only a couple were from late teens to university students. I've been talking ebooks for years professionally (mainly for libraries) and having to do show and tell at a more personal level has been a lot of fun too.

On the way home, the ereader was fully charged yet again and I did NOT use the backlight at any stage of the journey. The trip home was longer as I had a 4 hour layover in Singapore. By the time we were preparing to land in Sydney, I had one battery cell left on the ereader. I had read two new books, re-read/scanned through another four, and answered about a dozen questions on the ereader from the general (German) public.