Consumers may be hurt because of less options but you yourself state how many books are published, we will never be at a loss of content and anything that is not produced that otherwise would have been, we will not know about.

The world is changing and the consumer is king. With the option to simply pirate or ignore content (there is plenty to choose from) that is not convenient most of these methods are not good ideas. People with ebook readers read more, publishers will need to adjust to a lower profit higher volume world.  

Don’t make the same mistake as the movie industry. Make things more readily available not less. 

Retailers selling products at less than cost is clearly an anomaly that needs to be corrected.

I don't know about you, but I'm overwhelmed by the amount of content out there. Not just half a million new books every year, but blogs and websites, too.

Classical economics tells us that when supply exceeds demand, prices will eventually fall to create a new equilibrium.

I think we're just seeing the beginning of that.

I live in a small town and do most of my shopping at Wal-Mart. I buy books there, too. Rarely, do I go to the big cities with their bookstores (we have one true book/gift store–its prices are way too high). With time and economic issues, I don't see more frequent bookstore visits in my future. I appreciate the book section in Wal-Mart because it fits into my life.

Why don't you publishers use the changing circumstances to promote and sell more copies of your books? Work out deals with the "big box" entities in order to increase your numbers. Remember, you have the products these guys need to have access to in order to stay in business.

By the time you add the cost of capital to finance accounts receivable, author advances, and inventory, you're left with pretty slim margins. Added to this is the fact that more than half of new books lose money. The books that work have to earn enough to cover the losses.

Like most things, there is more to it than make be apparent on the surface.

Thanks.

Instead of attempting to preserve the multi-million dollar advance/$35 hardcover business model, publishers need to create a new model based on $10 paperbacks printed on demand and $10 content-enriched ebooks. The publisher who figures out how to profitably provide content consumers want, in the format they want, at the price they want to pay, wins.

On your mark, get set, go!

If the book business follows the music industry, the CBA channel will disappear, along with Bible and backlist sales. However, while music is inherently digital, books are not necessarily digital. Physical books will endure! The loss of the CBA channel would be tragic to authors, publishers, consumers and the mission.

I do believe that the price of some hardcover books is based on the expectation of heavy discounting. A reasonable price of $20 for a major hardcover with a MP seems to make more sense than $29 discounted 30%, but then again, the consumer always loves deals!

I would support MP, MAP, channel specific distribution (of course, I would want a CBA exclusive….).

Thanks for the dialog. Lots to chew on.

I'm working on creating ebook versions of my publishing company's old and new print titles. It's like building a new company alongside the old one. We have to check all the contracts–for the content the author sold us; for the charts, photos, long quotes or other content that the author used; and for the cover art and interior design elements our designer used–to make sure we can reproduce them all in digital form. In many cases we have to revise the content or cover or pay additional digital rights fees. Then we have to edit the content to add appropriate links, revise formatting that won't work on an ereader, change the copyright page, and so on. Once we have a final file to work with, we have to convert it into the various formats we want to offer and test for any problems on different ereaders. We might do that with internal staff or we might send the file out for conversion. We have to create marketing information and send it to our vendors. Some of these costs are different (and may end up being less) than for a print book, but they are still significant. And we don't expect to sell as many ebooks as we do print books, so the amount of internal cost that an ebook can bear is less–at least right now.

In addition we still pay a similar royalty to the author for an ebook–in general it's about 4% less than for a print book. And we still spend money on marketing and sales efforts. We have also built and now maintain a webstore where we can sell ebooks and other downloadable products direct to customers. With that comes the need for an extra employee to handle customer service questions and requests. Any savings we have on overhead because our warehouse staff aren't involved with ebook fulfillment is offset by the extra work our business and IT staff have to do to reconcile ebook sales into "orders" after the fact (Amazon.com and others tell us how many books they've sold and we create an order based on their sales report) and to support our webstore and customer records–so we can keep track of what individuals order and give them lifetime access to their purchases, among other things. We have also spent time and money retrofitting our internal operations to accommodate ebooks in a variety of ways. Many of these things simply were never needed when we were just publishing print books.

Some of these costs are "start up" costs and will diminish or disappear over time, and, sure, ebooks are in an experimental phase, so we publishers have to be willing to take some risk and invest now–planning to have that investment pay us back over the next few years. But we would be foolish to adopt a pricing structure that doesn't take these real and significant costs into account.

To me it makes sense to drop the ebook price by about 20% from the least expensive print edition. That's about the savings publishers get when they can remove printing and shipping costs and everything else stays equal–or shifts from one internal cost area to another. During the next few years, if we find that we can shave our internal costs after our infrastructure development is done, then we should pass more saving on to our readers or pass more revenue on to our authors–or both.

This is just 2 cents from one in the trenches.

I close with this question – if Steve Jobs was faced with the macbook, imac, iphone or ipod being sold at a steep loss by Amazon, Walmart or Target do you think he would let them continue to sell his product?

Publishers need to take a stand.

On your second point of channel rollout – I have a hard time believing that publishers could control themselves to not allow some of the top retailers in the country to have the top sellers on day 1. In addition, customers would be frustrated in not being able to buy the product where they wanted when they wanted.

On delaying ebook releases – MP would be a much better solution than a delayed ebook release. If the ebook is sold at a fair price and price was not controlled by a monopoly (Amazon).

continued – in next post

The tightrope of who, when and for how much is where things become very interesting for the publishers. One wrong move and not only the book but the publisher could be destined to oblivion.

I'm not saying abandon the retailer but in the end, publishers can only do so much to control the marketplace practices. Build a strategy with your authors, work together, and leverage your strengths all to build new direct to customer paths that grow your customer base, increase "book message bandwidth" and drive new-found revenues

While I know publishers need to come along side of retailers to help be a solution to the issue, publishers need to be innovative and create their own solution by relying more on growing and establishing a solid direct to consumer sales channel or expand their current customer base.

"As a former salesman, I like the MAP idea. Many manufacturers use this. That's why ads will read "Too low to advertise" or the website will say "See price in shopping cart" or at checkout."

The point I intended to make is that this is precisely why MAP is a joke. It is trivial to circumvent as Eric's examples demonstrate. People will see "too low to advertise" and they will check the attractive price "in their cart" and then they will buy.

A further observation –

As a consumer I will note that the price of paperbacks has increased (approximately) 10-fold during the last (approximately) 40 years. This is a honkin' big jump! What's the industry's excuse, eh?

As a counterpoint, let me recall the story which I recently encountered of Charles Sheldon, author of the Christian classic "In His Steps". tt is reputedly the number 2 all-time Christian best seller after the Bible. Sales estimates range from 8 million to 30 million. It is credited with popularizing, if not inventing the phrase "What Would Jesus Do". Sheldon cared so little for commercialism that he failed to register copyright and the book was picked up by several publishers who published it on their own and gave him nothing.

I think there's a lesson there somewhere.

-Steve

The question is not over whether or not this is right – there is no question about that, but what are we all going to do about it, individually and as part of the groups that we influence?

Not fun. Large box stores care very little for individual categories and category killers must match the attack. Very little anyone can do about it other than give mfgs. pricing power again – however, that would backfire in ways that might be worse.

How We Turned a Billion Dollars of Business . . . Into $10 Million Dollars Cash!