With all the gold medals being handed out at the Olympics, let’s reserve one for the e-book business. The International Digital Publishing Forum and Association of American Publishers have released stats for December 2009, and sales set the bar for E-Books’ greatest month ever, $19,100,000. That figure more than doubles the previous December’s mark and tops the best month to date, October ’09 at $18,500,000.
-“At Record-Busting $19 Mil, It’s Happy Holiday Season for E-Books,” Richard Curtis
The eBook Tipping Point: The New Issues It Creates
Speakers: Michael Cader, Publishers Lunch; Larry Kirshbaum, Literary Agent; Ken Brooks, Cengage Learning; Evan Schnittman, Oxford University Press
Moderator: Mike Shatzkin, The Idea Logical Company
eBook sales are still a single-digit percentage of most trade publishers’ sales and only creep into double-digits for some of the new titles coming out. Even so, digital change has already been disruptive, forcing many publishers to rethink their release windows, their sales terms and tactics, and their entire approach to marketing. One can only imagine what changes the industry will face when the eBook percentage doubles or triples from where it is now, which recent history suggests might occur in a relatively short time period.
Library lending could threaten single copy sales, agents might be splitting off eBook rights when they make print deals, and territoriality might be eliminated in the digital book arena. How will publishers react to all of that?
Because the changes are so disruptive, it is hard for incumbent C-level executives to talk about them publicly. So 2010 Digital Book World Conference Chair Mike Shatzkin assembled a panel of experts who know the business inside and out and who can predict the future without jeopardizing their jobs or their companies.
[The following post, a preview of the eBook Tipping Point panel, was originally published on The Idea Logical blog, and is reprinted here with Mr. Shatzkin's permission.]
The tipping has really already started
By Mike Shatzkin, 2010 Digital Book World Conference Chair
The idea of an “Ebook Tipping Point” panel for Digital Book World arose when I wrote a blogpost last August on the occasion of the regular monthly release of the IDPF’s ebook sales figures. It was clear then that very substantial percentages of the sale of new narrative fiction and non-fiction were going to move through ebook channels and this post raised the point that this would be disruptive just before Dominque Raccah and Sourcebooks started last Fall’s cascade of strategic moves by publishers to try to slow things down, at least for Kindle.
In October, really writing about the same situation, I predicted that major publishers would be challenged to cope with the problem of de-scaling.
When I wrote the August post, I was in the early stages of organizing the program for Digital Book World and I decided to put together the “Ebook Tipping Point” panel. I knew that current C-level executives, focused as they must be on making numbers for this quarter and this year, not to mention always having to be aware of the impact their statements could have on their companies, wouldn’t be the right panelists. So I just decided to recruit the four savviest people I knew — about ebook publishing, about the finances of publishing houses, and about the ecosystem publishers live in — to discuss the topic with me on stage.
Yesterday that panel — Ken Brooks of Cengage; Michael Cader of Publishers Lunch; Larry Kirshbaum, ex-TimeWarner Books CEO and currently a literary agent; and Evan Schnittman of Oxford University Press — met in my office for a preliminary conversation to help me formulate the questions that will trigger the discussions.
Ken Brooks is my go-to person for all things related to ebooks and digital production. He the SVP, Global Production & Manufacturing Services at Cengage Learning. Before that, Ken created and sold a company called Publishing Dimensions that did digital format conversions in the early ebook days. He’s run warehouses and other operations for Bantam and Simon & Schuster and he even had a brief stint setting up an early attempt at ebook distribution for BN.com ten years ago.
Michael Cader is the creator Publishers Lunch and Publishers Marketplace, the new nexus for conversation and information about the publishing business, which he developed from scratch starting with a free email newsletter less than ten years ago. Before that, he was a book packager. Cader is the single person who knows more about book publishing — the people, the deals, the business practices, the view of the business from the standpoint of the investment community — than anybody else I’ve ever met.
Larry Kirshbaum turned over the reins at TimeWarner Publishing to David Young three years ago, just before the company was sold to Hachette. He was known for his eye for bestsellers and his ability to make them work. Since then, he’s been a literary agent. Kirshbaum knows exactly what it is like to run a big publishing company; he did it for more than two decades.
Evan Schnittman is Vice President, Business Development & Rights at Oxford University Press. In that role, Evan combines the zeal and focus of a sales executive with targets to hit with the vision of a strategic digital thinker, a very unusual combination. Oxford is a university press, of course, not a trade house, but they have a trade list big enough to make them real players in that sandbox. Evan knows and understands trade, but he has the objectivity and vision of somebody who is not entirely dependent on that business.
One scorecard worth keeping is this: Brooks, Kirshbaum, and I were all sure ten years ago that ebooks would happen much faster than they did. Cader was sure they wouldn’t. Michael has been the hardest among us to persuade that ebooks would substantially displace print anytime soon.
We had a rollicking 2 hour conversation that would have entertained anybody who could have heard it. I am not going to steal the panel’s thunder by revealing much about it except to say that there was a strong consensus that big publisher overheads are going to have to shrink dramatically for them to survive. Michael Cader is particularly articulate — and particularly experienced — about the point that legacy businesses carry legacy cost structures that handicap them making a transition to a new paradigm. He lived that advantage as the David that slew the Goliath of PW.
So I awoke this morning to get the news in my mailbox that Simon & Schuster has redesigned its sales coverage to be “more phone”. Cheaper. Less overhead. But also (likely) less effective and (certainly) less differentiated from what any small publisher based anywhere can do.
So what distinguishes the big publishers from their competition are the capabilities of “scale.” And the albatross for big publishers going forward is the cost of “scale.” This is a tough box to get out of.
I think some eyes are going to be opened when this panel takes the stage on Wednesday, January 27.
