A lot has been said about eBook pricing in the past year. Publishers now are in a stronger position of control, shunning older pricing models for models that fit in with their business objectives.

The Retail model

In the recent past, the retail model, made popular by retail giant Amazon, has been facing a lot of criticism from publishers. Under this model the publishers sells books to online retailers, who then sell it to readers at a price that the retailer determines. Amazon was buying eBooks from publisher for about $13 and selling the same eBook, at a loss-leader pricing, for $ 9.99 for reading on its Kindle eReader device.

The strategy of taking a loss on each eBook was aimed to push sales of the Kindle mainly succeeded in establishing $ 9.99 as an acceptable and popular price for an eBook.

The problem publishers have faced with this model are two fold. Besides having limited control over pricing, publishers believe that a standard pricing of $9.99 devalues the book — negatively impacting sales of the hardcover paperback.

The Agency model

Many publishers such as Macmillan, unhappy with the Amazon eBook pricing model that resulted in devaluing the content of the book, began pushing for an ‘Agency model’ for the sale of eBooks.

Under this model, the publisher shall remain the sole seller, and an online vendor like Amazon would merely act as an “agent,” in exchange for a percentage of the commission. This ensured that the publisher had full control over prices, rather than having to accept the standard $ 9.99 price made popular by Amazon. Under this system, Amazon would probably earn extra dollars from publishers as compared to their current loss-leader pricing model.

The war against the $ 9.99 eBook price was started when Macmillan challenged Amazon head-on and refused to settle for the $ 9.99 price. Macmillan was soon followed by the Hachette Book Group and Harper Collins. Amazon initially retaliated by refusing to sell Macmillan books through their online store. But in a short span of time, Amazon accepted Macmillan’s terms and put their books back on the Amazon store — but not without insisting that Macmillan prices were still needlessly high for e-books.

Apple too has adopted the agency model for eBooks on its iPad, by signing up with publishers such as Harper Collins, Hachette Book Group, Macmillan, Simon & Schuster and Penguin.

The Subscription model

The problem that publishers faced with both the above models, be it the wholesaler-retailer model or the agency model (selling through agents), was lack of access to buyer statistics and behavior. In the future, publishers are largely going to shift from B2B to B2C business models i.e. selling directly to readers / end-users or institutions.

Under a B2C business model, the publisher enjoys certain advantages. Publishers have control over prices, get to know the readers directly and can gain insights into the usage of their content.  They can also sell several supplementary / ancillary assets at incremental prices directly through their website. This type of content monetizing is possible by adopting newer models such as marketplace Apps or subscriptions.

Many publishers are now choosing to supplement their retailers by distributing books and eBooks via their own branded eBookstores that have e-commerce systems built into them.

A buyer looking to purchase a particular book can visit the publishers’ eBookstore and buy the book directly from them. This is useful particularly when readers wish to gain access to several books in the store. Along with selling the titles individually, publishers can offer a monthly or yearly subscription to all the books in the store. Publishers can also go one step ahead and offer eBooks, eBook supplements or content chunks to customers on ‘rent’. i.e. enable micro-payments to provide access for a short periods of time. For example, a reader no longer has to buy an entire book just to access say Chapter-7 of the book. He can instead loan out the content for just as long as s/he needs it.

In the future, it is likely that more and more publishers will create and manage their very own eBookstores to supplement sales through their retailers, intermediaries and other online distributors. The advantage of reaching out directly to the end user, not only allows publishers greater control over prices, but also helps them understand their reader buying and consumption habits better.

Other Noteworthy Business models

Harper Studio

One model worth taking note of is the game changing business model by Harper Studio that pays the author 50% of the profit sharing as compared with the traditional 7-15% royalty that an author gets.

The model aims at seizing the doors of opportunity that technology has opened. Harper is looking at packing and supplementing their products with multimedia tools such as DVDs and / or embedded videos or narrative blurbs.

Odyssey editions

A group of well known and well respected authors, have formed Odyssey editions to sell their titles as Kindle ebook editions. Most of the books are priced under Amazon’s target eBook price of $9.99 and mostly undercut the price of the paperback edition. The model which offers self ePublishing authors 70% of sales, is facing flak from traditional publishers who have, under newer contracts been claiming exlusive eBook rights, offering authors only around 25% for ebook sales.

With the agent taking on the role of the publisher, Publishers such as Random house are disputing Odyssey’s rights to sell the ebooks.

References:

http://blog.macmillanspeaks.com/macmillan-ceo-john-sargent-on-the-agency-model-availability-and-price/
http://www.digitaltrends.com/gadgets/three-publishers-now-reject-amazons-9-99-ebooks/
http://www.fastcompany.com/magazine/135/fast-talk-the-experimenter.html
http://industry.bnet.com/media/10006134/harpercollins-inkpop-another-step-in-the-digital-publishing-revolution/
http://www.i-programmer.info/the-stone-tapes/1098-publishers-bypassed-by-kindle-ebooks.html

On March 20th we finally launched the Sesame Workshop eBookstore. The launch was followed by a spate of e-mails from subscribers telling us how thrilled they were to finally lay their eyes on the digital versions of their favorite stories and to see the characters come to life. This followed by overwhelming response from mainline media, television news and bloggers who covered the news about the launch, had us in high spirits. Working with a household brand like Sesame Street has been very special to us and with this launch our hard work and nights of toil finally saw the light of day.

Brands like Sesame Workshop opting to convert as many as 900 of their 5000 published print titles into eBooks, definitely marks a milestone in publishing. Traditional publishing, while still very much a part of the industry is incomplete without its digital counterparts.

In the past year, the publishing fraternity has gained critics and patrons, received praise and condemnation, faced evolution and revolution, been named the light of the future and the black hole of failure. But one thing that unites those critics and the patrons is the realization that the eBook cannot and will not be ignored.

The stamp of approval and the verdict has been passed with brands like Sesame Workshop going the eBook way. While there has been much debate on the subject of eBook pricing, Sesame Workshop has opted to go with the subscription based pricing model.

Fans, parents, teachers and schools can subscribe to get unlimited access to a library of more than 100 Sesame Street eBooks for an annual subscription price of $39.99, with a special early bird offer at $24.99. Titles are offered in a variety of formats such as eBooks that allow a child to read along at their own pace; audio eBooks that contain narration, sound effects, and music as well as animated and interactive eBooks that bring beloved Sesame Street characters and stories to life in full-color animation inviting children to play along and learn.

So do take a look at the brand new Sesame Street eBook store, show it, share it and relive your childhood with your kids, nieces, nephews, neighbor’s kids, the noisy ones down the lane and every Sesame Street fan you know. And, if you want a sneak peek before subscribing, they also have 5 free eBooks introduced every month!

With readers increasingly looking to the web and digital media for information search, learning and content needs, publishers have drastically expanded their business models to adapt to new and emerging trends, yet without losing sight of their core competency.

An interesting phenomena is the role social networks play in the publishing industry.

I would say that it impacts the industry in two major spheres

a) Sales

b) Content

Let me delve into this a little further;

Everyone has an opinion, and in the past, well that opinion was just an opinion. But today, opinions can be shared, heard and actually listened to. People share opinions about toothpaste, chocolate and well, most definitely the books they read.

Sales

A 16 year old cheerleader sitting in Austin could well be influencing your sales through her twitter profile, her facebook account or even her shared shelfari/ Amazon reading lists. That famous Harvard professor has the power to influence more than just the students he has spoken to by endorsing a particular book. Your author now has an even more powerful sales strategy that physical book signings in form of a fan page or a blog, managed from the comfort of his writing desk, saving millions of dollars that would otherwise be spent on a book tour.

Viral marketing tools like widgets that can be spread all over the web either by you, by your fans and readers or by authors enable readers to preview a sample of the book, search within the book, view the table of content or be directed to the e-commerce or retail site.

Today publishers are seeing the shift from a traditional B2B business model, where the sales cycle was incomplete without distributors and retailers. Without them, sales were more or less: nil. Publishers are surpassing these middlemen and have the option of selling directly to their readers. Today, it is relatively simple for publishers to create their own delivery platform or end user portal from where they can sell books directly to consumers. This enables them to reach readers spread over vast geographies with minimal investment. It also enables them to study reader behavior and preferences, that enables them to offer readers content chunks at lower prices, rather than the entire book which may not be if use to the reader. This could in way save them from piracy practices such as copying of books or the used textbooks market.

Content

Today readers are influencing and creating content in more ways that one. Not only do they call the shots when it comes to exactly which part of the content they prefer, social networking allows them to share opinions with readers who have the similar interests and expertise. Professors, schools and institutions now have the option of sampling content online. Social bookmarking too gives your content more visibility

Publishers now share a one on one relationship with readers and they have the option of ready reporting tools which tells them everything, from the number of pages read, time spent on each page, number of readers of a particular book old through an institution, notes made, recommendations and opinions shared, ancillary content used. This enables them to build content that is specific to user needs, and gives users the option of buying only that part of the content that they require.

In the education and professional learning sectors, too, social networking plays a vital role in creation of content. Readers of a particular book/topic are able to network with others of similar interests and expertise which allows the learning  experience to be enhanced by asking of questions, sharing of experiences and discussions.

Social networking in business has seen tremendous growth in the past few years, and its full potential, well, we’ll have to wait and watch where it takes us!

source: www.businessinsider.com

The iPad hit homes in the beginning of April and users have been going berserk playing with their sleek and shiny new toy. One single beautiful looking machine, gives them a host of entertainment options, starting from online web surfing, gaming, and most importantly reading and information consumption.

With the launch of the iPad, reader expectations seem to have skyrocketed. Readers now expect so much more from a book than just plain text. The iPad changes the way in which content is created and consumed owing to its video streaming, audio and interactive media capabilities.

The publishing industry for one is abuzz with predictions, hopes and, ambiguity. Many wonder, if the iPad will indeed define the future of books. Will print books eventually die out? Will publishing houses perish or evolve, the questions are endless and the predications aboundless.

Opinions are varied. Quoting Mr. Ulrich Hegge, Managing Director Burda Media Innovation Lab,

“We have to take readers’ view and expectations in regard to start telling stories in a way that suits the new possibilities. We have that potential and we already proved that in the printed publications department. We believe a new era has begun.”

Jim McGregor, who is Chief Technology Strategist at In-Stat believes the significance of the iPad for publishers will be much smaller than some seem to hope for:

“Although the iPad and other tablets are being positioned as next generation e-readers, their value really extends to more multimedia rich content. This may be a boost for audio and video, but it is unlikely to change the fate of the publishing industry which has to adapt to a digital world driven by the Internet. Devices like the iPad will probably accelerate the move to digital content, especially in areas that are traditionally tied to printed material, such as education.”

While both industry leaders question the extent of impact that the iPad will have on publishing they are the first to admit that the iPad cannot be ignored. They both endorse that publishers have recognized the need to adapt to the digitally skewed changes engulfing the industry. Many publishers are migrating towards the ePub format, thus making their content iPad ready. Yet, despite uncertainties, the iPad does open up a market of over 10 million users that publishers can target opening up a whole new business model that could be centered on selling through apps.

Publishers such as Condé Nast announced they were working on an iPad version even before the device became official, and according to a leaked memo will have GQ ready for the April launch, followed soon afterwards by Wired, Vanity Fair, New York and Glamour magazines.

Some publishers have even released demos of their iPad versions already, including the New York Times and Sports Illustrated, while Children’s novels such as the Toy Story and Alice in Wonderland are already on the iPad. In approximately two months, school textbooks will be available on the iPad in the form of highly interactive applications. TSTC Publishing is adding the first e-books to its inventory.

Yet questions still loom, will the iPad really transform publishing – boosting circulation numbers and opening up new audiences? Will selling content through apps and the iPad actually bring in additional revenues from end users?

With over 700000 introductory versions of the iPad already in homes, and thousands of people still awaiting their orders, one thing is clear - the iPad is here to stay. The rising number of apps also suggests that users are enthusiastic about milking this device to its full potential. iPad competitors such as Germany’s WePad, the Google tablet and more such devices, prove that this trend is here to stay, and publishers now have unlimited possibilities when it comes to creating interactive content.

While a huge problem is the investment required to optimize this platform, the sooner publishers realize the need to convert to ePub, (which is emerging as the industry standard, and whose open source features make it the ideal platform, accepted by a wide range of devices) the more return on investment in the long run. With the popularizing and acceptance of the value of e-based consumption of content, it is likely that content publishers will actually leverage interactive media to the fullest. Dynamic links and multimedia content will readily be embraced and supported by those that provide content.

Brief history

In September 2007, ePub became an official standard of the International Digital Publishing Forum (IDPF), superseding the older Open eBook standard. Since then ePub has gained widespread acceptance, starting with Project Gutenberg endorsing it as a preferred standard owing to its free and open source features.

ePub: Catching on

The main reason why ePub seems to have caught on as the most favored format is that this open book format is not owned or controlled by any one company or device as is the case with the Amazon Kindle’s AZW format.  This enables scope for critique and improvement as is the present case where IDPF has invited discussions on how to improve ePub standards so that it is more holistic and suits the needs of, and leverages the capabilities of newer devices such as the iPad.

Not only has ePub been built on existing standards, but ePub specifications or standards are free to be downloaded by anyone with out any licensing costs or restrictions. ePub file can easily be examined by simply renaming it to a .zip file and opening it with any tool or OS that supports the zip archive format (e.g. Windows XP and above, Winzip, gzip, 7-zip, etc).

A typical ePub file contains the following,

• Metadata, an xml file containing information about the ebook, such as the author, publisher, title and a list of all the other files in this ePub file
• A table of contents for the ebook
• One or more html pages, containing the ebook text
• Any images used in the ebook, such as a cover image, and images that accompany the text, stored in standard formats such as jpeg ePub uses the same standard file formats such as xml, html, jpeg that are used to build the web.

This has one indisputable benefit. Since every modern OS or programming language supports these formats, ePub files can be read on any system with an OS. The technology required to create an ePub reader application is the same as that required to display a web page and any modern computing device, be it a PC or a mobile device is compatible to this technology. Another advantage of ePub is that all text is represented in form of text files that can be easily opened with a text editor, viewed or edited. Also, the ePub format is DRM-free, which means that anyone purchasing an ePub file can be certain that they have full access to the content, and are free to convert it to any other format, transfer and display it on any device, print it and importantly in this case, convert it to speech. Yet, ePub does provide the option of adding DRM as an additional layer, if a publisher so chooses to protect the rights of his ebook/content.

Thus, the advantages of ePub format can be summarized as below:

• Compatible with almost any modern OS based device
• Can be created by common softwares such as InDesign and Quark
• Publishers can reduce the cost of conversion by only creating a single ePub file for multiple distribution channels
• Content can be sold from multiple outlets
• Compatible with most mobile devices including the coveted iPad

ePub Patrons

Currently, the ePub format can be viewed by Calibre, Adobe Digital Editions (ADE), Stanza, Aldiko, Sony reader, iPad, iPhone. Google too has 500,000 public domain titles in the ePub format. Many countries such China, Taiwan, Germany and France have chosen to use ePub as their primary electronic book format.

One point worth mulling over is the future of ePub. What could the format finally develop into?  Will it see more animation options, resizing, cross referencing, linked table of contents and footnotes?

The opportunity is endless. The future of ebooks could well be written by the ePub standard and converting to ePub is an investment in the future.

The electronic age has changed the way we explore, access and consume information. Today much of our information needs are fulfilled through the internet, for absolutely no cost. Much of professional and scholarly research is done through data collected from the internet, and through networking with other researchers. Yet, many argue about the perils of free content, as well the authenticity of content. The magnitude of free information, even throws up the argument of the need for books, or data that has a price tag attached to it. What is it about some content, that you can charge a premium for it? How do you get people to buy content rather than rely on free information sought through the internet?

Readers are given the option to search within the book and ensure that they are getting exactly what they are paying for. Up-to date research reports and full volumes of encyclopedias usually only allow for free book previews, through online readers. Access of an entire volume costs the reader, and if the preview shows content that is worthy, readers are indeed wiling to pay a price for it. The new system that is emerging is of “mixed bundling” - offering a product and its components in different permutations to satisfy different consumer needs. In a manner of speaking, your content is no longer just a product, i.e. a book. Today readers are demanding that there are no restrictions on structure and in a way turning your traditional ‘product’ into a service that requires more than just the physical version. Consumers are demanding specifics, and well, today they are getting what they want. Today, content providers give their readers content in the way they wish to consume it. They give them the option of buying part of the content, add supplementary material to the content, allow them to rent content and many more such options. Thus, to some extent curbing the attitude of, “why should I have to pay for something I don’t need/can get free”.

In a way, content, especially e-content, is looked on as an experience. Today, readers want to envision rather than imagine, they want to participate rather than watch. eBooks give them this experience. You can read an ebook, add notes, share notes with friends, discuss with experts, watch videos, take tests, play games, listen to audio and more, with the added advantage of consuming this content, anywhere and at anytime.

The trend of cloud computing, or saving of data on the cloud/internet, enables portability of content from device to device which represents the future of media and content consumption. The device market is constantly evolving, due to changing consumer preferences and the developing electronics landscape. Device manufacturers, marketers and publishers alike are challenged to make content available where, when and how their readers want to consume it—and that is anywhere, anytime and on any device. Multiple devices, numerous access modes and shifting consumer preferences mean, marketers and content owners cannot afford to choose any one single method. Until formats and device platforms get more established, multi-mode, multi-device support remains a must. So the overall expectations have increased and is more about convenience of accessing the content, choice of formats and price. In a nutshell, it’s about enhanced reading experience, and accessibility to needed resources.

The question of revenues for publishing is on top of everyone’s mind. In studying industry trends, and knowing that readers are not willing to pay for content that they can already access for free, the problem needs to be looked at from another angle. The real opportunity could lie in what we have been calling ‘the reading experience’. Publishers need to take on the role of service providers rather than sellers of a product. Real opportunity could lie in options such as is in selling access to repositories of content or in a constant stream of value adds, such as updates, buying in chunks, renting, links, audio, video, networking, gaming, sharing, participation and engagement and giving readers what they are looking for.

Click here for presentation and video: The new dynamics of Publishing

The publishing industry is evolving at an astoundingly fast pace. Besides going digital, the industry is gradually transitioning from a b2b business model to a b2c model. This is largely due to the changing scenario of retail, distributions sales and marketing, all owing to the recent and widespread popularity of social networking or social media.
– Presented at the O’ Reilly Tools of Change Conference 2010, By Sameer Shariff, Founder and CEO of Impelsys Inc. (iPublishCentral)

Impelsys’ Virtual Sampling is an innovative and revolutionary solution that allows publishers to publish electronic samples prior to print. These electronic samples offer a faster, easier and more powerful method for teachers and school administrators to evaluate and search all programs appropriate for a particular curriculum, for all grade levels, eliminating the time-consuming page-by-page evaluation of educational material associated with print sampling.

This revolutionary solution comes with end-user features like full-text search, user personalization, alpha channel video etc. that aid in the program evaluation process. It also provides internal editorial staff and customers the flexibility to pick and choose chapters/content chunks from different ‘products’ and customize the product as per their needs

This innovative digital alternative to print samples helps publishers to reduce printing costs and distribution costs as well as total turnaround time.

Visit HMH’s virtual sampling page Read press release