And so we reconvene – my first post can be found here, covering the Monday morning of O’Reilly’s Tools Of Change conference. The afternoon promised two sessions of trying to understand how business models for eBooks can work, exactly.
The first presentation was from Harvard University Press’ Timothy Doyle and Chronicle’s Lorena Jones discussing how you work out the viability of your electronic products. Yes, this means P&Ls. You can find the very helpful slides for this presentation at the O’Reilly Tools of Change website.
Digital products have different economic drivers than print products; this makes it worthwhile to consider the eBook as a separate product, with different demands. In the event of a cross-platform publishing endeavour, some costs would be sunk on one side or the other, however, eBooks have additional expenses that make it difficult to see the print book as the architecture that electronic forms can be added onto. This is why it is easier to think of the book itself as a brand that can be spun off into audiobooks, print books, eBooks and apps. All of these forms mean a repurposing of one original work, but all require different approaches to produce end-user content.
eBooks can be monetized through subscription models, aggregated and deaggregated content and through perpetual access sales. Even a pay-per-view model can be used. Conversely, added expenses include production, editorial, sales and fulfillment in ways that differ from print models, as well as encoding, DRM expenses and customer support costs, which may be 3rd party. This means that a title has to be evaluated at the acquistions stage in a way that predicts all the ways a potential title could be repurposed and regenerated as a saleable artifact. This is crucial for the rights negotiation as well as the development of the title and audience. Not all sales models fit all books, and a single publisher may use different kinds of sales negotiations for different buyers (libraries may want a perpetual use model, or an individual consumer may want a subscription model). This is a tricky proposition, because the costs of eBooks are very clear, but how they generate revenue is not. This speaks to the very nature of a publisher’s staffing and infrastructure, and what is being freelanced out as opposed to what is generated in-house. It also requires a fundamental understanding of the consumer of the electronic product to determine the product and pricing method that they are going to engage with.
I have no idea what Harvard University Press would make of Freegans, except to determine that they like free things.
The second presentation was from Carina Press, an imprint of Canada’s own Harlequin. They are unique amongst Harlequin’s imprints that they are a digital-first imprint that prints a wide variety of genre fiction. Their work presses up against the boundaries of traditional genre definitions, meaning that they are always struggling to find BISAC codes that match their unique books. They had the challenge of building this digital imprint from within Harlequin’s intensely sales-focused print empire, something that played to both the strengths and weaknesses of their parent publisher. They also freely admitted that they made lots of mistakes along the way.
The first thing to learn is that Carina Press is tiny – it features just one senior editor, and thus relies on a network of Harlequin employees and freelancers to accomplish all of its work. Secondly, Carina’s books range from gay male erotica to supernatural romances to steampunk, unlike other Harlequin imprints which are deeply thematic. Lastly, they get a book to press in under nine months, which is extraordinarily fast. Their business model relies on no advances being paid, but higher royalties – on average, 30% for books sold through Harlequin’s own store – and an insistence on worldwide rights. Authors can arrange for their copyright to revert after seven years, although they will try to increase the term. They also pay authors more frequently, moving to a quarterly basis from Harlequin’s standard biannual model.
They stressed that they were like other startups, and their goal was to breakeven after 12 months. They had several secrets for success for digital publishers. The first was not to underestimate the power of the reader, but to make things easy on them. This means creating well-edited books that can easily be found through its’ own metadata. This also means creating a website that is an e-commerce hub but also attractive to visit beyond the purchase point; this is particularly appropriate for Harlequin’s voracious readers. They also maintained that the best way to access your market was through bloggers, who provided incomparable access to potential readers.
Digital first publishers struggle against perspectives that imply that they are somehow lower quality than print books, something that the presenters from Carina Press said was prevalent from even within Harlequin. However, they said that they were able to react quickly to editorial demand – for example, putting steampunk books on the market as the market developed around the product – and this gave them a competitive edge on traditional print publishers, who can take years to get a book to print. They said that they had benefited from the recession since it meant that talented freelancers were available on the market after being laid off from traditional publishers; this was a particular advantage since a lot of their content is “off-brand” for Harlequin and thus outside of their area of expertise. In terms of production, we must bring the best of the print book reading experience forward to the electronic platform.
Carina Press does not use DRM, and advocated making at least a few DRM copies available to authors for giveaways or other promotions. Their authors blog, Tweet and Facebook their way to their market, providing a high amount of personal interaction between audience and author, which eases marketing for Carina and allows them to build a brand around the author, potentially leading to subscription-based pricing models.
How eBooks pay for themselves in a world where they are no longer the offspring of a print model, and Amazon wants to charge $2.99, is a matter of continous debate. Both Harvard University Press and Carina Press, despite having different products, have developed models that have resulted in profit. Both stress the primacy of the reader and understanding their experience, which seems to be the crux of the matter.