Doing Business with Digital Books
by Thomas Woll
When it comes to digital content, most trade publishers are behind the eight ball, and far behind professional and scientific/technical/medical (STM) publishers in terms of the digitization process and methods of selling.
Some methods used by STM publishers are becoming standard. They include:
• selling e-books one at a time through downloads, either directly from the publisher’s
site or through third parties
• selling a book in print on paper and as an e-book bundled together
• selling chapters of books or even smaller segments directly or through third parties
• selling subscriptions to a collection of content, including total site content or
libraries of content
• selling excerpts from books or complete books combined to make a new book
How well are these methods working, and what potential do they have? As you review the information that follows, remember that any electronic product must be viewed in a business context and must earn profits to contribute to the health of your company. E-books, in that respect, should be treated no differently than your other product lines.
Selling E-books One at a Time
Selling e-books one at a time is a growing business and currently the standard way that trade publishers sell to consumers. The print book is digitized and sold as is, with no changes. Publishers can sell this kind of e-book from their own Web sites (and many do), or they can use third-party vendors such as Amazon.com, bn.com, or Lightning Source, among others.
Some publishers offer e-books for the same price as their print counterparts, but many are now pricing e-books at 20 percent off the price of the print book. Formats vary from PDFs to HTML to Mobipocket, and usable reading devices differ to some extent, but the business principles stay pretty much the same.
When a third party is selling the e-book, the discount structure is similar to that for the print book. In most cases, the publisher gives the vendor a 50 percent discount from the retail price.
That vendor, however, may well discount the e-book’s retail price. Amazon.com, for instance, may sell it as a Kindle book at $9.99; other major retailers have matched this price and in some cases have gone lower than that in an e-book price war.
The prices that major retailers set affect publishers’ pricing on their own Web sites. If publishers sell books this way, they need to find ways to keep potential buyers from migrating to a site with a lower price.
Selling the Print Book and the E-book Together as a Bundle
You may think there’s not much demand for an e-book and a print book together, but a study funded by the Mellon Foundation for National Academies Press found that approximately 3 percent of buyers want to, and will, purchase such dual editions. Both NAP and O’Reilly make such sales and charge about 20–30 percent more than the retail price of the print book for the bundle.
So why not sell the two together? It makes perfect sense to do so.
Selling Segments of Books
In many cases, publishers are selling chapters of books, or even pages of books. They are, to use the buzzword, chunking their content into pieces that are valuable by themselves to various buyers, including students and researchers.
There are two approaches to pricing chunks. National Academies Press, which has been selling chapters for years, simply takes the retail price of the whole book and divides by the number of chapters to set a price for each.
The second approach involves perceived value. To determine a price, the publisher evaluates each chunk in terms of its importance to the market or in terms of the amount of content in that chapter in relation to the amount of content in other chapters. This makes sense as long as you don’t put a price on a chunk that prospective buyers will consider too high.
Small chunks, such as a page or a few pages, are usually priced at a flat fee per page.
Selling Subscriptions to a Collection of Content
Selling subscriptions to your content works best if you have content in specific categories. Maybe, for instance, you have a significant number of mysteries on your list, or a series of history books, or a number of novels by one author. If you do, you might open up another channel of revenue by allowing your customers to subscribe, for a specified fee, either to your total site content, or to various digital content libraries that you create.
Subscription prices generally depend on the amount of content offered, or on how much content a buyer wants; full access to all a publisher’s digital libraries, for instance, would cost more than access to any one of its digital libraries. Pricing may also depend on the number of users who want access. For good examples of pricing for total access and for library access, visit Books24×7 (books24×7.com) and O’Reilly’s Safari site (mysafaribooksonline.com).
O’Reilly, always a leader in the digital space, sells two kinds of access via its Safari site: access to Safari Library (Unlimited Access) for $42.99 a month or $472.89 a year, and access to Safari Bookshelf (Limited Access) for $22.99 a month or $252.99 a year.
Selling Excerpts or Complete Books Combined to Make a New Book
The ability to buy chapters from various books combined as a new book is clearly appealing to instructors and students, but others may well also want such custom books. Most digital asset management software enables chunking and rechunking of content for these purposes.
Pricing depends on how much of a content database is used, on the kind of product generated (which may be a book, a coursepack, or something else), and on the number of users involved.
Most academic presses have modules that allow for sales of combined content. To see a great example of a press offering the widest possible ways to buy books, visit the Taylor and Francis Web site, taylorandfrancis.com.
For trade publishers, the goal to keep in mind is expanding your sales potential by offering products in every possible digital way. Take a lesson from the STM publishers and sell combinations of print and digital books; consider offering chunks as well as complete books and combinations of content; create digital products that can be delivered to a variety of devices, including the mobile phone; make it easy to buy the products; and price them appropriately.
The key is creating strategies and tactics that make sense for your list, and then implementing them over the long term and modifying your plans as necessary while the digital selling environment continues to change and evolve.
Thomas Woll is president of Cross River Publishing Consultants, Inc., which helps for-profit and not-for-profit companies with all facets of trade, professional, and direct-response publishing. This article is derived from his book Publishing for Profit: Bottom-Line Management for Book Publishers, just out in a fourth edition from Chicago Review Press (chicagoreviewpress.com). To contact him or to learn more about CRPC, visit pubconsultants.com or email firstname.lastname@example.org.
More Advice About E-books
For other insights and pointers about creating and selling e-books, see “E-book Basics” by Joshua Tallent (January 2010), “One Book Nine Ways in Less Than 30 Days” by Gordon Burgett (December 2009), “Bulletins from the E-book Arena” (November 2009), and “What’s Happening with E-books?” (October 2009)—all accessible via the Independent archives at ibpa-online.org (click on “Newsletter Articles” in the navigation bar at the left on the Home page and then use the Search function).