E-book Delivery Challenges

by Linda Nix

Assuming a publisher has a book in the necessary digital formats and possesses all the necessary legal rights to sell the e-book in any territory, the publisher must still confront the challenges of distribution.

This means dealing with:

•e-book retailers—perhaps a dozen or more, including both online and physical stores (Barnes & Noble

and Amazon, but also e-book-only players such as Stanza, Kobo, ebooks.com, Apple, and now

Google eBooks)

• e-book library suppliers (for example, EBL, MyiLibrary, NetLibrary)

As with print books, publishers need to negotiate terms with each seller. But in the print world, publishers generally draft the terms of supply; in the e-book world, e-book vendors have been setting the terms. I’m not going to cover the pros and cons of various vendor agreements here, though some particular aspects are discussed briefly below. My point is simply that publishers’ cozy little world of dealing with bookshops has been overturned by new entrants who:

• know little about the “standard discount” and probably care less

• hold virtual monopolies in some markets that only the biggest of the big publishers can stand up to

• impose new conditions and restrictions on book supply that are bewildering to many publishers

Pricing Terms

E-book pricing has been particularly contentious. In the print book world, the publisher sets the recommended retail price (also known as the list price) and offers the bookseller a discount off that price, which generally does not exceed 50 percent. The bookseller then sets its own price, which may be more than, less than, or exactly the same as the recommended retail price.

By contrast, discounts for e-book vendors tend to start at 50 percent and get higher. For example, Amazon keeps 65 percent. (Meanwhile, authors are demanding royalties of 25 percent and more; you do the math.) Hence Google eBooks’ 33 percent share of revenue looks not only modest in comparison, but downright attractive, as do Apple’s 30 percent agency terms (at least until a publisher confronts the complex side effects of using the agency model).

Technical Factors

Another complication is that e-book vendor contracts generally cover all sorts of hosting, backup, digital rights management, IT security, and intellectual property issues that are not normally covered in print book vendor agreements. Publishers are wary of signing away too much, knowing that if they aren’t happy with a digital vendor, they can’t stop supply in the same way they can with a physical bookstore.

That is, they’re worried about whether they can even begin discussing terms with e-book vendors. All the e-book vendors tend to take a tiered approach to publisher negotiations. Major publishers are wooed to some extent, involved in vendor product testing and pricing discussions (such as they are), and generally included in the development and marketing processes. Smaller publishers generally get “Take it or leave it,” or they are ignored completely.

Small publishers do not get entrée at Apple, unless they sell a book as an app and get in via the App Store.

Publishers’ Problems

To be fair, many publishers are not easy to negotiate with. Specific difficulties that vendors have in negotiating with publishers include:

• finding the right person to start with—many vendors have been turned away because they

approached someone unaware of the company’s interest in e-books or someone whose bailiwick

didn’t include them

• finding the right person to conduct the negotiations—the people with the appropriate knowledge do not

always hold the power, and vice versa

• obtaining signoff on the negotiations—many an e-book vendor agreement has stalled at the contract

signing stage because the right procedures were not incorporated or the right people at the

publishing company were not involved early enough

• discovering after signoff that the publisher does not yet have any e-books, or that its e-books don’t

meet rights and/or production requirements

Are Major Vendors Mandatory?

The other option for publishers is selling e-books direct to the public, which some publishers are exploring and some have been using for quite a while. But since the public is increasingly comfortable buying e-books via major sites, it will become harder and harder for a publisher to get its own Web site noticed as a source of e-books,

Unless they have the budget and the expertise necessary to mount significant and effective marketing efforts, most publishers will have no choice but to try selling through at least one mainstream vendor site. It would be nice to pick and choose, or indeed to sell through all of them, but in the short term finding a vendor partner may come down to the vendor most willing to negotiate with them and/or whose production standards they can meet.

As the e-book power struggle between publishers and vendors continues, the vast majority of books available in print will continue to be unavailable from e-book vendor sites, at least in the near-term future. With any luck, Google eBooks will eventually change this aspect of the landscape for most publishers, as Apple has for a handful, and force the other vendor sites to negotiate more reasonably with publishers, regardless of a publisher’s size.

Linda Nix has more than 20 years of experience in publishing for print and online, across a range of production, editorial, marketing, IT, and business roles for small and large organizations in Sydney and Seattle. Drawing on her experience in online sales platforms and multiformat production systems, she recently began consulting under the name Golden Orb Creative Services, a move allowing her the freedom to publish her blog Gossamers (goldenorbcreative.wordpress.com). To reach her, email goldenorb@me.com.

E-books at Other Stages

Linda Nix’s two previous pieces in the Independent explain “E-book Formats: The Basics” (January) and “Why Producing E-books Isn’t Easy” (March). Both are available at ibpa-online.org via the Independent Articles button on the home page.