With lower costs, independent eBook publishers hold the advantage

Have you been following the Amazon eBook “price fixing” case?

Yes or no, don’t let this story discourage you from eBook publishing. If anything, this case should be encouraging independent news publishers to jump into the eBook market.

Why? As Talking Points Memo explained, this case boils down to an alleged attempt by big book publishers to collude to get an “agency” deal where they would get to set the price of the books they published and were sold on Amazon.

The TPM summary didn’t mention it, but that agency pricing model is the pricing deal that you get with Amazon as an independent eBook publisher. Why is that a price fixing offense for them and not for you? In short, because they allegedly colluded to get particular prices under that deal, according to the TPM summary.

Econ 101 lesson here: If you can enter a market where existing players are colluding to hold up prices, you have a huge business opportunity if you can undercut them on price. Typically, when big businesses try to collude on price, it’s because they have high barriers to entry in that business that keep potential competitors (i.e. disruptors) on the sidelines.

And that certainly was the case in the book publishing industry just 10 years ago. Today, however, the barriers to entry to book publishing are about the same as the barriers to entry to website publishing were 15 years ago – pretty much zilch. You need some tech know-how, but it’s nothing more than a sharp learner can teach herself or himself within a few weeks.

Remember, the big book publishers – like the big newspaper chains before them – have highly specialized, multi-level workforces that can drive their operating costs higher than Voyager 2. The traditional book publishing operation model includes

  • authors
  • agents
  • book editors
  • copy editors and proofreaders
  • interior designers
  • cover designers
  • manufacturing
  • publicists
  • distribution
  • retailers

Each book sold must pay a portion of the salary or wages of each person that chain. And don’t forget that each company involved needs to pay for all the managers overseeing these people, as well as a cut for profit as well. No wonder book publishers are trying to inflate the prices they charge.

Publishing an eBook independently through a retailer such as Amazon takes the manufacturing, distribution and retailing roles off your table. Independent publishing also removes the need for acquiring an agent and a book editor (though I recommend showing your work to a trusted colleague for feedback before moving into copy-editing).

As an online journalist, I have the ability to write my own book, to edit it, and to code up the HTML for the eBook design. As a website publisher, I have built an online community of tens of thousands of frequent readers to whom I can market my books, and the social media skills to help empower them to spread the word virally on my book’s behalf.

All this means that I can handle pretty much all the work of publishing and marketing an eBook. Which also means that I can keep all the money my books earn for myself. Sure, retailers such as Amazon will take a cut, but in Amazon’s case they do bring something very valuable to the table – a recommendation engine and category best-seller lists that help drive sales of your books. That’s worth the cut they take, in my opinion. (Barnes and Noble? Not so much.)

All the rest is yours. You don’t have to set aside anything for managers or for shareholders. That should give you the ability to produce and market your work for a fraction of the cost of producing and marketing that same work through a traditional publisher, even if they were producing only the same eBooks. And you can do that while making more money than you would as an author if you had published through a traditional publishing house. So let the federal government, the New York publishing houses and Amazon fight it out. Ultimately, the future of book publishing belongs to the independents.

I’m nowhere near unique among journalists. If you’ve worked in online journalism, you probably have a similar skill set to me, and can handle the work of self-publishing your best reporting work into eBooks. With lower expenses, you can undercut “the big kids” on price. That leaves it up to you, and your skills as a storyteller, to compete to attract the attention – and purchases – of readers.

You want to stay in the news business? Here is your purest, most direct shot to do that. If you can tell stories that people want to read, eBooks are a marketplace in which people are paying authors – nearly directly – to read them. No employer or publisher can tell you ‘no’, or silence you. No big business can beat you on price.

So why not jump in?

It's not the medium – it's the market

Newspapers and book publishers could learn some valuable lessons from one another. Unfortunately, it appears that the book industry’s going to make the same costly mistakes as the newspaper industry did, instead.

I thought again that as I read the New York Times’ story about Barnes & Noble from last weekend, The Bookstore’s Last Stand. The Times wrote of the publishing industry’s hope that Barnes & Noble will be able to stand up to the challenge from Amazon.com, preserving a major retailer where their companies’ products are king.

Like many struggling businesses, book publishers are cutting costs and trimming work forces. Yes, electronic books are booming, sometimes profitably, but not many publishers want e-books to dominate print books. Amazon’s chief executive, Jeffrey P. Bezos, wants to cut out the middleman — that is, traditional publishers — by publishing e-books directly.

Which is why Barnes & Noble, once viewed as the brutal capitalist of the book trade, now seems so crucial to that industry’s future. Sure, you can buy bestsellers at Walmart and potboilers at the supermarket. But in many locales, Barnes & Noble is the only retailer offering a wide selection of books. If something were to happen to Barnes & Noble, if it were merely to scale back its ambitions, Amazon could become even more powerful and — well, the very thought makes publishers queasy.

If Barnes & Noble’s future is tied to that of the print book publishing houses, then Barnes & Noble is as doomed as Borders, Crown Books and the other brick-and-mortar booksellers that have proceeded it into oblivion.

The Nook alone will not save Barnes & Noble’s business because the change that is roiling the publishing business today – whether it be for books or for newspapers – is not simply a transition from printed media to digital. It’s a transition from a marketplace where information was controlled by a few gatekeepers to one where anyone may offer their content to a mass audience.

This isn’t about eBooks versus printed books. It’s about a book industry where supply is controlled by a few publishing houses or one where supply is opened to all who wish to publish something.

In short, it’s not the medium; it’s the market. If your business model is based upon controlling access to the information marketplace, you’re doomed. If your business model is based instead upon enabling and expanding access to the market, you have a chance of succeeding. And that is what has the book industry scared.

The traditional publishing houses, like traditional print newspapers, built their businesses as gatekeepers. And despite its development of the Nook to expand into the digital marketplace, Barnes & Noble appears to be playing along. I’ve written before about Barnes & Noble restricting independent eBook publishers to its hard-to-find PubIt! ghetto on the BarnesandNoble.com website. I suspected that decision was driven by a desire to protect traditional publishing houses and the Times article only strengthens the impression that Barnes & Noble and the publishing houses have tied their futures together.

But by favoring print publishers in its retailing, Barnes & Noble is under-utlizing the one unique tool it could be using to lure eBook publishers and readers from Amazon.com – its physical stores. Instead of consigning eBook publishers to a tiny link on the BN.com home page, Barnes & Noble could be incorporating titles by independent publishers into section by section best seller lists, and individualized product recommendations, as Amazon does. Barnes & Noble (or its book publishing partners) could be offering a seemless ePub-to-print-on-demand option for indie publishers, as Amazon does through CreateSpace. But one thing that Amazon cannot do is to move the best-selling indie-published print-on-demand books into physical stores, located throughout the country. Only Barnes & Noble can do that. Nor can Amazon conduct book reading and signing events for indie authors at bookstores around the country. But Barnes & Noble could.

A decade ago, newspapers had a similar opportunity. They could have used their print publications as a lure to encourage would-be bloggers and smart commentators to publish on newspaper website community portals instead of independent websites, denying those competitors many voices with which to grow. Just select the best community content from the website each day, and print it in the paper. But papers were slow to embrace web-to-print, and now they’ve lost too much of the brand-name appeal and traffic advantage they once enjoyed over online start-ups.

Sure, book publishers don’t want to lose market share to independents. But book consumers want to select from the broadest possible selection possible, with easy to find links to both the best and most popular selections in desired categories, whether they come from New York or an indie publisher with just a PC and an ISBN. Ultimately, retailers like Barnes & Noble have to decide: Do you work for your customers, or your suppliers?

The book publishers could have a future. Beyond controlling access to the marketplace, book publishers provided one other, very valuable service to authors – book editing. And the demand for editing, guidance and advice for authors is growing as the number of authors grows. Book publishers could find ways to transition their business models to serve the growing number of eBook publishers, instead of hoping that Barnes & Noble shuts them out. But it’s becoming clear that they won’t.

Don’t be fooled by the industry’s attempt to distract from their failure by conflating their future with that of authors in general.

While publishers’ fates are closely tied to Barnes & Noble, said John Sargent, the C.E.O. of Macmillan, it’s not all about them.

“Anybody who is an author, a publisher, or makes their living from distributing intellectual property in book form is badly hurt,” he said, “if Barnes & Noble does not prosper.”

I call B.S.

If you are an author with a New York publishing house contract, perhaps your fate is tied to the publishing industry’s. But if you are not, well, you shouldn’t waste a moment of time rooting for a business that’s not rooting for you.

Is Apple's iBooks Author the right eBook creation tool for journalists?

So, is Apple’s new iBooks Author the solution for journalists looking for a simpler way to get into the eBooks market?

Nope, not even close.

Oh…kay, so is Apple’s new iBooks Author at least another option for writers looking to pick up some extra money writing eBooks?


Apple released its new eBook production tool last week, coupled with an upgrade to its iBooks app. Apple’s trying to get into the textbook market, positioning its iPad as an electronic textbook reader. But to do that, Apple needs an ongoing supply of eBook textbooks. The company’s signed deals with some textbook publishers, but it’s also offering the iBooks Author tool to encourage more people to create texts, as well.

The iBooks Author app’s gotten plenty of attention since its release for its user license restriction that any book created with it can only be sold through the iBookstore. No Amazon. No Barnes and Noble. While iBooks Author can export files as a PDF, it won’t generate the ePub file needed for best results in publishing eBooks through those and other online vendors.

That alone disqualifies the iBooks Author app as a serious option for any journalist looking for a single eBook creation solution. Better to continue creating an HTML file using your favorite editor, then running that file through Calibre to generate your ePub, which you can submit to Amazon, BN.com… and the iBookstore. The iBooks Author app also requires that you be running Mac OS Lion – it won’t download to Macs running Snow Leopard or earlier versions of the Mac OS. And if you’re using Windows? Fuggedaboutit.

But if you do have Lion, creating a book through iBooks Author and selling it exclusively through Apple is better than not making or selling eBooks at all.

The iBooks Author app offers several templates from which to choose in creating an  eBook textbook  eTextbook  TexteBook book. Your new book doesn’t have to be aimed strictly at students to use iBooks Author, but it seems a waste to use iBooks Author to create a novel or other text-driven book with few or no graphics.

Template Chooser

So why not try taking advantage of all that the iPad can do better than a printed page? Most newsrooms at this point have multimedia associated with major story packages. The iBooks Author app allows you to add those some of those elements into a pre-formatted book template with drag and drop ease. (You’ll need to convert to AAC from MP3, if your media files aren’t in Apple’s preferred formats already.)

The templates are quite nice, though if Apple doesn’t expand the selection soon, there’s the danger they will become cliche from overuse. It appears possible to alter Apple’s templates, though I didn’t spend a great deal of time investigating that. I suspect that anyone capable of doing that intensive of design work won’t be messing around with the aimed-at-beginners iBooks Author tool, anyway.

iBooks Author sample template page

If I had a hot story package with several must-see multimedia elements that would play at book length, I’d give iBooks Author a try to throw that eBook out there and see what I’d get. (Here’s a good, in-depth guide from Lifehacker.) Remember, you’ll need to promote your work aggressively through your own publications and social media channels. Chances are, no one’s going to find your book on the iBookstore, unless you send them there to look for it.

While the iBookstore continues to have a supply problem that limits its market share relative to Amazon and Barnes and Noble, the store’s biggest challenge is that its interface simply doesn’t enable readers to find additional titles of interest as effectively as those competitors do. Adding more title to the iBookstore, through iBooks Author’s exclusivity requirement, won’t address that issue.

If Apple wants to get more authors submitting more title to the iBookstore, it’d do better to improve the store’s interface so that it encourages more sales by books that aren’t in the Top 10 in the iBookstore’s limited number of categories. (I wish that Apple would spend a little of its huge pile of cash to buy a service such as Goodreads, then use it as a base upon which to build a social recommendation engine for the iBookstore.) That, plus a one-click publication function within iBooks Author, would be enough to make the iBookstore every bit as attractive to new authors as submitting to Amazon.

For what it’s worth, I hope that Apple succeeds in shaking up the print textbook market. Watching my children struggle under the weight of their backpacks when they go to school every morning frustrates me, as does the political process by which textbook contracts are awarded by states and school districts. I’d love to see students freed from the burden of heavy, out-of-date, static, printed textbooks and better engaged by frequently-updated multimedia texts, contained on an easy-to-carry tablet. I’d also like to see schools freed from having to install, maintain, assign and monitor lockers, which (outside gym class) would become unnecessary with tablet-based textbooks. And I’d like to see the political influence of textbook manufacturers diminished, which will only happen if the barriers to entry into this business are reduced by a disruptive technology such as eBooks.

So while I wish Apple success in disrupting the textbook market, I also hope that the company will further develop its iBooks Author tool, adding templates for other genres of publishing as a well as an ePub export tool. While I understand Apple’s desire to use the app to boost its share of the book sales market, I think that Apple’s best approach for doing that lies not in restricting authors, but in encouraging consumers to buy more of the books that Apple does sell.