In an at times contentious, moralistic but ultimately unfulfilled discussion on the future of the book this morning, Jonathan Galassi hosted the CEO forum to kick things off at BookExpo 2010. (Please excuse the roughness of this commentary).
On the panel were Jonathan Galassi, Farrar, Straus; with Scot Turow, Authors Guild, Bob Miller, Workman; Esther Newberg, ICM; Skip Prichard, Ingram; David Shanks, Penguin Group USA; Oren Teicher, ABA
In the opening salvo, Galassi asked bestselling author Scott Turow (ST) what he saw as the biggest issues in the e-world. ST responded by commenting that the industry faced an 'enormous risk' from piracy the results of which had already been seen in music where he suggested it had 'killed off the music retail business'. He went on to lament that the 'culture share of books (in the e-word) is not what it was in the paper world. This he sees as a problem in a universe where trade books are suffering.
Apropos of nothing, Agent Esther Newberg (EN) broke in to ask the assembled publishers why they couldn't pay 50pc on e-book backlist "it's a new thing" and David Shanks (DS) responded by saying that royalties on all formats were different and should be looked at as a package.
In a theme he was to come back to DS also reminded the audience that the business was still skewed 90pc to print and all the structure and overhead existed to support the legacy business. The financial picture will change "when the publisher doesn't need the warehouse" As a argument supporting the status quo, this ignored the multiplicity of options available to authors today. That the current cost structure legitimizes royalty schemes appears to many to be a weak argument. In the DS world publishers don't see themselves competing with a SmashWords model where most of the earned revenue goes to the author.
ST questioned why publishers had agreed to make the e-Book available at the same time as the hardcover and with a low price. (ST is also the elected head of the Authors Guild). Unfortunately, his comments sounded ignorant of some critical market dynamics which were corrected later by Bob Miller. On this point JG also suggested that it was a mistake to release books at the same time.
Oren Teicher (OT) - ABA President reminded the group that it the business needed to focus more on getting content to consumers in the format they wanted. He saw the bookstore as almost 'format neutral' and focused only on satisfying the customer. What he was reacting to was the suggestion that holding back content was a good idea, and BM pointed out that keeping people from content causes piracy and that in making it easy to buy content, digital is the better solution. (BM also corrected ST earlier comment that trade books 'were suffering'). Skip Prichard (SP) from Ingram also added that most piracy originated with print version of books and not the digital version and the group should be clear that digital books don't cause piracy.
ST launched into an attack on publishers ability to strategize: "You folks have to be able to see around the corners" and to counter the people in the world who don't believe in literary culture and would be happy with 52 published books per year. Responding to the idea of culture OT suggested that as music stores went away this contributed to the decline in the industry as a whole. The ABA and publishers need to support the 'community' aspect of book retailing as an important component of the whole industry. In agreement, BM contradicted ST by arguing that publishers "can't be keeping readers away from the books - meaning eBooks - and that we should always be looking to connect people to the content.
There were one or two curious comments during the 90min discussion such as JG's "no author is going to be happy to only publish online" since they will always want to give their mother a copy. But in contrast BM channeled the peasant in Gutenbergs lifetime: "these books are a real time suck" suggesting we sometimes miss the point.
On pricing OT questioned the $9.99 price point as irrational but BM couched that we can kiss the $27 price point goodbye. Continuing he point, he noted that books exist in competition with other media spend and additionally, that we can't lump all books together: the paper back for the plane ride is far different than the reference book you use for research. "We can't make blanket statements (about pricing) of all books.
JG summarized: "Bob suggests that providing changes are the result of a multifarious number of available choices" but he went on to say we want to be able to say to our customers that the new ST book is worth $27. Again however, this came across as an arbitrary argument based on history - why not suggest $100 - than one based on market reality. SP brought up the point that ease of use has in part contributed to the decline in value proposition for consumers. But there must be an incentive for authors as ST reminded the audience and in the absence of selling tickets to events he saw writers not writing if they were not adequately compensated. That authors would forgo their creativity seems a little absolute to me.
The discussion transitioned for a while to community and building awareness for books. BM commented that we may even have a larger readership without the traditional press noting social networks. DS agreed emphatically that there will be a bigger market but we shouldn't shouldn't forget there needs to be big investment to buy reading devices.
OT made the point the notion that the physical and digital are separate is wrong and to think of them separately will ultimately disappoint consumers.
The focus on the device was seen as a narrow view by SP who suggested, "in cloud it won't be about the device." And in addition it will become important to build community around the book using online networks.
Seemingly in contradiction to his earlier comments ST said that the publishers and authors "can't sit in the pulpit and demand that people value our content at a certain price."
While JG believes that there will always be segment that wants to go the bookstore, SP went much further and agreed curation via bookstores will be important but online it is far different and escalating in importance. Consumers are going to use facebook and online circle of friends much more than traditional promotional channels.
In a comment that initially confused me DS seemed to suggest that readers were clueless: "Readers don't know what to read. So they rely on their friends and on their community. Publishers are finding the places people are talking about books."
The last topic covered was prompted by EN description of an upcoming title by Hachette which will be highly stylized and designed. This she was as a wonderful consumer offer but was contradicted by SP who said that having the infrastructure that decides font and paper and cover is going to be under intense pressure. For the most part people don't care about this 'extra' effort. Managing downward pressure on pricing while trying to create value in physical books are opposing strategies and will be in conflict. "The economics of this are all at odds."
Lastly BM: The app and the book can be complimentary. We haven't seen the full potential of different formats working together yet. Can't generalize across all formats and content when we try to determine what works and what doesn't.