HarperCollins, Amazon Reach Agreement

HarperCollins, Amazon Reach Agreement
In an announcement that is certain to bring a sigh of relief to authors and readers, HarperCollins announced yesterday that it has reached a multi-year agreement with Amazon over its recent pricing dispute. While HarperCollins, like several other publishers before it, has been gunning for an agency pricing model in which the publisher sets the price of its books and basically forbids discounting on the part of the retailer, Amazon has long dug its heels in and refused to budge with the publishers in terms of its demand for a wholesale model. Under that pricing model, Amazon would pay publishers an agreed upon price for their titles and then could sell them for whatever it wants to, including at a loss.

On the surface, the wholesale model would seem to be the best form of pricing, at least as far as consumers are concerned, and certainly where publishers and authors are concerned. The publisher makes its agreed upon royalty–which it goes on to divide with the author according to their contract–and the consumer stands to benefit from an all-out price war among the retailers. The retailer gets to entice customers with the best deal possible, while using their interest in one product (the book) to encourage the sale of other items. It sounds like the American dream, capitalism at its finest.

But a recent interview with Smashwords’ CEO Mark Coker helped explain why that might be mutually beneficial in the immediate sense, but over time will lead to a break down of the entire publishing industry. A look at the history of corporations in the US shows a pattern of prosperity and decline, a system in which major companies go through stagnant years and are forced to reinvent themselves in order to climb back up to the top. The wholesale model means that one or two key players will have the power to sell books at a loss, driving out the smaller competition until there is no competition. Whether or not that’s the intended outcome when major players get to control the purse strings is irrelevant; once the competition is gone, where do readers turn for books when the major players also shutter their doors?

It comes as no surprise that HarperCollins and Amazon have reached an agreement, as the clock is ticking on one of the most important literary milestones of the century: the release of the long-awaited sequel to one of the most widely read books in modern history. If HarperCollins wants to sell Harper Lee’s Go Set a Watchman and Amazon wants to benefit from that sale, a meeting in the middle had to take place. But as of this writing, Amazon is offering the book for pre-order–something that many mom-and-pop independent bookstores aren’t even set up to do–for less than $13 for the hardcover; the Kindle edition is priced just over $11, while Barnes and Noble and Kobo are offering the ebook edition for pre-order for more than $16. While those are the major players in the online bookselling and ebook selling space, how many independent bookstores or online startups will be able to even come close to those prices?

While the terms of the deal haven’t been disclosed, it is a multi-year agreement in which HarperCollins will set the prices of its ebooks but allow Amazon to offer incentives to its customers. The most important statement made on the agreement comes from the publisher, who stated that its books will continue to be available from Amazon, a fate that was called into question if an agreement couldn’t be reached.

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HarperCollins, Amazon Reach Agreement

Bookstore Sales Up 0.9% in May 2015

Bookstore Sales Up 0.9% in May 2015

Brick and mortar bookstore sales are on the rise for the third straight month according to the US census Bureau.  In May 2015 sales across the board for books, stationary and magazines have increased 0.9% , to $776 million from the same period last year.

“The rapid growth of e-book sales has quite dramatically slowed and there is some evidence it has gone into reverse,” said Douglas McCabe of Enders Analysis. Though it’s hard to say what exactly has caused the apparent slow-down of digital book sales, this does spell good news for fans of physical books.

Bookstore Sales Up 0.9% in May 2015

B&N Closes up Shop in the District of Columbia

B&N Closes up Shop in the District of Columbia

Barnes and Noble has abandoned the District of Columbia, in Washington DC. The bookseller has proclaimed that they are closing their last retail location this December because of high rent .

The DC region has the largest incomes and overall annual expenditures and people are in love with the written word. According to the Bureau of Labor Statistics the DC region spends the most both in absolute and proportional terms on reading in the US.

Barnes and Noble used to have a location at Union Station in Washington, DC, which closed several years ago. There was also a Georgetown location (also in DC proper) which closed a few years before that.

Once December rolls around and the last Barnes and Noble bookstore is closed, readers will have to drive for thirty minutes to the suburbs in Virginia and Maryland.

B&N Closes up Shop in the District of Columbia

Barnes and Noble to Continue to Make Tablets and e-Readers

Barnes and Noble to Continue to Make Tablets and e-Readers

A few months ago, Barnes and Noble shocked the digital world when they said they were getting out of the device manufacturing business and splitting the company into two different segments. Today, the company totally reversed themselves, saying  “If we want to be in the content business, we need to be in the device business.”

Barnes and Noble organized an investors call today, the first one under Nook Media CEO Michael Huseby. They stated that the  Nook e-reader business, which includes hardware and digital content, logged revenues of just $153 million, down more than 20% from the same period a year ago. Hardware sales were down 23% and content sales were down almost 16%.

Michael Huseby mentioned, “We have sold approximately 10,000,000 Nooks and our content activation levels need to better leverage that accomplishment. Therefore, we are implementing programs to better serve our existing customer base and also aggressively exploring other target consumer markets with the potential to generate new revenue.”

One of the reasons Barnes and Noble is losing money on the Nook business is due to the sheer amount of inventory they have. “We overestimated demand for the products that we put out. As a result of that, we had to discount those products and we’re selling them now. We don’t want to be in that position again…eventually we’ll move to a business of lower priced at higher volume.”

He went on to say, “Our top priority in our operating strategy is to increase all categories of our content revenue. We are working on innovative ways to sell content to our existing customers and are exploring new markets we can serve successfully. The company intends to continue to design and develop cutting-edge NOOK black and white and color devices. We will continue to offer our award-winning line of Nook products including Nook Simple Touch, Nook Simple Touch with Glow Light, Nook HD and Nook HD+ at the best values in the marketplace. At least one new NOOK device will be released for the coming holiday season and further products are in development. All Nook devices will continue to be backed by world-class pre- and post-sales support in Barnes & Noble stores, as well as ongoing software upgrades and improvements to the digital bookstore service.”

Investors in the company were shocked by the revelations made today and have little faith in a company bleeding money. People may be concerned that B&N is lacking a complete vision in Nook Media, and are taking today’s announcements with a revamped website and new products with a grain of salt.

Barnes and Noble to Continue to Make Tablets and e-Readers

Authors Unions Petition Justice Department to Investigate Amazon

Authors Unions Petition Justice Department to Investigate Amazon

Amazon is celebrating their 20th anniversary, but not everyone is participating in the festivities. Three of the largest collective bodies that represent authors have filed reports to the US Justice Department that stated “Amazon has used its dominance in ways that we believe harm the interests of America’s readers, impoverish the book industry as a whole, damage the careers of (and generate fear among) many authors, and impede the free flow of ideas in our society.”

The Authors Guild, the American Booksellers Association, the Association of Authors’ Representatives and Authors United have all sent letters to the US Justice Department and even published a piece in the New York Times today.

The requests for an investigation arise out of last year’s titanic battle between Amazon and the publisher Hachette. As part of an unusually bitter contract dispute, Amazon made it more difficult to buy Hachette books, which angered Hachette authors and others.

Amazon’s critics portrayed it as a predator. The retailer and its supporters said the critics were trying to preserve their privileges against a much-needed wave of digital disruption. The conflict left both sides bloodied but produced no clear winner.

The collective bodies of author bodies main arguments is that Amazon’s dominant position makes it a monopoly as a seller of books and a monopsony as a buyer of books. According to published figures, this one corporation now controls the sale of:

  • More than 75 percent of online sales of physical books.
  • More than 65 percent of e-book sales.
  • More than 40 percent of sales of new books.
  • About 85 percent of e-book sales of self-published authors.

The American Booksellers Association has even accused Amazon of Free Riding.  “Amazon has long enjoyed three major competitive advantages over its brick-and-mortar counterparts: Without any physical stores, Amazon has low fixed costs, which enables it to offer lower prices than brick-and mortar stores, even when not selling below cost. Amazon can and does free ride off the sales and promotional efforts of brick-and-mortar stores (consumers browse the books at brick-and-mortar stores and then purchase them online at lower prices), greatly encouraging “showrooming.” Showrooming is the phenomenon whereby customers go to a physical bookstore to make a purchasing decision but actually purchase the item from an online retailer, in most cases Amazon. Amazon has even created an app to facilitate this practice, which allows customers to scan the barcode of a book in a brick-and-mortar shop and complete the purchase from Amazon’s website through their smartphones. Multiple industry research studies demonstrate that this is occurring, and publishers themselves have noticed increased Amazon sales during author events at bricks-and-mortar bookstores. State governments have subsidized Amazon with sales taxes avoidance. (Unlike bookstores, Amazon does not have to collect sales taxes in many locales.)”

This is the first time these collective bodies have ever banded together over a singular issue,  the market dominance of Amazon.  Will the Justice Department do anything about it?  If they don’t, these author unions will be relegated to standing on a soapbox and shouting into the wind.

Authors Unions Petition Justice Department to Investigate Amazon

Celebrity Memoirs Have Peaked

Celebrity Memoirs Have Peaked

Celebrity tell all books and memoirs have often sold enough copies to make the entire endeavor profitable for all parties involved. Lately, a number of flops have occurred and this has put the entire publishing business on notice.

There is lots of finger pointing going on at Simon & Schuster over the recent flop of the Hillary Clinton book entitled Hard Choices. The former secretary of state received an advance of $14 million dollars, the second highest ever. Her book sold 161,000 copies in its first three weeks, according to Nielsen BookScan — but 85,000 of those were sold in the first week. That number has dropped sharply to 48,000 and 28,000 in the following weeks. Total, as of December the book only sold only 250,000 copies.

Charlie Redmayne , UK chief executive of HarperCollins UK has publicly proclaimed that his company is “moving away from big celebrity hit-and-miss stuff.”

Certain celebrities in the United Kingdom have enjoyed huge success – with Alex Ferguson’s tell-all book notching up nearly 700,000 sales so far this year. Roy Keane’s The Second Half, selling 149,000 copies, and Lynda Bellingham: There’s Something I’ve Been Dying To Tell You, selling 265,000 copies. But for every successful book there are many more flops and Mr Redmayne says he feels it’s now time to pull back.

Part of the reason why the company is scaling back from celebrity based memoirs is because HarperCollins lost £180 million from January to June. He said: “I felt the company had embraced some quite risky celebrity non-fiction. A lot of these books were hugely expensive and they were not necessarily going to back-list well.” He went on to say that “celebrity non-fiction market, in my opinion, has peaked. It’s still there, there’s still a market for it, but it is coming down.”

Penguin Random House is also starting question their willingness to publish celebrity books. The catalyst was likely one of their biggest flops with last years Pippa Middleton fiasco. The Duchess of Cambridge’s sister was said to have received a staggering £400,000 fee for the book in advance and sold only 2,000 copies in the first week.

One book industry insider said that the range of books on sale this year is not as strong as last year. “This year it is essentially a bunch of 30-something comedians all fighting over the same slice of the market. There is also not much to appeal to ladies,” he said, adding that the recession has pushed total book sales down by around 5% this year.

The Bookseller Magazine recently reported that sales of biographies and autobiographies had slumped four per cent in 2014. Publishers are mostly in agreement that they are scaling back their operations on books on celebrity culture both in the US and UK. This might be a good thing, as most of them are written by ghost writers anyways.

Celebrity Memoirs Have Peaked

Veronica Roth Will Write Two New Books

Veronica Roth Will Write Two New Books

Bestselling author Veronica Roth has signed a new deal with HarperCollins to pen two new titles. The author of the hit Divergent series has a new movie hitting theaters soon called Insurgent. Likely the news of her upcoming novels will be met with wild abandon.

Little detail has been offered about the two books, both of which remain untitled. According to HarperCollins, the saga will feature “a boy who forms an unlikely alliance with an enemy […] they help each other attain what they most desire: for one, redemption, and the other, revenge.” The release also somewhat cryptically describes the narrative as “in the vein of ‘Star Wars.’”

The first of Veronica Roth’s upcoming young adult novels will be published in 2017, with the next novel to follow in 2018.

Going into the direction of a young male protagonist when all of Roth’s lead characters are female is interesting. Lets be honest, its mainly women that are the core reading audience of Divergent. Maybe the intention with the next two novels is to appeal towards a male audience, the sort that reads Ender’s Game and Maze Runner.

Veronica Roth Will Write Two New Books