Publishing/Writing: Insights, News, Intrigue

12/18/2009

Big Publishers Don’t See The Core Reason Their Biz Is Imploding!


The old business model for publishers of letting “content” find them is failing today due to the overabundance of content (much of it free) on the internet. Also, general publishers, who do not cater to a specific audience, are having more difficulty in selling content because they have not cultivated a niche audience and a sense of trust for what they do publish.

Anyway, Michael Shatzkin, an industry professional whom I trust and admire greatly, has some targeted thoughts on today’s publishing dilemmas and I am proud to present them here:

The rapid series of developments in the digital book space and my rising profile mean that I seem to be in an interview with a journalist just about every day. As I was yesterday. The focus of yesterday’s conversation was the Baker & Taylor“Blio” platform that I wrote about last week. How widespread did I think its uptake would be?

The interviewer and I covered a lot of ground, including ebook pricing and timing and whether publishers would be able to make enhanced ebooks work. Those are the topics of the moment (and they are all panel topics at Digital Book World.)

At one point we had a robust discussion about ebook pricing. My interviewer asked me about a pundit’s observation that hardcover books were just wildly overpriced. The implication is that publishers should consider themselves damn lucky that people would pay $9.99 for an ebook, which, after all, has far fewer bytes than a movie they can get for $1.99.

That’s an easy one to answer. What’s a “right” price? Well, from the publisher’s perspective, that’s a question with a clear mathematical answer. (The math wouldn’t yield the same answer for an author.) The right price is the one at which the total gross margin — revenues after all costs — is maximized. We all know more will buy if it is cheaper and fewer will buy if it is more expensive, but the “right” price is the one where customers times margin (margin being revenue minus costs) is the highest it can be.

There is no way in the world that a publisher would maximize margin cutting $28 print book prices to $9.99. So the author of this blogpost being quoted to me might be looking at the “right price” from a consumer perspective or a high-level industry observer perspective, but they sure aren’t looking at it from the perspective of the one who sets the price: the publisher.

At the conclusion of the interview, the journalist on the other end of the phone asked me whether, in effect, publishers would be able to save themselves. “Is there a model,” she said, “which assures that a publisher will profit selling their books in the future?” …

The rest of the story: http://alturl.com/ztsf

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4 Comments »

  1. Dear Author johnaustinblog.blogspot.com ! I apologise, but, in my opinion, you are not right. I can defend the position.

    Comment by Anonymous — 12/18/2009 @ 7:42 pm | Reply

  2. Hi, Anonymous, thanks for the comment. I am not right many times…And this may be one of them, at least to some degree…However, I would be interested in your position. I will post your comments on the main blog…John

    Comment by John Austin — 12/18/2009 @ 10:00 pm | Reply

  3. Can anyone recommend the top performing Network Management system for a small IT service company like mine? Does anyone use Kaseya.com or GFI.com? How do they compare to these guys I found recently: N-able N-central remote windows login ? What is your best take in cost vs performance among those three? I need a good advice please… Thanks in advance!

    Comment by Anonymous — 12/19/2009 @ 8:50 am | Reply

  4. Hi Anonymous,If you are the same Anonymous that posted on 12/8/09 you are off point. I'm still waiting for your position on Publishing imploding…If you are a new "Anonymous" you are still off point. However, I recommend you research as much data on Network Management Systems as reasonable on the Net then make your own comparisons. You can talk to 5 different people who use 5 different systems & may get a satisfactory recommendation on more than one system…So, you will just be back at square one having to make a decision b/t one or the other. After reasonable research, pick one…If it doesn't perform change to your 2nd choice…etc ad infinitum until you get one you like…

    Comment by John Austin — 12/20/2009 @ 9:35 am | Reply


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