The Inaugural LibraryReads List, With e-Lending Annotations

This morning the inaugural LibraryReads list was announced. However,  a number of the selected books may not be available in digital form in your library.

Fangirl
by Rainbow Rowell
Published: 9/10/2013
by St. Martin’s Griffin
ISBN: 9781250030955
X Macmillan does not do e-lending of the St. Martin's Griffin imprint. However, the Director of Library Marketing at Macmillan says "stay tuned as we continue to roll out new titles for e-lending."

How the Light Gets In: A Chief Inspector Gamache Novel
by Louise Penny
Published: 8/27/2013 by Minotaur Books
ISBN: 9780312655471
X Macmillan has some of the books from its Minotaur imprint in its e-lending pilot. But not this one. Again, "stay tuned". Apparently the audiobook is available for pre-order on Overdrive.



Night Film: A Novel
by Marisha Pessl
Published: 8/20/2013 by Random House
ISBN: 9781400067886
✓ Random House has a strong e-lending program, but the books are expensive! The ebook pre-order is currently available on Overdrive for $84; it's $12.99 on Kindle Store.


Help for the Haunted: A Novel
by John Searles
Published: 9/17/2013 by William Morrow
ISBN: 9780060779634
✓ HarperCollins allows e-lending. The ebooks expire after the 26th lend, but they're priced at a discount from retail print.


The Returned
by Jason Mott
Published: 8/27/2013 by Harlequin MIRA
ISBN: 9780778315339
✓ Harlequin has a good library e-lending presence. The library ebook is available for $21 on Overdrive. It's $9.46 on the Kindle Store.


Burial Rites: A Novel
by Hannah Kent
Published: 9/10/2013 by Little, Brown
ISBN: 9780316243919
✓ Little, Brown is part of Hachette Book Group. Hachette recently announced that its full list would be available for library e-lending. The program is comparable to Random House's.


Margot: A Novel
by Jillian Cantor
Published: 9/3/2013 by Riverhead
ISBN: 9781594486432
? Riverhead is part of Penguin, (now part of Random Penguin House). I'm not sure what the e-lending status of this will be.


Songs of Willow Frost: A Novel
by Jamie Ford
Published: 9/10/2013 by Ballantine Books
ISBN: 9780345522023
✓ Another Random House title, should be available for e-lending.


Five Days at Memorial: Life and Death in a Storm-Ravaged Hospital
by Sheri Fink
Published: 9/10/2013 by Crown
ISBN: 9780307718969
✓ Yet another Random House title, should be available for e-lending.

A House in the Sky: A Memoir
by Amanda Lindhout & Sara Corbett
Published: 9/10/2013 by Scribner
ISBN: 9781451645606
X Simon and Schuster is at this point in time the least e-friendly to libraries of the big 6 publishers. This title should be available as part of a pilot with New York City public libraries, but if you live anywhere else you are screwed.

It seems to me that if the librarians participating in LibraryReads really want to promote reading in libraries, then they should push to have any selected books available for e-lending, and not just in New York City. Just three years ago, fully half this list would have been digitally forbidden to libraries; just because some advances have been made doesn't mean the struggle for library survival is over. Not even close.

The covers are linked to Amazon. So there! Updated with some real pricing/availability info.

eBooks in Libraries a Thorny Problem, Says Macmillan CEO

John Sargent, CEO of Macmillan, one of the US's "Big Six" publishers, is not afraid of new business models. Over the past year, Macmillan has been trying to figure out how to push ebook pricing above the $9.99 level that Amazon had set as a standard on the Kindle. They had explored "enhanced" ebooks- ebooks that come with extra content- and were about to implement "windowing" (holding back ebook release to protect hardcover pricing, something that Sargent felt was "completely stupid").

Instead, Sargent decided to take advantage of Apple's announced entrance into the ebook distribution game to force a change of Macmillan's business relationship with Amazon. Instead of using the same discount model for both ebooks and print books, Macmillan wanted Amazon to change to a "agency model" where pricing would be controlled by Macmillan and Amazon would take a percentage. Amazon (which is Macmillan's 2nd largest customer) balked, and stopped selling Macmillan books entirely. But two days later, Amazon gave in. As a result, Sargent has been called publishing's "new hero".

Sargent spoke with the "Publishing Point" Meetup Group today in New York City, and I got to participate in the questioning. Michael Healy, Executive Director Designate of the Book Rights Registry, did a great job of leading the conversation. I was very impressed with Sargent, who dressed in jeans and had a casual, down-to-earth manner that matched. Sargent clearly understands all the challenges his industry faces- disintermediation, shifting distribution, the need to develop technology expertise, but at the same time he's very optimistic about publishing's prospects. He understands the assets at his disposal, in his words, "a lot of extremely good people who know how to obtain manuscripts and who know what people want to read", and who know how to gather enthusiasm around a piece of writing, a process that's "magic".

The most amusing comments by Sargent came in response to Healy's questions about whether the large, generalist, publishing houses would continue to be viable. Sargent seemed to think that in the near term (5-10 years) the big 6 would likely remain intact. (HarperStudio's Robert Miller has predicted the Big 6 could shrink to 3) His reason was not what I expected. The Big 6 are in no danger of implosion- they survived a very hard economic stretch quite well, but no private equity firm or bank would go near them because of "disastrous" balance sheets. They "suck cash, and have terrible profits." "We're disastrous but stable" quipped Sargent.

When my turn came to ask a question, I asked Sargent if he had thought about the role of libraries, and particularly public libraries, in ebook distribution.  His answer indicated that just as he was not afraid of changing the relationship with Amazon, Sargent is not afraid of changing the publisher's relationship with libraries. In fact, change may well be required.

"That is a very thorny problem", said Sargent. In the past, getting a book from libraries has had a tremendous amount of friction. You have to go to the library, maybe the book has been checked out and you have to come back another time. If it's a popular book, maybe it gets lent ten times, there's a lot of wear and tear, and the library will then put in a reorder. With ebooks, you sit on your couch in your living room and go to the library website, see if the library has it, maybe you check libraries in three other states. You get the book, read it, return it and get another, all without paying a thing. "It's like Netflix, but you don't pay for it. How is that a good model for us?"

"If there's a model where the publisher gets a piece of the action every time the book is borrowed, that's an interesting model."

Sargent has clearly thought about libraries, but perhaps he's not talked much to them. His points are valid- the existing business relationship between publishers and libraries won't work for ebooks the way it has worked for print books and the "frictions" that exist for print materials could disappear for ebooks. But he has gaps in his knowledge of libraries. The patron-on-the-couch scenario wouldn't work for libraries either- why would a town support its library's ebook purchasing if everyone could get the ebook from a library 3 states away? The fee-per-circulation model would be a disaster for most libraries, which have fixed annual budgets, and can't just close in September if they've spent their circ budget.

On the other side, the models preferred by libraries are not necessarily going to work for publishers. While the subscription model will probably work for academic institutions, it would turn public libraries into unnecessary intermediaries. The "perpetual access" model would be suicide for publishers if applied to their most profitable top-line books.

Now is the time for publishers and libraries to sit down together and develop new models for working together in the ebook economy. Executives like John Sargent are not afraid of change, but they need to better understand the ways that they can benefit from working with libraries on ebook business models. Libraries need to recognize the need for change and work with publishers to build mutually beneficial business models that don't pretend that ebooks are the same as print.

eBook Pricing Calculus and A/B Testing

You've probably read about how book publisher Macmillan has won a big battle with Amazon over the pricing of ebooks. By shifting to an "agency" model, publishers will gain the ability to control the price that consumers pay for ebooks. A much discussed question has been whether this is really a win or a pyrrhic victory for publishers.

My question is a bit different. How will book publishers determine the correct pricing?

In Econ 101, we learned that markets set pricing by matching supply and demand curves. The publisher's task in the ebook economy is to find a price that will maximize their profits. Too high a price will result is low unit sales, while too low a price will leave money on the table.

One of the frustrations you encounter trying to apply Econ 101 lessons to the real world is that you quickly find that most supply and demand curves are completely hypothetical. When W. W. Norton & Company set a retail price of $13.95 for The Blind Side (Movie Tie-in Edition) they didn't solve a set of equations that told them their profit would be maximum at this value. Norton doesn't know how many copies they would sell at $99.95, and they don't know how many they would sell at 99¢. It's likely they know how many total copies they're selling, but they probably don't have solid numbers telling them how many of those are selling at $9.81, the current price on Amazon.

But Amazon does.

Booksellers like Amazon can map out a large part of a demand curve using A/B testing. In A/B testing, website visitors are divided into two groups. The A group sees one version of a website and the B group gets another. The behavior of the two groups is then measured and compared. For example, the two groups could be shown different pricing for The Blind Side, and the rate that they purchase the book would be measured. Using repeated measurements of purchase rate vs. price, a dominant retailer such as Amazon is able to measure the consumer demand curve for a book or group of books. Pricing and profit can be optimized accordingly.

Amazon's pricing calculus will be somewhat different from the publisher's calculus, however. If the price they pay publishers is fixed (as it is for books), then the optimum price for Amazon will be higher that the optimum pricing for the publisher. You can do the math.

Amazon is well known for doing A/B Testing- see Bryan Eisenberg's description of the evolution of the Amazon shopping cart for a great example. Google is also notorious for depending on the technique. It even tested 41 shades of blue when it couldn't decide on a color for a design element.

Book publishers, on the other hand, have little experience with running e-commerce websites. A successful web merchant will optimize their site for search engine ranking, and will make it simple for users to find and get what they want.

Try a Google search for "The Blind Side". Since the book has become an Oscar-nominated major motion picture starring Sandra Bullock, it's not surprising that the top hits relate to the movie, not the book, but the complete absence of publisher results is striking. Here are the links my Google search pulls up:

1. Movie times
   
2. IMDB (Amazon property, links to Amazon)
   
3. the movie web site (Warner Bros., with move commerce links)
4. Wikipedia (film)
5. Google News Results (no book links)
6. Google Image Search results (First one a book cover at AOL shopping)
7. YouTube (official trailer) (no book links)
8. Amazon page for the book At last, a place to buy the book!
9. Rotten Tomatoes (movie reviews, no book links)
10. Yahoo Movies (no book links)
11. Apple iTunes Movie Trailers (no book links)
12. Fandango (no book links)
13. Moviephone (no book links)
14. Google video search results. The second result is a link to a YouTube interview with The Blind Side Author Micheal Lewis, labeled "WW Norton: The Blind Side". It seems the publisher ponied up for some promotional video! But are there any links from the video to a book related page? Of course not!

On the second page of google results, the book gets a Wikipedia link and another Amazon link. On page 3, there's a book link to Powell's. On page 5, there's an  excerpt from the book on the NPR website.

Perhaps the publisher web presence for The Blind Side has been swamped by the movie pages.  If we add "book" to the search term we might expect to see a publisher presence for the book. On the third page of that search, there it is: a result from WW Norton. It's their home page, and no mention of The Blind Side at all. A message there tells me that WW Norton has

"recently relaunched our website, and many things have moved around. If you're looking for a book, try the search field above, or browse all books by subject." 

Oh, and when I search Norton for "the blind side", I find this page, which says the book is out of stock! If a competant merchant were running the site, it would tell me that the version without the movie-tie-in cover was in stock, but no such luck. However, there's a tiny link way on the other side of the page that says the book is available on the iPhone/iPod Touch iTunes App Store! Although no one has submitted a review on iTunes, I'm told I can buy it there from Kiwitech for $13.99.

There are so many things wrong with Norton's attempt at e-commerce that pricing is almost the last thing you would want to test with an A/B study.

So the funny thing about the shift to an "agency" model for the selling of ebooks is that the power to call the plays (set prices) now belongs to the one player (Norton, Macmillan, Random House, etc.) that has the poorest view of the ebook playing field; in fact, I'm not sure they all know the rules. The big huge left guard (Amazon) has just been benched even though he blocks like a superstar, because he's urged Norton to run the ball. Norton wants to pass the ball, to his stylish wide receiver, Apple, but the other team's blitzing, and a speedy right defensive end named Google is bearing down on Norton from his blind side.

I'm not sure I want to look.