Business models of traditional and new publishing

Synthetized in a single business model canvas, you can easily see the main differences between the traditional and new pusblishing industry.

Books have existed for a very long time and play an important role in people’s life. Book publishers had time to build a strong market position and to anchor their brand in readers mind. These are called “traditional book publishers”. For about two years, their position has become weaker and more and more endangered by the evolution of technology. With the success of Apple, the behaviour of people has changed and they are getting used to tactile and modern products. Following the innovative trend, a new way of book publishing was created, the whole traditional publishing process has been disrupted.

Thanks to the new way of publishing, it has become easier to publish a book. Everybody is now able to sell his book. After writing it, a simple exportation to PDF followed by an upload to a publishing platform are required. Then the sales can begin. A consequence of this process is that there is no longer quality control on the contents of books compared to traditional publishing.

Each process has its strengths and weaknesses, but for the moment, none of them outperforms the other. For example Amazon has announced in January 2010 that 6 Kindle eBook are sold for every 10 physical books when both editions are available. The association of American Publishers declared that eBooks sales have nearly quadrupled between January and August 2010 ($ 89.8 million in 2009 à $ 263 million in 2010). Even if this growth seems amazing eBooks sales represent only 9% of total consumer book sales in 2010, but they represented only 3.30 % in 2009. This shows the exponential increase of eBook sales.

The evolution from traditional to modern publishing

Here is a slideshow explaining changes in the book publishing process. Please click on the full screen mode to better see the presentation!

Publishing industry evolution

More PowerPoint presentations from

Homemade by Gregg, member of book publishing industry!

Self-published authors find e-success

I found an interesting article talking about e-books from the authors' perspective. Some of them actually find success with the e-book format, while they had been rejected from traditional publishers for years. Konrath, a self-published author, declare:

""I am a guy who had his butt kicked by the industry for 20 years, and now I'm showing other authors what they can do so they don't have to go through the same thing," he says. "Traditional book publishers are just serving drinks on the Titanic." Konrath has seen his income from his self-published e-book sales go from $1,400 in April 2009 to $68,000 in April 2011."

Other authors began with great e-book sales but later decided to contract a traditional publisher in order to reach a larger audience. For example, Hocking who was formerly self-publishing her e-books, now decided to turn to a professional publishing house.

"Several self-published e-book superstars — most famously Amanda Hocking — have landed headline-making contracts with major publishing houses, which will be releasing their titles in print and digital formats (...).
"I wanted to reach more readers," Hocking says. She points out that most people — particularly the young teens she writes for — do not own iPads or e-readers. Hocking says it's about the story, not the device. "I wanted to write a fun book, not start a revolution."

Finally, authors simply prefer being dealing with traditional publishers so they can focus on writing. Andrew Martin, a publisher says:

"An established publishing house lets the author do what he does best — write — while the publisher offers expert marketing, editing, production and aggressive protection against e-books being illegally pirated."

Source: USA TODAY Newspaper, Deirdre Donahue
http://www.usatoday.com/life/books/news/story/2011-12-14/self-published-authors-ebooks/51851058/1

Ventes d'ebooks multipliées par 7 entre 2010 et 2015

Lors d'une présentation au Liberty Media's investor meeting, jeudi dernier, le libraire Barnes & Noble a fait part de ses prévisions pour le marché du livre imprimé et numérique. Des constats intéressants, tout autant que les pronostics posés par la chaîne.

Celle-ci estime en effet que le marché du livre imprimé va décroître pour passer de 21 milliards de dollars en 2010 à 14 milliards de dollars en 2015. Parallèlement à cela, le marché du livre numérique devrait passer selon le libraire de 1 milliard de dollars en 2010 à 7 milliards de dollars en 2015. L'un dans l'autre, donc, la perte en papier devrait être compensée par les ventes de numériques, si l'on suit leur projection.

En ce qui le concerne plus précisément, le libraire a prévu de gagner des parts de marché sur le secteur du livre imprimé (notamment parce que son plus gros concurrent, Borders, n'est plus là) passant de 17 % à 20 %.

Il a estimé que ses ventes de livres imprimés devraient chuter de 3,6 milliards de dollars à 2,8 milliards de dollars toujours sur la même période. Il a envisagé une augmentation de ses ventes d'ebooks qui passeraient de 250 millions de dollars en 2010 à plus de 2 milliards de dollars en 2015.

Selon Barnes & Noble, sur l'année fiscale 2012, ses ventes d'appareils Nook et de contenus numériques devraient atteindre 1,8 milliard de dollars. Sur l'année fiscale 2011, ces ventes-là s'élèvent à 880 millions de dollars.

Source : www.actualitte.com, 21 novembre 2011

Amazon and the Incredible Disruption of The Publishing Industry

Here is a great article summarizes the whole idea of the disruption of the traditional publishing industry, notably the one triggered by Amazon.

The Incredible Disruption of The Publishing Industry

Amazon.com is at the heart of the disruption and the opportunity. I first started watching Amazon closely about 5 years ago or so when I learned of CreateSpace, Amazon's "do-it-yourself" publishing site where basically anyone can upload a PDF, choose a cover (or create your own) and... publish your book into Amazon.com! The cool thing is that your book shows up in Amazon listings just like those from the traditional publishers.

1. Write your book.
2. Export to PDF.
3. Upload to CreateSpace.
4. Start Selling!

Boom!

That's the sound of the traditional publishing industry business model going up in smoke...

In the years since, CreateSpace has of course expanded into ebooks and Amazon's rolled out many other services helping authors get their content out.

Now, of course, to do it on your own is not quite that simple. Traditional publishers provide some key assistance to authors:

1. Editing - a critical piece of writing a book
2. Design - of the cover, the book, graphics, the typefaces, etc.
3. Marketing - promoting the book across many different channels, advertising, etc.
4. Distribution - getting the book out to where people will buy it

Editing, design and marketing are all areas where you can find people to help you... and the distribution is the whole point of what Amazon.com, Smashwords, Lulu and a zillion other sites will now help you with. Sure, the traditional publishers can help you with distribution out to brick-and-mortar bookstores... but how are those doing these days? (The sad subject of another blog post at some point.) For some authors those bookstores may be a market... and for them the traditional publishers may be necessary. For other authors starting out - or writing for more niche audiences, the "indie publishing" route may work better.

Some Traditional Publishers Get It

I should note that some publishers certainly "get it", have seen the disruption and are doing what they can to both survive and thrive in this new world. The primary reason why I signed with O'Reilly for my latest book was because the entire idea behind the the book was for it to be an "ebook" that could be constantly updated as we as an industry learn more about IPv6 application migration.[1] O'Reilly has long been paying attention... they brought out Safari Books Online many years ago... they have their excellent Radar blog/site that indeed includes ongoing commentary about the disruption in the industry... and they sponsor the annual excellent Tools of Change for Publishing conference. I wrote earlier about how O'Reilly makes it so easy to get ebooks onto your mobile devices.

O'Reilly is a stellar example of publishers who see the changes and are looking at how to be part of that wave. There are others, too. The smart ones are evolving.

Some Traditional Publishers Don't

Others aren't. As both the GigaOm and NYT piece mention, some of the traditional publishers are instead fighting tooth and nail to hang on to some relevance.

I loved Mathew's ending paragraph:

Here’s a hint for book publishers: take a lesson from the music industry, and don’t spend all your time suing people for misusing what you believe is your content — think instead about why they are doing this, and what it says about how your business is changing, and then try to adapt to that. Amazon is giving authors what they want, and as long as it continues to do so, you will be at a disadvantage. Wake up and smell the disruption.

Wake up and smell the disruption, indeed!

Source : www.disruptiveconversations.com, by Dan York, October 18, 2011

Local Bookstores Ask Customers To Boycott Amazon Over New Price Check App Offer

Should people boycott Amazon? Increasing numbers of retailers and publishers have been daring to ask the question, in the face of aggressive tactics by the book industry leader.

Although Amazon offers an unmatched selection of books and other products via its website, some of the Seattle-based company's recent moves, such as its book lending program and its sales tax policy, have led many retailers, publishers and politicians to turn against it. But would enough customers change their spending habits in order to force a shift in the company's behavior?

Earlier this year, a movement in California called on customers to boycott Amazon over the online store's attempts to avoid paying internet sales tax in the state.

Now an offer related to the company's new Price Check app for smartphones is causing further dissatisfaction with Amazon's aggressive policies.

Read the rest of the article here

Source : huffingtonpost.com December 9, 2011

Soupçons de cartel entre Apple et les éditeurs.

J’ai trouvé aujourd’hui cet article dans le journal suisse allemand NZZ. La commission européenne cherche à savoir si Apple a conclu des contrats avec les éditeurs tels que Hachette Livre, HarperCollins, Simon & Schuster, Penguin et George von Holzbrinck qui ne sont pas conformes à la loi sur les cartels en ce qui concerne les ventes de livres électroniques.

Pour le moment, Apple et les éditeurs concernés n’ont fait aucun commentaire. Cette affaire est à suivre de près.

Cliquer ici pour lire l'article (attention c'est en allemand ;-) )

Source: nzz.ch, December 6, 2011

The true price of publishing

Ebooks have reignited the question of what we're really paying publishers for – the physical product, or what's written inside?

If you think of books primarily as physical objects, then off course they'll seem a rip-off, because printing and distributing them is cheap. But as Levine points out, what you're really paying for when you buy a book is something different. You are buying the "text itself". And why is that so expensive? Because the publisher will, in many cases, have paid the author a considerable sum for the right to sell it. And because that same publisher will also (if they're any good) have ploughed considerable further resources into editing and marketing it.
[...]
In other words, publishing is a business that incurs high fixed costs. And it's this, to return to my initial question, that accounts for the high price of (indeed the very existence of) hardbacks. The publisher needs to maximise revenues in order to defray its outlay. Some people are prepared to pay top dollar to have the premium product – a hardcover copy that comes out, crucially, months before other versions. So it makes sense for the publisher to offer it to them.

Source : http://www.guardian.co.uk/; William Skidelsky, August 4 2011

The eReader price war

At the end of last year [2009], Amazon was selling its basic Kindle for $259. In June of 2010, Barnes & Noble slashed the price of its Nook eReader to $199. Amazon immediately responded by dropping the price of the simplest Kindle to $189. That's when both companies stopped making money on the e-readers, according to iSuppli, an analysts' firm known for taking apart gadgets to estimate how much they cost to manufacture. In July, Sony dropped the price of its eReader from $169 to $149. The Nook then went down to $149 and Amazon announced that its new Kindle Wi-Fi, eventually released in August, would retail for $139.

The eReader price war in turn fueled demand for eBooks. During the first nine months of 2010, market leader Amazon sold three times as many Kindle books than during the same time period in 2009

Sources : Kindle Wins E-Reader Price Battle, But It Hasn't Won the War, by Adrianne Jeffries, Top trends of 2010: Growth of eBooks & eReaders, by Richard MacManus, on www.readwriteweb.com

Growth of eBooks in 2010

Here are some insights about the eBooks growth in 2010, sales almost doubled.

A recent report (December 2010) from the Association of American Publishers stated that eBooks sales grew 193% between January and August 2010. In dollar terms, eBook sales for January to August were up from $89.8 million in 2009 to $263 million in 2010.

What's more, according to the Association of American Publishers, eBooks now (December 2010) make up 9.03% of total consumer book sales - compared to 3.31% at the close of 2009.

It's difficult to get sales data from the eReader vendors. However Amazon was vocal throughout 2010 on the overall trends.

In January (2010) Amazon announced that it was selling 6 Kindle eBooks for every 10 physical books, when both editions are available. Later, in October, Amazon announced that sales of Kindle eBooks had passed sales of hardcover books. Specifically, over the three months prior to October, Amazon said that it had sold 143 Kindle books for every 100 hardcover books.

At the end of October (2010) Amazon announced that for its top 10 best-selling books, customers bought the Kindle edition twice as often as the print copy. According to Amazon's VP for Kindle, Steve Kessel, Kindle eBook sales also topped print sales of hardcovers and paperbacks for its top 25, top 100 and top 1,000 bestsellers.

Thus, this growth was fueled by intense competition amongst eReader manufacturers over 2010. Amazon Kindle, Sony Reader, Barnes & Noble Nook and others attempted to undercut each other throughout the year. Further, the Ipad arrived in 2010 and added to the choices for eBook consumers.

Source : Richard MacManus, December 2010, www.readwriteweb.com

Which are better, eBooks or Paper Books?

I found an interesting post in www.readwriteweb.com comparing the advantages of paper books versus ebooks, by Richard MacManus, December 2010.

In August I wrote a couple of posts that posed the question: which are better, eBooks or paper books? I'm not a fan of black and white answers, but in this case the answer was even more grey than usual. The fact is, there are pros and cons for both. I myself still read both paper books and eBooks, alternating between the two depending on the book.

Here were the arguments I presented for each side.

5 Ways That eBooks Are Better Than Paper Books
1. Social Highlighting

2. Notes 

3. Look-up of words

4. Ability to Tweet & Facebook quotes

5. Search

5 Ways That Paper Books Are Better Than eBooks
1. Feel

2. Packaging

3. Sharing

4. Keeping

5. Second-hand books

There's little doubt that paper books will be a commercial force for a long time yet. Nevertheless, in 2010 eBooks and eReaders took a big step forward and eBooks now represent a sizable minority of the overall book market.

Source : www.readwriteweb.com

Book publishing industry in France

Here are some interesting numbers about the book publishing industry in France. (Please click on the image to see the larger version.)
Data were collected by two different panels. As you can see, growth of books sales has globally decreased since 2007. Please find below the graph describing the evolution of book sales in France from 2007 to 2010.

News of the ebook industry

Here are the latest news of the ebook industry.

The first article gives us some news about ebooks in French countries. The main French publishers signed contracts with Amazon and Fnac in order to also sell ebooks. The ebook French market is clearly developing.

Read more...
(Source : Lematin.ch)

The second one tells us about the launch of a lending library by Amazon: Kindle Owners' Lending Library.

Read more...

(Source: online.wsj.com)

Good reading!!

Environment Model < Industry Forces

Competitors and new entrants:

The landscape of the book publishing industry has changed in recent years. Large publishers are no longer alone. They continue to be important competitors, based on their main advantages which are guaranteed quality of the object and content. However, "new" competitors have emerged with different business models: e-book and self-publishing. The main advantage of these new entrants is the cost structure. While traditional publisher face costs and risk of unsold books, new publishers have an advantageous cost structure obtained by transferring the printing costs and the risk of unsold to the authors. One of the advantages of this new cost structure is that it helps to meet the demand from small and unknown authors.

Stakeholders:

Since the advent of e-books and the development of self-publishing, there has been a change of power among stakeholders. Before, big traditional publishers held much power. Authors were totally dependent on them for the publication of their books. Today, authors do not necessarily need traditional publishers, they have more power. Indeed, even unknown authors can more easily be published.

Choice of books has exploded and readers have become dominant stakeholders, especially since they can express themselves through blogs and social networks such as Facebook and Twitter.

Substitute products and services: The book format may be in danger, but the need that books (or e-books) are satisfying will certainly not disappear.

Suppliers and other value chain actors:

The business of self-publishing is dependent on unknown and small authors. Printers are important suppliers of the book publishing industry because traditional publishers often printing services. IT providers take more and more importance in the book industry because of the new publishers and their need to have a developped and efficient web-platform either to self-publish book or create e-books.

Environment Model - Industry Forces

(Click on the right arrow key to go through the presentation and
please use the full screen option to better see the slides)

More PowerPoint presentations from Mathieu

Environment Model < Key Trends

Technology trends
Changes in hardware are a main point in the technology trends. Tablets and e-readers are the most important examples. These new types of products are growing very fast and this will continue in coming years. Apple with the Ipad and Amazon with the Kindle are the most often cited as major manufacturers, but there are others (Sony, Barnes and Noble), and the list is still growing. Fnac announced the launch of an e- reader last week.

In addition, software plays an important role with the emergence of applications to read books on tablets for example.

Finally, the online platforms are also becoming more prevalent: Itunes allows to download books, a lot of websites allow to purchase books or make self-publishing, etc…

Regulatory trends
The main issues in regulatory are obviously intellectual property and all aspects of piracy. The appearance of many platforms to download ebooks of course increases the threat of hacking and illegal downloads.


Societal and Cultural trends

People change their way of consuming books and the emergence of new ways of reading allows them to consume books differently. They can now have their entire library with them at all times ! Social networks and blogs also play an key role. Readers can now access information anywhere, even for free.

Socioeconomic trends
The population increases, the demand for books will also increase, and more and more under a digital form. In addition, the education’s world, which is a key player in the world of books, is turning to new ways of reading.

Book-Publishing Industry - Key trends

(Click on the right arrow key to go through the powerpoint presentation)

More PowerPoint presentations from FA

Finally, we found an interesting article that we want to share with you about trends in the publishing industry. In this article, Kevin Kelly, former Editor and now Senior Maverick at Wired magazine, presented an impressive look at 6 trends that are currently affecting the publishing industry. CLICK HERE TO READ MORE

Environment Model < Macroeconomic Forces

The main points of the Macro-Economic Forces are the following :

• Even if the economy is globally subject to a financial crisis, the book publishing industry seems to successfully go through. Indeed, reading has a huge audience, it is an entertaining, interesting and educating activity which is attractive for a lot of people.

• The structure of costs resources in this industry varies a lot. Raw materials are cheap and easy to access but authors that are well-known should be costly for publishers.
  

• The quality of the economic infrastructure depends on states of development of countries. Indeed, developped countries have a better built economic infrastructure than emerging countries.

Here is a slideshow about the macro-economic forces of the book publishing industry.

Environment Model - Macro Economic Forces

(Click on the right arrow key to go through the powerpoint presentation)

More PowerPoint presentations from Audrey

Environment Model < Market Forces

Market segments : authors, publishers, book retailers and readers are the important stakeholders of the book publishing industry.

The needs and demands of the customers are high. They indeed want lots of different functionalities when they read. It is even sometimes contradictory : for example, they like advice from (printed) book retailers that you can obtain in a shop; but they also like books that are small and do not weight a lot, and that can only be achieved with an e-book.

Switching from a printed book to an e-book has a cost. It is especially high for publishers and readers: Publishers have to change their whole production process and readers have to adapt themselves to a totally new way of reading. In addition, readers have to purchase an e-reader, when switching from a printed book to an e-book.

Revenues generated by e-books seem attractive, from each stakeholder's perspective.

Finally, the dematerialization of books is a market issue as e-books become ever more popular. Moreover, the price of books, either printed or digital, is going to be sensitive to the creation of more open sources libraries and free e-books online stores. Piracy of books is now possible with the e-book appearance and will certainly be a problem when dealing with authors rights. E-books growth also questions the information quality of the content, as nowadays anybody can publish anything.

Here is the slideshow explaining in detail the market forces of the environment model applied to the book publishing industry.

Environment Model - Market Forces

(Click on the right arrow key to go through the powerpoint presentation)

More PowerPoint presentations from Mathieu

The team working on the Environment Model

One day to sketch out the Environment Model of the Book Publishing Industry ! No need to say that we were quite productive.

The results will be presented as slideshows on this blog in a few days.

The Future of Book Publishing

In january 2011, Kodad hosted a roundtable at the New York Public Library with the key members of the publishing industry (a retailer/ a printer/ a publisher/ a distributor/ an author) aiming to discuss the trends of the industry and strategic approaches, successes and future direction.

Sell first. Print second.



Members of the publishing industry speaking:
Elizabeth Scheier, BarnesandNoble.com
Jim Robinson, Harlequin Enterprises Ltd
Paul Morgan, Lulu.com
Larry Bennett, Baker & Taylor
Melinda Roberts, Author, "Mommy Confidental"
Craig Bauer, Hachette Publishing
Jac Garner, Webcrafters Inc
Jeffery Mathews, Scholastic

New York Times article

I found an interesting article published in the New York Times a few days ago about "Amazon signing up authors and writing publishers out of deal".

"Amazon.com has taught readers that they do not need bookstores. Now it is encouraging writers to cast aside their publishers.

Amazon will publish 122 books this fall in an array of genres, in both physical and e-book form. It is a striking acceleration of the retailer’s fledging publishing program that will place Amazon squarely in competition with the New York houses that are also its most prominent suppliers."

CLICK HERE TO READ MORE
Source : www.nytimes.com

Mathieu

Book Publishing Team

Our team, developing Apple's Business Model & Environment Model.

Fabrice, Grégoire
Fabienne, Sarah, Audrey
Mathieu

Unibook business model

Unibook is a self-publishing web-platform.

Editions Larousse - Business Model

Larousse is a French publisher specialized in reference books such as dictionaries.

(old style publisher's business model)

More PowerPoint presentations from Audrey

Kindle Direct Publishing - Business Model

Here is the Business Model of the Amazon's Kindle Direct Publishing, a quick and easy way to self-publish your books for sale in the Kindle Store.

More PowerPoint presentations from Mathieu

eBusiness Class

Welcome to this Blog dedicated to our E-Business class & group projects.