Tag: Barnes & Noble

Busy morning

Just a quick note this morning. I’m putting the finishing touches on Light Magic and verifying conversion files this morning. That includes the print files. More on that when it’s done.

In the meantime, I’ve got a couple of blogs up elsewhere this morning. Over at Victory Girls, I discuss that sad excuse for a teacher, Gregory Salcido, who refused to step down from his city council seat last night. You see, he’s a pacifist with a capital “P” and while he didn’t mean to hurt anyone when he spewed his anti-military comments in class, he wasn’t going to apologize for them either. Instead, he gave that age-old “it was taken out of context” excuse. Of course, it’s hard to make that argument fly when we have a five-frigging-minute video of his ravings. Continue reading

Barnes & Noble misses the mark yet again

It’s been awhile since I’ve blogged about Barnes & Noble here. Usually, when they’ve done something that catches my eye, I save it for Mad Genius Club. However, I came across an article this morning that simply begged for me to write about it today. I found it almost immediately after reading about the Bay Area losing another B&N store and after hearing that Len Riggio bought up another million shares in the company. Put it all together and, at least to me, it shows how B&N and its management still fails to understand the marketplace.

Let’s get the latter two articles out of the way first. The B&N store in San Jose’s Eastridge Mall is closing.  The official shuttering date is Jan. 11. This lets B&N run its closeout sale during the holidays. At least that is good planning. However, this is at least the third B&N to close in the area in the last year or two, if I remember correctly. More to the point, this store is located in an area where it should thrive, at least looking at median home values. The median value in San Jose is $934,000 and in Fremont they are $967,000. So what is B&N doing wrong that it can’t keep its brick and mortar stores open in this area?

Now we have news that Len Riggio, B&N’s founder and chairman, has bought up another million shares of stock in the company. This gives him 4 million plus shares in the company and something like a 19% ownership stake. This should not give investors or customers any warm fuzzy feelings because it has been under Riggio’s various times at the helm that B&N has failed to flounder its way out of its current troubles.

Now for the news that really struck me as a “What the hell are they thinking?” move. It’s been no secret that you could order books and other items from the B&N website for less than you could buy them going into the stores. In a way, that makes sense. After all, those items don’t come with the same overhead that items in a store will have. However, it is also sort of not only a dick move but also a stupid one when what you recognize as your core business is starting to circle the drain. When you lament that you don’t know how to get customers into the stores but don’t given them any incentive to come in, you have a problem.

And that brings us to this latest story about the bookseller. It seems B&N is finally going to start matching prices on its website in its brick and mortar stores. But, since this is B&N, there’s a catch. Several of them, in fact. First, you have to know about it. In other words, if you haven’t seen the message (assuming they sent one out), you won’t know and they won’t have to offer it. Second, you have to ask for it. Third, you have to be a member of their club.

What this says to me is that not only do I have to pay them the $25 or whatever their annual membership is now but I also have to look online before going to the checkout stand to purchase my book. Why? Because I need to know what the online price is since I doubt they are listing that in-store. Then I’m going to have to ask for it, show my membership and pray the worker behind the counter knows what I’m talking about. How is this supposed to help me?

Oh, I know. They say it will save me money. Except I could have saved that money and more by simply shopping from the comfort of my home. I wouldn’t have to fight the crowds, assuming B&N gets crowds during the holiday season now, and the even longer lines as additional codes are punched into the cash register since this apparently isn’t automated (how can it be if you have to ask for the discount before it is given?).

B&N had a nice slow pitch right over the plate and it whiffed. Way to go — not.

I miss the days when Barnes & Noble focused on books and had a knowledgable and caring staff. I miss the days when they didn’t mind if I spent hours browsing and reading, days when they made it not only convenient but comfortable to do so. Now it is as if they are trying to find new and “better” ways to fail.

If they really wanted this promotion — and that is exactly what it is: a promotion. A poorly planned one with a limited time period — to work, they would open it to every customer. They wouldn’t demand the customer be a member of the club. They would advertise the hell out of it TO GET PEOPLE IN THE DOORS. Isn’t that what they need? Don’t they need warm bodies that will actually buy something? Don’t they need to expand their customer base? The answer to that is a resounding “Yes!” and yet they continue to shoot themselves in the foot when trying to accomplish it.

How much longer until B&N is finally put out of its misery? I don’t know and I really don’t want to see it fail. I love brick and mortar bookstores. But, unless its management opens its eyes and climbs out of the early 20th Century, I don’t hold out much hope for its continued existence and that’s too bad, not just for publishing but for the reading public.

 

On B&N, Spenser Rapone and more

Just a quick post this morning. Yesterday, I blogged over at Mad Genius Club about the latest news coming out about Barnes & Noble. Today, I have a post up at Victory Girls about that poor excuse for an Army officer, Spenser Rapone. While completely different topics, they have one thing in common: they are perfect examples of someone doing whatever the hell they want without worrying about the consequences.

In B&N’s case, the blame falls on Leonard Riggio and the rest of the company’s board. They continue to refuse to admit the world has moved on beyond just the print book. The company waited too long to get into the digital side of the business. It failed to invest the money necessary to develop and maintain the tech side or, even worse, a website that is easily navigable. It lost its identity as a bricks and mortar book store by decreasing the number of books available in favor of non-book related items. Now, after too many losing quarters, it announced it is abandoning the tech side (sorry Nook users) and focusing on the stores. Riiiight. They have been promising to listen to customers and focus on stores for ages and it hasn’t helped. When is the board going to finally realize they have to move forward and be responsive to what their customers want instead of focusing on what worked 20 years ago?

As for Rapone, well, my post at Victory Girls says it all. I’m a proud military mom. I wouldn’t want my son serving anywhere near him. Why? Because someone who doesn’t value the basic tenets of this country, who violates his oaths, can’t be trusted to watch the backs of his squad mates. How he managed to get through West Point is beyond me.

Finally, work progresses on Light Magic. I’m trying to decide how often to post snippets. Now it’s time for me to get back to work. Let me hear your thoughts on both B&N and Rapone. Now go have a great day!

It’s doing what?

(I’m going to steer clear of the Brexit vote today. Not because I don’t have things to say but because there is so much hand wringing and head shaking and doom-saying that I have already had enough of it this morning. I’ll have something to say, probably next week. Besides, BN has made a couple of announcements that have me shaking my head and wondering what the heck is going on.)

I don’t think it is any surprise that BN announced yet another sales drop earlier this week. This time, it announced a 3.1% drop for fiscal 2016. From Publishers Weekly:

Revenue in fiscal 2016 was $4.16 billion, 27.from $4.30 billion a year ago. The retailer also reported a net loss of $24.4 million in the most recent year, compared to net income of $36.6 million in fiscal 2015. Excluding the $39.1 million loss from discontinued operations, B&N posted earnings of $14.7 million, down from $32.9 million in income from continuing operations in fiscal 2015.

The article goes on to note that BN’s Nook division once again took major hits. Total revenue for that division fell 27.4%. Part of this was attributed to costs incurred in the restructuring of the division. However, that was only $4 million. The Nook division has so many holes in it and BN has yet to figure out how to deal with it.

Where I had to laugh about the PW article was when it said this, “Comparable store sales were flat in the year, while comp sales excluding the sale of Nook products rose 0.4%, slightly behind the 1% increase that B&N had expected.” When all you expect is a 1% increase, a 0.4% increase is not “slightly” behind. That is a kick in the teeth. The fact that PW bought into the misconception shows that it continues to embrace the same misunderstanding of the market that BN and the Big 5 do. They want the industry to go back to how it was several decades ago instead of moving forward.

Am I wishing BN ill? No. I want bookstores to succeed. However, I don’t believe they will as big box stores. That day is gone. Boutique stores and stores that have minimal stock but POD on-site capabilities very well may be the way to go. The fact that BN is continuing to try to maintain their large footprint storefronts in the face of economic realities is mindblowing.

Of course, so is the news I saw this morning about their plans for some new “flagship” stores next year. These stores aren’t increasing their stock of books. No, they are going to try to increase traffic by — wait for it — selling beer and wine and having full breakfast, lunch and dinner menus. In order to handle the increased traffic they are sure this change will bring into the store they are — drum roll — doubling the size of the cafes.

Hmm, a bookstore that is taking away even more floorspace from what they say is their core business. How many customers are they truly going to bring in as opposed to those they may lose because of less space for books, less space to sit and read comfortably without being interrupted by someone who might have had too much to drink?

Hell, how many folks are going to say, “Hey, hon, let’s go to BN for dinner tonight!”

It may work but, at the moment, it looks like a desperate grab for a straw that is getting shorter and shorter.

Into the cornfield — not

Just when you think the idiocy of the knee jerk reaction to anything Amazon does, or doesn’t do, can’t get any worse, you find it. Today’s reaction comes from the typical crew of Amazon haters. I’d been expecting them to whinge and whine about news that Amazon was introducing same day delivery for some items in certain markets. After all, what could be worse than — gasp — making your customers happy by having same day delivery? I’ll even admit to feeling a little disappointment because the usual suspects seemed to take no notice. I shrugged, figured they were ignoring it because Amazon was actually going to charge for the service, and went along my way.

Then came the NY Times article about how Barnes & Noble is teaming with Google’s year old delivery service to have same day delivery in parts of Manhattan, LA and San Francisco. While the cost for the Amazon service is $6 for Prime members and $10 for non-Prime members per delivery, the BN/Google delivery will cost $4.99/each. Now, what we don’t know is how much the “subscription” for the delivery service will cost at the end of six months, the introductory period for this new partnership’s service.

Now, to read the initial reactions of the Amazon haters, it’s hard not to shake your head. Some of them actually seem to think B&N and Google managed to pull this partnership together in the 24 hours or so since Amazon announced their new service. Others seem to be taking the approach that the Times does and feel that this new agreement between B&N and Google will not only help save B&N but will put a big dent into Amazon’s online presence. Then there are the ones that have me wondering why they left their sanity locked in their junior high school gym locker and never returned for it. Those are the ones who are trying to snark as they “wonder” if Amazon will go whining to the Department of Justice about another “conspiracy” against them.

First of all, there is nothing about the B&N/Google agreement that smells anything like the Apple/Big Five price fixing scheme. For one thing, there are only the two parties involved. For another, the Google delivery end has been in existence for approximately a year. B&N is now, iirc, the 19th business to contract with Google for same day delivery. No, definitely nothing close to the price fixing case, even if it is B&N’s latest attempt to regain part of its market share. Besides, if it was DoJ complaint worry, we’d be seeing announcements coming very quickly that B&N/Google would be making same day deliveries in all the same cities as Amazon is AND that their “partners” included other booksellers in the area with special discounts from certain “select” publishers”.

As for the instant response to Amazon’s announcement, give me a break. Even if they’d wanted to, there is no way B&N and Google could have put this partnership into place in a matter of days, make sure the logistics were in place, pricing agreed upon and then make the announcement. No, I have a feeling this is something that Google probably approached B&N on when it first started the delivery service and they have been negotiating for months.

Finally, as for the belief that this new service will not only help save B&N but will hurt Amazon, well, sorry but I don’t see it happening. First of all, the customer base for the service is limited by the product base offered by the B&N stores. We aren’t talking about them being able to get this service for everything that is offered on the B&N website. The delivery service is limited to what is in the B&N store in the area — basically the same limitation Amazon has, except with Amazon it is what’s in its warehouse. So B&N isn’t going to get those customers who buy a book, but also buy a birthday gift from the neighbor kid who doesn’t read and the new frying pan or coffee maker, etc.

So I’ll let the haters have their moment of joy as they think of something actually toppling Amazon. One day, that will happen but this isn’t the day and it certainly isn’t the way, at least not with these partners. My parting comment for those authors who are so adamant about finding ways to destroy Amazon is simple: if Amazon were to disappear tomorrow, how would you make up the sales you’d lose? Do you really think your publisher and B&N would be able to make up the difference? Better yet, do you really think your publisher would be willing to pay you more to make up for the lost income?

Think on that before you go wishing your biggest sales outlet out of existence. Until there is something better to replace it, quit grasping at straws. Work instead to find a better alternative but be damned sure that alternative is in place and well-funded before wishing Amazon into the cornfield.

***

HuntedIn the meantime, the countdown special for Hunted (Hunter’s Moon Book 1) is still going on. If you enjoy mystery, romance and shapeshfiters, check it out. It is only $1.99 today.

When Meg Finley’s parents died, the authorities classified it as a double suicide. Alone, hurting and suddenly the object of the clan’s alpha’s desire, her life was a nightmare. He didn’t care that she was grieving any more than he cared that she was only fifteen. So she’d run and she’d been running ever since. But now, years later, her luck’s run out. The alpha’s trackers have found her and they’re under orders to bring her back, no matter what. Without warning, Meg finds herself in a game of cat and mouse with the trackers in a downtown Dallas parking garage. She’s learned a lot over the years but, without help, it might not be enough to escape a fate she knows will be worse than death. What she didn’t expect was that help would come from the local clan leader. But would he turn out to be her savior or something else, something much more dangerous?

(This is a new edition of the novel and there is some new back material.)

 

Quit whining when you get caught breaking the rules

Almost every author who has ever considered going indie, every small press that has weighed the different options of getting e-book titles to the public has read any number of terms of use documents. Amazon, Barnes & Noble, Kobo, iTunes, Smashwords and others all have their own set of rules that have to be followed. The rules deal with what sort of files you need to upload, what royalty rates are and when payments will be made, what sort of material you can upload, etc., etc., etc. One of the most important terms in the ToS documents is about pricing. For authors, it’s because pricing is often tied to royalty rates. For the retailer, it’s because they don’t want to be undercut by other retailers.

The most common ToS when it comes to pricing is what I just said. If your e-book is priced at $4.99 on Amazon, you can’t then go in and price it at $3.99 everywhere else. If you do, Amazon has the right to drop the price to match that at the other retailers. The same goes if you try to pull a fast one and actually give your book away at another retail site and Amazon finds out. If their search engines discover your book is being given away, they can and will drop their prices to match.

The problem from the writer’s standpoint with this is that you have absolutely no control over when Amazon drops the price or when they return to the original price. If you’re lucky, Amazon will contact you and let you know that it’s found your book at a lower price and you need to come into compliance with their ToS. This has happened to me a couple of times when their searches have found my work on pirate sites. All it’s taken from me is an e-mail back to Amazon telling them that I hadn’t authorized the site to carry my work and that I had sent a take-down notice. Easy enough.

However, when you try to game the system by lowering your prices to free on one site because that site allows you X-number of promotional days, you can’t then whine and bitch because Amazon matched that price. You especially can’t do that if you admit in your whine that you know you were in violation of Amazon’s ToS. When you send your email to Amazon asking them to return your e-book back to its original price because it is now back to normal at the other site(s), you certainly don’t do yourself any favors if you get snarky with them. You are the one who broke the contract with Amazon.

No, I’m not going to get more specific than this because this incident came to me through a private e-mail list. I don’t have permission to excerpt the e-mail or name names. So I won’t. But, going back to my post the other day, there are simply times when you need to stop, read what you’ve written, consider it and then consider whether it really serves your best interest to hit the send button.

But, if you do feel the need to send an email and then berate the company, any company, for enforcing the ToS you agreed to, don’t then go on a tirade about the reviews you then got on your e-book. Yes, there does seem to be a correlation between the number of free downloads and the number of negative reviews a title gets. I’ve seen it with one of my books. It is something I take into account now when I consider taking a book for free.

Even if you do feel the need to complain about it, then don’t complain that someone downloading your book for free can’t be an “Amazon verified” purchaser because the book was free. An “Amazon verified purchase” is simply a means of noting that the reviewer got the book from Amazon, nothing more. That can also be found in the FAQs, iirc. But, if you haven’t paid enough attention to know Amazon will enforce its ToS, you probably haven’t taken the time to read the various FAQs and understand them.

Then, don’t compound the problem by complaining that you don’t have a way to take down negative reviews. Certainly, don’t go in and try to debate the issue with the reviewers. That will simply make things worse. But to try to say that we, as authors, should be able to handpick what reviews are allowed to go up on our product pages is to want to game the system in a way that is unfair to our readers. As a reader I’d resent the hell out of it. Besides, trust your readers enough to be able to tell a valid review — one that actually read your book and put some consideration into the review — from the ones who just like to troll indie books to give them negative reviews.

In other words, if you are going to be a writer, pull up your big boy pants and treat this like a business. That’s what it is. Grow up, grow a pair and be profressional.

A few Saturday morning thoughts

This is going to be a quick post this morning for a couple of reasons. The first is that the dog that apparently lives in my computer ate a final edit I’d done of someone else’s work and now I’m having to recreate it. It’s one of those situations where I know I backed it up. I’m obsessive about that sort of thing. But I either did it under a name that makes no sense now or I saved over it or something because it just frigging isn’t there. Fortunately, this author is one who needs little editing so it should take only a couple more hours. But that is just the first of about six things I need to do today, not counting cleaning house and calling my son to wish him a Happy Birthday.

Barnes & Noble just went through a downsizing in my area. Fort Worth lost two stores, one of which had been a major destination in downtown. The corporate suits have claimed it was because the landlords, evil people that they are, wanted too much in rent. That might have been part of it but the reality is the suits didn’t think what putting three stores withing approximately a five mile radius would do to each store’s sale. No one in the area really bought the blame game B&N tried to play.

So imagine the response when the local CBS station — now picked up by the other stations in the area — broke the story about what a four year old found when his parents took him to the B&N in Southlake. Picture this: parents who love books want to instill that same love in their young child. So they do what so many of us have done over the years. They took their child to their local bookstore. In this case, it was the Barnes & Noble in Southlake.

Like so many of the larger B&N stores, this one has an area for children. There are tables and on some of those tables are Nooks and Nook tablets the children can use. That is exactly what this youngster did. And that is where the problem arises — mom and dad found their four year old with a Nook that was streaming porn.

Yep, you read that right. A Nook provided by B&N in their children’s area didn’t have parental controls activated on it so the four year was watching porn.

Now, I don’t know about you, but I’d have been more than a little upset. The parents of this particular child most definitely weren’t pleased. But they did what any responsible parent would do. They approached store management and that is where things get surreal. First of all, the store manager apparently didn’t bother to respond to the parents. That’s when they took to social media and, finally, to the local TV station to let other parents in the area know what was going on.

In a comment issued from B&N executives — note, this isn’t from the local store — an apology was given to the family but it was confirmed that Nooks provided by B&N stores for demo purposes, such as the one in question, operate without parental filters. It doesn’t matter if they are on tables for kids. The statement goes on to say that they “regret” what happened.

But do they plan to change their policy, at least for those Nooks set aside for use on kids-only tables? Nope. Instead they will “take steps to communicate a parental disclaimer that the in-store devices aren’t password protected.” Let’s not take any responsibility for what happens in our own stores seems to be the overwhelming rule here. It would be very easy to slip on parental controls on those tablets left on the kids-only tables. But B&N can’t be bothered to do that.

And then they wonder why they don’t have the reputation they once did.

The Glamour’s Worn Thin

(Cross-posted from Mad Genius Club)

I’m a little late posting this morning because I’ve been going round and round about what to write. Dave did such a wonderful job yesterday discussing his thoughts on Mike Shatzkin’s blog about what he thinks will happen if the Department of Justice’s possible antitrust investigation into Apple and five of the big six publishers causes the agency pricing model to disappear. I’ve already covered my thoughts on Scott Turow’s letter about the issue. Then I made the mistake of reading some of the comments from the “enlightened” on it and, well, you guessed it. I’m weighing in again on the issue.

I’ll admit, part of the reason for this post is a thread started by what I can only term a publishing troll on one of the boards I read every morning. This person posted a defense of big publishing comment that included a statement that the people “attacking” legacy publishing are doing so because they don’t have the talent to be published by a “real” publisher.

I beg your pardon? Oh, and that grinding sound you hear is the sound of the teeth of innumerable mid-listers who have suddenly been cut loose by their publishers because, even though their books are still on the shelves more than a year after publication and even though there are continued demands from their fans for more in a series, the publisher claims they just didn’t connect with the public. And that evil laugh you hear is me as I contemplate what will happen when these same mid-listers, free of the fear of upsetting their publishing masters, finally demand full audits and the publishers are caught between a rock and a hard place because of their “creative” bookkeeping methods.

So, yeah, I’m in a pissy mood this morning. I’m tired of legacy publishers thinking they can pull the wool over the eyes of authors who should know better. I’m tired of them also thinking readers, those good folks who buy their products, as so dumb they can’t see what is happening. With that in mind, I’m going to revisit Shatzkin’s blog and some of the sources it cites.

From the opening paragraph:  But if this does mean the end of the agency model, it would seem to be a cause for celebrating at Amazon and a catalyst for some deep contemplation by all the other big players in the book business.

Duh. Of course it will be “a catalyst for some deep contemplation”. The problem is, they should have been doing this “deep contemplation” years ago. Market trends and technology have been changing for the last three plus decades and yet the publishing industry hasn’t really embraced these changes. The publishers should have been concerned when the big box stores came onto the scene and forced the smaller, locally owned bookstores out of the market. But publishers weren’t. Oh no, not at all. They embraced these new stores, loving the fact they could do larger orders and write bigger checks. But now, with the economy and other trends causing these large stores to close down, publishing is running scared and blaming Amazon for the problems faced by these brick and mortar stores. But the truth of the matter is, Amazon is only one small part of the whole equation. Unfortunately, neither the big box stores nor publishers did any “deep contemplation” before things became so bad their entire companies are in danger of failing.

Agency pricing, for those who have not been following the most important development in the growth of the book market, enabled the publishers to enforce a uniform price for each ebook title across all retail outlets

Okay, pardon me while I laugh for a bit. Is he really saying agency pricing is the most important development in the growth of the book market? Sorry, but no. E-books are the most important development in the growth of the book market. If you’ve followed the sales numbers over the last few years, the only segment of the market to consistently grow, usually in triple digit percentage points, has been e-books. The only thing agency pricing has done is artificially inflate the price of certain e-books and that, in turn, has opened the market to small press published and self-published e-books.

This was Apple’s desired way to do business, and it addressed deep concerns the big publishers had about the effect of Amazon’s loss-leader discounting.

Okay, whether he meant to or not, he just admitted that agency pricing is something dreamed up by Steve Jobs and agreed to by five of the big six publishers. And, if you read the link included in the quote above, you will see this wonderful piece of logic from Macmillan: The agency model would allow Amazon to make more money selling our books, not less. We would make less money in our dealings with Amazon under the new model. Our disagreement is not about short term profitability but rather about the long-term viability and stability of the digital book market. Am I the only one to see all sorts of wrong in this statement? How in the world is lower profits for the publisher–which would mean less money for authors under most contracts–be good for the publisher? How is this sort of an agreement going to safeguard the “long-term viability and stability of the digital book”? It makes absolutely no sense. My opinion is that they went along with this because they wanted into iBooks/iTunes and the only way to do so was to accept Steve Jobs’ terms and that meant forcing Amazon, B&N and other e-book retailers to adopt the agency pricing model. Remember, the key to the agreement with Apple was that these publishers would not allow their e-books to be sold for less anywhere else. So Amazon isn’t the only market where these publishers would be making less money. Funny how folks seem to overlook this little item.

Back to Shatzkin: Although the WSJ article and Michael Cader’s follow up in Publishers Lunch make no “agency is dead” declaration and there are quotes from publishers and others indicating that there are a range of possible outcomes, including a version of agency that is modified to allow some discounting, everybody in the industry now has to contemplate what it would mean if the agency model is legally upended.

Again, why weren’t they already considering this? For one thing, the contracts signed with Amazon, B&N, etc., weren’t for perpetuity. There would soon be a time when they came up for renegotiation. For another, The European Union, not to mention more than a few states’ attorneys general, were already looking into the legalities of agency pricing. The fact that the industry hasn’t been considering “what ifs” simply shows how out of touch it is with the reality of the market these days.

To Amazon, it would mean they would be free to set prices on all books again, including the most high-profile and attractive ones that come from the big trade houses. That is an opportunity they are likely to seize with loss-leader discounting of the biggest marquee titles.

Ah, evil Amazon. Conducting its business as, gasp, a business. The ability to sell a product wanted by the public at a lower price has been an age-old tactic of shop owners and merchants. It gets folks through the doors, be they physical doors or cyber doors. And isn’t this basically what the brick and mortar stores did when they burst onto the market? They were able to price hard covers much less than the mom and pop bookstore could. That’s why the public initially loved these larger stores. It’s also why publishers loved them. These lower prices meant more units being sold. Funny how the publishers have forgotten that.

To Barnes & Noble, it would mean they have to devote cash resources to ebook discounting that they might have preferred to dedicate to further development of the Nook platform, maintaining the most robust possible brick-and-mortar presence, and improving the user experience at BN.com. 

This very well may be true. The problem with this statement is that it omits the part about BN waiting too long to enter the e-book market. It forgets that BN spent too much time selling third-party e-book readers instead of developing and putting on the market its own e-book reader. It also ignores the fact that the BN online presence is not user friendly, especially not when it comes to e-books. It also lacks the vibrant online community Amazon has built.

Unconfirmed stories abound that B&N is about to announce an international expansion. Whether that will produce cash flow immediately or require it for a while is not yet known. For B&N’s sake, it would always better if it were the former, but if they’re about to fight discounting wars, it might be critical.

I seem to be saying, or at least thinking, “too little too late” a lot as I re-read Shatzkin’s post. BN needed this international expansion long ago. The fact that it may, finally, occur probably is too little too late. I’ll note here that this possible expansion is for e-books, not brick and mortar stores. Again, why has it taken this long? I’ll also note that the source Shatzkin cites is from August of last year. So far, to the best of my knowledge, that expansion has yet to occur.

To Kobo, it would mean that they also will need to devote cash resources to subsidizing price cuts to match Amazon. With their new ownership by Rakuten, they should have the capital they need to fight this battle. They must be glad that deal got done before agency was upended.

Nope, sorry. For those of you familiar with Kobo, you know they don’t always match Amazon prices. There are a number of titles Kobo offers for substantially higher prices than the same title is offered for on Amazon. And, before you ask, I’m talking about legacy published e-book titles. So I don’t see them trying to match prices with Amazon except on certain titles.

To Google, it would mean that the bookstore service piece of their ebook business will suddenly be highly challenged. Many independent stores might be pushed out of the ebook game completely; it certainly would be extremely difficult for them to support competition with Amazon’s prices. To Google itself, with their new Google Play configuration, it means they will have to both spend more margin and more management energy to be a serious competitor in the retail marketplace. There’s no clear evidence that they have the interest at the top to do that, although they certainly would have the resources.

Yes, I’m laughing again. Google’s e-book business is already highly challenged. They’ve dropped the number of stores able to take part in their program. Their interface for authors and small presses leaves a lot to be desired. As for Google Play, why is Amazon the only reason they would have problems? Doesn’t Shatzkin remember a little company called Apple and its iTunes store? Or does he not see the parallels between Google Play and iTunes?

To Apple, it would mean that their entire iBookstore model is in question. They apparently didn’t want to take on all the normal responsibilities of a merchant, which would include setting prices. Now they may have to.

Oh, cry me a river. If Steve Jobs hadn’t presented the agency model to publishers and said “accept or else”, we’d not be having this discussion. But then, I’m just a bitter small publisher employee who can’t put our e-books directly onto iTunes/iBooks because we use PCs and not Macs, something required to use their interface. And, btw, they are the only storefront for e-books that we’ve come across that requires a certain computing platform in order to upload a file.

To all the big publishers, including Random House (the one of the Big Six not being sued, because they stayed out of agency for the first year and therefore were not considered part of the “collusion”) it would mean that they will have to painfully reverse the re-pricing and systems adjustments they went through to implement agency in the first place.

“Painfully”? How can it be painful if they can return to a pricing model where they made more money? Remember the quote from the Macmillan post above. It was admitted then that agency model pricing meant less money for publishers.

Smaller publishers and distributors might be beneficiaries if agency is eliminated, but they might not. The agency model is a great advantage for those publishers who are able to fully implement it. But that is only six publishers — the Big Six — because Amazon has simply refused to let anybody else sell to them that way.

I ask again, how is ia great advantage for publishers when these same publishers admit they don’t make as much money from agency pricing as they did before? As for Amazon refusing to let anyone else use agency pricing, good for them. It means Amazon is looking out for the economic well-being of the company and making sure it keeps its shareholders happy. It also means Amazon is looking out for its customers. But that’s a bad thing I guess because, gasp, it isn’t saving legacy publishing from the follies of the boardrooms in NYC.

That creates problems for the smaller publishers but an even more threatening one for distributors. All but the Big Six, if they want to sell to both Amazon and Apple, must operate a “hybrid” model, selling Apple on agency terms and Amazon on wholesale terms. The two are inherently in conflict. What is ultimately a threat to the distributors is that distributees that desire agency terms, and many would. might seek distribution deals from one of the Big Six. (It might be coincidental, but it is worth noting that IPG, the company having a fight with Amazon at the moment over terms, is a distributor.)

Okay, here is where I have to watch myself. It doesn’t create a problem for small publishers. We set our own prices both with Amazon and with Apple. If one lowers the price for promo reasons, the other can and does the same. As for the two being inherently in conflict, thank Apple. As noted before, Jobs required the first five of the big six to accept agency pricing or not sell in iBooks. Blaming Amazon for something it had no control over is ridiculous.

As for the threat to distributors, get real. I’ll admit distributors have a role in publishing, but not when it comes to e-books. Sorry, but there is no reason a small press has to use a distributor to get into Amazon or BN. The process is simple and relatively pain free to upload titles to either of these stores. Given the proper Apple computer, I assume it is for iTunes/iBooks as well. So I have no sympathy for IPG or other distributors moaning the fact Amazon won’t let them go to agency pricing. As an author I have even less sympathy because I know publishers take out the cost of distribution before figuring royalties. Why would I want to lower my already too small royalty payments?

Of course, we don’t know how the Big Publishers will respond if they’re forced off agency. It’s long been my opinion that the 50% discount for ebooks is unworkable. It leads to ridiculous and unrealistic retail prices. (Publishers operating on the hybrid model have to have two retail prices: one on which to base the wholesale discount and another at Apple operating agency-style. It’s crazy.) Would the big publishers, if they couldn’t do agency, keep the 30% discount and their current prices? Would they go back to the 50% discount and jack the suggested retail prices back up? If they did the former and nothing else changed, the smaller publishers could be at a much greater disadvantage than they are now.

Ah, the economic double-speak. First of all, small publishers won’t be at a “much greater disadvantage” because we will still be pricing below major publishers. Why? Because our overhead is much smaller. Also, for those of us with a limited paper-side publishing, we aren’t trying to artificially prop up the hard copy publishing arm with the digital arm. And that is exactly what the legacy publishers are doing. They are trying to use their e-book sales to keep the print side alive.

The other thing Shatzkin keeps overlooking is the fact that publishers aren’t making as much per sale under agency pricing as they did before. So, going back to the previous pricing method would actually give them more money in their pockets. How that is a bad thing, I don’t know.

Over time, the biggest losers here will be the authors. The independent authors will feel the pain first. Agency pricing creates a zone of pricing they can occupy without much competition from branded merchandise. When the known authors are only available at $9.99 and up, the fledgling at $0.99-$2.99 looks very attractive and worth a try. Ending agency will have the “desired” effect of bringing all ebook prices down. As the big book prices are reduced, the ability of the unknowns to use price as a discovery tool will diminish as well. In the short run, it will be the independent authors who will pay the biggest price of all.

This guy really should try his hand as a comedian because he’s killing me here. First of all, do any of us really see legacy publishers pricing their books under $5.99, much less as low as $2.99? And let’s forget about the fact that they already have e-books in the $7.99 range.  The loss of agency pricing will simply allow best sellers and new releases to come down in price to something more readers will be willing to pay. This will be, in my opinion, back in the $9.99 range and there simply aren’t that many self-published or small press published titles that are in that range.

With regard to his comment that the lower prices will make it harder for “unknowns” to price their titles low enough to be discovered by the average reader, wrong again. I would be very surprised if legacy publishers will price any book, much less a new release, at less than $7.99. Remember, they are using e-books to prop up their print divisions. If they price low enough to shut out these so-called “unknowns”, they will have to do some major cost cutting somewhere and that isn’t going to happen. They like their plush offices and they’ve already cut out or outsourced so much of the editorial process that it isn’t funny.

But, in the long run, all authors will just get less. They will join the legion of suppliers beholden to a retailer whose mission is to deliver the lowest possible price to the consumer.

Authors already get less. Most authors are not paid royalties based no cover price, not really. Publishers take out expenses. So, if an e-book has a price of $12.99 and the publisher gets 30% of that under agency pricing, that starts the share of the pie the author gets to look at at $3.90. Believe me, the author is not getting much of that at all. Once more, I remind you of what the Macmillan post said. Agency pricing means less money for publishers than the previous pricing plan paid. Less money for publishers means less money for authors.

Seth Godin has recently made the argument that this is simply inevitable. Perhaps it is. The laws of supply and demand would support that contention. But from my personal perspective, I don’t like seeing the government hasten the process along.

Could this be because he works with/for publishers? I am not, and never have been, one to want our government interfering in business. However, we do have laws and the Department of Justice is tasked with upholding these laws. If there has been collusion between the publishers and Apple — and I think it is pretty clear there has been — then those laws need to be applied to them.

The truth of the matter is simple. Agency pricing has hurt publishers and hasn’t done what they wanted–it hasn’t saved their print divisions. Those sales continue to fall while e-book sales continue to rise. Amazon is not the only reason for the problems publishers face. Despite what one commenter on the thread that got me started on this this morning said about publishing’s business model not being broken, it is. Until legacy publishers address ALL the issues facing them and not just try to save things by artificially inflating e-book prices, the industry will continue to flounder. Just a few of the issues they need to address are:

1. the failure of agency pricing to do as they wanted

2. low royalty rates to authors

3. cutting of mid-list authors, traditionally the work horses of the industry, as a cost-cutting means to allow them to continue paying higher advances to their so-called best sellers (note here that those advances have fallen just as have the advances to mid-listers)

4. lack of push or promotion for books

5. decline of physical bookstores (yes, Amazon has had a hand here, but so has the economy, over-expansion of the big box stores after pushing the locally owned stores out of the market, mismanagement of the big box stores, etc.)

6. decline in the quality of their product (publishers have cut their editorial staffs, often use interns to do copy edits and proofreading, lower quality bindings and paper, etc)

7. economic downturns that have people unable or unwilling to pay $10 for a paperback or $30 for a hard cover

There are a number of others as well. But agency pricing is not the savior of the industry. Amazon is not the big bad that a few outspoken publishers and authors would have us believe. Publishing is plagued by what could almost be termed a perfect storm, a combination of factors that it failed to see coming and that it has failed to effectively deal with once those factors could no longer be denied.

 

And another casualty of teh stoopid

One of my main beefs with big box stores is the way corporate bean counters have taken away local and regional discretion on ordering books for a store. There once was a time when a store manager could place an order for multiple copies of a book to be sold at that store because a local author sold well. Those same managers could order enough books for a teacher’s class if needed — and without the teacher having to pay up front. But those days are, for the most part gone. Worse, an Alaskan author has been caught in the middle of the world v. Amazon battle — and no one is standing up for that author against BN because, duh, Amazon is involved.

This morning’s edition of Shelf Awareness Pro tells the story of Alaskan author Debbie Dahl Edwardson. Her latest book, My Name is not Easy, isn’t available in Alaskan Barnes & Noble stores because her publisher was purchased by Amazon last year. Now, the interesting thing is that prior to Amazon buying the publisher, Marshall Cavendish, Ms. Edwardson’s book was apparently available. From the Anchorage Daily News: “An email from the Anchorage Barnes & Noble store informed her that her book, “My Name is Not Easy,” would no longer be available on their shelves.”

Would no longer be available on their shelves. NO LONGER BE AVAILABLE.

Sigh. So, a book they had been selling, a book that was nominated for a National Book Award last year, has been removed from the shelves. A book written by a popular local author has been removed. A bookd the Anchorage B&N manager said had been doing well. Why? Because the publisher was purchased by Amazon. No other reason except it is now tainted by THE EVIL THAT IS AMAZON.

And no one is up in arms about this. No writers are hitting social media condemning Barnes and Noble for taking income away from an author, from keeping reading material out of the hands of the buying public.

But the thing that really has me shaking my head is that BN has forced stores to remove a book from the shelves that was selling well, at least locally. And then they want our sympathy for their economic problems. Sorry, that dog don’t hunt. That would be like a coffee grower burning down part of its crop just because the plantation next to it was growing the same type of beans.

Understand, Amazon wasn’t taking this title as an exclusive. In fact, there is news today that Amazon’s latest line of e-books will not be exclusive only to Amazon.

Now, before you claim I’m applying a double standard here, I’m not. B&N has the right to choose what books it will and won’t sell. Just as Amazon does, even though the lemmings I’ve written about earlier don’t think so. However, my beef is with the policy that prevents a store manager from being able to order books for the local buying public that help make money for the store. My beef is with the double standard being presented by a certain group of writers who are so quick to condemn Amazon for not “doing right” by authors but they don’t hold the big box stores to the same standard.

I agree with what Ms. Edwardson had to say about all this calling it “the latest in a series of sad moves that keeps books from readers and punishes individual writers for decisions they had no say over.”

So, my recommendation is to take a look at Ms. Edwardson’s book in hard copy and on the kindle. In fact, here’s a link to it on Amazon. Why Amazon? Because I’m contrary.

 

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