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The Return of Print?: Contemporary Australian Publishing

CHAPTER FIVE

Deckchairs and Life Rafts1

Australian Trade Publishing’s Perfect Storm

TRACY O’SHAUGHNESSY

Introduction

In 2012, Mike Shatzkin, publishing industry commentator and guru, reported about the retail book market in the United States and the United Kingdom:

Going from 80 to 90 percent of book sales being made in stores to that same percentage being made online in a decade’s time certainly justifies anybody’s pronouncement of profound and disruptive change. (‘By One Benchmark’)

Not since the Gutenberg press started to roll in the mid fifteenth century has there been such upheaval in book publishing as that which has been occurring since 2010. The Gutenberg press led to the industrialisation and democratisation of book publishing and, more than five hundred years later, globalisation, the internet and technological advances have come together in a perfect storm to deliver equivalent disruption. Changes such as digitisation, the accessibility of ereaders and consumer book-buying habits have had a particular impact on trade publishing. John B Thompson writes in the preface to the second edition of Merchants of Culture that ‘the oldest of the media industries finds itself in the throes of tumultuous change, struggling to cope with the impact of a technological revolution that is stripping away some of the old certainties, undermining traditional models and opening up new possibilities in ways that are at once exciting and disorienting’ (vi).

In the Australian market, a number of factors have meant that, for the first time, international online print book (or p-book) retailers could outcompete local Australian suppliers. The high Australian dollar during the period 2011 to 2013, the exemption from GST charges for books bought outside Australia and cheap (or free) reliable delivery to Australia have all contributed to this phenomenon. At the same time, consumers have gained access to a multitude of affordable ereading devices, backed by a huge array of ebook titles to choose from. Writer and former politician Barry Jones succinctly summed up the issues in the final report of the Book Industry Strategy Group in 2011: ‘Such overseas factors influence the price of books and pose a threat to the viability of local publishing … creators, producers and consumers are all affected by the twin challenges of globalisation and technology’ (12).

This confluence of events has had profound effects on the trade book publishing landscape through the entire supply chain: it poses challenges for the traditional roles of the publisher, agent and author; it has had an impact on royalties and advances; it has affected book production and printing, distribution and delivery; and it is transforming how books—both p-books and ebooks—are priced and retailed.

The Australian trade-publishing industry has been pitching about in these turbulent seas with its UK and US counterparts for the last few years. During that time the publishing industry has had to examine all aspects of its operations to find ways to effect lasting and viable change. I like to think about these possibilities in terms of deckchairs and life rafts. Deckchairs are the impermanent fixtures of the industry that publishers have always seen from behind the helm but will eventually go overboard as the seas get rougher. Life rafts, on the other hand, are ongoing safety nets with specific function and meaning.

In this essay, I try to separate the rafts from the chairs. What practices should traditional trade book publishers jettison as no longer relevant in the current climate? What should they cling to, to successfully sail through the storm? I look first at the key areas where change is happening and/or needed, starting with the relationship between the publisher and the author, working through the impact on author earnings and publisher profit to look at the commercial implications of the ebook’s rise for both. I then explore the issues of self-publishing and ‘discoverability’, before moving on to examine the other end of the publishing supply chain, the relationship between the publisher and the reader.

The Publisher–Author Relationship

The publishing supply chain usually starts with the relationship between author and publisher. Traditionally, the relationship has been symbiotic and co-dependent: authors have needed publishers to get their books published and read, and publishers have needed authors to supply the content to be published. That is not to say it has always been equal. Many authors would argue that publishers have had too much power and control in this relationship. They feel that the growth of ebooks, in particular, has led to democratisation and a power shift. In this environment, it is essential that publishers and authors look to each other as partners to find smarter, improved financial models that spread the profits and the risk. This could mean rethinking the traditional advance/royalty model where publishers pay authors through a percentage of the retail price (royalties) and a lump sum advance against those future royalties.

Author Earnings

The advance/royalty payment model, which has been the lifeblood of the publisher–author relationship, is calculated on expected book sales (both p-book and ebook) and recommended retail price (RRP)—both of which have been declining. Literary agent Jenny Darling reported in an interview with the author in mid 2012 that ‘advances had been cut in half since 2010’. So how can authors make a living and continue to write books? And what can publishers do to help make this sustainable for writers and therefore the industry? In the world of p-books and ebooks, there are four possible permutations of publishing formats and author earning models. These are:

p-book only

ebook as an adjunct to the p-book

publishers’ ebook-only or digital-only imprints

self-publishing.

Here, I look at each in turn, to illustrate how earnings in this new climate might look for a mid-list author.

P-Book Only

This is the traditional system for paying authors for their work. The figures in Table 5.1 show the distinct decline in author earnings since 2011, showing why the existing traditional model of advances and royalties is no longer very attractive for a mid-list author in Australia.

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Table 5.1: Author earnings—p-book trade paperback, pre-2011 to 20132

Ebook as an Adjunct to the P-Book

The picture gets more complex when we consider ebooks. At this stage in the Australian market, most ebooks are published in conjunction with a p-book, and the p-book carries the costs of author advances and production (that is, editing, proofreading, design, typesetting and layout).

Most Australian trade publishers reported that ebooks in 2013 brought in about eight to twenty per cent of their total revenue (depending on the publishing house and what they typically publish). On average, this represents sales of 500–2000 ebooks for a mid-list ebook title. Table 5.2 shows the income an author could expect from ebook sales. The figures are based on the industry-accepted ebook royalty rate of 25% of publishers’ net receipts. (Publishers’ net receipts is defined as the monies left once the GST (10%) and bookseller or eretailer discount (both variable) has been deducted from the income received for the sale of books (both ebook or p-book.)

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Table 5.2: Author earnings—ebook as adjunct to p-book3

Publishers’ Ebook-Only or Digital-Only Imprints

Australian trade publishers are experimenting with ebook-only titles with varying degrees of success. Harlequin’s Escape, Pan Macmillan’s Momentum and Penguin Books’s romance imprint, Destiny Romance, are examples of recently established ebook-only imprints.

Digital-only imprints differ from self-publishing, which I will discuss later in this essay, because these books are selected for publication and produced by the publisher rather than appearing through the uncurated system of open-access self-publishing companies like Smashwords or Lulu. Publishers usually make their ebook-only imprints available on as many ebook platforms as possible to achieve maximum reach, but they can struggle to get any traction in the traditional media, as ebooks are rarely reviewed.

However, digital-only ebooks can also subsequently be made available by the publisher as print-on-demand (POD) p-books or short-run digital printing (SRDP) p-books. The acceleration of new print technologies that make POD and SRDP possible have also enabled publishers to have an ‘unprecedented level of control over costs, return rates, and inventory levels, generating significant savings in shipping, handling, carrying cost, return and inventory obsolescence’ (Bennett 15). Publishers are using this technology for reissues of backlist titles and out-of-print books, as well as for short-run printing strategies for new titles and for p-books created from ebooks. In an increasing number of cases, such as Paddy Manning’s What the Frack?—which NewSouth Books originally and unsuccessfully published as an ebook-only title in 2012 but which became a strong seller when released as a p-book as well in 2013—the usual trend is being reversed: ebooks can and do become successful p-books.

Author contracts for digital-only imprints usually have a number of characteristics that distinguish them from a ‘p-book with ebook’ contract. These can involve the author:

receiving no advances (or extremely modest ones)

being offered a profit share rather than a royalty rate

contributing to start-up costs (such as editorial)

relinquishing global digital rights to the title.

Table 5.3 shows what ebook-only author earnings can look like under the profit-share model. As you can see, an ebook-only title that sells less than 1,000 copies at $9.99 is unlikely to make any income for the author.

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Table 5.3: Author earnings—ebook-only, with publisher4

Self-Publishing

The final model is where the author publishes their ebook directly through companies such as Smashwords and Lulu, which are market leaders in ebook self-publishing. These companies help authors and small independent publishers publish and distribute their ebooks directly to readers.

They typically offer the author around eighty to eighty-five per cent of the revenue received; however, price point (RRP) is a very important factor in whether self-published ebooks sell at all, and prices are usually set very low. As the Lulu website says: ‘Pricing for your eBook is up to you, but we’ve noticed Lulu authors that price their eBooks in the 0.99—2.99€ [$AUD1.23–$3.72] range sell more units and earn more revenue than those in any other price range’.

There are examples of authors who find enough readers to make money, and establish a following, out of self-publishing ebooks (Amanda Hocking, E. L. James and Hugh Howey are notable examples), but most ebook authors will struggle to reach their audience and will earn very little. As Table 5.4 shows, income from ebook sales is not high, even for self-published authors who receive a far higher proportion of the sales revenue than those published by the ebook-only imprints of established publishers.

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Table 5.4: Author earnings—self-publishing5

Publishers’ Income

If earnings for authors are looking lean, it is not because publisher revenue is increasing. Historically, the Australian book market has been a hybrid of the US and UK markets with a lag of two to three years. At the 2012 US Book Expo, there was agreement that ‘Australia’s ebook market seems to be where the US was three years ago’ (Lloyd). Evidence gathered by the author in interviews with representatives from a cross-section of Australian publishers (two multinationals, two medium-sized independents, two small publishers) suggests growth in the ebook market can be roughly summarised as follows:

2009: nil income

2010: less than one per cent of total revenue

2011: up to eight per cent of total revenue

2012: from four per cent to twenty per cent of total revenue

2013: similar figures to 2012

Table 5.5 shows the year-by-year decline in Australian trade publishers’ revenue that has occurred over the same period. This has been in the order of twenty per cent per year and, at the end of 2013, there are no immediate signs the downward trend is going to end anytime soon. This impression is reinforced by Table 6, which uses the example of a standard trade paperback to show the variation in income received by publishers under the different models discussed above.

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Table 5.5: Summary of the Australian trade book market 2010–2012
(Source: Nielsen BookScan Australia AP3 Summary)

Table 5.6 (over page) also makes it clear that for stand-alone ebook publishing, especially at the low end of the pricing margins for ebooks ($AUD0.99–$4.99), the traditional advance/royalty model is not sustainable. Other models—such as profit share between publisher and author, no author advances and no high-discount clauses for authors—clearly need to be considered and trialled, as they are in publishers’ digital-only lists.

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Table 5.6: Publisher and author earnings for each model6

Publishing Jobs

The decline in publishers’ revenues has flow-on effects in a number of areas. The traditional publishing industry in all markets is experiencing a downturn in jobs vacancies and many traditional publishers are also cutting overheads, which includes staff redundancies. The Australian Bookseller+Publisher magazine did a survey on job advertisements from 2005 to 2010 that showed the number of job advertisements had gradually fallen from a peak of 762 in 2005 to between four and five hundred jobs being advertised across all sectors of the industry—publishing, editorial, marketing and publicity, sales, design and production, bookselling and other (Stephenson 12–13). On the other hand, the digital shift is creating jobs in areas such as marketing and publicity (for social networking strategies) and for digital workflow administration, but until traditional publishing is able to reverse the decline in revenue, jobs growth will be limited. This factor adds to the urgency to develop sustainable changes, before the expertise of those currently employed in the publishing industry is lost. Publishing professionals—people experienced in commissioning, editing and marketing books to high standards for the trade market—are what distinguish traditional publishing from self-publishing. It is these people who ‘add the value’ to the raw material of an author’s unedited manuscript. It is essential that their knowledge and ability be kept and developed if trade publishing is to maintain its professional quality. But while trade publishing needs to remain distinct from self-publishing in the current climate, it can also learn from it.

The Power and Proliferation of Self-Publishing

Until the recent explosion of ebook publishing, the traditional publishing industry often viewed self-publishing as vanity publishing and, as Ed Pilkington of the Guardian newspaper stated, as ‘the last resort of the talentless’. It was usually for authors who were unable to get a deal with a traditional publisher and who were prepared to pay to have their manuscript turned into a book.

The ebook revolution has changed all that. Traditional publishers have struggled to keep pace with technological changes and to meet the demand from readers. This vacuum has been filled by many authors who were already self-publishing, and it has also created an opportunity for many who in the past have failed to get traditional publishing contracts. There are many advantages for authors in publishing their own work: they retain creative control over the work and all rights in it, access to publication is straightforward and relatively immediate, there are shorter production time frames, the book can be kept available for sale at all times and there is no need to share any profits with the publisher.

As Mike Shatzkin noted in 2011:

[S]mall publishers, literary agents, and authors are becoming publishers at an astounding rate … services like Amazon’s KDP (Kindle Direct Publishing) service, Barnes & Noble’s PubIt!, and service providers Smashwords and BookBaby, offer the possibility of creating an ebook from your document and distributing it through most ebook retailers, enabled for almost all devices, for almost no cash commitment.

But there are also a number of disadvantages for authors publishing in this way. Authors are not provided with expert editorial input, which means a time-consuming and specialised task is left in their own hands; they receive no advance or other payment from a publisher, and there is no guarantee of quality in self-published ebooks—indeed, while the quality varies enormously it is often towards the lower end. Perhaps most significantly, in a crowded market it is very difficult for self-published ebooks to attract reviews or any other kinds of publicity. As I will discuss in the next section, the ‘discoverability’ factor of self-published ebooks is very low.

In a 2011 Australian Publishers Association (APA) seminar address, Curtis Brown literary agent Fiona Inglis identified this as one of the biggest problems with the proliferation of self-published titles: ‘The combined output of just Smashwords and Lulu is about 20,000 titles per month. So the question is not, “can we get these books into the market?” but “how does anyone know that they are out there?”’

Despite these difficulties, trade publishers are finding new ways of engaging with this market, rather than eschewing it as they have in the past. Many trade publishers closely watch the ebook bestseller lists found in The New York Times, The Guardian, Amazon, Nook and Kobo among others. They see ebook success as a litmus test of how the titles will perform in the traditional p-book world and seek to sign up the successful authors for large advances and multi-book deals. Young Adult writer Amanda Hocking and Fifty Shades of Grey author EL James are two such examples who typify the new breed of ‘hybrid author’: authors who publish in both the self-published ebook world and the traditional p-book world.

The current self-publishing landscape poses some important questions for trade publishers. How can trade publishers compete in the prolific and borderless world of ebook self-publishing? Do they need to? Or can both publishing approaches exist alongside each other? What can trade publishers offer that companies like Smashwords can’t? The answers to these questions will evolve over the coming years when ebook growth plateaus and the operating landscape for traditional trade publishers and self-publishers in both p-books and ebooks become stable.

In addition to expert knowledge in editorial and production, traditional trade publishers have access to media and broad-scale marketing, which enhances the ‘discoverability’ of the ebooks they publish. They are in a prime position to find new ways of letting readers know their books are ‘out there’.

Discoverability

[T]here seems no clear answer yet to the declining numbers of physical bookshops for helping connect readers with authors who are not already on the bestseller lists, or not yet published. Technology may be publishing’s only clear way forward, but in cyberspace, no one can hear a new author scream. (Lloyd)

The traditional p-book could be discovered at a traditional bricks-and-mortar bookshop. This was where readers found books and where trade publishers primarily marketed their books. Doing this was one of the major services a publisher could provide for their authors. But this is no longer the case. As Seth Godin argued in 2012:

For decades, the single biggest benefit a publisher offered the independent writer was the ability to get the book onto the shelves of the local store. The entire sales organization at the publisher … is first and foremost organized around getting more than its fair share of shelf space. … If there’s infinite shelf space (as there is for ebooks), ALL of this is worthless.

According to a recent survey of readers’ book-buying habits, carried out by a US research company, The Codex Group, bricks-and-mortar bookshops are declining as a key source of book discoverability. In 2010, 31% of respondents found their book in a bookshop, but in May 2012, this number was down to 17% (Hildick-Smith in Owen, ‘Social Reading’). The survey also reported that one in three people entered a bricks-and-mortar bookshop to browse rather than with a specific title in mind. This suggests that bookshops are good for spontaneous purchases. Fewer people going into bookshops (down 14%) has a double negative effect: the initial sales lost to eretailing and the decline in spontaneous purchases.

In the old days (around 2009) the publisher’s sales team was responsible for getting the books into bookshops, and discoverability was focused around the traditional tools of ‘analog’ marketing and publicity: reviews in papers, radio interviews, author tours and launches and events—many held in bookshops. In the new digital world, the road to discoverability starts in the editorial department, with the book’s metadata being created, and moves swiftly to the marketing and publicity people, whose job is to create an online community around the book’s subject and/or author and to leverage the author’s profile through targeted and clever use of emarketing and social media.

Thus publishers now attempt to build communities around authors, topics and individual titles so they can have direct conversations with readers and build meaningful customer relationships. The tools for doing this online are many and varied but include email newsletters, Facebook, Twitter, Pinterest, blogs, online book review forums and online book clubs. Also valuable are peer-to-peer sites, such as aNobii and Goodreads internationally and The Reading Room locally, where titles are recommended through an online community. Matteo Berlucchi, aNobii CEO, is trying to harness on a large scale the predilection many people have to recommend books they have read and enjoyed to their peers. The site does this with a ‘filtering’ system that makes the recommendations meaningful and akin to word of mouth, long accepted widely as the most effective way to find a reader (Berlucchi 9).

Another online marketing strategy is buying space on the home page of Amazon or another eretailing company. But this is far less popular. Many US and UK publishers see this as an ineffective option because not all readers enter the retail site through the home page—and because large eretailing sites are where readers transact, not where they browse. It is felt generally that ‘the uplift doesn’t justify the costs’ (Atkinson).

But while publishers have such strategies around social media and retailing, one of their most powerful tools in increasing discoverability is their initial provision of metadata for each title published.

Metadata

Metadata is central to any ebook’s discoverability. Metadata is the bibliographic data about the ebook and includes critical information such as author, title, ISBN, name of publisher and date of publication. In Australia it is usually generated as an Excel spreadsheet that can be loaded into ebook vendors’ databases or as ONIX data (online information exchange: the international standards for sharing and supplying information about books).

A book’s metadata is used by search engines, retailers and other digital media to find, display and sell the book. To be most effective, it should tell the story of the book. In addition to the basic bibliographic data, it is important that it includes reviews, sales data, a description or blurb, the name of the imprint, details of territorial rights, digital rights management (DRM) status, price points for different markets, the language it is printed in (EN for English) and the Book Industry Communication Code (BIC, a code that describes the book’s category; for example, cooking, economics, crime fiction) and industry category code. In the digital marketplace, it is essential for publishers to provide thorough, accurate and up-to-date metadata if their ebooks are to be visible to readers. As Edward Nawotka argues: ‘Search engines, social networks, e-book retailers all depend on metadata to help users find their book. Get it wrong and they’ll never find it and you’ll lose the sale; get it right and it is going to be the first book that will pop up after a search query.’

But recording effective metadata presents a number of difficulties for publishers. It is currently a time-consuming and painstaking process, and even if a publisher chooses to use someone else (such as an aggregator) to look after the task, it is still the publisher’s responsibility to ensure the information is correct from the start. If there is just one mistake in the metadata, the book will be relegated to an anonymous life in cyberspace, unlocatable by search engines and unseen by readers. The process is made harder because there is no standard format for supplying the data. Different ebook vendors require different amounts of metadata with slight variations on a theme. For example, a date might need to be expressed as yyyy/mm/dd (Kobo) or mm/dd/yyyy (OverDrive) or dd/mm/yyyy (for many Australian ebook vendors).

During a session of the 2012 Digital Book World conference by Nielsen BookScan UK, Michelle Calligaro, Digital Manager at Text Publishing, reported that enhanced metadata increases sales by 55%, with fiction sales stronger by 140%, and an increase of 178% in online sales. She also made the salient points that the most important enhanced metadata is the long description (thus all keywords should be in the description field); that editors, who know the content of the books best, are the key to good metadata and Book Industry Standards and Communications codes (BISAC codes, industry-approved subject descriptors represented by a nine-character alphanumeric code); and that Google’s AdWords Keyword Planner is an excellent resource to help determine appropriate keywords. Calligaro left no doubt that enhancing metadata leads to increased discoverability for ebooks. There is also no doubt that it is up to publishers to ensure they are doing this effectively if they are to reach readers. And this is just one of the changes that has occurred over the past four years in the relationship between the publisher and the reader.

The Publisher–Reader Relationship

[Readers] are our audience, our direct target, yet who pays them enough attention? (Davis 15)

Before the digital revolution, traditional trade publishers rarely sold direct to readers. If this did happen, it was only on the odd occasion for a special order when the traditional supply chain had broken down. Books, as noted above, were sold to consumers through bookshops.

The Australian Booksellers Association reported that between 2009 and 2011 there was a loss of 126 bricks-and-mortar bookshops across Australia. With such rapidly diminishing numbers of bookshops and increased competition from online eretailers, traditional publishers need to consider ways of selling direct to the consumers (B2C) rather than following their existing models of selling direct to other businesses (B2B) such as bricks-and-mortar bookshops and eretailers. For instance, Markus Dohle, CEO of Random House, has argued, ‘We have to change from being a b2b company to a b2c company over the coming years … publishers have to become more reader oriented in a marketing and trend finding/setting way rather than in a direct to consumer selling way’ (qtd. in Shatzkin 2010).

For many years it has been an unwritten covenant between traditional trade publishers and booksellers that publishers would not sell books directly to consumers. The ebook and eretailing revo lution has changed this. Publishers still need to foster and build strong sustainable relationships with booksellers; it is essential for both parties that this remains a vital and viable part of the publishing industry. Many booksellers believe that publishing house sales reps are critical for understanding a publisher’s mid-list, and that without reps to sell this list into bookshops effectively it will be the mid-list that will suffer and disappear. But at the same time, publishers also need to develop their publisher-to-reader relationship. Bookshops are becoming physical author communities, hosting readings and signing events. Just as publishing houses need to develop online author communities through various strategies including emarketing and social media, and through brand-building their authors, they need to tap into the potential of bookshops to expand these communities in promoting recognition of their authors.

Publishers’ brands and imprints (that is, their names) are barely recognised by readers, with some obvious exceptions like Penguin Classics, Harlequin and Dummies. On the other hand, the author’s brand is compelling. Readers may not know the publishers’ names but they come back time and again to buy the brands that they know and trust—Jodi Picoult, Michael Connelly, J. K. Rowling, to name a few. Authors are publishers’ most recognisable brands and publishers need to build connections with the brands the readers know.

In addition to publishers needing to develop connections with their readers, the rise of the ebook, and esales, has introduced further complexities for the publisher–reader relationship. There is a tension that exists between the publisher’s need to protect copyright and guard against piracy and the consumer’s need to have unfettered access to ebooks and their ebook libraries. This is the area of digital rights management.

Digital Rights Management

Publishers are partly to blame for the walled-garden status of the market as well, since they handed Amazon and Apple the stick of digital-rights management, which the two companies are now using to beat them—and they won’t allow their books to be loaned to other users, or even in many cases to public libraries, and they certainly don’t make it easy to get access to them on different platforms. Welcome to the mutually incompatible, silo-based, platform-dependent and user-unfriendly future of books. (Ingram)

Digital rights management (DRM) for ebooks is an area where publishers need to carefully balance the need for copyright protection for the author with access and ease of use for the consumer. DRM technologies restrict or control access to copyrighted material and are designed to stop the widespread practice of pirating digital content. The existence of multiple proprietary ereader platforms—Kindle, iBooks, Kobo, Adobe and Nook—which all have their own individual forms of DRM, has made it impossible for consumers to share books across platforms. This is a problem, for a number of reasons.

On the face of it, DRM seems a perfectly reasonable and indeed responsible proposition: it restricts an ebook from being widely and publicly distributed from one purchase. It is particularly valuable if a publisher is dealing with territorial rights. Traditional publishers support DRM because they want to protect their assets (copyright and revenue) as well as their authors’ assets.

Not all publishers see it this way, however, and it may be an area that traditional publishers need to consider more thoroughly. Maja Thomas, US Senior Vice Principal of Hachette’s digital operation, told the OnCopyright 2012 conference that DRM is just ‘a speed bump’. She went on: ‘[DRM] doesn’t stop anyone from pirating, it just makes it more difficult, and anyone who wants a free copy of any of our books can go online now and get one’ (qtd. in Owen, ‘Will Hachette’). That is, DRM can be removed, rendering it ineffectual as asset protection.

Further, the disadvantages of DRM to readers are considerable. A reader in effect only licenses an ebook. It can be withdrawn from their device at any time and if the platform ceases to exist the ebook is lost entirely. Ebooks, unlike p-books, can’t be resold, printed out, given away or shared between friends (or can only be shared with a very limited number). The relationship between the purchaser and the product is thus very different from the one that results from the sale of a print book. On top of this, DRM contributes to monopolies within the industry by locking consumers in to particular eplatforms and devices.

Traditional and ebook publishers, authors and eretailers are all locked in fierce debate over DRM, with responses to the issue varying dramatically. The current market tends towards extremes, with publishers who are going DRM-free (science fiction publisher Tor, an imprint of Macmillan, for example) at one end and the fully locked systems of most publishers and eretailers at the other. There have also been attempts to develop a system somewhere in between, such as Pottermore’s social DRM. For this, a unique code or simple watermarking device (see Figure 5.1) that tracks the customers’ or retailers’ usage, particularly if the ebook is uploaded to a file-sharing site, is added to an ebook (Naoum).

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Figure 5.1: Pottermore’s social DRM

The advantages of an ebook with social DRM are:

It can be lent to friends and family.

It can be stored in one single place and is not platform-dependent.

It can be transferred across edevices and eretailers.

It does not lock customers into particular eretailers so could result in more competition and fewer monopolies, such as Amazon.

It makes the user aware that it is copyright material.

It is easy and cheap to implement.

It is easy to remove, but then so is traditional DRM.

A recent study in the US on piracy of music and books reached the conclusion that ‘only the legal users pay the price and suffer from the restrictions; illegal users will not be affected because the pirated product does not have DRM restrictions’ (Vernik, Purohit and Desai, 1,012). If this is the case, publishers need to look closely at their use of DRM to see whether its value in preventing piracy outweighs the inconvenience it causes the reader.

Conclusion

To return to where I started: in the stormy seas currently facing the publishing industry there are a number of life rafts—ongoing safety nets with function and meaning—and some deckchairs that have served the trade-publishing industry well in the past but which should now be jettisoned. This essay, looking through the prism of the relationship between publisher and author and between publisher and reader, has identified and analysed some of the key issues. The following is a summary of which practices belong in which category.

The Life Rafts

Professional publishers and editors:

As Malcolm Gladwell succinctly said, ‘What will sustain this industry is if it returns to what we wanted it for … which is to be a tastemaker and a gatekeeper … an expert’s job is to place limits and standards and it’s the editor who is the king.’ Publishing professionals and their expertise are what the industry has that self-publishing doesn’t, and more needs to be made of them.

Business to Consumer (B2C):

Publishers need to engage directly with readers by building author and reader communities through their websites, through blogs and social media and through direct marketing.

Print on demand (POD) and short-run digital printing (SRDP):

These strategies will contribute to keeping the p-book in bookshops and reduce the waste and inefficiencies of traditional publishers.

Metadata:

As the publishing industry continues its inexorable shift to digital, good metadata will ensure that titles find readers and, no matter how platforms and devices shift, this information will remain immutable. Traditional publishers need to recognise its importance.

Bookshops:

Bricks-and-mortar shops must remain an important part of the trade-publishing cultural fabric. They are places where readers can serendipitously encounter new titles and meet authors. The bookshop may become more specialised and niche but it will continue to have a vital role.

Self-publishing:

This new segment of the trade-publishing environment is unrecognisable from earlier vanity publishing days. Traditional publishing needs to engage with it and recognise the opportunities it presents.

Social media:

Traditional trade publishers can use social media as the primary means by which they engage directly with readers and build communities for their authors and brands. In many publishing houses there is no strategy or dedicated team looking after what is an increasingly important aspect of any publisher’s business. This needs to be rectified, to make the most of social media’s potential.

And the Deckchairs?

Digital Rights Management (DRM):

In its current form DRM encourages monopolies in the ebook market and diminishes the readers’ experiences; it needs to be reconfigured to take into account rights protection for territorial copyright and to enable more flexibility for the consumer across platforms.

Traditional trade-publishing models for ebooks:

Many traditional publishing industry standards, such as author advances, pricing and high-discount royalty clauses for ebooks, need to be rethought to create more flexibility and responsiveness for traditional publishers to embrace the ebook revolution. The pricing of ebooks is also an area where work needs to be done to find the right tension between what is fair and what will maintain a diverse, vibrant and sustainable industry for all the stakeholders (the consumer, the eretailer, the originating trade publisher and the author).

Lack of standardisation:

This is most evident in the delivery of ebook metadata for the different ebook platforms and different ebook vendors. The industry is trying to address this problem and working towards solutions, but at the moment is failing to get compliance across the supply chain. Poor or inaccurate metadata leads to problems of discoverability of titles, so readers are unable to find the ebooks and therefore ebook vendors, publishers and authors do not benefit.

Despite the turmoil in the publishing industry over recent years, traditional publishers have always been and will remain a critical and valuable part of the industry. The challenge is for traditional trade publishing and the new world of ebooks to find an equilibrium and symbiotic relationship that allows the industry as a whole to flourish. As Stephen Page has written, ‘Readers will be best served by publishers who can marry the best of what is sometimes labelled “legacy” publishing to the new means of developing and delivering what readers want and writers need. And if that marriage is achieved, then the persistent reporting of the death of old publishing will continue to be a mere exaggeration.’ The storm might have hit, but all the signs are it will not be fatal.

Works Cited

Atkinson, Will. ‘The Art of Discovery.’ The Bookseller FUTUReBOOK Conference Preview. London: The Bookseller, 2011.

Bennett, Larry. ‘Maximising US Opportunities.’ The Bookseller FUTUReBOOK Conference Preview. London: The Bookseller, 2011.

Berlucchi, Matteo. ‘Social Butterfly.’ The Bookseller FUTUReBOOK Conference Preview. London: The Bookseller, 2011.

Calligaro, Michelle. 2012. ‘An Australian Perspective on the Digital Book World 2012.’ Digital Publishing Australia. Copyright Agency Limited, 10 Apr. 2012. Web. 15 Apr. 2016.

Darling, Jenny. Personal interview. 29 Jun. 2012.

Davis, Lindsey. ‘The Reader Rules.’ The Bookseller 6 Apr. 2012: 15.

Gladwell, Malcolm. ‘Malcolm Gladwell Celebrates the Editor as “King”.’ Publishers Lunch. Publishers Lunch, 14 Mar. 2012. Web. 15 Apr. 2016.

Godin, Seth. ‘The End of Paper Changes Everything.’ The Domino Project. Amazon Publishing, 13 Feb. 2012. Web. 23 Sept. 2015.

Inglis, Fiona. Australian Publishers Association. 29 Nov. 2011. Address.

Ingram, Matthew. ‘How the E-Book Landscape is Becoming a Walled Garden.’ Gigaom. Knowingly, Inc., 29 Feb. 2012. Web. 15 Apr. 2016.

Jones, Barry. Book Industry Strategy Group (BISG). Final Report to Government. September. Canberra: Dept. of Innovation, Industry, Science and Research, 2011.

Lloyd, Virginia. ‘Reading, Screaming in Cyberspace: Notes From US Book Expo.’ Crikey. Private Media Operations Pty Ltd, 8 Jun. 2012. Web. 15 Apr. 2016.

Naoum, Joel. ‘Harry Potter and the Digital Rights Management.’ Momentum. Momentum Books, 28 Mar. 2012. Web. 15 Apr. 2016.

Nawotka, Edward. ‘Why Metadata is the Key to Your Digital Future.’ Publishing Perspectives. German Book Office, 29 Jul. 2011. Web. 15 Apr. 2016.

Owen, Laura. ‘Social Reading, Discoverability and other Unsolved Problems at BEA.’ Gigaom. Knowingly, Inc., 7 Jun. 2012. Web. 15 Apr. 2016.

———. ‘Will Hachette be the First Big-6 Publishers to Drop DRM on E-Books?’ Gigaom. Knowingly, Inc., 31 Mar. 2012. Web. 15 Apr. 2016.

Page, Stephen. ‘The Future of Publishing Takes Shape.’ The Guardian. Guardian News and Media Limited, 7 Oct. 2010. Web. 15 Apr. 2016.

Pilkington, Ed. ‘Amanda Hocking, the Writer Who Made Millions by Self-Publishing Online.’ The Guardian. Guardian News and Media Limited, 12 Jan. 2012. Web. 15 Apr. 2016.

Shatzkin, Mike. 2012. ‘By One Benchmark at Least, We Are Probably Halfway Through the (R)evolution.’ The Shatzkin Files. The Idea Logical Company, 13 Feb, 2012. Web. 15 Apr. 2016.

———. 2010. ‘Publishers, Brands, and the Change to b2c’, The Shatzkin Files. The Idea Logical Company, 6 Sept. 2010. Web. 15 Apr. 2016.

———. ‘What Smaller Publishers, Agents and Authors Need to Know about Ebook Publishing.’ The Shatzkin Files. The Idea Logical Company, 5 Sept. 2011. Web. 15 Apr. 2016.

Stephenson, Kate. ‘Jobs Making a Comeback.’ Bookseller+Publisher 91.3: 12–13.

Thompson, John B. Merchants of Culture: The Publishing Business in the Twenty-First Century. 2nd ed. New York: Plume, 2012. xi.

Vernik, Dinah, Devavrat Purohit and Preyas S. Desai. ‘Music Downloads and the Flipside of Digital Rights Management.’ Marketing Science 30 Jun. 2011: 1011–27.

Woodward, David. ‘5 Tips for Selling More Ebooks.’ Lulu. Lulu Press, Inc., 14 Sept. 2011. Web. 15 Apr. 2016.

 

1This published version of a conference paper delivered in November 2013 reflects the parameters and climate of Australian trade publishing during the period 2010 to 2013.

2Based on author royalty rate of 10% of RRP less GST, which is considered an industry standard; RRP prices and print run figures are based on anecdotal surveys of small- to medium-sized Australian independent publishers supported by BookScan analysis. Author earnings figure is calculated by multiplying the author royalty per copy figure by the print run.

3Based on author royalty rate of 25% of publishers’ net receipts (NR) and 30% eretailer discount. Author earnings are calculated by multiplying the author royalty per copy by amount of copies sold.

4Based on no author royalty but 50% share in profits with publisher and 30% eretailer discount. The profit share is based on 50% of the publishers’ net profit (net profit is less GST, eretailer discount and book production cost (editing, proofreading, cover and text design and typesetting).

5Based on author royalty/share of 70% of eretailer revenue. Author earnings are calculated by RRP less GST (10%) less 30% eretailer discount multiplied by number of copies sold.

6* p-book includes production, printing, distribution, promotion and overhead costs

* p-book: bookseller discount: 45%; author royalty: 10% of RRP (less GST)

# ebook-only: eretailer discount: 30%; author royalty: 25% NR; book production costs: editing, proofreading, cover and text design and typesetting

> self-publishing: author royalty/share: 70% of NR

The Return of Print?: Contemporary Australian Publishing

   by Aaron Mannion and Emmett Stinson