Forum Moderators: goodroi
Watch out Amazon. Google is hitting the online bookstore business.The search giant announced Thursday at the Frankfurt Book Fair that in the first half of next year it will launch Google Editions, a new service that will deliver e-books to anyone with a Web browser.
I see this as Google's first real foray out of search advertising into directly monetizing things that people search for. And this will be where they go to.
Books now. Your niche coming up next. Are you in the travel business? If I was you and you was me, we'd be making career change plans sooner rather than later.
I understand it to be all available books. Public domain books are already free on Google. There are questions about orphan books. For commercially available books, they are apparently partnering with retailers
Google plans to share the sales with both publishers and the online bookstores. For books sold directly from its Web site, the search giant said at the book fair that it would give publishers 63 percent of the sales and keep 37 percent itself. For books sold through Amazon or other retailers, the publisher would get 45 percent, while the retailer would get almost 55 percent with a small share for Google.
See this thread for some related information
[webmasterworld.com...]
Google plans to share the sales with both publishers and the online bookstores. For books sold directly from its Web site, the search giant said at the book fair that it would give publishers 63 percent of the sales and keep 37 percent itself. For books sold through Amazon or other retailers, the publisher would get 45 percent, while the retailer would get almost 55 percent with a small share for Google.
I can assure you that Amazon and similiar sized retailers already cause behind the scenes issues with publishers (and of course other book retailers). Lemme give you two examples.
Used to be you'd publish and release books whenever the heck you felt like. I was speaking with an author just yesterday who was telling me that the release date of his new book was dictated by the retailer not the publisher. The retailer has two times a year they have release dates, publishers fall in line or else.
Retailers can buy books with a return guarantee. So you might buy 10 copies of a book and after a while only sell 8 - so you return 2 copies to the publisher for credit. It's odd, but has to work this way due to small margins. Along comes amazon, they order (I"m making up numbers) 5000 copies. Sell 1000 copies, and then return (surprise!) 4000 copies. Now try and imagine you are a small publisher that just paid to print 5000 copies and now you're looking at a truck backing up to your warehouse returning 4000 copies for full credit. Stuff like that can put you out of business. While the numbers I pulled out of the air, the reality and magnitude of this problem is not pulled out of the air. This was a problem 10+ years ago when amazon first got big, it's a problem today. Prior to the walmart sized book retailers, the independents would order fewer copies and return less, because they wouldn't want to pay for the copies or the shipping. Economies of scale limit both those problems for larger companies.
These are two symptoms of having large dominant retailers in the current publishing environment. large retailers - not just amazon but others of similiar size - cause problems in the industry that eventually get passed to the consumer. Google's entrance into this marketplace with their flagrant disregard for other's copywritten work is likely to make these problems much, much worse.
There's a reason I buy all my books from a local independent bookstore.
Someone please list all the favors Amazon has done for independent bookstores.
The small local bookstores are the ones I worry about.
Since Kindle is such a ripoff, Google will merge this with their Google Android, so soon everyone will be buying and reading their books on their cellphones and pdas.
They'll probably revolutionize ebooks and have a revenue sharing deal with authors. With authors now, after the publishing company and book store get their cut, the authors get very little, Google is probably going to give them great incentives to signup directly and publish under them. Imagine that, soon if you want to buy a book, you'll just visit Google Bookstore and buy books cheaper. Everyone's happy, the authors get a better deal, the consumers get cheap books, and with the Google platform, I reckon their search algo is going to put the Amazon system in shambles. Amazon will be left in the dark selling traditional books.
I've been noticing Google members are departing the Apple board, I reckon soon we'll hear Google Music store. Apple is earning wads of money from ipods and itunes, I think Google want a piece of that too.
What I was suggesting was, that any problems Amazon causes due to it's size, we'll have 10 times those problems now that Google's running the show.
One of the book publishers I haven't followed lately but must be getting slammed by this is O'Reilly (computer books publisher).
Also, will Google have an affiliate program for these ebooks?
Probable run ads on the publisher network based on usual targeting.
Mack.
Retailers can buy books with a return guarantee
Does any other major industry work this way? My publishers sells mostly to libraries and individuals, so they don't get hit that hard with this, but I've never understood how a small general publisher can work like this.
BTW, another thing in the US that makes it hard for publishers is the inventory tax. In many places books are exempt and so books don't get remaindered. In the US, having books sit in your warehouse costs you money at tax time every year (is this still true? It used to be, but I don't know anymore).
will spell the end for the Kindle and Amazon
Does anyone know what percentage of Amazon income still comes from books?
Does any other major industry work this way? My publishers sells mostly to libraries and individuals, so they don't get hit that hard with this, but I've never understood how a small general publisher can work like this.
The reason it works this way is due to a combination of small markup by retailers on many books (i.e. textbooks) and the transient nature of books.
If you buy 10 textbooks that retail at $100, you are going to be paying the publisher $80 plus shipping. Say you markup $18 a book. You sell 8 books and you've grossed $800 in sales for a bit more than $800 in costs. Your money's tied up in those last two books.
Now the publisher brings out a new edition, making your 2 books worthless. Burn!
Same goes for best sellers. Order a boat load so you've got lots of inventory, sell most of them fast...then sales go to nothing and 30% of your inventory just became worthless. Retailers can't absorb that, but the publishers can because their 'cost' is only the cost of publishing.
The way around that is if they bring out a new edition, I return the last two books for credit - and use that credit to buy two copies of the next edition. Now I can make some money.
I don't know any other industry that works this way. The entire book industry from author to publishing to retail is full of idiosyncracies. Really weird. I miss it :).
I clearly recall when Amazon first cracked the market. I was on the phone with a small publisher when she said she had to go - there was a truck backing up to the door with a skid full of returned books from Amazon. She was very distressed. Again, not a jab at Amazon, just highlighting that large retailers cause problems for this industry because of the way it works.
the search giant said at the book fair that it would give publishers 63 percent of the sales and keep 37 percent itself.
Hmmmmm. The books will surely be stored on Google's systems, right?
Then those greedy publishers will probably be in for a little surprise:
1) Complete intransparency on who purchased which book, and when. At best you may get an indication of Google about the total number of sales per day. Naturally, this figure can not be verified in any way. (You don't like it? Well, there is the door.)
2) Once the book industry has been destroyed, expect Google's revenue share go up. (You don't like it? Well, there is the door.)
Don't believe me on these two? Have a look at Adsense. After all, there is a reason why Adsense publishers are called "publishers".
3) Don't expect consumers to pay the same for an e-book as for a real physical product! Your revenue share might be a bigger portion, but the absolute revenue is lower than in the past.
4) Expect top authors to become publishers themselves. Why have the middleman (the publisher) at all? Oh, for marketing you say? Er, no. Google has all the eyes, so "marketing" is not needed for established writers.
Clearly, Google wants to destroy the book industry.
As reported at The Register:
[theregister.co.uk...]
And it is a bit sad, because in my opinion, Amazon has *the* best e-commerce site on the web - they deserve to do well.
Since ebooks cost almost nothing to sell when compared with printed books, chances are that google will start pricing ebooks at significant discount to price of printed version of the same book thus taking away market share from the printed versions.
Certain kind of books such as John Grisham's thrillers will continue to sell in printed version because of the kind of audience they attract and their low cost overall. On the other hand costlier text books used in college, books related to technical subjects like engineering and such will move on to ebook versions because of the likely cost advantage. Already Kindle version of certain books is priced at a discount to the printed version on Amazon.
Now look at the silver lining in the storm clouds. Overall it is good news for environment because less trees will be cut to make paper for printing the books.
Np2003 touched on it, but it looks like Google are only going to be dealing with digital versions of these books, so:
1) Publishers may well be better off as they won't have the problems Wheel mentioned with having to take back unsold stock
2) The impact won't be as large as has been indicated in other posts. Maybe a bit biased here but I think ebooks are going to have a surge at the beginning and then find it hard to gain large market share and break down the more traditional book buyers as they like to have a hard copy (I'm including myself here so there's where the bias comes in)
I think that's the key with any future Google products, they're going to deal with digital products only at the beginning (at least for a while yet), so:
1) Travel - think it's a 'safe' area at the moment - G might go down the route of Bing travel, but that's just aggregation / another form of advertising rather than direct product selling
2) Music / film downloads - I'd think definitely high up there on G's target list
No, it's precisely the publishers that are screwed.
Independent bookstores took the first hit and there honestly wasn't much they could do about it (BTW wheel, I began web programming as a volunteer trying to save a local, not-for-profit independent bookstore. Didn't work).
The next heads on the chopping block are big chain bookstores (already in major trouble) and publishers.
Authors have, I think, more opportunity than ever.
On the NPR show I mentioned, one caller was a first-time novelist two years ago. Her publisher used her as an experiment. They took her book provided she did a certain amount of blogging and social networking prior to publication date.
She said she was willing to do it to get her foot in the door. Got the book published, it sold pretty well but not blockbuster and won some award for fiction writing. She figured with those results her foot was in the door.
The problem: in the intervening two years, publishers started demanding that level of engagement from all authors except for a few huge a-listers. She said, and this is roughly a quote, that means that now a typical novelist spends 5% of the their time writing and 95% of their time doing marketing and promotion.
To me, that all begs the question: what is the point of having a publisher anymore?
One friend got a $250,000 advance to work on his second book, despite his frist book not selling that well, but that's a major exception and that was 5 years ago. That book, which took extensive research in the US and China, would not have gotten written without an advance like that. So that's something a publisher *can* do.
My books are very esoteric, scholarly books which take probably 10 years just to break even, so that's another thing a publisher can do. That said, I would publish my books for free as ebooks if I didn't have a publisher (I get paid out of grant money, not royalties or advances).
But another friend has a successful business self-publishing 3-4 titles of his own and has another 30 titles he has commissioned. I only know sales figure for his *lowest* selling title. He sells 1000 copies per year of that one. Not much. I'm guessing his best seller is around 10,000 copies per year, but a bit cheaper, so a bit lower profit.
But here's the thing. He does a lot of the writing, the page layout, commissions the printing, does the order fulfillment. His profit on each book after paying printing and shipping is about $13-15 on wholesale orders (a knowledgeable friend who co-wrote a book with him says $17, but I think that's high). He also has a popular website associated with the books which does a strong retail business and I'm guessing the profits there are about $20/copy (they sell for $25/copy).
So on 1000 copies, he's making maybe $15K/year. Multiply by 30 titles, most of which sell far more, some of which have less profit per book depending on price and arrangement with the co-authors... and you have a pretty good business for a guy who's not yet 30.
How much would he make if he were just an author at a regular press, instead of self-publishing?
So if publishers are going to require authors to market themselves and publishers are still going to take the lion's share of the profits, what's the point of having a publisher?
Certainly the book industry, like the music industry, has some bad practices that need to be cleaned up. But Google dominating the industry isn't the way to do that. In fact this announcement concerns me for two reasons:
1) I think it'll have longterm negative impact on consumers ability to access books (and authors). and
2) it signals Google's interests in moving outside of search engine advertising into traditional, more tangible products. Sure ebooks aren't tangible - but they are a lot closer to hotel and flight bookings, local flower delivery, books, music downloads, mortgage and insurance leads, and so on, than 'search ads' are. This is clearly their intent.
Consider that in light of Google's recent crackdown on affiliates.
just to be clear, I wasn't saying that the Google thing was good for authors or readers, but merely that it is
- death for many publishers
- this is in some ways a good time to be an author, the Google initiative aside.
OK, Textbooks are another special case where a publisher and their staff of lobbyists are necessary to placate the Texas board and the Daughters of the American Revolution. I kid you not. If you make it through the hoops with your book, you can retire on the earnings, though obviously most people don't and the shelf life on most of them is fairly short.
And then there's the fact that the "author" of the textbook often wrote little to none of it.
Textbooks are a racket - read Lies My Teacher Told Me. Great book if you have chance.
Then again, another brand with Google ...something something ... is bound to fail. I still maintain they need new branding for new products.
Question that I don't think has been answered yet - how are they going to promote this?
A: all over the serps. Do a search on anything book related, get at the top of the page 'buy this book from Google'. I don't think that'll fail.
I do agree that they are basically just another affiliate. They're commissioned salespeople for the book companies now. Ironic.
Ebooks have been around for a long time, but have they realy made a marked effect on traditional book sales?
Google may well do a great job of marketing this venture, but are they realy going to convince readers that their way is better than the way people have been reading all their life? If I read a book its relaxation time. I don't want to be anywhere near a computer.
The publishers, authors and Google have another potential issue to overcome. What's to stop people simply sharing books?
Let's not have more debates over drm standards, this time covering Ebooks.
Mack.
So if publishers are going to require authors to market themselves and publishers are still going to take the lion's share of the profits, what's the point of having a publisher?
That was my argument to an old friend of mine who's a novelist whose agent is now out looking for a publisher for my friend's latest novel.
His answer: "There's no points for self-publishing".
In other words, in certain circles (he's also a professor of creative writing), there's still a stigma attached.
One must be "published".
I asked him what was more important, "points" or people actually reading his book?
My rhetorical question has, so far, gone unanswered.
We all gotta do what we gotta do.
VHS Machines did not replace movie theatres in the 1980's and books will always be with us too.
Book-Em Dan'o!
