Penguin Books’ CEO John Makinson gave a presentation in London today where he demonstrated some books/applications–I’m not sure what you’d call them technically–that Penguin plans to sell on the iBook store when the iPad launches later this month. Penguin is doing some pretty inventive stuff with its content, judging by these demos, and I think it points a clear path toward how publishers can provide new offerings that printed books can’t match.

Included in the demo:

- A children’s book that includes interactive activities for the reader: at one point, the child may be asked to help the main character color in a picture before swiping to the next page of the story.

- A reference book based on DK’s The Concise Human Body, where users can tap illustrations to zoom in for a detailed view, then tap again to transition to animated 3D models.

- Networked, community-driven editions of books from the Vampire Academy series, where a reader can both read the book and interact with other readers.

- Travel books that allow readers to develop itineraries and make use of interactive maps.

- An astronomy book that uses GPS and the iPad’s motion sensor to display constellations that match up with the sky above you.

It’s all quite impressive–I especially like the Vampire Academy books, which allow you to read the book traditionally but also extend your level of interaction through a built-in, attractive social network interface.

Makinson suggests that the ePub format can’t handle some of the more advanced content they’ve come up with, so the publisher is planning on releasing apps in many cases. I think this is one area where publishers can claim a huge amount of revenue in the digital book marketplace; it’s a lot harder for an independent or writer to develop a high-concept app than it is to self-publish a “traditional” ebook, and I suspect customers will gladly pay significant amounts of money for books that do more than just display text.

“First Look: How Penguin Will Reinvent Books With iPad” [Moconews.net]

When it comes to ebook pricing, I’ve changed my position on the matter almost weekly; sometimes I side with publishers, sometimes with retailers, sometimes with consumers. But I think this week I may have finally realized something that forces me into a more permanent point of view on the matter. It’s this:

Most publishers, in fact, are trying to intentionally slow the uptake of ebooks by consumers. I think that’s what the whole pricing issue is really about–driving away customers as much as possible, because ebooks don’t easily fit into the existing business model of the average publisher.

Last week, an industry insider circulated talking points among publishing types, instructing them on how to frame the debate in the media in order to convince consumers to accept higher ebook prices. This in itself is offensive–if your approach to innovation is to act like a political group, and to deliberately strategize how to abuse language so that you can confuse the issue, you’re sending a clear message that you don’t want to have an honest conversation with your customers.

In response, I posted a piece on Consumerist.com that explains the issue in plain language for publishers: if you want to raise prices, make the ebook worth the price. It’s that simple. Add value, raise the price.

I also pointed out four things that publishers should take under consideration immediately, instead of memorizing talking points:

• Stop calling consumers cheap; they want fair value.
• Stop hiding behind industry inefficiencies. Innovate.
• Stop asking consumers to trust you; demonstrate that you want the ebook market to grow, or be honest and admit that you don’t.
• Stop saying lower prices will destroy author incomes and modern culture; it derails any meaningful discussion.

Most complaints you read from publishers commit at least one of the above four sins. Why, take a look at this email I received from a publisher earlier this week when I suggested that she might sell more copies of a novella (a novella!) if she would price the Kindle version lower than $10 on Amazon:

What I think consumers don’t understand is there is still a decent amount of cost & time we as publishers have to put in to offer a book on Kindle (or B&N, etc.)…So, it wouldn’t be fair to us or the author to charge much lower. All publishers struggle to make ends meet and the majority of our authors certainly aren’t making a living off their book royalties, so for this reason I don’t think we can discount books — print or ebooks — any further.

Look at that: she implies Kindle customers are being cheap (as opposed to asking for fair value), she blames the industry for barely being profitable as it is, and she says authors won’t be able to make a living. Three in one paragraph!

So I finally get it. When publishers say they want to maintain a competitive marketplace, or they don’t want ebooks to cannibalize print sales, or they need to recoup the cost of publishing, what they’re really saying is simply: we want to make sure ebooks don’t take off, because we have no idea how to make that work within our current business model and we’re reluctant to try to innovate.

What they’re not saying is that they’re taking authors or readers into consideration. There may be a more profitable model out there for publishers and authors–one that includes lower prices for consumerst, in fact–but it won’t be discovered by one of the existing big companies. And the next time you read a publisher’s complaints about ebook pricing, make sure you’re not just being fed talking points.

“Consumerist: If publishers want more money for e-books, they should offer something worthy of the price” [Consumerist]

RELATED
Read more comments on this topic at the following two posts:
“Consumerist: If publishers want more money for e-books, they should offer something worthy of the price” [Teleread]
“Book Publishers Circulating ‘Talking Points’ To Counter Arguments That Ebook Prices Need To Go Lower” [techdirt]

(Money photo by aresauburn™)

This whole issue of how ebooks are priced, what they’re worth to consumers, and how to make money off of them is actually pretty complicated. It’s also fascinating, at least to someone like me; for the first 18 months after I bought a Kindle I demanded that no publisher ever go above the $10 mark. (I’ve since softened my stance somewhat for new releases, although personally I don’t buy ebooks over $10 regardless.)

Two of the best explanations I’ve found come from published writers who have an obvious interest in what Amazon and publishers end up doing:

Read “Amazon, Macmillan: an outsider’s guide to the fight” by Charles Stross

Read “Why my books are no longer for sale via Amazon” by Tobias Buckell

Bonus! Read “Kindle Numbers: Traditional Publishing Vs. Self Publishing” by Joe Konrath for an alternate take on earning money from ebooks if you’re a midlist writer.

Set aside 10-15 minutes and read these two (or three) guys for some great insights, for example on Amazon’s reasons for holding to the $10 price point (hint: it’s not really for our benefit), on how much it costs to publish a high quality ebook, and on how to price more efficiently to take advantage of what different customers are actually willing to pay (hardcore fans are usually willing to give more support to their favorite authors).

This post originally appeared on Kindlerama.

(Photo: kretyen)

If you found yourself reading more frequently after you bought an ereader device, you weren’t alone. People who own ereader devices read crazy high amounts of books each week, according to a new study by the business consulting firm L.E.K. It appears the idea that reading is a dying activity is, as ever, a fallacy. At least for ereader owners.

The average time spent reading in the U.S. is 7.1 hours a week, says L.E.K. Ereader owners, however, average nearly 2 1/2 times that at 18.2 hours per week. Over a third of those extra books are considered “incremental,” meaning they wouldn’t have been read otherwise.

The study compares media consumption across all content channels, including TV (still the king), movies, music, and Internet. But the big news of the study is just how voracious ereader owners seem to be. Why? It seems to come down to these three benefits:

• Affordability – Ebooks are cheaper than printed books, and most people are on restricted budgets in this economy. One of the big media/marketing angles when the Kindle launched was that it would save the owner money over time. Although that may not be exactly accurate, the current ecosystem for ebooks lets a consumer spend less per book. You can stretch your book budget with an ereader.
   
• Discovery – L.E.K. is guessing at this one, based largely on the fact that many respondents said they felt there was a better selection of ebooks compared to other retail channels. I agree with L.E.K. that what they’re probably describing is the ability for ebook retailers to customize their inventory pages based on your past purchases and likes. I’d probably buy more books at a bookstore if there were a shelf up at the front that had titles hand-picked to appeal to my interests.
   
• Accessibility – If I’m using a Kindle or an iPhone or iPod Touch, I can finish a book at three in the morning and immediately purchase the next in the series, without leaving my bed or sofa. Hell, it’s even easier than ordering a movie through my Xbox or cable box. Here’s a real world example: two weeks ago, I was reading a preview on the subway on my way to a meeting, and I bought the book as I came up to street level and was walking down the sidewalk. It was a real purchase for the publisher, but practically an afterthought for me as far as fitting “shopping” into that day’s busy schedule.
   

“Hidden Opportunities” [L.E.K. Consulting via MobileRead]

(Photo: unfoldedorigami)

I attended a Google Book Search settlement workshop yesterday hosted by the National Writer’s Union (NWU), the American Society of Journalists and Authors (ASJA), and the Science Fiction & Fantasy Writers of America (SFWA). The workshop’s panel included representatives of those organizations as well as an agent, a professor who has been studying the issue, and the executive director of the Authors Guild, which is one of the primary parties involved in the settlement. Here are the main themes from the event.

 

“A settlement isn’t the right way to settle this.”

New York Law School Associate Professor James Grimmelmann, who remained a largely non-partisan outside observer (although he has stated he thinks the settlement should be approved, with modifications), pointed out that a class-action lawsuit isn’t the right way to determine an issue like fair use under copyright law. It needs to be addressed by the government and not through private negotiations, he said, because it has huge societal implications.

Grimmelmann also pointed out that if the settlement goes through, it’s likely Google will emerge with a huge market advantage over any potential competitors, which may negatively impact any healthy competition in the marketplace.

Paul Aiken, executive director of the Authors Guild and a lawyer, argued that the risk of losing the lawsuit was too great: if the courts found Google’s scanning to fall under fair use–as Grimmelman and at least one other legal expert think it could–then others would copy Google’s scanning project. “In our view,” he told the hostile crowd, “It would be catastropic.”

Grimmelman responded that the proposed settlement wasn’t the only valid solution, and that there could have been other paths to a compromise.

 

“The settlement is overreaching, and probably untenable.”

Lynn Chu, an attorney, author, and book agent, was the most vocal opponent of the settlement, calling it an “outrageously bad deal as a financial matter” for writers and a “typical entertainment industry scam.” At one point she implied that the Authors Guild had been misled by incompetent legal counsel, which not surprisingly seemed to anger Aiken.

Chu pointed out that the business model proposed by the settlement has nothing to do with the original lawsuit, which was solely about fair use. “You glued a business contract to a waiver,” she told Aiken, and accused the Authors Guild of appointing itself as an agent to the world’s authors.

She also criticized the proposed Book Rights Registry, which is sort of an ASCAP for authors appearing in Google Book Search, noting that it would help Google shift costs over to authors by forcing authors to take care of administrative and publishing tasks on their own dime.

“[The settlement] probably won’t survive an appeal,” she told the crowd, a sentiment that Grimmelmann seemed to agree with. Still, she cautioned, “There’s no reason to be apathetic.”

 

“The settlement isn’t really author-friendly at its core.”

Edward Hasbrouck of the NWU pointed out a worst-case scenario that could happen to an author under the terms of the settlement: You have a book included in the database, but your ex-publisher claims that because it has authorized a print-on-demand version of the book it still owns the rights, so you and the publisher agree to binding arbitration and you lose. Since the arbitration is legally enforceable, you will have permanently lost your claim of ownership over the digital copy in Google’s database.

Chu noted that Google reserves the right to audit the Book Rights Registry, but that the favor isn’t returned because Google claims trade secrets will be compromised. She also noted that authors can make their own deals with Google and don’t need to rely on the settlement.

Note: the Science Fiction & Fantasy Writers of America hosted an online panel discussion this morning. You can read through it at http://sfwa.org/online-google-settlement-panel/.