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eBook break-even…

08.15.2011, No Comments, Uncategorized, by .

eBooks are the growth vehicle for book publishers today. But still many are hesitant to spend the money to convert their backlist. I understand it can be an expensive proposition especially if the backlist is extensive. Some go direct to Amazon Kindle and B&N nook. These companies will do it for free or will take a higher % of the sale to pay for the conversion, But the publisher doesn’t own the files.

eBooks are great because once the initial costs are recovered, the incremental costs are minimal. So once the break-even if achieved, almost 100%of the revenue will go to the bottom line.

How long does it take to break-even?

Assume $1,000 to convert and distribute an eBook. If it is all text, it will be 30% of that, but let’s use $1,000 including QA costs and time.

Agency pricing — $9.99 retail delivers $7.00 (70%) to the publisher. At that rate, the break-even is less than 150 copies. If the price is $4.99, then $3.50 is generated per sale and the break-even is less than 300 copies.

Wholesale pricing works pretty much the same. List the book at $14 and collect 50% or $7.

If a publisher sells to libraries, the entire conversion cost could be recouped just in that channel. Then ALL retail sales would be profit.

It actually is a good time to be a publisher.

Agency

 

An old adage in publishing is the smaller the ball, the bigger the sales. This is traditionally true but there are, of course, exceptions.

A look at four sports that proves this statement:

  • Golf — Sales of golf titles generally back-list very well. This is dominated by “how-to.” As with the enormous sales in golf equipment illustrate, people are always trying to get better. Many of these books are by golf coaches as opposed to the celebrities. There are also a few successful books about the Masters, US Open etc. But overall the instructional books dominate. I wonder how eBooks and websites have changed this?
  • Baseball — The sport that has the most literature devoted to it. Historically baseball writers were considered a step above the other sports. Baseball has a tradition like no other and Biographies of the stars seem to have the best sales. Sales also that follow a specific championship season and team can be very appealing.
  • Football — Although football dominates television and mind-share of sports in America, the book sales generally lag behind baseball. Successful football books generally are around a single player or coach (Maraniss’ book on Vince Lombardi is classic). College football has some success too but it is highly regional.
  • Basketball — Few books on the NBA or NCAA basketball sell that well. Bill Simmons recently hit #1 with his NBA book but that was more built on his celebrity through ESPN, his blog and Twitter. Overall basketball books don’t sell very well.
There are other sports books that do sell but many transcend the sport. Examples of these include Andre Agassi’s OPEN and Lance Armstrong’s IT’S NOT ABOUT THE BIKE. These highly successful books sold outside of the sports demographic. Both of these men had stories to tell that had universal appeal.
One area of sports books that has basically been eliminated by eBooks and websites is Sports Reference. I grew up scanning my Baseball Encyclopedia every day looking at past stats. Today it is all online. I prefer Baseball-Reference.com.

MLB Realignment

08.03.2011, No Comments, Uncategorized, by .

It is August and the pennant races are heating up. The traditional winners, Yankees and Red Sox (and others) are settled at the top. There are a few surprise teams like the Pirates. The Royals are way back in last place as usual. Although there are some shifts, overall the playoffs continue to be between a handful of select teams.

There are 30 MLB teams. The NL has 16 teams and the AL 14. I hate the imbalance. I understand for scheduling reasons, an even number of teams in each league is considered necessary. But I don’t buy that. I am sure the computers that crank out the schedules can make it work. Or MLB can add two more teams (or drop) to balance the teams.

But, ignoring the need to be even, I would like to propose a 2-league 15-team set up. I had been thinking about this last year when the current division set-up seems to be un-fair with less deserving teams getting playoff births. Then this Spring Mike Greenberg on ESPN’s Mike and Mike discussed it at length. He even asked Bob Costas about it, and he was not against the idea.

Rumor has it the Astros are willing to leave the NL for the AL. This would establish a much-needed rivalry for them with the Rangers. That would give us 15 teams in each league. I suggest the divisions be eliminated. The Rays, Blue Jays and Orioles get screwed every year because they have to play in the same division with the Red Sox and Yankees. These teams have to play a tougher schedule but still compete for the same wildcard. Plus every year one of the other divisions is won with a team barely above .500. Seriously, how many times would the Twins have made the playoffs if they had to compete with Boston and NY? Probably zero.

Two 15-team leagues. No divsions. The top six teams make the playoffs. The top two get first round byes. The team with the best record always gets home field advantage. Sure the top will still be dominated by a handful of teams, but there is more equity and fairness for the wildcard spots.

Just a thought. Before 1969, MLB had two leagues and no divisions. Win the regular season and you were headed to the World Series. So in some ways this is a return to tradition (but with a twist for the realities of the playoff system in place.)

Waldenbooks RIP

07.24.2011, No Comments, Uncategorized, by .

This week marked the end of Borders Books and Music. There are thousands of articles, posts and comments. Most lamenting the demise of one of the largest book sellers in the nation. Many pointing out the problems. This post is to remember the forgotten sibling, Waldenbooks.

Waldenbooks started to die when the company was purchased by KMart and absorbed into Borders. Then they moved to Michigan and started to quickly lose it’s identity. Borders hastened the death by deciding that 3,000 sq. foot mall stores were no longer viable. Bigger was better. The superstore model was the only way to go. Borders started to bleed Waldenbooks profits and put them in the Borders superstore concept.

Some facts about Waldenbooks:

  • At it’s height, there were over 1,200 stores. By far the biggest in the nation and sold more books than any single company.
  • Celebrated GENRE fiction when most bookstores ignored. WB sold Romance, Science-Fiction and Mystery better than anyone.
  • Didn’t look down on less expensive mass-market titles. At that time many bookstores didn’t like that format (still don’t).
  • Had lists of MILLIONS of devoted readers through their “Preferred Reader Programs.” These were focused on ROM, SF and MSY.
  • These names were invaluable and today it is still a target for booksellers — get the names of the rabid readers and ‘own’ them.
  • The first to embrace scanning technology and utilize bar codes for inventory tracking.
  • Opened stores in communities that were not served by bookstores. Almost every mall in America had a Waldenbooks.
  • When a new book of commercial fiction arrived, WB had a lease-line program that announced it to millions of people. People walking in the mall would see it even if they were not ‘book people.’ It was tremendous exposure.

Waldenbooks is another casualty in the death of the bricks and mortar bookstore. It started decade ago, but the final nails were just driven by the end of Borders. Waldenbooks dies with it – although they had been dead for years.

I still believe a chain of mall-based bookstores can survive.  3,000 square foot stores that are focused on genre and customer service. Combine it with a strong curated on-line precence and re-establishment of the Preferred Readers club. It is still something that can be effective (possibly more on this in another post). Add in bargain and Children’s books and it would be successful. Counter-intuitive?  Yes, but that is part of the success.

Waldenbooks was the only bookstore within 50 miles of my home when I was growing up.  Waldenbooks game me my first job in book-selling and opened doors for me to decision-makers in publishing. I owe my career to WB. It is sad to see a friend die. It is sad that WB is also forgotten.

Murdoch is not the first…

07.18.2011, No Comments, Uncategorized, by .

 

Rupert Murdoch’s media empire has come under tremendous attack the past few weeks.

I am not a fan on Murdoch and have believed his actions have always been one step ahead of the law. So this latest scandal doesn’t surprise me.

Evil Media Conglomerates are common in history.

Rupert Murdoch is just the latest in a string a mega-maniacal media barrons who manipulate the news, intentionally mis-lead and create a story they want to tell. Murdoch’s cronies went too far and broke the law. They should be arrested and jailed.

But again, this is not the first time, nor will it be the last time someone gains monopolistic control over the media.

William Randolph Hearst and Joseph Pulitzer were known for their battles and the tension to get a story created ‘yellow journalism’ and the active mis-leading of the truth. Hearst is even credited (blamed) with stirring national sentiment and created the Spanish-American War. That is power?

Murdoch is evil. What he has done in the UK is completely wrong and he deserves to be brought down.

Will anyone see that his FOX NEWS in America has done more to harm our Democracy than any single entity of the past 50 years?

Murdoch is old and maybe this scandal will kill him. But there will be others. As long as the media has such control over how and what people think, there will be criminals like Murdoch to exploit it.

3000 hits

07.08.2011, No Comments, Uncategorized, by .

 

Twenty-seven major league players have at least 3,000 hits in their career. Over 100 years of Major League Baseball, only 27 players have reached this plateau. It is a major milestone.

Derek Jeter is two hits away from joining this group. So, for this post, I am going to assume he also has 3,000.

  • 12 have batted left-handed.
  • 14 have batted right-handed.
  • 2 have been switch hitters.

To achieve 3,000 hits, a player must average 200 hits a season for 15 years. That is an amazing level of consistency over a long period of time.

Nine players have achieved all their hits with one team:

  • Stan Musial – Cardinals.
  • Carl Yastrzemski – Red Sox.
  • Cal Ripken – Orioles.
  • George Brett – Royals.
  • Robin Yount – Brewers.
  • Tony Gwynn – Padres.
  • Craig Biggio – Astros.
  • Roberto Clemente – Pirates.
  • Derek Jeter – Yankees.

Two players have over 4,000 hits. Ty Cobb, who played in the early decades of the 20th century and Pete Rose.

Roberto Clemente ended his career with exactly 3,000 hits.  He died in a plane crash during the off-season. He was part of an effort to bring supplies to earthquake victims in Nicaragua. What a class act.

Here’s the the 28 men who have achieved 3,000 hits in a career. Quite an accomplishment.

 

 

 

eBook pricing snapshot

07.02.2011, No Comments, Uncategorized, by .

 

eBook pricing is a big issue in the Publishing industry. It is so important that few publishers will discuss on the record.

There is a battle between the publishing companies and the retailers.

There is a battle between the retailers and other retailers.

There is a battle between authors and publishers.

Everyone has an opinion. Self-published authors believe they need to drop prices to $0.99 to be seen. Corporate publishers want the price to remain above $10 to protect margins and pay overhead. Amazon wants prices at $9.99 and below but Apple wants to preserve $12.99 and $14.99. Sony, Nook and Kobo get caught in the middle.

I looked at the prices for the top 20 eBooks at the top five retailers:

  • $0.99:  Kindle 6; Kobo 3; Apple 1; B&N nook 0; Sony 0.
  • $1 -$4.99:  B&N nook 5; Kobo 4; Kindle 1; Apple 0; Sony 0.
  • $5 -$9.99:  B&N nook 11; Sony 11; Apple 7; Kindle 6; Kobo 5.
  • $10 – $14.99:  Apple 12; Sony 8; Kindle 7; Kobo 7; B&N nook 4.
  • Over $15:  Kobo 1; Sony 1.

Some observations:

  • Kindle has by far the most at $0.99. This is because of self-published authors. They also generally have the lowest prices overall.
  • B&N nook has 16 of their 20 titles priced at $9.99 and below.  They also try to push down prices.
  • Apple has the highest prices with 12 of 20 above $9.99. This is because they are on Agency with everyone.
  • Kobo has the most balanced prices across the board. This is in line with their ‘eclectic’ personality.
  • Sony also has high prices. They don’t do much promotions and generally follow the others.

Pricing is in flux. Corporate publishers are trying to maintain margin. Individual authors believe the prices should be lower. They are both right, They are both wrong. The ability to move the prices is a big game changer. It will be interesting to see how they move and what happens over the next few years. I believe prices will drop. But it will take a lot of experimenting and discussions for it to happen.

 

Self-Publishing…

06.24.2011, No Comments, Uncategorized, by .

 

 

 

 

 

 

 

 

 

Earlier this week, Amazon announced that John Locke had joined their ‘million-sellers’ club. He has joined six other authors (all from major publishing houses) as one of a select few to sell over one-million eBooks.

Congrats to Mr. Locke. This is an amazing achievement for any author. It is especially noteworthy that he self-published his books and has done the marketing and publicity all on his own. He truly has accomplished something remarkable.

He also is the exception that proves the rule. The majority of self-published writers sell very few copies.

So what’s the secret to success?

  • Good story-telling — most of his titles have 4-star averages on Amazon.
  • Returning character that readers care about.
  • Good eBook genre — Mystery.
  • Professional and alluring covers — many with good-looking women on them.
  • Loyal following.
  • Great ‘author name.’
  • Low price – every novel is $0.99.

I want to discuss the last point in more detail. Mr. Locke has credited the low price to much of his success.  He has also stated that the price of 99 cents will remain even though he could make more money by raising it. He wants to have as many people read his stories as possible. I am not questioning this policy — he has proven it to be successful.

But, looking at the numbers.

Amazon’s policy is simple. Price the book between $2.99-$9.99 and receive 70% royalty. Price it anywhere else and get 30% royalty.

Locke has sold 1,000,000 eBook at $0.99 retail. He receives 30% or $0.30 per book = $300,000.

How many copies at different-price points would be need to sell to make $300,000?

  • $0.99 –    1,000,000
  • $2.99 –       142,000
  • $4.99 –         85,000
  • $9.99 –         43,000
  • $12.99 –       76,000

Would he had been better off raising the price? Who knows? But it is an interesting model in that a small change in price can have a dramatic effect on the revenues. He probably could have made more money – but then the success may have come from the very cheap $0.99 list.

eBook pricing is all over the map. Publishers (and self-publishers) are looking at this in a way to maximize sales and exposure. The answers are being determined and we do need a lot more data. But it would be interesting to see what would happen if the prices were moved around.

This is just one of the new skills publishers must master in the “Digital Era.”

Social Media

06.20.2011, No Comments, Uncategorized, by .

 

Build your “platform.”

Build your “brand.”

How does one go about doing this? How much time do you have to devote to it? I know some people who have done a great job building their on-line footprint. But they work at it — spend 40 hours a week building. It is hard work. It doesn’t come easy.

I try. I don’t have the time to do it all the time. But I have found success in a focused group. I do get leads and consulting gigs from my network all the time. I enjoy it. I like to post my opinions. Do I think anyone reads? Maybe not — but that’s ok. I am building.

Some of the tools I use:

Twitter – a must for anyone on-line. I have heard many people claim it is a waste of time. I guess anything can be a waste if you don’t know how to use it. Twitter is very effective. But it takes nurturing and building.  You must be on Twitter.

Facebook – everyone is on Facebook. I use it more for staying in touch with friends. I do not have a business fan page. But many do. Businesses are finding Facebook more effective than their home page. There are 400-million Facebook accounts. You must be there.

WordPress Blog – if you are reading this, then you are on my website. I don’t think everyone needs a website, but a blog is important. It can be substituted by a Facebook Fan page or Tumblr.

Tumblr – They just passed WordPress as hosting the most blogs. It is easy, clean and gaining popularity. I have three Tumblr accounts – one is personal, the other for my art and a third that I am still debating what to do.

LinkedIn – The place to put your resume and so much more. Everyone should have a page. I find it to be the best business network tool period. I drive my Tweets and Blog posts to LinkedIn. I do research. I use it as my calling card. It is very important.

Pandora – The best ‘radio’ on the web. I don’t use it a lot for posting comments, but I find it great to hear various types of music.

Flixster – I prefer this movie site over the others. It is connected with Rotten Tomatoes and one can get both critics reviews and consumer. I use the % to determine which movie I want to see. I post my reviews.

Amazon – I shop on all the various eBook sites (B&N, Kobo, Apple) but Amazon is the one with the reviews and major feedback. I try to hold back on most reviews but Amazon will give me a sense of movement re: books.

bit.ly – A tool I use to shorten URLs. Besides it being a necessity for the 140 character limit on Twitter, it is a great tool for tracking. You need to register with bit.ly and then they will track usage on your posts.

Zite – for iPad only. This is a great tool to sort and curate all the various news on subjects that are of interest to you. I use it and find info to Tweet quite a bit. It is a different way to look at the subjects that interest me.

Klout – a measure of on-line influence. Sure it has it’s bugs, but it is the best way to find out influence.  Check it out.

Others that I have but don’t use often (should):

YouTube; Digg; MySpace…  and many others, I am sure.

These are just a few tools that I use. There is only so much time to do everything!

The key — you must get on-line and discover this for yourself.

 

 

Twitter

06.11.2011, No Comments, Uncategorized, by .

I have been on Twitter for about 18 months. I like it. I just passed the 400 followers mark. Not a huge number but I am happy with it. It is a good way to keep score. But what is more important is when I run into people in the industry and they mention my tweets.

I know many of them follow me through my LinkedIn page. I drive all my tweets there.

I also am happy when someone deems a tweet of mine worth of a re-tweet (RT) and sends my comments to their followers.

There are some people I connect with through Twitter instead of email or the phone. We talk via Twitter. It gets to the point where we have dozens of ways to reach one another — some prefer DMing on Twitter.

I use Twitter for my first shot on breaking news. If something big happens, it hits Twitter immediately. It doesn’t replace news, but it directs it for me. I will then click through to CNN, MSNBC or FOX etc. But I do like the way Twitter is in real time.

Twitter is fun. It connects many of us.

I find that celebrities are boring on Twitter. A started out following dozens of them. Now I only follow a handful. Most have nothing to say.

I use Twitter a lot for my profession — Book Publishing. I find individuals tweeting about publishing vastly more interesting than the publishers themselves. It always feels like publishers want to sell me a book (which is true) but publishing professionals just want to talk about the industry. They give me book recommendations that I take 100% more serious than any book publishing tweet.

I like Twitter. I have kept those that I follow to 500 or less. It makes for some tough choices but I want to maintain some level of control.

If you are on Twitter — check me out at @38enso.

If you are not on Twitter — get on it. You need to know how it all works.

Twitter is one of the most important tools of today — you are missing out if not involved.