Like much of our world, BEA has shrunk but also expanded.
It has shrunk in physical size and razzmatazz: gone are two crowded floors and many big publisher stands bedecked with actual books, in favour of blown-up jackets, selected proofs, booth signings, and cheaper space. It has expanded to try to make up for changes in a business being challenged, frightened and inspired to reinvent itself, a usiness that is not in control of the situation and lacks even a reliable three-year plan. In short, BEA is a five-ring circus juggling identities: a traditional exhibition showcasing big ummer and autumn books; the American Booksellers Association's annual meeting place; BEA's own-brand "Big Ideas" conference; the Global Market Forum, this year focusing on Italy (next year will be Russia); the separate International Digital Publishing Forum (IDPF); and the new guys on the BEA fee-paying circuit, Mike Shatzkin and Michael Cader, débuting Publishers Launch.
In the statistics department, Bowker's Kelly Gallagher gave numbers from the fifth Book Industry Study Group/Bowker survey on consumer attitudes to e-books, but this time also surveyed student attitudes to digital content in higher education. Out of 78,000 consumers, the fourth trade survey garnered 750 respondents; the fifth captured 1,200—a big increase mirroring marketplace activity.
Bowker's stats for the size of the trade e-book market closely align with those of the Association of American Publishers and IDPF: in October "the curve really took off." For A-list authors with new frontlist (mainly fiction), e-books represent on average 25%–30%, ut can go as high as 60%; overall, e-books comprise 11% of trade. However, April saw the market dip.
"One month doesn't a headline make," Gallagher warned, "but this market will have fluctuations." On the other hand, the college text e-market is "just on the launch-pad", and represents only 6%. It's trailing trade by seven to eight months, and Gallagher does not expect it to catch up any time soon.
Survey respondents said the most compelling reason to buy a trade e-book was not price, but portability. Lower cost, compared to a paperback, only ranked sixth in terms of importance, "so there is still some room for pricing elasticity"—especially for apps. What consumers wanted on their "wish list," in order of desirability, was to be able to give or lend an e-book; to view colour graphics; and to buy an e-version before the print copy goes on sale.
In general, students do not like it when e-text subscriptions expire at the end of term. They also suffer from "digital fatigue" and choose print over digital three out of four times. Such "fatigue" also affects the trade YA and 20-something e-book markets. Yet students do value other forms of digital content: online quizzing, self-assessments, course outlines and management systems.
In an IDPF session, Kobo's Michael Tamblyn provided four conclusions gleaned from this past year: First, pricing is changing dramatically. A year ago, $10 was the top frontlist e-book price, but now things have diverged. The $7.99-$8.99 non-agency titles have been leading in sales; below that is the agency band of $12.99-$16.99; but then there's that whole other level of experimental and self-published works, priced from $0.99 to $2.99.
Secondly, self-publishing is big, and represents 7% of worldwide sales. Third: tablets have not killed e-ink. At this point, e-ink consumers read more and generate more profit. Kobo's BEA announcement of a new black-and-white touch-screen e-ink device priced at $129 (it comes with a $10 gift card) launching for Father's Day should be seen in that context.
And his fourth and final point? That this is happening across all markets worldwide.
Who wants enhanced e-books?
IDPF and Publishers Launch both positioned themselves as bringing international visitors up to speed with the American market . . . and reminding Americans that digital is global. Attendees could be forgiven for some confusion: all of the duelling BEA conferences featured many of the same panelists: Sourcebooks' Dominique Raccah, Bloomsbury's Evan Schnittman, the Cursor start-up's Richard Nash, Google's Tom Turvey, Wiley's Peter Balis and Ingram's Andrew Weinstein, among others.
One of the major problems identified in various panels was how to transform non-fiction and children's books into e-books. In an IDPF executive roundtable, Raccah asked: "How fast can we find digital platforms for these categories?" She also added, on the subject of enhanced e-books, that "so far we haven't seen much take-up. We haven't found a good methodology for immersing the reader". "What people have created are enhanced DVDs, but we can't sell them," Schnittman agreed. They are "a unit-price preservation mechanism, producer-driven, not consumer-driven," was Nash's similar conclusion. To Raccah, it is "very clear" publishers are going to need to work with advertisers but others disagreed. "Books and ads are two competing, not complementary revenue streams," Nash said.
In another IDPF panel on transforming the business of publishing, Cengage Learning's Ken Brooks spoke of "the cash vice we find ourselves in". He said: "Digital is breaking the stable relationship between product investment, revenue and cash. As revenue from old product is falling off and digital product is sold at lower prices, we have a greater need for cash. We need to find savings from current operations and be far more disciplined in the product development process. At Cengage, we had 200 freelancers doing page make-up. We now have five. That freed up internal staff time."
In a Big Ideas panel on the future of e-books, organised by Google, Perseus c.e.o. David Steinberger emphasised that although discovery is the big challenge, "digital is very good for hunters, but not so good for gatherers". Addressing the subject of proliferating bestseller lists, O'Reilly's Andrew Savikas did not see a strong future for the "objective, single-source list." Evan Schnittman disagreed, pointing to consumers' need for authoritative sources of recommendation.
B&N's Theresa Horner, addressing the subject of "breakthrough business models" for IDPF, gave some eye-opening statistics about the Nook. "It took a huge effort to train employees within the stores . . . But our members who own Nooks spend 120% more, and a large percentage of Nook Color owners are new customers to B&N," she said. The B&N "More in Store" promotion, which gives special offers to those who bring their Nook to a B&N store, has had over 225,000 sessions of people reading digitally in-store and on average a 25% conversion rate to purchasing the e-book, which in some cases rose to as high as 70%.
The PubIt self-publishing platform, launched last October, has put 35 titles into B&N's "Top 200", including the current number one bestseller.
Explosion of foreign language digital titles
A recurring topic was whether the Nook might go international, specifically with the new Waterstone's ownership. No answer was forthcoming, but at a Publishers Launch panel evidence was presented by B&N's Patricia Arancibia, Random House Mondadori's Carmen Ospina, MVB GmbH's Ronald Schild, and Brazil's Miriam Gabbai about foreign-language digital content being sold to consumers in the US and elsewhere. For years, the Spanish language print market was very fruitful for B&N, but there were never enough titles available to sell and deliver quickly. Arancibia said: "Now we already carry twice as much in digital as we ever carried in print. Sales are outrageously high; 80% of our Spanish language customers are already buying digital. So we had an idea: have an international store in the US. We have more titles in German, Italian and Portuguese than were ever available here . . . Sales of foreign-language books are growing faster than those in English; we didn't know it would work so fast."
Ospina said Random House Mondadori signed with B&N last year as Spain was slow to digitise. She said: "They are selling more e-books for us than what our largest client is selling in Spain. And Spain may not be our biggest market: Latin America and the U.S. could be, and we'll become global publishers."
The biggest problem, though, is differential pricing. "I'm not sure differentials can be sustained world-wide in the long term. A global business is global; we need more innovative strategies as an industry," Schild said.
Differential pricing also reared its head in an earlier panel, devoted to lessons learned from the e-book experience in America. As Evan Schnittman pointed out from Bloomsbury's perspective, "with multiple currencies, languages and laws, Europe is very complicated.
"In the U.K. there's no VAT on print books but there is VAT on e-books, so you have to think very hard about how to price e-books there." It is for that reason that Schnittman believes in "one global English market, period. The only way to survive is to not sell rights."
Random House's Nina von Moltke looked at the pricing and legal differential headaches around the world, and predicted the continued existence—and success—of publishers, who have resources to eclipse even the most successful self-published authors. Other lessons from Schnittman, von Moltke and Balis which emerged from the BEA include: build a scalable workflow nimble enough to support marketplace changes; the importance of bibliographic metadata; build content that can become apps—but remember, today it's apps, and tomorrow the trend will be something else; errors creep in in digitisation, so plan on a second copy edit after the conversion; in digitising, begin by prioritising by sales, but over time prioritise by author—people want to read more of the same in e-books.
A final word should go to Carlton's Jonathan Goodman, a longtime BEA veteran. Whatever may happen with Amazon, B&N, Google, Apple, the big six and everybody else, "this industry [will] reinvent itself," he said. "There has to be a process of destruction, annihilation of the old order, and rebuilding. But the industry will survive."