Kindle as Magic 8 Ball. Illustration by Todd Goldstein
This year, for the second time in a row, I spoke with about a dozen ebook and book-publishing experts to get their predictions on what would happen in book publishing in 2013. I compiled the information and published this: Ten Bold Predictions for Ebooks and Digital Publishing in 2013.
The thing is, while I think these are solid predictions and will probably be more accurate than our predictions from last year(which have turned out to be really accurate — but more on that in the new year), it doesn’t really scratch my personal itch for making predictions. These, of course, are the predictions of experts that I merely filtered and compiled. When do I get to make predictions?
1. Goodreads becomes a bookseller.
This one is a bit more than a prediction. I have spoke with three sources familiar with the matter (though none of them are at the company) that have given me credible background on the matter: Goodreads, the massive social network dedicated to books and readers, will turn into a bookseller in 2013. When I asked founder and CEO Otis Chandler about it earlier this year, he said “not yet.” When I approached the company with my information and asked for comment, a spokesperson told me, “We don’t comment on rumors or speculation.”
Fair enough and time will tell but let’s think about this for a second. Why not?
The company has more than 12 million registered users who are all there for books and reading — they share book recommendations, find out about new titles and build massive lists of books they intend to buy and read. It already drives a lot of book sales at partner retailers through affiliate links. And it has great relationships with publishers (aka, suppliers) that it can leverage to build stock. So, why wouldn’t the company try to sell books?
Well, for one, it’s risky. Goodreads would likely be giving up its affiliate revenue to go after this and what if people don’t buy? Second, it doesn’t currently sell an e-reading device, so for ebooks, at least, it needs to sell through an app (and give a cut to Apple or Google) or sell files that users will upload to another device. Not a great user experience, though some booksellers are doing it (unless it sold or gave away an e-reading device — not so far-fetched as the costs of those devices approach $0). And on the print side, there are a lot of logistics issues the company would have to solve.
That said, it’s happening, folks. So get ready for a bookseller born of the social media era in 2013.
2. Ebook marketplace gets dynamic and goes beyond discounting.
Book-industry insiders have been privately talking amongst themselves about how the end of agency pricing for the major publishers (the end of their ability to limit discounting by retailers, basically — and slightly inaccurately, but fine) means the end of Barnes & Noble and every other Amazon competitor in the ebook space. The thinking is that Amazon will discount everything as much as it can, driving smaller players that can’t afford to discount as much out of business.
First, I don’t think this will happen. The most important factor for each of the major ebook retailers at this point is getting their devices into the hands of consumers. An owner of a Nook e-reader is likely buying her books on that device. So, as long as each of the retailers can continue to sell devices, they will continue to sell ebooks to the readers who use those devices. The bad news on that front is that e-readers are becoming less popular among consumers.
Second, I think the removal of discounting restrictions could be good for some of the smaller players in the marketplace. They can get creative with what they do with retail. It’s already happening. Barnes & Noble has a program going in the days leading up to Christmas where in-store shoppers who buy an ebook from a pre-selected list can gift an ebook from that list to someone else. Translation: Barnes & Noble is giving away ebooks. That’s a creative retail strategy. From short-term giveaways, to bundles to all sorts of creative deals, we’re going to see this market get very interesting in 2013.
3. Major publishers will form back-list marketing divisions.
I have no direct knowledge of this happening, but how can it not?
Let’s engage in a thought experiment. You are a $1 billion book publisher. You derive 40% of your revenue from back-list sales. That’s $400 million. While at this point probably most of that comes from print books you see in stores and online — perennially popular paperbacks — some of it is ebooks and, in fact, more of it should be ebooks because delivering the electronic file of an old book doesn’t involve hunting down a copy somewhere or printing it on demand. As more people read ebooks, more people will read back-list ebooks. You spend probably less than 1% of your, say, $100 million marketing budget on marketing your back-list.
Do you think it’s reasonable to ask your chief marketing officer to come up with a plan to grow that revenue by 1% ($4 million) next year? Say, by investing about $1 to $1.5 million on a small team of five people with a small advertising spend? Large publishing companies have back-lists of thousands or even tens of thousands of books that they can sell as print-on-demand books or electronically. Some of the books are tied to holiday seasons. Some are about people who are in and out of the news. Some are about things like World War II that are always popular topics for books, especially in December, for instance.
I think in 2013 publishers are going to figure out how to profitably market their back-list titles.