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Vin Crosbie Vin Crosbie
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Dorian Benkoil Dorian Benkoil
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Bob Cauthorn Bob Cauthorn
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Ben Compaine Ben Compaine
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Dorian Benkoil senior consultant at Teeming Media. An award-winning journalist and editor, he was a foreign correspondent for AP and Newsweek, and international and managing editor for ABCNews.com. At ABC News he moved to the business side, handling sales integration and business development, before joining Fairchild Publications as General Manager for their Internet division, becoming editorial director for mediabistro.com, then a consultant for Teeming Media in New York. He graduates this year with an MBA from Baruch's Zicklin school of business. Learn more about him at Benkoil.com or his blog - MediaFlect.com.

Robert Cauthorn is a journalist, former vice president of digital media at the San Francisco Chronicle, and was the third recipient of the Newspaper Association of America's prestigious Digital Pioneer Award. He launched one of the first five newspapers web sites in the world and is generally considered to have delivered the first profitable newspaper web site in 1995. Cauthorn has been in the middle of the transition from old media to new and is recognized as frank-talking critic when he believes newspapers stray for their mission. In mid-2004 he became the president of CityTools, LLC a new media startup based in San Francisco.

Ben Compaine has divided his career between the academic world and private business. He was a journalist when manual typewriters were considered state of the art, but also led the conversion of his college newspaper to cold type. He has started and managed weekly newspapers. His dissertation at Temple University in 1977 was about the changing technologies that were going to unsettle the landscape of the staid and low profit newspaper industry. Since then he has focused his research and consulting on examining the forces and trends at work in the information industries. Among his most well-known works (and the name of his blog) is "Who Owns the Media?".

Vin Crosbie has been called "the Practical Futurist" by Folio, the trade journal of the American magazine industry. Editor & Publisher magazine, the trade journal of the American newspaper industry, devoted the Overview chapter of executive research report Digital Delivery of News: A How-to Guide for Publishers to his work. His speech to the National Association of Broadcasters annual conference was one of 24 orations selected by a team of speech professors for publication in the reference book Representative American Speeches 2004-2005. He has keynoted the Seybold Publishing Strategies conference in 2000; co-chaired and co-moderated last year's annual Beyond the Printed Word the digital publishing conference in Vienna; and regularly speaks at most major online news media conferences. He is currently in residence as adjunct professor of visual and interactive communications and senior consultant on executive education in new media at Syracuse University's S.I. Newhouse School of Public Communications, and meanwhile is managing partner of the media consulting firm of Digital Deliverance LLC in Greenwich, Connecticut.
About this blog
Two forces have shattered the news media. Technology is the first. Although media technology is undergoing its greatest change since the day in 1440 when Johannes Gutenberg first inked type, for more than ten years now the news industry has mistaken new technologies merely as electronic ways to distribute otherwise printed or analog products. Estrangement is the second. The news media has lost touch with people's needs and interests during the past 30 years, as demonstrated by rapidly declining readerships of newspapers and audiences of broadcast news. How we rebuild news media appropriate to the 21st Century from the growing rubble of this industry is the subject of this group weblog.
In the Pipeline: Don't miss Derek Lowe's excellent commentary on drug discovery and the pharma industry in general at In the Pipeline

Rebuilding Media

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July 17, 2009

Another Innovator's Dilemma: Book Publishers Uncertain About E-Book Releases

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Posted by Ben Compaine

According to a piece from The New York Times this week, “No topic is more hotly debated in book circles at the moment than the timing, pricing and ultimate impact of e-books on the financial health of publishers and retailers.” It goes on to says that publishers are concerned about making e-editions of their trade books available the same time as the print edition.

Amidst the uncertainty of how to treat the e-books is the fear of cannibalization of hardcover sales. “If you as a consumer can look at a book and say: ‘I have two products; one is $27.95, and the other is $9.95. Which should I buy?’,” according to Dominique Raccah, chief executive of Sourcebooks.

I’ve been delving into the nuances of book distribution and marketing since I wrote a book about the subject in 1978. And, typical for anything about the book publishing industry, notably missing form this article, and most such discussions, is an examination of the economics and the retail marketplace.

First, for bestsellers, at least—which is what this article focuses on—the real retail price of a hardcover fiction is not about $25 or $30 but the 40% discount price charged by most major outlets, including Amazon and B&N. Thus, the real price difference for most consumers is roughly $15 to $18 for the hard copy vs. $10 for the e-book.

Second, the article does have one data point—that Amazon is paying the same price for the e-book as the hardcover. Assume that is 50% off list. So that from the publisher’s position, it gets the same revenue no matter which format. And it saves the manufacturing cost. And it gets no returns! What’s not to like?

Third, this discussion would be enhanced by knowing how author royalties are being handled these days. If the author is earning a royalty based on a percentage of the revenue the publisher receives, then it is at worst a wash whether it is a percentage of the physical book or the price the e-book distributors pay. And to the extent that books are price elastic, the $10 e-book price point could potentially increase sales, thus resulting in greater revenue.

Comments (8) + TrackBacks (0) | Category: Books | Revenue models | Strategy | media industry


COMMENTS

1. Nate Wilson on November 17, 2009 4:00 PM writes...

Great article! This seems like a no-brainer to me and if major publishers don't make these rather simple changes in their business models, they absolutely deserve to lose their business. My opinion is that there will always be demand for the nostalgia of paper print, albeit a smaller niche as the future progresses. For now, I am not impressed enough with the limited capabilities of handheld e-book readers to buy one and commit to digital books. My laptop is an inconvenient way to read e-books (relative to a light-weight, ultra-portable paper book) because of it's awkwardness, battery limitations and cumbersome size. The only limitation keeping my iPhone from being the ideal e-book reader (within the constraints of currently available technology) is its too-small screen size. Apple designers take note.

Permalink to Comment

2. clie78787878 on December 4, 2009 5:09 AM writes...

" .Hello,

'Yes', the Cart can be used for subscriptions.

Majority of our merchants' buyers are actually international. Sadly, not a lot of local users are accustomed to buying things online.
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3. clie78404743 on December 4, 2009 6:33 AM writes...

" .Hello,

'Yes', the Cart can be used for subscriptions.

Majority of our merchants' buyers are actually international. Sadly, not a lot of local users are accustomed to buying things online.
It does not include a website (although we also offer that service separately). You can get any 3rd party to do the website and we will just integrate with them.
regards
hazz.hazz"

Permalink to Comment

4. clie78404743 on December 4, 2009 6:33 AM writes...

" .Hello,

'Yes', the Cart can be used for subscriptions.

Majority of our merchants' buyers are actually international. Sadly, not a lot of local users are accustomed to buying things online.
It does not include a website (although we also offer that service separately). You can get any 3rd party to do the website and we will just integrate with them.
regards
hazz.hazz"

Permalink to Comment

5. Rabblais on June 11, 2010 2:25 PM writes...

The real difference SHOULD be that e-books have a huge advantage. The printing costs, binding costs, shipping costs, etc., have all disappeared.
Check out Baen Books (Baen.com). I've been buying books for years, e-books, at a great price. For my favorite authors I also get the dead tree edition.
In the long run, this is a great way to get books. If I see one I like, I can order it and start reading in a couple of minutes.
This is so successful that Baen actually has about 50 FREE books online. Why? Great advertising for their different authors and series.
This is the wave of the future. It's ecologically better (no waste of paper). It's quick. It's a far better medium for textbooks. A school district could buy a years license for X number of downloads. And books could be updated each year. All for far less money.
This is the new tech. In fifty years, this is the only way it will be done. Since we CAN do it now, maybe we should.

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6. Kaleberg on July 1, 2011 10:15 PM writes...

I just popped over to Amazon, and there the typical Kindle book is maybe a dollar or two cheaper than the physical copy on a typical price between $10 and $20. That isn't much in terms of savings. The paperback or a used copy is often cheaper than the electronic version. Of course, a lot of people find the electronic version to be worth its relatively high price, but ebooks aren't about cost savings to the consumer.

The big difference is price fixing, or agency pricing, as they call it. Amazon can set the prices on physical books, so they are frequently sold for half the publisher's list price. The publishers set the prices on ebooks, so they can enforce their high prices.

I usually buy the hard copy. If I don't like it enough to reread it, I resell it on half.com. Otherwise, I spend the 10 or 15 minutes it takes to scan it with a sheet feeder. Then I recycle the original.

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