At a well-attended, hour-long session called ‘Is the US EBook phenomenon a harbinger of every country's book future?’ at the Frankfurt Book Fair Wednesday morning, Google Books’s Tom Turvey questioned a panel of executives, from both the U.S. and Europe, about where the digital market is, and where it’s headed. Among the main topics were: devices, pricing and rights.
Most panelists agreed that, as in the U.S., the European market will likely be device driven and that book retailers abroad, as the case has proven in the States, will need their own e-reader to be competitive. Bloomsbury executive director Richard Charkin said that in the UK this is indeed the case, with Amazon overwhelmingly dominating the market with its Kindle. Charkin also noted that the country’s big chain retailer, Waterstone’s, is set to announce its own reader in the coming weeks, proving a company does need a device to stay competitive in digital sales.
Although some panelists were more squeamish than others when Turvey asked everyone to estimate what percentage of their revenue now comes from digital, and how much of their backlist is available in digital, a few statistics were offered. Charkin went up to bat first and, while he put the caveat that he was going off of a very rough personal estimate, he thought Bloomsbury has, on the adult trade front, roughly 75% available in e. (He noted that the 25% of titles not available is likely to do with rights being held back by discussions with authors or estates.) As to revenue, he estimated that digital now makes up between 5 and 10% of Bloomsbury’s revenue.
Joerg Pfuhl, CEO of Random House Germany, said about 5,000 of his house’s titles are available in e-book, and digital currently account for about 2% of the house’s overall revenue. He also noted that in Germany e-books currently account for about 1% of the overall book market.
Tim McCall, v-p of digital commerce at Penguin, offered even fewer stats—he said he could not speak to revenue--but acknowledged that one area Penguin is lagging in is children’s e-books where the market for picture books is just developing. (Although McCall initially used the term “lagging,” he quickly rectified that by saying the market for digital picture book is nascent, more than anything else.)
When the issue of pricing was raised, namely the question of whether low prices (and discounts) are the only way to drive consumers to digital content in particular, Charkin said pricing has remained one of the trickiest elements in the book business, in digital and print. Nonetheless, he said, the line of thought that the “e-book price should slavishly follow the print price is bizarre.” He added that he feels there are no “rules” when it comes to pricing and that, overall, if publishers follow a lowest-common-denominator pattern in their pricing, the ramifications could be disastrous. As he put it: “If we follow to zero, [as an industry] we are completely doomed.” McCall also felt pricing is a dicey issue and noted that he feels consumers are willing to pay a very broad range of prices for digital content.
All panelists also felt that, as the e-book market expands, the need for publishers to acquire world English rights does become more necessary. As Peter Balis, executive director of e-commerce at Wiley noted, the acquisition of world English “will become de rigeur in the industry.” He also added that Wiley is even looking into the possibility, one day down the line, of doing its own translations, on the academic side, to possibly handle its own sales and distribution abroad. Charkin, who said buying world English is certainly necessary now, noted that, for something like Bloomsbury’s adult trade list, it would probably never make sense for the house to try and publish in other languages.
When the topic of the agency model came up, specifically whether agency or wholesale is better for publishers, a range of responses came through. Almost all of the panelists said choosing one over the other is often a personal decision. McCall said that, at Penguin, it was the right choice for the house to go agency, and Balis concurred. Balis, like McCall though, said there are things to think about. “For Wiley, being under the agency model has worked,” Balis said, then added: “but the decision should not be taken lightly.” Balis said that a number of changes need to be made, on the backend and elsewhere, for a publisher to switch from selling wholesale to selling agency, and significant work needs to be done ahead of time to make the transition.
That digital represents opportunities to sell more books, and reach new (and different), consumers was also something the panelists largely agreed upon, however they said, there are hurdles. While all the panelists seemed optimistic, on some level, about the digital business, Charkin noted, echoing Balis’s warning, that going into ‘e’ is an involved process. Äyou can’t just say let’s do some e-books and put a marketing person in charge. You need to get a program in place.”