In a world where people increasingly consume their content on multiple platforms—watching TV recorded on their DVR, as well as downloaded to their iPad; reading the New York Times in print Sunday mornings, on their Kindle during the morning commute, then on their desktop at the office—questions are starting to be asked about why publishers are not allowing readers easy access to both digital and print. (Studies show that most e-book readers also buy print books.)
Although bundling—packaging a frontlist hardcover with an e-book edition in one sale—has been lightly tested by publishers, some executives believe that the time has come to wholeheartedly develop this model.
Bob Miller, at Workman, is one of the few publishers to have tried bundling. Last October, Workman created a bundle for Hillary Jordan’s novel When She Woke, which was published by the company’s Algonquin Books imprint. The promotion—readers who bought the hardcover received the digital edition for free—was offered to all retailers, but only Barnes & Noble and indie bookstores participated. “I’m very interested in the idea of using digital formats to help sell physical formats,” Miller said. “And I think consumers don’t want to have to buy the same book multiple times, for multiple formats.”
For those in publishing who see bundling as an enticing model, the assumption is that it will get consumers to pay a higher price for the content they want, while also delivering it the way they want it. As an added bonus, bundling has the potential to bolster the virtues of print. Currently, though, there are major issues that the industry needs to overcome before it can offer bundles.
The When She Woke experiment, if anything, highlights how difficult it can be in the current retail environment to offer a seamless way for consumers to simultaneously receive two formats of one book. Transaction problems were the major issue: a reader who bought the hardcover at a bricks-and-mortar B&N had to go to bn.com and plug in a code to receive the digital copy. More laboriously, those buying the hardcover at an indie bookstore had to go to indiebound.com, where they could then click through to another third party e-tailer, and then, at that point, use their “free book” code.
One of the biggest hurdles to bundling, though, may prove to be the current system through which the big six publishers sell their digital books. Aside from questions about royalties and pricing—what should an author, who normally receives a separate royalty on print and digital editions receive when the two formats are combined? what should publishers charge for a hardback sold together with an e-book?—there is the issue of the agency model. Because the big six sell their print books on the wholesale model and their e-books on the agency model, this poses tricky questions on what terms to set for bundled editions.
Some executives, though, see opportunity. Evan Schnittman, managing director of group sales and marketing at Bloomsbury USA, has been talking about bundling for months now. The idea, he said, is beginning to interest more publishers, as well as retailers. In a presentation at Futurebook—an event in London, where Bloomsbury’s parent company is based—Schnittman laid out a possible model for a book bundle. For Schnittman, the upside of bundling is manifold: the consumer can enjoy the malleability of digital reading without forgoing the joy of retaining the paper book, while the author/publisher/retailer benefit from charging more for the content. In Schnittman’s view the bundle, which he dubs an “enhanced hardcover,” could be priced at 25% more than a regular hardcover. The result? “The retailer is happy. The author and agent get a higher royalty. The consumer wins,” he explained.
Since the agency model hampers the big six publishers from bundling, Schnittman also thinks mid-size and indie houses (neither of which sell agency), like Bloomsbury, might be able to reap the benefits with a market advantage. And to those who say bundling will devalue one format? Schnittman says this is an old-school mindset. “You’re never going to have consumers buy two different versions and be happy about it. [With bundles you’re] offering convenience plus permanence.” Schnittman also believes that bundles will only appeal to a small percentage of readers; he guesses it could be anywhere from 10% to 35% of the customer base.
The largest retailers had little to say on the subject. Amazon did not respond to questions about bundling. And Barnes & Noble, asked about a 2010 speech CEO William Lynch made to the AAP on this very subject—at the time he was discussing a planned promotion in which the retailer was offering customers, for a select period, the chance to buy a discounted e-book edition of a title when they purchased the hardcover—also did not comment. Matt Supko, technology director at the American Booksellers Association, was more forthcoming, saying bundling represents “a potentially exciting opportunity for indie bookstores,” even though “we’ve only just begun to explore the possibilities.”
Although reps for the big six largely declined to comment on the topic of bundling—most said they could not speak to a sales format they were not trying—one insider at a major house said there remain concerns about “pricing and perceived consumer value” as well as “distribution channel hurdles, both technological and logistical.”
But for those at the major houses who say that the demand for bundling is not there, from readers or retailers, there does seem to be a disconnect. Agents, for one, seem to be interested. Robert Gottlieb, chairman at Trident Media Group, would like to see bundling experiments move forward. “The music industry has been bundling MP3s with CDs and vinyl records for some time now and have not seen a leveling off of music sales,” he said. “In fact, the music industry has seen a healthy 3% overall growth in recent years.” Furthermore, Gottlieb agrees with Schnittman: “Why make someone pay twice for essentially the same thing?”