A panel discussion recorded at Digital Book World Conference & Expo 2013
- Brian DeFiore, Founder, DiFiore & Company
- Joseph Mangan, Chief Operating Officer, Perseus Books Group
- Nathan Maharaj, Director of Merchandising, Kobo Inc.
- Ashleigh Gardner, Director, Content Management, Kobo Inc.
For podcast release Monday, January 28, 2013
KENNEALLY: Good afternoon and welcome, everyone. Welcome to a program called Clearing the Path: Eliminating Obstacles to Global Ebook Sales. My name is Chris Kenneally, I’ll be your moderator. I’m with Copyright Clearance Center, director of business development there. We’re online at copyright.com. And my Twitter handle is @BeyondtheBook.
Digital Book World has asked Kobo, one of the more fully developed global ebook distribution networks, to explain what kinds of problems prevent ebooks from being sold in some territories where they should be available or where you, the publishers, would like them to be. They’ll describe a variety of issues, and then we’re looking forward to a lively panel discussion with some special guests.
I should warn you – and you may have seen this already, I certainly did in earlier presentations this afternoon about the whole global sales challenge – that there’s going to be some disagreement on the stage, and presumably with you in this room. But I was thinking about all this and reminded of something Gandhi said. He said, “honest disagreement is often a good sign of progress.” So we will expect that by the end of today’s session, we will have made some progress in this area.
With that as a way of introduction, let me welcome to the stage, then, our two panelists from Kobo. Here to my left is Nathan Maharaj. Nathan, welcome.
MAHARAJ: Hi, Chris. Good to be here.
KENNEALLY: He is director of merchandising for Kobo, manages an international team of merchandisers based in Toronto and throughout the EU and Brazil, and he works with book publishers worldwide. A merchant of digital content, Nathan boasts retail roots running from the sales floor to the central buying office. And then on the very far end is his colleague, Ashleigh Gardner. Ashleigh, welcome.
GARDNER: Thank you.
KENNEALLY: Ashleigh is director of content management at Kobo, helping publishers worldwide list their books for sale and also answering all of their problems around metadata and e-pub. With that as the introduction, Nathan and Ashleigh, show us what you got.
MAHARAJ: OK. Thank you. Let’s jump into it, then. We’re going to talk with you about the stuff that gets in the way of the hard stuff – the stuff that’s sort of out of the ordinary operational menu. We’ll just get on with it. What we really see – so we want to introduce ourselves, sorry.
We’re Kobo, hi. We have 12 million users worldwide. We’re selling ebooks in like 68 languages. I’m sure we can’t gather that many spoken languages in this room. You all look very smart, but I just think it’s a lot. We’re selling to over 100 countries in any given day. We were acquired by a Japanese e-commerce juggernaut called Rakuten about a year ago, and it’s been crazy fun. We are the ebook partner and solution to booksellers around the world. We also have some very popular and award-winning devices, which we think are quite handsome, and they’re available throughout the world as well.
These are some of the places we started selling our devices and ebooks, and dealing with publishers around the world last year. That’s last year. Wow. Prior to that, this is where we were already at. Satellite offices around the world, based in Toronto, that’s us.
I am Nathan Maharaj, as stated. I am director of merchandising, which is basically head bookseller.
GARDNER: And hi, I am Ashleigh Gardner, I am our director of content management. In my job, I work with publishers to help make sure that their books are live in-store or on-site without any errors in as many territories as their rights allow. Something that we often find ourselves doing on our team is answering questions from publishers and from readers wondering why their books aren’t available in certain territories. Often, we can track this back to an operational or process issue on our side. So when we were asked by Digital Book World to talk about this, Nathan and I sat down and came up with several reasons on what we thought were the biggest hurdles to having your titles available in as many territories as possible.
One of the first things that we want to talk about is the idea of being agency everywhere, and some of the complications that ensue from agency contracts in certain territories. To start off, we just want to go over one scenario. You’re a US publisher, you’re agency in Canada – in what currency would you communicate your agency prices in Canada? South African rand, Great British pound, Canadian dollars, or US dollars? I think that this is quite a simple first example. I think we all in the room agree that it should be CAD. Although being a Canadian consumer myself, I can tell you that not all publishers always recognize that and communicate it.
As we all know, in the agency model, the power of setting the price lies with the publisher. And in doing so, so does the responsibility. In that first example, I think we all know, like I said, in Canada, it’s Canadian dollars. But as we go out into other territories, and even remaining in English-language territories, it does get more complicated. Many publishers aren’t aware that in Ireland, they do not use the pound, but they use the euro. Or that in New Zealand, they cannot send Australian dollars, but we do require a local New Zealand dollar price.
If agency is setting the price the consumer pays, we do expect you to be pricing in the currency the consumer is paying in. That’s not to say that we can’t convert prices, and in fact, we do. But that does need to be explicit. That cannot be an ambiguous agreement. We do need to hear from you and what you would like.
But when we get into foreign exchange, that becomes discretionary to the retailer. Which bank’s rate do you want us to observe? How often is it updated? Are all of your retailers working on the same schedule? If you’re asking the retailer to do the exchange, you’re asking us to take part in setting the price. When we do get into exchanges and currencies, you lose your pricing strategy. I think we all agree that 9.99 is a much stronger price point than 10.14.
One of the things we wanted to talk about, as well, is how many agency publishers have always supplied us with the symmetrical rights and currency types, and have never had a book that has been deactivated when it should be active. That is none. Every single agency publisher that we trade with has had unexercised rights in the past because their contracts have been out of step with their operations. These aren’t fringe markets. We’re not talking about Brazil or South Africa. These are major releases that have been missing rights in Canada or Australia because we have not had the proper pricing to sell.
We often find that publishers make this mistake when they’re doing things out of process. Whether it’s a new title late in the season or an embargo title that wasn’t sent through their normal operations route, or it’s because they’ve just opened up agency in a new territory and they haven’t finished completing going through their backlist. And then there are, additionally, other publishers that we have to call weekly and remind them that we do need more than just a US dollar price.
Another issue that we come across frequently is the complex rights composites and how best to communicate them. There are many translation steps that go from signing the contract to the data that Kobo receives in ONIX. There are many people along the steps, and we often find ourselves playing some rights-broking telephone. Often we find that the people that are in charge, at least, of distributing those details directly to Kobo are quite junior members of the team, or often interns as well. I don’t think that it’s a situation that any publisher in the room would allow a book jacket to be printed without proper review processes, and yet the metadata is being distributed without any second set of eyes.
We’ve had situations in the past where an intern didn’t understand open market and just sent everything with US rights because it was easier. It took a long time for that to be corrected. We trust at Kobo that the metadata that is being received is accurate. If we have no reason to doubt it, that’s how it goes up in the system. So it is the publisher’s responsibility to review this and make sure that what is on-site is what’s intended.
And just because you’re paying a digital asset manager and you’re outsourcing it does not mean that what they’re sending is what you’re intending. In this example below, if these are all the rights that you hold, we recently had a scenario where a bug from a digital asset manager – they had a maximum countries in their system as 30. All of the additional rights that the publisher was sending were just cut off.
We’ve also had situations where bugs in upgrades to systems can cause things to reverse. Do you know what your digital asset manager is sending? If you’re not seeing the ONIX, you can’t guarantee that. If all you’re seeing is the Web form that you’re using, you need to know what you’re sending and you need to get reporting that says where your books are.
MAHARAJ: Sorry. I didn’t mean to just hip-check my colleague. There’s the publicity asymmetry, too. English is the biggest example of this, where word happens in one place and spreads around. Yesterday, we knew a lot more about Dan Brown by 9:00 AM because of the UK than we did from any news coming out in the US. We knew that because the UK media was talking about it. It was English, it was easy, and no embargo Random House US could impose could stop it.
That was a micro sort of example. There are macro examples – our pet name for this around the office is the Downton Abbey problem, where you’ve got all of these highly engaged, interested markets that want this. You’ve got this weird behavior of people wanting to read about this thing that they love, and yet not wanting to read about it, because if they read the wrong source, they’ll spoil the whole season. Because this is how the thing’s released – these egregiously long delays from one market to the next.
Obviously, there are reasons. Rights take time to negotiate. When something blows up and becomes valuable, those negotiations drag out, because the price starts changing. All legitimate – none of those reasons are customer-facing. We got to figure that out. And by we, I mean all of us. Nobody’s winning by leaving customers out in the cold and reinforcing every bad stereotype we can about how content creators view customers, and how retailers view the same.
Great example of a contrary example, Oprah last spring picks Wild by Cheryl Strayed. She, of course, points to the Random House US edition. That’s her Oprah 2.0 Book Club pick. Meanwhile, overseas, scheduled for launch now from Atlantic Books. What’s a publisher to do?
This – they released the ebook immediately. They brought it to market ahead of the print. They didn’t change the print schedule. Print went ahead as planned, although I’m sure those plans were much better informed by having sold a few thousand ebooks ahead of time. Brilliant, agile – it’s a small thing, but they nailed it, and it would be great to see more of that kind of thing. If somebody else is doing publicity for you, you’re allowed to use it. The customer can’t tell it’s not your edition that they’re hearing about.
This one’s ugly. This one hurts us, because it’s people fighting. I don’t like people fighting. Toes get stepped on, right? Things are complicated. Kobo’s one of the few ebook sellers that maintains everything in one central office. You don’t trade with a different Kobo if you want to do business in the UK. It’s all coming through Ashleigh’s team. It’s going to get merchandised by a member of my team.
In our database, there’s a certain amount of crushed toes and bloodied toenails. Traditionally, it’s happening to markets regarded as secondary, where someone has sold rights and not taken the rights out of their composite, so there’s redundant editions, they’re sitting there, they’re in the catalog. It’s dynamic. Rights are getting sold, they’re getting bought, they’re bouncing all over the place.
It comes back to the integrity of the operational systems, like Ashleigh says. If this stuff is important enough – if selling rights is important enough to attract attention of senior people in the organization – then the integrity of the database that communicates that to retailers is probably worth more attention than the intern or most junior member of staff can muster.
Like Ashleigh says, every publisher’s metadata is gospel. We don’t start second-guessing – this guy’s probably right, I think what happened here was – we don’t. It’s just such an ugly precedent. It’s hands-off. We let both parties know there’s a conflict, and we will update at the speed of metadata as they come to a resolution. The last thing we want to get into is resolving the playground disputes. It would be better if there weren’t any, because someone’s stealing someone else’s sales in that case.
Last story available in Fifty Shades of Grey. This is the last untold story. Lean in close. Fifty Shades of Grey, it was a case where rights were sold and the customer never noticed. Random House bought up rights worldwide, it was already selling like hotcakes from the Australian micropublisher Coffee House Press.
When Random House bought those rights, they were very, very careful to make sure that there was always a book available with each retailer. They worked with us very closely. We have every reason to believe they worked with all our competitors just as closely to ensure that we had their edition loaded successfully, ready to go, on sale, before we took down the one that they’d bought the rights from.
That was about the most harmonious situation you could ask for, but it wasn’t replicated by everybody else who bought erotic romance novels out of the self-publishing market last year. There was some disruption caused, where someone would say, well, we bought rights. They were going to take down their rights – this book is now not for sale for this period of time, when presumably it was bought because it’s a hot commercial property.
It’s a problem, it’s another one of those things that there’s a good reason for it that we can all agree on, but for the customer, it makes absolutely no sense. It doesn’t make any business sense, either.
That’s it to set up this discussion. I know this is going to be vigorous, and we’re going to argue, and there’s going to be more people fighting, but I’m going to be OK. That’s us. Tweet at us, e-mail us, thank you very much.
KENNEALLY: OK. Well, thank you, Ashleigh and Nathan, for that. Before we get started with the discussion, let me introduce our other two panelists here. To Nathan’s left is Joseph Mangan. He’s the COO of the Perseus Book Group. Joe, welcome.
MANGAN: Thank you. Good to be here.
KENNEALLY: It’s good to have you here. In September 2008, under Joe’s guidance, the company launched Constellation, the book industry’s leading digital service for independent publishers. Prior to joining Perseus, Joe was a managing director at Razorfish, responsible for all the company’s activities in the northeastern United States. Prior to that, he was a principal at Booz Allen Hamilton, where he specialized in advising media and entertainment companies.
To his left, we have Brian DeFiore. Brian, welcome.
DEFIORE: Thank you. Nice to be here.
KENNEALLY: Brian’s a literary agent who started DeFiore & Company in 1999 after close to 20 years as an editor and executive at several major publishing houses, including Random House, Hyperion, Dell, and St. Martin’s Press. In the last few years, the company has had over a dozen New York Times Best Sellers, and dozens of other titles on regional and chain store best-seller lists around the country.
Brian serves on the board of directors of the Association of Authors’ Representatives, a literary agents’ organization, association, and he’s the chair of the AAR’s electronic rights committee. Finally, he’s on the faculty at the Center for Publishing at New York University.
We promised people at the very beginning a healthy disagreement. Let’s start with that. I want to turn to Joe. I promised it, and we’ll see whether I can deliver. Joe, metadata is the publisher’s problem, right?
MANGAN: Yes, it is. But it’s not the publisher’s problem alone, right? It was interesting to watch the presentation. I guess the first thing that I’d like to comment on is there’s good news behind all this, which is we’re much better as an industry – not just publishers, but publishers, distributors, and retailers – than we were three years ago. It really shouldn’t be a big surprise that the ebook as a species isn’t acting like a fully formed adult human being yet. At best, the ebook is a young adolescent.
KENNEALLY: I was going to say in daycare. Is it in daycare? No, you’re thinking it’s a teenager?
MANGAN: It’s a young teenager, yeah. It’s a young, problematic teenager. It’s got lots of potential, some of it not yet realized.
KENNEALLY: How’s the communication, then, between vendors and publishers, in your view?
MANGAN: That’s a theme that I have, and one of the ones I’d like to have some discussion on, is really when we think about the opportunities for ebooks – first of all, as publishers, we’re very driven by the dollars. The reason that we’re much better at ebook metadata than were three years ago, and international ebook data, the reason we’re better than we were three years ago, is because the dollars are starting to materialize.
We as publishers have a limited amount of resources. When I say publishers, I mean Perseus Books as a publisher unto itself, with 11 imprints in house and roughly 400 independent clients riding on our Constellation system. We all have to look at where we apply those resources, and we’d like to lead the dollars a little bit, but not by too much. So it’s hard to get our publishers’ attention and say, you know, you really need to scrub your deep backlist rights data so that we can sell your fiction books in Korea. It’s a hard conversation to get their attention on, as you might imagine.
The thing that we all really work on is the whole ecosystem around sharing and managing the lifecycle of ebooks and the metadata that follows from that. The publishers are, and have been, busily scrubbing their metadata and following the dollar, so working on the territories that matter most and working on the books that matter most, and going deeper and deeper into the backlist.
The stories that you hear are often the ones that fall outside that. They’re surprise hits that people – it was deep in the backlist, somebody won a prize, and now that book is selling like hotcakes, and all of a sudden, the publisher doesn’t even know where the title is, or the jacket.
KENNEALLY: It strikes what’s one of the challenges is a cultural issue here. Which is, in publishing, prior to the ebook world arriving, you published the metadata and that was it. You didn’t worry about it after that. Metadata today is a constantly evolving component of publishing. It’s not simply a fixed one.
I want to turn to Brian DeFiore, though, to get your perspective on another issue that Nathan and Ashleigh raised, which is around the complexity of rights. I think sort of implied there is, wouldn’t it be better if it was all just one simple piece of paper?
DEFIORE: In fact, Ashleigh and Nathan took the winds out of my sales a little bit –
MAHARAJ: I’m so sorry.
DEFIORE: – in their presentation, because that’s exactly what I expected, and it’s what I hear every day of my life. When publishers are trying to buy the rights these days, their first position is always, we want world English rights, we have to have world English rights. Why wouldn’t you give us world English rights in a world like this, in which ebooks can be available instantly around the world, and there’s publicity, there’s leaks from one market to the other?
I get that from a publisher’s point of view, that makes sense. But my job is to look out for the authors. And from the author’s point of view, it often does not make sense. My job in each case is to find a publisher who will do the best job at publishing an author’s work. There’s a real difference between publishing well and just making a book available for sales and distribution. It’s really hard – and as you said, I did my time on the publishing side of things, too, so I get that it’s hard. A lot of agents do think it’s easy.
I get how hard it is to ignite the buzz that will start word of mouth in different – for an American author, in the US – that will get people to hear about a book and want to buy it. It is a really hard thing to do. My job is to find not only the publisher who will do it here, but in the best of all worlds – and by the typical US grant of rights – but also find a publisher who is just as enthusiastic in the UK who’s willing to do the same thing.
I couldn’t help noticing when you showed the story of Wild and how they sped up their ebook that the publisher of the British edition was Atlantic, which is a tiny publisher in the UK. I know nothing – I wish was the agent of Wild. I wasn’t, I know nothing about what happened. But I would bet everything in my pocket that Random House UK didn’t like it and didn’t want it, and said it’s too American, it’s about kites on the West Coast, we don’t get that here. So the agent had to take a deal with a smaller publisher, but one who loved it, and was enthusiastic, and knew how to sell it in their market.
That is why, from the author’s point of view, the best thing often is to find different publishers in different territories that have the best understanding of the work, who will work tirelessly to publish it, and we understand sometimes it throws up some complicated roadblocks to easy distribution, seamlessly. But that’s why it gets done.
I mean, if you have the next book by John Grisham, it’s not hard. Or the next book by Stephen King, it’s not hard. You do it the same day internationally, same publisher – easy. It’s the ones where you have to find a publisher who love an author’s work where it gets difficult.
KENNEALLY: Generally speaking, obstacles are in the eye of the beholder. At the risk of going back on my word about promoting disagreement, Joe, you’re in violent agreement with him.
MANGAN: I am, yeah. It makes perfect sense that as long as there’s a belief that not one publisher is going to do the best job and maximize the revenue opportunity for that title in any given market, we will continue to parse rights. It’s the way the business has worked. It’s the way the business will continue to work. The idea that the ebook is going to be the tail that wags the dog and says, we’re going to realign all that and sell global rights for E and P, or just for E but not for P, really doesn’t seem to make sense to us.
One of the important things – I think it’s more helpful and more beneficial to align E and P in a given market than it is to worry about trying to make ebooks global – global rights. Because people buy books, people promote books, people publicize books, not a format.
KENNEALLY: Nathan, I want to give you a chance to respond to what you’ve just heard. I suppose these are conversations you have on a regular basis, and you hear these things regularly. You brought some of these up in your presentation. It’s not just in the rights area, not just about who holds the rights, but when they have the rights. Is that one of the points you want to underscore?
MAHARAJ: That’s a little bit. It’s less when they have the rights, as we saw in the Atlantic case, it’s when they exercise their rights. To Brian’s point, when they really engage with the verb of publishing, as opposed to acquiring. To Joe’s point, it’s true. It’s unrealistic to expect that suddenly this whole model is over and the format that’s growing is also going to be the one that authors will retain control over, or that it’ll be terribly upset, and that maybe the better approach is to do a better job with the two things coupled.
But I wonder about the growing power of the author – I’m saying it like it’s a real thing, so now we can disagree about whether it’s a real thing or not.
KENNEALLY: We can always disagree about everything.
MAHARAJ: Right, exactly. No, we can’t. I wonder where the author’s retaining those rights – I’m thinking of Hugh Howey, another example. Hugh is a science fiction author. He published with Random House UK. We keep coming back to the Bertelsmanns. I don’t know what the deal is with that. He published with Random House UK his sci-fi series, Wool, which is awesome, by the way. But nobody was exercising American rights, and he had negotiated that he would retain those until such a time as – whatever, I wasn’t at the table.
But in any case, the only way to get Wool in US and Canada was you’re going to get the ebook, and you’re going to get it via Kobo Writing Life or one of our competitors’ self-publishing platforms, but that’s something he did. Somebody does own the print rights, and Wool’s a-coming.
DEFIORE: S&S, I think.
MAHARAJ: Yeah. And Ridley Scott’s got the movie. There is a fragmentation. Maybe it’s less a fragmentation in an absolute sense, but more a gravelly kind of fragmentation – a chronological fragmentation, where rights live one place until such a time as somebody begins such actions that they snap those rights up.
MANGAN: Right. It takes me back to the very first question, which was the ecosystem for managing all this, and that we’re in this young, adolescent stage of that. There’s a lot of conference time – and I think there’s one going on right now, in parallel to this – that’s a metadata management. How to manage your metadata. It’s very publisher-directed.
One of the things that I think is under-discussed, if you will, is publishers need to scrub up their metadata rights, and they need to take them from human-readable form to ISO codes and machine-readable form and all of that, and do it in a much more robust way. But then what do we do with those rights, and how do we transmit those rights, and maintain and evolve those rights over time?
One of the dirtiest little secrets in the ebook business is that ONIX is not ONIX. While there is an ONIX standard for sharing all of this metadata, the way it’s implemented at each vendor, and sometimes the way it’s implemented at the UK version of the vendor, and the Germany version of the vendor, and the US version of the vendor, are all different. And rights is a really clear example of how that works.
To make that real and put it into context, I know some of the ebook vendors are still on the very old model of we will determine the rights in the market by whether you give us a price for that market. Some of them will say, OK, there’s an ONIX field that says, give us all the ISO codes for the territories in which we can sell the book. Some of them say, give us all the ISO codes for the territories where we can’t sell the book.
So it’s not like publishers have this – they do have one source of ONIX, but in sharing ONIX out with each and every one of those vendors, and often different territory destinations for those vendors, each of those ONIX feeds needs to be tailored and made unique. That’s just getting the data out there.
And we’re getting better. As I said earlier, we’re much better than we were three years ago. That is a challenge for publishers. The next challenge for publishers and retailers is, OK, we’ve got the data out there. How do we make changes to it? How do we change rights, how do we change prices, how frequently can we do that? How do we know when the title’s live on-site, how do we know when you took it down? How publishers and retailers interact on all that data is really not very well standardized today.
KENNEALLY: And Joe, if I can stick with you for just a second regarding pricing, because you have an interesting perspective. You’ve got the Perseus responsibility around pricing, and then you work with all the various publishers in Constellation. Are the smaller independent publishers in any kind of disadvantaged position at this time?
MANGAN: I don’t think so, and it’s a really a matter of how hard people want to lean in. There’s at least three or four stages of pricing evolution, if you will. In other conferences in other rooms, we’ve had conversations about who should be doing the localization of the pricing, and how many territories do you actually localize into.
The very neophyte, newborn model would be, I’ve got a US dollar price, I’m going to put that out there and hope that the vendors can convert it. One level of evolvement from that is, OK, I’m going to do the conversions for the four or five major currencies that matter – the Canadian dollar, the British pound, the euro, the Australian dollar – and the rest of it is going to be US dollar conversions.
But then from there – and both of those are really very elementary models. From there, you get to the place where it really matters, which is it’s not just a currency conversion, it’s a localization. It’s a price to market in the individual markets. Where, in some markets as a smart publisher, you want to up-price your book. Canada and Australia being good examples – you don’t want just a straight dollar conversion. In some markets, you want to down-price the book. Rupees is a good example. So now you’ve got to be market-aware and price to market.
And then interestingly from there, again, because this gets complicated quickly, you want to be able to say, well, some of my titles, I want to price using one set of logic, and some I want to use another set of logic. Does the print book exist in the market? If it doesn’t, I might want to price the ebook higher. If the print book does exist in the market, I might want to price the ebook lower. If it’s a business book or a fiction book, again, I might want to price it differently.
KENNEALLY: Right. Ashleigh Gardner, since you raised pricing in the presentation, any response to what Joe’s just said, or does that ring true to your experience?
GARDNER: No, I think that rings true for sure. I like hearing about – and I know Nathan does as well over there – of actual active pricing, and that it’s not this passive thing that you’ve set one price, and just letting it convert. It’s good that people are thinking about it.
But I think that you’re right. It does get extremely complicated as you go into different price types that ONIX has. You can send tax-in, tax-out, agency prices, wholesale prices. We’re seeing new pricing formats that are being introduced. Even within that, the ambiguity that comes when you’re in territories where you’re not pricing.
So you’re sending those five currencies – US dollar, Canadian dollar, euro, GBP – but then you’ve given rights for Australia. So out of those four prices, which one is supposed to be used in Australia? Especially if they’re all different values, what are you, as a publisher, expecting to be paid? Because what we find is that it’s extremely ambiguous in the data. It’s not being sent in an explicit way.
DEFIORE: Can I just bring up one interesting –
KENNEALLY: I was going to turn to you, because you’re literally in the middle of this discussion, and I wanted to bring you back in.
DEFIORE: I was just thinking. An interesting wrinkle here, and it just will make my head explode. I don’t even know what to say about this. But some things that I know agents keep hearing about and don’t quite know what to do about is – so everything we’re talking about on this panel, and everything Joe and Perseus does are English-language books. But what an agent does sometimes, also, is try to sell foreign translation rights to a book.
Say we sell the foreign rights to a publisher in Germany, and the German publisher translates the book, gets it out in their edition, print and ebook probably, and they set their price. Well, a lot of people in Germany are bilingual. Now, you have situations where the ebook publisher of the English-language edition in Germany may try to underprice the German-language edition in Germany, which, of course, was never an issue in the past, because you had the physical cost of actually shipping books by slow boat, and the foreign-language edition would be significantly higher priced.
MANGAN: Or there’s UK publishers.
MAHARAJ: There’s now this new level of competition which just makes you crazy. You can’t even think about how to handle that.
KENNEALLY: Joe, you’ve identified a problem regarding UK publisher, US publishers in that market.
MANGAN: It’s, at some levels, not a new problem for non-exclusive territories, where you’ve got a US publisher and you’ve got a UK publisher, and they both have non-exclusive territory rights in Europe. The basis of competition was broader than it is now in the print world. There’s availability, there’s print quality, there is marketing support.
MANGAN: Yeah, packaging. In ebooks, a number of those really dissolve away, and I think a reasonable concern to both US and UK publishers is if we continue to make Europe, in particular, a non-exclusive market, is the basis of competition the price to the retailer, and is it a race to the bottom? It’s not something that we’ve got a published point of view on, but it’s an issue that I think we’re all starting to really wrestle with more directly.
KENNEALLY: Right. Brian, I do want to bring you back, because you’re the agent, the authors’ representative here. You’re hearing this discussion between publishers and distributors. Are you concerned about a confusion that’s happening between those two roles?
DEFIORE: No. I actually think that’s pretty clear. I think the confusion comes more in the area of what Joe was talking about, the territories in which there can be competing editions of the same book. I don’t think there’s confusion among publishers and retailers.
KENNEALLY: Nathan, if I can turn back to you for a second. You talked about some of the restrictions and some of the shackles that you have in the global marketplace. Talk more about the print/ebook relationship, if you would.
MAHARAJ: I could go so many directions, Chris. I’m sorry.
KENNEALLY: Pick one.
MAHARAJ: Pick one. We’re talking about price, and that’s the nagging concern, of course, as we see vastly different tolerances for prices, as Joe alluded to. Secondary markets like Canada and Australia, the reason they’ll tolerate a higher price is actually because they’ve been given higher prices for a while. One, Canada, was because it’s cold. (laughter) Australia, because you had to put things in a boat and send it to Sydney, and you didn’t know if it would get there, and everyone there is a criminal anyway, right? (laughter)
That tolerance has been built by print. Of course, one can run against it and just say, well, we’re going to do equivalent pricing. What we’ve seen in ebooks is some publishers are pretty disciplined about this. Their ebooks are always below their print. It’s not by a fixed percentage. It’s not a linear relation. It’s very much curved. A higher price exerts more downward pressure on the ebook price. I’m drawing a graph in the air with my finger. This is useless for the audio podcast. It’s probably useless for most of you too.
But what we’ve seen is some where it’s completely disconnected, and we’re alerting them to the fact that our retail partner is a little bit concerned that the ebook appears to be a buck more than the trade paperback, and that their customers are interpreting that as some kind of malicious intent, and not the sort of benign neglect that it, in fact, is.
What’s interesting is, in Europe, there’s much less of an expectation of the differential, which may be because of some fixed-price laws around print, where there isn’t a race to the bottom. That’s the price, and that’s what it is, and that’s what retailers are going to sell it for, and they don’t have a great expectation of clearance sales after Christmas, which we’ve just been through.
We saw completely divergent behavior between English markets and non-English markets, non-English being largely subject to widespread set price laws. There aren’t the retailers showing up in the market and just driving everything to the bottom. They’ll tolerate just a nominal discount for ebooks.
All that said, where we’ve seen most rapid ebook adoption, it’s been where it presents a more substantial discount against buying print.
KENNEALLY: Joe, in looking ahead, you were talking about the last couple, three years, we’ve made some progress. Though we’ve been promoting a bit of healthy disagreement here, you’re promoting a pause moment – giving people a bit of slack, trying to get the infrastructure up to where it should be.
MANGAN: I am, and I’m happy to talk to that. I want to just comment on one other thing on your previous question, which was the dynamics of print versus E in various markets around the world. One of the things that I think publishers are wrestling with more now – and you guys actually brought it about in your presentation – was the release dates, and the staggering of release dates on the print world, which is a legacy issue tied to getting title availability.
You might stagger the UK by a month and the Australia by two months to get the books there and get them distributed. In an e-world, that barrier goes away, so what I think a lot of publishers are wrestling with in international markets is whether or not to have global release dates or whether to drop the ebook and pick up those sales in advance of the print book being available. That’s another kind of E and P issue that I think there’s a lot of thinking on and a lot of experimentation on now.
KENNEALLY: Can you share with us a Perseus position on any of that, or is still really evolving?
MANGAN: It’s a title by title decision, really. I would say title by title and imprint by imprint, depending on the kind of books they publish. If you’re crashing a book in the US, you do not want to hold up the US release date so that you can have a global release date, and make sure the books are in the UK and Australia on that global date. If you’re not crashing books, and you’re a publisher that’s got a very methodical release schedule – not that many of them out there. But if you are one of those, you can lean towards global release dates. We have publishers within our group of 400 that are actually doing global release dates today. But it really is a publisher by publisher and a title by title decision.
KENNEALLY: Brian, you hear what Joe has to say. How do you feel about that situation?
DEFIORE: Listen, I think from an author’s point of view, a global release date would always be the optimal situation, but only if everything else remains equal, and it never does. Again, it’s only equal in a situation in which you’re lucky enough to represent someone like John Grisham or J.K. Rowling.
With virtually every other author, you’re dealing with the individual publisher who has their own release schedule, have their own list of titles, have certain lead books on every month. If the question is, do you want the British edition to come out simultaneous with the American edition, or would you rather have it be a bigger publication two months later? Well, you’d rather have it be a bigger publication two months later, even though, again, there might be a few lost sales and some confusion.
But I mostly would agree. It’s a title by title issue, and it’s based on so many variables of what the publishers on each side of the Atlantic are capable and willing to do.
KENNEALLY: I want to thank Nathan Maharaj, Joe Mangan, Brian DeFiore, and Ashleigh Gardner for their participation today. Ladies and gentlemen, if you’re confused, I think you’re beginning to understand the problem, right? (laughter) My name’s Chris Kenneally. Thank you all.