HarperCollins ceo says ebooks will hurt publishers revenues

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HarperCollins ceo, Victoria Barnsley, says that the 7% drop in the retail value of paperback fiction this year is “almost entirely” dut to the sale of ebooks, even though the combined sale of ebooks and print books has increased.

In an article in The Bookseller she says:

“The signs are that consumers expect e-books to be priced considerably lower than physical books. There’s no easier way to drive an e-book up the charts than by massive price reductions,” she said. Whereas in a bricks and mortar environment other factors, like the look and feel of books and recommendations from booksellers, can influence choice, most of these factors are stripped away in an online environment, Barnsley argued. “So, not surprisingly, brand and price become the deciding factors.”

At what level the price of e-books will stabilise, the consumer will decide, she added. “And only then will we know if there is a viable e-book business.”

12 Comments on HarperCollins ceo says ebooks will hurt publishers revenues

  1. I think Ms. Barnsley needs to spend more time in eBook forums and pay closer attention to the ever-changing numbers. Far too many consumers frequent the mega-stores, most of which do not provide easily accessible employees who can be trusted with recommendations. This is the purview of the small, locally-owned specialty stores, not B&N, Borders, WalMart, etc. eBooks are the obvious alternative that is taking over.

    There is no “value added” in a brick and mortar mega-store other than the physical feel of a book in your hands. Online stores such as Amazon show covers, liner note descriptions, author biographies, tables of content, and most anything the buyer would need to make an informed decision to purchase/rent. Additionally, recent book quality has tanked, with shoddy bindings, bad glue, and cheap paper that yellows in a few short years. I’m still waiting for electron deterioration on my eBooks. :-)

    It seems difficult for these behemoths of the publishing industry to realize their gravy train is coming to an end. More attention needs to be put into digital editing and formatting and eliminating the excessive handling/shipping/printing overhead. Those are the publishers who will survive and thrive.

  2. Umm, she’s kidding right? We might be expecting cheaper e-book prices…but we aren’t getting them that’s for sure! They dropped the paperback and hardcover prices on purpose so people would stick to buying paper (while at the same time in the last year and a half steadily raising prices on e-books) because for some unknown reason they think e-books will tank them.

  3. borax99 (Alain C.) // May 10, 2011 at 11:55 am //

    Bull.
    Just.
    Bull.

  4. Ms Barnsley – Another deluded Publisher who doesn’t seem to have a clue what she is talking about.
    “Publishers are unlikely to be able to replace the revenues lost in the shift from print to e-books unless they can significantly grow volume sales”
    So it is clear from the start of the article that Ms Barnsley doesn’t even appreciate the difference between Revenue and Profit. Losing Revenue is not what is important. Prices can drop if Margins stay the same or increase, resulting in equal or enhanced Profits. A shocking revelation about someone who is a CEO.
    Right now it is clear that the A6 Publishers are earning enhanced profits from their eBooks because they are charging higher prices than paperbacks while incurring drastically lower costs.
    ” . . (For eBooks) brand and price become the deciding factors.” Clearly, again, Ms Barnsley is clueless about the fact that eBook buyers probably spend far more time choosing their purchases than pBook buyers. They have access to social reading sites, recommendations from all around the world, previews etc. etc.
    “Barnsley commended the agency retail model . . ” “. . ways to extract maximum value from publishers’ content.” “Most important of all, publishers need to listen to consumers”.
    That paragraph really made me laugh.

  5. “A civilization runs on words. Civilization _is_ words. Which, on the whole, should not be too expensive.”

    Terry Pratchett, “The Truth”

  6. Before continuing to bash the HarperCollins CEO, it would be worth reading her keynote address to the World eReading Congress, a two day industry trade show and conference.

    Her full address is here: http://futurebook.net/content/it-end-publishing-or-new-beginning

    For example, she wrote: “In the digital world the consumer, the reader, is in pole position. So what does this mean for publishers? If we are to survive, and professional authors are to survive, we need to convince consumers that our content is worth paying a fair price for. That means finding the optimum price to stimulate demand while preserving value and avoiding the pitfalls of piracy.”

    The address is a very thoughtful, passionate tee up for an eReading conference. Ms Barnsley DOES strike me as someone who “has a clue” and might be considered a thought leader, in fact, in a rapidly changing publishing world.

  7. Mike Segroves // May 10, 2011 at 1:15 pm //

    As a former brick and mortar bookstore owner as well as the marketing manager of the first successful eBook retail storefront (peanutpress.com aka Palm Digital Media aka eReader.com) I have to agree with the first half of this statement and strongly disagree with the secondhalf. However, the issue is not revenues going up or down, it’s what happens to profitability.

    John Maninson has it correctly: “There is a growing distinction between the book reader and the book owner. The book reader just wants the experience of reading the book, and that person is a natural digital consumer: Instead of a disposable mass market book, they buy a digital book. ” And that consumer expects that the elimination of the physical costs of producing a book will result in a reduction in the price of the book. A decade ago Jane Friedman, then the CEO of HarperCollins, tried to convince me that the value of a book was in the intellectual property, “the ideas and characterizations, and the plot development and the story” that a book contains, not in the physical realization of the book, “which should have no bearing on the price of the book”. Sorry, but that just isn’t so. Paper, print and binding are just a delivery vehicle, not the embodiment of the book.

    Look and feel and recommendations still play a major factor in influencing purchases. Cover art is and always will be important. And knowing that a title is well edited and free of typo’s is extremely important. That’s my biggest complaint with self publishing. Today recommendations come from other readers, not booksellers. Before I buy any book today, I go to Amazon and see what the reviews are like. If the majority of reviews are less than four stars, I keep looking. That may be the biggest value that Amazon offers. (And not just for books but for everything they offer.)

    Ultimately, profitability should increase on a publisher’s sales, even while revenues go down, reflecting the reduction in pricing. A properly organized editorial unit should have a much lower cost of operation today than it has in the past. There is almost no reason for a new title to actually be sent to hardcopy today, until it’s hardcover release. From submission to final proof, every step in the process should be electronic. And that should also decrease the amount of time between submission and First Customer Shipment (FCS).

    Over the next two or three years as eReader devices become more and more accepted, Mass Market books should all but disappear. And along with them will go all of the cost of distribution – and returns. That’s when the publisher should really start to see profitability increase. Yes, that’s going to involve some pain. The number of retail booksellers is going to shrink even more dramatically than they already have. Rack sales at Wal-Mart, CostCo and other mass market retailers will become a thing of the past. Start planning for it now; it’s too late to even think about slowing it down.

    The publishing business is on the brink of a set of challenges bigger than anything anyone currently in the business has every imagined. Now is the time for imagination, adaptability and perseverance.

  8. ” And knowing that a title is well edited and free of typo’s is extremely important. That’s my biggest complaint with self publishing. ”

    That has to be a joke right ? The numbers of ghastly errors in the eBooks I have read from established publishers in the last 18 months have been far far worse than those in self publishing.

  9. Having read Ms Barnsley’s full address I found it extraordinarily bland and a regurgitation of a multitude of summaries of the market changes available across the web, aimed at people with almost no knowledge of the subject.

    She completely misrepresents Hocking’s decision on a publisher. She uses a completely inappropriate example of Hocking, to pump up the value of old style publishers. She labels Apple as a hardware company … !! She misrepresents the margins earned on eBooks and pBooks. She talks about listening to readers but opts for the Agency Model, and hasn’t the gumption to discuss DRM.

    She may couch her talk in enlightened language but the content is inadequate, uninformed and typical of so many in the industry. It is really hard to believe she is a CEO. Shocking.

  10. Whether the will be “a viable ebook business” is unquestionable: there *is* a viable ebook business.

    Whether or not HarperCollins is part of it is what’s in question.

    Personally I don’t give a damn if they are or not, so long as books I enjoy can be gotten. If she thinks readers are loyal to the freakin’ imprint I think she’s got a hard lesson coming.

    — C

  11. If I have any loyalty, it’s to my favorite authors. But even then, I won’t buy the ebook if I think it’s over prices.

    As an ereader, I have a lot of antipathy for the big 6. I don’t pay attention to the publisher when I’m deciding to buy a book. I look at price, and I look at the customer reviews and how many there are. If a book has at least 4 stars and at least 100 reviews, that influences my decision. If anything the fact that a book was published by Harper Collins would be a mark against it.

    Since I only buy ebooks these days, not offering ebooks at a reasonable price means losing my business.

  12. Harper Collins has already demonstrated, through their shoddy handling of backlist titles (by using cut-rate scan-and-OCR contractors and no proofing), that they are more concerned with bottom line than product quality. If HC can’t figure out how to lower internal costs while giving consumers good quality books, their future is their problem.

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