I want to talk briefly today about two topics that are totally unconnected, except that I think the conventional wisdom is well wide of the mark on both.
First, let’s talk about ebooks. There was an apparent rush a year ago toward them. Several large publishers announced initiatives or imprints, Random House and Rosetta had a very public battle over what seemed at the time to be very valuable rights. Bookstores were figuring out how to get into the game, publishers were developing strategies to make sure they had all the ebook rights and even, sometimes, planned to publish them in ebook form.
This year, because ebook sales cluster in the double and low triple digits per title, the herd has marched in the other direction. You can almost hear the collective sigh of relief among the traditionalists who KNEW people wouldn’t read books on a screen.
Here’s a take on this situation which I haven’t read anywhere. It is this simple.
If you really use a Personal Digital Assistant each day, are among the growing number that carry one with you all the time, you don’t need anybody to explain the value and utility of ebooks. I speak from personal experience with the worst possible monochrome screen: once you have a book in your possession all the time, it is addictive. I just finished reading Richard Reeves’ “Nixon: Alone in the White House” and now I’m working on a Donald Westlake novel I missed. The subway, cab, and waiting room time that I now have to devote to book reading is, cumulatively, substantial. Once you stop wasting that time, you are hooked.
And, frankly, the small text page area is actually better than a book.
The converse of this is that if you don’t use a PDA regularly, ebooks are of very little value to you. There is some minor utility to having a book and reader software on your notebook, but not much.
So, if this simple observation is correct, ebook takeup will grow as the number of readable screens being carried around rises. Very soon cell phones will be providing them as well as Palm and Microsoft-compatible handhelds.
There is one other reason it is a mistake to overreact to the first year’s lack of ebook sales. In one of the world’s best kept secrets, Microsoft ebooks have been, and for the most part still are, not readable on most of the handhelds they are intended for. This has to do with the level of encryption that many publishers have required and what the handheld devices would support, until the most recent batch of them were released last October. This glitch has undoubtedly discouraged many MS Reader ebook customers who bought one, saw it on their PC, but couldn’t get it to work on their Journada.
And it is a big part of the reason why sales of ebooks in the Palm Digital format are so much larger than sales of the same titles in MS Reader format, according to all the publishers I have talked to who make ebooks available in both.
Now the MS Reader problem is fixed for new devices, Palm reports sales increasing regularly, and more and more people are carrying ebook-useful screens with them at all times. This market will, I believe, more than double annually for the forseeable future and, within two or three years, will be producing sales figures on many titles that can’t be resisted or ignored. Even sooner than that, the ebook market will fuel the word-of-mouth for the printed book market for those publishers smart enough to make simultaneous (or prior) ebook publication, with broad distribution that goes well beyond their own web site, a normal part of their program.
Now, let’s completely shift gears and talk about a brand new opportunity to get more sales and lower the returns of physical books.
Here’s the inescapable fact that most publishers and chain booksellers seem to ignore: the only effective way to control book inventory is title-by-title, store-by-store. All of the various shortcuts, like saying “this title is ‘like’ that one” or “we’ll buy six for the A stores”, which have become more and more common over the past 20 or 30 years as computers and central offices served by national account managers have replaced reps visiting owner-operators in their retail location, have served to block sales and increase returns.
This is not to fault the skill level, dedication, or work ethic of the people doing either the buying or the selling. This is the inevitable result of more and more aggregated decisions. But when a company like Borders or Barnes & Noble is managing in excess of 100 million retail stock levels with all decisions being made by humans, it is hard to see how else to do it except by aggregating and averaging.
Now, in the old days, the successful publishers that grew over time (thinking from the 50s forward, the two best examples were Doubleday and Random House) did so by building large sales forces that checked stock, took inventory in store after store so that informed backlist buying recommendations were based on the real sales and inventory information in that store.
Today, publishers have the opportunity to go back to that work ethic, without getting on their knees to count books on the bottom shelf. POS data exists for almost every retail outlet in the country that matters. A substantial business called Bookscan has been built assembling and selling that data. New businesses are being organized to help the titans in the marketplace analyze that data.
But not a single publisher that I know of is routinely assembling and manipulating that data at the granular level — the STORE level — to manage inventory title-by-title, location-by-location.
It is not easy to do that. There are both political barriers and systems barriers to getting that data, even through Bookscan. Indeed, Bookscan and its sister company in Britain, BookTrack, have focused on selling aggregated data and seem unaware of the critical value of granularity. Of course, the publishers who are their customers seem unaware of it as well.
The trade book business seems daily to become ever more unprofitable for publishers; every day it is harder to get the sales books deserve and to avoid painful and costly levels of returns. It is now possible to use data to solve those problems, title by title and store by store, if there is the will to learn the way.