Lloyd Jassin
Lloyd Jassin

How Free eBooks Can Save Local Book Retailing

Lloyd Jassin, Authorlink Guest Columnist

July 2011

In the mid- to late-19th Century the custom in England was to publish novels in three volumes which were affectionately known as "triple deckers." They were published at artificially high prices for subscription library sales, and select readers willing to pay a lot for a new book. Cheap reprints came later. The genesis of hardcover first. High prices for new books sold to institutions, followed by cheap editions for the masses. For a number of reasons, this model can save the publishing industry from the problems that come along with the opportunities ebooks create.

“. . .the decision to sell ebook and pbook day-and-date is misguided.”

eBook publishing is invading trade publishing and the decision to sell ebook and pbook day-and-date is misguided. It is my contention that anything that weakens the sale of bound books sold through traditional brick and mortar stores, threatens the traditional publishing model. However, traditional commercial publishers have elected to publish pbooks and ebooks day-and-date. With ebooks you don't have to negotiate with retailers to get them into stores, and consumers don't have to leave their homes. That seems destructive to both the traditional book retailer as well as the overhead-burdened book publisher. Bookstore owners worry about weakening sales as shoppers simply elect the convenience of the ebook, or visit their book shops, then purchase their books online. Publishers need to prop up bookstores. Here's how to do it.

“You need to own the customer.”

Tethering the Reader

With each pbook purchased at a local bookstore, or purchased online, include a free content access code that lets the consumer register that book and access the digital version online. It will encourage the sale of the pbook and stimulate word of mouth. Then hold back the digital only version for 60 or 90 days. While consumers are reading your ebooks, you can be reading them, since you will have established a digital relationship with them. Currently, Amazon and Apple, who are unwilling to share customer data with you, know your customer better than you do. Ignoring that fact can be fatal to your business. A key reason for giving away an ebook with a pbook during the first sale window is to tether the reader to the publisher. You need to own the customer. It's no longer about the number of copies available, it's about accessibility to readers.

From the Fury of the Northmen (i.e., Amazon), Good Lord Deliver Us!

In the dark ages, Irish monks tethered bibles by book chains to make them harder for the Viking marauders to make off with them. It's still a good idea. The Seattle Vikings are not just a rugby team. While Amazon's efficiency is not aimed at just books, they are intent on destroying bookstores or reducing them to mere curiosities.

Sales Windows

In the movie business, a 'window' is the time between when a movie ends its run in movie theaters and begins its release on home video, television or elsewhere. When a studio considers shortening the time between theatrical release and home video release, they take into consideration the fact that they may be weakening ticket sales, as the audience for the movie may simply wait for the convenience of the home video release.

The motion picture industry understands that they have to balance the interests of theatre owners and the home video market if they are to maintain both a healthy home video and theatrical market for their wares. I don't think the publishing industry is doing a very good job of balancing their digital and physical interests.

“Digital is indiscriminate. It's about distribution to a mass market without intermediaries.”

What is the publishing industry's aversion to windowing? While home video release windows were never popular with consumers, neither were hardcover first windows a big hit with readers. If you publish downloadable ebooks day-and-date with pbooks, you will not expand your business — except over the short term. The deteriorating status of hardcover, trade and mass market books, combined with free downloadable versions of your favorite author's book isn't the end of the world, but, it is the beginning of the end of the existing publishing ecosystem. Putting books on retail shelves suggests discrimination. Each book is subject to negotiation. Digital is indiscriminate. It's about distribution to a mass market without intermediaries. Today, in an age of author-retailers, bookselling is no longer separated from publishing.

The Battle for Tomorrow Starts Today*

*season one opener, Terminator: The Sarah Connor Chronicles

Commercial publishing is doomed if the price of new books continues to fall and Amazon launches a viable cloud service. And, prices will fall. Printing and publishing are no longer synonymous. Digital publishing has sharply reduced the capital investment required to be a publisher. As such, the perceived value of a digital file is near zero. At some point even free may seem like a lot of money. Cheap prices devalues literature. That's what the remarkable — and successful — campaign to adopt agency pricing was about. Leonard Shatzkin (i.e., Shatzkin the Elder) said it best, "The retail price of any commodity should depend more on the value the buyer places on the product than on the cost to the producer."

Cheap and nasty pirated editions compete with full price digital downloads. The storm is coming. Everything you need to know about digital publishing, the music business can teach you. Peer to peer sharing of digital downloads killed the record business.

Ebooks on Your Web Browser

What to do? Publish hardcover or quality trade paperback books bundled — at no extra cost — with access to a digital version of the book stored on a remote server. Cloud computing is on the cusp. It's about access to your ebook, not ownership of it. An ebook stored on a remove server can be read on a web browser on multiple devices. No device lock in. It's device agnostic. So, the silliness that accompanied the introduction of the late great Stanza reader will seem, well . . . silly. It's about content, not dedicated reading devices.

How Do You Compete with Free?

Bundling a pbook with a free ebook you can read on your web browser is a temporary bulwark, not a solution. The main battle to be fought is how to create value when purchasing a book becomes optional. In the meanwhile, Amazon, Apple and Google are tussling for dominance of cloud computing. Each has, or will soon have, a cloud computing platform for music. Books and video are next. If I were a publisher, I'd be both concerned and excited. Book publishing was a business built on copyright. Cloud computing is a business built on secure content stored on remote servers. Books are owned. Ebooks are accessed. Cloud computing is about access to data. Customer data — not content — is king in the new world order.

“The time is ripe for the traditional publishing industry to ask, "What does print do best?"”

What Does Print Do Best?

The time is ripe for the traditional publishing industry to ask, "What does print do best?" Guttenberg's significance was that he made books available in uniform multiple copies. For 500 years publishing was a top down, multiple uniform copy, "All Rights Reserved," "No Derivative Works," "You Buy it You Own it" business. The digital world is not uniform. In cyberspace no one can hear you scream "All Rights Reserved."

What does print do best? If done right, it gives the printed word authority. Read the Borzoi Credo. So, how do you compete with probalistic algorhthms and overwhelming probabilities? Read the Borzoi Credo. While essential for a publisher to have a book available in bound and ebook form on pub date, let the scarcity of retail outlets work to your advantage. Hold back the stand alone ebook and be nice to bookstore clerks and managers. People who buy books in bookstores talk up books.

Like the home video distribution window, in many instances, the digtial-only version should be released two to three months after initial release of the premium pbook (i.e., pbook bundled with ebook) edition. Pbook first would address protests by booksellers who can't compete with Amazon, Apple and Google in the digital arena. Pbook first can stem the coming storm of free, pirated ebook versions.

A drastic fall in book prices and peer to peer sharing of ebooks, will mean many authors won't get paid. Royalties of 10% of the published price on books was arrived at according to Victor Bonham-Carter's "Authors by Profession," on "the calculation that it represented one-half of the net profits remaining after the cost of printing, advertising and putting the book on the market was covered."

One-half of nothing is nothing.

For traditional publishers and traditional booksellers, a premium "P" / "E" bundled edition is one strategy for fighting the digital book wars. Yes, I'm talking about defending the system. But, don't brand me as a supporter of the status quo. Defending the system need not be at the expense of new business models. Publishing entrepreneurs can start from scratch with e-subscription models, e-syndication models, e-advertising supported, short term licenses (e.g., Richard Nash's Cursor), and other models that leverage their copyright interests and/or the readers' eyeballs they aggregate. How you extract value from your intellectual property assets (and readers) is up to you. It's just a matter of how you plan to ride the storm.

Some people just have to read a book when it comes out. Others can wait several months. If someone must have a book when it comes out, it can be purchased as pbook bundled with a browser-based ebook. According to a recent online consumer research survey by Elastic Path, if a favorite author was released initially only in hardcover, 41% of readers would buy it, whereas 39% would wait for the ebook.

Convenience of Avoiding Bookstores

Alternatively, release books digitally at a premium price prior to the release of physical books. It's another way to create excitement. Hardcover pricing for ebooks proves that people will pay for the convenience of avoiding a physical bookstore. Bookstores make traditional publishers relevant. Downloadable ebooks are growing geometrically. Things are about to get cheap and nasty, and Amazon, et al, are intent on destroying the existing supply chain.

“Some books should go direct to ebook.”


Memo to traditional publishers: Some books should go direct to ebook. In other cases, especially with franchise authors, consider a 60 to 90 day window between availability of a digital only version and bound edition. Work with traditional booksellers. Don't further jeopardize those valuable retail relationships by releasing stand alone downloadable digital books day-and-date with physical books. Bundle them. Neither publishers, nor their bookseller partners can compete with Amazon, Apple and Google on their terms. Embrace digital, but, don't undermine traditional booksellers.

Lloyd Jassin
Guest Columnist
Lloyd Jassin

Lloyd Jassin is an attorney who focuses on publishing, entertainment and IP law. In addition to analyzing, negotiating and drafting entertainment industry contracts, he consults for other attorneys on IP and business issues. He's been widely quoted in the news media, including The New York Times, The Washington Post and Publishers Weekly. He began working in publishing at St. Martin's Press. Later, he joined Simon & Schuster, where he was Publicity Director of the Prentice Hall Reference Group. Before forming his firm, he was an IP associate with Cowan, Liebowitz & Latman. Prior, he worked in TV syndication and legal affairs at Viacom. A graduate of Benjamin N. Cardozo Law School, he is admitted in NY and NJ. He serves on the Advisory Board of the Beacon Press, America’s oldest indie press, and is counsel to the Independent Book Publishers Association. He is an adjunct professor at NYU, and coauthor of The Copyright Permission & Libel Handbook. Contact: jassin@copylaw.com, 212.354.4442. Visit: www.copylaw.org.