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Publishing News: Agency pricing, out of the pan and into the fire

Publishers face antitrust investigations, newspapers must control their ads and data, and a look at the most-read web authors.

Here’s a look at the publishing stories that caught my attention this week.

Antitrust investigations focus on Apple and publishers

ibooks2.jpgOn Tuesday, the European Commission opened an antitrust investigation into pricing deals struck between Apple and five international publishers: Hachette Livre, HarperCollins, Simon & Schuster, Penguin and Holtzbrinck (the publishing houses were raided back in March). The Bookseller reports:

The Commission said it would investigate whether publishers and Apple had engaged in illegal agreements or practices that would restrict competition, and would also examine “the character and terms of the agency agreements entered into by the above named five publishers and retailers for the sale of e-books,” with “concerns that these practices may breach EU antitrust rules that prohibit cartels and restrictive business practices.”

On Wednesday, the U.S. Justice Department confirmed it, too, was investigating.

Reuters provided the background for these investigations:

Publishers adopted the agency model last year when Apple launched the iPad, allowing publishers to set the price of the sale of e-books. In turn, they would share revenue with the retailer. In the past, publishers would sell ebooks on a wholesale model for 50% of the retail price … In the traditional “wholesale model,” publishers set a recommended retail price, but the seller is free to offer deep discounts.

Bloomberg reports that “Publishers’ deals with retailers are also under scrutiny.”

Publishers need to get a grip on their data and take control of their advertising

Google_logoDavid Soloff at Advertising Age took a look this week at declining advertising revenues for newspapers and magazines and placed the blame squarely on the publishers. Soloff writes:

Publishers have not generated much of the almost infinite supply of channel-choking inventory, but they have also done next to nothing to preserve what is good and proprietary and “premium” about their own inventory. In some cases, they have chosen lowest common denominator ad networks, exchanges and supply side platforms to do the hard work of selling.

He says publishers need to regain control of their advertising inventories and that “big data tools can dig them out of the undifferentiated, over-supplied, machine-driven nightmare of the sell side.” His take on how to put the “premium” back in premium content is well worth the read.

Publishers may want to get a grip on their data and take control of their advertising sooner rather than later. Google’s retail push against Amazon may very well have consequences for online ad revenues, particularly in the retail space. Ken Doctor over at the Nieman Lab took a look at Google’s plans to enter the retail/ shipping business and its possible implications. He points out that “[r]etailers don’t want to advertise; they want to sell stuff,” and he says there’s no loyalty in advertising:

Give [retailers] new routes to sell stuff, and deliver it more cheaply than they could before, and they’ll migrate their ad/marketing/lead generation dollars. So, if Google can really make it easier to personalize, routinize and make more efficient the selling process, it will place itself between the seller and the buyer. As it does that, it replaces the newspaper as middleman, further reducing much of the revenue that is keeping newsrooms staffed, even if many of them are now half-staffed at best.

Read it Later identifies the most-read authors on the web

Read it Later recently passed 4 million users. Earlier this year, the service used data gathered from its users to look at online reading behavior and how it’s affected by the “time shifting” content afforded by mobile technologies. This week, the company released a new study identifying the most-read authors on the web. The study looked at data gathered between May and October 2011, which was based on 47 million-plus saves, according to the report.

Who came out on top? Have a look:

most_saved_authors.jpg

The study also looked at longevity and loyalty — the authors with the best return rates, or those with stories readers returned to in some way. The report points out that “[t]he most interesting thing isn’t just that we found different authors for the top ‘return rate,’ but also different categories of content and types of publishers.”

author_return_rate.jpg

The full report can be found here.

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