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Publishing News: Penguin goes back to the library

Penguin and library lending, ebook cost accounting, and Knight News Challenge winners.

Here are a few stories that caught my attention in the publishing space this week.

Penguin tests digital library waters

Penguin LogoPenguin Group and ebook distributor 3M announced a pilot program this week to distribute Penguin books in The New York Public Library and the Brooklyn Public Library. The program is scheduled to begin in August, and if successful, could be rolled out to libraries nationwide. There are a couple conditions, as noted in the announcement: Ebooks for lending will be windowed — or held back — for six months after publication, and the books will expire (and need to be repurchased) after one year.

Tim McCall, vice president of online sales and marketing at Penguin, told the Wall Street Journal “the six-month delay is intended to prevent library e-books from undercutting other sales” and “the renewable one-year expiration date on e-books, meanwhile, is designed to mimic the natural shelf life of print books.”

Over at Publishers Weekly, Peter Brantley wrote a nice commentary on Penguin’s return to the library and its included conditions. He says Penguin has it all wrong in terms of protecting sales:

“Most recent studies of library patron’s borrowing and purchasing habits indicate that the most active library users are also the most active purchasers … These surveys suggest that windowing will indeed have an impact on sales: it will reduce them, by eliminating their exposure among patrons who would otherwise be among their most fervent marketers.”

A Pew Internet study, “Libraries, patrons, and e-books,” released this week states: “Among those who read e-books, 41% of those who borrow e-books from libraries purchased their most recent e-book.” Statistics from the report also highlight another important point about awareness:

  • 58% of all library card holders say they do not know if their library provides e-book lending services.
  • 53% of all tablet computer owners say they do not know if their library lends e-books.
  • 48% of all owners of e-book reading devices such as original Kindles and NOOKs say they do not know if their library lends e-books.
  • 47% of all those who read an e-book in the past year say they do not know if their library lends e-books.

Brantley says this is an area of untapped opportunity: “[B]oth publishers and libraries should be particularly trying to build relationships with the large portion of the population that is ‘e-unaware’ — prospective readers who have not been introduced to e-books, or find their adoption too difficult because of digital illiteracy. Libraries can bridge these divides and increase the number of readers that no bookstore or online retailer would be able to reach.” Brantley’s post is a must-read this week.

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Ebook accounting

Philip Elmer-Dewitt at CNNMoney highlighted an excerpt from a piece by Ken Auletta at the New Yorker (subscription/purchase required) this week that debunks claims and perceptions that ebooks cost almost nothing to produce. In the New Yorker piece, Auletta concedes that ebooks are about 20% cheaper to produce than print books, as they don’t require paper, printing, shipping and warehouse, and there are none of the costs associated with book returns. But Auletta points out other cost considerations:

“… [T]hey create additional costs: maintaining computer servers, monitoring piracy, digitizing old books. And publishers have to pay authors and editors, as well as rent and administrative overhead, not to mention the costs of printing, distributing, and warehousing bound books, which continue to account for the large majority of their sales.”

Elmer-Dewitt also submits that “[t]he accounting gets even more complicated when you consider that most books cost publishers more than they earn.” To this end, Kevin Murphy over at Melville House shared a New York Times graphic that approximates publisher costs and profits for hardcover books and ebooks. According to the graphic, for a $9.99 ebook, a publisher will profit $3.51 to $4.26 — this is profit before overhead costs, such as staff salaries, building rent and utilities.

Tracking news that resonates

The first round of 2012 Knight News Challenge winners were announced this week. The theme for this round of awards was networks. Mathew Ingram at GigaOm has a nice roundup of all the winners, as does The Nieman Journalism Lab, but one startup stood out in its practical approach to solving a problem newsrooms are experiencing across the board: shrinking resources. Using an editorial analytics approach, Signalnoi.se looks to help editors decide which stories warrant resources. From the Nieman Lab post:

“Signalnoi.se aims to help, by tracking social engagement with the news — scanning social network activity to provide real-time information on what’s resonating with readers. Editors are able to track their own — and competitors’ — stories. Signalnoi.se will sort not just headlines but news topics — to spot trends and spikes in interest.”

You can read full descriptions of the six winners here and here.

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  • Troy McConaghy

    “the renewable one-year expiration date on e-books, meanwhile, is designed to mimic the natural shelf life of print books.”

    Print books evaporate after one year? Wow, I never knew.

    Safari Books Online is a real leader in getting ebooks to libraries with sensible terms. The other publishers should look at what *they* are doing.