Electronic Publishing and
Marketing
L 10
Ing. Jiří Šnajdar
2015
E-books, which used to be the step-child of the
publishing industry, are now being adopted and
accepted in a major way.
For e-books, at least, the future has arrived—
propelled by Amazon.com’s release of Kindle 1 and
2, the continued success of the Sony e-book reader,
and the growth of delivering e-books onto mobile
phones, as Harlequin and others are successfully
doing.
Overall sales of electronic books and “chunks” of
books are now firmly embedded into the fabric of
most publishers’ product lines, especially those in
the professional, college, and STM (scientific –
technical - medical) segments of the industry. In
many of these houses, electronic editions now
prevail over the print versions.
And analysts are forecasting that global e-book
sales at Amazon alone could reach $2.5 billion by
the year 2012!
E-books
What is it about e-books that appeals to publishers?
There are basically five primary benefits:
1. New products, new markets, new sales
2. Portability
3. Minimally incremental cost of goods
4. Elimination of returns
5. Elimination of warehousing and fulfillment costs
New Products, New Markets, New Sales
E-books may best be viewed in the context of a new
format, or product, that creates new, incremental
sales by building on an investment you are already
making in the core market format, the print edition.
The results of this new format are new opportunities
for sales through new markets.
The true benefits to publishers of this new format
are twofold:
1. You can create it at little extra development
expense
2. The new format can be sold through current and
new distribution channels and can therefore expand
sales.
Given a new format, it is relatively easy to create an
internal structure in which all revenues, cost of
goods, and expenses of the e-book are held against
the appropriate division or profit center and judged
according to whether or not they result in profits.
What’s important for publishers is to market their
e-books just as they do their print books.
Marketing methods may differ somewhat,
specifically being more reliant on links and
e-marketing techniques, but the overall goal of the
marketing is the same: to generate sales within
budget.
It is important, therefore, to view e-books from a
standard profit perspective.
We can see the relatively small difference between pbooks and e-books easily:
Core Product (P-book)
Incremental Product (E-book)
Revenues
Development costs
Paper, printing, binding
Royalty
Revenues
Conversion expense
Manufacturing
Royalty
= Gross margin
= Gross margin
Note that allocating all of the development costs to the
core p-book, and leaving few for the e-book, is similar
to the way many publishers, when printing
simultaneous hardcover and paperback editions,
allocate all of the development costs to the hardcover
edition, leaving few development costs allocated to the
paperback edition.
Converting p-books to e-books basically means
reformatting the digital file.
This can be expensive or relatively inexpensive
depending upon the original formatting and when the
reformatting is done.
In addition, the “manufacturing” costs of e-books are
basically zero, since they are delivered online, which is
what makes this format so appealing.
Any new electronic product must still be viewed in a
business context and must still earn profits if it is to
successfully contribute to the health of the company.
The expenses for e-books must be directly proportional
to the sales revenue generated in order to have a
positive contribution to profit. E-books, therefore,
should be treated no differently than any other product
line, category, or division of the company.
Portability
The primary benefit of e-books that most people think
of is portability.
The digitization of a book allows the reader to take not
just one book, but multiple books, anywhere and read
them at any time assuming the screen, the lighting,
and the format of the e-readers are conducive to that
task.
Reduction in size and weight are paramount if the
technology is to gain widespread acceptance.
This evolution towards portability continues, it will
make reading e-books and other information in eformats more appealing and popular.
If the prices on the devices can come down further,
there will be increased demand for them.
When this happens, e-book sales will pick up
dramatically.
We can expect this to happen within the next five
years.
These devices and e-books won’t replace p-books, but
they will provide a viable alternative for those who
prefer electronic formats.
The size of that market remains to be seen, but one
fact is certain: younger generations are more attuned
to receiving information electronically.
They will certainly be more willing than the current
generations to read books in this electronic format.
Reduced Cost of Goods
The more publishers can sell e-books, the more their
cost of goods will be reduced.
Why?
Because publishers can consolidate their formatting,
which in essence is the “make ready” or electronic
component of the development costs, for all product
variations including p-books, e-books, CD-ROMs, and
the world wide web when they edit the book in the first
place. By coding the work with metatags up front, time
and significant money can be saved later—which
means on each “reprint” of the work.
Electronic products, however, require different formats,
typically HTML (HyperText Mark-up Language), PDF
(Portable Document Files), or XML (Xtensible Mark-up
Language).
Currently, most publishers go through a two-step
process: first creating the p-book files as above, then
going backward and creating the e-book files.If the
publishers combine the production procedure and
consolidate two steps into one by coding or
metatagging the word processing file prior to its final
design and formatting, then significant savings can
result.
If the the document is metatagged once and is then
available for all end products, whether printed books,
electronic books, CD-ROMs, or another.
This saves time, effort, and additional cost in the long
run.
The e-books have virtually no manufacturing cost
associated with them (unless they are put on CDROMs).
Thus, the more e-books that can be sold, the more the
publisher saves.
Finally, the royalty component of cost of goods is
always negotiable. If you can pay less than 50% of net
dollars ( or other currency ) received, you can increase
your gross margin significantly.
Elimination of Warehousing and Fulfillment Costs
A key benefit of creating and selling e-books and other
digital editions is that there is no physical storage cost.
From an efficiency standpoint, and from that of cashflow and cash-savings, e-books should theoretically
save publishers significant amounts of money.
Over the next five to ten years, however, as e-books
begin to take a larger and larger proportionate share of
a publisher’s sales, warehouses should begin to shrink
substantially, and the associated costs should decline
as well. Ultimately, this will benefit publishers in a
significant way.
Print on Demand
While e-books are gradually catching on, one facet of
e-publishing has arrived already. Print on demand
(POD) is being used successfully by many publishers
to: • create bound galleys • keep out-of-print books in
print • maintain backlist • produce academic books
and course materials that sell in limited quantities
• save cash
What is print on demand?
It is, in essence, what its name says it is: a printing
technology that allows publishers and printers to print
and bind books and other materials in one operation in
very short runs—from one copy upward.
What differentiates print on demand technology from
other short-run printing presses is that the POD
machines are more closely related to copy machines
than they are to large presses.
Print-on-Demand Models
At the moment, there are basically two business
models that POD printers offer to publishers:
1. Short run digital
2. Print and distribute
Short run digital printers function much the way regular
commercial presses function.
Short run digital printers basically print for the inventory
needs you, the publisher, have.
They quote you a price on printing a number of copies,
and that price to some extent declines as the number
of copies printed increases.
Unit costs, therefore, vary with quantity.
The print and distribute model is a bit different.
In this case, the printer truly prints on demand.
When an order for a book comes in from either the
publisher or a third-party customer, the printer will print
the book to order and ship it directly to the customer.
The POD publisher will then send the original publisher
a check for the agreed upon percentage of the
transaction, less the cost of goods incurred by the
POD printer.
Digital Business Models
When looking at the digital models for selling content,
we can see some methods that are becoming
standard:
1. Selling e-books one at a time through downloads
either directly from the publisher’s site or through thirdparties such as Amazon and bn.com.
2. Selling the print and e-book together as a bundle
3. Selling chapters of books—or even pages—directly
or through third parties.
Digital Business Models
When looking at the digital models for selling content,
we can see some methods that are becoming
standard:
4. Selling subscriptions to a collection of content,
including:
a. The total site content
b. Libraries of content (such as Books24x7; O’Reilly’s
Safari site, etc.)
5. Selling different chapters or books combined into a
new book (these can be called coursepacks or “built
books” but the method of combining chapters into a
new whole is the defining characteristic.)
Selling from Your Own Website
A good website is your sales tool—and image—to the
world.
A website, like a book, has to be attractive but highly
functional. You don’t want your customer trying to
figure out how to buy your products.
The sequence has to be easy to use and navigate,
customer friendly, and visually easy to look at. It needs
to be seamless.
The first key to selling, then, is to make your website
attractive, highly functional, and reflect the professional
image you wish to convay to your buyers.
You also need to have e-commerce capability in place.
With your website up and running you can focus on the
key question that impact your sales:
• How can you get customers to your site?
• How can you get your products known to your
customers?
• How can you get the customers to buy from your
site?
• How can you capture information about your
customers?
Once you know your target market, you need to sell to
that market.
Add fresh content to your website and continually
update it.
Generate publicity. Your publicity efforts overall should
support your website sales. Every press release,
every radio or television effort, every postcard that
goes out from your publicity department needs to note
the company’s website URL and needs to alert those
receiving the publicity that your website is available
24/7 to accept orders from them. A constant stream of
publicity to a targeted group of interested people has a
cumulative effect.
Among the ways you can get publicity and drive
people to your site, are:
• E-mail news releases
• Online news rooms
• Discussion group postings
• Newsletters and direct marketing
• Chat tours
• Online seminars and workshops
• Contests and other fancy promotions
• Syndicating your promotions
• Blogs
Fully use your authors. Closely related to publicity is
the need to use your authors fully. Your authors are
your best promotional tools.
Use social networks to expand your reach.
Social networks are great places to get the word out
about your new titles and backlist (don’t forget that
backlist!) because in almost all cases the social
networks have interest groups or communities that are
perfect targets for your information.
They are also great places to build your brand and
your expertise as an information provider—and a
perfect place to get your authors fully involved as well.
Optimize your website.
Using keywords that relate to your company, books,
authors, and customers and both enabling and
facilitating the various search engines to find this data
can instantly and exponentially expand the reach of
your marketing and draw customers to your site.
Use carefully targeted e-mail marketing. One of the
wonders of the internet is that you can get targeted
mailing lists of those who fit the demographic profile of
your optimal buyers. One world of caution: don’t send
spam—don’t send people continuous e-mails that they
don’t want.
Getting Customers to Buy from Your Site
Once customers learn about your products and get to
your site, then how can you get them to buy from your
site?
To make your site sticky you need to make it
interesting. Thus, creating “look inside the book”
sections with the table of contents, interior illustrations
and chapters, index, and more help to sell the
customer.
One sometimes overlooked page is a “contact us”
page with specific address, phone number, and
personal information for those who want more
traditional customer service help.
Customer service is critical in an electronic age and
sometimes the old fashioned way of talking to a real
human being is the best approach.
This is one reason you need to have a professional
website designer working on your site.
One of the benefits of the internet is that it levels the
playing field of large and small publishers.
Create appealing offers and be price competitive.
There are two approaches.
First, create offers with added value.
Offer the book at full price, but offer another product at
a significantly reduced price or free with every
purchase. This effectively gives the customer
something extra while maintaining your retail price.
The second approach is to take a more aggressive
position.
This strategy posits that as a vendor, you need to
meet the competition just like any other vendor does.
Using this approach, you’ll price your products either
at the low end of the competitive pricing scale, or
somewhere in the middle.
Accept credit cards or use PayPal.
If you want to get customers to buy from your website,
you need to provide them with a mechanism to do so.
This means you need to accept credit cards or use a
payment service such as PayPal to facilitate the
transactions.
Estimate website sales very conservatively.
Selling on Other E-tailing Websites
The second method of extending your reach and your
sales takes advantage of the fact that there are
literally hundreds, of websites that sell books.
Each of these sites is a potential sales venue for your
books.
Look at your customer demographics carefully.
Keep in mind at all times that you need to convert
visitors into buyers.
Understanding the internet, creating an attractive and
highly functional website, instilling excellent customer
service and fulfillment mechanisms, creating excellent
marketing and sales plans, and analyzing the results
will help you increase your sales in a consistent way.