What We Learned About The Book Industry This Week

We’d expected that Liberty Media’s bid for Barnes & Noble would be the most talked-about topic this week at BookExpo America, the largest trade book fair in the United States. Then Amazon (NSDQ: AMZN) stunned the industry by hiring traditional publishing vet Larry Kirshbaum to launch its new general trade imprint in New York. The news, which hit the internet Sunday night, has the industry nervous and curious, to say the least. Kirshbaum is staffing up the New York office (it’s still unclear where it will be located), so the next question is how many people he’ll be pulling from traditional publishers.
In case you missed our coverage of BEA, here are our big takeaways from the week.
»  Book publishers’ greatest challenge now is discoverability in the digital age. How do they ensure that their ebooks and apps get found? How do they market directly to consumers? Brick-and-mortar bookstores that were once publishers’ main customers are disappearing and sales are moving online.”Our content has always been discovered by people either looking for it or recommending it,” said Charlie Redmayne, EVP and Chief Digital Officer of HarperCollins. “But now looking for it is through search and recommending it is through social media.” “Publishers do not know how to market e-books yet,” said Evan Schnittman, Managing Director of Group Sales and Marketing at Bloomsbury, said.
»  Oh yeah…and pricing is a pretty stiff challenge too. As book publishers have moved to the agency model–in which they set their own prices for e-books and the retailer (the Amazon Kindle Store, Apple (NSDQ: AAPL) iBookstore, or whoever) receives a commission–they are realizing there’s a lot they don’t know about that area. Traditionally, bookstores set their own prices and ran promotions. When Perseus Books Group set out to learn more about pricing, Joe Mangan, COO, said they realized how little they knew about it: “Online retailers were repricing books every two or four hours.”
»  Gadget gossip. It was a huge week for e-reader announcements. On Monday, there was Kobo with its $129.99 eReader Touch Edition, which incorporates the company’s Reading Life social networking technology. On Tuesday morning, Barnes & Noble (NYSE: BKS) announced its new Nook, the $139 Simple Touch Reader, whose main claim to fame is its two-month battery life. CEO William Lynch said the Nook has captured over 25 percent of the e-book market. “Based on industry data, it is our belief that Nook Color is the bestselling Android tablet in the U.S., second only to the iPad,” he said. Apparently feeling left out, Amazon announced on Tuesday evening that it’s releasing a $164 Kindle 3G with Special Offers.
Though it currently has only about 10 percent market share, Kobo might have been the winner of the week, at least in terms of good feeling: At its party on Wednesday night, it gave away an eReader Touch to every attendee.
»  Will these e-readers find buyers? The trend lines are moving in the right direction for e-reader sellers: The percentage of print book consumers who say they download e-books more than doubled between October 2010 and January 2011-from 5 percent to almost 13 percent. “Power buyers,” who buy at least one e-book a week, represent about 18 percent of the total people buying e-books today, but they buy 61 percent of all e-books purchased. Meanwhile, an eMarketer report found e-reader usage is growing much faster than previously predicted.
»  Book publishers are grappling with where to find digital talent. Many are conducting in-house training sessions, particularly in social media. tHarperCollins is building an in-house app studio. Random House recently acquired app developer Smashing Ideas. News Corp. (NSDQ: NWS), HarperCollins’ parent company, is launching an in-house marketing training program that will start out in the UK, then move abroad.
»  Traditional book publishers have so far been reluctant to experiment with new pricing models…but they may have to start soon. The Google (NSDQ: GOOG) eBookstore appears to be planning a Netfix-like e-book rental service, though no official announcement has been made. Scott Dougall, Google Books Director of Product Management, said the company also hopes to offer physical/digital book bundles, but “it’s up to the publishing industry to be more open-minded” about it.
Of course, he’s talking about the big six–smaller publishers have been much more open to experimentation in this area. Andrew Savikas, VP of Digital Initiatives at O’Reilly Media, even said, “I think we’ll move away from being a purchase-based industry. Publishing will move toward…access-based models in which case the actual price of the unit is irrelevant.” You’re not going to hear anybody from Random House saying that any time soon.
»  There’s a huge market for foreign-language e-books in the U.S. Barnes & Noble Manager of International Digital Content Patricia Arancibia said the retailer’s sales of foreign-language e-books are now growing faster than their sales of English e-books–increasing over 100 percent each month…
»  …but territorial rights for e-books are a huge issue and source of friction. Currently, a publisher may have the right to sell an e-book within one country, but not another. “The notion that we can or should enforce geographic restrictions on web and digital content is a lost cause,” said O’Reilly’s Saivkas. “I don’t believe territorial restrictions make sense with digital content. It’s not the way the web works.” Again, that’s an area where the big publishers are more conservative: “We are rigorous as a company in terms of territorial management,” said Amanda Close, Random House VP of Digital Sales & Business Development.
What are your takeaways from BEA this week? Please let us know in the comments.