The following post is reproduced from my column in the May 2012 edition of News on Bookselling, the magazine of the Australian Booksellers Association.
Booksellers were dealt two blows last month in their efforts to carve out a slice of the ebook market. The agency pricing model began to fall apart. And Google cancelled its Partner Programme which provided technology for booksellers to sell ebooks from their websites.
Agency pricing, in which publishers set prices and booksellers take a fixed commission, promised to make it easier for small booksellers to compete by removing the threat of predatory pricing by retailing behemoths like Amazon. Instead, the model came under attack from US regulators who saw it as a competition violation.
In a second blow to booksellers, Google closed its Partner Programme to focus on selling direct. This was its ‘white label’ service that put Google-powered ebookstores on booksellers’ websites. It hadn’t met expectations. It left existing partners, including Dymocks and Booktopia, looking for new providers, and closed a door that many smaller booksellers had hoped would open to them.
There’s some good news here. Booksellers now have more ebook technology choices than they had when Google first pitched its service, including three home-grown offerings: ReadCloud, Booki.sh (now owned by US digital distributor OverDrive), and the soon-to-be-launched TitlePage Plus.
But there’s bad news, too. The poor sales that led to Google’s pull-out happened in spite of booksellers being able to sell almost any ebook to loyal customers at an identical price to rivals. It raises the question: If Google and price parity couldn’t make this work for booksellers, are there any prospects for this market?
Lessons for booksellers
Before addressing that question, there are some useful lessons that can help shape plans for a more successful online foray.
- Customer loyalty isn’t enough. Even with pricing parity and a top-tier technology partner, strong relationships weren’t enough to prize loyal customers away from major ebooksellers. The tough lesson here might be that any business case for an ebookstore must reach well beyond a perceived need to serve existing customers.
- The e-reading device matters. Google was alone among the major ebooksellers in not having its own e-reading device, even though it supported the industry standard format. The lack of a desirable tied-in device probably made it hard to leverage bricks and mortar stores effectively.
- Online expertise and focus matter. Most Google-powered bookseller sites were basic, giving customers few reasons to visit. Even with Google’s considerable help, many booksellers were ill-equipped to attract and engage online customers.
- Beyond the transaction. The Google Ebooks experience shows that a bookseller’s ebook site will probably need much more than profits from the ability to sell ebooks.
Where to now for booksellers?
These lessons show that a tough challenge still lies ahead. It will convince many booksellers that they’re better to stick to the real rather than virtual bookselling world. But for others, it might prompt a fresh look and some fresh thinking. Here are a few ideas to get started.
- Ask a different question. Instead of, “How do I sell ebooks from my site?”, a better question might be, “How do I engage readers looking for great books?” Selling ebooks might follow rather than lead the plan.
- Think small. You might side-step competition by devoting your entire online operation to a narrow niche, rather than trying to serve the broad interests of your bricks and mortar bookshop community.
- Think big. Booksellers often aim content at their store’s local customers. Instead, picture a different reader as you create (and curate) your content – perhaps in a specific niche and crossing regional or country boundaries. The content will take the same time to create but picturing a different target reader can multiply the audience it attracts. Consider using a simple Facebook page to stay in touch with local store customers at minimal cost.
- Discovering good books online. Publishers and authors are struggling to be noticed in a vastly bigger online pool of books and ebooks. Booksellers have advance knowledge of what’s coming, deep understanding of what readers love, and trust from readers to make good choices. Yet you’d seldom see this online, even though reviews, recommendations, lists, advance news and insider gossip – things booksellers know better than most – are staples of good book sites.
- Work together. It’s a social, networked world online so don’t think of your virtual enterprise as an island. Design it from the start to be part of a bigger connected community. An example: the emerging trend of author ‘blog tours’. These run to organised schedules like bookshop tours but use devices like guest blog posts, Q&As, samples and give-aways, and live chat on participating sites. Make sure you’re on the circuit.
Paying for it
Making money online is at least as challenging as making it in bricks and mortar. But there are many more people today building sustainable online businesses because revenue sources are expanding.
- New revenue sources. Sites selling digital content and services tend to make money from multiple revenue sources such as advertising, sponsorship, affiliate fees, fees to premium membership content, and events (online and in-person). By tackling the online opportunity creatively, booksellers can tap into many of these emerging sources.
- If you can’t beat them, join them: Affiliate programmes. An alternative to a full-blown ebook site is an affiliate programme. Amazon, Kobo and Google let websites earn commissions from sending customers to their ebookstores. If they buy, you get a cut that ranges from 4-8.5% (Amazon) to 15-25% (Kobo). Affiliate links and marketing tools are simple and free to add to your site.
- In-store discovery and leveraging loyalty. Many booksellers are hostile to customers using their stores as showrooms for online competitors. But in the absence of a way to sell ebooks for Kindles or other devices, booksellers could openly welcome this practice and actually make it easy for them to buy through the store’s affiliate programme. It could help booksellers retain customers, buy goodwill and cement their place with the online community (who are also their customers).
- Sell ebooks! No need to run up the white flag. If your online business attracts more readers, you’ll sell more ebooks from it, if or when you add an ebookstore.
- Look beyond the book industry for role models. Take Melburnian Darren Rowse: He attracts millions of visitors a month and generates significant revenue from his Digital Photography School website. Many fields are well ahead of books in working out how to serve online enthusiasts so hunt them out for business and role models.
Successful online booksellers might bear little resemblance to their bricks and mortar alter-egos. But their mission can be the same one that gets you up every morning – connecting readers to great books.
Picture credit. ioba.org
>>>The e-reading device matters. Google was alone among the major ebooksellers in not having its own e-reading device …
In America, it did. The iRiver Story HD. It also had the first HD eInk screen. It tanked in less than a year and was deeply discounted to clear it out of stores. Oh, you never heard of it? Chalk that up to Google never really marketing it even though it got in some large chain B&M stores in America. Google’s new thing is dedicated Google Play software pre-installed on certain devices. One of these is called “Play Books,” its cloud Google Play eBook reader. Rumors are of a cheap but powerful 7″ tablet, likely called the Google Play tablet, real soon. None of this helps physical booksellers. They can’t be helped.
Great suggestions here. One I’d add is that booksellers wanting to sell eBooks better figure what add’l value they’re able to provide customers. As you point out, loyalty won’t be enough. Price parity won’t be enough. To do anything substantial and innovative enough to make a difference, booksellers will need their trade organizations to take a much more proactive approach. Sadly, I think the time may have passed.
@Mike, it’s certainly looking like Google will have to crack the device market to be a player in digital media. Will it help bricks and mortar booksellers? As you suggest, probably not. Google seems to have concluded they can’t bring enough to the table to be useful to them. To Google’s credit, they’ve poured a lot into the industry trying to make this work.
@Peter. This is the nub of the issue for booksellers. Most of them have seen the value as being in the transaction – the ability to actually sell and deliver an ebook. But that part of the equation has well and truly moved away. Bookseller trade organisations will help most if they practice a bit of tough love and kill the notion that their members’ main goal should be to ‘sell books in any format the customer wants’. Once this idea has gone, booksellers will have a chance to get creative and open the door to some genuinely new thinking. Who knows what will come out of it?