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Cambridge University Press: Too Old to Fail

In this era of government bailouts, you’ve no doubt heard the phrase “too big to fail”. Most of the time this phrase is aligned with banks and insurance companies who are so interconnected with other industries that if they were to go out of business, the result would be a complete collapse of whole economies. According to Washington, being too big to fail means you automatically get a life extension, whether you deserve it or not.

None of this is lost on the publishing industry apparently. While no single book publisher can claim they are too big to fail, employees of one in particular believe their publishing house is too old to fail. Cambridge University Press recently announced plans to cut 150 jobs due in part from changes being forced on them as the book industry moves from lithographic to digital publishing. Critics of the staff reduction claim that this is just the beginning of the end for the publisher.

The CUP is a charity that is supervised by a “Syndicate” of 18 academics from the highest echelons of the university.

Representatives from the shop floor and the Unite union took their case direct to the Syndicate, which is chaired by Dr Gordon Johnson, the president of Wolfson College, and includes economist philosopher Amartya Kumar Sen, former master of Trinity College.

They say their arguments were sympathetically received and that this has led to a change in tack from the former accountant and current chief executive of the press, Stephen Bourne and his fellow-managers.

Tomorrow, Unite is set to meet CUP management again, amid mounting hope that at least half of the jobs threatened by the restructuring will be saved in what looks like a U-turn by the publishers.

But the management is more cautious. Peter Davison, CUP’s corporate affairs director, confirms that the company is trying to soften the blow in a harsh employment environment but says structural change in the printing industry has swept away pretty much every lithographic printing company in the high-cost south of England.

“We needed to take action because we saw losses of £2m annually for the next three years. We estimate that if we reduce the number of redundancies to 60 it would mean ongoing annual losses of £300,000 which we can tolerate for the time being, but it’s not as though we are free from the technological writing which is on the wall,” says Davison.

Clearly, the decision to eliminate staff is a purely economic one. It’s math, plain and simple. If you want to be around next year and the year after and so on, you need a sound financial plan. Losses of 2 million pounds are catastrophic, and while smaller losses of 300,000 pounds can be tolerated, it’s not a plan for long term viability. Understandably, no one wants to lose their job or make decisions to eliminate jobs. It’s painful. Yet, it seems the intentions of the critics are confused. One the one hand, they complain that job elimination means the end of their beloved press, yet they are confronted with the reality that financial losses also mean the end of their beloved press. You can’t have it both ways. So, rather than confront the lesser of two evils, they collude with the members of the “Syndicate”, career academics without real business experience, to garner their sympathy. Perfect! Go and complain to the very people who champion the inherent value of traditions and resist change at most every level.

Let’s face it, change happens, no matter how much we conspire against it. Cambridge University Press, like many other publishing houses, must confront the changes occurring in the industry in order to stay in business. If this means they do it without pomp and circumstance, then so be it. If it means they can no longer afford to be the “printer to the Queen”, then that’s the way it must be. If it means they can no longer sustain the cost of weekly air shipments of thousands of pounds of printed paper, then they’ll have to find another way. But, if the people who claim to care so much about the future existence of the 425 year-old publisher continue to cling to a sentimentality of the past, they will ultimately succeed at insuring the very thing they fight against.

Google Book Settlement: Devil’s in the Details

Seems as time goes by, more people are coming to grips with what’s in the Google Book Search Settlement. Everyone knows the basics of the agreement – Google pays $125 million total to publishers, of which, $35 million will be spent to create the Book Rights Registry. The registry will be an online database of books and information about their ownership. It’ll also provide the ability to process royalty payments from online content sales and facilitate sending the payments to the proper parties. It’ll be run by author’s and publisher representatives and will be independent, in that, it won’t be used only by Google. Any service provider will be able to use the service. Sounds great, right?

Well, some folks are reading the tea leaves a bit and are now wondering aloud what it all really means. Others have already come to their conclusions and are filing objections to the settlement with the AAP and the Author’s Guild. While Google professes to “do no evil”, their willingness to agree to paying out such a large sum isn’t an indication of guilt and regret. There’s always a silver lining, and you can be sure Google will make the most of it.

University Presses React to Soft Economy

Most university presses are realizing a decline in revenue in this current economic climate. But rather than whine about it, some are seeing opportunity. Of those, the press at Massachusetts Institute of Technology (MIT) is taking opportunity to the next level: action. The answer? eBooks.

In today’s soft economy, the eBook system has acted as a way out of financial shortcomings. According to Rebecca Schrader, Assistant Director of Finance of MIT Press, a large portion of the university press’ e-book sales comes from users of the Amazon Kindle, a portable e-book reader that has access to over 250,000 books.

According to Schrader, university presses throughout the country have experienced similar declines in sales. A recent survey published by the American Association of University Presses estimates an average 10 percent loss in sales and revenue between July and December 2008.

As a result of declining earnings, university presses are also starting to take different approaches to their business models.

And MIT isn’t alone in their need to shift focus from print only to print+eBook publishing. Yale, Cornell, and the University of Michigan Press also plan to cut back and increase their eBook publishing programs.

While it’s no surprise that text book publishers are heading toward broader eBook publishing initiatives quicker than the general book publishing industry, what university presses learn along the way will be of great help to the big houses in NYC and others around the country. That is, if they’re paying attention.

Verizon and AT&T Want a Piece of the eBook Business

Envy: it’s a powerful thing.

Verizon Wireless (NYSE: VZ) and AT&T (NYSE: T) are both looking at e-book readers as a new source of income, having eyed up the success of Amazon’s Kindle, which uses Sprint (NYSE: S) Nextel’s network to allow consumers to download digital books to their devices. The e-reader interest is part of a larger drive to find additional wireless devices to connect to networks, as the US’s wireless market for cell phones reaches saturation point.

Bloomberg quotes AT&T’s head of emerging devices Glenn Lurie as saying the Kindle has done a “phenomenol job” and that the network wants to be part of that market. Lurie told the news service, “There’s a whole bunch of ways to monetize that type of device. That’s coming, it’s coming fast. We’re going to be part of it.” Lurie didn’t mention any potential partners, however, or any timing on when such a device might be available.

The key sentence here is, “there’s a whole bunch of ways to monetize that type of device”. Sounds like part of that monetization could be ads. Like, popup ads, and ads embedded into content, like right in between paragraphs on the page of your most favorite novel.

Hope I’m wrong.

Obsessed With Book Smell?

Think the eBook discussion focuses too heavily on the tactile differences with print? Over at Booksquare, it’s OK to let digital books be different from paper books. I agree.

Now…about that bacon smell, you just might have something there, Kassia.

Do eBooks Have to Fail?

I read with interest a post from Evan Schnittman of Oxford University Press which outlined conflicts between a current print publishing business model and the emerging eBook business model. According to Schnittman, the incompatibilities between the two models means that consumer stand-alone eBooks must fail in order for existing print models to continue.

How does the publishing industry fund the creation, editing, design, production, marketing, e-warehousing, and sales of ebooks, if the income isn’t there? How do ebooks cover the huge advances needed to buy books if we cannot generate the cash, especially at their extremely low, discounted prices, cover the advances that an entire industry has come to require? The answer is that ebooks, alone, cannot.

What this means is that unless a very different model evolves, ebooks can never become the dominant version of content sold by book publishers. It means that ebooks will always be priced to sell, but sold as an afterthought, not as the primary version of a work. It means that the need for blended e plus p models will evolve, in order to take advantage of all the great qualities of ebooks, while providing the financial support and structure that print offers. It means that consumer ebooks, as a stand-alone version of an intellectual property, must fail.

As you can imagine, there’s lots of opinions expressed in the comment section of Schnittman’s post. Many mention the obvious: that print business models must change in order for publishers to survive (and thrive in) the eBook business. Thinking up a new model might be easy enough, but what about changing the culture inside these publishing houses? It seems publishers are their own worst enemies in this regard. The “we’ve always done it this way” thinking is a major contributor to the less than sound decisions book publishers make when it comes to eBook development, marketing and sales. What else explains their habit to instantly apply existing print models to the eBook business? Their entire infrastructure is built upon the print model, so it’s no wonder they struggle.

  1. Publishers need to have the will to bring in new people (i.e. new ideas) and avoid the career folks who’s corpus of knowledge is based on the past 3 decades (or more) of the book publishing business. They need to implement an eBook business model that eliminates the risks inherent in the print model. There are already a few out there that they can adopt. Once they do…
  2. They need to develop a direct relationship with the end-user customer so they can effectively execute the eBook model.

That’s a tough road to travel though, since the book publishing industry has, for the most part, completely avoided the customer and embraced the retailer. Of course, this all made sense before the Internet. Unfortunately, book publishers didn’t grasp the importance of the customer relationship when the web came along, and now they have allowed Amazon, Google and others to own the critical data. Amazon not only knows where the customer lives, they know his buying habits, and more importantly they know his credit card number. How many publishers have any of this stuff? How many publishers recognize the value in it? How many would know what to do with the data if they had it?

The success of the eBook business for traditional book publishers will depend on the relationship they have with the end-user customer. Every day they willingly give this away, they lose the one sales channel that will matter most. Yet, none of this will matter if they continue to embrace the vicious cycle of today’s print business models.

An Author’s Perspective on the Book Publishing Industry

Dr. Gary S. Goodman, best-selling author of 12 books, warns prospective writers to be aware of the current state of the book publishing industry.

(1) Distribution through bookstores has never been tougher. Most publishers sell to stores on consignment. If books don’t fly off shelves into the hands of buyers, they’re returned to publishers, very quickly. Your title doesn’t get very long exposure or time to establish itself.

(2) Books used to be kept “in print” and available for longer periods of time, in many cases, for years. Now, they’re put to death quickly, if initial sales are anything other than brisk.

(3) We live in an era of the celebrity book. If Oprah wants to write a diet book, it will be a monster hit; you know that. But the most exciting, up and coming, highly credentialed nutritionist may not have a chance of breaking into print.

(4) Publishers expect authors to make them profitable through personal promotional efforts. “What are you going to do to sell this book?” is the major question they ask, and agents will tell you, without a personal commitment to sell your own copies, stated in your book proposal, you won’t get a publisher to bite.

(5) Publishers are clueless, themselves, about what to put out there. Reluctant to lead, and reluctant to follow the success of others, they are like the proverbial deer in the headlights.

Just the rantings of a disgruntled author? Some may believe that’s what motivates Goodman. I’m not so sure. It’s possible that his experience echo’s that of other authors who are thinking twice before handing over the copyright to their next work to a book publisher. As I’ve said before, the book publishing industry is in danger of losing the very asset they need the most – the writer. Counting on the laziness of the author and their lack of enthusiasm for self-promotion isn’t the best business model. Just look around. Many of today’s self-published books are hard to distinguish from their counterpart coming out of a major NYC publishing house. As self-publishing matures and begins to mirror professional publishing, the lines between the two blur and the need for a traditional book publisher becomes less necessary.

Move Over Kindle: New eBook Readers Enter the Market

Samsung and Fujitsu enter the market with eBook reading devices.

Let me say up front that I’m not a big fan of dedicated eBook hardware. Call me jaded ever since I bought the Rocket eBook (now living in a cardboard box somewhere in my garage). I’ve seen/held/experienced most all of the gadgets on the market, and while many of them include compelling feature sets, and adequate reading experiences, they remain elusive to the broad consumer market due to high prices and complexity. Until these constraints decrease, devices like these will remain locked within the realm of the early adopters.