In what has become a crowded digital conference circuit, Digital Book World seems to have solidified its importance to the industry with an impressive turnout. DBW closed out this year’s programming with a grab bag of presentations at the end of the day that featured the results of a Mike Shatzkin poll of agents on e-book royalties; an Amazon.com presentation on e-book as well as print sales; and a roundtable discussion attempting to project the shape of the publishing landscape to come.
Publishing consultant Shatzkin, among the organizers of Digital Book World, offered some interesting reponses from a blind poll of 130 agents on e-book royalties (along with publisher responses to agents), certainly one of the hot button topics in an industry in transition from print to digital. Among the result, Shatzkin noted that ¾ of agents believe an author should have one publisher for both electronic and print; that most agents, unsurprisingly, believe a 50% e-book royalty rate is “fair,” and that most publishers thought that 25% of net ebook receipts, the generally accepted e-book royalty rate today, was fair. Shatzkin pointed out that older houses with big legacy print backlists were much more reluctant to want to go above 25% rate.
Not surprisingly he said the highest royalty rates were paid by digital-only publishers, houses that don’t have a large print backlist. He said that 1/3 of the agents have deals over 25% for e-book royalties and half the agents said they have deals with larger e-book royalties on backlist titles. And while 90% of the agents said their authors are interested in self-publishing, publishers are generally not worried, Shatzkin said, because they believe their ability to offer advances will keep authors coming to them. Finally, Shatzkin emphasized that he believes the 25% e-book royalty rate “will stick for awhile,” at least until print sales fall below 50% of publisher revenue.
Russ Grandinetti, Amazon.com v-p of Kindle Content, offered a series of observations about the impact of digitizing on print and e-books sales. He noted that the Kindle is being sold in more than 100 countries and Kindle consumers buy 3 times as many books as their print consumers, emphasizing that “digital is coming faster than you think.” He noted the importance of preorders to Amazon, “24% of print sales happen before the street date,” and pointed out that during the first 30 days a new digital book is available, it drives sales of the backlist. And he highlighted the rising popularity and quality of POD copies produced through Amazon.com, which have risen from less than 500,000 POD copies produced in 2006 to nearly 3 million copies produced in 2010.
And the day and DBW came to a close after a wide ranging conversation between Shatzkin, Random House’s Madeline McIntosh, literary agent Simon Lipskar, Sourcebook founder Dominique Raccah and Publishing Lunch’s Michael Cader. The topic was “where will we be in 12 months,” and at least one point that was unanimously agreed upon was that publishing revenues will likely be at least half digital by 2014. While MacIntosh noted that the 50/50 digital/print split has been a benchmark for planning at Random House for some time, she also emphasized that indeed some categories have already reached that mark. “For a big house like Random,” McIntosh said, “the challenge is to learn how to manage a split market.” Lipskar made the point that the digital/pring split affects authors differently, noting that some authors have big digital followings while others do not.
McIntosh also emphasied the importance of accurate, timely metadata to marketing, highlighting the need for scalable marketing strategies over what she believed was an overemphasis on focusing on marketing individual authors and collecting specific e-mail names and addresses. Nevertheless, Lipskar said he believed that “getting authors in more direct relationships to their fans,” was one of his big goals in the next year and pointed to Rebecca Skloot’s efforts (and to the PW profile of her) using social media of all kinds to promote, The Immortal Life of Henrietta Lacks f before publication. And Raccah pointed to the importance of “testing covers, testing titles, experimenting and getting comments and feedback” to guide a digital publishing program and joined with McIntosh in pointing to world English rights and the potential for finding growth on the global marketplace.
Look for more coverage of Digital Book World in the print magazine.