February 7, 2012

Is bundling ebooks with print books a good idea?


From an ad for a Hillary Jordan book, published by Algonquin in a bundle including print and digital versions (from HoodedHawk.com)

Is bundling — selling a print book together with its digital version for one price — a good idea? Is it, indeed, an idea whose time has come?

There have been a few stray efforts to see how it might work —- Barnes & Noble tried it out almost two years ago, as this Publishers Weekly story reports, but the dearth of follow-up reports, and the fact that they haven’t tried it since, may tell us how well it worked.

But it’s certainly become a topic of conversation again lately. British indie bookseller Tim O’Kelly got a lot of attention when he called for it in a Bookseller commentary last fall. He set out the argument that most proponents make:

In many ways this is less radical than it sounds. When you buy a CD in a shop you can make a back-up copy on your computer, and although technically breaching copyright, people have been known to transfer these onto their iPod.

A concern might be that if the e-book was part of a package and not paid for, sales would be lost. However it’s clear that the reverse would be true. Very few people currently buy both forms of a book separately, so only a tiny proportion of sales would go—and one thing we know for sure about British consumers is that they love a bargain. More copies of books would undoubtedly be sold and it would return power to the physical book and its publisher. Some people would continue to buy the electronic version on its own—like the people who use iTunes to buy their music.

At a stroke it would blow open restrictive use of DRM (Digital Rights Management) as every e-reader would have to be able to accept these free books, or risk becoming obsolete. Regular bookshop customers lost to Kindle would be able to buy their books (in whatever form) from their favourite bookseller again.

Digital would cease to be a threat, and instead it would be a shot in the arm for the traditional physical book, adding value at no actual cost to the publisher or the author.

Of course, it’s hard to find someone speaking to the opposing argument — not because there isn’t an opposing argument, but because of the general hesitancy of publishers to ever appear to oppose digital anything. They’ve — we’ve — learned the hard way that this leads to instant derision (as I’ve complained before). But what they would probably say in response to O’Kelly’s pitch is that much of what he says seem illl-informed:  It’s not at all clear that sales wouldn’t be lost, as there’s little statistical back-up of that supposition, and indeed, to the contrary some studies show ebook readers are heavy print book buyers (see below); the DRM argument is irrelevant — regular bookshop customers can buy ebooks from a growing number of brick-and-mortar booksellers now, including MOBI files which work on Kindles; and then there’s the ever-popular canard that there would be “no actual cost to the publisher or the author” in giving away ebooks. In fact, ebooks do indeed cost something to make, and authors certainly do stand to lose income in a give-away of their work.

In fact, most of the publishers I’ve talked to about this see ebooks as, simply, a third format, in a trilogy that includes hardcovers and paperbacks. One reason they like that, of course, is that it would mean an expanding readership, a readership that might not otherwise have been reachable. This excites any publisher, and not just because of sales. It’s not all about money. But it’s a business, after all, and it does also mean something to publishers that a third format does help to amortize costs and make a distressingly low-margin industry look at least a little more like it has a workable business model. There’s a hesitancy to voice that because it seems, if you’re a cretin, to resonate with the above-mentioned canard about ebooks having no costs involved in them (i.e., the idea that publishers are just greedy bastards). But it’s a viewpoint that makes the idea of giving away ebooks for free as nonsensical as the idea of giving away paperbacks for free.

But as a Publishers Weekly report by Rachel Deahl noted just yesterday, there are some smart publishers who say nonetheless that bundling’s time has come. “I’m very interested in the idea of using digital formats to help sell physical formats,” Workman publisher Bob Miller tells her. ”And I think consumers don’t want to have to buy the same book multiple times, for multiple formats.”

And Evan Schnittman, managing director of group sales and marketing at Bloomsbury USA, feels “the upside of bundling is manifold: the consumer can enjoy the malleability of digital reading without forgoing the joy of retaining the paper book, while the author/publisher/retailer benefit from charging more for the content.” With a little contract restructuring and a raised retail price, Schnittman says, “The retailer is happy. The author and agent get a higher royalty. The consumer wins.”

Of course, there are some major business hurdles, notes Deahl:

One of the biggest hurdles to bundling, though, may prove to be the current system through which the big six publishers sell their digital books. Aside from questions about royalties and pricing—what should an author, who normally receives a separate royalty on print and digital editions receive when the two formats are combined? what should publishers charge for a hardback sold together with an e-book?—there is the issue of the agency model. Because the big six sell their print books on the wholesale model and their e-books on the agency model, this poses tricky questions on what terms to set for bundled editions.

Still, leave it to Deahl herself to smartly describe a scenario that’s the most provocative consideration of the idea that bundles make sense — a scenario that constitutes, as well, a far more convincing argument for bundling than the lame music CD-copying analogy most advocates trot out:

In a world where people increasingly consume their content on multiple platforms—watching TV recorded on their DVR, as well as downloaded to their iPad; reading the New York Times in print Sunday mornings, on their Kindle during the morning commute, then on their desktop at the office—questions are starting to be asked about why publishers are not allowing readers easy access to both digital and print. (Studies show that most e-book readers also buy print books.)

Now, that makes a publisher wonder ….


Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.