Tuesday, September 15, 2009

Dan Brown and Publishing Pricing in 2009


In the article (see link above) in UK's Independent, DJ Taylor bemoans the fact that Uk retail cutthroat discounting on major bestsellers like "Lost Symbol" and Harry Potter, etc are a lost opportunity for struggling book retailers to realize profitable revenue. With UK chains selling the title at 50% discount or half price, Mr Taylor notes that selling a copy is either a loss leader to drive traffic, or a break even proposition at best. Mr Taylor neglects to note the major cash flow advantage that retailers will see in selling many copies quickly to consumers, collecting that cast, then paying their suppliers with extended dating.
He writes, "All this renders the book's publication horribly symbolic. For all the bright-eyed talk about 'diversity' in the nation's bookshops, the over-riding tendency in publishing is for more discounted copies to be sold of fewer, similar books. Some might argue that putting Dan Brown on sale at half-price is a thoroughly democratic way of making literature more accessible to a mass public. In the end, though, price-cutting simply devalues the allure of what remains. "
Mr Taylor may not have noticed, but a sort of consumer price deflation has hit many physical media products in the last year or so. I would propose that the revenue dampening impact of the global recession, combined with the emergence of digital media, the increased visibility of used products (via eBay and Amazon.com), and the corresponding weakening in physical media product sales and retailer performance has driven this phenomena. Lost in many industry blogs and trade articles about eBook pricing and the $9.99 Kindle consumer price target is the fact that in 2009, the price of physical book product matters much more to publisher's top and bottom line results.
The industry is in an almost existential juggling act, trying to find the balance of consumer value vs publisher profitability while many of the primary factors that influence both are changing. What is indisputable in 2009 is that the industry needs more consumers to buy books, whether in the US or UK, whether in chains or indie bookstores.

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