Is B&N Divestiture the Pathway to Samsung?

With the recent news of Samsung taking over development of Barnes & Noble Nook Media tablets, followed by the news this week of the coming divestiture of B&N Retail from B&N Nook Media, might this all be leading to a solution to problems for both Samsung and Barnes & Noble?

Let’s start with B&N Retail, who once free of the Nook Media relationship can surely find better ways to maximize profitability from that current floor space and drive increased store traffic. Possibly they will want to sell a more diverse selection of tablets and smartphones. Possibly high-level corporate pressure will temper the difficult negotiations likely to occur so a sensible B&N overall brand strategy is followed.

But NOOK Media will not want to overpay for that prime retail space given their current difficulties and so a significant reset of that valuable floor space seems likely, especially given it is front and center in many locations, prime real estate. How many more print books might they actually be selling in that space right now if it were available?

What NOOK Media needs most is available via Samsung, whose tablet and smartphone lineup gains them access to Best Buy, Staples, AT&T, Verizon, and more, amounting to several thousand more storefronts located in the places people already shop for tech.

Samsung, on the other hand, made a weak attempt to establish their own branded ebook storefront but are too late to that game, a game in which even Apple is struggling competing against Amazon. So the B&N NOOK Media group would potentially offer Samsung the second largest database of ebook buyers after Amazon. Chances are many of these customers have zero (or worse) brand affinity toward Amazon, so they are not likely to leave if given better hardware than what they have gotten from B&N in the past. And many prefer their Nook models dedicated to reading over multi-purpose “distraction-easy” tablets.

That better hardware will start soon as the strategic partnership rolls out. Assuming it is going well, which I believe will be the case, then the divestiture to follow opens the door for Samsung to outright buy Nook Media, leaving B&N Retail Founder Leonard Riggio free to resume running the retail business he loves so dearly. As well as gain from the Nook Media sale. Which from a brand standpoint is a great reason why B&N came up with the NOOK name, because it is an excellent ebook product brand name and can be carried forward under any other larger brand umbrella.

I do not own shares in any of these companies and am just an interested industry observer speculating off in the wings. I appreciate your comments.

Publerati Titles on Scribd for eBook Subscribers…

All Publerati works of fiction are now available as part of the Scribd $8.99 monthly ebook subscription program.
Scribd is doing for books and reading what Netflix has done for movies and television. Ideal for avid readers, Scribd offers a great selection of titles at a terrific price: essentially half the price of one trade paperback for all the ebooks per month you can read. They support Apple iOS, Android, and Kindle.
Please visit our home page to see our titles and know that when you buy any of them from Scribd or other ebook resellers we donate no less than 15% of our net proceeds to help the Worldreader Organization spread literacy using ebooks.
All titles also available for libraries through Overdrive.
— Caleb

‘Tis the Season of Not-So-Happy Returns

Can you feel it?  I can. Always will. Haunts me.

The sound of the returns, like an ominous storm in retrograde, unsold inventory backing in on you from retailers everywhere, reducing holiday sales results. All part of the cruel retail game.

I used to fear this time of year when I worked in the book industry and later the packaged goods’ software industry, because large retailers stand between the producers and the purchasers, so you cannot truly know what actually sold to an end-user until well into March. Many of those “sold” gifts are returned by the recipient as well, only adding to the inventory turmoil.
Sales commissions and bonuses need to be paid, yet you do not know what actually sold through. Annual results need to be reported, pay raises given or not, plans completed.
The book industry is among the worst in this regard, employing an antiquated business model that hurts everyone along the way. Retailers are pushed to load up for the holidays, early sales estimates look promising so reprints are ordered and shipped. After the holiday blitz, when the invoice comes due in February, the publisher’s sales and accounting teams suddenly catch wind of the impending invoice reductions for returns.
Turns out sell-through was not that great, 35% of the product is coming back from retail. The finance team reserved for a 20% returns rate. The publisher moves urgently to declare the book out-of-print to stem further returns, forcing the bookseller to mark down and dispose of remaining inventory instead of taking a credit on their invoice. Which further delays their payment and possibly propels them out of business as they decide whether to pay the tax man or the publisher.
The authors are out of luck. Their book’s life was cut prematurely short. A fast and furious game of roulette with no winners.
The software industry was smart enough to sell their goods on consignment starting in the late 1990s, a trend driven by large retailers Staples and Best Buy looking to reduce all the reverse-flow returns chaos. The cost in the stores to pull product from shelves, in the warehouses, in the accounting departments — just staggering. Packaged goods’ software publishers resisted at first but then discovered it was a major improvement. The retailer stocked more inventory without the ownership risk. They worked through their inventory instead of returning it for credit. Eventually when a new version came out, they destroyed the old one in-field as instructed. Similar to the fates of magazines and mass market paperbacks.
The consumer products hardware industry (e.g., cameras, phones, tablets, GPS, etc.) is the worst: you cannot reliably estimate true sell-through nor would you destroy in field, so you load up the channels for the holidays with a full line of price points and models, and then grind your teeth this time of year when the returns start showing up back in the warehouse. The unopened products need to be received, go through QA again, be re-flashed with the latest firmware updates, loaded with the latest software, and stuck back in a new box on a warehouse shelf waiting for hopeful “future marching orders.”
This returns nightmare is one of the main reasons I believe so strongly in digital goods and why they can and should cost the end-user less. Streamed content. Ebooks, photos, movies, and music. They don’t come back and create nightmarish churn. This is another of the revolutionary advancements that the digital world brings to our otherwise antiquated physical goods and retail business models, which continue to be in decline in part due to these inventory inefficiencies.
And it is not just brick-and-mortar retailers. Amazon surely is one of the newest sources of bi-polar anxiety for product producers, as they reorder feverishly after Black Friday causing producer elation, run their Holiday Daily Deals, only to reach mid-January and realize the demand was not what their algorithms projected, resulting in sudden producer depression syndrome (SPDS). Back comes the product, which given Amazon’s impact on most businesses can amount to 40% of all the producer’s product available in the field. Ouch.
So for those of you living through this returns season, you have my deepest sympathies. It is a cruel game and depending on what the real sell-thru looks like after all the counting is finally complete, jobs may be lost or gained. 
— Caleb

You Made a Difference

Thank you to everyone who purchased a Publerati ebook during our 100% Publisher Donation Program with the Worldreader Organization over the holidays. You made a difference.
Not all sales results are available yet but it is clear many people bought ebooks from Publerati in part knowing we were donating our entire publisher’s share. Our sales increased during the promotion and I received many thoughtful emails from readers who were pleasantly surprised by the calibre of our fiction. Thank you for those emails as the work involved in writing and editing novels can be a bit like making maple syrup: a true labor of limited love.
It looks like we will be able to at least quintuple our annual donation to the Worldreader Organization from a year ago. So that is great news!
As a reminder, we always donate no less than 15% of our publisher’s share to Worldreader so I appreciate any help spreading the word. The goal is to increase our sales to the point where we can once again run this 100% donation program next holiday season and continue funding the hard work that goes into acquiring, editing, and marketing excellent new works of fiction.
Have a happy and healthy 2014!
Best wishes,
Caleb Mason
Founder & Publisher
p.s. please click the share button below as one way to share, by selecting your preferred social media outlet from the list.

Giving Back for the Holidays

Publerati is pleased to announce now through December 31, 2013 we will donate 100% of our publisher’s share of all Publerati ebook sales to the Worldreader Organization, who also has a matching program in place now through year-end.

A core mission of Publerati is to increase access for excellent fiction around the world using ebooks and e-reading technologies. Worldreader is achieving remarkable success through a combination of hard work and vision in providing digital readers and ebooks to teachers and children in developing nations.
Publerati wants to be more than just another publisher. Our goal is to help bring interesting, challenging fiction to readers at accessible ebook prices and in the process donate a portion of our sales to Worldreader on an ongoing basis. 
It should be a win-win: excellent novels and story collections that might be a little too risky for mainstream publishing now see the light of day as affordable ebooks, and in the process those less fortunate gain access to a huge digital library of ebooks on e-readers provided by Worldreader, fostering a lifelong love of learning.
Our list is purposefully small as we are highly selective in what we publish and have worked to create a diverse list showcasing what we feel represents the best of the art of fiction done in differing styles.
Please share this and help make a difference around the world simply by reading. You can find our titles on Thanks.
Happy Holidays!
Caleb Mason
Founder & Publisher









Espresso Print-on-Demand at Books-a-Million Maine Store

Sometimes living in Maine has unexpected advantages beyond lobster, seaside air, and friendly people, as I discovered yesterday when learning one of the newest beta sites for the Espresso Print-on-Demand system was being unveiled at a South Portland Books-a-Million store. Publerati is located in nearby Portland. 

Oddly enough, Maine was also a test-market back in 1995 when Time Warner was rolling out its national Road Runner program, which I got involved with when working for Konica in the photo industry, who had a photo processing plant in South Portland. TW Cable was eager to see if a high-speed photo system would have consumer appeal. And now we have Facebook.

I stopped in to snap some photos and visited with the nice people running the machine as well as a rep from NYC working with Espresso On-Demand and the local PR agency Burgess Advertising. There was a ribbon-cutting event, music, and food. Well done. Some kids were crawled up on the floor watching intently as the demo book passed through the machine, very cute.
Here is a photo of the store-within-store On-Demand space, which is very similar to what Fuji and Kodak did fifteen years ago in supermarkets, drug stores, and mass retail, set off in a corner:

Here is the machine combination, which in this case is a Xerox book assembly, gluing/binding machine that allows you to watch like an old-fashioned taffy machine, and then a Konica Minolta printer. I was told different configurations are being tested but given that I worked for Konica years ago, I know how strong their R&D and onsite service people are so would not be surprised to see them in the wider rollout over the coming years. Not many people know that the founder of Konica and the founders of HP were friends in the 1950s and several Konica patents are included in HP products.  Here is the machine combo up close:
The Konica printer is the black machine on the right that looks like a woodstove, perfect for life in Maine! Wonder how many BTUs that thing throws off in wintah? That would close the deal for many around here for sure.
Here are some books, which take on average 7-10 minutes to produce from soup to nuts, including this color example of a Peter Rabbit public domain book, which looks great when done. All the paper is archival quality, similar to how the photo machines in mass retail now provide long-life paper you cannot get off your home printer. I was unable to find out about the longevity of the inks, however, which would be important to know for all these POD books.
Okay, so possibly you wonder why this matters? My own view is it will matter more in other types of retail formats than it will in current book superstore configurations, but for now it allows a retailer to print books for self-published authors as well as out-of-print books for large publishers, such as HarperCollins. 
It allows any book that is provided through Espresso On-Demand in the suitable PDF format (one for the cover, one for the content), to be available to someone who might not otherwise be able to find it. And it allows any individual to have their own books produced, even simple photo scrapbooks, along the lines of how one goes to the Staples Copy Center.
This picture shows how the important cross-merchandising can happen in the store:
As the technology improves and the pricing comes down (this is not going to be a break-even venture for some time probably, but I am sure the investors behind everyone involved are willing to float some beta testing units while working out the kinks and building consumer demand), I envision these units in some Starbucks, airports, “A” store supermarkets, which have the highest repeat traffic of any retail format, and some drug stores already printing photos. The advantages these retailers have over bookstores is the average person is there several times a week.
I hope the better indie bookstores will be able to offer these as well as they do a great job of buying selected pre-printed books that appeal to the tastes of their clientele while also being able to serve the local market through the new POD capability and author events. 
In photo, more of this business actually went direct online than into retail. We now have Shutterfly and others who have self-service Web ordering systems online (e.g., your computer, tablet, or phone), so expect Amazon to be a player in this space as well. And I would also expect the total number of books consumed in print to decline similar to what happened with photos, where far, far fewer are printed now than fifteen years ago. So the on-demand retail store product mixes will be important to watch and a nightmare to plan for as retail space declines in total for books.
Publerati will offer our ebook fiction through Espresso On-Demand to supplement the delivery we are already getting through the Overdrive system to libraries and some retail. I hope we can do author signings using these machines and retail locations. But I personally believe the majority of books will be read digitally in the future and if you simply must own it and put it on a shelf, that option will exist for those special cases. Just like I choose to own the DVD for “Gone with the Wind.”
Bringing this back to Maine, we have seen better than many how the decline in paper consumption has put many paper manufacturers out of business here and cost so many jobs. It is sad, but we need to face the truth, which is the world will spin on its merry way without us and not care a hoot.
I know there is much more about this that I do not know so welcome comments from those with more information. I wanted to share these photos and thoughts realizing this is another instance of technology being early to the game but with the potential to play a key role in a few years. And, go figure, it happened to be going on right in my neighborhood.
— Caleb

Publerati Titles Now Available on Overdrive for Libraries

Publerati is pleased to announce all our fiction titles are now available on Overdrive for libraries and other retailers participating in the Overdrive kiosk ebook program.

A core mission of Publerati is to increase access for excellent fiction around the world using ebooks and e-reading technologies. Libraries and their dedicated librarians have long been instrumental in helping readers access books and develop a passion for reading. The Overdrive lending system assures this great work can continue as ebooks become widely demanded by consumers.
Publerati donates all our ebooks to the Worldreader Organization to help spread literacy, as well as a portion of every sale. We have carefully selected $4.99 as the ideal price for new works of fiction originated as ebooks, believing more readers will purchase at this price point and as a byproduct help fund access for those with fewer options. Libraries are critical to helping make this all possible.
A new title sure to be in demand at libraries this month is Thanksgiving by Ellen Cooney, which has been receiving terrific reviews. The other works of fiction in the program are: Normal Family by Don Trowden; Journey of the North Star by Douglas Penick; Dancing in the Kitchen by Susan Sterling; An American Gospel by M.T. Daffenberg, and Marriages are Made in India by Lakshmi Raj Sharma. All upcoming Publerati titles will be included in the Overdrive program. The list is small and carefully curated to represent our commitment to excellent fiction written in differing styles, reflecting the core uniqueness of the art-form versus other entertainment choices.
I hope next time you visit your local library you will ask about the Publerati works of fiction, all with detailed descriptions on our home page at 
— Caleb


Thanksgiving by Ellen Cooney Early Reviews

We would like to thank the many book bloggers who are passionate about excellent fiction for their coverage of this extraordinary novel.  Here are links to recent reviews:

This is a win-win…because when you read any Publerati work of fiction, priced at just $4.99 to encourage wider readership, we donate a portion of all sales (as well as the ebook itself) to the Worldreader Organization, who is working to spread literacy using donated ebooks and ereaders. Good works.

Buttons, Zippers and Books

I very much enjoyed my time at the Publishing Business Conference and Expo, where as always I learned a great deal from some very bright and thoughtful people.


As someone who has now attended three decades of conferences in the book, photo, and consumer electronics industries, I have noticed one constant across them all: denial of the speed and depth of the coming changes.


This conference had many feel-good moments of “print is not dead” and “print will always be here” and one excellent speaker used an analogy I had not heard before: “Just look down at your shirt buttons, which have been around since the earliest times. The same will be true for the printed book.” 


I dutifully looked down at my shirt and did indeed notice many buttons (all buttoned thank goodness!) but then continued downwards to my pants where I encountered a zipper and metal clasp. Hmm…I thought…plus geez I hope no one is looking at that strange balding dude up front. 


The point of these changes is not about “going away forever” but how the companies making the buttons of their time adapt to weird things like Velcro, metal clasps, and zippers, which reduce the number of buttons they sell.


So I did a little button research and came upon this fascinating excerpt about the dawn of the zipper:

“In 1913, Sundback revised and introduced a new model, which had interlocking oval scoops (instead of the previously used hooks) that could be joined together tightly by a slider in one movement or swoop. This final model is recognized as the modern zipper, which took many months to find success in the industrial market. Retailers, who were prone to sticking with traditional materials and design methods, were slow to purchase the product.” (Source: Wikipedia, whatever that is!)


And then I started thinking about the great wooden boat builders here in my state of Maine and how they “totally missed the boat” when the rest of the world moved on into the age of metal. And indeed you can find some of the best wooden boat builders in the world still operating in Maine, but most ship builders who did not move forward are gone.


A direct mail guru once told me the reason people open sealed envelopes at a higher rate than wafer-sealed self-mailers is because this sacrosanct item dates back to the time of Charlemagne and is therefore deeply encoded in our DNA in signifying something important is inside. (He also had some important “ins” with a 6 x9 envelope vendor needing to dump excess inventory. Would I like to purchase 1.5 million today?) 

The only thing that comes sealed in my mail is a treasured invitation to go see the newest Volvo S60. The important messages I receive are happening in email, text messaging, or on Facebook. And my missing a wedding invitation could be the best thing to happen to that lucky couple getting married.


The old photo industry denials were truly tough to fathom. “People love their prints, they will never give them up!” “You cannot match the quality of a printed photo with digital!” “Yes, things are shifting but we will be fine for the next 10-15 years and then I can retire.” (As in screw the younger people.) Well 15 years later the number of prints produced has dropped to a whole new scale and stalwarts like Kodak, Sony, and Polaroid are forever changed. And the number of photos being captured and shared has never been higher.


And what about those old paper mapping atlas denials? “People will always want a printed atlas,” the Rand McNally man is so certain, it guarantees he must be wrong. Funny but a woman sitting next to me at the Book Conference commented that her teenage son could not figure out how to use a paper atlas recently, where you have to go from page 14 to page 37 to connect to the north but page 17 to connect to the east and so on. Plus you cannot even see where you are on the page. “Jeez, Mom, I can figure that all out in a few seconds using my phone.” (Guess who never figured out how to penetrate the GPS market…yup, Rand McNally.)


Older people will lament the loss of map-reading skills and a few teenagers will probably die in the woods unnecessarily. But how many more will show up on time for their college interview? Will get into North Dakota State because they actually showed up in the correct town? 


I think Sony had it right even though they have lost so much over the years. “Disrupt yourself before someone unexpected does it to you.” Many of the changes come with comforting but deceptive downward plateaus, where you get to catch your breath. But you are still in a stepping-down trend that becomes more and more problematic as key volume thresholds are passed. Retailers need to sell “x” amount. When it falls to the “g” amount, they need to ask you to leave the shelves. And depending on how smart they are in staying current (Staples does an excellent job with this) the stores themselves close. CompUSA, Borders, and Circuit City were not so smart apparently.


The hardest part is managing the profitability slides from print to digital with all those fixed overheads (e.g., human beings with kids to feed), but this control is not actually in the manufacturer’s hands. New competition comes along and baits you into eroding what you have. You follow you lose. You don’t you lose. But change was going to erode and alter everything anyway so why not figure it out yourself while you still can? Continuous innovation. Kodak did not. Palm did not. The list is very long.


And I imagine many button manufacturers who continued to supply the risk-averse retailers who confidently dictated what products they should make (do NOT go there) failed to survive as clasps and zippers and Velcro reduced their volumes. I will zip it now. Or button it?


— Caleb





Adult Fiction Sales: How Much Was Print in 2012?

With permission of the American Association of Publishers and the Book Industry Study Group 2012 data, I recently took a look at how the ebook and print book revenue and unit splits came in for 2012, just for the trade adult fiction category.

It is important to note the following when looking at this data:

1) This study measures the traditional publishing industry, not self-publishing titles. If those titles were factored in, the balance between ebooks and print would skew further toward ebooks.

2)  In 2012, net book sales across all categories fell slightly over the previous year, the third straight year of declines, but with more stability. Much of that decline was within the education, scholarly, and nonfiction book categories.

3) The excellent news is that two categories grew: adult trade fiction and young adult trade fiction. Some or quite a lot of this could be due to blockbusters in each category that will be difficult to replicate in 2013: 50 Shades of Grey and The Hunger Games. Trade publishing now represents 55% of the total book market, up from less than 50% a few years ago, which speaks in part to the emergence of ebooks but also the decline of the total pie as the other sectors shrink. It’s probably a good news/bad news pie chart.

This is what I see in the 2012 Trade Adult Fiction category data:

2012 Trade Book Adult Fiction Total Dollars: $4.8b

Print books (all formats): $2.9b (62%)
Ebooks: $1.8b (38%)

When looking at the unit split, it was 40% ebooks and 60% print.

What this data cannot answer is how many people would have paid the higher paperback or hardcover price for a book if it was not available in ebook? (As in let’s pretend ebooks don’t exist.) Conversely, how many more people read the book and talked about it because they downloaded the ebook “before they forgot to buy the print book.” How many new readers were created by ebooks for that title? In the case of 50 Shades, the book might very well have never existed had it not been self-published first as an ebook and the entire 2012 industry results and Random House would have suffered as a result.

I think common sense says there is a tradeoff at play here. But is readership of adult fiction and young adult fiction going up because of ebooks? Are more people reading books they would not have otherwise read? That answer must be yes.

If someone knows what adding the self-publishing units and dollars into this mix looks like I would be very interested in knowing. For instance, of all the books sold in 2012, how many came from the publishers covered in the AAP/BISG report and how many came from self-publishing programs? (NPD retail data, for instance, typically says: this data represents 91% of all cash register rings made via our measured retailers.) I realize this data for fiction alone is probably not available.

— Caleb Mason