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The publishing industry has always known challenging times, but new challenges are raising questions about the future of traditional publishers.
"The whole value chain is changing," said Kobo CEO Michael Serbinis, whose company has gained six million users of its e-readers in more than 100 countries in less than two years.
"Everything from author, agent, publisher, distributor, retailer, it's all changing," he told CBC News.
The price of books has been forced down by big box store competition and growing e-book sales, which some U.S. publishers predict will reach 50 per cent of all sales by 2014. There's also the booming trend in self-publishing by authors, especially with e-books. All of this is cracking the foundations of the business model publishers have stood on for centuries.
Amid all this, add the fact that Kobo is following Amazon’s lead and plans to launch a comprehensive publishing service for authors in 2012, with the offerings to book editing, design and marketing. Amazon recently announced that it will publish 122 titles this fall, including the latest from American mystery writer Barry Eisler, who passed up a $ 500,000 US, two-book deal with a traditional publisher to sign with Amazon.
According to Eisler, he's smashing his personal e-book sales record with his newest release The Detachment and taking a much bigger slice of the profits from each book sold than when his publisher had a piece of the pie. When his publisher refused to lower the price of his e-books, it pushed him to go to Amazon, where he says sales take off if these digital titles are priced attractively around the $5 mark.
Here in Canada, Kobo has already amassed a stable of 10,000 authors from around the world who are self-publishing e-books on its website, including British Columbia writer Phyllis Smallman. At press time, her 2008 mystery novel Margarita Nights was fifth on the Kobo website bestseller list.
California romance writer Barbara Freethy has sold more than a million e-books in 2011 alone, through self-publishing on Kobo, Amazon, Apple's iTunes site, Barnes and Noble and other websites. These were books that were out of print, she noted, and making no money at all. Now she’s made more than $1 million US and is easily paying for her childrens' college education.
Some in the industry, such as Writers' Union of Canada chair Greg Hollingshead, believe traditional publishers are threatened by these changes. B.C.'s Smallman thinks many will go out of business. But these publishers insist there's still a need for their strong editorial and marketing expertise, especially with literary authors.
“Good luck to them. The more the merrier,” said Louise Dennys, executive vice-president of Knopf Random House.
Indeed, award-winning Canadian authors like Charles Foran and Kate Pullinger say they plan to stick with their publishers for both print and e-book sales. Still, technology is bursting the traditional gates of publishing, Foran acknowledges.
“It's an unusually free market. It's a free-for-all free market out there,” he said.
Some writers worry their work could get lost on websites featuring hundreds of thousands of other books and believe that consumers will continue to rely on publishers to be the gatekeepers for what is worth reading.
However, even those who are sticking by their publishers want some changes. Foran, Pullinger, Nino Ricci and others are joining in the Writers' Union's call for a greater share of e-book profits for authors.
The writers want their take doubled, from 25 per cent of a publisher’s net proceeds (after costs are deducted) to 50 per cent. It's an argument that's also being made by authors in the U.S., U.K. and elsewhere, especially when it's known that Amazon, Kobo and other online retailers are offering authors 70 per cent of the retail price of self-published books.
Publishers say they just don't have the money and that they too are being squeezed by the industry's new fiscal realities.
No one knows what the changing landscape will look like in five or 10 years, or whether there will be a push back against Amazon and Kobo. Two U.S. independent bookstores are even boycotting Eisler's new, Amazon-published title. However, it's clear the genie is out of the bottle and publishers will have to be even more nimble as they figure out how to survive in an industry that seems to change from week to week.