"The End of the Beginning" re: Digital Transition in Book Publishing

Almost goes without saying: Jane Friedman once again the smartest person in the room @ Digital Book World. PW: "The CEOs agreed that they face many challenges, but said there are many opportunities as well. Jane Friedman, CEO of Open Road Integrated Media and former CEO of HarperCollins, said the industry is 'vitale and vibrant,' adding that at no point in her career as she seen such change and that things will never go back to the way they were. 'It’s the end of the beginning' of the digital transition, Friedman said."

Niches, Backlist Books Fuel Open Road's Growing Partner Program

PW: "With three new publisher partnerships launching this fall, and more to come, digital upstart Open Road is betting that while formats, technology and strategies may change, good digital publishing will be built on the same foundation as good traditional publishing—niches, backlist, and great marketing. The latest partnerships, with literary publisher Delphinium, Philosophical Library, and spirituality publisher Shambhala, will see a host of new e-book titles and digital marketing efforts rolled out in the coming weeks and months—and they mark another step forward for Open Road’s business ..."

Open Road Announces E-riginals Debut List

Jane Friedman has some great things happening. PW: "Jonathon King is moving his Max Freeman mystery series to Open Road, releasing Midnight Guardians as an e-book October 14, although it is up at Amazon for $9.99. Open Road will also release King’s earlier Freeman titles as e-books plus two standalone novels. Another previously published author, Alan Dean Foster, is releasing his travel memoir, Predators I Have Known as an E-riginal in January. Foster has written over 100 books. Home in the Morning is a first novel by Mary Glickman set for November, while veteran entertainment journalist Jo Piazza’s look at the business of being famous, Celebrity, will go on sale in February. Open Road has worldwide electronic and physical rights to each title, and marketing efforts will include producing videos that will be distributed through the company’s digital marketing platform. Trade paperbacks will be sold only through online retailers. Jeffrey Sharp, president and cofounder of Open Road, will work with each author on the exploitation of additional media rights for their books. Authors receive a 50/50 split on e-book sales."

PW: Evolving Standard Deal for eBook Originals - No Advance, 50/50 Split of Net Proceeds

This is exactly how my firm, New Street Communications, is structuring things. Publishers Weekly: "Most e-book original publishers interviewed by PW do not offer advances, explaining that the rules in the e-books world are different from traditional print publishing. Waxman said that while he won't rule out offering an advance to the right author, currently Diversion is not giving advances. Angela James, executive editor of Harlequin's e-book original imprint, Carina Books, said something similar: 'Carina Press does not offer advances, because the digital-first business model works differently.' The new business model is different largely because it works more like a partnership: the author supplies the text, the publisher pays for production, and they split the return down the middle (after the publisher recoups production costs). That's exactly how Diversion works. 'We put up money for the production costs and we recoup those costs as first revenues. That seems to be the model that makes sense in the nascent business at this time,' said Waxman. Open Road, the most visible publisher of e-book originals, also works on a 50/50 profit share, offering no advances. James said that in exchange for sacrificing the advance, Carina authors get 'increased marketing support, higher digital royalties on cover price, and more frequent royalty payments.'"

Requiem for Traditional Book Publishing in Crain's New York

From Crain's New York Business: Another requiem for dead-tree publishing, paired with a great discussion of Jane Friedman, her Open Road, and another interesting start-up, Dale Peck's Mischief and Mayhem.

... Apple's iPad, Barnes & Noble's Nook and new iterations of the Kindle have accelerated the e-book revolution, which is undermining traditional publishing's economics with lower prices than those for hardcover books. It's also threatening the foundation of the business: the humble brick-and-mortar bookstore.

Several weeks ago, Barnes & Noble, the largest bookstore chain, did the unthinkable and put itself up for sale. Independent bookstores, whose ranks have diminished by about half since 2000, continue to close.
The end of bookstores could be the final nail in the coffin for traditional publishing. The big trade houses rely on acres of shelves to sell their wide-ranging titles, from literary and commercial fiction to nonfiction that doesn't have a news hook or a celebrity's name on the cover.

And the end could come sooner than many people think. E-book sales have tripled in the past year, and now make up 8.5% of publishers' revenue. They'll hit 50% by 2015, according to Mike Shatzkin, chief executive of The Idea Logical Co.

At that point, the few stores left standing will sell just a quarter of all physical books, down from around three-quarters today, and big publishers will “come under threat,” he says. “Their value is based on delivering distribution.

... Through May, overall net sales for hardcover books totaled $713 million—a bump over last year's numbers but a decline of 19% from the same period in 2007, according to the Association of American Publishers.

“The hope is that e-book sales will balance out the decline in physical book sales,” says Jack Perry, a former Random House sales chief who consults on digital issues for publishers. “That hasn't happened yet.” ...

Pat Conroy and the E-Book Future - AP

Hillel Italie:

Conroy is a good example of the divided state of electronic books. With standard contracts now including digital rights, e-editions of his recent works — from "South of Broad" to a memoir out this fall, "My Reading Life" — are handled by Random House, Inc., which also releases the bound versions. Meanwhile, rights to his older books have shifted among outside companies.

The Open Road releases were first published by Houghton Mifflin (now Harcourt Houghton Mifflin), but came out before the rise of e-books, when many contracts did not specifically cover rights to electronic editions. ...

Conroy and his agent, Marlee Rusoff, both say the major appeal of Open Road was not royalties, although Open Road almost surely is offering more than the 25 percent most publishers give, but how the books would be packaged and promoted.

For several years, "Prince of Tides" was released through a licensing agreement with rival digital publisher, Rosetta Books. But after the Rosetta contract expired, Rusoff thought it better to try a new company.

"Nothing had been done to promote the books; they were languishing, I felt," Rusoff says. "What made me introduce Pat to the people at Open Road was the visual element of their books. I think that can enhance the experience. None of that was happening at Rosetta."

"Did I want to renew this license? The answer is 'Yes,' says Rosetta founder Arthur Klebanoff, who has fought with Random House over rights to older titles. "But until the arrival of the Kindle, you had a tiny, tiny marketplace. That has changed dramatically over the last 12 years, but if you're an agent looking for results and you were hanging around with Rosetta for nine years, it looks like there's no action." ...

eBook Royalties - New Street Communications, LLC

After studying the matter quite carefully, I've decided New Street will follow the royalty model that seems to have become the standard for Jane Friedman's Open Road Media. We'll pay authors 50% of net profits, generally with no advance. We'll report every six months. And we'll hold no reserve against returns for amounts payable because (in less than five words) eBooks don't get returned.

Open Road: $4 Million in Venture Capital from Kohlberg

From Publishers Weekly:

Kohlberg Ventures has increased its investment in Open Road Integrated Media LLC. The venture capital firm invested an additional $4 million in Series A financing, building upon its original $3 million investment last August. ...

Jane Friedman's Open Road Continues to Thrive

From Examiner.com:

As former ambassador Mitchell Reiss is set to begin his new position as president of Washington College, he also announced that he is writing a book, Negotiating With Evil, on the ins and outs of negotiating--or not--with terrorists. As someone knowledgable about the subject, the real surprise is not that he is writing the book--but that he chose to go straight to ebook format with the publication.

Reiss will be publishing his book through Open Road Integrated Media, founded by former HarperCollins CEO Jane Friedman and film producer Jeffrey Sharp.

Reiss is not the only author to choose ebook format over traditional publishing methods. He's joined by the likes of rize-winning author John Edgar Wideman and crime novlist J. A. Konrath--both of whom enjoy very strong sales through lulu.com and Amazon's AmazonEncore.

Open Road has been having success with the novels of late author William Styron, who wrote The Confessions of Nat Turner, Sophie's Choice, and others. Those titles were released on May 4th and have been ranking high for Amazon's Kindle and Barnes & Noble's Nook. ...