Surging eBook Sales Help a Shrinking Random House Find Profit

PW: "Led by a 250% increase in e-book sales, strong lists and favorable exchange rates, total revenue at Random House rose 6.1%, to 1.83 billion euros ($2.57 billion at current exchange rates), while earnings before interest, taxes and special items jumped 26.3% to 173 million euros ($243 million). In addition to top line growth profits benefited from cost controls, parent company Bertelsmann said. Random ended 2010 with 168 fewer employees than in 2009. ... "

Rumor: Random House UK considering agency pricing switch

EBOOK MAGAZINE: "Random House UK could follow their US counterpart in adopting agency pricing for ebooks according to internet rumours which also suggest an announcement confirming the move could come as early as this week. ... "

AppleInsider | Random House books come to Apple's iBookstore for iPad, iPhone

Well, of course they have.

AppleInsider: Random House may soon join iBooks -

Well of course. Hell, agency model was the only issue between them in the first place.

Random House Switches to Agency Model, Joins Other Large Houses in Helping Small Upstarts Get a Jump on Them Pricewise

Thank God. The last thing I needed was RH not trying to gouge customers. PW: "In the agency model, publishers set the price and designate an agent—in this case the bookseller—who will sell the book and receive the commission. Adopting the model for e-books tends to mean e-book prices will rise, something both publishers and independent retailers applaud. Publishers believe low e-book prices devalue their books and cannibalize hardcover sales. Under the agency model once a price has been set it cannot be changed or discounted by the retailer and independent e-book retailers believe the higher prices of the agency model allow them to compete with big e-book vendors."

Santa Brings Random House Record E-Book Sales

PW: "December 25 and 26 were the two biggest e-book sales days ever for Random House, the publisher reported today. Combined e-book sales across e-retailers on those two days rose more than 300% over last year's sales for the same two-day period, which had been Random's best two-day e-book sales period ever. ... " Note that Random House does not make its content available via iBooks, yet nevertheless seems to be surviving.

iBooks: No iTunes When It Comes to Dominating the Market

PW: "Want an e-book version of the nation’s bestselling nonfiction hardcovers? Don’t bother looking on the iBookstore. Apple still hasn’t struck a deal with Random House, publisher of George W. Bush’s Decision Points and Laura Hillenbrand’s Unbroken. For now, iPad users who want to get any of Random House’s bestsellers -- which also include John Grisham’s The Confession and Stieg Larsson’s The Girl with the Dragon Tattoo -- need to visit Apple’s App Store and download the free application for the Kindle or the Nook. ... "

Random House to Release "Ebook Insider" Sampler in Time for Christmas

The Digital Reader:

Random House are planning ahead for all the e-reader that people are going to be giving for Christmas. They’ve released an ebook sampler with a selection of all their latest titles. It’s called The Ebook Insider, and you can find it here.

For some reason it’s an 5″x8″ PDF. I wonder why they didn’t just make it a website? It’s already unusable on most e-readers; it needs a 9″ screen. Oh, they’re blinkered by the iPad, aren’t they? (I had to write the screen size before I realized it, actually.)

I’m beginning to get the feeling that the RH marketing department came up with this without consulting the ebook geeks. ...

Random Housel eBook Sales Jump 250% Over 2009

And they've done it WITHOUT iBooks. Hmmm. The Bookseller: "Random House's global e-book sales are up 250% year-on-year according to chief executive Markus Dohle. In his end of year letter to staff Dohle also said that in the US this autumn for some of its lead titles nearly half of the overall first-week sales have been in the e-book format. Dohle added that he expected this growth would continue into 2011: 'With the coming proliferation of e-reading devices and e-bookstores in Germany, the UK, Spain, and Latin America, we expect digital sales increases to resound globally.'"

Random House eBook Sales "Surge" 300% in First Half of 2010

Interesting. Not participating in iBooks does not seem to have hurt Random very much. Authorlink.com: "Random House U.S. e-book sales surged 300 percent in the first six months, and comparably in Germany and UK. The company’s e-book program in these countries cumulatively expanded to 20,000 titles. The UK Group’s Nigella Lawson digital cooking app became an immediate global bestseller."

Same-Day E-Book Sales Propel Grisham's Thriller

Jeff Trachtenberg, WSJ.com: "In recent years, even some of the biggest authors have lost gravitational pull with readers. But for John Grisham's 24th adult book, The Confession, the e-book version has helped propel first-week sales beyond that of his last legal thriller. The Confession is the first of Mr. Grisham's adult hardcover novels to also be available simultaneously as an e-book. Doubleday, an imprint of Bertelsmann AG's Random House, says e-book sales were about one-third of week-one hardcover sales, or around 70,000."

Bertelsmann Raises Outlook

WSJ.com: "Media conglomerate Bertelsmann AG Tuesday lifted its full year outlook after a significant improvement in first-half results, driven by the steady improvement in advertising markets, cost cutting and lower charges compared with a year earlier. Growth was mainly fueled by the advertising-driven divisions, broadcaster RTL Group SA (RTL.BT), Hamburg-based newspaper and magazine publisher Gruner Jahr, and by trade book publisher Random House where the U.S. business and digital activities were particularly positive, Bertelsmann said."

Digital Royalties: Random House Sets 40% Bar for Some Titles

Here's the thing. The so-called "big-six" no longer define the industry standard. The publishing world is fast becoming flat. The majority of small indies offer 50% royalties on new frontlist titles off the break. And the big, old-media houses bring less and less of an advantage to the publishing/distribution equation every day as paper evaporates and digital distribution comes to the fore.

Publishers Weekly:

A source confirmed that the biggest of the 'big six,' Random House, has adopted an e-book royalty that tops out at 40% for all titles covered by contracts signed before 1994. Sources said that Random is offering a starting royalty of 25% on these titles—which is the de facto standard in the industry on frontlist books—that then rises to 40%. The hike works, as one source put it, like a 'sales escalator,' jumping a certain percentage after a specified number of sales. While Random considers the agreement it has with Wylie and other agencies to be a standard, there is room for flexibility in different negotiations. The 40% royalty rate does not apply to digital editions of Random frontlist titles; that royalty remains 25%. ...

Agent Richard Curtis, president of Richard Curtis Associates, also questioned the supposed fairness of this new rate. “It’s fairer than 25%, and not as fair as 50%,” he quipped, noting that e-reads, the digital publishing company he also runs, offers, like Rosetta, a 50% royalty.

Although sources did not specify whether a similar backlist digital royalty standard has been adopted by the other big houses, agent Robert Gottlieb, chairman of Trident Media Group, said, “What Random House has done successfully is press the issue and work out a deal with Wylie that will help the other houses come to a similar conclusion.”

Certainly the presumption is that all of the big six are talking to agents about trying to come to terms on digital royalties for titles where e-rights are in question, and that agreements will closely follow the RH-Wylie settlement. The contentious issue over digital royalty rates for frontlist titles, however, remains to be resolved.

What Can We Take Away From Random House's Backlist eBook Deal With Andrew Wylie?

DailyFinance: "What does the Wylie/Random House deal mean for the future of digital publishing ventures? The flippant answer is that no one really knows yet, even as Amazon's newest version of the Kindle sells out faster than any other device they've made and the e-book market continues to grow. The more nuanced response is that Odyssey Editions was always a one-of-a-kind venture, hovering well outside the ever-expanding horizons of a most exciting -- and unpredictable -- future for existing and still nascent e-book ventures."

Random House Has Caved to Wylie on eBook Royalty Rates

Told you so: "While Applebaum held the line on the question of the digital royalty rate--he said that 'Random House has been engaging in ongoing and productive conversations relating to e-book rights for certain Random House backlist titles and the arrangement reached with The Wylie Agency to now publish these particular titles as e-books in the United States is consistent with agreements we've reached with other literary agents'--one high-placed source with direct knowledge of the rights talks said the house has quietly been offering agents a better deal on backlist e-book rights for a brief period now. The source said Random is offering a royalty built around a sliding schedule on e-book rights for backlist titles that can approach 40% 'rather quickly.'" - Publishers Weekly

Maybe Andrew Wylie Actually Won the Random House/Odyssey War

Fast Company: "Publishers are concerned about losing their relevance in the digital age. Production costs of e-books are declining thanks to online distribution (Amazon, iTunes, Barnes & Noble), and literary agencies are more and more considering breaking from traditional publishers. The Wylie Agency was one of the first to perform this coup, launching a line of e-books through Odyssey Editions, an e-publishing firm the agency started that attracted authors with offers of higher royalties. As reported by the Associated Press, traditional publishers typically offer 25% royalties for e-books--agents and authors are now hoping for 50%. But today, the situation has been resolved, though not in the Wylie Agency's favor."

How do we know that this was not settled in the favor of Wylie and his clients? The terms of the agreement between Wylie and Random House are sealed. It is entirely possible that Random House blinked and Wylie got the 50%. Also note this from the Financial Times: "Mr Wylie was not immediately available to discuss where the truce left his plans for a new imprint, but told the Financial Times last month he was principally trying to make a point about the importance of getting the right terms in the e-book era."

The only clear loser in this particular deal is Amazon, which loses its two-year exclusives on the 13 Random House titles. But by my count, that leaves them with seven more Wylie/Odyssey exclusives still in hand.

Random House/Odyssey Editions (Wylie) Tiff Settled

The NY Times's headline suggests that Random House has "won" the standoff. But since neither party is willing to disclose financial terms of their agreement, my guess is that the jury is actually still out on the question of win/lose. NYTimes.com: "'We are pleased to announce that the Wylie Agency and Random House have resolved our differences over the disputed Random House titles which have been included in the Odyssey Editions e-book publishing program,' said a joint statement signed by Markus Dohle, the chairman and chief executive of Random House, and Mr. Wylie. It added: 'We both are glad to be able to put this matter behind us.' The dispute erupted in July, when Mr. Wylie announced that he was starting Odyssey Editions, which would release e-books exclusively through Amazon.com. ... Stuart Applebaum, a spokesman for Random House, declined to disclose the financial terms of the agreement but said they were consistent with agreements that Random House had reached with other literary agencies on backlist e-book rights. He said Mr. Wylie met with Mr. Dohle alone at the Random House headquarters in Manhattan on two occasions, most recently last Friday. ..."

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." ...

Random House Sees E - Book Sales Jumping - CEO - NYTimes.com

Random House Sees E - Book Sales Jumping - CEO - NYTimes.com: "VIENNA (Reuters) - Bertelsmann's Random House, the world's biggest book publisher, expects electronic books to contribute more than 10 percent of its U.S. revenue next year, its head was quoted as saying on Sunday. Chief Executive Markus Dohle told German magazine Der Spiegel that e-book revenue had already jumped to 8 percent in the United States and had turned into a new growth driver for the publisher of Dan Brown, John Grisham and Stieg Larsson."

Crown Digital's eBooks Pricing Policy Misses the Mark

I think the pricing scenario described below is a mistake in that it will disadvantage the eBooks of Crown authors against more fairly and appropriately priced eBooks from other publishers. The eBook market has already been trained to expect e-editions to be more economically-priced than dead-tree media, and will vote with its dollars. Crown's theory, I assume, is to guard against moderately-priced e-editions cannibalizing dead-tree sales. Previously, Crown has also experimented with delaying e-editions until a period of time well after the dead-tree publication, thus endeavoring to create artificial scarcity and protect higher-priced dead tree sales through brick-and-mortar outlets. Either approach will rebound against Crown and Crown authors.

Crown Digital Embraces eBooks And Interactivity - mediabistro.com: eBookNewser: "Random House's Crown Digital imprint is embracing the digital publishing landscape with interactive digital titles and a push into iPhone apps. Crown is also setting eBook prices equal to print editions. ... For example, if a novel is $24.99, the eBook is $24.99. It is consistent with the lowest price, so if the publisher puts out a paperback version at $12.99, then the eBook will drop to $12.99. ..."