February 19 , 2019

The Nook is dead

Long-time readers of this newsletter know we've been concerned about the viability of Barnes and Noble as other big box retailers meet their demise and Amazon gobbles up their customers.
Barnes has also struggled with their executive leadership and appear (to us) to be mostly disorganized and rudderless. While we greatly value them as a means to get to our customers -- they are the largest brick and mortar book retailer after all -- we have realized we need to part ways in a couple of key ways:
1) We had taken advantage of Barnes & Nobles direct distribution model which permitted them to print books for us for their online customers and, in theory, provide a direct means to print and distribute to their stores. You might recall some of the early problems with them rejecting our content for being labeled "Made in the USA" and for them clamping down too hard on intellectual property -- in effect locking up dozens of our titles for no valid reason. After these issues were resolved, we gave them another chance, but three times now they have held book signings with our authors who had books in their direct supply chain. Three times they called us directly to place an order. In other words, their store managers have no idea they had a print and distribution option internally and that the books they were calling about were set up. "Oh, that's corporate" or "Oh, that's the e-Commerce department" were typical excuses. Realizing this was not likely to be corrected any time soon, we moved all of this business over to Ingram. While we pay more per book, at least we know the stores are looking here for them. Ingram was more than happy to oblige and set up a slick automated way to move them over. We are now working on this. You should know the metadata about your books at B&N is only about 20% of what is available at Ingram. And here is what else we learned -- corporate was only giving a 35% discount to their stores! Ingram gives them a better deal --- no wonder they were ignoring it!
2) Sales on the NOOK platform have been sliding for many months. During December we sold only one NOOK eBook despite having many dozens listed on the platform. This was the end of the rope for us. Being on the NOOK platform prevented us from getting full access to Amazon Kindle promotions and opportunities. While I firmly believe this is monopoly-like behavior on Amazon's part and should be looked at by the FTC, we are now able to switch on all of our eBooks on Amazon without limitations. What does this mean? We can now run promotions and giveaways for you on Amazon. We also will receive funds for Kindle Unlimited. Bear in mind, they are paying (gross) about four tenths of a cent per page. This means we are receiving about $1 for a 250 page book -- the typical size of most books. In other words, Amazon, by default, is paying us like every book is on sale for 99 cents. Again -- another monopoly-like example that needs to be looked at. But we were not fully participating in this in the past. When we did, we just lumped the pennies on to your ebook sales rather than listing it separately. Now, we will be listing it separately on royalty reports so you can see the impact. We think you will see a modest increase in the coming months.
How will that look on your royalty reports? We will be reporting to you in 1000 page units. So if you "sold" 1542 pages, your quantity would be 1.542. The price is then normalized to 1000 page units. So the price of .00446 per page will be expressed as $4.46 per 1000 page units. This is closer to the typical full price paid for an ebook.