BPN 1123 The rise of the eBook publisher

A bachelor graduate of the Erasmus University in Rotterdam produced a Bachelor Thesis on the influences of digital publishing on the traditional book publishing sector in The Netherlands. It is an interesting thesis, written in the English language by Nicole Neven. I had a chance of reading and digesting the 51 pages.

In this thesis Nicole Neven tested the theory about electronic publishing in The Netherlands. She starts from the position that there is a progressive development of digital publishing, that traditional publishers will take care of the electronic publishing themselves and that new parties will enter also. But in the two interviews she conducted, the interviewees do not agree with this position and argue that the development actually occurs in three phases.

1. In this phase, there are only print book publishers that produce large piles of printed books. In The Netherlands they store them at the Central Book House, a central warehouse, or in private warehouses before they will be distributed to the retail dealers selling the book. As an author it is very hard to get your book published because of the excess supply of writers. Publishing companies take a risk in choosing what books to publish.

2. In the next phase, new publishers arrive, producing only electronic books. Here the development of the eReader and other devices that read the eBook is important. The market for the eBook has to grow and the supply of eBooks has to increase parallel to this growth. This is the phase the book market in the Netherlands is in right now. An example of such an e-publisher is Pinion of the NDC/VBK Holding. In this phase the e-publisher has no contact with the authors themselves, and produces little or no new books as an eBook, only already existing books in printed form.

3. In this phase, the traditional publishers will take over the function and activities of the electronic publishers and become mixed publishers.. The publishers will start to produce new titles directly as eBooks. Besides the eBooks, they will supply Printing on Demand. Here books will only be printed when there is a consumer that wants to buy it, or has already paid for it. According to the expert the book store in the form that we know, will disappear. Apart from the numerous websites where eBooks can be purchased, there will appear eBook stores, where people can buy eBooks that are directly transmitted to their eReader. In these stores the possibility will still exist to print the books in the form of printing on demand. People will mainly read books from their eReader or cell phone. The paper book will never disappear, but it will certainly have a different function than it has now.

The figures in the research of Price Waterhouse Coopers (PWC) display an rise in the sale of eBooks. The electronic book spending will increase from €1 million in 2004 to €42 in 2011. The present figures for 2008 suggest according to PWC that the electronic book market has already a 3,24 per cent market share of the total book market in 2011. These figures are doubted in publishing circles. The market for eBooks might reach the 10 per cent market share of the total market in twenty to thirty years. (I personally doubt the PWC figures, as hey are mere deductions from PWC's global media study, IMHO. JB)

Nicole Neven offers traditional print publishers consolation, but saying that eBooks will not take over printed books in the next couple of years, maybe never. However she argues that the book publishers of professional information will have a less bright future ahead, unless they move over to eBooks.

The author also offers a suggestion to the publishers. Get reliable information about eBooks and collect sales figures of eBooks and position them over against the figures of the printed books. In this way publishers can decide whether or not they want to anticipate on this development.

Blog Posting Number: 1123

Tags: electronic publishing, eReader, eBook

Never a dull moment at PCM

Hardly has the private equity company Apax closed the door to the premises of the publishing company PCM and made off with their financial spoils or the new owner, who was the owner before Apax, let the world know that they are in charge again.

Apax is out now. And the other shareholders, foundations, are in charge again just like they were before Apax was invited in. Those shareholders will look back at the Apax era and most likely shake their heads. What did it do for the newspaper and book publishing company?
- NRC.next is only tangible product, which just celebrated its first anniversary;
- One board member went out during the Apax regime: Mr Theo Bouwman;
- Two new board members came in during the Apax regime: Ton aan de Stegge and Philip Alberdingk Thijm;
- A free daily was announced in cooperation with a free daily which has been published in the meantime; PCM is now working on its own free publication;
- For the rest, Apax has financially reshaped PCM, but the company will have to pay off the loans for a long time.

So now the foundations are in charge again and they let it know to the world. They sent off Mr Alberdingk Thijm immediately. He had successfully operated at the Dutch financial daily Het Financieele Dagblad, where he shaped a cross-media operation, with print, radio and internet. According to the foundations he was unable to pull off the same trick for PCM. But he walks off at least 2 million euro richer, but of course his name in tatters. And also Mr Aan de Stegge will be slaughtered. He has been asked to stay on for another half year until a new chairman has been found.

All this turmoil normally leads to a period with no strategy or a strategy recalled. Mr Aan de Stegge had already announced that newspapers and education were the spearpoints of the strategy. The book division, except the educational section, could be sold, he said. But surprise, surprise PCM (read the foundations) are negotiating a merger with NDC/VBK, a newspaper and book publisher. Their profiles are quite similar. Both are in the newspaper and book business. PCM is in the national newspapers, while NDC/VBK is in the business of regional newspapers. Both companies have a book publishing division. PCM is heavily mortgaged, while NDC/VBK is well financed. The company have been in talks already for months and are already talking about board members. Rumour has it that the chairman of NDC/VBK, Jan de Roos, will be named the new chairman.

But these merger talks could take some time. Discussions about the cross-ownership in the media are certainly coming up. The competition watchdog will have look into the matter. It might be that the watchdog will ask to sell particular parts. In this way the company would become a conglomerate of national newspapers, with regional newspapers in the North of the Netherlands. But the book divisions would be a problem. Putting the two book divisions together would produce the largest book publishing conglomerate in The Netherlands. There will be two reactions to this. The competition watchdog might ask to sell some companies or some book publishers might step out of the conglomerate and start their own company, as happened with the PCM book publishing companies.

For the immediate future there are two operational projects. PCM will finally launch their own free newspaper, named Dag (translated Day or Goodbye). There are high expectations about the project as PCM is working together with the incumbent telco KPN. PCM will produce the paper and be involved in the internet site; KPN will be involved in the internet site, but mainly work on the exploitation of the mobile/PDA and interactive television side. Another project will be the digital paper project by de Volkskrant and by NRC Handelsblad. As I remarked in the flash item of yesterday: this has been on the drawing boards for long. But now it seems to become reality. I personally would have combined it with the launch of the free newspaper Dag and experimented with day-parting. We will wait and see. I am eager to hear the price PCM is going to ask for the e-Reader and the subscription to the newspaper. Besides, with the merger of PCM and NDC/VBK, an expert company on e-Books and digital paper would be included: Pinion.

For the next half year there will not be a dull moment at PCM.

Blog Posting Number 709

Tags: newspapers, digital paper, e-Reader