Britain's biggest publisher Penguin Random House is set to close its largest distribution centre - Western Daily PressOh, the gullible media. Too many journalists in the U.S. and elsewhere have acted as PR reps for legacy publishers and proclaimed that E is just a craze.

But wait. First we’ve read that e-books are contributing to the bankruptcies of small publishers in the U.K. And now comes word that Penguin Random House in the UK is shutting down its biggest distribution center because of the rise of e-books.

Here’s part of a story in the Western Daily Press, which also notes that industry consolidation is a factor:

A spokeswoman said there has been an industry-wide decline in physical book sales, matched by an increase in ebook sales, but that overall sales were not in decline.

Penguin Random House said the proposed changes were also due to a decrease in distribution client publishers due to industry consolidation.

In the UK last year, £3,311 million worth of electronic and physical book sales were recorded by the Publishers Association – down two per cent on the previous year.

Of those, £2,748m million worth of printed books were sold – down five per cent -compared with £563million of digital books, showing an 11 per cent increase on 2013.

Unlike some, I don’t take pleasure in the suffering of the large publishers—I see room for houses of all sizes. Perhaps in time the big boys will get out of their denial mode and end e-book price gouges. Overpricing e-books will harm the giants’  revenue as readers forsake them for smaller publishers or library loans or nonbook-related forms of entertainment.

Related: Book readership slips—and Big Five mistakes could worsen matters, where I tell how Luddites fixated on the preservation of legacy infrastructure could harm all reading, not just the digital variety.


  1. “Overpricing e-books will harm the giants’ revenue as readers forsake them for smaller publishers or library loans or nonbook-related forms of entertainment.”

    Count me as one who has given up buying legacy publisher eBooks in favour of smaller publishers and my local library. One example for me is Patricia Briggs’ “Night Broken”. Kobo has it for sale at NZ$19.99 – this is just over 20 months since the book/eBook was released by Orbit. If I wanted to purchase the paperback edition I could buy it for NZ$11.42! US editions of eBooks, if they are available, are cheaper than UK editions but it is usually only the UK edition that is available. If the US edition is available, then I will buy it. If only the UK edition is available then it is a lost sale.

  2. It’s not the mega publishers I worry about — they have embraced ebooks. Yes, sometimes pricing is a bit iffy — particularly for back catalogue — but we’ve come a long, long way since 2008 and the first Kindle device.

    Two trends ARE worrying:

    1) Amazon is locking in more and more exclusive deals with authors that remove their books from other vendors entirely (Erle Stanley Gardner’s Perry Mason books were effectively out of print for a decade or more but are now back in ebook form — but only from Amazon. In Canada, that means no libraries have them, and that Kobo or Nook are shut out entirely.)

    2) Small publishers, including academic presses, might not offer ANY ebooks, or just very few select titles. And, sometimes when they do offer ebooks, they turn out to be pdfs formatted in a way that is impractical to read except on a very large format tablet (like a 12″ or larger screen).

  3. @Alexander: Nice hearing from you. The big publishers could be doing much better with e-books than they are right now. See URL below. It’s a WSJ paywalled article, but you’ll see the main point in the head. I fervently agree with you about the risks of Amazon exclusives. As for small publishers, you are right about the omissions and other mistakes of many small legacy houses, but the real growth is most likely coming from small born-digital publishers as well as self-publishers. David

    • From the WSJ link:
      “One high-level publishing executive disputed that the Amazon pacts are behind the e-book sales decline. “This is a title-driven business,” he said. “If you have a good book, price isn’t an issue.””

      Well, there’s your problem. In aggregate, new promoted books will demand and get a higher price tag. But the decision at the individual consumer level remains: “of all the books in the universe to choose from, is this one worth $15?”. Substitution is real but it’s not precise and it can be serendipitous. Amazon, having trained the market to buy below $10, means that consumers, in general, will shape their reading / buying habits to reflect that — even though they may still buy a few titles at a higher price. All of us can still only read one book at a time.

      Consumers, too, are not idiots. When a publisher thinks a mainly text only title is worth more as an ebook than as a print book, they miss the boat. Reading is a divine pleasure for many of us but, unlike publishing execs, we live within real world budgets. Caviar pricing might be sampled occasionally, but most of us, most of the time, who do not have car elevators in their garages, will opt for reading something at a more modest price using personal substitution preferences as a guide.

  4. Notwithstanding that I am mainly a self-published author, I like you still, “don’t take pleasure in the suffering of the large publishers.”

    Nevertheless, I question the whole concept of “e-book price gouges” and that legacy publishers should be charging less for their ebooks. Lately I have seen two “legacy publishers” reduce the price of the Kindle edition of their retirement books to $1.99 (which totally surprised the heck out of me). On the other hand, I have maintained the price of my “How to Retire Happy, Wild, and Free” at $9.97. This I know: I sold a lot more copies of the Kindle edition of my retirement book priced at $9.97 than these publishers sold of their respective retirement books while they had the price at $1.99. Remember, that they were likely getting a royalty of 35% while I was getting a royalty of 70% (less delivery charges).

    Because I have pride and confidence in my books, I won’t participate in either Kindle Unlimited or Kindle Select. I also refuse to price any of my ebooks below $5.97 unless it is a book of quotations. Offering my books for free or 99 cents or even $2.99 would severely cheapen what I have to offer.

    Marketing guru Seth Godin called the strategy of low ball pricing: “Clawing Yourself to the Bottom.” I totally agree.

    Seth Godin stated:

    “Trading in your standards in order to gain short-term attention or profit isn’t as easy as it looks. Once-great media brands that now traffic in cheesecake and quick clicks didn’t get there by mistake. Respected brands that rushed to deliver low price at all costs had to figure out which corners to cut, and fooled themselves into thinking they could get away with it forever. As the bottom gets more and more crowded, it’s harder than ever to be more short-sighted than everyone else. If you’re going to need to work that hard at it, might as well put the effort into racing to the top instead.”

    Indeed, clawing your way to the bottom costs you the chance to make a decent living.
    It also costs you your reputation and your self-esteem.

    Incidentally, this year I raised the price of the print edition of my “How to Retire Happy, Wild, and Free” from $16.95 to $19.95. The price was $16.95 since I self-published the book in 2004. Guess what? The sales of the print edition this year will the highest ever since 2004.

    In short, when your book doesn’t measure up, the answer may be to charge a lot less for it and loan it out through subscription services. If you have a great book, however, the answer is to charge a lot more for it than the substandard competition charges for theirs. At the same time, there is no need to loan out a great book through subscription services because people who appreciate quality are willing to pay for it.

    Seth Godin in another blog also advised:

    “The only things we spend time and money on are things that we believe are worth more than they cost. If people aren’t buying your product, it’s not because the price is too high. It’s because we don’t believe you enough, don’t love it enough, don’t care enough.”

    I also like what Mark Coker (owner of Smashwords) recently said relating to being successful at the game of publishing:

    “Good isn’t good enough.”

    Indeed, not only must your book be better than good, your marketing must be better than good. In other words, you will require a great book and great marketing to succeed in the future. That means being a 1- percenter — something most people will never attain because they resent 1-percenters. As for me, I like being a 1-percenter. That’s why I will always price my books higher than that of my competition.

  5. Part of the latency with other European markets has to do with culture. After living in France for a couple of years, I realized that not only are they laggards when it comes to the adoption of new technology, but established industry can’t be so quickly disrupted either. They don’t trust “new and shiny” and won’t jump on it for the sake of the novelty or inherent potential like we do. In talking with French author friends, it would seem the entire digital publishing revolution passed them by; the idea of going indie is a foreign one and holds little appeal. I can’t speak to Germany or Italy, but I would guess there are similar causes at the roots of a slower adoption there as well.

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