DSCF1073Timothy Doyle (Harvard University Press), Lorena Jones (Chronicle Books)

Doyle: Chief financial officer. Taking a deliberate approach to this, both because of culture and because of the uncertain nature of environment. Target markets are institutions and individuals. Receive very little financial support from the University. Non-profit. Growth strategies are to introduce new products (digital and print), publish more titles (front and backlist) and target new markets. Digital products are enhancements to current books or stand alone products. Moving slowly. Deliberate approach to digital products: development of digital product strategy as starting point – content assessment, understand markets and customers for digital products; Prioritization of opportunities – ebooks as an additional format, curated collections, enhanced ebooks, digital distribution; Critical to consider implications to staffing and infrastructure. Doing ebooks for about 3 years but a very small percentage. Increasing about 100% a year but misleading because starting from such a small number. Significant opportunities in creating curated collections. This stresses the organization from a staffing and infrastructure standpoint because need so many different skill sets that a traditional publisher doesn’t have. Different revenue streams and costs on the digital side: bulk of revenues will come from subscriptions and perpetual access. In US libraries want to buy perpetual access because of stretched budgets; subscriptions popular overseas. For digital products need different kinds of editorial, production and fulfillment. Created an acquisitions editor who functions only on digital products: the editor must scope out whether the conversion will be a low or high effort because the costs can be significantly different. Do a P&L for every print book. Developed a P&L for digital products – look at perpetual access and subscription models. Price for perpetual access, top up, single viewer ebook, multi viewer ebook. Earnings tend to come in on a 4 year time frame. Conversion, hosting, software expenses will be several years in advance of revenue. Piracy is an enormous issue they are facing as they move into the Asian markets.

Jones: very heavy into design and complicated content. Doesn’t lend itself easily to ebook conversion. Digital publishing is conceived and developed in house. Using epub and looking forward to epub 3. Also doing apps. Some of the costs are the same as print especially in acquisitions, production and operations. New costs are conceptualizing the digital product, prospection authors with multimedia ability, acquiring new sets of rights, video, audio, animation creation, UI and UA work, interactive designer, additional photography and art to animate, devices equipment and software, production work for engineering-ready assets, editors, copyeditors, proofers who work on interactive content, converting designed books for ebooks, building the files fore each ebook profile, programming and asset preparation for multiple platforms, screen proofing and reconciling, quality control, more layers of metadata creation and management, assets development an programming for product updates, submission fees – buying back our own products one live, establishing and servicing digital product sales channels, marketing digital titles in a complex market. Savings in paper printing and binding, indexing, less discount to retailer, freight, customs clearance and safety compliance, warehousing and insurance, inventory, live author events, brick and mortar co-op, no returns. For a hypothetical product selling a $30 with 15K print run, p/l shows a profit of $19,343; for an app selling T 14.99 with downloads of 12,500, the p/l shows a profit of $48,000 even with a higher royalty being paid. Digital production is a long term investment in a short term environment. Payout for the investment will not come about for a number of years. Planning for a digital product is very expensive because requires a lot of people who are at a fairly high level. To produce an app costs about 10 times more than it costs to produce an ebook. Straight ebook conversion can cost between $500 – $1,500 and app can cost over $50,000 depending on what’s in it.


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