A view from the top: Steven Zacharius, President/CEO of Kensington Publishing
This is part two of my recap of the LIRW luncheon held on Friday, June 11, 2010 (part one is here). The keynote speaker was the President of Kensington Publishing, Steven Zacharius – and he gave such a thought-provoking and clear-eyed talk about the state of publishing today that I wanted to devote a post to his comments alone.
I ran my general impressions past Mr. Zacharius via email – but these are my own impressions, the major highlights that stuck with me from his talk. He had a lot more to say – if you also got to hear Mr. Zacharius’s remarks, please feel free to weigh in with comments and observations of your own.
*despite massive consolidation in distribution and the slow demise of the hard cover, he is optimistic about the future. In an era of industry contraction, Kensington is growing.
*ebooks are a growing income stream for Kensington. Sales are doubling every four to five months and they expect ebook sales to be up to 10% of the total business within a year’s time.
*Amazon is Kensington’s top online account for the moment, but B & N and Sony are both growing rapidly, and Apple sales are sure to explode as well. The sleeping giant is Google, when they come out with their ebook program.
*publishers have a role in the ebook world because distribution and marketing is the name of the game, both online and in the brick-and-mortar world – special deals between publishers and all etailers lead to online ads, promotions, targeted special deals, etc. It is very difficult for a solo author to generate enough online attention to build sales. The problem with authors publishing books on their own is that they can’t generate enough interest from the big etailers to be able to promote the book. When there are thousands and thousands of ebooks available, it’s hard to find a single title without the promotion efforts that a publisher can offer.
*Mr. Zacharius doesn’t much understand the agency model kerfuffles with Amazon that erupted recently. In his view, a seller can cut prices as much as they want, because it doesn’t affect the original discount negotiated with a publisher. They can charge whatever they want if they think it will move the books – and this goes as much for Amazon as for Walmart.
I asked Mr. Zacharius to expand on this point via email, and this was his response: “With the wholesale model, the publisher sets a digital list price (DLP) and the retailer can discount it to whatever it likes, but the publisher’s receipts are based on that original price. With the agency model, the DLP is fixed, now at a lower price than the wholesale model, but the publisher gets a higher percentage of the receipts to make up for the lower price point. Depending on the price of the book, the publisher will make more on the mass market and trade books but less on the hardcovers. I do not have a problem with the wholesale model at this time and want to continue to let the market continue to mature before we commit entirely to one model over another. Right now, I’m fairly comfortable with letting retailers set the price of the product. We are however working with Apple using the agency model.”
*Advice for writers – online promotion is key. Twitter, FB, website, content. Most important thing you can do: build an email list and share it with your publisher (Kensington uses these lists for email blasts etc). A good email list is the foundation of an author’s platform.
Mr. Zacharius, thank you very much for your keynote! Lots to think about here.