London based publisher Penguin had pinned great hopes on the iPad and had predicted an increase in the sales of it e-books on the back of success of the iPad. It went on to deliver a rich book reading experience on the iPad where a book need not be read from cover to cover. Instead, the mega publisher has made e-books to come with embedded media content like audio and video. In fact, e-books from Penguin can boast of even more advanced features such as the facility to chat with fellow readers.
All of this has ensured reading an e-book will never be a boring affair. For instance on a page from an anatomy book showing the innards of the human body, simply clicking on an organ will bring forth more information about that with even streaming video to support the content.
Well, all of this has paid off well for Penguin and it can rejoice on its tremendous success with Apple iPad. Its parent company, Pearson has released the financial reports for first quarter, which reveals good sales showing good demand for e-books. Add to that the willingness of online retailers to sell Penguin’s e-books after a hiatus of some time. Then, there also seems to a good relationship building up between Penguin and Apple all of which is pointing towards a boom time for Penguin. However, on the flip side, Penguin is having hard time dealing with Amazon who has got into selling some of its hardcover editions at a very low price, thereby dealing a blow to the publishing house.
As per the O’Reilly Radar, which conducts market research on recent trends on publications, the initial earnings reports gives a good picture of Penguin making a good headway with its e-books on the iPad with most of the publications through Penguin stable has made up to 23.5% on the iBookstore app which is amounting to the largest percentage of any publishing company.
If anybody is having doubts as to how the single largest collection in the iBookstore, which can boast of just 46000 to 60000 titles is having a positive affect on Penguin’s earnings, one should take note of the mere fact that the iPad sales have gone beyond the 5 million mark and continues to be in high demand.
In fact, Penguin has lofty plans up its sleeves, as what they are attempting to do can well change the very definition of an e-book. They are looking beyond the ePUB format, which means much of the content that it releases will be in the form of applications rather than just e-books.
Also, from what seems evident, the present arrangement of Apple taking away 30% share of the e-book list price contrary to Amazon’s $9.99 cap price is working well for both sides. This however has led to a lot of issues for other retailers who had to reframe the prices, work out the details of sales tax collection and also handle other issues. Penguin a along with other publishers was keen to have all the agreements in place by the time the iPad was ready for launch and this bode well for Penguin as it translated to success right from the word so considering the manner in which the iPad literally flew out of store racks.
Genuine Hardcovers from Penguin going cheap at Kindle Price – Courtesy Amazon
The move by independent e-retailer Diesel to enter into an agreement with its first Agency Five publisher Penguin means its sweet news for Diesel’s customers since this means they can have access to books from Penguin. At the same time, sources reveal that other distributors are also in verge of closing associations, which will enable Penguin’s e-books to reestablish in the market. With all this, there is one prominent company, which is missing from the scene. And that is Amazon. They sell e-titles from rest of the A5 publishers – MacMillan, Simon & Schuster and also Hachette, and HarperCollins. Amazon has not yet done any further deal with Penguin, which had already expired on April 1st.
Amazon is now playing the game well with Penguin and is putting pressure on the publisher by selling the hardcovers at rock bottom $9.99 price, something that triggered Penguin to adopt the agency model. To give a clear indication to its customers that Amazon is still in the game, it is providing select hardcovers at a discount price despite the fact that it is not able to sell the digital editions of Penguin books.
In a nutshell Amazon is making a huge loss on hardcover editions of various selected books but needless to mention, such moves undermine the organization’s faith in its proprietary Kindle books – which actually now is accountable for close to half of the gross sales of a book when available in print and digital editions and especially when accompanied on offer in either print editions or on Kindle devices.
For the time being Penguin can afford to negotiate the terms and conditions with Amazon but with lot of uncertainty around in future, Penguin has to tread carefully especially with its current associate Apple who might come up with a plan which can affect Penguin severely in 2011.
This article is a re-write of an article we posted a few weeks ago, which we have removed. We cited many sources for industry information and facts.