HarperCollins Direct Sales Initiative: Is it Reactive or Proactive?

Last week big 5 publisher HarperCollins launched a new e-commerce initiative with the intention of encouraging its authors to direct sell their print books, e-books and audio books using an affiliated link to its new direct sales website. The new website is a great deal more refreshing than its older corporate orientated site and the bonus for participating HarperCollins authors is that they will receive an additional 10% on their current royalty rate (that would mean a total of 35% for e-books). The new sales website is much more reader and author friendly than previous incarnations. Curiously, of the big 5, Hachette is now the only publisher not engaging in the direct sales of print books.

What isn’t entirely clear from the HarperCollins press release is what price the publisher will be selling books at on the sales website—full list price or with any kind of reduction. Remember, direct sales from HarperCollins means no external retailer discount to offer and a bigger slice of the pie for both publisher and author. In light of this, that 25% +10% of net royalty doesn’t seem quite so appealing. HarperCollins is also not clear on whether there is going to be a commission taken on every direct sale and I can’t see the publisher being able to compete with other large online retailers on shipping costs. So far, the publisher does offer a limited discount on some titles listed on the main page of the website.
For those authors wishing to participate, it is also a way for HarperCollins to harness the author’s online presence to sell their product.
Fifty years ago most major publishers sold books directly to readers but publishers eventually shifted their operations to a business-to-business focus, with booksellers being the real end-customer, not the reader. The growth and importance of digital publishing and social media as an additional bow to marketing has seen large and small publishers alike return to old ground.
What should also not be forgotten is the rise of companies like Kobo and Smashwords, promoting the ease of self-publishing, and of course the presence of book retailers that also have publishing arms like Amazon and Barnes & Noble. There was a time when big booksellers were exclusively retail partners for publishers. Now, certainly in the case of Amazon, a bookseller can also be a competitor, and a considerable adversary for publishers in both print and e-books.
While I have suggested for several years that traditional publishers need to develop direct sales platforms and better online communities for their authors, much of my thoughts on this stemmed from my belief that publishers need to do a great deal more to help authors connect with their readers and add improved book offerings and promotions beyond just pricing.
Understandably, publishers need to thread cautious steps when it comes to direct sales. Should they aggressively develop it—in light of current and future contract discussions with Amazon—it becomes more than just an interactive online catalogue of books and there is a distinct danger of disenfranchising other retailers, particularly independent booksellers. Much of this is going to be about how HarperCollins and other publishers best use a direct sales channel to reach readers. It would be a mistake for mid and large scale publishers to believe it is a long term vehicle to directly taking on Amazon. Instead of competing on pricing and delivery logistics, publishers would be wiser to create enhanced reader value and bundled offerings, free chapter samples, exclusive interviews and author fan communities for subscribers.
Publishers like O’Reilly Media, Verso, Baen and F+W Media do this really well—Harlequin, Penguin and Bloodaxe have particularly strong publishing brands and lend themselves better to offering direct sales. A strong brand is something not a lot of publishers have, at least not in the eyes of the people who matter—readers. Readers simply don’t see a publisher’s website as the primary shopping point to purchase books. Frankly, in the chain of supply points, publishers likely come behind retailers, community review sites, author sites and bookclubs as a first port of call.
Last week, HarperCollins President and CEO Brian Murray spoke to Publishers Weekly and said that ‘the company is rolling out the e-commerce program to authors to give them another option to reach readers in a fast-changing, and volatile, retail market.’ But isn’t the very fundamental argument of traditional publishers that their distribution and retail partnerships are the best way for an author to reach the widest readership? It goes to the heart of what the indie community has argued these past years. That publishers now can’t deliver and function long term unless all their authors (predominantly midlist down) are prepared to operate as marketing agents to sell YOUR book, but THEIR product.
Again, Murray in the HarperCollins press release:
While our first priority is to sell books through as many different retail channels as possible, we are pleased to provide this platform for our authors who want to sell directly. Our authors can also be certain that their books will always be available to consumers through HarperCollins, even if they are difficult to find or experiencing shipping delays elsewhere. […] Since we view this program as both a service to our authors and a partnership with them, those who participate will receive additional earnings.~ Brian Murray, President & CEO, HarperCollins
I’m sure there are many HarperCollins authors updating buy links on their websites. And why not? The authors are in a committed contract and it’s an opportunity to increase their royalty income by a small amount. I bet many of those buy links also originally linked to retailers like Amazon, Barnes & Noble and other online retailers. But in a year when there has been much talk about the rights and wrongs of using authors as leverage by all sides in commercial publishing disputes—is this just another pre-emptive example of this?
Let’s hope not and that HarperCollins are dealing with the question of direct sales in a proactive and innovative way and not simply as a method of reaction and defence.   

Mick Rooney – Publishing Consultant

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