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Updated: eBooks are a Stupid Product, and Other Blinkered Ramblings

Lagardère Publishing CEO Arnaud Nourry gave an interview to this weekend that showed both that he was remarkably ignorant about his products as well as how and why consumers value his products.

FYI: Lagardère is the parent company for Hachette Book Group (US) and Hachette (UK), and Hachette Livre (France).

The interview also showed that his PR staff needs to be fired (Nourry should never have been allowed to say this).

It’s been a little over ten years since ebooks came to the market in the form of Kindle. You mentioned a small decline – do you think the market has plateaued? Are there formats other than ebooks that publishers should be looking at?

There are two different geographies to look at for this. In the US and UK, the ebook market is about 20% of the total book market, everywhere else it is 5%-7% because in these places the prices never went down to such a level that the ebook market would get significant traction. I think the plateau, or rather slight decline, that we’re seeing in the US and UK is not going to reverse. It’s the limit of the ebook format. The ebook is a stupid product. It is exactly the same as print, except it’s electronic. There is no creativity, no enhancement, no real digital experience. We, as publishers, have not done a great job going digital. We’ve tried. We’ve tried enhanced or enriched ebooks – didn’t work. We’ve tried apps, websites with our content – we have one or two successes among a hundred failures. I’m talking about the entire industry. We’ve not done very well.

I’m convinced there is something we can invent using our content and digital properties beyond ebooks but I reached the conclusion that we don’t really have the skills and talents in our companies because publishers and editors are accustomed to picking a manuscript and creating a design on a flat page. They don’t really know the full potential of 3-D and digital. So we acquired three video game companies in the last two years to attract talent from different industries and see how we can nurture one another and how we can go beyond the ebook on digital. We need to offer different experiences to our consumers.

One could bristle in reflexive annoyance over Nourry dissing ebooks, but the bigger story is what this says about Nourry.

Edit: I thought everyone knew this, but no, ebook sales have not plateaued. Hachette’s sales are low because Hachette keeps their ebook prices high. If you check the Author Earnings report, you will see that ebooks make up a significant part of the market. And it’s not just a tiny group of readers who like ebooks; almost all of romance has gone digital, as well as around half of the SF market.

This guy understands so little about ebooks that it is almost frightening.

Edit: When he calls ebooks stupid, what he really means they are dumb, as in the opposite of a smart product like an enhanced ebook. This is true, epubs are simple dumb files, but that is what consumers want (and Nourry won’t sell consumers what they want).

Basic market research will tell you why consumers like a product and how they use it, but if Hachette has access to that research then the info is not making its way to Nourry. As a result, he is blindly leading Hachette down multiple wrong paths.

They’ve tried enhanced ebooks, ebook apps, and even ebooks on websites, all because Nourry doesn’t understand ebooks as a product. And soon they will be trying video games.

Let me say that again so it sinks in.

The CEO of a major multi-national book publishing conglomerate does not understand his company’s products or his company’s markets.

This point is so mind-boggling because it is really not that hard to find out why consumers like ebooks: just go ask them.

Consumers like ebooks because we can change the font size. We like ebooks because we can carry a hundred ebooks on a smartphone. We also like being able to search the text, add notes that are can later be accessed from a web browser, and easily share those notes with other readers.

Edit: As Andrew Rhomberg pointed out on Twitter and a reader explained in the comment section of this post, readers like ebooks because they are the exact same stories we already read, only with a few extra minor improvements.

All of these opinions are both obvious and readily available from the nearest ebook fan – including the ones that work for Nourry.

What is especially weird about this story is not just the lack of understanding but also that one would think Nourry has staffers who use ebooks constantly, and yet he has never listened to them explain why they like ebooks.

And this is the CEO of a company with annual revenues around 2.2 billion euros, folks.

Nourry has been the CEO of Lagardère Publishing since 2003, which means that every decision he has made about ebooks in that time has been based on him not understanding the first thing about ebooks.

Do you know that stereotype about legacy publishing companies being dinosaurs that don’t understand the first thing about their business?

Nourry has just shown us that there is a lot of truth behind the stereotype.

Chew on that.

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John Aga February 19, 2018 um 4:31 pm

My first e-reader was a first gen Nook, a big clunky thing but I got a taste of the possibilities. Then along came the Kindle Keyboard and I went all in with ebooks. Now only one in 100 book purchases is a pbooks. With ebooks I found I read more. My ebook purchases were more impulsive and experimental. Lower ebook prices made me more willing to take a chance. With ebooks I have control over font choice, font size, margins, line spacing and page background, white, black, sepia, built in dictionary, text to speech, whispersynch synching books among devices, the ability use Immersion reading and read and hear audio at same time and on and on and on. All my ebooks are backed up. If I have a house fire I cannot say the same for my pbooks.Nourry not ebooks is stupid.

Mike Hall February 19, 2018 um 4:54 pm

Reading the full article what struck me – other than the nonsense you point out – was his delusion that they had won against Google’s decision to digitize all books (it’s as if no one ever told him about the Supreme Court’s fair use ruling) and that he still thinks the outcome of their dispute with Amazon was a victory; technically, I suppose it was a victory as they got what they wanted but why they wanted to lose market share, switch sales to a lower margin product and to share the costs of discounts which had previously been fully born by Amazon was never clear to me.

Mark Williams – The New Publishing Standard February 20, 2018 um 3:31 am

Nourry did not claim a victory for Hachette in this article. That was the words of the Scroll reporter.

Mike Hall February 20, 2018 um 12:47 pm

Fair point, though Nourry’s reply implicitly accepted the reporter’s words and I think he (Nourry) still thinks of the result as a victory.

Margaret February 19, 2018 um 4:56 pm

I don’t think he meant it in the way you are interpreting it. He is saying that all an ebook can do is put words on a digital reader page. They aren’t smart or interactive. Publishers "don’t really know the full potential of 3-D and digital." He mentions buying three video game companies to help punch up ebooks and make them smarter (as opposed to dumb). In my opinion, where he’s wrong is that most of us don’t WANT interactive books. If so, we would be playing video games instead of reading.

Nate Hoffelder February 19, 2018 um 5:43 pm

That is a good point, and it’s worth incorporating in the post.

Mark Williams – The New Publishing Standard February 20, 2018 um 3:27 am

Surely what "most of us don’t want" is no reason not to offer something for those that do.

And just maybe a lot more *will* want the new and enhanced products when they are done right.

Most of us didn’t want ebooks when they first came on the scene. By this logic Amazon should never have introduced the Kindle.

Disgusting Dude February 20, 2018 um 10:42 am

Except that over and over all attempts to monetize "enhanced ebooks", for 20-plus years, have failed to build an audience or a viable business out of them.

Corporate publishing dreams of selling enhanced ebooks at premium prices (historically, the $50 and higher range) yet they fail to sell at half or a third that price. It is no different than Sony selling the movie studios on BluRay by swearing consumers would happily pay $50 for HD movies. Or the dreams of 3D videos that crashed upon the reality that most people see no value worth paying extra in those "enhancements".

Sure, you can find a largish number of people who would welcome fancy enhanced non-fiction books. But the number of people willing to pay a price proportional to the production costs rapidly dwindles below breakeven.

The issue isn’t the technology–that has been available since tbe days of Quicktime 1.0 and Hypercard–but the economics.

Note that a fiction version of "enhanced ebooks" has been around for decades and is a very profitable business…for software developers. Typically at the $60 price point with development costs in the millions to tens of millions. Trimming back costs means trimming back on the very interactivity that is supposed to sell the product. Cut back enough to sell at a mainstream ebook price and you end up with something like the "enhanced" Harry Potter iBooks. No real value add, just fancy goldplating.

Enhanced ebooks is simply a product where the production costs curve and consumer price elasticity curve do not intersect.

Allen F February 19, 2018 um 6:21 pm

"The ebook is a stupid product."

So’s a book if you look at it the way he looks at ebooks. Both were made as a means of getting printed words in your hands to read.

I normally read on my older kindle (or on a 27″ monitor) but found I had an older story only in paperback form – and rediscovered why I prefer reading on a digital format. 😉 (font size was a big deal for my ageing eyes)

gbm February 19, 2018 um 7:31 pm

The book is not the format it is the story, does not matter if it is on paper or electronic.

Tauriel Vorkosigan February 19, 2018 um 8:41 pm

Nourry also overlooks a major advantage eBooks have. I currently have six books open in six different readers:
Marvin 3: Lone Star Baby Scandal (Harlequin Romance)
Marvin: Palulukon (Paranormal Romance)
Queue: Getting Started with Raspberry Pi
PocketBook: Your Best Year Yet! (Self-Help)
Kindle: How Not to Die (Food and Nutrition for Better Health)
What I want to read at any given moment is immediately available, right where I left off.

Just try carrying six books around all the time, and one of them is a VERY thick hardcover.

I laugh at Nourry!

Hyphen: The To-Do List Formula (Organizing)

Tauriel Vorkosigan February 19, 2018 um 8:43 pm

Sorry. I left out Hyphen: To-Do List Formula (How to)

hayden February 19, 2018 um 9:19 pm

"The ebook is a stupid product. It is exactly the same as print, except it’s electronic. There is no creativity, no enhancement, no real digital experience"

Well something similar can be be said for a paperback. The story is the same as the Hardcover version, just that the carrier of the story is different.

Absolutely ignorant comment to make from Nourry. They story is what we want, the way it reaches us should cater to what the reader (or listener) prefers. Some people like hardcovers, some ebooks and others audiobooks. Nothing wrong with any of these.

The reason enhanced ebooks have "not worked" is because to the big publishers they have to make lots of money. Enhanced ebooks are awesome but the market for them is very small.

Chris February 20, 2018 um 8:09 am

he reason enhanced ebooks have “not worked” is because to the big publishers they have to make lots of money. Enhanced ebooks are awesome but the market for them is very small.

This is maybe a chicken or the egg argument, but IMO the reason the market’s small is because enhanced ebooks either are marketed horribly or haven’t convinced consumers why we should buy them over "regular" ebooks, or both. All of my ebook reading has been confined to the Amazon ecosystem thus far so perhaps there are more enhanced books offered by other stores but I don’t think I’ve ever used one. =

Avi Lieberman February 20, 2018 um 4:43 am

Nourry in his interview cites statistics showing a very low uptake in ebooks and suggests that the industry needs more innovation in order to change the situation. The author then accuses Nourry of having frighteningly little understanding of ebooks. Why? Not due to errors of fact or analysis, but because People love ebooks! They really really do!

The fact that this self-selecting group loves ebooks has no bearing on what was said in the interview, which is that ebook share is small and declining and it behooves the industry to figure out why. I daresay the lack of understanding here may not be on Nourry’s part.

Nate Hoffelder February 20, 2018 um 7:20 am

"ebook share is small and declining"

I’m so used to hearing that industry myth that I glossed over it in the interview. (Maybe that was a mistake.)

No, ebook sales are not small and declining; check the Author Earnings report, and you will see ebook sales are growing. It is Hachette’s ebook sales that have leveled out because Hachette charges too much for their ebooks.

And it’s not just a tiny group of readers who like ebooks; almost all of romance has gone digital, as well as around half of the SF market:

Jake February 20, 2018 um 6:38 am

I found his comments essentially Frank and thought-provoking. Your overheated reaction not so much.

Eduardo Teixeira February 20, 2018 um 6:44 am

I will sort-of play devil’s advocate here. I believe he has the right idea, but has no clue how to market it. Interactive books have their place: I imagine chemistry and anatomy books where you can visualize illustrations in 3D, for example.

I know this is uncharted territory but I believe there is a market for interactive books if they are well marketed. Problem is these books are expensive to make, relatively difficult to develop not to mention big publishers are imaginatively lazy and greedy.

Currently I am trying to develop an interactive book with mechanics loosely based on the Fighting Fantasy book series. Since I decided to choose an open format (epub3), I am dealing with the quirks around it: e-readers epub3 compliance is all over the place and the format itself seems to be in the middle of a refactoring, putting my project partially on-hold . Fortunately developers are working to solve these problems.

Despite relatively clueless CEOs, I look at the future of ebooks with moderated optimism.

Nate Hoffelder February 20, 2018 um 7:28 am

The first problem with publishing nonfiction is that the internet is eating that market. In all seriousness, the web browser is the Kindle for non-fiction, so I would turn your attention there.

And a bunch of companies have tried to make enhanced textbooks over the past 20 years; none have sold very well. I really don’t think there is a market for selling your interactive book. (Some textbook publishers have licensed similar textbook platforms to schools, but that is not the same thing.)

Eduardo Teixeira February 21, 2018 um 6:22 am

Oh, I now realize I did not make myself clear. When I gave those examples I was thinking about more specialized books, like Gray’s Anatomy (the book, not Grey’s Anatomy – the TV series 🙂 ), which are bought by university students, since those have more in-depth information than the average Wikipedia article. The chemistry example would be the best example of the two I gave, since molecule models are so simple to build in 3D I bet it would be cheaper to pay a 3D modeler to build a bunch of them and a developer to program a simple camera to orbit the model than to hire an illustrator to render the molecules with a sense of perspective.

Perhaps you are right when you say there is not a market for the book I want to make. The closest thing I have seen to my idea, since I was inspired by them, is the series of games made by Tin Man Games. They resurrected the Fighting Fantasy series as a series of apps. I realize:

1- There was already a market for the books – kids who were 12-14 in the 80’s early 90’s, in other words people like me.

2- The books were marketed as games.

They also made similar books with their own IP. Would love to know if these ones made a profit.

They already they made a quite a few interactive books, so I presume they are doing OK.

I do not think they do anything not theoretically possible with epub3.1 . The two things putting my project on-hold are e-reader compliance with the epub3.1 standard and the format itself seems to be not entirely stabilized according recent news.

Anyway, the chances there is not a market for my book are quite big, but even if that is that case, I am not too worried since it is a side project I do in my free time.

Sorry for my long reply and thanks for your input. 🙂

Disgusting Dude February 20, 2018 um 10:59 am

Look into the history of Multimedia CD ROMs. The only application that proved a viable business was Encyclopedias and the internet killed that. Microsoft saw the handwriting on the wall and divested Encarta while it still had some value. There were some brilliant products produced in that era but none survived and few are remembered.

The issue isn’t the distribution or display technologies.
It is production costs.
Adding real value to an enhanced book costs disproportionately more than what readers are willing to pay for those enhancements.

It is that simple.The

Anybody wanting to build a viable business out of enhanced ebooks needs to reduce the production costs to the same order of magnitude as un-enhanced books as consumers will balk at anything beyond a low double-digit premium. Say 30-50%.

Eduardo Teixeira February 21, 2018 um 7:09 am

My experience with multimedia CD-ROMS was limited in the mid-to-late 90’s, but I found those I tried generally awful. The feeling I got they were a mass of disjointed text and video, like "here is the text and by the way, there is some video to go along withit).

My take is UI design was a subject not as advanced as it is today and publishers did not had enough time to improve it before the number of internet users exploded.

Anyway, you are right about production costs. Since I am doing almost everything, I can keep costs low.

The closest thing I have seen to what I want to make in ebook format is "Galdo’s Gift" which is an iBook currently sold at $7.99. So far my project seems feasible at that price point.

Disgusting Dude February 21, 2018 um 4:14 pm

Like every new format, you get a lot of early misfires. But there were some jewels: Asimov’s Robots, for one. Another I remember was a multimedia encyclopedia of martial arts.

The key to the good ones was that they were conceived as a multimedia project from the ground up and didn’t just cut-n-paste video in a preexisting text.

The Asimov book was both a history of automata, automation, and robotics and a tutorial on the (then) state of the art, contrasted with the fictional stories that inspired the modern researchers. It is the sort of thing that could be done with Brian Greene or Jared Diamond if there were a market for the things.

The closest equivalent are the PBS and DISCOVERY CHANNEL Youtube channels which are quite viable and by most reoorts, profitable.

As pointed out here regularly, today’s enhanced ebooks reside on the internet which is quite stable, well understood, and has abundant cheap development tools. And dynamically updatable, which packaged ebooks aren’t. Which is why textbook vendors are building proprietary websites to host their interactive textbooks.

Among other virtues, paywalled platforms are profitable and protect their IP a lot better than epub3 can. (Which is a whole can of worms on its own. Right now it’s even odds we will all be worm food before epub3 is a stable, widely adopted distribution channel for interactive textbooks.)

Sam T. February 20, 2018 um 7:46 am

Print publishers recall the glory days of hardcover books at high margins and then paperbacks at high volumes and think, "now with ebooks, I have eliminated material costs, shipping costs, and overrun discounts". They want to get the same price, higher margin, and get fabulously wealthy. That is why they want 3D, narration, and other features.

The publishers interests are not the same as the readers interests. To survive, they need to remember that serving the customer’s interests is what keeps a business relevant.

Mike Hall February 20, 2018 um 12:58 pm

Interesting comments which have made me realise that I could claim that I have several enhanced e-books on my tablets. They appear as apps – free ones at that – which replace rather expensive books like Norton’s Star Atlas and Rukl’s Atlas of the Moon; however, they are so far from being book like that I’m not sure that it is useful to call them "enhanced books" rather than just accepting that certain styles of reference book are now obsolete and that there is no reason that the replacements will come from the traditional publishers..

Jacintha February 20, 2018 um 3:53 pm

All the "enhancements" Nourry suggests for e-books, I find kind of appalling. The appeal of ebooks is that I have access to about a thousand of them on a phone that weighs ounces. How is ultraportability not "enhanced" enough?

Roland Denzel February 20, 2018 um 7:10 pm

An ebook is just a book format. It’s like saying the paperback is stupid because it’s the same content as a book – We failed to make it different.

Randy Lea February 20, 2018 um 8:54 pm

I have to wonder if this guy actually reads books, any kind of book, ebook or paper.

Ebooks have to be their highest margin products, and with today’s pricing, I think a significant amount of readers prefer ebook over print. Not all at this price, but enough, and maybe a lot more with reasonable pricing.

I can imagine a few books, maybe the new Harry Potter books (I don’t read these), might make sense to have animations. Same with children’s books. Do you want any of this when you read a book that’s either all text, of a book with a few images? No, readers want an ebook that works like a printed book, but with the convenience of bits over paper and pricing that makes sense.

The enhanced stuff exists today and is in wide use, its called the World Wide Web. It has all kinds of advertising, flashing bits here, pop-up stuff there, does anyone want an ebook costing $14.99 with all this stuff? Not so much.

Ebooks are a problem for big publishers, the eliminate the need for their service, the same as we’ve seen with newspapers and magazines. May of these publishers have seen the light and have gone 100% digital. I haven’t seen it, but I wonder if and when we will see either existing or new publishers become digital only? Maybe it’s only Amazon that’s willing to go there, as they’ve gone so many new places and created new markets.

Disgusting Dude February 21, 2018 um 4:22 pm

Benelegere February 20, 2018 um 10:59 pm

Am I far off the mark or is it easy to imagine Nourry saying "Now go away, or I shall taunt you a second time!"?

Ebook Industry News Feed – About Ebooks February 21, 2018 um 12:24 am

[…] observation that ebooks have not changed the reading experience much. See The Guardian,  The Digital Reader, et […]

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