Should Publishers Sell Direct to Consumer? One Good Reason: Data
Madeline McIntosh, COO of Random House (US) provided many interesting insights at the IDPF conference, organized by Bill McCoy during BEA12, but there were two comments that really stood out:
1. What is the goal of removing DRM? What would we [RH] gain by doing so?
2. We [RH] don’t think we could add value by selling direct to consumers and competing with book retailers
In my opinion, publishers create a more diverse marketplace and improve their negotiation position regarding their primary customers (retailers) if they remove DRM and I believe these benefits will outweigh any increase in piracy (with most piracy probably occurring among people who would never have bought the book in the first place).
Further, removing DRM is a path to selling direct to the consumer and another speaker at the IDPF conference at BEA12, Sourcebooks CEO Dominique Raccah, made an interesting argument as to why selling direct to the consumer is important and valuable.
Sourcebooks sells the bulk of its titles – print and digital – through established retail channels, like Barnes & Noble, Amazon, Kobo and others, but it also sells direct, though this is small percentage of its total sales.
Dominique covered many fantastic examples of how Sourcebooks picks the right cover, optimizes meta-data (yes, optimizes, for maximum chance of discovery!) and improves its “product” through A/B testing and other data-driven experiment.
The key is that all these experiments are conducted through Sourcebooks’ own shop, its direct-to-consumer channel, because it can gather the data which it needs and which it does not get from Amazon, BN or others.
Say Sourcebooks wants to picks from among two covers (it actually considers 17 different covers on average), then it is the direct-to-consumer channels where it tests reader reactions and gets real-time feedback. It turns out that the most insightful option (not included initially) was the option “I don’t like any of the covers and I would like a cover, like XYZ instead”.
It is not the total sales that make a direct-to-consumer shop so valuable, but the ability to conduct experiments and make data-driven decisions.
Kudos to Dominique for sharing her experience at IDPF during BEA. I thoroughly enjoyed her talk. It was one of the great highlights of my NYC visit last week.
I look forward to hear more from Dominique and Sourcebooks in the future and maybe other publishers will join her in conducting direct-to-consumer experiments and talk about them?