Fragment, bundle and sell, sell, sell....

Sebastian Faulks

The move from physical to digital distribution is forcing the publishing industry to reconsider how they package their products. By ‘packaging’, I refer not to hardback or paperback, but to bundles, fragments, online subscriptions and access. For example, a set of chapters from 20 different medical books, or a monthly digital-delivery of fiction from one specific author, are both ways of packaging bundles of content. 

Earlier this year, Anthony Tjan, of Harvard Business Review’s Blog, examined the pro’s and con’s of bundles pricing. He states that there is a fundamental rule that applies to all industries:

“Unbundling or ‘a la carte’ pricing benefits the buyer, whilst packaged or bundled deals give the advantage to the seller.”

Unbundled pricing gives the customer a clear view of what they are buying, whereas bundled pricing provides the seller with simplicity, which usually means lower marketing and selling costs. For publishers, those benefits go a step further – not only can publishers bundle their content with other relevant material, but bundled products also allow publishers to resell content.

This rule can be proven in trade publishing with the recent announcement from Random House and BBC Books. The two publishers have come together to create at set of e-book bundles that tie into a fiction series by Sebastian Faulks, with books in the Vintage Classics series, which will simultaneously run alongside the television series Faulks on Fiction. The theme is to examine the history of the British novel through the popular archetypes - heroes, lovers, snobs and villains - most commonly depicted in them. It is perhaps relevant at this stage to note that it is still relatively early days for the book trade in bundling products, whereas academic publishers have been benefitting from bundled product for years.

The Random House / BBC Books partnership will see the release of five e-book bundles on the same day, themed "Heroes", "Lovers", "Snobs" and "Villains”. Each of the themes will be bundled with some out of copyright titles, i.e. royalty free titles. The “Heroes” package, for example, includes Faulks' heroes chapter, along with Robinson Crusoe, Vanity Fair and The Hound of the Baskervilles.

Here, they are bundling out of copyright material with small amounts of premium material, in this case, a chapter from Sebastian Faulks to add value and sell the older content at a good price. If you un-bundle each component from this package, this set of content doesn’t offer particularly good value or appeal to the consumer. But it’s good news for the sellers, as they are using a single chapter of premium content alongside royalty free content, which they probably already have digitized and ready to go.

Digital growth is going to be driven by publishers being able to actively engage in creative business models such as this one. The Wiki definition of a business model is, "the rationale of how an organisation creates, delivers, and captures value.” Unbelievably some businesses do exist without a business model; think of the dot com era! But in today’s enlightened world, publishing runs on this business model, so create content, make it of value to the customer and sell the content. Where this really starts to get interesting is that digital allows publishers to sell and resell, bundle and fragment, and then resell and resell time and time again. If you can apply recurring revenue from an existing IP, then you gain incremental cash flow without investment.