While Hachette and Amazon slug out the terms of their latest agreement, HarperCollins continues to quietly, steadily develop a publishing and bookselling strategy that inoculates it from the worst of over-dependency on 'The Everything Store'. Earlier this month HarperCollins announced that it would launch its own ecommerce operations on HarperCollins.com to sell books and eBooks directly to consumers. The new HarperCollins ecommerce site is live in the US and will soon cross over to other territories.
The fact that HarperCollins is explicitly putting more faith into developing a direct to consumer (D2C) business model is interesting though not very surprising in itself. Many other publishers on both sides of the Atlantic sell books through their websites, though the fact that none of them release sales figures suggest that it is not a major sales channel. Indeed a cursory examination of where publisher websites rank on Alexa.com is instructive: HarperCollins.com is ranked 12,709th out of all US websites for web traffic, whereas the struggling Barnes & Noble is 296th.
HarperCollins' ecommerce is far more intriguing a development when we put it in context with the other strategic moves that the publisher has made in the past year. All of these have one thing in common: they all explore ways of getting books into the hands of consumers without having to involve Amazon.
1. eCommerce sites for 'big' brands - HarperCollins dropped the first hints that it would go after direct sales when it announced it would sell eBooks to the public via its own brand-specific sites. This activity began with www.cslewis.com and www.narnia.com: a move that allowed it to side-step publishers' traditionally low profile among consumers by getting leverage from a much more recognisable brand - in this instance The Chronicles of Narnia.
2. A dedicated HarperCollins reading app - As we've explored before, one of the ways in which Amazon exerts its influence over the buying and consumption of eBooks is through owning the experience through its Kindle devices and apps. The first thing that a company needs to do in order to try to wrest some of that control away from Amazon is to create an app experience through which consumers can experience its eBooks. Last autumn HarperCollins did just that with the HarperCollins Reader, which is available for Android and iOS devices. The app itself has big limitations. It's not currently possible to buy eBooks directly through the app and the only way to get eBooks into its library is to sideload them, which can be a complicated and confusing experience for consumers. Even so, while the app itself requires development, the statement that a publisher wants to own the whole reading experience and is prepared to invest in infrastructure to make that happen is telling.
3. The Harlequin acquisition - Much of the buzz that surrounded HarperCollins' acquisition of Harlequin earlier this year focused on the idea that buying a publisher famed for commercial romance would give it a bigger lead in genre fiction, where sales of eBooks are increasingly concentrated. Harlequin itself was presented as something of a spent force that was suffering sustained falls in revenues as it struggled to keep pace with aggressively priced self-published titles. The genre story itself is compelling, but it missed a larger, potentially more important point. Harlequin is distinctive among publishers in having a developed and profitable D2C sales business. While this business has done less well in recent years, owning it would still give HarperCollins an important head-start over other publishers if it has chosen to become a business focused on reaching consumers.
4. eBook and print book bundling - Around the same time that it launched its app and D2C eBook business, HarperCollins also announced an interesting partnership in the UK that saw it work with Foyles and eBook platform txtr to offer eBooks bundled with a select number of print titles. This worked by the retailer including a download voucher in each (shrink-wrapped) book that the consumer could redeem. Again, eBook and print book bundling is not an especially novel tactic (Source Books has trialled it numerous times, as has the UK's eBooks by Sainsbury's store) but placed in the context of other experiments and developments it emphasises that the publisher is determined to get the most out of every possible sales channel.
5. eBook subscription - Another distribution channel that HarperCollins has supported prominently is eBook subscription services. Two of the largest and most successful 'Netflix for Books' business Oyster and Scribd offer users access to a library of eBooks that include many (backlist) HarperCollins titles. As we've explored on this blog before, there remain many questions over the earning power of eBook subscription services themselves, but from a publisher's point of view their current terms of business could make them an excellent source of revenue for low-selling backlist titles.
HarperCollins' decision to pursue D2C sales has been positioned on Digital Book World as a pivot. This is not the case. Placed into its proper context, ecommerce looks more like the latest building block in an attempt to wean itself off depending on Amazon. While consumer ecommerce, eBook subscription revenues and bundled eBook sales will no doubt represent a tiny proportion of its current year earnings, they are an important strategic statement. Instead of pursuing a strategy where it as a publisher is firmly wedded to getting sales from a dominant Amazon, it has chosen to diversify its business models. Some will work and some will fail, but its willingness to experiment puts it at an advantageous position.