Joseph Kaestner-Provencher

BUS445
11/6/14
Bookmaster Case Study
Bricks and mortar process stages:
Author(s)

Paper
Manufacturer

Publisher

Retailer

Customer

Printing
Company

The author(s) create the content to be published sometimes with the help of focus groups
or collaborators. They will generally get paid by the publisher up front advance to work on the
book. After the work is done by the author publisher will receive another lump sum of money.
The publisher pays a printing company to print the books. The printing company will buy paper
for the book from a paper manufacturer. Once the book is sold the author will receive a small
percentage of each sale as a royalty. The publishers sell the books through a retailer such as
Target and get most of the purchase price.
EBook Process Stages:
Author(s)

Publisher

Online
Retailer

Customer

The author publisher relationship is essentially the same for an eBook. The publisher
again get the biggest cut and doesnt have to pay a printing company in this case. The retailer
being an online store through an iPad or Kindle and wirelessly downloads the book to the
customers device. The online store will make a percentage of the purchase price for selling the
eBook to the customer. The author will also receive a royalty from each eBook downloaded.
The customer wont see a huge difference in how they get the book besides not needing
to go to a brick and mortar store. They can avoid the hassle of driving to a store to buy a book if
they buy an eBook. They can also preview books from the online store before buying and
downloading the book. In many cases eBooks are less expensive than the print alternative since
there are less production costs. However, some customers prefer the traditional print book. They
would prefer a book that doesnt run out of battery in the middle of a vacation.
From a management perspective it would likely be easier to manage an eBook value
chain over a print book value chain. You would not have to pay for a printing company to
physically make and print the book or worry about issues with fluctuating paper costs or supply
issues. Since there are less players in the value chain of eBooks it would likely be quicker to get
an eBook to a customer than it is a print book. Although, to get the most market exposure the
publisher would want to have the book on as many of the eBook stores as possible. Amazon,
Apple, Google, and others do not all use the same format for eBooks making extra work to sell in
all digital stores. Another difficult issue for both print and eBooks are negotiating contracts.
There is no set sum of money given to a publisher or royalty percentage. Each author or each

Joseph Kaestner-Provencher
BUS445
11/6/14
book needs separate negotiations, which can take time and money before any money is made
from the work.
The role of operations is important in both value chains. Using technology for growth and
development play a role in finding innovative ways to save money such as new lower cost
devices to store and display eBooks or a new environmentally friendly way to recycle paper to
cut printing costs. Biodegradable ink that improves efficiency and reduces the use of chemicals
was an important innovation recently in the print world (EU). Globalization is especially
important to eBooks. Being able to sell eBooks around the world can save hassle and money
over shipping printed copies overseas. Also, technology will need to be developed to help
combat piracy, but still allowing those digital copies to be easily used across devices by
consumers who purchase them. To keep books relevant and eBooks to gain market share
innovations in both value chains are constantly needed for cost saving and customer acquisition.
There are other factors to think about in the two different value chains. As the case
mentioned pirating has become a large issue to publishers and content creators. On one had the
digital content can be easily downloaded anywhere and anytime with an internet connection it
also makes it easier for people to illegally share that content over the internet. It would be hard to
find someone I know that has not at one time or another downloaded a song, movie, book, or
textbook. It can be done on the vary devices meant to deliver the legal content not just a
computer. To combat this publishers and digital stores have started using files with embedded
Digital Rights Management. DRM serves the purpose of controlling functions such as copying
and distributing the content to other people or devices other than the one it was purchased on.
Essentially it blocks you from giving it to others for free to stop pirating (EFF). However, as a
consumer who has purchased content with DRM it can be very frustrating that you pay for
content and you want to use it on a new device but you can not move it because it is locked to the
original device. I find some times it punishes those who purchase it legitimately, and those who
pirate it dont have DRM so they can move it and view it more freely. The DRM does not seem
to stop anyone from getting it illegitimately, so is it really working?
Recently, in the news I have heard of Amazon fighting with eBook publishers over
pricing. Large retailers like Amazon and Wal-Mart have a habit of wanting to buy in large
quantities so they can offer items at lower prices than competitors. While customers may enjoy
buying products at lower prices, these large retailers throwing their weight around can hurt the
authors and publishers. Amazon is demanding that they sell eBooks at $9.99 for all eBooks or
they dont want to do business (Bus Insider). Amazon says this price point will mean higher
volumes of eBooks sold, but the publishers dont feel it is always a fair price. I can see that
retailers would want to sell the eBooks for less because a print book takes up inventory space in
a retail store, but an eBook is easily stored on a server not taking up much space. I also see that a
flat $9.99 may not fit all eBooks as a fair price.
Overall, eBooks would be easier to manage as a value chain because there are less
variables in the process of delivering them to customers, but there is less money to be made from
each sale. EBooks also seem like the more popular option as we move into the future, especially
with the younger generations. On the flip side there are still plenty of consumers who prefer print
books. There is also no license or terms of service to worry about with printed copies after the

Joseph Kaestner-Provencher
BUS445
11/6/14
sale. The global sales of print books in 2013 were 53.9 billion compared to $8.5 billion (Forbes).
There is definitely still a solid profit to be made in the print industry there is just more to manage
in the value chain.

Works Cited
Bertrand,N.(2014,October7).HowAmazon'sUglyFightWithAPublisherActuallyStarted.RetrievedNovember
2,2014,fromhttp://www.businessinsider.com/howdidtheamazonfeudwithhachettestart201410
Biodegradableinksenableecofriendlyprinting.(2011,November24).RetrievedNovember6,2014,from
http://ec.europa.eu/environment/ecoap/aboutecoinnovation/goodpractices/eu/766_en.htm
DRM.(n.d.).RetrievedNovember2,2014,fromhttps://www.eff.org/issues/drm
McCarthy,N.(2014,October22).DoReadersReallyPreferTheirDustyOldPaperbacksToEBooks?TheEBook
IndustryByTheNumbers[Infographic].RetrievedNovember2,2014,from
http://www.forbes.com/sites/niallmccarthy/2014/10/22/doreadersreallyprefertheirdustyoldpaperbackstoe
bookstheebookindustrybythenumbersinfographic/