@TheBookMaster Interview – Edwin Fager, President, Kensai International Ltd

Kensai International is a US-based book publishing consulting firm, which advises publishers on software systems and industry best practices. Edwin Fager is the founder of the company, which provides three types of services to clients. These include Operations Consulting & Management Services to advise publishers on how to improve their operations. From warehouse management to marketing to financial management Kensai’s experience has showed publishers how to improve staff productivity and increase profits. The company also provides Software Implementation Project Guidance to help publishers to implement new book publishing software systems and Internet Marketing Guidance to give publishers guidance on how to market their products via the internet.

BM: What is the biggest trend you are finding in terms of software for the publishing industry right now?

EF: Without doubt, the biggest challenge for publishers right now is implementing systems to handle rights and royalties. The eBook revolution has overtaken the system capabilities of most publishers and it is in the area of royalties where some of the biggest headaches are being felt.

BM: What are the specific reasons for this?

EF: The first key issue is that eBooks have created a second tier of royalty payment. For physical books, they tend to pay around 10% of sales revenues to the author. For eBooks, agents have argued long and hard that the cost to the publisher of distributing the products are less, because they don’t need to print, store or transport anything. Therefore, the royalty payment to authors for eBooks tends to be between 20-25%. Publishers that are starting to see serious growth in digital books are being forced to find new software that can handle these more complex pay structures.

Another important issue is the way in which eBooks and digital content is sold and how this sales information is fed back to the publishers. For example, each month Amazon (as well as many other resellers) will provide a file that shows in detail how many products were sold on the Kindle. The information in this file needs to be integrated into the royalties system to allow fast, accurate and seamless payment.

Finally, many publishers, particularly in the education sector, are exploiting digital content by mashing books together to produce new books. Professors are pulling chapters, pages or even paragraphs from a range of publications and splicing them together into a new digital textbook for their students. These new products contain a percentage of several different authors’ works and the royalties calculation needs to take this into account.

Most older royalties systems simply cannot cope with these new requirements, which is why many publishers are looking to upgrade their royalty systems.

BM: How does IBS Bookmaster’s Right and Royalties system fare in this area?

EF: I am very familiar with the Bookmaster system and its Royalties module has been developed to handle the complex requirements of the digital supply chain. Bookmaster’s big strength is that it is a complete and integrated end-to-end publishing ERP system and it stands to reason that publishers may not want to go through a complete overhaul of their entire system simply to resolve the royalties issue. However, I understand that the Bookmaster roadmap is focused on delivering many modules, including rights and royalties, as standalone products in the near future. This will allow companies to take the product on module by module, enabling high functionality and seamless integration, without committing to a complete system replacement in one implementation.

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