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Spain’s Big Three to Form New Digital Distributor

By Emily Williams

Spanish football fan

MADRID & BARCELONA: Spain has not been on the leading edge of the digital revolution up to this point. Now, after years of observing how the market has developed in other countries, the biggest publishing groups in Spain have decided the moment has come to take a big step forward – and they will do it together. Planeta, Random House Mondadori, and Santillana, which together make up some 70% of the market, are joining forces to set up a digital distribution company for ebooks. This initiative will go hand in hand with a major marketing effort starting with a splashy launch of e-books and e-readers this holiday season through at least one major retailer. They have set a goal of having every frontlist title able to be published simultaneously in both print and ebook form by mid 2011.

In addition, given the strength of cell-phone penetration in Spain, the plan calls for making ebooks available through smartphone apps, starting with the most popular devices from Apple and Nokia.

In negotiations with the Association of Spanish Literary Agencies (ADAL), the publishers have agreed to price ebooks at 80% of a printed books cover price, with a standard 25% royalty rate. Booksellers will be offered a maximum discount of 50%. The two groups hope to sign an agreement soon.

At this point, the publishers do plan to apply DRM to all titles, although consumers will have the right to download any ebook they purchase to multiple devices. All of these conditions will be set out in riders to be negotiated individually with each author and set to expire at the end of 2011. The idea is to establish a robust market and see how it plays out, with the option to renegotiate within two years depending on how things develop. “We hope to capture a set of readers who perhaps don’t read on paper, as well as a new generation who will grow up reading and writing on computer screens in school and will have different reading habits,” said Maru de Montserrat, agent at International Editors Co. and president of ADAL, “It’s important to meet that demand, rather than waiting for readers to take matters into their own hands and create a black market of scanned books.” The agents also have high hopes that the move to digital might reinvigorate interest backlist and out-of-print titles.

This “long tail effect” has not yet had much of an impact on the Spanish book market, which has not embraced online book retailing to the same extent as other countries. Spain reliance on fixed book prices has kept away powerful online discounters like Amazon.com. This gives publishers much more leeway to experiment with pricing on their own terms, and will also determine how Spanish ebooks will be sold internationally. In most cases Spanish publishers control the worldwide Spanish language rights to the books they publish (both native and translated authors) and will be able to sell their ebooks to consumers anywhere in the world. However, because of price controls those purchases will have to go through Spanish booksellers or other sites that respect the terms set by the Spanish market. This would likely exclude Amazon, who will not only be unable to sell books in Spain, but will not have access to the vast majority of Spanish language titles for either the US or Latin American market.

Not everyone is in agreement with the project, however. The most significant dissenter is the Carmen Balcells Agency, Spain’s most powerful literary agency with a list of clients that includes Gabriel García Márquez and Isabel Allende. Balcells has already begun a limited collaboration with ebook publisher and distributor Leer-e and has not signed on to the agreement between ADAL and the major publishers. Managing director Javier Martín explained that Balcells has a large enough list of authors that they have the ability to negotiate independently with any partner they choose, and believes the royalties for ebooks should be higher than the agreed rate, closer to 40%. “We are open to other projects,” Martín said, “as long as they conform to the terms we consider to be fair.” Balcells has retained digital rights to all of their books up to this point, putting them in a strong position to negotiate with publishers on their own terms.

Others are concerned that the Big Three already have too much power, and that in joining forces they will create a monopoly. Juan Díaz, international coordinator for Random House Mondadori and head of the digital distribution project, dismisses the accusation. “Everyone is welcome to participate,” he said. “This is just a distributor, publishers will still set their own prices and compete with each other in the marketplace.”

Indeed, the Big Three have invited other publishers to participate as well, either as partners or as distribution clients. As part of their agreement with agents, the publishers will not sell ebooks direct to consumers and the newly formed distributor will instead act as a white box company, partnering with retailers and booksellers to sell ebooks through their websites.

VISIT: Spanish e-book retailer Leer-e

Explore Spain’s Big Three:

PLANETA , RANDOM HOUSE MONDADORI, and SANTILLANA (Spanish only) .

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2 Comments

  1. john reilly
    Posted July 14, 2009 at 1:55 pm | Permalink

    I found Ms. Williams article: “Spain’s Big Three…”,both incisive and comprehensive. Her knowledge of this emerging industry is impressive. We need more author’s of her caliber to profile and explain the rapid changes occurring in the digital publishing domain. john reilly

  2. Posted May 12, 2012 at 9:29 pm | Permalink

    Dear Sir,
    I have translated a book on the laws of the sea from english into spanish. It
    covers all the facits of a boat owners requirements are when here takes his boat out on the water and what is responsabiltys are for is passengers are and what here should be caring with him on board the boat. I have also had done a CD which is intergrated so you have to sit it like an exam. Like for example you may answer 10 questions then
    push the answer button and it will tell you how many you got right and how many you
    got wrong which is a very good way to learn the laws of the sea and be a good skipper

7 Trackbacks

  1. [...] OUR: article about the Big Three’s digital distibution plans [...]

  2. [...] (Publishing Perspective) [...]

  3. [...] Publishers are showing every other publisher how to do it (Publishing Perspectives via Teleread) – Planeta, Random House Mondadori, and Santillana, which together make up some 70% of [...]

  4. [...] Authors will receive a standard 25% royalty (I presume based on net receipts but this is not clear in the article reporting the initiative). [...]

  5. [...] three largest Spanish publishing groups are joining forces to set up a digital-distribution company for [...]

  6. By Tökland » Digitaliza – Acción (revisited*) on March 10, 2010 at 5:48 am

    [...] una entrada del 13 de julio de 2009, titulada Spain’s Big Three to Form New Digital Distributor [Los tres grandes de España forman una nueva distribuidora digital], Emily Williams [...]

  7. [...] Publishers have also had a harder time than expected negotiating rights, despite an earlier umbrella agreement reached last year with the Association of Spanish Literary Agencies (ADAL). (Unofficially, one RHM editor noted they [...]

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