Readers of ebooks: rejoice!

[Chefguy]

The publishing industry finally gets bitch-slapped for manipulating the prices of ebooks. We all knew this was going on, but couldn't do anything about it except not read those high-priced downloads. This suit by the federal government now puts Amazon in the catbird seat to charge lower prices, which is great. The other publishers are crying about it, but they made their own beds on this one. Huzzah!

[silenus]

Let's just hope this doesn't end up biting us in the ass. I love Amazon, but Lord Acton stated a Universal Truth.

[Chefguy]

Originally Posted by silenus

Let's just hope this doesn't end up biting us in the ass. I love Amazon, but Lord Acton stated a Universal Truth.

I'm sure it could in some way, but I haven't had any coffee yet so brain not work so good. I seriously doubt that Amazon would charge higher prices rather than lower. Amazon almost always undercuts the competition on all their products, and they've received withering criticism from all fronts concerning raising the ebook prices above $9.99, even though they had no choice in the matter, since prices were being manipulated by the publishers.

[silenus]

It's the "almost always" that is the concern. They have been the White Knight on prices for forever, but when they control over 90% of the market, the pressure from stockholders for more profit could undermine that quickly. I love my Kindle, but I'd rather there were a number of competing platforms, just for safety's sake.

Of course, the smart thing to do for the publishers is to follow the lead of Baen Books. Fat chance of that happening soon.

[Simplicio]

Originally Posted by silenus

It's the "almost always" that is the concern. They have been the White Knight on prices for forever, but when they control over 90% of the market, the pressure from stockholders for more profit could undermine that quickly. I love my Kindle, but I'd rather there were a number of competing platforms, just for safety's sake.

Tney're not going back to 90% percent market share. Its not like Apple doesn't have enough money lying around to compete with Amazon on prices if they have to.

[silenus]

No kidding, and I hope they do. There is no reason whatsoever that back catalog ebooks should cost what publishers are trying to get for them.

Let the price wars begin!

[Hello Again]

I am perplexed by this quote:

“My fear is that the major publishers won’t be able to stay in business just selling e-books. You can’t bring in enough money to support the infrastructure. If that happens, there goes the marketing, the editorial, the author tours, the expertise of the book industry.”

I'm not sure why they are so sure that the only way to buy books will be in ebook form in the very near future. But even assuming that's true, I've been out of the biz for quite a while but as I recall the ever inflating cost of a paperback has, in the past, been attributed to the ever-rising cost of paper and gasoline (distribution).

ebooks don't use paper and don't ship on trucks. The costs to produce them are mainly sunk costs that also apply to paper books (selection, editing, promotion). How can book publishers NOT make money on ebooks sold at the paperback price?

[Simplicio]

Yea, I don't really get the publishers concerns either. As you say, ebooks significantly cut down on overhead. And they still control what they sell the books to distributors for just because Amazon wants to sell the book cheaply doesn't mean the publisher has to sell it to Amazon cheaply. If Amazon wants to sell a book for 9.99 that the publisher sells them for 10.99, that's a good deal for the publisher, their sales are being subsidized with someone elses money (my understanding is that this already happens for "bestsellers", Amazon sells them at a loss).


I can see them being worried that some authors will bypass publishers altogether and just create and distribute their own ebooks (though I kind of doubt that will be very common), but as far as books from authors that stay within the system, I don't really see this hurting them.

(plus, I doubt the average reader is really haunted by the spector of an end to author tours and book marketing)

[gazpacho]

Originally Posted by silenus

It's the "almost always" that is the concern. They have been the White Knight on prices for forever, but when they control over 90% of the market, the pressure from stockholders for more profit could undermine that quickly. I love my Kindle, but I'd rather there were a number of competing platforms, just for safety's sake.

Of course, the smart thing to do for the publishers is to follow the lead of Baen Books. Fat chance of that happening soon.

The publishers are ding dongs. They could sell directly to the public and still use the Adobe DRM that would get them onto all ereaders but kindle. If they forgo DRM they can sell to kindle users also.

[RealityChuck]

Originally Posted by Simplicio

Yea, I don't really get the publishers concerns either. As you say, ebooks significantly cut down on overhead.

It doesn't affect overhead in the slightest (you still have to hire editors and pay your office expenses). It does affect printing costs, but they're only about 25% of the cost of the book, something that they have already factored in with their prices.

Amazon has set the prices for ebooks at a level that is unsustainable for publishers. And without publishers, there's no gatekeeper to determine which books are publishing, and no one to promote them effectively.

Self-publishing is a loser's game; it rarely works and keeps an author from doing what he should be doing: writing. It ultimately means less money for authors, and less money for authors mean fewer authors.

If you think publishers are unnecessary, take a look at your book collection (e-books included). How many of them are self-published books that you've paid money for? If you have more than two, I'd be amazed. So nearly all the books in your collection were put out by publishers. If the publishers go under, the supplier for 99% of the books you read will vanish and you won't be willing to take a chance on anything that's not free (especially with fiction).

The suit is misguided. I doubt there would have been any difference in the price of e-books even without collusion. Publishers have expenses and the Amazon price point it bleeding them dry (and book publishing is not a particularly profitable business; one reason that so many US publishers have European management is that the business doesn't make enough profit to interest US investors).

[Hello Again]

Hmmm, I'm still not buying it. The entire reason "Trade Paperback" was introduced was because it was becoming prohibitively expensive to produce a hardcover. If your statements are true, Reality, and the cost of production is actually trivial, the cost of a hardover, trade paperback and mm paperback would be within 25% of each other, right?

Which I am sure, they are not.

And publishers are receiving 70% of the list price of a book under the Apple plan! When has that ever happened before??? In the past, publishers received around 50%, sometimes less with shared markdowns, of the list price of a book sold through a bookseller.

[Simplicio]

Originally Posted by RealityChuck

Amazon has set the prices for ebooks at a level that is unsustainable for publishers.

That's what I don't get. Amazon sets the price at which Amazon sells books to the public, not the price at which publishers sell to distributors. If Amazon offers the publishers too little money, the publishers can not sell to them. What Amazon was doing was buying books from the publishers and selling them at a loss, which is good for the publishers, there sales are being subsidized out of Amazon's pocket.

The usual concern of a producer is that the retailer will sell their product for too much (hence limiting sales), not too little.

Self-publishing is a loser's game; it rarely works and keeps an author from doing what he should be doing: writing. It ultimately means less money for authors, and less money for authors mean fewer authors.

I agree, that's why I said I doubted it would become a major problem for publishers.

The suit is misguided. I doubt there would have been any difference in the price of e-books even without collusion.

Prices on Amazon went up when the Publishers cut their deal with Apple, and have already fallen since the recent decision. Seems pretty clear that the deal was driving up prices.

[Hello Again]

Originally Posted by Simplicio

That's what I don't get. Amazon sets the price at which Amazon sells books to the public, not the price at which publishers sell to distributors. If Amazon offers the publishers too little money, the publishers can not sell to them. What Amazon was doing was buying books from the publishers and selling them at a loss, which is good for the publishers, there sales are being subsidized out of Amazon's pocket.
.

And in the past, Publishers have not stepped in to stop massive bestsellers being widely sold at a loss. In fact they didn't care in the slightest. EVERY hardcover copy of Harry Potter #whatever, sold at 40% off, was sold at a loss.

[Simplicio]

Originally Posted by RealityChuck

It doesn't affect overhead in the slightest (you still have to hire editors and pay your office expenses). It does affect printing costs, but they're only about 25% of the cost of the book, something that they have already factored in with their prices.

Sorry, I meant marginal cost, not overhead. But its not just the cost of printing, its the cost of transportation, storage, and then the costs associated with running a brick and motor store to sell the book. I don't think its unreasonable to expect that without those per-book costs, the price of books should be significantly lower.

[Chefguy]

Originally Posted by RealityChuck

The suit is misguided. I doubt there would have been any difference in the price of e-books even without collusion. Publishers have expenses and the Amazon price point it bleeding them dry (and book publishing is not a particularly profitable business; one reason that so many US publishers have European management is that the business doesn't make enough profit to interest US investors).

I have to take issue with this. The suit is unfortunate (not misguided), but it was brought on by greed and collusion on the part of the publishers. Profits NOW is the motive, instead of the long game. Most of that, as with other public companies, is shareholder driven rather than customer driven. In that regard they are no different from medical insurance companies, who care nothing about the patients, only about the profits.

Since prices went up on Amazon, I have refused to buy a book over $9.99. My support for the local library went way up, while my ebook reading dropped dramatically. Multiply that times what has to be thousands of other disgruntled customers, and profits suffer to some extent. Not to mention, authors take a hit because readers enter negative reviews online, not of the work, but of the cost. While those complaints are aimed at Amazon, it still affects the authors and their sales. Apple's part in this lowers my estimation of that company substantially, and will affect my future purchases from them.

[jackdavinci]

I think it's all a bit silly. The publishers/authors should just set the price for their cut, and let the distributers and sellers determine their own markup. All these other shenanigans are needless complications. I do think all ebooks should be readable on all devices though.

[theR]

Originally Posted by Simplicio

Tney're not going back to 90% percent market share. Its not like Apple doesn't have enough money lying around to compete with Amazon on prices if they have to.

Don't forget Barnes & Noble. They have half the market share of Amazon, 30% compared to 60%, but that is probably enough to keep Amazon from thinking they can simply impose their will and raise prices willy nilly.

I'm not sure why the article says analysts think Barnes & Noble could suffer the same fate as other traditional book sellers. I thought one third of their sales these days were e-books, so they seem to be in a good position to remain competitive.

[Bleach23]

New releases and bestselling titles are only a part of the revenue that publishers bring in. Historically they have also made a large portion of their profits selling classic titles. I can’t remember the statistics but publishers and books stores have made money year after year selling The Great Gatsby, Sense and Sensibility, To Kill a Mockingbird, etc. Since these books are public domain they are available free online and as eBooks. Taking this revenue away is a blow both to the publishers and print book stores.

[Exapno Mapcase]

Originally Posted by theR

I'm not sure why the article says analysts think Barnes & Noble could suffer the same fate as other traditional book sellers. I thought one third of their sales these days were e-books, so they seem to be in a good position to remain competitive.

Amazon can subsidize losing money on books because books are a segment of their overall profitable company. Barnes & Noble has nothing to subsidize ebooks because print bookstores are dying. It will get crushed by this.

Originally Posted by Bleach23

New releases and bestselling titles are only a part of the revenue that publishers bring in. Historically they have also made a large portion of their profits selling classic titles. I can’t remember the statistics but publishers and books stores have made money year after year selling The Great Gatsby, Sense and Sensibility, To Kill a Mockingbird, etc. Since these books are public domain they are available free online and as eBooks. Taking this revenue away is a blow both to the publishers and print book stores.

Back catalog, pretty much by definition, is not public domain. Anybody can publish a public domain title. Back catalog is almost always books that were published after 1922, which means that they are still under copyright and therefore only one publisher can publish them and make money from them.



Chuck and I are veterans of the industry and I think that those of you applauding the decision are all on the other side. I apologize if I'm wrong. But it should say something that we both see this as a very bad thing for writers.

There has been a squeeze on the midlist for years. For our purposes I'm defining midlist as the general run of books that are not bestsellers, not interchangeable formula genre, and not specialized titles, like atlases, manuals, almanacs, and the like. The midlist allowed writers to have careers as writers. Increasingly, writers have needed to have another source of income unless they won the lottery of bestsellerdom.

The publishing industry had enormous faults but a few critical virtues. It got books into bookstores. It paid advances. It rewarded writers who specialized in certain arcane subjects. It took chances on new writers. It maintained the enormous and essential overhead of editors, copyeditors, proofreaders, art directors, typesetters, rights managers, lawyers, and anybody else who made books readable and professional. And it subsidized this by bestsellers and to a smaller extent the back catalog.

The costs of print always were a minor percentage of the price of a book. Most of the money in an average book went to the author's advances and royalties and to overhead, with whatever was left over for taxes and profit. Those costs do not disappear with an ebook. Only a minor printing percentage goes and that is offset by the increase in costs required to make a book look good on twenty different platforms.

Remove the support of overhead and the midlist gets squeezed even more. This move will predominantly reward the publication of bestsellers and self-published books. Those are the only sectors that can survive without support. And both are essentially lotteries. Every aspect of ebooks as loss leaders will exacerbate the already deadly trend. The publishers were totally correct in fighting it, not because they are evil greedy bastards who want to rip off consumers but because that was the only viable way of preserving writing as a profession and publishing as an industry. Not to mention that allowing one company to take over bookselling by subsidizing its books at a loss is even more insane than the notoriously insane publishing industry. Yes, you can buy books anywhere on the Internet. And Amazon will go from 60% market share to 75% in a year. Just watch.

So please go cheer for your ebooks sold below wholesale by a monopoly. Just ask yourself for a second what other industry would survive that. And what you would say if it were your industry.

[jackdavinci]

Exapno, I can't really argue with you because you are speaking mostly from authority. Can you please explain how Amazon choosing it's own markup makes any difference to the publisher if the publisher set its own wholesale price?

[Simplicio]

Originally Posted by Exapno Mapcase

There has been a squeeze on the midlist for years. For our purposes I'm defining midlist as the general run of books that are not bestsellers, not interchangeable formula genre, and not specialized titles, like atlases, manuals, almanacs, and the like. The midlist allowed writers to have careers as writers. Increasingly, writers have needed to have another source of income unless they won the lottery of bestsellerdom.

Amazon pays the same price that they always have for books though. Whatever has been happening to midlist authors recently, I don't think you can blame Amazon. The only thing they've done is subsidize book sales out of their own pockets, which should make publishers more profitable, not less.

The costs of print always were a minor percentage of the price of a book. Most of the money in an average book went to the author's advances and royalties and to overhead, with whatever was left over for taxes and profit. Those costs do not disappear with an ebook.

That appears to be half true. Printing is a small part of the cost of a (physical) book. But the largest portion of the cost isn't on the publisher's end, its on the retail end. Half of the cost of a book is getting it to the store, stocking the shelves, manning the cash-registers, etc. Thats why ebooks have been so much cheaper, no brick and motor stores means you can almost half the price. There's no reason this should effect the publishers, though its certainly a bad thing if you own a physical bookstore. (using the numbers here)

Remove the support of overhead and the midlist gets squeezed even more. This move will predominantly reward the publication of bestsellers and self-published books. Those are the only sectors that can survive without support. And both are essentially lotteries. Every aspect of ebooks as loss leaders will exacerbate the already deadly trend.

Not if the "loss" is paid by the retailer. Publishers are worried that won't be true in the future, but its true now.

Not to mention that allowing one company to take over bookselling by subsidizing its books at a loss is even more insane than the notoriously insane publishing industry. Yes, you can buy books anywhere on the Internet. And Amazon will go from 60% market share to 75% in a year. Just watch.

That's what they're worried about, but I don't think it will ever happen. Distributing ebooks is too easy a market to break into. Publishers can do it themselves if they need to (and apparently they already are). And as I said, Apple has more then enough money lying around to compete on price. If the publishers really feel they're getting screwed by Amazon, the answer is simply not to sell their books to them and go ahead and sell them directly.

[Exapno Mapcase]

Originally Posted by Simplicio

That's what they're worried about, but I don't think it will ever happen. Distributing ebooks is too easy a market to break into. Publishers can do it themselves if they need to (and apparently they already are). And as I said, Apple has more then enough money lying around to compete on price. If the publishers really feel they're getting screwed by Amazon, the answer is simply not to sell their books to them and go ahead and sell them directly.

Can you name another industry in which this successfully happened?

[Simplicio]

Originally Posted by Exapno Mapcase

Can you name another industry in which this successfully happened?

PC games. They used to be sold by retailers, and are now usually either downloaded from the publishers website or from Steam, which itself is owned by a prominent publisher.

I really think of the players here, its Amazon that has to worry. Digital distribution is a pretty common thing to set up and doesn't take a lot of capital to get started. Everyone that makes a tablet is going to set up one to move units (as Apple has done) and if Amazon tries to screw publishers (which again, they haven't actually done, they continue to pay the same price to publishers as they always have, something that helps publishers bottom line), the publishers can go open their own digital marketplace site and sell their books there.

[Simplicio]

Just to add a little more, I think publishers are really thinking about this the wrong way. What ebooks mean is that the retail side of the business is going to be much cheaper: it costs a lot less to run a website then a Borders. This means books will be much cheaper, and so people will buy more books. But since the "savings" will largely come out of the retail side of things, the amount the publisher gets "per-book" will be about the same. So publishers will get more money, not less.

And if tablet makers like Amazon want to subsidize sales, that will only increase sales more at no expense to the publishers.

And when some of your competition (libraries and borrowing books from friends) has a cost to consumers of essential $0, it helps to have as low a price as possible, so ebooks will probably increase sales from that angle as well.

But instead of trying to get this to work for them, publishers seem to just be freaking out over the $9.99 thing (up to and including participating in illegal collusion, apparently). I suspect this is partially due to the fact that the rise of ebooks has coincided with the Great Recession, so bottom lines have been dropping while ebook sales have been growing, and partially just from future shock. But they and consumers would do better if they tried to create a new ebook model of selling books instead of trying to shoe-horn the technology into the old model.

[iamthewalrus(:3=]

Originally Posted by Exapno Mapcase

Yes, you can buy books anywhere on the Internet. And Amazon will go from 60% market share to 75% in a year. Just watch.

So please go cheer for your ebooks sold below wholesale by a monopoly. Just ask yourself for a second what other industry would survive that. And what you would say if it were your industry.

The normal danger of letting a monopoly take over is that they'll eventually raise prices, or that they'll use their monopoly power to squeeze their suppliers.

But the barrier to entry in the eBook market is about as low as it can be. All you need to sell an eBook is a website and a merchant account. What are you worried will happen if Amazon's market share keeps going up?

[Athena]

Count me as another one wondering how Amazon setting their own price and paying the publishers the same royalty as everyone else somehow screws publishers and/or authors. It'd be one thing if they were taking the WalMart route and pressuring publishing houses to give them better deals, but I've never heard any mention of that.

From my non-industry perspective, the publishers are being a bit too much like music publishers were ten years or so ago; they aren't embracing the digital market in ways that create new revenue streams. There's a couple aspects to e-Books that would create revenue streams to the publisher than nobody seems to be taking advantage of:

- the fact that you can't resell them. Yeah, a lot of people don't like this. But to the publishers, it's a great thing. If I tell a friend "you oughta read this book I just bought!" in the old paradigm, I'd lend it to her. Or she'd go to a used book store and buy a copy. Or she'd get it from the library. If an eBook is readily available at a good price, I think more people would opt to buy that book. It's convenient, you own it, you don't have to find a place on the bookshelf to store it, AND the publisher gets a cut.

- For-profit libraries. Why can't I subscribe to a service like Netflix is to movies and "rent" books? Heck, the publishers themselves could set something up like this if they wanted. I'd happily give Penguin Books $10 or $15 a month for the pleasure of having one or two of their books to read at a time.

- Increased sales if the price are low. I can't tell you how many books I've purchased from Amazon's Daily Deals and their $3.99 and under monthly list. For $3, I'll buy a book even if I have a very minor interest in it. Apparently I'm not the only one because these types of programs seem to be increasing. I can't help but think it'd be worth exploring the concept of dropping book prices below even the $9.99 range and see if the publishers can make it up with volume. In a way, this idea has already been proven to a point - with the advent of Big Box Book Stores that sold every book at a 30 or 40% discount, didn't publishers sell more hardcovers?

[tullsterx]

That's pretty cool. But, I am uncomfortable with Amazon holding so many cards.

This also supports my belief that Apple is the real evil overlord and that Steve Jobs is actually the devil.

[AndyPolley]

C Net Article that sheds some light on the issue. Exapno Mapcase & RealityChuck are right about this. The industry needs publishers. The model amazon wants is short-sighted with regards to the creative side of the equation. Discounting e-books that much will cause pubs to go under, or severely cut back. Does anyone think that's good news for writers? Maybe JK Rowling can self-publish, but most authors will not become successful this way. That means more writers giving up. I envision a market filled with self-published hacks peddling sensational nonsense bordering on fan-fiction, and the breakout quality author becomes rarer & rarer. This says nothing of textbooks & educational materials, which will also take the hits along with every other aspect of publishing.

Also, I'd like to see bookstores actually remain in existence. There's a reason why I don't mind skipping the trip to the store to buy a PC game...the experience offered little to me. Going to a bookstore has a value to me, and to young readers, and to a community (and it's educators.)

[Simplicio]

Originally Posted by AndyPolley

Exapno Mapcase & RealityChuck are right about this. The industry needs publishers. The model amazon wants is short-sighted with regards to the creative side of the equation. Discounting e-books that much will cause pubs to go under, or severely cut back.

Again, why? If Amazon discounts books by subsidizing them with their own money, and pay the publishers the same per book that they've always been paid, how will that cause publishers to go under? As your own article points out, the publishers actually make considerably less money under the Apple model. And again, if Amazon subsidizes book sales, then more books are sold and again, the publishers make more money.

And its not like retailers subsidizing books is something specific to ebooks. Big book sellers have been offering 40% off on bestsellers for a long time. If the discounts are so damaging, why haven't they created the dystopian world you picture already.

Also, I'd like to see bookstores actually remain in existence. There's a reason why I don't mind skipping the trip to the store to buy a PC game...the experience offered little to me. Going to a bookstore has a value to me, and to young readers, and to a community (and it's educators.)

Yea, no question traditional bookstores are the real ones getting screwed. But thats true regardless of what model ebook sellers use.

[Athena]

Originally Posted by AndyPolley

C Net Article that sheds some light on the issue.

Nice article. But what I got out of it is that the publishers are still betting too much on paper books staying popular. I think they're wrong. We've already seen it in music and it's happening with newspapers and movies - people increasingly want media electronically. When's the last time you bought a CD? How many of us rent movies in physical form versus downloads? None of the physical industries are dead yet but they're going that way.

I think it's inevitable that books will go that way, too. I resisted it for a while, but now, with the exception of books with lots of diagrams and pictures, I prefer them on the Kindle. I prefer online booksellers to physical bookstores - I think it's vastly better to be able to read reviews and check out the first chapter than it was to randomly browse physical books. I also like that I don't have to have a room in my house dedicated to holding all the books I buy.

I think the publishers who embrace the eBook format and the associated paradigm changes in the sales model that are inevitable are the ones who are going to stay in business and prosper. The ones who stick to the old model are going to be left behind.

[Implicit]

Originally Posted by RealityChuck

Amazon has set the prices for ebooks at a level that is unsustainable for publishers.

So the publishers claim. They may have a point, it may be unsustainable for their current business model, but it's the internet age and their centuries old business model needs an update.

[Simplicio]

Originally Posted by Athena

Nice article. But what I got out of it is that the publishers are still betting too much on paper books staying popular.

This, I think, is the real issue. As I've shown, the publishers stated reasons for the collusion don't make much sense. What I think is going on is that publishers aren't really worried about Apple ebooks being competitive with Amazon ebooks, they want physical books to stay competitive with ebooks, probably because they're scared of the ease of piracy of the latter.

I'm not sure that's an irrational fear. Once people get used to having ebook readers, book piracy probably will take off. People already have an expectation that they can share books they've bought and get them for free at the library, so book piracy feels less like a crime. And of course, book files are small and easy to download. I think this effect will probably be counteracted by increased sales due to ebooks being cheaper and easier to get then physical books, but I can at least see where it would be a real concern for publishers.

But in anycase, ebooks are going to keep increasing their marketshare whether publishers like it or not, and whether ebooks cost 9.99 or 12.99 (and I say this as someone who prefers physical books). By fighting it by trying to keep ebook sales more expensive, they're just increasing peoples incentive to pirate over purchasing digital books.

Originally Posted by Impicit

So the publishers claim. They may have a point

Except read the thread, they don't have a point. The publishers make more money off Amazon's discounted books then they do otherwise.

[PoorYorick]

Originally Posted by Athena

- the fact that you can't resell them. Yeah, a lot of people don't like this. But to the publishers, it's a great thing. If I tell a friend "you oughta read this book I just bought!" in the old paradigm, I'd lend it to her. Or she'd go to a used book store and buy a copy. Or she'd get it from the library.

Many public libraries like mine now include e-books in their catalog. It's easy as pie for me to select a book for the library's web site, and the next time I boot up my Kindle, voila, it's there. After two weeks it goes away. So there's that, but at least for now, my library's e-book catalog is much smaller than it's hardbook catalog, and many of the books aren't in the Kindle format.

[iamthewalrus(:3=]

Originally Posted by AndyPolley

The industry needs publishers. The model amazon wants is short-sighted with regards to the creative side of the equation. Discounting e-books that much will cause pubs to go under, or severely cut back. Does anyone think that's good news for writers? Maybe JK Rowling can self-publish, but most authors will not become successful this way. That means more writers giving up. I envision a market filled with self-published hacks peddling sensational nonsense bordering on fan-fiction, and the breakout quality author becomes rarer & rarer. This says nothing of textbooks & educational materials, which will also take the hits along with every other aspect of publishing.

I think this is the fundamental issue at stake here. I disagree; the industry doesn't need publishers. It needs filters. Publishers act as gateways to the market. To make sure that they publish books held to a sufficiently high standard of quality, they don't let anything pass below that standard. But there's another way to make sure that you only read quality books: read based on recommendations of people you trust, and based on your own experience.

Today, I (as a reader) don't need a publisher to tell me whether a work or a writer is good enough for my time and money. I can find dozens of bloggers who will review books I like. I can read the author's blog, or the articles they've written that are freely available. A few keystrokes will tell me vastly more than the fact that a book made it through the standards of some publishing house.

Publishers used to set a minimum standard because there were huge fixed costs in releasing a book. Now there aren't. There used to be lots of friction and unknowns in the marketplace. Now there are many quick and easy ways to check whether a book is good.

The idea that somehow the old model, where an aspiring writer submitted manuscripts to agents and publishers, hoping that he'd either get approved, or at least get more than a form letter rejection, is better for discovering breakout talent than one where anyone can release a book, anyone can read it and provide feedback, and the best ones spread by word of mouth and social media is completely backward. How is getting lost in some junior reader's slush pile more nurturing to the young writer than being surrounded by hacks?

Imagine if putting up a web page required convincing a publisher to back you. How much poorer would we all be for it. Sure, there wouldn't be any total cesspools on the internet. But would that really be better for people who make web pages? For people who read them? The democratization of writing that eBooks represent is going to be just as amazing for creativity and production in long-form writing as the web was for... so many other things. Publishers are dinosaurs.

[AndyPolley]

Originally Posted by iamthewalrus(:3=

Imagine if putting up a web page required convincing a publisher to back you. How much poorer would we all be for it. Sure, there wouldn't be any total cesspools on the internet. But would that really be better for people who make web pages? For people who read them? The democratization of writing that eBooks represent is going to be just as amazing for creativity and production in long-form writing as the web was for... so many other things. Publishers are dinosaurs.

If you want the landscape of literature to resemble the landscape of web-browsing, that's one way to look at it. I don't happen to agree that this is a desirable scenario, or a good analogy. Revenue through successful web pages is driven by advertising. When a site increases it's views, it's a live process that can add and/or alter ads, and the prices charged for them. A book is a static object that has to be produced...e-book or not.

To flip it around on you, imagine a place that only hosted 'published' (Publisher-backed) web sites. How would the quality of those sites differ from the wild west of the internet now? It doesn't matter in cyber-space if there are 10,000 crappy web pages to every good one. That level of failure will bankrupt every bookstore in the world, which in turn ends the era of printed book.

Like it or not, books are more than just someone's summer reading list. Books are needed in schools for students...in Libraries...in research labs...whatever. The difference between what book publishers do for books & what record executives do for music are very, very different things.

I wasn't terribly clear in my last post. Somewhat unrelated to the article, Amazon's ultimate business plan is to self-publish through Amazon, onto e-readers made by Amazon, with a format developed by Amazon. Undercutting other booksellers hurts the publishers & the perceived value of an e-book. What the publishers are trying to do is stabilize the price of an e-book so Amazon doesn't drive every other game in town out of business. Why? Read the article. Borders went down owing Penguin $41 million dollars. Sure, that means Penguin has to lay folks off. More importantly, that's money they cannot invest in future authors & their projects. A best case scenario here is still a monopoly by Amazon and the end of actual book stores.

Penguin isn't just a money-grubbing middle man. They provide opportunities for authors. Do they discriminate? Sure. Any idiot can write a book, but there's a level of quality that must be met to be published. (well, by an actual publisher)

Mets Pitcher R.A. Dickey's book (not exactly a renowned author) is being published because someone at Penguin thought it could make money. Now, his book gets edited, it gets promoted, the author does the rounds, ect...Without a publisher, he doesn't write the book. Without publishing, if he does write the book, it's competing with 10,000 crappy e-books about cats or video games or whatever else is yielded by the power of independent internet-based non-publishing.

I want to live in a world where there is a financial incentive to write a book. The complete independent way will provide way fewer paths to success, while providing more & more bad books to sift through.

And while I like to think I'm tech savy & I love to read e-books, the reality is that physical books aren't going to die anytime soon. The big business of big bookstores might, and fiction best sellers might, but unlike CDs or DVDs, the world still need physical books. Not for nostalgia's sake, but for the sake of the population that can't easily use e-readers. For classrooms & Libraries and whatever else I'm not thinking of right now.

[Frylock]

In very simple terms, can someone knowledgable explain how the publishers are screwed if Amazon is continuing to pay them exactly the same royalty?

[Athena]

Originally Posted by iamthewalrus(:3=

Today, I (as a reader) don't need a publisher to tell me whether a work or a writer is good enough for my time and money. I can find dozens of bloggers who will review books I like. I can read the author's blog, or the articles they've written that are freely available. A few keystrokes will tell me vastly more than the fact that a book made it through the standards of some publishing house.

Just who do you think marketed these books so the bloggers know that the book even exists? As others have asked, how many self-published books do you have in your library? That's the best answer to whether or not publishers provide a service. I want to read a book, not a slush pile.

[AndyPolley]

Originally Posted by Frylock

In very simple terms, can someone knowledgable explain how the publishers are screwed if Amazon is continuing to pay them exactly the same royalty?

Simply put, Amazon sells e-books at a loss, to promote their site & the sale of Kindles. This makes it difficult for other e-book sellers (B&N, Apple...) to compete. If they can't compete, they go away.

Publishers are screwed if the only way to sell an e-book is through Amazon, since Amazon would then hold all the cards and can decide to no longer pay the same royalty. Amazon could then choose to deal with whatever publisher it wants.

Publishers are even more screwed if the only publisher Amazon wishes to deal with is Amazon.

[Hello Again]

Originally Posted by AndyPolley

Simply put, Amazon sells e-books at a loss, to promote their site & the sale of Kindles. .

That hardly even makes sense, because Amazon does not sell all ebooks at a loss, and the devices themselves though initially sold at a loss are now reaping a tiny profit.

Many posters in this thread are conflating the fates of bookstores and publishers. I'm pretty sure ebooks are not good for physical retailers unless they really do some sharp thinking*, but I still see no logic in the premise that ebooks are bad for publishers.

• There is no physical printing cost. Even if the physical cost of printing is 10-12% of a print book, an additional 10-12% profit is ENORMOUS in the publishing industry. That this savings is brushed off is to me, incomprehensible.
• Ebooks cannot be loaned or resold on the used book market. Publishers who allow libraries to purchase ebooks, limit the number of times they can be circulated.
• It's impossible to have print overrun and the publisher never has to absorb the cost of returned, unsold ebooks.
• Ebooks do not need to be shipped, distributed, or stored. They cannot be damaged by water or nibbled on by varmints or stolen by warehouse workers or suffer any physical hazard as a result of being printed, stored, or shipped.
• There is never any lost profit due to shortages; there are always enough ebooks for every buyer.
• If an ebook contains a significant mistake, the cost of reprint and replacement is negligible (Deathly Hallows had a minor misprint, a couple hundred copies were missing 33 pages, and I recall at least one Harry Potter novel previous to that had a serious misprint identified before the laydown date)
• The format ebooks arrive at the publisher in, is the same format they arrive for print publication in. Microsoft Word. Adobe Acrobat.
• Ebooks don't participate in shared markdowns. (do they ever not!)
• When promoting an ebook, there are no pay-for-placement ("co-op") fees to bookstores.
• contrasted to the savings above, ebooks do not create any new costs that were not already present in the cost of publishing print books.

I don't agree with those that post that Publishers are unnecessary. Publishers despite their many flaws are the #1 expert in identifying quality prose and delivering it to readers. The idea that most people who really enjoy reading are going to sift through the Amazon $1 slushpile to find something worth reading is absurd. I have like 200 (print) books in my to-read pile; I'm not going to mess with that bullshit. I don't personally know anyone else who would.

However I also don't agree that ebooks are obviously inherently unprofitable. To me they appear to be more inherently profitable than hardcovers. And I also don't agree that profit-killing discounts by retailers are in any way a new phenomenon nor that they are isolated to e-books nor that they are something the publisher has ever tried to control in the past.

The NYT did the math and found that the profit on a $9.99 ebook is roughly the same as that on a $26 hardcover - in real dollars, not in percentage. Profit before overhead on a hardcover: $4.05. Profit before overhead on an ebook at the 9.99 price point: 3.51-4.26. At $12.99 minus apple's 30% commission, they were making MORE profit on an ebook than a hardcover. You'll also note that, contrary to the implications in this thread, the cost of printing and shipping a physical book is just about as significant as the cost of author royalties.

*And before anyone says so, ebooks did not kill Borders. Borders was killed by its own unbelievable and unshakable stupidity over a 10-13 year period beginning roughly in 1999. My cite: I worked for 7 years at Borders HQ, between 1998 and 2005.

[Evil Captor]

Maybe the approach of EL James in writing that fanfic that preceded "50 Shades of Gray" points to a way for authors to self-publish via the Web successfully ... tie into an existing online community and let them boost the sales of your work.

Hmmmmm ...

Introducing my new kinky romance: Slug Signorino: The Master of Desires!

[Thudlow Boink]

One blog post I read yesterday claims that "DOJ probably just destroyed the publishing industry."

This claim seems to be based on the idea that e-book prices will inevitably fall to a level where publishers will be unable to make a profit,

2 year prohibition on any contract that prevents retailers from discounting retail prices. The destruction of publishing companies is guaranteed now. In 2 years things will accelerate and soon we will have $1 and $3 as the new normal for book prices. What publishing company can survive on $3 per book?

and Amazon will gain Ultimate Power over the world of books

2.Just to be very clear here – The grand ‘collusion’ between Publishers and Apple was a desperate attempt to prevent Amazon (and to a lesser extend B&N and Kobo) from replacing Publishers as the Kings of Publishing and Books. DOJ has struck down this collusion agreement and thus made it inevitable that Publishing Platforms 10 times more powerful than Publishers arise. Platform = Publisher + Services Provider + Distributor + Retailer.

[iamthewalrus(:3=]

Originally Posted by AndyPolley

If you want the landscape of literature to resemble the landscape of web-browsing, that's one way to look at it. I don't happen to agree that this is a desirable scenario, or a good analogy. Revenue through successful web pages is driven by advertising. When a site increases it's views, it's a live process that can add and/or alter ads, and the prices charged for them. A book is a static object that has to be produced...e-book or not.

You're thinking about only a subset of websites. There are plenty of websites that sell a product, not advertising. Netflix, Dropbox, and Amazon (for example) all sell products and services, not advertising. An eBook is a product. There's no reason you can't sell it as a product and keep a clean advertising-free site.

It doesn't matter in cyber-space if there are 10,000 crappy web pages to every good one. That level of failure will bankrupt every bookstore in the world, which in turn ends the era of printed book.

The era of the printed book is coming to an end. All the publishers' attempts simply cannot turn back the technological progress that's driving that change. It's not going to end tomorrow, but eReaders are getting better very quickly. Similarly, the concept of a general book store as a relatively small building where you go in and look at individual physical books and maybe buy one is coming to an end, just like record stores and video shops have died out.

Penguin isn't just a money-grubbing middle man. They provide opportunities for authors. Do they discriminate? Sure. Any idiot can write a book, but there's a level of quality that must be met to be published. (well, by an actual publisher)

I don't think publishers are evil or add no value to the process. I just think they're inefficient and limited and are going to be replaced by more efficient and open ways of accomplishing the same thing. I also think that as they are replaced, it will provide more and varied opportunities for people who were excluded from the old system for various reasons, and that that will outweigh the losses by people who can't figure out how to navigate the new world of self-publishing and promotion. There are always winners and losers when industries change. But I think that on the whole, the change is a good one.

Mets Pitcher R.A. Dickey's book (not exactly a renowned author) is being published because someone at Penguin thought it could make money. Now, his book gets edited, it gets promoted, the author does the rounds, ect...Without a publisher, he doesn't write the book. Without publishing, if he does write the book, it's competing with 10,000 crappy e-books about cats or video games or whatever else is yielded by the power of independent internet-based non-publishing.

How is it not already competing with that stuff even with publishing? We've got crappy e-books about cats now. If publishers can't figure out how to make money by finding good authors, striking deals for a portion of the future profits, and promoting them above the chaff, I'd suggest that the reason for that is that publishers are not very good at figuring out what books will be successful. Why do we want to keep a system around that's demonstrably more wasteful and inefficient than the alternative?

Originally Posted by Athena

Just who do you think marketed these books so the bloggers know that the book even exists?

In some cases, the authors themselves. In some cases, it was a publisher's agent of some sort. Some, I found in discussions here on the Dope.

As others have asked, how many self-published books do you have in your library?

Maybe a dozen or so (out of a library in the 200-300 titles range. I've culled my bookshelves a lot in recent years), counting both physical books and eBooks. I expect that's significantly higher than most people. Part of the reason is that, when getting rid of books, I tended to keep the self-published ones and donate the mass-market ones. I can always find a major author in the library. I'm not likely to I'm currently reading Confessions of a Long-Distance Sailor, which I found as a result of the author doing an AMA on Reddit.com.

Comparing the count of self-published to traditionally-published books in my personal library isn't really an apples to apples comparison, though. Part of the reason people have relatively few self-published books is that the historical nature of printing books required big up-front fixed-cost expenses that made publishers well-suited to the market. That's only not been the case for, what, five years, maybe? I'm arguing that that's changed, but that doesn't retroactively change the history of the publishing industry. The fact that my copies of Hamlet, Moby Dick, and Lord of the Rings tell us relatively little about the value of a traditional publisher in a world where the internet exists.

That's the best answer to whether or not publishers provide a service. I want to read a book, not a slush pile.

Again, I'm not claiming that publishers don't provide a service. They clearly do. But so did milkmen and record stores, and you don't see them much any more.

[AndyPolley]

Originally Posted by Hello Again

That hardly even makes sense, because Amazon does not sell all ebooks at a loss, and the devices themselves though initially sold at a loss are now reaping a tiny profit.

According to my cite, Amazon was selling e-books at a $2.50 loss. Are you saying it doesn't make sense for them? Or that I'm not making any sense? It makes sense for them to be the go-to place for e-books, because while you're there you can buy other things...like their e-book reader.

Thudlow Boink's link touches on a lot of what I'm trying to say. Basically, I don't think this is good news for readers (or authors.) I don't have such a book habit that I want to 'rejoice' over lower e-book prices that cannot support publishers and in turn, writers. I feel that the quality of writing will go down, and the number of sub-standard writers will go up.

Also, in your NYT link, notice what happens to the profit margin when they reach Amazon's $9.99 price point. What do you think happens when it's $4.99? $2.99?

iamthewalrus(:3=, you cannot compare an e-book as a product to web sites, and then bring in Netflix as an example. You comparing apples to space shuttles. As I noted, a book is a static product, it cannot provide a 'service.' You & I agree that publishers bring some value to the table. The vast majority of readers have never read an independently published book. I have none in my library. The example of the AMA Reddit guy is super rare, and I'll wager not terribly successful when compared to published authors.

I disagree with the "era of books coming to an end" saying too. Books will still be printed 100 years from now. The era of big book stores is coming to an end, but books are not just inefficient means of delivering content. It's not the same as CDs & digital music. Just because my Nook or Kindle is super-efficient to me, doesn't mean it is to the guy without internet access, or people in poverty, or people in countries where electricity is scarce, or in space, or on an aircraft carrier...until you can create an e-reader that never fails & doesn't use power, there will be books.

[Evil Captor]

As a counterpoint to what Reality Chuck has been saying, an article on IO9 points out that the Amazon list of the top 100 best selling science fiction books on Kindle consists mostly of authors who have NEVER shown up on Locus. They speculate that the Kindle may prove to be a great thing for writers and fans, opening up all sorts of new, good reading experiences to all.

RealityChuck and Exapno tout the "services" that publishers provide by sorting out the slush file, why can't fans collectively "sort out" the slush file by reading and commenting on works by authors directly. I mean, the publishers concentrated in New York are kind of an insular fraternity, you know? You can tell that a lot of books get passed just because the editor knows the writer ... how many mainstream novels have been about middle-aged academic/writers who cheat on their wives? A Story That Must Be Told indeed!

[Frylock]

Originally Posted by Hello Again

I don't agree with those that post that Publishers are unnecessary. Publishers despite their many flaws are the #1 expert in identifying quality prose and delivering it to readers. The idea that most people who really enjoy reading are going to sift through the Amazon $1 slushpile to find something worth reading is absurd. I have like 200 (print) books in my to-read pile; I'm not going to mess with that bullshit. I don't personally know anyone else who would.

But you don't need a publisher for this. If this is the only thing left, there's no point in talking about them as "publishers" anymore. Instead of publishers, we'll have groups who maintain lists of good books. Authors will vie for inclusion on these lists. Kind of like a certificatin system for books.

[Dave Hartwick]

Publishers are going to be hurt? Not the good people who made Dan Brown and Danielle Steel millionaires! Who's going to control the quality? Who's going to put a chick with big tits on the cover so science fiction fans what to read? Who's going to make Stephen King's last name big so it's exactly as wide as his first?

I feel a little for retailers but they'll just have to sell something else, same as people who used to sell piano sheet music or sailcloth or whatever. I wonder if anybody got all puppy-eyed about them?

[iamthewalrus(:3=]

Originally Posted by AndyPolley

iamthewalrus(:3=, you cannot compare an e-book as a product to web sites, and then bring in Netflix as an example.

I'm not comparing books to websites as products. I'm comparing the web industry with the print publishing industry. My point in bringing up websites was to contrast an environment in which new products are offered through a gatekeeper to one in which they are offered without a gatekeeper. My point was that if there had been a gatekeeper entity to the internet, all sorts of cool things we have now wouldn't have been approved. I claim that when you remove the gatekeeper from the publishing world, we'll see some cool adaptations and advancements there, as well, though probably less dramatic ones given the limitations of the medium.

The vast majority of readers have never read an independently published book. I have none in my library.

Sure, but, like I said, lots of the reason for that is due to historical economics that don't necessarily apply going forward. We're on the cusp of a sea change in book distribution. If we'd been having this conversation in 1993 about, say, online publishing, you could say the same thing. The vast majority of readers had never read an article on the internet. That doesn't mean that they won't.

The example of the AMA Reddit guy is super rare, and I'll wager not terribly successful when compared to published authors.

Probably true. I was asked how many self published works I had, and I responded, admitting that I expect I'm an outlier and that my experience is not typical.

But I still think that it will be increasingly common.

Barbara Freethy, for example, sold 2 million+ eBooks, self published through Amazon. It doesn't look like my cup of tea, but there are clearly lots of people buying them. That sort of success wasn't even possible ten years ago without a publisher. So of course most people haven't read much self-published work. It's really just getting started.

I disagree with the "era of books coming to an end" saying too. Books will still be printed 100 years from now.

They still print records on vinyl and you can still buy buggy whips, too. I'm talking about the mass market.

[Hello Again]

Originally Posted by AndyPolley

Also, in your NYT link, notice what happens to the profit margin when they reach Amazon's $9.99 price point. What do you think happens when it's $4.99? $2.99?

There will always be Bestseller type books desirable at the $10 price point and the $12 price point. Eventually, JUST LIKE NOW, they will reduce the ebook price as the title ages. At 9.99 the publishers endure the horrible tragedy of selling ebooks at the Trade paper price while still making as much profit as a hardcover. (oh the humanity) At 3.99 they will endure the (according to them) still greater tragedy of making as much profit as a mass market paperback. Incremental reductions in price (and retailer discounting off list) has ALWAYS been a part of the book pricing model, a model the publisher wants to abandon cause... *cue wailing and gnashing of teeth* ... actually I don't know why.

You can buy the box set of the first 4 "Song of Ice and Fire" mass mark paperbacks for $21 and the publisher doesn't give a crap about that, but the Kindle set is $29, and that, apparently, is a symptom of an national publishing crisis.

[Hello Again]

Originally Posted by AndyPolley

According to my cite, Amazon was selling e-books at a $2.50 loss. Are you saying it doesn't make sense for them? Or that I'm not making any sense? It makes sense for them to be the go-to place for e-books, because while you're there you can buy other things...like their e-book reader.

I'm saying that there is no universal $9.99 max price point now and no reason to think there ever will be.

Charlene Harris -- trueblood series author -- has a new book being sold for $15 kindle edition and...... $15.16 in hardcover. (and a whopping $15.98 at bn.com). Explain again how the kindle price is wildly unfair and will destroy the industry?

Amazon sells SOME ebooks at a loss. Retailers have always sold SOME print books at a loss as well. In fact, best selling books are USUALLY sold at a loss by retailers. Publishers have never considered this their problem.

[Thudlow Boink]

Originally Posted by Hello Again

In fact, best selling books are USUALLY sold at a loss by retailers.

Really?