Mike Shatzkin is confused. He can’t seem to understand why self-publishers spend so much time documenting the ills of the publishing industry.
Or, as Shatzkin puts it in one of his typically snappy headlines, “The motivation of the publisher-bashing commentariat is what I cannot figure out.”
I did a fair bit of bashing myself last week when I said that “Publishing Is Rotten To The Core.” I had intended to follow that up with a more positive counterpoint in a couple of weeks, but Shatzkin’s post demanded an immediate response.
Motivations are less interesting to me than the arguments themselves, and questions about motivations can often be an attempt to avoid the actual issues, or a simple fishing expedition – i.e. looking for a point of entry for an ad hominem attack. But the misunderstanding on this issue is so fundamental that it is worth addressing.
So, why do we care? Is Jamie Ford correct when he claims that we are motivated by bitterness? Was he right when he said that we’re all “people who’ve been told that their baby is ugly”?
It’s possible that bitterness/rejection is a factor for some self-publishers. And maybe even most of them at some level. But the idea that it’s the prime motivation, or any significant factor here, doesn’t stand up to any real scrutiny because the “publisher-bashing commentariat” doesn’t just list the failings of the business, but also suggests remedies.
If we wanted to destroy publishers (or cackle as they destroyed themselves), why would we write posts suggesting that they drop DRM, embrace low pricing, and hurl themselves with lustful abandon into the digital future?
Mike Shatzkin is right when he says that it’s not in our narrow self-interest to do so. But I think there are several flaws with thinking in that very narrow sense. Nate Hoffelder at The Digital Reader nails it:
I am tired of Mike’s assumption that anyone who bashes the publishing industry wants Amazon to win […] some actually are socially aware, and are joining in the debate so they can point out what they see as the best way forward for the publishing industry.
Nate Hoffelder.
He’s right, but there’s more to it. Here are my motivations, in no particular order:
- I have many friends who are traditionally published. I want publishers to reform so that my friends are treated better.
- I have a sense of fellow feeling with my colleagues – possibly because writers have been historically treated so poorly (or maybe because I’m a human being who can occasionally rise above considerations of narrow self-interest) – and I want conditions to improve for all authors, however they decide to publish their work.
- There is a lot of FUD around which can cause writers to make poor choices, or take decisions for the wrong reasons. I feel a need to counter that, perhaps because of the above above.
- I can’t see myself signing a traditional deal (absent an obscene amount of money) because we seem to have diametrically opposing views on key issues like contracts, piracy, pricing, and marketing. That limits my options as an author to self-publishing, or (perhaps, this is not a given) signing a deal with one of the Amazon imprints. Self-publishing has been very good to me, but I would also like more options because it’s always good to have more options. If publishers get smarter about all this stuff, then I will have them. So will everyone else who currently can’t imagine signing a deal. And that, in turn, will act as an incentive for all players to improve their treatment of writers. (Note: the “obscene amount of money” is attractive for obvious reasons, but that theoretical level of demand for my work probably means I could get rid of the contract stuff that bothers me, have the publisher really back the book, and have actual input on key decisions.)
- Some of the things that publishers get up to are simply unconscionable, from using corporate sleight-of-hand to screw authors out of royalties, to profiting from predatory vanity imprints. It’s certainly not in my self-interest to speak up about this crap, but I hate to see writers suffer and cheats prosper, and I can’t abide the hypocrisy/stupidity of FREAKING OUT about what Amazon might do in the future when publishers are doing this stuff today.
Now, in case you think this is an argument I’m constructing after-the-fact, let me point you towards a discussion I had with Chuck Wendig back in August. You’ll see I made many of the same points there.
And if the negative criticism from the “publisher-bashing commentariat” outweighs the positive suggestions, I respectfully suggest that’s because it’s much harder to get people to consider an alternative approach if they don’t accept there is a problem in the first place.
DRM doesn’t “prevent piracy,” it causes it. Higher pricing doesn’t “protect the literary way of life,” it is killing it. Writers aren’t being “treated as true partners in the publishing process,” they are being exploited.
Here’s the curious conclusion to all of this. In one sense, both myself and Mike Shatzkin want the same thing: a diverse retail and publishing landscape. And we both believe that’s best for the industry. Where we differ is in the approach to achieving that diversity.
Mike Shatzkin wants some form of (yet to be explained) governmental intervention to restrict Amazon’s market power. I think that would be a terrible move and publishers, as well as Amazon’s retail competition, would have zero incentive to reform or innovate.
Instead, I want to see publishers actually compete. I want them to embrace the future, drop DRM, stop pretending the internet is going to go away, get rid of dumb non-compete clauses, realize that readers are your customers now and not just bookstores, resist the temptation to screw writers with crappy option clauses and toothless reversion clauses, understand that reading is in competition with all sorts of other forms of entertainment and that they need to start pricing much, much cheaper (particularly for debut authors), and, finally, stop scamming writers with exploitative vanity imprints.
I also want to see retailers adopt Amazon’s core philosophy of always trying to display the book the reader is most likely to purchase – no matter who the publisher is or what price it’s selling at. I’d like them to understand that the store is at least as important as the device, that they should develop a fully fledged recommendation ecostructure and beef up their email marketing, and that they need to give up more of the co-op reserved for publishers to organic, targeted recommendations. (And, to be fair, this is starting to happen.)
In other words, I’d like to see a world with several retailers taking Amazon’s approach, as well as a plethora of future-forward publishers, with real digital savvy, who actually respect authors, treat them fairly, and consider them real partners in the process of publishing books and reaching readers.
Because that would be better for everyone. (Including me.)
Is that really so hard to understand?
Wow. I definitely don’t critique trad publishing from a place of bitterness. I wanted something better from publishers and more competitive models and so I started my own publishing company and now publish myself and other authors too.
There really are a variety of ways forward in book publishing and my little company is proof, I think, that publishers can run a business and take good care of their content creators at the same time! I’m not sure how the debate has become so two sided: big publisher or self-publisher. There’s so many different models in between!
Trad publishing has real issues and they could take the time to listen and grow with how the book industry is growing. It’s weird that so many would rather force readers to play the game the way they want it.
and +1 on all points
Okay, that guy has been banned. It should be pretty obvious why. If anyone has an issue with that, or wants further explanation, feel free to email me, or comment below. I think I was incredibly patient, probably too patient. It’s the first time I’ve had to ban someone from commenting here and I didn’t take the decision lightly.
So it goes.
I think you were astoundingly patient. He’s a troll. But you were right to give him every opportunity to behave like a human. Thanks for the very lively and civilized blog!
Does anyone else find objectionable the way Shatzkin grants full names to Lee Child and James Patterson, but refers to spokesmen for our team as Konrath, Eisler, Howey? No first names for these low-level toilers in the content mines! Servants are addressed by last name only.
Good catch!! There are so many little cultural clues that signal class distinctions. Often they are unconscious on the part of the person using them, and they also can slip right into the unconscious of the person hearing or reading them. Thanks for pointing this one out.
Ditto to Nirmala’s comment. I’d not spotted that.
Well done, Castle. You may have some fresh straw to sleep on tonight.
Someone else suggested it is not really a class distinction, but just the way you refer to someone you dislike.
And besides, especially Konrath and Eisler are not always gentle with Shatzkin 🙂
David said: “Finally, I’ve managed to survive over three years on this blog without banning anyone, moderating comments (despite your rude assumptions otherwise), or introducing rules/guidelines for commenters.”
I wouldn’t trouble yourself. The further I got down the comments, the more obvious it became that he’s here only to publicise his own tumble-weed blog, I just skim-read him now, if that.
I work hard to create an atmosphere on this blog and in these comments where people can have productive and respectful conversations.
Me too. I have my own blog and have been a sysop on forums since the days of BBS systems.
+++ People can be passionate and disagree with each other, but they must respect each other. +++
I make no attempt to read the minds of people and have no idea if people respect each other. Unless you have access to some special sort of brain scanner, I can’t even imagine how you would know if people respect on another.
Here’s what I do when I run a forum.
No bad language.
No personal threats.
No slander/libel.
No threatening to sue someone.
Attack the argument, not the person.
That’s pretty much it. You’ll note I adhere to the above.. I don’t feel the need to always “respect” an argument. Sometimes I do, sometimes I don’t. If I don’t, I will make the case for why the argument is bad. OTOH, I may feel an argument has merit but still falls short. Or I may agree with it.
+++ If someone says they don’t want to continue a conversation, shouting at them is rude and obnoxious. +++
I have no idea what you’re talking about. If someone wants to comment on a forum, then they must expect that other people will comment on their observations. That’s why you have a reply button in these things. And I don’t type things in ALL CAPS, which is shouting.
+++ Insinuating that the other side in the argument is incapable of logic is rude and obnoxious, as are characterizations of other people’s arguments as “ankle-grabbing” and whatnot. +++
I have no idea what you’re talking about. I don’t do much “insinuating.” I’m rather straightforward about things. If I think you’re wrong about something, I say “You’re wrong.” I then back it up. As for me saying “I” don’t ankle grab, are you again saying I shouldn’t insult myself? I think I said I’d give “supine bending” a try, didn’t I?
If I disagree with you, I say “I disagree with you.” I don’t insinuate it.
+++ On that note, I’d like to see you try and engage with the opposing side. +++
I have no idea what you’re talking about. What is the “opposing side?” I’m not on a team here. I express my opinions, not others.
+++ then find something you can twist.+++
I don’t “twist” anything. I quote. I try to make my quotes as large as possible to ensure that context is retained. You cannot find one thing here I have twisted or taken out of context.
+++ Please refrain from linking to your blog again. I think at this point everyone knows where it is. In fact, cut the links all together. +++
No. People link to other places, blogs, etc all the time. If I can’t link, then why should they? I’m not going be treated like a second class citizen anywhere by anyone. You want to ban me because I link to relevant information, ban me. Nirmala placed several links in her piece to me. I didn’t complain about them. I read them and commented back on your blog about them.
Ruth Nestvold reposted your article on her blog. Is that banned as well?
BTW, Nirmala did finally read the series and thanked me. She found them very interesting.
+++ Finally, I’ve managed to survive over three years on this blog without banning anyone, moderating comments (despite your rude assumptions otherwise), or introducing rules/guidelines for commenters. Please don’t be the person who breaks that streak +++
It’s your blog. You have the right to ban anyone you wish for any reason you wish. I certainly can’t stop you and wouldn’t if I could.
If you do, I will, course, blog about it! You will be welcome to comment on my blog and rest assured if you don’t do the things I outline above, you will be welcome to comment as often as you wish without fear of being banned. You are free to disrespect my arguments to your heart’s content. You can also link to wherever you wish (well, no porn sites or malware pits).
rick
Some friendly advice, Mr. Chapman:
You’re already in a hole. You can stop digging.
Tom, don’t care about holes and threats. Don’t like what I say, don’t read it. He wants to ban me, his right.
Several people seem to have benefited or found value in my observations.
rick
Rick, I will add that while I did find the ideas on your blog interesting and insightful, and they helpfully made me aware of some perspectives I had not considered, I also find your posts to be prickly, although, I have experienced much, much worse online. I almost did not explore your ideas further because your tone can be off-putting, both here and on your own blog. Of course, you do not need to change for any of us, but sometimes it can help to hear direct feedback. It does affect how your ideas are received, and your ideas are worth further exploration as long as someone can get past the tone of your posts. Not everyone can. I am glad I was able to, but I am pretty easy going generally.
You want examples? Here you go.
What’s amazing is that you only starting showing up here a few days ago, and that this is just a sample of the behavior I outlined above. Keep it up, and I will ban you. And I’m not impressed with your threats to “blog about it.” Go crazy.
“Except that Amazon said it did. But, with you here to tell the world that they were not telling the truth, it will all be clearer!”
“You will be doing the world a great deal of service by making all this clear. Let us know when you embark on your new spokesperson career.”
“You DID read the section on Macmillan vs. Amazon?
“Could you PLEASE not ask me to link to something when I’ve already provided a link? It’s tedious.”
“Well, it’s exciting to know that so many people are completely uncurious…”
“And, as I said to you, you are wrong.”
“I think you need to learn about the concept of revenue curves.”
“I don’t quite understand why you don’t understand the concept of…”
“…you have clearly have not studied this issue…”
“And again, you are wrong. Again, I can see you have not read the blog and have not studied publishing.”
“I’m sorry, but I’m not going to reprise the whole blog post for you. That’s why I wrote it in the first place! Please read and study it”
“So, are YOU ready to tell us how the Amazon pricing codex will work? Because is sure is hard to get people to answer that question.”
“You are completely wrong.”
“I can’t believe a writer would even contemplate this is acceptable behavior. This is potentially far more insidious than anything AS has ever been up to.”
“Can I safely assume you think that’s ridiculous?”
“Isn’t that special.”
“Now, if you’re done being rude, why not scoot over to my website and read the new article I’ve just posted.”
“Is Amazon any better than AS when it misleads you and everyone else by claiming a huge retail usage fee of 30% is a “royalty” when it is no such thing? I believe that is a valid, and debatable, question.”
“I do warn you I may giggle a bit when I read about these various plots and conspiracies, but you won’t hear me.”
“I cannot believe you swallowed that big mess of median stew so uncritically.”
“I think that you and other Amazon supporters need to provide a far more balanced perspective.”
“…let’s just say you like them very, very much without supporting them.”
“As I said, you really really like them but don’t support them. OK by me!”
And on and on and on and on.
+++ “Except that Amazon said it did. But, with you here to tell the world that they were not telling the truth, it will all be clearer!”
“Except that Amazon said it did. But, with you here to tell the world that they were not telling the truth, it will all be clearer!”
“You will be doing the world a great deal of service by making all this clear. Let us know when you embark on your new spokesperson career.”+++
Yes? The tender flowers here can’t handle sarcasm?
Good thing none of you grew up in the Bronx, You would have died in infancy.
He never answered my question. He still hasn’t YOU never answered my question. You complained that I hadn’t addressed your statements and research about AS, but I read your work and said I agreed with you. I didn’t avoid the question. I buckled down and did some work!
Now, again, you’ve read my comments on Amazon’s proposal to set up a pricing codex. I have quoted AMZ accurately and fairly. Nothing has been “twisted.”
Do you think it is a good idea for Amazon to establish a pricing codex for books? Are you prepared to speculate on just how this amazing concept would administered. As a writer, do you have the least bit of sympathy for the concept of huge corporation attempting to exercise that degree of control over books?
+++ “You DID read the section on Macmillan vs. Amazon?
“Could you PLEASE not ask me to link to something when I’ve already provided a link? It’s tedious.”
“Could you PLEASE not ask me to link to something when I’ve already provided a link? It’s tedious.”
“I don’t quite understand why you don’t understand the concept of…”
“…you have clearly have not studied this issue…”
“And again, you are wrong. Again, I can see you have not read the blog and have not studied publishing.”
“I’m sorry, but I’m not going to reprise the whole blog post for you. That’s why I wrote it in the first place! Please read and study it” +++
Are you aware that Nirmala thanked me for the info I provided and is over on my blog asking me more questions? And that I’m answering them? And that she pointed out that I may have misinterpreted a statement by Hugh Howey and that I answered her and said if she’s right I’d change the post and attribute the correction to her?
I didn’t warn her to not hurt my feelings. I told her she may be right and I’ll fix it if she is.
+++ “Now, if you’re done being rude, why not scoot over to my website and read the new article I’ve just posted.” +++
You mean you don’t like that I said the rude guy was rude? Tell the rude guy to stop being rude. I have NEVER talked like that to anyone here.
+++ “Is Amazon any better than AS when it misleads you and everyone else by claiming a huge retail usage fee of 30% is a “royalty” when it is no such thing? I believe that is a valid, and debatable, question.” +++
Yes? And the problem with that is?
+++ “I cannot believe you swallowed that big mess of median stew so uncritically.” +++
And I can’t believe you swallowed that big mess of median stew so uncritically. No one with experience in the industry should take that claim seriously. It’s mathematical junk. Bilge. When you read that, did you take it seriously? Didn’t you wonder how you could apply a single optimal number to hundreds of book categories and thousands of authors with varying brand equity, and books of widely varying lengths and time in the market?
+++ “I think that you and other Amazon supporters need to provide a far more balanced perspective.” +++
Yes? And the problem with that is?
Look, if you want to run a blog where you can’t be criticized, why not just state that you can’t be criticized on this blog. That your feelings are the paramount issue here. I don’t roll that way.
No problem. And if you want to ban me, absolutely your right.
@RickChapman
I’d like you to consider the following before you post here again
1. I work hard to create an atmosphere on this blog and in these comments where people can have productive and respectful conversations. People can be passionate and disagree with each other, but they must respect each other.
2. If someone says they don’t want to continue a conversation, shouting at them is rude and obnoxious.
3. If someone disagrees with you, repeating your words in a more aggressive and insulting way is rude and obnoxious.
4. Insinuating that the other side in the argument is incapable of logic is rude and obnoxious, as are characterizations of other people’s arguments as “ankle-grabbing” and whatnot. We don’t engage with each other like that here. If you want to engage with people like that, there are a trillion places on the internet with exactly that tone.
5. On that note, I’d like to see you try and engage with the opposing side. It feels to me that you go through someone’s comment and then find something you can twist. I find it really tiresome.
6. If you are going a couple of rounds with someone on a particular point, and neither side is making any progress in convincing the other, repeating your position ten more times isn’t going to advance things. It just becomes annoying and repetitive for everyone else. You can’t browbeat people into agreeing with you.
7. Please refrain from linking to your blog again. I think at this point everyone knows where it is. In fact, cut the links all together. Anyone can click on your name and go to your site, if they are interested in what you have to say. It’s getting really annoying.
8. On that note, stop hounding people to read a particular link. It’s rude and obnoxious, and if someone doesn’t want to read your blog, maybe you should ask yourself why that is, instead of trying to force them to do so.
Finally, I’ve managed to survive over three years on this blog without banning anyone, moderating comments (despite your rude assumptions otherwise), or introducing rules/guidelines for commenters. Please don’t be the person who breaks that streak.
BTW, for those of you interested in something completely different, I’ve just posted up a review of Indomitable, a sci-fi novel, here:
http://www.rule-set.com/ricks-blog/up-in-the-sky-its-a-bird-its-a-plane-its-spandex-unbound-my-review-of-indomitable
I have a lot of skepticism towards Amazon, but not towards indies and like to review their books!
rick
I wonder if the increasing independent market share is Shatzkins motivation for caring what independents think.
I have multiple relationships with publishing in general as well as with Amazon, B&N and other booksellers.
I am a reader, author, editor, reviewer, adviser, and (tiny) publisher. I buy most of the books I read (both e- and p-) from Amazon but ritually visit my local B&N once a month to spend some money to help keep the company alive. I think that diversity in publishers and sellers is critical for culture, for writers and for readers.
I am thrilled by what Amazon does for me as writer and publisher, and as a purchaser of books, music, movies, food, clothing, electronics, home furnishings, office supplies and more. It’s nice that B&N sells my books that were produced by Amazon’s CreateSpace as well as by Lightning Source. I am amused that books printed by CreateSpace can reach me faster and for less money when I order them from Amazon than from CreateSpace.
I am saddened by the shrinking number of huge publishers. I am saddened by the success of dishonest/predatory/incompetent selfpubcos like Author Solutions and Outskirts Press. I was thrilled that PublishAmerica finally succumbed to “bad press” in the USA. I was saddened to see it reborn as America Star Books, trying to extract money from naive international authors who want to sell books in English-speaking countries. I was saddened by the failure of Vantage Press, a pay-to-publish company that seemed to concentrate on quality but made some bad decisions as the business rapidly changed and ended up disappointing many authors who had made big payments. I am pleased that Lulu is trying to enable its author/customers to make more money on competitively priced books.
My first book was published by Doubleday in 1977. I didn’t like the book or my earnings. My second book was published 20 years later by a tiny publisher that ruined the book and cheated me.
In 2008 I formed Silver Sands Books with the intent to publish exactly one book. I thought I could produce a better book myself than those that were produced for me. I did and I’ve published more than 40 books and others are on the way. Money comes in every month from all over the world. People want me to write my name in books they buy. Wow.
I love the speed, freedom and earnings of running my own publishing company. Like David, I would consider an “obscene” deal from a traditional publisher if the advance, royalty percentage and promotional budget are HUGE. But, since that possibility is remote, I’ll keep running my own company,
http://www.DoAsISay.xyz
“The motivation of the publisher-bashing commentariat is what I cannot figure out.”
This paints an unflattering picture of Shatzkin’s mindset. If he saw someone getting screwed over, wouldn’t he stand up and say something about it? If he’s about to put money in a charity box, does he pause and stroke his chin and say ‘Mmm. Now hang on. What’s in if for ME?’
Does Shatzkin think that everybody is entirely motivated by self-interest?
kchapman says: +++ Is it Amazon’s position that all e-books should be $9.99 or less? No, we accept that there will be legitimate reasons for a small number of specialized titles to be above $9.99. +++ Isn’t that special. A $75b company that control at least 65% of the digital book download market is proposing to, what? Establish a special pricing committee for the book industry? Decide WHAT the legitimate reasons are?
When you’re laying down a policy like this, the last thing you want to do is paint yourself into a corner when you don’t have to. What Amazon is saying that $9.99 or less is their preferred price-point, but that future, unforeseeable, market conditions might mean they have to be higher. It’s corporate wriggle room.
+++ This paints an unflattering picture of Shatzkin’s mindset. +++
Why? You may not agree with his viewpoint, but he makes a good case for it. He thinks people like Howey and Kornrath are not accurate in their assessments of the value of publishers.
Howey is formally published, you know. So even he apparently feels the industry provides some value.
+++ Does Shatzkin think that everybody is entirely motivated by self-interest? +++
I think it’s a safe guess he thinks that the publishers and AMZ are almost entirely motivated by self interest.
+++ What Amazon is saying that $9.99 or less is their preferred price-point, but that future, unforeseeable, market conditions might mean they have to be higher. +++
Uh, huh. OK, would YOU care to speculate about how the pricing codex will work? David hasn’t to date. Amazon didn’t say “might.” We can all read exactly what they said:
+++ we accept that there will be legitimate reasons for a small number of specialized titles to be above $9.99.+++
“There will be.” Not “might be.”
So, again, care to speculate about the pricing codex?
rick
I think we can answer Mike’s question about our motives pretty easily. Direct him back to the articles covering Harlequin when they sublet printing rights to themselves in order to avoid paying royalties. In the comments, were indie writers happy that Harlequin did this, indifferent, or pissed off?
If we were looking after only our own best interest, this would be a great story to see. Not only did other writers get hurt by this, thus weakening our competition, but also the publisher is being harmed by the lawsuit, further lowering competition against us.
If we were indifferent, there would have been few comments. Were there few or many?
If we, however, were angry to hear about this, you can only conclude that we care about other writers, and that we are incensed to hear about unprofessional and immoral treatment of them.
If you’re willing to see, it’s obvious.
“…and I can’t abide the hypocrisy/stupidity of FREAKING OUT about what Amazon might do in the future when publishers are doing this stuff today.”
That right there is the million dollar question. And you are right, instead of competing and innovating they would rather focus resources on tackling Amazon, which makes no sense, because while they are doing that Amazon is just getting better and better at this.
Amazon might one day become a bully, might start reducing royalties, etc., but where will publishing be then? If they don’t stop this silly notion that their success depends on Amazon’s downfall, or at the very least a hamstrung Amazon, and start innovating more to compete, they may discover that it is too late to anything about it.
It’s always good to have various options available, but I don’t even see them trying. Maybe I’m missing something.
Instead of splurging $116m on a predatory outfit like Author Solutions (which is a dying model too), Penguin could have bought Goodreads. The industry in a nutshell.
I’m sure there are many people that wish they bought Goodreads. Nobody even knew they were for sale. It was a very good move by Amazon.
Maybe Goodreads didn’t know either. Money can quickly change minds.
When you say “royalties,” do you mean the royalties they pay their house imprint authors?
Because if you mean indies, they don’t pay royalties. They charge 70/30 and 35/65 for you to use their download service. They may increase these charges and you can expect they’ll extract more margin from you via MDF programs.
rick
I think the big difference between traditional publishers and Amazon is that Amazon went to Goodreads and said “We’d like to buy you.”
In my personal case, my comments tend to be sparked by a “I can’t believe they really just said that!” reaction. One cruises along, assuming that “experts” and the “news” know and are honest about what they are talking about, and then stumbles over a topic that one has some experience or learning with and is stunned by just how in error they are and the likely reasons they are. And wonders if that holds true for other things. One then picks one’s jaw up off the floor and is tempted to respond. That… and I’m getting old and cranky.
I have the sense that I’ve contributed slightly to sensitizing a few reporters to the difference between “authors” (implying “all authors”) and “some authors”. There’s been a slight improvement relative to that in coverage. But the temptation of various folks in the media production pipelines toward the long standing practice of catchy simplistic sensationalized headlines remains strong.
But doing so definitely also constitutes procrastination on my part and distracts from my writing.
This is much less about setting the retail price then it is about setting the cost of the book to the retailer. Agency pricing and wholesale pricing both determine the price that the publisher will receive for the book. The retail price is only for what the customer has to pay. You can have wholesale pricing but if the retailer requires you to have caps on what your wholesale price should be, the publisher could be getting less money for their books. The publisher should be able to set the amount they receive for the book to whatever price they want.
Hi again Steven. Always nice to see you participating on these blogs. I would perhaps amend your statement to include the fact that the publisher ultimately also has to get the retailer to buy the book. The publisher can set whatever price they want, but they won’t receive that price if the retailer refuses to pay it, or demands a different set of terms in order to accept a higher price. So it really is a question of reaching an agreement between the publisher and the retailer about pricing, which is why we are all talking about this whole situation with Hachette and Amazon. Hopefully, they will find a way to compromise and we can all go back to rattling on about other things.
The publisher should be able to set the amount they receive for the book to whatever price they want.
When a buyer and seller are contemplating a trade, how do we determine which one should get to set the terms of that trade?
Suppose we said, ” The buyer should be able to set the amount they pay for the book to whatever price they want.”
Sellers have an asking price. Buyers have a bid price. Very often they differ. After negitotiation, they may settle on a price and trade.
A seller certainly should be able to set his own asking price, but what reason is there to presume he should be able to set the amount he receives? What he receives is a function of negotiation after bid and offer are both on the table. He may receive nothing. The buyer may pay nothing. They don’t have to trade.
Suppose a publishing house and author were considering a contract. The author pulls out his uke and starts strumming Kumbaya. All aglow, we say, “The author should be able to set the amount they receive for the book to whatever price they want.” Think the publishers would keep singing?
+++ A seller certainly should be able to set his own asking price, but what reason is there to presume he should be able to set the amount he receives? +++
Yes, yes, yes, very convincing. Except when an indie wants to set the price of their book, Amazon prevents them from doing so with their pricing box. Then publishes a bunch of bilge about “optimal” pricing that shouldn’t fool anyone with more than high school freshman math. Then tells the world (to avoid monopsony questions) that “there will be” reasons for books to be priced out of the box, but then refuses to tell anyone WHO will be let out of the box and when and just how liberation will take place. And who runs the box. And also spends considerable amounts of PR dollar proclaiming their love for authors while hurting thousands of them.
Gosh, when you think about it, this sounds like the company might be as bad as Hachette.
And, of course, some people are absolutely uncurious as to their motivations for all of this but very interested in Shatzkin’s motivations who, last time I checked, was many billions of dollars short of Amazon’s power and size.
I will speculate deeply on this.
rick
And, of course, some people are absolutely uncurious as to their motivations for all of this but very interested in Shatzkin’s motivations who, last time I checked, was many billions of dollars short of Amazon’s power and size.
How about Amazon wants to make lots and lots of money, and doesn’t give a hoot about niches.
+++ How about Amazon wants to make lots and lots of money, and doesn’t give a hoot about niches. +++
I think they should hire you to be their spokesman to say just that. And to recant their statement about how they know that there will be reasons for some books to be priced over $9.99.
That will be exciting! I am hoping for your success in your new career!
rick
Yes, yes, yes, very convincing. Except when an indie wants to set the price of their book, Amazon prevents them from doing so with their pricing box.
Correct. The independent can ask whatever he wants. He can go out on the street and ask anything. He can set up a web site and ask anything. Consumers decide if they want the independent’s terms. He can also ask Amazon for any terms he wants. Amazon decides if it wants to deal. Nobody has any obligation to the independent.
I think they should hire you to be their spokesman to say just that. And to recant their statement about how they know that there will be reasons for some books to be priced over $9.99.
They do know there are reasons to sell some books over $9.99. Why recant?
There’s a very different world between print books and digital books. In the print world we have to sell the books to book buyers because there is very limited shelf space. The buyers look at prior sales history, the competition from other publishers that month, etc… With digital books you don’t have any of that. All the retailer has to do is put every single books that’s available electronically in their catalog and price it. Then marketing takes over how it will be promoted. It’s a very different type of business.
Terrence, there are historical guidelines for terms. There are also channel of distribution guidelines as well. There is a starting point for negotiations and the end point has to be profitable for both sides or we don’t have a business.
Terrence, there are historical guidelines for terms. There are also channel of distribution guidelines as well. There is a starting point for negotiations and the end point has to be profitable for both sides or we don’t have a business.
Well, if the historical guidelines say the seller gets to determine what he will receive rather than what he will ask, I’d say the guidelines are being challenged. There certainly was a way things were done in the past. New players don’t choose to go along.
I agree there are starting and end points in any negotiation. And there are also two parties. Those parties choose the starting and end points. There is no reason to think either party gets to set the end point and define what they receive. Sellers don’t get to set the bid, and buyers don’e get to set the offer.
And it is entirely possible there is no point where both parties make a profit, and there may be no business. In those cases what we normally see is some new player stepping up who can make a profit at a different point. Consumer demand rarely goes unfilled.
Terrence in your comment about setting the price I think that you’re leaving out the fact that publishers are not talking about setting the price for one book. In our case at Kensington, we’re setting the terms for close to 700 books so you can’t have a give and take negotiation over every book obviously. You have to agree on a yearly basis or longer for what terms you’re going to sell to the account. There are general guidelines that have been industry standards forever now. And those general terms are what form the basic publishing model. Ebooks have changed that model substantially obviously but as Amazon has gotten more and more powerful they’ve also been trying to capture more of the margin which is going to in the long run cause the prices of books to increase if publishers are going to want to make the same revenue they were making before. That loss of margin has to come from somewhere and it’s not going to just come from the publisher’s bottom-line because they are relatively small in comparison to almost every other industry; single digit profits as I’ve mentioned before.
Sure. I certainly don’t think negotiators put one book on the table and haggle over it, then haul up another book. I presume they are batched in some manner.
And I accept there are patterns and practices which have endured for years. OK. They endure only as long as everybody complies. Looks like things have changed.
Can you define something for us? I hear lots of people talking about “The Margin.” They talk about Amazon and publishers fighting over it. So what is The Margin? How is it calculated? If it is X – Y, what is X?. What is Y?
I ask because in most businesses, margin is a firm’s sales price less the firm’s unit costs. This is unique and limited to the specific firm. It is what a firm sells something for and it is what it costs the firm to make it. It can be calculated without knowing anything about any other firm. If it is a manufacturer’s margin, it can be calculated without knowing anything about what the retailer subsequently does.
So, in book parlance, what it The Margin?
+++ Amazon decides if it wants to deal. Nobody has any obligation to the independent.+++
Except that Amazon said it did. But, with you here to tell the world that they were not telling the truth, it will all be clearer!
You will be doing the world a great deal of service by making all this clear. Let us know when you embark on your new spokesperson career.
rick
Except that Amazon said it did. But, with you here to tell the world that they were not telling the truth, it will all be clearer!
Amazon assumes obligations to those with whom it has a contract. In that case it has an obligation to conform with the terms of the contract. Other than that, it has no obligation to independents. Nobody does.
But that’s not what Amazon said. That’s what YOU say. I’m addressing Amazon’s position as they stated it.
Can if ask if you are now speaking on behalf of Amazon and that is an official retraction?
If not, I have to say I’m not that interested in your position on this. I’m much more interested in Amazon’s. You’re not a $75b company with 65%+ control of digital downloads. They are. And they have stated that:
+++ Is it Amazon’s position that all e-books should be $9.99 or less? No, we accept that there will be legitimate reasons for a small number of specialized titles to be above $9.99.+++
So, unless you can tell me that you speak for Amazon, I don’t find your position on Amazon’s position that relevant. I mean, I don’t MIND if you want them to publicly proclaim that they don’t care about small independents and they’re there just to make lots of money and so on. But you aren’t Amazon (I think).
What IS relevant are the details of Amazon’s pronouncement. I want to know the legitimate reasons Amazon will accept for raising the pricing of books. How this system will be run. Who will run it. Who will have access to the pricing codex. I am interested in informed speculation on this entire concept.
And I also want opinions on whether people think this is a healthy thing?
rick
But that’s not what Amazon said. That’s what YOU say. I’m addressing Amazon’s position as they stated it.
Under our system, an individual decides if he wants to make a commercial deal with another. He is not obligated to make a deal. He does incur obligations when he enters a contract with another. Those obligations are specified in the terms of the contract.
An individual is also not obligated to devote his time, talent, and resources building something because some other individual wants him to. One individual may want some other individual to create something for his benefit. That does not create any obligation.
So, the idea is not unique to Amazon. It’s the way our economy works, and it is reasonable to apply it to both Amazon and independent authors.
I want to know the legitimate reasons Amazon will accept for raising the pricing of books. How this system will be run. Who will run it. Who will have access to the pricing codex. I am interested in informed speculation on this entire concept.
So stop asking blog posters. Write a letter to Bezos.
Sorry. I didn’t know Mr. Chapman had left when I posted those last two. That’s not sporting.
Publishers do support letting retailers set their own prices in all print accounts. Publishers sell the books at a specified wholesale price and retailers can discount the price from the cover….at all accounts. It’s only ebooks where the Agency pricing comes into play and then it’s only with the big 5 publishers. There are times when publishers will drop the price substantially on an ebook to stimulate sales. You don’t always know if it’s the publisher doing it or if it’s the retailer doing it. If you see it across the board at all retailers, generally it would be from the publisher. But I’ve seen plenty of times where we’ve done a promotions with one online retailer and then Kindle will come in and just match the retail price; although pay us based on our normal terms.
I can see how that would be a benefit for your sales. Although, you guys would face the same challenge as indie authors: price matching doesn’t run quite like clockwork.
In the print world we set the wholesale price and the retailer sets the retail price. It’s up to them if they’re going to discount it. Sometimes publishers do actually partake in the markdown of prices with co-op funds for better placement or bigger buys.
Does Amazon setting retail prices for paper books endanger literature and culture? Roxana Something and Douglas Preston tell us books are special and can’t be treated like consumer goods or stuff Chinese folks make. What you describe sounds very much like selling widgets. Sounds fine to me, but it does seem counter to what 900 of the finest writers in the English language think.
Rick says, “You are completely wrong. There are many examples you can look at and I discuss the topic in greater detail on my blog. When a book is new, and you’re a brand, you can make more money with higher pricing because you don’t make up revenue lost by lowering the price to X point due to increase volume Y. ”
Your point has nothing to do with my statement. I said that publishers and authors make more with wholesale pricing than with agency pricing. I was not comparing two different price points for selling the ebook to the consumer. You are correct that when a best-selling author sells a lot of books at a high price, it is possible that he or she would not make up the difference by selling more for less, although he also might. Who knows for sure? Amazon’s data and Authorearnings data ( http://www.hughhowey.com/data-guy-on-price-points/ )does suggest it is possible he or she could make more at a lower price. But that has nothing to do with how much Amazon pays for the book which is typically more under the wholesale model. And remember, for ebooks the author is paid 25% of net (not a percentage of the suggested retail price as they are for print books). The net to the publisher is less under agency and so the 25% for the author is less also.
I will check out your blog post in response to Joe’s old post when it comes out, but really it is simple math. I am not sure how you can say that even with a high priced ebook, the author does better under an agency model.
And also I do not know really what you mean when you keep saying that ebooks revert to a wholesale model after a while. Right now, Amazon and the publishers are operating under a modified agency model which is basically the same as the wholesale model except for how the splits are calculated. Amazon pays 70% of the retail price set by the publisher but is free to discount however they wish (as long as they are still making money overall on the publishers ebook catalog as a whole). So your examples of an ebook dropping in price have nothing to do with it reverting to a wholesale model. Either the publisher dropped the retail price or Amazon is deeply discounting that particular title. But it is not evidence that some books are priced via agency and some are priced via wholesale. I am pretty sure Amazon has a contract with the publishers that applies pretty much to every ebook. And there are plenty of titles that are new and selling well that Amazon is deeply discounting already including Hachette titles. “The Goldfinch” has an ebook list price of $14.99 (which is what it is selling for on B&N) however on Amazon the Kindle version is selling for $6.99. So Amazon is losing about $3 for every copy it sells. It has nothing to do with the book reverting to wholesale.
+++ Your point has nothing to do with my statement. I said that publishers and authors make more with wholesale pricing than with agency pricing. +++
And, as I said to you, you are wrong. Whether agency benefits an author and publisher is dependent on several factors. If you are are a well known author, agency will tend to benefit author and publisher.
If you are unknown, the publisher will normally not attempt to agency price your book.
+++ But that has nothing to do with how much Amazon pays for the book which is typically more under the wholesale model. +++
Wholesale pricing may, or may not, match the margins of an agency priced book. This is dependent on the reseller’s pricing and promo strategy.
+++ And remember, for ebooks the author is paid 25% of net +++
If you’re talking about the publishers, most pay based on the stated retail price of the E-book. Not net. There are exceptions, of course, As an author, I would never sign a net payment model, though since current models are being disrupted, it might make sense in the future.
+++ You are correct that when a best-selling author sells a lot of books at a high price, it is possible that he or she would not make up the difference by selling more for less, although he also might. +++
I can assure you that Stephen King’s publisher would be leaving money on the table if they’d come out with Mr. Mercedes at $9.99. As you can see.
+++ Amazon’s data and Authorearnings data ( http://www.hughhowey.com/data-guy-on-price-points/ )does suggest it is possible he or she could make more at a lower price. +++
It does nothing of the sort. It does not provide the cross tabulation along axes to demonstrate this.
+++ I am not sure how you can say that even with a high priced ebook, the author does better under an agency model +++
I think you need to learn about the concept of revenue curves. Again, consider how Apple prices its i-Phones.
+++ And also I do not know really what you mean when you keep saying that ebooks revert to a wholesale model after a while. +++
Nirmala, did you read the blog post? Because it really doesn’t feel like it. I’m posting it again below:
http://www.rule-set.com/ricks-blog/what-hugh-howey-wont-talk-about-but-should-the-book-channel-part-v-of-several-parts-the-resellers-and-agency-vs-wholesale-pricing-and-mdf-oh-my
I don’t quite understand why you don’t understand the concept of a contract between a supplier and a channel reaching a contractual agreement that the channel will buy X amount of product under one pricing model and then revert to another after X period of time has passed. Happens all the time in hundreds of other industries and products. Macmillan and Amazon fought over this point. It’s in the post.
+++ Right now, Amazon and the publishers are operating under a modified agency model which is basically the same as the wholesale model except for how the splits are calculated. +++
Nirmala, excuse me, but you have clearly have not studied this issue and don’t have a grasp of the models and numbers. The above is not true.
+++ I am pretty sure Amazon has a contract with the publishers that applies pretty much to every ebook. +++
And again, you are wrong. Again, I can see you have not read the blog and have not studied publishing.
I’m sorry, but I’m not going to reprise the whole blog post for you. That’s why I wrote it in the first place! Please read and study it. It’s dispassionate and accurate and you can learn a great deal from it.
rick
+++ Roxana Something and Douglas Preston tell us books are special and can’t be treated like consumer goods or stuff Chinese folks make +++
Oh, yeah, Howey’s “Books are Exactly Like Razors” post. I believe that may be the single dumbest thing said about books I have ever read. And he was being serious.
Yes, books have to be marketed and sold. Mozart wrote for commissions to pay the bills.
Books are not exactly like razors. I’m not going to explain it. I wrote a quick post about it here:
http://www.rule-set.com/ricks-blog/books-equal-razors-its-its-its-howeyish
rick
Hi Rick, I am sure I have made many wrong assumptions and get my facts wrong sometimes, but probably not quite as often as you seem to think. I challenge you to find some authors who recently signed with a big publisher who are being paid a % of the retail price on their ebook sales. Several years ago the big publishers went in lockstep to 25% of net for ebooks as reported in numerous places: https://www.authorsguild.org/authorship/e-book-royalty-math-the-house-always-wins-2/
In fact in a lot of your assumptions you seem to confuse and conflate ebooks and paper books. Ebooks are being sold right now under a modified agency model. Paper books are and have always been sold under a wholesale model.
Your example of Stephen King’s book proves nothing. It shows that a book at $11.99 can reach #2 in some categories on Amazon. What if it was priced at $9.99 and made it to #1? What if it sold 100 times as many copies at $9.99? Wouldn’t the net revenue to the publisher be higher then? You seem to think it is not possible for a best-seller to make more money at a lower price. I am using an extremely unlikely exaggeration here to make a point. It is possible for a newly released best-seller to make more revenue for the publisher at a lower price, especially with ebooks where the marginal price to produce and sell an additional copy is close to zero. I did not say that authorearnings data proved that a particular ebook would make more at a lower price, just that it is possible ( and generally likely) for any ebook to make more at a lower price.
And why do you think I am wrong in saying publishers are using a modified agency pricing model? That is what the settlement allowed for:
http://lunch.publishersmarketplace.com/2012/04/settling-publishers-are-allowed-modified-agency-for-two-years-that-could-limit-predatory-pricing/
And that is what they announced at the time that they are now using:
https://gigaom.com/2012/12/10/simon-schuster-signs-new-ebook-retailer-contracts-post-doj-settlement/
Can you post a link to evidence that publishers are using two different pricing models for ebooks in their current contracts? Of course you are right that it could be done, but I have never heard anyone else suggest that such a thing happens.
Finally, I always appreciate someone taking the time to discuss my comments and attempt to show me where I am mistaken. But after this post, I am going to let this particular discussion go. Thanks for your time and perspectives.
+++ . I challenge you to find some authors who recently signed with a big publisher who are being paid a % of the retail price on their ebook sales. +++
As I said, the publishing model is undergoing disruption. If you read further back in the series, I discuss the changes in publishing contracts that are starting to occur. I know of two friends who are signing deals that fall into the parameters in the article, but I can’t give the details. I would die horribly if I did.
I believe that the publishing model is moving to a pay for performance model down the road. This will be driven by the fact that it will be possible to apply real performance metrics to publisher marketing programs and that they will be held far more accountable for “their” book’s performance than in the past. I do believe that if the publishers want to survive, they’re going to have to accept treating their authors more equitably. JK Rowling shows what a powerful brand can do. She was able to turn Amazon into an affiliate. (Also in the blog.)
These new models will appear more quickly the faster that print dies.
If the publishers do not adapt, I agree that the channel will eat them for lunch. And they’ll deserve it.
+++ Ebooks are being sold right now under a modified agency model. +++
Some E-books are being sold under the agency model. Most are not.
+++ Paper books are and have always been sold under a wholesale model. +++
No, they have not. There have been times when a publisher sold under agency, particularly for major releases, though not often. If the book was discounted, it was because both the parties agreed to a promotional program. This happens all the time in other industries, as well.
+++ confuse and conflate ebooks and paper books. +++
No, I do not. I take care to break out the issues by type of author, as you can read. When I mention indie authors I trust the audience understands I’m talking E-books. There are self-published print authors, but this segment is dying rapidly, much faster than mainstream books.
As for the royalty structure in E-books, it’s being disrupted so quickly I’m a bit afraid to make any long term predictions. Again, read the earlier article in the series.
+++ Your example of Stephen King’s book proves nothing. It shows that a book at $11.99 can reach #2 in some categories on Amazon. What if it was priced at $9.99 and made it to #1? +++
It made it to 1. The book’s been out for several weeks. But it doesn’t really matter. That’s not the point of a pricing curve. Again, if volume does not rescue revenue, you’re leaving money at the table. Does the difference in sales between one and two comprise a delta large enough to make up the loss in revenue?
+++ What if it sold 100 times as many copies at $9.99? +++
Spreadsheets have been around for PCs since VisiCalc. And publishers have the opportunity to sell their author’s books many times. Many, many times in the case of S. King. He’s a writing machine.
If a drop to $9.99 would increase sales by 100 times, they would do it. And S. King would be up their ass if they didn’t. And you don’t want the King of Horror in any part of your fundament.
If Amazon could demonstrate the $9.99 was optimal for high selling or well know authors, they’d damn well do it. But they can’t.
And please don’t quote that stupid median stew bilge they threw out. You DO understand why that’s useless?
+++ You seem to think it is not possible for a best-seller to make more money at a lower price. +++
Again, you need to study how pricing curves work. The point is to maximize revenue, not volume. But you are right. It IS possible to do this. But in many cases, it won’t. You’ll just leave money at the table.
+++ Under the settlement, they promise for two years not to “restrict, limit, or impede an e-book retailer’s ability to set, alter, or reduce the retail price of any e-book or to offer price discounts or any other form of promotions to encourage consumers to Purchase one or more e-books.” +++
That prohibits pure agency for two years for these defendants in the case.
+++ “these provisions do not dictate a particular business model, such as agency or wholesale, but prohibit settling defendants from forbidding a retailer from competing on price and using some of its commission to offer consumers a better value, either through a promotion or a discount.” +++
You are misreading this ruling. This ruling doesn’t mean that the publishers MUST price under agency. It means that IF they sell under agency, the above restrictions are now in force under the terms of the settlement. The publisher are being punished for collusion.
I can assure you, if Jeff Bezos attempts to discount the i-Phone without Apple’s agreement, there will be a big empty hole in his warehouse. And the feds won’t do a thing about it. And those hot little smartphones are moving into those warehouses under strict agency.
+++ Can you post a link to evidence that publishers are using two different pricing models for ebooks in their current contracts? +++
Again, I refer you back to the blog post available here:
http://www.rule-set.com/ricks-blog/category/self-publishing-info
You DID read the section on Macmillan vs. Amazon?
Could you PLEASE not ask me to link to something when I’ve already provided a link? It’s tedious.
+++ Of course you are right that it could be done, but I have never heard anyone else suggest that such a thing happens.+++
You just did. And I’m sorry, but you haven’t studied channels and I have. Contracts between suppliers and sellers that have time restrictions, special pricing components, performance clauses, special provisions etc., etc, etc. are not rare.
rick
Hi Rick, I came back on here just to say that I finally took the time to really study some of the posts on your blog and that now several of your statements on here make a lot more sense, especially after I read some of your older posts so that the more recent ones made more sense to me. I will keep reading over there, and thanks for opening up some new levels of this whole publishing arena for me.
I am probably like everyone else on this planet in that it takes a while for the conclusions I have already made to be shaken loose long enough to hear another viewpoint. Thanks for helping me do this, but I can still feel the old conclusions sticking around up there between my ears 🙂 And of course, some of the old conclusions still have some validity. The challenge is knowing where that validity applies and where it doesn’t.
Terrence, I’m not concerned with what 900 writers wrote or what the thousands wrote on the other side. I’m concerned with us selling books in a commercial marketplace. Kensington is a commercial publisher. We publish books that people want to read and hopefully we make a profit at it. It involves negotiations with vendors all the time. Some go well and some not so well. But I’ve never seen anything like this type of negotiation that Hachette and Amazon have been going through. If any retailer wants to discount our books at their expense, I don’t have a problem with that. Many times publishers pay for that discounting through co-op funds paid to the retailer. What I do have a concern is when retailers sell large numbers of titles at or below cost to just capture marketshare knowing that their competition can’t afford to sell the book at a loss. I don’t think that’s fair competition. It would be different if it was one or two books, but when it’s most of the bestsellers at break-even terms, that’s a different matter to me.
I think the retail cost competition you see is a larger transition out of bookstores and into outlets that sell lots more than books. It’s similar to the movement from small specialty stores to department stores, and then big box stores. We hear the same objections with books that were voiced in those past situations.
Outlets with many items simply use some of them as loss leaders. Books are being used the same way my grocery store now has Campbells Chicken Noodle soup on an endcap for 57 cents.
Consumers love it. More books available at lower prices. I dobt the specialty stores carrying mainly books will be able to compete.
Terrence the big box retailers do not sell books as loss leaders. They work on low profit margins but I’ve never seen them sell books at a loss. Amazon actually sells books at a loss often. Walmart does not sell books at a loss, they just discount them as do many retailers with bestsellers.
I’ll defer to you on the big box purchase cost vs retail price. But don’t those very low big box prices have the same effect on competitors that Amazon’s very low prices do?
One reason the big boxes can sell at a lower profit margin than their competitors is because they have so many other goods at higher profit margins. That power to rotate the very low margin goods is why specialty store like bookstores have so much trouble competing. So it has the same effect as an Amazon price. Competitors can’t meet them.
Terrence, I can’t speak for all items in big box stores but with at least books they work on very low margins. It was my understanding that is the way they work on all merchandise. But they do not sell books below cost like Amazon might.
There’s a lot of things I agree with you here. I personally have no problem with hybrid authors and we publish some. I disagree with some of your arguments regarding DRM and pricing books lower; but that’s okay to have differing opinions. I agree with you about sleight of hand to cheat authors out of royalties; terrible thing to do.
So I understand, Steven, are you saying that lower prices don’t always generate better profits?
Yes I am saying that Jim. Lower prices don’t even necessarily equate to more units being sold let alone better profits. If people can’t discover the books, you can be selling them for $.10 and you won’t sell 2 copies. And there’s obviously a crossover point where lower prices and higher profits would intersect. If you’re lowering the price you have to sell considerably more copies to cover all of the costs. I’m not talking about an indie book where you don’t have additional costs to cover because it’s only in e. I’m talking about a book that is in print and digital. If you lower the ebook price to $3.99 versus $6.99, I have to see an awful lot more copies to make up for that lower price.
There is a point where lowering a price generates less revenue, and raising the price generates less revenue. That is the revenue maximizing price.
Yes Terrence I agree about finding that special magic price point. But Amazon stating that you sell more books if you lower the price is way too simplistic. It depends on the level of the author, the genre and more.
Steve,
Have you noticed the Hachette authors telling us their welfare is endangered because Amazon has increased the price of Hachette books? They tell us fewer books are sold at the higher prices. They want Amazon to reduce prices so the publishers get more revenue at the lower prices.
Douglas Preston is saying the same thing about price elasticity that Amazon is saying.
Simplistic? Yes. But basic economic principles are pretty simple. Just about every good we know of faces a downward sloping demand curve except for Giffins and Veblens. And Giffins real world existence is under serious question.
Terrence the Hachette battle is more than just prices not being discounted. And frankly I would think Hachette would have the least amount of their negotiation issues regarding the price of the books. I think a big concern was Amazon not ordering the books and keeping them in stock and saying that delivery would be in x amount of weeks and blaming it on Hachette not shipping books fast enough to their warehouse. It was also a major concern removing the preorder buttons. Preorders play an important role in initial sales.
David–
Two things. First, it would not be wrong to call me bitter. But I didn’t wake up one morning and say, “Hello, what a perfect day for bitterness!” And it’s not because my baby’s being called ugly. It’s because the way traditional publishing operates is glacially slow, and maddeningly cavalier in its attitudes. Example: for the most part, agencies now urge or require writers to submit electronic queries. They usually promise to respond in two to three months. In all cases, these agencies announce that they will not reply unless interested. If you think about this timeline from the writer’s POV, it’s crazy. I have grown old–literally, not figuratively–under this system.
Second: the only problem I have with what Mike Shatzkin wittily calls the “publisher-bashing commentariat” is that most of its members first made their bones in trad publishing. They gained the considerable advantages of doing so, and built a following. Only then did the Eureka! moment about being financially exploited come to pass. But let me anticipate your reply: these are really the only people in a position to carry the flag for self-publishing. They have visibility and a voice that can be heard. I know that, and appreciate what they do. But while they may be serving the interests of other writers, without a doubt they are also serving their own as St. George taking on the dragon. For this reason, the self-righteousness can sometimes be a bit much.
+1 on all points.
Barry – I think that people tend to overestimate the “platform” that being traditionally published gave some of these authors. Joe Konrath has documented his sales growth right from the start. His sales are up 1000% on his tradpub days. Similarly, people often write off Bella Andre’s success as being, at least in part, down to her previous tradpub career. Her last offered advance in tradpub was $5,000 – she was hardly a big fish. She has sold 4m self-pubbed e-books since.
David–thanks (sincerely) for all you do to promote awareness about publishing among writers. Perhaps you are right, and I overestimate the influence of “platform,” etc. But what I’m mostly talking about is the editorial feedback and general help that comes to a writer when he or she works with a traditional editor/publisher. Konrath dismisses the “validation” that comes with being published by a trad publisher as delusional. But his description of his own sense of accomplishment convinces me that trad acceptance led to a self-confidence on which no price tag can be fixed. I got the help I’m talking about with my one commercially published novel–and then I was on my own. I believe additional exposure and help of this kind might have made for a different, better experience than the one I’ve had. I think it would have positioned me to take better care of myself as an indie. Is this rationalization for things not having worked out? Maybe, or maybe not.
Here, here! I avoid commenting on much of this stuff, even among close writer friends (most of whom are not indie authors) because of the immediate backlash claims (even when ‘joking’) of Amazon-worship. Even when Amazon isn’t part of the commentary citing detriments/problems/solutions/etc. to traditional publishing, regardless of mention of benefits/etc. offered by self-publishing/e-publishing, the associated “Amazon-worship” accusations jump in, thus masking the whole conversation and preventing much progress towards real mutually-beneficial paths for proceeding in the future.
It’s impossible to get anywhere when large numbers (on either/any side) of a topic have such dense blinders on. If only people would actually listen and think beyond their own narrow scope. Of all the types of people, I would think writers would be the most proficient at this. After all, they do have to be able to see deeply inside opposing perspectives in order to create compelling, believable, and realistic stories with compelling, believable, and realistic opposing characters/forces. At least, I think that’s what happens in the stories I favor most.
Anyways, thanks for expressing your views in this much appreciated post so genially, straight-forwardly, and reasonably.
Reblogged this on Ruth Nestvold – Indie Adventures and commented:
Interesting post from David Gaughran on why indie authors sometimes criticize trad publishing — and interesting discussion as well.
“Maybe things will get better in that future, but maybe we’ll look back in ten or twenty years as this being some kind of unique golden era for authors, and that we should have spent more time writing and less time bickering :)”
Hear, hear.
The counter-point argument is why don’t more published authors get angry about the unfair practices of traditional publishers? Is it because they are placated by a big industry telling them how pretty their baby is? Is it the illusion of safety, like being invited to live in a gated community – the threat must be outside the gates, right?
The trick is to know when you’ve locked yourself in with wolves because you smell like fresh meat.
There are plenty of published authors that feel that heir publisher provides a very useful service to them. Unfortunately you don’t see most of them in these blogs that are geared towards indie publishing.
True.
I think there are quite a few authors out there happy with their deals. I also know more than a few who say things in private they’d never say in public for fear of “retribution”
Heck, there was a big to do earlier in the year when an author put her latest royalty statement on her blog, and her publisher freaked out.
Andrew if an author wants to put their royalty statement online for the world to see, that’s up to them. If the royalty statement showed low sales is that an indictment of the publisher or the book? Because the book didn’t sell doesn’t mean the publisher necessarily did anything wrong. Publishers first have to sell the book to the book buyers. That’s our first hurdle to get by, especially when there’s only about a dozen major accounts left in this business. If the author’s previous title didn’t sell well, they’re going to order less copies this time around. They don’t want to have the cost of handling books just to have to return them later. If a publisher continues to have poor sales on a specific author’s titles, the publisher will eventually make the decision to stop publishing that author. So I don’t know if an author showing their royalty statement online has any bearing at all. It just shows how that one title performed in the marketplace.
I would also add Andrew that there are large numbers of indie authors that write to me privately all the time with comments that they don’t want in public either for fear of being ridiculed. It works both ways. I’ve had some authors of ours who have written to me with issues and they haven’t been “punished”. I listed to what they say and then try to find out what may have caused the problem. That’s how we learn.
I learned that the ugly baby argument is bullshit when I began noticing that in the financial downturn, the big Six (now five, and counting…) gave birth lot quite a few ugly babies. Really questionable little monsters, despite what was perceived as excellent, or at least notorious genomes. The reader market is the only useful gatekeeper, but unfortunately it can be manipulated and controlled. The more a market segment begins to understand to what degree they are being pushed and pulled, the better it is for the playing field and new voices.
In this post Hugh Howey discussed why self-published authors should care about ebook pricing, a major issue of the Amazon-Hachette dispute: “Why Should We Care?” http://www.hughhowey.com/why-should-we-care/
As a reader I’m also deeply and directly affected by the outcome of the dispute. I guess many self-published authors are also readers and may be affected enough to have a stake.
But I think self-published author may have an even more important way of being affected by Author United’s actions. Their call to regulators for an antitrust investigation of Amazon, even based on bogus or dubious claims, may directly impact also the self-publishing business, e.g. with restrictions on pricing.
Paolo, in light of the anti-trust, anti-price fixing position of the Justice Dept., I would seriously doubt that any emerging regulation would restrict self-published pricing in any way. The conservative view is that price, as linked to value, is determined in the marketplace. Not in a boardroom filled with the marketing directors of competing corporations.
Being European, I don’t take it for granted that pricing and discounting of books may note be regulated.
European and American law and traditions are very different on the issue. We can see that it does happen in Eurpope.
When using big Words for the Big5, please don’t forget to use Oligopsony (multiple buyers purposely NOT competing in order to reduce the selling price of the sellers.
The Big5 should know it : it’s something they did (and would do again) when self-publishing was no good option.
Oligopoly too : multiple sellers purposely NOT competing to set a high price. They settled that one with the DOJ, last time I heard…
I didn’t use it because it’s a big word; I used it because it’s really the only word to describe why the feds might proceed against a channel or channels.
“Oligopsony” is a big word. “Collusion” is the one most people use.
rick
It would be great fun to watch the feds attack a company for offering consumers more books at lower prices than at any time in history. And doing it in support of a French publisher and millionaire authors who summer in Maine would be worth the price of admission. Even Washington could look in the mirror and see it’s a clown suit.
For me it’s more about legacy publishing being a bad business decision. I’m sorry, even Shatzkin must admit that that model is unfair for the author on many levels. It makes no sense to me as a business person. If someone offered me those legacy terms on a business deal for my content I’d laugh them out of the building, and so would most anyone, including Mike. And I’ve done one deal with a big publisher already… first and last.
But for some reason, guys like Mike continue to perpetuate this defense of the indefensible. Let’s all take heart in knowing that in 3-5 years they’ll all come around. And they’ll try to rewrite history where they’ll say now they’re doing it and they were never really against it and how all of us “indies” were just doing it wrong until they came around. Book it.
***even Shatzkin must admit that that model is unfair for the author on many levels.***
I think that’s one of Mike’s core arguments he is not willing to concede, or at least only for a tiny minority of self-pubbers.
I will defend the model and would make the point that there are thousands of authors who do accept the terms and don’t laugh at them. In fact, every major bestselling author has been happy to accept them as well as many debut authors as well. For those who don’t like traditional publishing deals we also have digital lines, as do many other houses, where the terms are different and offer higher royalties because we’re not initially investing in print copies and we’re not paying an advance.
+++ Mike Shatzkin wants some form of (yet to be explained) governmental intervention to restrict Amazon’s market power. I think that would be a terrible move and publishers, as well as Amazon’s retail competition, would have zero incentive to reform or innovate. +++
The publishers want the feds to charge Amazon with abusing its power as a monosopony. A sort of mirror image of the monopoly that is relevant to distributors and resellers. There are many links that will explain the concept further.
Monosopony suits are much rarer than monopoly and collusion suits, but they do take place. The US government is taking a look at Amazon’s pricing policies in respect to a potential monospony case, but it’s anyone’s guess as to whether they would actually file suit. However, Amazon is well aware of the potential and this is why they stated this:
+++ Is it Amazon’s position that all e-books should be $9.99 or less? No, we accept that there will be legitimate reasons for a small number of specialized titles to be above $9.99. +++
Isn’t that special. A $75b company that control at least 65% of the digital book download market is proposing to, what? Establish a special pricing committee for the book industry? Decide WHAT the legitimate reasons are?
Does anyone think that’s healthy? That a RESELLER should be attempting to price rig an industry but will decide WHAT books deserve to be priced higher than others.
The mind boggles.
As Vlad V says:
“Amazon isn’t evil and neither is Big Pub.”
He’s right. They’re both big financial powers and that is why this blog would be better if you dispensed your thunderbolts more dispassionately and evently and didn’t brush off observations such as Amazon’s claims that it pays indie are untrue as “hairsplitting.”
IOW, never trust anyone over a $1b in revenue.
Hi Rick. Unless I missed a post (which is possible), Mike Shatzkin hasn’t explained exactly what type of governmental intervention he wishes. He has alluded that it might be time for such intervention, but I haven’t read his explanation of what that entails. Maybe he would like price-fixing laws like Germany, discount restricting like Spain, or to ban free delivery like France. Or maybe it’s a DOJ investigation.
As for that, historically at least, the DOJ seems loathe to build a case against a company’s market power, if the company is using that power to reduce retail prices. But the future is a story yet to be written, so we’ll see.
Re pricing: Amazon is putting the case for the prices Amazon charges readers. AFAIK, that statement is not in reference to the prices publishers charge Amazon. Are you arguing that Amazon shouldn’t have the freedom to set retail prices? We may differ, but I think the Agency model was bad for all parties, and I suspect that publishers only adopted it as a means to slow the transition to digital.
Which is a legitimate business goal. I think it was the wrong move, but I understand the logic behind it. The issue, IMO, was how publishers attempted to achieve that goal – windowing, high pricing, a go-slow approach to digitization, collusion – which didn’t endear them to writers, readers, or the courts.
FWIW I don’t think Amazon is some kind of benevolent fund whose sole aim is to empower and enrich authors. I’m perfectly aware that, at the moment, our goals more-or-less align with Amazon’s, which creates good business conditions for us. I’m also aware that Amazon is a large corporation, and that corporate culture can change and business goals can shift. And it’s inevitable that Amazon will become bloated and inefficient at some point, and that they, too, will be disrupted.
Maybe things will get better in that future, but maybe we’ll look back in ten or twenty years as this being some kind of unique golden era for authors, and that we should have spent more time writing and less time bickering 🙂
+++ Unless I missed a post (which is possible), Mike Shatzkin hasn’t explained exactly what type of governmental intervention he wishes +++
I don’t know about his wishes, but if the government would decide to act, it is on that basis. Their is no basis in current US law to proceed on the different Euro laws you mention.
+++ Amazon is putting the case for the prices Amazon charges readers. +++
Amazon charges more than $9.99 for many, many books. Anyone can quickly find that out for themselves. Just use Stephen King for a reference point to make things simple. Only indies are put in that ridiculous box.
+++ Are you arguing that Amazon shouldn’t have the freedom to set retail prices? +++
Are you arguing that INDIES shouldn’t have the freedom to set the prices for their books? Because that’s the situation we’re in. Trapped because Amazon wants to wrest pricing control away from the book suppliers (publishers) to its own financial benefit. Anyone who understands the eternal battle between suppliers and their channels understands this. Anyone who understand some basic MATH understands how stupid and deceptive Amazon’s “analysis” of “optimal” book pricing was. And also understands why Amazon stuck in that odd sentence about “legitimate reasons for a small number of specialized titles to be above $9.99.”
Can I safely assume you think that’s ridiculous?
If not, do you care to speculate exactly how such a pricing codex would be created and administered?
+++ but I think the Agency model was bad for all parties, +++
No, it’s not. If you’re a well known and high selling author, agency works to your benefit. And Amazon sell lots of things it purchases via agency. The i-Phone 6, for example. Apple is not allowing Jeff Bezos to loss leader its premium lines. Or significantly discount them unless a prearranged promo has been agreed to by both parties.
Is agency BAD for Apple fans? I don’t know. They seem willing to buy the phones at Apple’s prices. They certainly don’t have to. The whole issue seems to be none of Amazon’s business.
So what business is it of Amazon’s if a book is sold at $7.99, $9.99, $12.99, $24.99 or $199.99? If your pricing is stupid, the market will punish you almost immediately.
Further more, if agency is so bad, why does Amazon impose a modified version of it on indies? Because that’s what it does. Locked in margin and limited pricing. If you want to dish it out, is it not fair you eat it?
And a final point. Only a small % of books, even by the major publishers, are sold at agency. After X period of time, the model drops back to wholesale. Again, check S. King. The Shining is $2.00 on Kindle. That book is wholesale priced. Obviously.
+++ The issue, IMO, was how publishers attempted to achieve that goal – windowing, high pricing, a go-slow approach to digitization, collusion – which didn’t endear them to writers, readers, or the courts. +++
Only collusion was of interest to courts. Agency pricing is not illegal. If the book publishers don’t realize paper is deader than reel to reel, that’s stupid on their part but not the courts business.
As for readers, they don’t have to buy anything they don’t want to. But it seems lots of them will pay a premium price for a well known author’s book:
Mr. Mercedes: A Novel [Kindle Edition]
Stephen King (Author)
4.3 out of 5 stars See all reviews (3,764 customer reviews)
Print List Price: $30.00
Kindle Price: $11.99
#2 in Kindle Store > Kindle eBooks > Mystery, Thriller & Suspense > Suspense > Ghosts
#4 in Kindle Store > Kindle eBooks > Literature & Fiction > Horror > United States
#4 in Kindle Store > Kindle eBooks > Mystery, Thriller & Suspense > Suspense > Horror
Would you like to give feedback on images or tell us about a lower price?
So much for $9.99 being optimal, eh?
+++ FWIW I don’t think Amazon is some kind of benevolent fund whose sole aim is to empower and enrich authors. +++
Amazon is a big company. The publishers are big companies. Ankle grab for neither. Hold both accountable. Watch them both like hawks. I think your criticism of AS is spot on. I dug a bit and read it.
Amazon deserves, and requires, the same level of scrutiny.That serves the interest of writers best.
Rick Chapman
http://www.softletter.com
http://www.saasuniversity.com
Author “SaaS Entrepreneur: The Definitive Guide to Success in Your Cloud Application Business.” Self-published.
Read Excerpts from all 10 chapters at http://www.saasentrepreneur.com
Author “In Search of Stupidity: Over 20 Years of High-Tech Marketing Disasters.” Formally published, Apress (a Springer imprint).
Author “Rule-Set: A Novel of a Quantum Future.” Self published.
Just Released. More info at http://www.rule-set.com
I’ll focus on the pricing issue because that appears to be the main source of disagreement.
There are two seperate issues intertwined in this exchange, one of which doesn’t (IMO) have any relevance to the above post. The first issue, the one I was referring to, is the battle between Hachette and Amazon over retail prices of Hachette (and other Big 5) books. That’s what Amazon’s statement referred to.
The pricing of indie books and the percentages we receive has nothing to do with that. But, on that note, if the $2.99-$9.99 window is such a big problem for you, there are options. You can go through a third party like Vook and have a wholesale agreement with Amazon instead and get 50-odd percent off list… no matter what price Amazon decides to sell at.
Does the $2.99-$9.99 window really affect your business that much? For me, it’s a minor irritant. I would like to sell short stories at 99c and get 70%. In the future, I’m sure I’d like to sell a bundle at over $9.99 and get 70%. But this rule doesn’t have a noticeable effect on my bottom line, and, if it does to yours, I really would suggest petitioning Amazon and making the case for an alternative.
But, again, that really has little to do with the above post.
First, let me correct myself. That’s monopsony! I always stick in that extra “o.”
+++ Hachette and Amazon over retail prices of Hachette (and other Big 5) books. That’s what Amazon’s statement referred to. +++
The statistical stew? I don’t see any reference that that “analysis” was specific to Hachette. And even if it was, it’s a meaningless bit of bilge. To have any value, you’d have to cross tab and correlate across different axes of analysis points.
+++ The pricing of indie books and the percentages we receive has nothing to do with that. +++
I’m sorry, but I disagree.. Amazon doesn’t want to buy books on an agency basis, but imposes a modified version of the model on indies. I think that’s hypocritical. And it also makes Amazon’s public hand wringing on what Hachette is putting its authors through rather ludicrous. Amazon is quite willing to hurt thousands of other authors with that predatory 35/65 retail usage fee.
And their battle with the publisher has NOTHING to do with benefiting the writers. It has everything to do with attempting to shift the balance of power between the publisher and a reseller. It is a channel struggle. Amazon is not a hero. The publishers aren’t heroes.
+++ But, on that note, if the $2.99-$9.99 window is such a big problem for you, there are options. +++
Again:
+++ Is it Amazon’s position that all e-books should be $9.99 or less? No, we accept that there will be legitimate reasons for a small number of specialized titles to be above $9.99. +++
AMAZON has already accepted it’s a problem. And I told you why they think so.
So, again, how do you think the book pricing codex should be administered? Who will be the keeper of the Amazon codex? Maybe there will be a committee an indie writer has to meet with? Maybe Jeff Bezos will preside wearing a robe and pointy hat a la the inquisition?
+++ Does the $2.99-$9.99 window really affect your business that much? +++
For two of my books? Absolutely. Amazon’s $7 box makes it absolutely ruinous to even think about using it.
+++ I really would suggest petitioning Amazon and making the case for an alternative. +++
You mean applying to the codex committee? The one that is supposed to deal with the ” legitimate reasons for a small number of specialized titles to be above $9.99″?
What room is the guy with the pointy hat sitting in? If you could direct me.
I can’t believe a writer would even contemplate this is acceptable behavior. This is potentially far more insidious than anything AS has ever been up to.
Rick Chapman
http://www.softletter.com
http://www.saasuniversity.com
Author “SaaS Entrepreneur: The Definitive Guide to Success in Your Cloud Application Business.” Self-published.
Read Excerpts from all 10 chapters at http://www.saasentrepreneur.com
Author “In Search of Stupidity: Over 20 Years of High-Tech Marketing Disasters.” Formally published, Apress (a Springer imprint).
Author “Rule-Set: A Novel of a Quantum Future.” Self published.
Just Released. More info at http://www.rule-set.com
Here we go. Your comment went into the spam filter because of the number of links. Try and avoid more than one in the future. This is overkill.
(And, by the way, your equation of Amazon offering a higher percentage in a certain price band with the practices of Author Solutions is absolutely ridiculous.)
Traditionally, manufacturers set an MSRP (Manufacturer’s Suggested Retail Price) and retailers are free to follow that suggestion if they so choose. More often than not they don’t and usually reduce the price. I’m not sure why publishing has always gotten a pass in this regard.
+++ Traditionally, manufacturers set an MSRP (Manufacturer’s Suggested Retail Price) and retailers are free to follow that suggestion if they so choose. More often than not they don’t and usually reduce the price. I’m not sure why publishing has always gotten a pass in this regard. +++
They’re not. Nor do other industries. Agency pricing is not illegal and is used in other industries, where it’s often called something different. (US references only.)
This article will help make it clearer:
http://www.rule-set.com/ricks-blog/what-hugh-howey-wont-talk-about-but-should-the-book-channel-part-v-of-several-parts-the-resellers-and-agency-vs-wholesale-pricing-and-mdf-oh-my
rick
No one (including the DOJ or Judge Cote) ever claimed that Agency was illegal. It was the collusion between five of the Big 6 and Apple to force Agency on Amazon that was illegal.
+++ Rick, do you realize how it sounds when you insinuate that you are the only person capable of logic/impartiality/moderation? Try stepping outside your own skin for a moment.+++
I think before I worry about that I’d like you take my last post off moderation and allow people to read it so they can judge for themselves how I sound.
I haven’t placed any of your posts in moderation. But I’ll go and check the spam filter…
By the way, I’m referring to your comments here. Characterizing someone’s position as “ankle-grabbing” is a little much. Try and tone it down please. We can disagree without being disrespectful.
BTW it’s this kind of snap assumption and rudeness which is getting incredibly tiresome. Again, please tone it down. We can disagree all day long, but, on this little corner of the internet at least, I demand that people treat each other with respect. If you don’t like it…
Amazon doesn’t want to buy books on an agency basis, but imposes a modified version of the model on indies.
The KDP contract says Amazon has complete discretion to set retail price. That is completely opposite of agency pricing.
+++ Here we go. Your comment went into the spam filter because of the number of links. Try and avoid more than one in the future. This is overkill. +++
Thank you. I did that a couple of times to provide concrete evidence of my bona fides. Mission accomplished.
+++ Rick, do you realize how it sounds when you insinuate that you are the only person capable of logic/impartiality/moderation? Try stepping outside your own skin for a moment +++
What can I say? Jesus and me are like THAT. And I’m not even Christian.
My messianic complex aside, would you like to comment on the point of my post? Are you interested in speculating how Amazon, which has already conceded that some books should be priced outside their $7 box, will manage the codex? The processes and procedures they will establish to enforce compliance with their pricing strictures?
+++ By the way, I’m referring to your comments here. Characterizing someone’s position as “ankle-grabbing” is a little much. Try and tone it down please. We can disagree without being disrespectful. +++
Hmmm? I said that “I” had not ankle grabbed on behalf of anyone. And anyone who reads the post would agree, I think.
Don’t worry about me insulting me. I do it a lot and always forgive myself. I’m like that.
But if good strong Bronx vernacular is a bit too brawny for you, I’ll give “supine bending” a try.
+++ (And, by the way, your equation of Amazon offering a higher percentage in a certain price band with the practices of Author Solutions is absolutely ridiculous.) +++
That is your opinion. My opinion is that an objective observer would look at the two models:
Agency, fixed margins, set prices
Amazon indie retail Usage fee model: fixed margins, pricing placed in a very narrow band,
and agree with me. Amazon imposes a modified version of in agency pricing on indies. The similarities between the two models aren’t really disputable. They would also note that Amazon’s claims that pricing above $9.99 for all classes and types of book is optimal is a fairy tale and hurts many authors.
rick
@RickChapman – I loved your post on Agency versus MRSP. Awesome.Thanks. I left a comment.
From David’s post: “Is Jamie Ford correct when he claims that we are motivated by bitterness?”
If Jamie Ford said that…NOW, I’m bitter.
I subscribed to Mike Shatkin’s blog a long time ago, I don’t know why I haven’t turned it off yet. I guess I just get amused by his posts. For one, I used to enjoy the comments that filtered in, but now the comments don’t work half the time, which clearly reflects how far in the past he dwells.
As an Indie author, the whole Hachette thing has little impact on my day-to-day. Other machinations are more pressing for me: KU, exclusivity requirements for most, not all, the all stars gig, algorithms, Amazon favoring their own publishing line, and programs like Amazon First and pre-orders which all takes slots on the bestseller lists I’m trying to hit, FB algos for advertising that have clearly changed, the endless abyss for my marketing $$ in which I throw into the well that is without end, BookBub and its weird-ass selection and ebbing ineffectiveness that no one is talking about. “Those” things affect me.
IDC about authors seeking a traditionally publishing deal anymore other than Gillian Flynn who actually deserves one. They don’t care about me. I’m not sure why the continued focus on this aspect about Hachette remains. However, it will get more interesting when other publishers enter the ring and I will watch.
Thank you Katherine. I tried to play it straight down the middle and present the situation from the standpoints of both players. No ankle grabbing for either side.
BTW, if you wish to tweet about the piece, I’m @rickchapman53.
Thanks again.
Rick, do you realize how it sounds when you insinuate that you are the only person capable of logic/impartiality/moderation? Try stepping outside your own skin for a moment.
I do not think Amazon would need to set up a committee to set prices, they could just use something like the different percentages Indies get at different price levels to encourage publishers to price below $9.99. Amazon would probably never get away with charging publishers 70% for ebooks above $9.99, but maybe some kind of sliding scale: 30% up to $9.99, 35% up to $11.99, 40% up to 13.99, 45% above 15.99, and so on. That way publishers could still choose to price ebooks higher but they would pay the cost of doing so.
I also took Amazon’s statement about all of this to suggest that they were open to agency pricing, as long as ebook prices were generally below $9.99.
And I do not get your argument that agency can be good for authors. Both publishers and authors make less with agency pricing which is why it is so mind boggling that publishers colluded to force it (although it is less boggling if you remember that their main motivation in all of this is to protect their cozy relationship with brick and mortar booksellers, and for that they think they need ebooks to retail for a high price). Amazon’s ulterior motive is the opposite: to encourage greater adoption of ebooks. Because their true motivations are so opposite, in the end Amazon and Hachette will probably have to find a compromise solution.
Finally, your analysis of agency pricing compared to wholesale pricing on your blog is flawed because you use the same list price for both calculations. No publisher in their right mind is going to set a fixed retail price of $24 for an ebook. Once the publishers got to use agency after colluding, they set the retail price mostly around $14.99. So the list price of the paper book was $25 or $30, but the ebook list price was $12.99 or $14.99. When you do the calculations correctly (as Joe did a long time ago on his blog: http://jakonrath.blogspot.com/2012/04/agency-model-sucks.html ) then it becomes very clear that agency pricing, as Joe so delicately put it, sucks. And it sucks for authors. The only party it does not suck for is the publishers if their theory is correct that high prices of ebooks protect paper sales. My guess is that is no longer true or at least is becoming less and less true. Someone who reads mostly ebooks is not going to go buy a hardcover just because the ebook is priced too high. They will buy a different ebook instead.
I would add that publishers may not even care if they make much less on an ebook and yet only make the same amount as before on the paper version of that book, as long as the brick and mortar bookstores still give them all of the perks and exclusivity they currently enjoy. If publishers just allow ebook prices to drop dramatically, the bookstores may decide that since they are getting screwed anyways that they should stop cooperating wit publishers. Maybe they would start selling Amazon’s imprints and POD books. Maybe then paper distribution channels would become as open as online sales channels. But that is exactly what publishers do not want. It is not about agency versus wholesale, it is about protecting paper sales versus encouraging ebook sales.
+++ I do not think Amazon would need to set up a committee to set prices, they could just use something like the different percentages Indies get at different price levels to encourage publishers to price below $9.99. Amazon would probably never get away with charging publishers 70% for ebooks above $9.99, +++
You DO realize that that’s exactly what they’re CURRENTLY doing to indies? You DO know that above $9.99 and below $2.99 the retail usage fee is 65%?
And you surely must know that established publishers don’t pay that type of predatory margin?
IOW, Amazon should be able to punish me more and more if the economics of my particular market or sub market require higher pricing to make publishing a niche or specialized book necessary?
Wow. Amazon. For the indies. For the little guy. Wow.
+++ And I do not get your argument that agency can be good for authors. +++
No problem. Earlier I posted up a sample taken straight from Amazon’s listings that show how $9.99 is not optimal for Steven King.
+++ Both publishers and authors make less with agency pricing which is why it is so mind boggling +++
You are completely wrong. There are many examples you can look at and I discuss the topic in greater detail on my blog. When a book is new, and you’re a brand, you can make more money with higher pricing because you don’t make up revenue lost by lowering the price to X point due to increase volume Y. These are revenue curves and they differ by types of books, genres, brands, etc. That is why Amazon’s “optimal” pricing “model” I’ve linked to is utter bilge.
And as I’ve already pointed out, Apple practices STRICT agency pricing with their premium brands when they’re first released. And Amazon, as well as the other resellers, toe the line.
Does this hurt Apple? It does not. The model has made them the most valuable company in the world.
That is why no one’s mind is boggled.
Amazon vs. Hachette has almost nothing to do with the writers. It has EVERYTHING to do with power and control between a channel and its suppliers.
+++ Amazon’s ulterior motive is the opposite: to encourage greater adoption of ebooks. +++
No. Amazon’s ulterior motive is take control of the pricing structure E-books so it can control its suppliers. This is by no means the first fight between a channel and its supply chain over pricing. Happens all the time in thousands of industries.
+++ Finally, your analysis of agency pricing compared to wholesale pricing on your blog is flawed because you use the same list price for both calculations. No publisher in their right mind is going to set a fixed retail price of $24 for an ebook.+++
I was comparing the apple to the apple. I guess I could put up a matching chart for E-books, but is that necessary? The point, I think, was made. But you can do the numbers yourself. Start with $14.99 is a good median.
+++ When you do the calculations correctly (as Joe did a long time ago on his blog: http://jakonrath.blogspot.com/2012/04/agency-model-sucks.html ) +++
I read it. It’s pretty much junk.
I’m going to dig into that analysis in a future blog post but not now. But if you think about it, you should be able to figure out why much of what he wrote was fallacious.
Here’s a hint, one I already provided you the post up at:
http://www.rule-set.com/ricks-blog/what-hugh-howey-wont-talk-about-but-should-the-book-channel-part-v-of-several-parts-the-resellers-and-agency-vs-wholesale-pricing-and-mdf-oh-my
Books aren’t released and sold at agency for an indefinite period. After X period of time, they revert back to wholesale pricing. I explain why in the post.
Why do you think that is?
+++ The only party it does not suck for is the publishers if their theory is correct that high prices of ebooks protect paper sales. +++
The publishers indeed do want to protect paper. I said that in the post. But please remember that at $14.99, an E-books pricing reflects the margin not being consumed by production, shipping, and distributor “break bulk” costs.
rick
IOW, Amazon should be able to punish me more and more if the economics of my particular market or sub market require higher pricing to make publishing a niche or specialized book necessary?
Amazon should set retail price anywhere it chooses. The economics of any particular niche don’t matter. Some people might think Amazon is punishing them by not accommodating them. OK. That’s how markets work. Nobody is obliged to devote their talent, time, and resources in support of the other guys’s needs.
That’s why I’m also not particularly exercised by publishers’ practices. I can compare them to KDP, and make a very good economic case that KDP is superior for fiction (outside of a select group of authors.) And I’m happy to share and discuss that analysis.
But since the market does offer an excellent alternative other than publishers, I’m content for anyone else to offer whatever they want. I encourage people to offer whatever they want. Authors can choose the path they want to pursue, and I respect their choices, and wish them luck..
+++ Amazon should set retail price anywhere it chooses. +++
Well, gosh, heck, darn it! That’s just what Hachette says!
+++ The economics of any particular niche don’t matter. Some people might think Amazon is punishing them by not accommodating them. +++
But, but, but, AMAZON already said there will be situations where the price should be higher! Right?
So, are YOU ready to tell us how the Amazon pricing codex will work? Because is sure is hard to get people to answer that question.
Boy, is THAT an idea for a dystopian novel of the future or what. Why hasn’t Hugh Howey latched onto this?
A novel that imagines a world where a multi-billion dollar corporation controls what you read via its insidious control of pricing. Where only selected authors are allowed to be read, otherwise they are crushed via ruinous retail usage fees.
I see this taking place in giant cash registers buried in and around Seattle.
What would be a good name for this bleak, barren, blasted landscape? A land where evil drones sweep the earth continuously in search of writer’s who attempt to avoid those crushing retail usage fees?
What would be good name for this book? How about “Margin?”
My reply to Rick ended up way down the thread under another series of comments (please feel free to delete it). Meanwhile I will repost it here:
Rick says, “You are completely wrong. There are many examples you can look at and I discuss the topic in greater detail on my blog. When a book is new, and you’re a brand, you can make more money with higher pricing because you don’t make up revenue lost by lowering the price to X point due to increase volume Y. ”
Your point has nothing to do with my statement. I said that publishers and authors make more with wholesale pricing than with agency pricing. I was not comparing two different price points for selling the ebook to the consumer. You are correct that when a best-selling author sells a lot of books at a high price, it is possible that he or she would not make up the difference by selling more for less, although he also might. Who knows for sure? Amazon’s data and Authorearnings data ( http://www.hughhowey.com/data-guy-on-price-points/ )does suggest it is possible he or she could make more at a lower price. But that has nothing to do with how much Amazon pays for the book which is typically more under the wholesale model. And remember, for ebooks the author is paid 25% of net (not a percentage of the suggested retail price as they are for print books). The net to the publisher is less under agency and so the 25% for the author is less also.
I will check out your blog post in response to Joe’s old post when it comes out, but really it is simple math. I am not sure how you can say that even with a high priced ebook, the author does better under an agency model.
And also I do not know really what you mean when you keep saying that ebooks revert to a wholesale model after a while. Right now, Amazon and the publishers are operating under a modified agency model which is basically the same as the wholesale model except for how the splits are calculated. Amazon pays 70% of the retail price set by the publisher but is free to discount however they wish (as long as they are still making money overall on the publishers ebook catalog as a whole). So your examples of an ebook dropping in price have nothing to do with it reverting to a wholesale model. Either the publisher dropped the retail price or Amazon is deeply discounting that particular title. But it is not evidence that some books are priced via agency and some are priced via wholesale. I am pretty sure Amazon has a contract with the publishers that applies pretty much to every ebook. And there are plenty of titles that are new and selling well that Amazon is deeply discounting already including Hachette titles. “The Goldfinch” has an ebook list price of $14.99 (which is what it is selling for on B&N) however on Amazon the Kindle version is selling for $6.99. So Amazon is losing about $3 for every copy it sells. It has nothing to do with the book reverting to wholesale.
And I will add that your comparison on your blog is not apples to apples. The retail price would never be the same under agency and wholesale. Under wholesale the retail price of ebooks was the same as the hardcover price. Under agency the retail price was always lower. That is why Joe’s math is correct.
Agency pricing can indeed be better for publishers. It depends on their list. Certain formats of books make more money in agency versus wholesale for the publisher and retailer depending on the price point and where the price point has to be set. When agency pricing started there was a grid that specified what the price had to be in relation to the printed price of the book. Maybe they’re trying to change that now with Amazon. We just don’t know.
Stevne I would have to agree with your statement “We just don’t know” Somehow that never stops us from speculating thought does it? 🙂
And can you give a specific example where a book makes more for a publisher under agency. I don’t doubt it as it is really just numbers which can be adjusted any way possible, especially when there is discounting allowed under agency as it is now. For example an ebook could be priced higher under agency than under wholesale and of course the publisher would make more. But can you give a real world example (or at least a plausible hypothetical example) where a book earned the publisher more per copy it sold to Amazon under the agency model when it was a pure agency model with no discounting? I am having a hard time wrapping my mind around how that would happen, if the book was meant to sell tot he consumer for about the same amount in both cases.
So, are YOU ready to tell us how the Amazon pricing codex will work? Because is sure is hard to get people to answer that question.
I’m ready to answer the question, but my answer is I don’t know how Amazon will set retail prices. I don’t care. It’s none of my business. They can flip coins, use a random number generator, or just take what authors give them within Amazon’s parameters. They can price all books above $100, or sell them all for a nickel.
+++ I’m ready to answer the question, but my answer is I don’t know how Amazon will set retail prices. +++
Well, it’s exciting to know that so many people are completely uncurious about how a $75b company that controls 65%+ of the digital book channel will establish and manage a pricing codex.
An interesting experiment in civic engagement!
rick
It stems from the notion that the purpose of markets is to facilitate tade. Their success is measured by their ability to make an abundance of goods available at low prices. We have observed that free markets where each player is free to deal with the next produced greater prosperity for more people than any other system observed. This means buyers and sellers at each level freely deal with each other without interference from other parties. That includes retailers dealing with consumers, and it implies retailers set their own prices, and consumers make their own purchasing decisions..
So supporting the freedom that makes that prosperity possible is indeed civic engagement.
Nirmala, this is not correct in my opinion. Publishers need to keep the prices of ebooks where they are because they still have to cover their expenses for producing the book. If the print side of the business has declined and you’re still paying the same level of advance to an author….now you have to make up some of that money from the digital version as well. If the price is lower and we don’t sell a huge amount more of copies, we’ve lowered our total revenue on the title. I don’t agree with the logic that if you just lower the price you sell more copies. We have plenty of titles where we’ve offered books at low prices or dropped a price and it didn’t move the needle at all.
Steve,
I understand the problem of pricing and covering overhead. A supplier has to price at a point that ensures he can make money. And I understand the various GAAP methods for allocating cost to product. This certainly affects pricing.
But that price is what the retailer pays him. That’s where the publisher’s revenue comes from to pay his costs. As you explained earlier, hardbacks are sold to the retailer at a given price, then the retailer sells the hardback for whatever he wants.
Is there some reason the same system cannot work for eBooks? The retailer pays the publisher a given anount for each downloaded book, and then sells to the customer for whatever he wants.
Many advocates of traditional publishing oppose that idea and contend the publisher should have control over the price the retailer sells to the consumer.
Nirmala, here are real world examples of agency versus wholesale pricing for you. It all depends on what the whole dip is set at.
This is easier to look at in a spreadsheet but I will describe.
A trade paper title with a print price of 15.00 would be 9.99 on agency. That’s agreed upon agency pricing….with 70% going to the publisher that would be 6.99. The same book on the wholesale model would have a dip of 12.99 and using a 50% discount would only net 6.50 to the publisher. The key point would be what the publisher is allowed to set the dip to be. If it was 14.00, it would get the publisher the same 7.00. But that makes the wholesale dip way more expensive then the agency retail price and any wholesale retailer would not be happy and might not allow it.
If the mass market print price was 7.99….the agency price would be 6.99 and the publisher would receive 4.89. The same book on the wholesale model would also use the same dip of 6.99 and net the publisher only 3.50. Agency is always better on mass market for the publisher even the dip were the same as the print price.
Hardcover books favor the wholesale model but there are less hardcovers today because of the lower prices of ebooks.
Jeez, this blog software is the worst for trying to figure out where you reply from. Terrence, I agree with you that it’s the wholesale price or the price paid to the publisher that’s important to me. Maybe that’s just me and my company. But a huge part of the negotiation with Amazon or other retailers is what that wholesale price should be. Is it based on the print price of the book as in the Agency model where Apple has specified rules for pricing or is based on rules that another online retailer might have for guidelines in relation to the DLP. There are all sorts of different requirements to meet and the publishers don’g have the flexibility to just set the price wherever they like.
Terrence, I would tend to agree with you that ebooks could certainly work the same way as print books and basically they do with all the publishers that are on the wholesale model for ebooks, which is everyone but the big 5, as far as I’m aware. But the publisher has to be able to determine what that cost can be to the retailer free and clear without any restrictions and that’s not the way it currently is. There are restrictions placed on the publisher as far as how high the price can be in relation to the printed price of the book. And I do agree that the ebook should be less expensive than the ebook.
Thank you once again David for an excellent posting intended for those that may still not be so wired as to realise what is really going on in the ‘Publishing World’ today.
With the following you now have, (even considering the possible downside to your own original personal roadmap), I sometimes wonder why do not consider setting up ‘The Gaughran Publishing Co-Op’, or some such similarly named group, to gather all us lost or simply wandering sheep. I for one, would be one of the first to sign up.
I appreciate your selfless time to help others.
Excellent post, David.
Why is it so difficult for people to understand that Amazon, like Hachette and the other big publishers, are businesses, and are thus motivated by profits? People are constantly trying to project some moral conscience into the debate on one side or the other, as if corporate benevolence is the prime motivator for whichever side they happen to be on. I love Amazon both as a writer and as a customer, but I’m not so naive to think that it if its interests are better served elsewhere, it could drop indies like a hot potato.
Amazon isn’t evil and neither is Big Pub. One just happens to be a successful innovator while the other is floundering, but this isn’t the first industry to be knocked on its butt by an unforeseen opponent. Business is business, and indies ought to adopt a business mindset, too, and save their emotions for their word count. Granted, Big Pub has treated many authors poorly and so is losing the information war for the hearts and minds of the public, but it wouldn’t surprise me if Amazon started doing the same at some point, if that is in its interests (I don’t foresee that happening, but it could happen). As such, I’m not keeping my eggs all in one basket, independently or traditionally. Diversify! And make sure you read the fine print in any contract a publisher hands you.
Just out of curiosity, how do you figure big publishing is floundering? Most publishing companies have had very good results the past few years.
Of course they’re pulling in more money, e-books are almost pure profit. After all, 50 Shades pulled in so much money even the janitors got bonuses.
And K.A. Jordan, you’re talking about an example that happens once ever bunch of years; not every day. It sold a load of copies in print as well I might add.
While ebooks are more profitable obviously than print books the difference in manufacturing is about $.40 less versus the book being a mass market title. So you’re not talking about a dramatic difference in price versus mass market titles. The fact that there are no returns is the big savings. But as ebook sales increased; although that increase has slowed down dramatically now, print sales declined….so you’re spreading the same amount of overhead over a different number of units sold.
Sure. This is the core of the independent market power. The successful independent book doesn’t have to carry the overhead from the unsuccessful independent books.
Terrence, in traditional publishing before ebooks the printed book carried 100% of the overhead of the title. There is still plenty of overhead in putting up a bestselling book as an ebook. Now most publishers split the overhead between the various formats like they did with hardcover and mass market titles. If it’s a digital only edition and there is no advance it’s a totally different ballgame and that’s why royalty rates are much higher. We also avoid many other costs with digital only production.
I have heard a lot of people throw around numbers about production cost differences ($0.10, $0.40, etc) but have 1) yet to see anyone back those numbers up, and 2) yet to hear anyone explain how that difference carries over to the marginal production of an ebook, and how it could possibly be true over vastly different publication runs. The marginal production cost of an ebook is almost nil, so the differences in physical book production and ebook production costs are going to be dramatically different depending on what the print run of the physical book is, the size of the physical book, how widely it is shipped, and even the type of print– all fixed costs for the physical book each time it is printed and distributed, all nil after the first copy of the ebook is created. You are correct that you are spreading overhead over a different number of books, but you’re only counting the overhead of creating the book, not all the post-design costs that continue for physical books, and are non-existent for ebooks. I am not questioning your take or motive, or even numbers, I just never quite understand how people can say there is a fixed difference in production costs that can actually be measured– it has to vary dramatically on a per book basis.
Actually, it’s quite easy to understand. Marketing and selling anything takes time and money. And your time is money.
E-books are substantially cheaper than paper because the print production and distributor overhead is gone.
Marketing never goes away.
rick
There is still plenty of overhead in putting up a bestselling book as an ebook.
Completely agree. And I am sure much of it applies to both the print and eBook. I suspect the combined exenditures on both versions have a very high percentage that would be classed as common costs.
My point was the revenues of the successful independent author do not have to cover any costs for unsuccessful independent authors. Hugh Howey’s revenues do not cover any of my costs.
The publshers’ revenues from successful authors do have to cover the costs of unsuccessful authors. If a publisher had both Howey and me, Howey’s revenues would contribute to my costs.
Looking at it another way, for the independnet, his cost accounting and financial accounting results are very similar. That is something that rarely happens with firms that have multiple products. Cost accounting may show a profit for a product, but the financial accounting shows a loss.
So, I’d support the idea that a publisher’s* costs for both print and eBook versions of the same book are very close.
*Limited to publisher expenditures only, not including logistics, retail, or selling expenses.
Gobstopped, i’m not sure where you’re trying to get to with your discussion. You’ve asked for backup for the costs of a book. As the owner of a publishing company and someone who’s been in the printing business for 40 years, I know the cost of manufacturing books. Massmarket books cost about $.40-$.60 for manufacturing depending on the length of the print run. Tradepaper titles cost about $1.00 and hardcover about $1.50. Those are rough numbers and just include manufacturing, paper and foiling/embossing. I don’t know what else you need for backup but those costs are accurate. As a publisher, we publish both print/digital and digital only. When I’m talking about the spreading the costs, I’m talking about over the typical print/digital book. This is the overwhelming number of books we produce. So if the print run is 100,000 copies of a mass market title, and the ebook is 15,000 copies…we have to spread our overhead costs over both formats. There is no manufacturing for the ebook per se….yes there are conversion costs and maybe a different cover, digital warehousing, but that’s small. But our total overhead of the business had to be spread over what we publish. As ebooks increase in marketshare we have to assign more of the overhead expense to the ebook side of the business. And in fact the ebook side is the side of the business that has been increasing in overhead. We’ve added more art directors, more production, promotion and publicity people. We’ve had to spend more on our website and social media. You have to remember in this type of scenario, if we weren’t publishing the printed book the overhead costs would be 100% applied to the ebook.
David,
My answer is “No,” it’s not that difficult to understand. Fairness and a robust marketplace are good reasons and motivations for the debate.
New authors have come to me excited to have their very first contract in hand and I’ve had to explain the non-compete clause to their incredulous selves. Other authors have come to me with already signed contracts with vanity imprints and, well, there it is, money’s gone.
As for Amazon, there will come a time when they are not the only kid on the block with a viable digital bookstore. As a reader, that’s what I really want — a better way to shop for what I read.
Change is here and change is coming. To be fair, change can be confusing.
Kathryn
Why am I interested in traditional publishing doing better? Because more books is better than less books.
I devour books in nearly any format you could imagine. I might be slightly ahead of the curve on book inhaling, but I suspect most other authors are well above the mean when it comes to books read.
If I want more people to read my books, you could make an argument it is in my short-term interests to reduce competition; but if I want to be sane enough to benefit, instead of being some twitching ball of ink and incoherence restricted to re-reading my own books, more books is better than less.
Absolutely. I don’t get why TradPub just doesn’t understand what we’re talking about. Lee Child is an example of this – a bright, intelligent, hugely successful author, but all he keeps banging on about is how rich he is from TradPub, and how if we’re not careful, Amazon will take over the world. He completely misses the point, no matter how many times people try to make it to him. Blinkers or what?
Great post. The question of the “motivations” is the one that not only the “Mike Shatzkins” of the industry are voicing, but even people like myself. I asked Hugh Howey and others why they fought so hard for something that was not necessarily in their interest (if publishers price their books higher, this will make indie books even more competitive…).
And I got to the happy conclusion that indie authors are simply doing this because no one else is there to “fight” for the middle-to-low-list authors who still are in a contract with publishers. These people literally have no say in this dispute, you don’t hear from them when they are actually the most concerned.
Of course, you’ve got the Pattersons and Prestons claiming that they represent them (“Authors United”…), but that is very hard to believe: why would traditionally published authors who struggle at being discovered agree to have their ebooks priced higher?…
This is more or less what I tried to explain in an interview with JJ Marsh (Words With Jam), released today, when asked on my opinion of the whole dispute and what I thought about your previous interview with her.
And I think this realisation is key to all people in and outside the industry. It’s good to talk about the indies’ motivation in this whole dispute because it’s a thoroughly selfless one, and saying this adds a lot to your message.
I don’t think there’s anything wrong with questioning motivations per se, but that it’s a common tactic by dishonest interlocutors to distract from the actual discussion.
And you are right when you say that mid-list authors often can’t speak up. If you are part-way through a three-book deal with Penguin, it’s probably not in your best interest to slam them for Author Solutions, or complain about non-compete clauses. I talk to authors all the time who are in terrible contractual situations, but can’t speak publicly about it. Not yet at least. I think we’re going to hear so many horror stories when these authors finish their contracts and start self-publishing.
Oh and if anyone wants to read the interview Ricardo is talking about, it’s here and it’s good: http://www.wordswithjam.co.uk/2014/09/the-industry-view-reedsys-ricardo-fayet.html
Sorry, I came late to the discussion (was in Sicily and got knocked out of the Internet by a…storm!) But I just wanted to say how happy I am this basic point is made here so clearly: it is not at all in the interest of indies to insist for low prices – if the publishers wake up to the opportunities on the Net, they’ll clobber most indies – but it shows how selfless indies really are.
Indies put the readers’interest in the first place and more broadly, understand that keeping book prices low will help defend reading in the face of the onslaught from other forms of entertainment, like video games and films. Strange to say, but the fact that other forms of entertainment, since they are visual, have a great advantage over books is not something that publishers seem to be aware of, I’m not sure why. Perhaps they are reassured to see that many blockbusters – like, say, the Hunger Games – start with a book. But the handwriting is on the wall. Many ambitious young writers starting out today may very well not even consider book writing as a viable career and instead jump straight into script writing for films and video games.Books are already a niche activity, and if we’re not careful in defending reading, books are going to become ensconced in a really small niche, barely good for a basset hound!
claudenougat–
Everything you say is true. Values closely linked to reading–introspection, reflection, even the value placed on privacy, on which the act of reading depends–are all in decline. Bradbury had it right so long ago: if you want to improve the odds for fascism/totalitarianism, diminish the value of reading. I would say all things indie work in the interests of freedom.