Monday, February 01, 2010

Eeeee!

So I was going to write something about ebooks, beginning with a note about the ongoing evolutionary process and Apple’s iPad, the latest but certainly not the last ereader to emerge from the thrashing recombinatory process of that particular gene pool, and then moving on to write about how this would affect the profession of writing - which is where I got bogged down in mechanics and economics that, frankly, bored me. And while I was still thinking about that, there was a brief but vicious turf war between Amazon and the publisher Macmillan in the US, in which Amazon delisted all of Macmillan’s titles, only to back down after a couple of days, possibly because it realised that hurting authors and readers didn’t make for good PR.

The spat was ostensibly over pricing, but actually it was about market control. Essentially, Amazon wants to become both wholesaler and bookseller, and to dictate recommended retail price of the stuff it sells. Macmillan, wanting to keep control of the stuff it produces, expects Amazon to act as an agency, supplying books to customers at prices dictated by Macmillan. There have been plenty of good analyses on various authors’ blogs of what happened and what it means; go check out these links if you want more detail.

It’s clear from the comments on those blog pieces is that an awful lot of people think that Amazon is the reader’s friend. No, it isn’t. Yes, it supplies a vast range of books at attractive prices: and in the case of ebooks delivers them to the reader’s Kindle directly and quickly. But it is also a very big capitalist enterprise that wants, quite naturally, to maximise profits and undercut the business models of its rivals. And it wants to do that selling as many Kindles as possible, by tempting customers with deeply discounted prices on ebooks and locking them into its supply chain.

It also became clear that many readers think that ebooks are too expensive. It doesn’t cost much to produce or to distribute them, the argument goes; in fact, duplicating ebooks is virtually free. So why aren’t they as cheap - if not cheaper - than paperbacks? Three reasons.

First, printing and distribution costs are a much smaller percentage of a book’s retail price than many imagine, and all the production work needed to publish a regular book - editing, design, typesetting, marketing and publicity - is also needed to produce an ebook. Second, publishers’ profit margins are a very small percentage of a book’s RRP. If they’re cut much further, the entire present-day publishing model will collapse.* Some think that will be a Good Thing, in the same way that some cock-eyed optimists thought the Internet would be full of nothing but stimulating creativity, high-minded democratic discourse, rainbows, and puppies; imagine trying to sort the good stuff from the fire-hydrant flood of the indifferent and bad if all authors were forced to self-publish through the kind of monopolistic content supplier that Amazon so dearly wants to become. Amongst other things, publishers are useful - albeit not always accurate - filters.

And third, books aren’t that expensive. No, really. My first novel, Four Hundred Billion Stars, was published in1988, a paperback original in the US, a hardback in the UK. The hardback was published by Gollancz, and most of the print run was sold to libraries (it was had one of the last of Gollancz’s famous yellow dust jackets, designed for easy recognition by browsers). Its RRP was £11.95, and that was the price you paid in every bookshop in the land, under the old net book agreement. My most recent book, Gardens of the Sun, was also published by Gollancz, in 2009. The RRP of the hardback is £18.99. Compared to the 1988 price, that’s cheap. The retail price index of 2009, the best measure of high-street inflation, is about twice that of 1988, so the RRP of the 2009 hardback, at 1988 prices, should be £23.61. But wait - there’s no longer a net book agreement. Booksellers don’t have to sell the book at the RRP, and many don’t. Amazon sells it at £12.28. And then there’s the trade paperback edition - same content, published at same time, at an RRP of £14.99, discounted by Amazon to £8.99. Much less than the price of the hardback of my first novel, even without taking inflation into account. What a deal!

It’s a slightly different story when it comes to paperbacks. Hardback prices haven’t kept pace with inflation; paperback prices have. Back in the late 1980s, Gollancz didn’t publish paperbacks, but it licensed publication of a paperback edition of Four Hundred Billion Stars to Orbit. The RRP of that paperback, published in 1990, was £3.50. Gollancz reissued the title in paperback in 2009 at a RRP of £7.99, an increase that’s slightly greater than the increase in the retail price index. Still, you can buy a copy at the discounted price of £5.56, roughly the same as the adjusted-for-inflation price of the 1990 paperback.

So, books are already a good deal. Especially if you consider that newspapers have more than tripled in price over the same period. The only way ebooks can really make a big difference to readers’ pockets is if the price at publication is the same or less than the price of the mass-market paperback. That’s what Amazon wants; to get rid of the pricing structure that allows publishers to charge a bit more (but much less than they used to charge) to readers who want to get hold of a title when it first comes out. And that will cut into publisher’s margins, which means that books will have to be produced more cheaply, and most authors will have to take big cuts in payment. Boo-hoo, you might say. Why don’t they do it for free? For, you know, the love of writing. Simple. Authors want to write the best book they can. They can only do that if they have the time and space to do it properly. And the simplest way of ensuring they get that, at the moment, is if their books are sold for what they’re worth, not as content-bait. And if you’re not convinced by that, remember this, dear reader: you get what you pay for.

*the current publishing model is probably going to collapse anyway, but hopefully it's going to collapse slowly, and into a new and useful form, rather than rubble.

EDIT 02/02/10: this is also worth reading.

Currently reading: Hitler's Private Library, by Timothy W. Ryback (and yes, I'm fully aware of the irony of linking to Amazon, but it helps to pay for the blog).

8 Comments:

Blogger ArabiaTerra said...

I just pulled a bunch of mass market paperbacks from my shelf.

Robert Heinlein-The man who sold the moon-1971-30p

Anne Mcaffrey-Dragonsong-1981-£1.50

So fivefold increase between 71-81

David Brin-Startide Rising-1991-£4.99

threefold (thereabouts) between 81-91 though it's a much thicker book

Robert Reed-Marrow-2001-£6.99

40%ish increase between 91-01

Charles Stross-The Jennifer Morgue-2009-£6.99

No increase since 2001. And as I got the Stross book from Amazon, I actually paid less than the cover price, so books have got cheaper since 2001.

February 02, 2010 12:18 AM  
Blogger Al said...

But an ebook isn't really a book. It's an ephemeral thing with DRM locked onto my Kindle. I can't share it. If my device breaks or Amazon quits doing ebooks, it's gone.

I expect a physical object made of paper to cost more. If people expect me to pay physical book prices for ebooks, they are in for a surprise. If the price is the same, I'll buy the paper version (if I buy it at all).

The only exception is mass market paperbacks. For the most part, I (and I think others) are willing to pay about the same for an ebook that we pay for these cheap and shoddy paperbacks that don't last and turn yellow in the sun anyway.

February 02, 2010 12:49 AM  
Blogger Adam Roberts said...

Excellent post, Paul, with which only a fool would try to disagree. But in the spirit of Al's comments (which is spot on) there are a couple of other things that occur to me. Like Al says, 'buying' a book for the kindle isn't buying it at all. It's more like renting a DVD from Lovefilm: you pay, you get the film, you can keep it for as long as you like, but it's not yours. The difference is that Lovefilm don't try and charge you £18.99 (or whatever the buy-in-a-store price of DVDs is nowadays) for your rental; because if they did then nobody would rent their films.

Then again, I have the sense that new fiction is only ever going to be a tiny proportion of what ereaders are used for, something I'm not sure the marketing models of the multinationals take into account.

Here's an example of what I mean: I have a Sony eReader. On Saturday I took the train to central London for a wedding. I was in the middle of re-reading Our Mutual Friend for work -- a bi-i-ig fat novel of course, in its lovely fat penguin livery. But I didn't want to take a bag, and I didn't fancy carrying the paperback around wedding and reception and so on, since it didn't fit in my suit pocket. So I went online, and in 30 seconds I had downloaded from google books, completely free, a first edition of Dickens's novel onto my eReader, which I then slipped in my suit pocket and off I went.

The point is this: this is a wonderful, wonderful novel; it's out of copyright; its available in multiple forms all over the web, it's free. (The bonus of it being a first edition is just gravy. I have several first edition Dickens, and for most of them I was paid triple figures).

People who like reading want to read. They may well want to read the newest fiction; but if that's too pricey, they'll read classic fiction instead. OUP turned their profitability around in the late 80s and early 90s by putting gorgeous covers on their paperback Literature Classics list and selling the books not as formerly only to students but to a huge new marker of (mostly) retired people with lots of disposable income and time on their hands looking for a good read. Whilst blurbs from reviews on the cover are one, rather hit-and-miss index of quality, 'classic' status is another and, for a certain kind of reader, much more reliably so. And to repeat myself: there are millions upon millions of words of clssic fiction sitting online waiting for you to download it --legally, freely -- onto your platform.

If publishers aren't careful, the unintended consequence of all these turf wars will be to drive readers away from new fiction in droves; not away from reading altogether but into the arms of Austin, Dicken, Tolstoy and Zola. Which would be bad for me, of course; but it's hard to see what you can do. (I mean, a reader may or very well may not enjoy my Russian novel; but they're almost certain to enjoy War and Peace and it will cost them nothing at all).

February 02, 2010 12:33 PM  
Blogger Adam Roberts said...

'...into the arms of Austen ...'

Embarassing typo. Tch.

February 02, 2010 12:35 PM  
Anonymous Al R said...

I keep hearing about paperbacks that fall apart but my own experience is that, out of many hundreds bought in the last thirty-odd years, the vast majority are still in perfectly good nick, with at worst a little yellowing and maybe a little crinkling around the spine from having been read. I've had one or two fall completely apart on me, but it's not typical. I wonder if British paperbacks were just more durable. I certainly agree that, whichever way you cut it, books remain astonishingly good value.

February 02, 2010 1:35 PM  
Anonymous Al R said...

ps

I'm reading The Old Curiosity Shop myself, as it happens.

February 02, 2010 1:39 PM  
Blogger Paul McAuley said...

Al, I agree that ebooks should be cheaper than they currently are. And yes, there's no reason why they shouldn't cost as much as a paperback - eventually. But not because they're just a bunch of ephemeral electrons.

At present, we have a mixed-market economy, and publishers are unhappy - rightly in my opinion - with the idea of ebooks undercutting sales of hardback and trade paperback books. Why rightly? First, because the ebook market is pretty small. Publishers are still making most of their money (and they don't make a *lot* of money btw) from sales of paper books. Second, there's the question of premium content. Hardbacks are sold to people who can't wait to read a particular title by a particular author. Everyone else is happy to wait a while (it used to be a year; it's now less) for the much cheaper mass market paperback. Cheaper not just because it costs less to produce, which it does, marginally, but because it is sold in higher volumes, which cuts unit costs.

Amazon wanted to get rid of the notion of premium content, not because it wants to help the reader, but because it wants to sell as many Kindles as possible by offering cheap content (so cheap Amazon lose money on sales of almost every ebook). But ebooks don't mean that the idea of premium content has to vanish - Baen has a good model in which it sells advanced ARC ebooks to avid fans for $15, and later on standard ebooks for half the price or less. That's one way forward. I'm sure there will be others; and I'm sure the price of ebooks will come down as their market share increases. Hopefully, in useful rather than a damaging way.

Adam, Agree absolutely. I don't have an ereader yet, but gaining access to the classics would be a major reason for buying one. It wouldn't stop me buying new books, in whatever form, and I think that holds true for the majority of readers, but the trick is, yes, not to drive them away while the market adjusts. And it's definitely a good idea that publishers and booksellers (and authors!) shouldn't lose sight of the plain fact that demand is led by readers. Something that seems to have been lost in the dust and noise raised by this particular skirmish.

February 02, 2010 1:43 PM  
Blogger Paul McAuley said...

Al (R) - paperbacks are tough as cockroaches. But if publishers want to keep premium content going in the form of hardback books, here in the UK, they need to stop using cheaply glued 'perfect' binding and start using acid-free paper. Some of my hardbacks, less than twenty years old, are in shocking condition...

February 02, 2010 1:47 PM  

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