… so maybe I will, too.
Yes, Amazon screwed up the public relations — you really should read John Scalzi’s excellent analysis of why, but as usual, skip the freakin’ comments.
I don’t really think that’s arguable. Everything outside of that is where things turn into a sort of wiggly, wobbly munge.
I think where I’m at is encapsulated well enough in my response to Jennifer Jackson’s question over on livejournal. I’ll mostly repeat what I said there, here, with some edits and expansion:
My take is I’m torn.
Amazon is right that prices on eBooks need to be lower, possibly vastly lower, to give them a real chance to take off. Publishers generally have their heads up their asses on this point.
But I think Macmillan is right, too, in that the publishers should be free to set their prices. A competitive marketplace is going to reveal the flaw or lack thereof in the prices they choose to set.
I think most parties are deeply wrongheaded as far as the whole DRM thing goes, but that’s a big kettle of fish and I’m just looking for an appetizer-scale comment here. 
Someone laid out a price model above as indicative of what (some) publishers are doing right now with books, along the lines of:
$7 for a paperback
$15 for an ebook
$20 for a hardcover
But that’s an incomplete listing. Here’s what it’s more like:
$7 for a paperback released one year after the hardcover
$15 for an ebook released the same time as the hardcover
$20 for a hardcover released as the earliest available form of the product
Pricing isn’t just about format. It’s about availability and urgency. If you feel you MUST get your hands on “Changes” by Jim Butcher the first day it’s available, in an eBookless world you’d be spending that hardcover price, period, or you’d have to sit on your thumbs and wait a year for the paperback. It’s as simple as that.
The fact that there have been explicit statements from a few publishers in this kerfluffle that talk about sliding the ebook pricing scale around as the physical format options of a particular book become available makes sense, honestly, because of the urgency principle. If you want the convenience of first-available access, you pay more, and you pay more because that author’s content is so valuable to you that you cannot wait for it to become available later in a cheaper form. And one hopes that a hardcover/higher-pricing-period-eBook generates a proportionately larger payout for the author, since that’s who you’re (psychologically) supporting when you make an urgency rather than patience oriented purchase.
YES, some — even many — publishers have completely screwed the pooch on following the logic of this approach, pricing back catalog works at ridiculous levels. People can and should be angry about that sort of stuff. It’s just silly, and it’s going to hurt the form (but maybe the publishers want that, because the market hasn’t yet screamed “give us eBooks or go out of business” at them enough).
But let’s also remember eBooks in this format (kindle/iPad friendly) are still in their infancy. Babies poo outside their diapers all the damn time, I can say from experience. But eventually they grow up and start to get it right more consistently. It’s a matter of time and a matter of market pressures.
I’m going to be real interested to see what if any independent eBook marketplaces open up, ones oriented on getting good content from “unknown” authors available to voracious readers at a cheap and DRM-free pricepoint. That’s where I think smaller, nimbler mammals are going to outstrip the dino-publisher set. Whether or not the bigger guys will go extinct once something like that really gets rolling is the question. Maybe, maybe not, but either way I’m hoping the environmental changes ahead teach the good ones how to survive — or present our favorite authors with ways to get it done themselves.
It may simply be a matter of time before a few reasonably big name authors decide that it’s time to buy into the new way of doing things, and do something really splashy — think about what’s happened with some music-makers after years of iTunes’ presence in the marketplace. “Pay whatever you think it’s worth including free” ala Radiohead, for example. Now, I don’t think that the music model works 100% with fiction — musicians go on tour and make a lot of their money through those ticket sales, rather than via albums, and there’s no easy analogue for that from the perspective of an author. But imagine what happens if, say, Stephen King says: I’m gonna publish my next book myself, as an eBook, for five bucks (or one buck). You can buy it from my website.
Right now, the old way of doing things is still the dominant way of doing things. It’s going to take years more to get to where it becomes clear that the old way is built on what’s now a foundation of sand. Until then, many successful authors are going to want to support the old way because the new way is hard, and because the publishing world is really very, very small and as an author you don’t want to piss off your friends and colleagues who’ve so far been a part of your success and will have a very palpable impact on your ability to get your works out there and selling.
As with so many things in publishing, though, the middle-man — whether you’re talking distribution or non-creator-owned publishing — is in trouble. The middle man will continue to have some value over the years, though, as the guy/organization that is focused on reaching people and the selling and the skills that are involved in doing both effectively. But those middlemen will eventually only have value to those creators who don’t, themselves, feel like they have or want to have those skills (or exercise the time to use them). Some will say this has already happened for a number of creators. They’re mostly right. But it’s not a widespread phenomenon yet.
And that’s a shift to where the middlemen are the clients of the creators, not the other way around.
Speaking to my personal experience, that’s pretty much exactly what Evil Hat did for Chad Underkoffler with Swashbucklers of the 7 Skies. Chad didn’t want to deal with the business particulars of publication, so Evil Hat stepped in to do that job for him, for a cut. This is less a change of process than it is of perspective. If you view Chad as Evil Hat’s client — we take on his content, we publish it, it’s “our” game that he happened to create — you’re old school. New school says that Evil Hat is Chad’s client — he created his content, figured out what services he wanted us to provide, and we provided them for an agreed-upon price.
There’s very little that’s procedurally different between the two, but the change in the minds of those parties involved is a big deal. It changes the perspective on who is thought to be in control, and a hundred other things that tie into that. And once someone feels like they have more control over their options, those options get just a little bit closer to being something that could eventually be turned into a pointy-clicky self-serve solution.
I’ll be real interested to see how all that comes about. Next to that, this whole Amazon/Macmillan thing is just a side-show, an amusing light-show that is at best a mild precursor to the main event.
19 Comments
The thing this highlights for me is the question that’s been niggling at my mind: What to publishers contribute to the process now? In the past? In the future?
The past is easy. Publishers brought money, expertise, editors, marketing and a way into stores, plus of course the actual production of books.
But nowadays they seem to be offering less expertise and support. Authors are left to self-promote more and more these days, and I’ve heard tell of editing responsibilities being pushed off on the the author as well. They’re not totally out of the game – there’s still cover art and such – but that leaves money, getting books into stores, and production.
The problem is those last two are looking kind of fragile. Bookstores aren’t doing great, and outside of brick and mortar, the barriers for entry are much lower for the small press. Ebooks are, of course, a big threat to the production monopoly as well (though that won’t go away totally – actual books still have plenty of market). That just leaves financing, and while I’ll concede that’s important, I’m not sure that’s the only possible source of it.
Now, this is a gross simplification – I haven’t even touched on things like brand and the virtues of culling the slush pile – and the things I see as problems won’t really materialize for years. But I can see them on the horizon, and I doubt I’m the only one.
-Rob D.
But I think Macmillan is right, too, in that the publishers should be free to set their prices.
The problem with this statement is that Macmillian is not setting the recommended retail price of their product, but rather the actual retail price. Under the new agreement Amazon cannot offer the book at a discount without being in violation of the agreement.
This is a restriction which no other retailer is under. Admittedly it would probably save local and even chain bookstores against their supermarket competitors (who can afford to use best-sellers as loss leaders to get people into the store, if they extended this restriction to their physical product as well), but I imagine the restraint of trade law suites would make Amazon’s little tizzy look like the storm in a teacup it really is.
YMMV.
Eh. I see no problem with my statement, in that it is not actually in any sort of conflict with what you have to say. I think publishers should be free to set a price.
I did not say publishers should be free to lay shackles on the sellers of their products. Though even there, I’m of a mixed perspective. IPR, for example, reserves the right to stop selling books to any retailer that sells a title we’ve sold them at a deep discount online. (They can deep discount in their brick & mortar store if they like; the online, directly competing with IPR is the problem.) And I don’t see a problem with that. As the owner of a particular chunk of content you should be free to define the conditions under which you will sell the product to someone, I think.
Of course what I’m saying is due to change is who will be perceived as the owner of that content.
Agreed. My apologies.
Then again, I will definitely admit in this particular argument, the shackles Amazon was attempting to lay were much larger and weightier than the publisher was attempting to lay. Especially their offer to authors for 70% of the net, which had the added clause that they set the price and thus the royalty the author receives, which is well, detestable, to say the least.
I should add the disclaimer that I never use Amazon as a consumer because of it’s predatory policies on content providers.* Besides there are lots better deals out there. [Here in Oz we have http://www.booko.com.au to do internet searches for best price; hopefully you have something just as good rather than relying on an Amazon search.] And as far as I’m concerned any DRM makes an ebook unsaleable to me. [I do like the Webscription scheme from Baen however, which is how I'd like to see an ebook scheme run. Although I do think that authors should get a larger cut of the royalty pie for ebooks than they apparently do.]
[* We had a similar situation here in Oz not that long ago, where the largest book chain [A&R] sent letters to the local small press saying that they would have to pay if they wanted shelf space in the store. There was considerable public outcry and people stopped using A&R
(much to the concern of many of the franchisees who actually had no part of the decision), resulting in the collapse of the central chain-owned stores. But we had other book stores to go to. ]
Haven’t read all the thread, but spotted this while scrolling rapidly:
“New school says that Evil Hat is Chad’s client — he created his content, figured out what services he wanted us to provide, and we provided them for an agreed-upon price.”
Eh? If you’re providing a service to Chad for a price, *he’s* the client.
But I wouldn’t be surprised if Chad thinks of it in terms of “partnership” anyway.
“But I wouldn’t be surprised if Chad thinks of it in terms of ‘partnership’ anyway.”
Beat me to it, Tim.
The reason I see it mostly as such is that I’m not happy with either the old school or new school dichotomy — I think the situation is more complex than that. (That being said… I lean more new school.)
Then again, even when I have handled the business-end of Atomic Sock Monkey stuff, I’ve often dealt highly-involved folks in for a cut (and then, eventually, when that cut dwindles, have “bought back” the cut).
However you care to run the semantics of it is fine by me. The point being that the old paradigm is getting flipped.
I’m going to be real interested to see what if any independent eBook marketplaces open up, ones oriented on getting good content from “unknown” authors available to voracious readers at a cheap and DRM-free pricepoint.
Yeah, except in a lot of ways, that’s fun but unimportant. The publishing world moves around authors like Dan Brown. Small unknown authors might be fun, but the Dan Browns of the world want millions of dollars.
Oh, and Nightshade Press is a good example of a small press working hard to put out ebooks. Windup Girl, which is one of his hot new titles, can be had on Baen’s Webscription page for $6.00. That’s not bad, and John Scalzi’s Zoe’s Tale (A Macmillan book, through Tor) can be had at B&N for $6.39. These are both popular titles. They’re not HC releases, and they’re not catering to a ravening fan base like the expensive list price on the Wheel of Time books that are cheaper to by in MMPB.
All in all, Macmillan is being quite demanding in it’s new plan, but the price point setting is designed to work on a revenue share model, not the way physical books are sold. If you’re selling a download through a reseller like amazon, you have reason to want to set the price at the point of sale, which is different than if you’re selling a physical book, where you really shouldn’t mess around too much with the end sale price.
At this level, it’s not as much a question of who’s “in the right” in the dispute, though. What the problem came out of was Amazon pulling all of Macmillan’s print books as well.
The publishing world moves around authors like Dan Brown. Small unknown authors might be fun, but the Dan Browns of the world want millions of dollars.
The days of superstars driving the middlemen are waning, though. If the publishing world is suffering because they’re not adapting their business models, they’re not going to have millions of dollars to offer to the Dan Browns, no matter how many millions the Dan Browns want.
Something will give. It will probably be a lot of small gives in a variety of places, including business models, old players being usurped by new players, and the Dan Browns becoming both fewer and somewhat poorer.
If you’re going to all calm and rational about this shit, your readership is bound to drop!
Thanks again!
If you feel you MUST get your hands on “Changes” by Jim Butcher the first day it’s available, in an eBookless world you’d be spending that hardcover price, period, or you’d have to sit on your thumbs and wait a year for the paperback. It’s as simple as that.
Or, if I can wait a couple of days, I get it at the library, and pay nothing.
Your library is as speedy as a couple days? You’re very lucky. I’ve encountered plenty of reports of folks waiting months — sometimes due to the library’s ability to supply, sometimes because every copy they have gets checked out instantly and there’s a long line of folks waiting for it.
Yep.
If I request they purchase the book (as soon as the ISBN and other information are out), I’m usually one of the first people in the Hold list, and will have it within a week of it coming out. If I miss that, I’ll have it within a couple of weeks.
Even with my notable lack of patience, I can manage that to save $30.
Here is the thing.
I’m a lifelong voracious reader. I have, by any reasonable standards, plenty of discretionary income.
And the fiction publishers have lost my business. When they started raising prices on fiction in the 1980s, for whatever reason, they thought they had an inelastic demand. They don’t.
I buy used fiction.
I buy e-versions of fiction if I find the price reasonable.
I make extensive use of my library system (which is superb).
But I no longer buy new hardbacks or paperbacks for fiction.
Cookbooks, yes. Reference books, sure. Fiction, no.
I still get to read what I want, I may just have to wait longer. Somehow, I think I’m not the one losing in these calculations they are making regarding pricing.
I was cheering on Amazon, not because I thought they had a right to set Macmillan’s prices for them, but because ebooks need to be cheaper (and there is no convincing economic reason why they shouldn’t be), and if Macmillan isn’t going to by choice…well, screw ‘em.
And also because if it is Macmillan’s right to set their own prices, why isn’t it Amazon’s right to set their own discounts on those prices?
Which I ask because if the business model being assumed by both companies as well as the argument about rights holds, and since I’m selling it FOR them because I’m offering them the service of being included in my giant electronic display & distribution network, then why can’t I sell more cheaply than they want since they’re using my service to get their books noticed and delivered?
The convincing economic reason would be that, at least for the major publishers, printing the bound volume is, by most accounts, only roughly 10% of the cost of creating a book. Much of the cost instead comes from paying editors, book designers, marketing people, etc., and, of course, the writers.
Even if you believe printing only accounts for 10% of the publisher’s costs (and I don’t: publishers are notorious for claiming numbers that serve their interests), according to various pro writers I’ve spoken with over the years, the total cost for the publishers (all the items you mention, and assuming they are still doing all of those) only requires 30% of the profits from the book. The distribution chain eats up the other 60%-70%.
Hence why I stated there was no convincing economic reason to charge those prices for ebooks: you don’t suddenly need 70% more money to spend on the production of an ebook as opposed to a physical book.
Oops, sorry: Which I admit is a huge thorny ball of rights-issues that don’t delineate out neatly into clear camps of “right” and “wrong”.
So, we are moving to a space where traditional publishers are the dinosaurs, and vanity presses are the mammals?
Ultimately, I don’t think we can predict the new business model. Because ebooks are just a small symptom of the bigger picture. The entire nature of media production, media distribution, and media consumption is changing. This isn’t as simple as “now I can get books delivered over the intertubes.”
One of the sea changes that I see the iPad heralding is the multimedia ebook. You get an ebook that isn’t just the printed page scanned and delivered to your glass. You get an ebook that also comes with a soundtrack, animated illustrations, direct links to an author’s site where he’s uploaded bits like his working character bible, etc. Just like the special features on a DVD.
At that point, the big publisher gains a huge role in the process again. Sure, if you just want to deliver text to your readers, you can put out a PDF for free on your site. But, if you want a proper ebook, you need to engage the specialists who can put you in touch with experts in other media who will work with you. The “editor” becomes a project manager, pulling all these diverse elements together into a seamless magical whole.
The big publisher also regains control of the revenue stream not by trying to clamp down on the distribution of the ebook, but by controlling the central web server that functions as the hub for the entire multimedia experience. Pirate it all you want, none of the enhanced features will work without the key into that server. In fact, at that point, piracy really does work as free advertising, as readers become hungry for the full experience after the appetizer of just one aspect of the media.
Is that the way things will go? Maybe. Probably not. There are way too many variables. The economy is a variable. The personalities involved in the industry is a variable. The technology is a variable (don’t think we’ve seen all the changes the simple existence of the internet has to offer). The impact of legal changes is a variable (will the UN find a way to institute and enforce global copyrights?).
Ultimately, this spat doesn’t even count as a battle in the ongoing war. It counts as a single shot in the battle over ebooks. And, based on what we’ve seen since, it wasn’t even a shot that hit home.
Fred, Smashwords is exactly what you’re talking about above. It’s an independent ebook marketplace, DRM-free, creators have a “pay what you like including free” option, there’s no gatekeeping except that you have to meet their technical requirements (and I think the usual “no hate speech” provisions).
They have a cunning piece of code which takes your Word or RTF file and converts it into (from memory) 11 different ebook formats, so that people can use any device they have – iPhone, Kindle, Sony Reader, whatever.
Their cut is very reasonable, too, much less than Amazon’s (which is one thing that has kept me from signing up to the Kindle store as an outlet).
It works really well, and is currently doing deals with the major ebook outlets such as B&N and even Amazon to get its users’ content into their stores also.
One of the things I like about them is that they’re very frank about setting sales expectations – they’re not trying to suck people in by promising illusory fame and riches. But with more and more people reading on ebook devices of one kind and another, I think they’ll become a force to be reckoned with.
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[...] Fred Hicks and Rob Donoghue have already weighed in. I don’t have anything new to add except possibly my opinion which I think is completely uninteresting. Facts will carry the day and this is clearly a skirmish in the war that will occupy the next several years in the publishing business. The expected (and apropos) analogy with dinosaurs and mammals has been made repeatedly. I believe I alluded to it myself last year sometime. [...]