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Old 05-05-2010, 06:06 PM   #26
Worldwalker
Curmudgeon
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I think what the publishers aren't realizing about the change is this:

Their traditional model is one where they as an industry are the gatekeepers of books. They decide what will be published. They decide what book prices will be. They decide which books will be on the store shelves, and when, and for how long. The reader has few choices, with the only really viable alternative involving public libraries (which would probably never have gotten any traction if they'd been proposed today).

The problem is, that concept is already as dead as the buggy-whip business. The publishers aren't the gatekeepers anymore; anyone who wants to can sell their book as an ebook, or POD on dead trees, for that matter. Free books, ranging from public-domain classics to authors' promos, are everywhere a reader turns. Authors are reclaiming their backlists and selling ebooks, whether directly, or through retailers, or through authors' consortia such as Closed Circle. And, of course, there's always the darknet for those who choose to go that route.

So readers who were formerly limited to fulfilling their desire to read by buying books at publishers' prices, from the limited available selection of the works of a limited number of authors that the publishers chose to make available, now have choices. Lots of choices. And they're taking advantage of those choices -- buying indie books, buying through authors' websites, buying from market-smart publishers like Baen and O'Reilly, finding public domain works here on MobileRead, etc.

The genie can't be put back in the bottle, and the bell can't be un-rung. The old model of publishing, which was based on the fact that only a substantial company had the resources to turn a manuscript into a book on a bookstore shelf, is gone. Trying to cling to it is like insisting that all automobiles should carry a buggy whip. It's gone, and it's not coming back. Big publishers are no longer competing only with other big publishers; in today's market, they're competing with everyone from smart little publishers like Baen to every schmuck with a word processor and a Facebook page.

And that's what they're missing. The market has changed, and the change is not about price, it's about value.

What value does a big publisher -- Tor, let's say -- bring to the table? Why should I buy a book from Tor rather than from BookView Cafe? Or from Joe Schmoe with a tacky Facebook page? What is the benefit to me from that Tor imprint on the cover, and why should it be worth money to me?

Most publishers have not yet figured out that selling poorly-formatted, error-laden, DRM-restricted ebooks for higher-than-pbook prices is not enhancing their brands; in fact, they're destroying the image, the market appeal, and the goodwill that they are going to have to depend on to compete in the publishing marketplace in the future. They have something very important to the consumer that our buddy Joe with his Facebook page and those really bad circa-1995 animated GIFs doesn't: They have editors. They have development editors, they have copy editors, and the whole nine yards, whereas Joe Schmoe has his brother-in-law, who's the same guy who told him his Facebook page looks "really rad". That is something they can compete on ... but it seems that instead, all too often it's the first thing being cut.

They still have some vestiges of the gatekeeper role. Many buyers still have the idea that if a book is from a big name publisher, it's going to be of higher quality (content-wise, that is, not just production-wise) than whatever it is that Joe Schmoe is selling, and OMG someone stop that MIDI! That carryover will last for a while ... but it, too, is dying. Readers are connecting with each other in ways that were not practical twenty years ago, and finding books they want to read in those ways. Just as we used to be more likely to read a book recommended by a friend than pushed by a massive advertising campaign, today our "friends" extend to bloggers whose taste matches ours, entire online social networks, random people on MobileRead, etc. The value of those third-party recommendations is overtaking, if it hasn't already, the value of a publisher's name. If someone whose recommendations I trusted told me I just had to read Joe Schmoe's book, that it's great despite that Facebook page with the background that must be bringing in kickbacks from the manufacturers of headache remedies, I'd read it. It's not so much that my trust in publishers has gone down (although given the level of trash some of them are pumping out, they're certainly trying to make that happen) but that the availability of other, and more trusted, sources has increased dramatically.

Tor is not going to be able to compete on price with Joe Schmoe. His ebook costs him nothing to produce, market, or sell. They have to -- they absolutely must -- compete on value. They have to have a better product (and a better website!) than Joe does, and they have to have consumer trust in their brand that will make them stand out from the Joe Schmoes of the ebook world. They also have to accept that the market now has choices, many choices, other than them, and the loss of their quasi-cartel control over it means they don't get to determine the prices anymore. They're in a free market now, and free market forces will determine the price. If readers would rather pay $1 for Joe's very strange ebook about the space aliens living in his spleen instead of $20 for Tor's latest and greatest, the customers think they're getting a better value for their dollar from Joe than from Tor. If Tor wants to compete, they're going to have to match and beat that by either offering more value, or asking for fewer dollars. That's capitalism, and however little they like it all of a sudden, it's about to have its way with them. In fact, it's starting to look like something very close to a perfect market, which is a very rare beast indeed.

Good editing adds value.
A reputation for picking good books adds value.
DRM takes away value.

The equation is this:

value = content + editing + reputation - DRM - price

If that "value" number comes out higher for Joe Schmoe than it does for Tor, then Joe is going to be the very startled author of a bestseller.

Content isn't fully under their control; they can only publish what comes in the door, and luring the good stuff in the door means offering the authors a better deal than their competition -- which is not only other publishers but self-marketing. They can lower the price variable, but in the long run, they're never going to undercut Joe with his zero expenses. The only variables they really have control over are editing and DRM, and those actions which influence reputation. Joe doesn't use DRM, so they can't out-compete him on that. If they're going to compete, the editing has to be better, and their reader cred has to be top-notch. Aside from pushing for a government-protected monopoly or cartel status, that is the only thing they can do. That's how free markets work.

So the question Tor should be asking isn't "how much would you pay for an ebook?" ... it's "what would make you want to buy an ebook from us rather than them?" Until they understand that, they're just going to be researching the price of buggy whips.
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