Hachette complains about eBook prices

[GA Russell]

Here is a Financial Times article from today in which the French publisher Hachette complains about Amazon's $9.99 price for best sellers. He thinks that if the public becomes accustomed to that price point, all other eBooks would have to be sold for less, and the hardback book may go away.

http://www.ft.com/cms/s/0/0df31226-9...44feabdc0.html

[Superlucky]

Publishers should be worried, but not because of Amazon's pricing. They should be worried because of what happened in the music industry. When music distribution became primarily digital, the artists fared much better, but the record companies started dying. When book distribution becomes primarily digital (as I think it will), it's the publishers who will suffer. The last thing they want is for authors to no longer need them, so of course they're complaining. IMO, this digital trend is good for both authors and consumers.

[LDBoblo]

The publishing industry needs to get on its feet and start promoting paper books if they want to keep that market strong.

Buy some placement in the next post-apocalyptic blockbuster where the main character's ebook reader dies before he can solve the riddle hidden in Chaucer.

I'll call Tom Hanks, you call Dan Brown.

[Daithi]

I'd be interested to see what the financials really are in regards to a typical new hardback book. Is Amazon really losing money on ebooks they sell at $9.99? How much does a hardback actually make after you deduct the cost of printing, distribution, and the discount from unsold books returned to the publisher? What is the author's percentage?

Something about the Hatchette CEO just rubs me the wrong way. He seems to be complaining about Amazon, complaining about free public domain books, and complaining about ebooks in general. I don't know enough about the book business to say he's not justified in complaining, but I still doubt I'd invest in Hatchette.

[Ervserver]

the writing is on the wall.

[GA Russell]

Here's a second article from today's Financial Times in which the author speculates that publishers may limit the distribution of their books to the eBook "partner" of their choice.

http://www.ft.com/cms/s/0/efcbfef2-9...nclick_check=1

[nomesque]

Originally Posted by Ervserver

the writing is on the wall.

Wouldn't that require some sort of ebook/digital projector combo?

In all seriousness, I generally roll my eyes at complaints from traditional (paper) publishers. People in businesses which have failed to keep up with the times generally DO whine about how they're losing money.

On a side note, I'd expect that in the long term, the paperback will probably disappear rather than the hardcover.

[ahi]

Originally Posted by Superlucky

Publishers should be worried, but not because of Amazon's pricing. They should be worried because of what happened in the music industry. When music distribution became primarily digital, the artists fared much better, but the record companies started dying. When book distribution becomes primarily digital (as I think it will), it's the publishers who will suffer. The last thing they want is for authors to no longer need them, so of course they're complaining. IMO, this digital trend is good for both authors and consumers.

Publishers should be worried because the majority of them are corrupt jackasses that screw both authors and customers every chance they get.

They shouldn't be worried about the feasibility of their general business model though. The publishing industry is not really analogous to the music industry. Publishers, despite everybody on this board knowing better, do actually do a lot of work that they are better suited to handle than anybody else... the author included. The same is increasingly less true of music labels.

- Ahi

[Kostas]

Originally Posted by Superlucky

IMO, this digital trend is good for both authors and consumers.

I'm not sure that this is what happened with authors (artists) in the music industry. I suspect they lost a lot of money too. That's probably why they are much more on tour during the last years, trying to compensate income losts.

[doreenjoy]

Originally Posted by Kostas

I'm not sure that this is what happened with authors (artists) in the music industry. I suspect they lost a lot of money too. That's probably why they are much more on tour during the last years, trying to compensate earning losts.

That's exactly right, and it's why concert tickets went up about 1,000 % in the past 10 years.

[Kostas]

Originally Posted by doreenjoy

That's exactly right, and it's why concert tickets went up about 1,000 % in the past 10 years.

And what would be the analogy to concerts for book authors...

[Alfy]

And of course, the article barely mentions the lower cost of distributing books electronically. I think I'll pass on the crocodile tears for Hachette this time around.

[Superlucky]

Originally Posted by Kostas

I'm not sure that this is what happened with authors (artists) in the music industry. I suspect they lost a lot of money too. That's probably why they are much more on tour during the last years, trying to compensate income losts.

Only the big names in the music industry (e.g. U2, Metallica, Springsteen, etc.) made any money from CD sales. The smaller acts only made money touring. So yeah, some of the big artists took a hit, but not all of them. For example, acts like NIN and Radiohead have put out their recent releases for free on the web and claim not to have suffered financially as a result. Record labels are notorious for cheating their artists, and IMO the digital music revolution gave them what they deserved.

I suspect that one reason that ticket prices have risen so much is because of the Ticketmaster monopoly.

[Kali Yuga]

Originally Posted by Superlucky

Publishers should be worried, but not because of Amazon's pricing. They should be worried because of what happened in the music industry....

There is a major difference between the book & music industry though, namely that music had been released in a completely unprotected digital format (CD's) for years. This made it a snap to release massive catalogs of copyrighted music onto P2P networks, and it's fairly clear that massive copyright infringement has devastated music sales. Paper books require much more effort to convert, so it's unlikely that you will get anywhere near the depth of books shared out as you saw with sound recordings.

Originally Posted by Daithi

Is Amazon really losing money on ebooks they sell at $9.99? How much does a hardback actually make after you deduct the cost of printing, distribution, and the discount from unsold books returned to the publisher?

Yes, Amazon and others lose $3-4 per copy on $9.99 new bestseller ebooks. However some hardcover bestsellers are loss leaders for retailers anyway. As to "how much a hardback makes," that depends on who you're talking about: the retailer, distributor, or publisher.

Originally Posted by kostas

the article barely mentions the lower cost of distributing books electronically. I think I'll pass on the crocodile tears for Hachette this time around.

Oh? Margins in the book business are razor-thin. Most books actually lose money; the big sellers subsidize most of the other titles. I believe the old saw is, "if you want to make a million in publishing, start with two million...."

Digital distribution does cost less -- but nowhere near as much less as most people presume. To publish an e-book you still have to pay: the author's advance and royalties, agents, editors, proofreaders, lawyers, marketers, PR, management, overhead and (last but not least) taxes. The retailers make out much better with e-books, since they don't have to manage, warehouse, or distribute inventory, and can cut out the distributors (e.g. Ingram).

Originally Posted by nomesque

In all seriousness, I generally roll my eyes at complaints from traditional (paper) publishers. People in businesses which have failed to keep up with the times generally DO whine about how they're losing money.

The problem isn't that publishers aren't "keeping up with the times." They've adapted reasonably well to many industry changes such as online and discount-chain sales (e.g. Walmart), and POD.

The problem is that it's quite plausible, although not yet certain, that reducing the wholesale price for a high-margin book could destroy their profit margins.

I might add that I have a sneaking suspicion that at least some of the people who deride an industry for failure to adapt to a disruptive technology would not be too thrilled if it was their industry, livelihood and/or profits that were under threat. This is quite evident, for example, when you examine how negatively programmers and IT workers react to their own jobs getting outsourced to India.

[mollybo]

Tell me about it. I purchased five tickets to a tour recently and paid over $80 in "convenience" fees. For whose convenience? I bought the tickets over the Internet! They then tried to charge me extra to print the tickets there and then, but I had them mailed for free (?) instead. So strange. And this wasn't even through Ticketmaster, to my knowledge.