Ex-CEO of Random House on ebook pricing and the future of publishing

[garygibsonsf]

Originally Posted by Penforhire

... why would I trust a publisher more than, say, a SF reading group?

Err ... because they're dedicated professionals with decades of experience under their belt and a record for finding all those knockout books you like to read and helping their authors develop from ingenue to sophisticated story teller?

[rixte]

Originally Posted by garygibsonsf

Err ... because they're dedicated professionals with decades of experience under their belt and a record for finding all those knockout books you like to read and helping their authors develop from ingenue to sophisticated story teller?

This.

There really is a significant difference in quality between an unedited manuscript and a finalized one. There are always exceptions to the rule, but I prefer the quality of a polished manuscript. Not that it doesn't sometimes backfire - I can think of a lot of big name authors where their work actually seems to decrease in quality, because they have enough clout and influence to reject editorial suggestions.

[NormHart]

I find myself agreeing with the article's authors on ebook pricing, much to my surprise. Certainly if the publishers fulfill their responsibilities, both to authors and to customers, there is justification for them getting their share of the profit.

However, it is amusing to note that one of the authors was from Random House Publishing Group. Random House recently floated their free ebook site http://www.suvudu.com/freelibrary/ and one of their first offerings was His Majesty's Dragon by Naomi Novik. I got a copy of the ebook and compared it to the paperback I already owned. I was more than surprised to discover that the quality of the editing/proofreading of the ebook was far below the print version with quite a few simple errors in the ebook that were not in the print copy.

It is also interesting to look at the prices of another book in the series. The Throne of Jade, the second book in the series, is advertised at $7.99 on the Random House site for both paperback and ebook. The book is also available from Random House as an abridged audio download for $14.98 and unabridged audio download for $25.00. (Is it any surprise that Random House was one of the first publishers to disable TTS in their ebooks?) I paid $7.50 for the paperback at a bookstore, the paperback version is no longer available at Amazon except used but the ebook version sells for $6.39 and the hardbound version is $78.75 (The newest book in the series hardcover price is $16.50). Following the pricing guidelines proposed in the article the ebook version should be around $3.00-4.00 which seems more reasonable than the current ebook price if the editing/proofreading is up to snuff.

It is worth mentioning that Random House Publishing Group is a firm supporter of DRM and has been diddling with author's royalties with respect to ebooks of late. I don't buy ebooks from them but I'll take free ones.

[Lemurion]

I don't like DRM, but I'm learning to live with it. I'm more concerned with pricing, and while I'd love to see $2-3 as a regular price I'm perfectly willing to pay $5-8 for a novel. I think ebooks of books currently available in paperback should cost about the same (ideally a little less - but never more) as the mass market edition.

[thebrave]

Originally Posted by garygibsonsf

"
I could just about accept the 2 dollars argument for an older book that's deep into the long tail ... heck, quite a few people have books like that up for free now. But it's a ridiculous notion. I've seen this view promulgated on these boards, and I'm sorry but it annoys the hell out of me. You're effectively saying you want me and other people like me to do the next best thing to giving away our work for free. Sorry, doesn't cut it. You want quality entertainment, pay for a decent price for it.

Well, my point is that on electronic releases, the profit that goes to (author + publisher) should be higher than in traditional print books because you don’t have to make and print paper, send to store, pay them, take the unsold books back then dispose of them.

So the profit of (author + publisher) is what, 5x higher? Maybe more? it has to be, we're comparing selling a digital good in a world where bandwidth is (almost) free and carriyng things all over the country in a truck.

So like I’m cheap (and I still have good eyes) I usually buy soft backs (10E average), if I download an eBook for 2E on your publisher website, then you and your publisher are earning the same, maybe more, no ?

Plus the "Google" point of view of that transaction: you just sold a book to me.
No middleman, I just came to you. You can contact me (no spam please), you can infer my taste from anything else I did from you or you publisher or platform. That could have a value.

Then, forgetting about all the things that went wrong in everything I stated above, (but I would really love to be corrected, because I tend to think that the dead tree related costs makes for 80% of the cost of an newspaper/book/magazine) if buying a ebook for 2E is a acceptable deal, then it looks your book is way cheaper than a pack of cigarettes, but hopefully everyone (author and publisher) get more.

[Elfwreck]

Originally Posted by Moejoe

Promoting talent? It's bs PR talk at its finest. They're all terrified that readers will take over the role of discovery and authors will promote themselves.

Not all authors want to promote themselves. Some of them just want to write books. Some of them who are very, very good at writing books, are lousy at PR.

When Baen promotes a new author, I pay attention. I don't love everything Baen publishes, but I know it'll be in a quality range I can enjoy, even if the book itself isn't to my taste. I don't want to scour a hundred potential author websites looking for new sci-fi talent.

I read some romances... and again, I certainly don't want to search for those on my own. Harlequin rarely publishes anything I consider great, or even memorable--but almost all of their works fit in my "light entertainment for an afternoon" zone. Knowing they consistently provide content in that niche, saves me a lot of hunting time.

I read Pagan religious books. I dislike much of what Llewellyn publishes; I don't touch their books unless a friend I trust recommends one in particular. OTOH, a lot of people do like their books. And I am willing to try Weiser or New Falcon from an interesting title--I know that their choices fit what I like to read.

The problem's going to be the non-niche publishers, who'll need to figure out how to cater to *all* their types of readers. Right now, they're working more as distributors. While they do spend time (and money) finding new authors and guiding them through the process, the public doesn't see it, doesn't know how their selection process works... doesn't know how to recognize books by publisher, rather than by genre or keyword.

A person might know she likes "murder mysteries in rural settings," but not realize that one publisher has an entire line of those.

[Moejoe]

Originally Posted by Elfwreck

Not all authors want to promote themselves. Some of them just want to write books. Some of them who are very, very good at writing books, are lousy at PR.

When Baen promotes a new author, I pay attention. I don't love everything Baen publishes, but I know it'll be in a quality range I can enjoy, even if the book itself isn't to my taste. I don't want to scour a hundred potential author websites looking for new sci-fi talent.

I read some romances... and again, I certainly don't want to search for those on my own. Harlequin rarely publishes anything I consider great, or even memorable--but almost all of their works fit in my "light entertainment for an afternoon" zone. Knowing they consistently provide content in that niche, saves me a lot of hunting time.

I read Pagan religious books. I dislike much of what Llewellyn publishes; I don't touch their books unless a friend I trust recommends one in particular. OTOH, a lot of people do like their books. And I am willing to try Weiser or New Falcon from an interesting title--I know that their choices fit what I like to read.

The problem's going to be the non-niche publishers, who'll need to figure out how to cater to *all* their types of readers. Right now, they're working more as distributors. While they do spend time (and money) finding new authors and guiding them through the process, the public doesn't see it, doesn't know how their selection process works... doesn't know how to recognize books by publisher, rather than by genre or keyword.

A person might know she likes "murder mysteries in rural settings," but not realize that one publisher has an entire line of those.

The problem is *all* new authors have to promote themselves, it's just part of the business. Doesn't matter how good they are, or what kind of agent they have, they're going to end up on the treadmill of trying to get their work noticed. The companies now (unless you're tied in because of celebrity) will do very little to market you, that's now down to you as a writer and probably has been for a long time. As you said, Baen has a captive audience, it's a niche, they really don't have to market much because the audience seeks them out. There's already a trust relationship going on before you purchase from Baen; for me they're a club of like-minded readers who just happen to publish sci-fi. The same could be said of Angry Robot (who have a similar Baen like approach and respect for readers).

Oh. I'd love to live in a world where the writer can just write and that would be the end of it. Cloistered away from the reading public with several layers of agents, publicists and marketing droids between me and the reader -- but that's just not how it is any longer (if it ever was).

[Moejoe]

Originally Posted by dadioflex

Did we see this?

http://www.forbes.com/2009/06/04/boo...e-twitter.html

Anyway. If books were cheaper, would you read more? Do you read according to what you can afford? Just playing Devil's Advocate. I'm all for cheaper ebooks, but I think a two dollar ebook might sell better than a fifteen dollar one, but over all there are going to be winners and losers.

From that article above.

"In short, book-writing is a worse-than-ever means to a livelihood, and mass-market renown is disappearing as a concept, fractioning into a million niches."

ie, if people forego the fifteen dollar book in favour of the two dollar one, then some talented writers are going to be looking for a different way to make a living.

Thanks for this article, the last paragraph is very telling:

In short, book-writing is a worse-than-ever means to a livelihood, and mass-market renown is disappearing as a concept, fractioning into a million niches. Ultimately the only good reason to write books remains what it probably always was: The compulsion to try to entertain, persuade or make meaning is irresistible, and the process absorbs you like nothing else. If it doesn't, there's no reason to bother.

[Alisa]

Originally Posted by dadioflex

Anyway. If books were cheaper, would you read more? Do you read according to what you can afford? Just playing Devil's Advocate. I'm all for cheaper ebooks, but I think a two dollar ebook might sell better than a fifteen dollar one, but over all there are going to be winners and losers.

I think if books were cheaper, many people would buy more books. It wouldn't necessarily change how much they read, but how they acquire what they read. In the pbook world, new books compete with used books, the library and your friends' bookshelves: cheaper but less convenient. This is why the price goes down over time. They extract the high margin from people who want it badly enough that they will pay a premium price. Those that can't pay that price and those that are willing to wait will have greater opportunity to read the book more cheaply or for free as time goes on. More copies show up used. The wait at the library for the title gets shorter. One of their friends who bought the book is done with it, etc. When the cheaper paperback comes out, they can bring in some of these folks who didn't want to pay so much but are still willing to buy a new copy whether for convenience or collecting.

In the ebook world, they compete with the illegal download. This is available quickly and conveniently from the time of release or shortly thereafter if the book has any popularity. This makes price much more important because convenience is no longer in the mix. Sure, some of us won't download illegal copies because it's against our ethics. I don't think that's a majority of people. They will need to offer a fair price and hopefully some other compelling benefits to keep people buying.

[junkyardwillie]

I'm all for lower priced ebooks but to tell the truth the publishing industry just isn't built for it yet and they will need to do some slimming down if its ever going to happen.

eBooks sales are growing at a crazy rate (170% or something like that) compared to the decline in book sales but the problem is that their is a much smaller base that eBooks are growing from compared to paperbacks. Paperbacks are still the lifeblood of a publishers income.

The only reason why unknown authors can get published is because there are James Pattersons that are selling like crazy for prices not far above what a new author would sell for. Every book sale has to account for the risk not only of the book that you are buying but the book that you're not buying because the costs are mixed. It would make sense from a business standpoint to charge $50 for a James Patterson book because you know people want it and $0.50 for a new author because its not known how many people will want it or better yet why even print it at all. I think publishers are afraid to move ebook prices substantially lower than hardback and paperback books because it may dramatically shift consumer attitudes toward ebooks and people will buy them up in droves.

How many people that never bought a book in their life are going to because an eBook is $5? Not many because they could probably get the same book used on amazon for $2 if they wanted to. The issue with the publishing market share between Hardcover, paperback and ebooks is that it is mainly based on cannibalization. The market for books is pretty much defined, there are people that read and people that don't. If you make ebooks much cheaper than paperback and hardcover books, there will not be a flood of new readers; old readers will shift from hardcovers to ebooks (more likely paperback to ebooks as people that buy hardcovers usually are more wedded to the format). That is a drastic drop in the profitability of the books being produced for a publisher. Therefore what a publisher would need to do is stop taking risks with new authors and stick with the homerun hits (established authors) but then that depletes your future revenue projections if an old author retires or moves to a different publisher.

Publishers are going to have to really sit back and find a new way to rationalize their business model. They are still needed for promoting (most new authors are not going to have a couple ten or hundred thousand dollars to go on a promotion tour for their book, unless they plan on murdering someone on youtube it might be difficult for them to get mass appeal). How will the publisher be compensated for its risk on these authors if they aren't getting the same upside? The answer is they need to cut their bloated costs which will take time. It will be interesting to see how the whole thing develops and I foresee a lot of news on major publishers revamping their business structure as eBooks become more prominent (a few of them may end up going under if piracy can not be stymied as new readers and ways to read ebooks are debuted) but ultimately they will have to give consumers what they want at a reasonable price or similar to music and mp3s, people will find it elsewhere

[Alisa]

Originally Posted by Penforhire

I sort of understand the promoting talent aspect but I feel that paradigm will still be broken. The noise-to-signal ratio is increasing on the internet. I expect we will evolve toward a group consensus or trust rating system to avoid more of the chaff. That applies to books as well. We will search for aggregate ratings from individuals or groups with our taste. I suppose a publisher could be one of those trusted sources but why would I trust a publisher more than, say, a SF reading group?

When we stumble across authors we like why wouldn't we simply track their new work from their personal blogs or sites? No need for a publisher to tell me there is a new book available from them. I've probably been following the book's progress prior to release!

I think the noise-to-signal ratio is at the point where it can easily overwhelm these sorts of group ratings. The slush pile of bad writing is more than most people will sift through and just like marketeers manipulate Amazon reviews and Yelp ratings, they will game that system, too.

[griffonwing]

Originally Posted by Jack Tingle

What's ironic about the article is that Mr. Olson's innovative vision (and I credit him with having vision) is still technologically years out of date. All of his technical suggestions are things you can do today if you want to invest a small amount of money and a slightly larger amount of time. If someone wanted to do them routinely, it would be a few million and a year to put them into place in something like Express or Indesign.

His 3 points are insightful, and some publishing company ought to snap him up, or at least give him a consulting contract and actually listen to him.

Regards,
Jack Tingle

I searched for EPUB and INDESIGN and found this link.

http://blogs.adobe.com/digitaleditio...sign-epub.html

[junkyardwillie]

Originally Posted by Alisa

I think the noise-to-signal ratio is at the point where it can easily overwhelm these sorts of group ratings. The slush pile of bad writing is more than most people will sift through and just like marketeers manipulate Amazon reviews and Yelp ratings, they will game that system, too.

Second that, people think that everything going digital makes it easier to self-promote but in reality it is harder unless you have some sort of extreme gimmick, how many people are video blogging youtube, now how many of them are you following daily. There is a flood of information available to people nowadays, there's probably 100,000 things that come out everyday that we have no idea of. If you don't have access to major news / information hubs you're going to fall through the cracks before you even get a chance to start.

Publishers still have a use and an important one because they have connections to get the word out to a mass audience which is still difficult. You can't google a new author if you've never heard of them and don't know that they are writing a book. The established players will be able to go independent more easily but in reality they probably wont want to deal with all of the hassle that's involved (opportunity cost of the amount of extra effort they need to put in vs what they will get from nixing the publishers probably isn't worth it, they could spend that time writing another book)

[tompe]

Originally Posted by Alisa

I think if books were cheaper, many people would buy more books. It wouldn't necessarily change how much they read, but how they acquire what they read.

But that will not happen if books have DRM since you cannot know that you will be able to read the books you buy if you wait to long. I buy or bought much more paper books per year than I read but I know that I can read the book any time in the future if I keep it.

From my point of view a ebook with DRM is significantly less useful than a paper book so I am not willing to pay much for such a book. And I will not remove DRM since I am then showing that I support books with DRM by buying them.

[junkyardwillie]

Originally Posted by Alisa

In the ebook world, they compete with the illegal download. This is available quickly and conveniently from the time of release or shortly thereafter if the book has any popularity. This makes price much more important because convenience is no longer in the mix. Sure, some of us won't download illegal copies because it's against our ethics. I don't think that's a majority of people. They will need to offer a fair price and hopefully some other compelling benefits to keep people buying.

Also publishers have a chance to produce a better product than what is available illegally in most cases (poor OCR'd docs, PDFs, etc.) so if books are available at a reasonable price (around the $10 mark is what I think) people are more likely to buy an eBook than to download it illegally because its not worth the time and effort to find a good illegal download version. There's a big opportunity here for them that they need to capitalize on. The music industry had it much rougher because the illegal music downloads were of the same quality and were actually better because they didn't have DRM, books on the other hand are not as popular therefore do not have the same infrastructure as MP3s did in their bootlegged form.