e-Books: Averting a Digital Horror Story (BusinessWeek)

[=X=]

Here is an interesting article from Businessweek. They do a great job of posting views from the publishers side. What I like is they cover many of the commonly mentioned publishers but also mention ORiely and their efforts.

Anti-Kindle folks might find this article interesting.... or those same folks might be hoping Kindle wins out.

One thing I really like about this article is they also compare the eBook industry to the music industry, but from the publishers side.

e-Books: Averting a Digital Horror Story
Amazon.com's growing might and the sizzling success of the Kindle has publishers terrified. Hachette, Harlequin, and others are fighting back

On Christmas Day, for the first time in its history, Amazon.com (AMZN) sold more digital books than the old fashioned kind. It was a watershed moment for the book industry—but it's scaring the hell out of traditional publishers.

http://www.businessweek.com/magazine...2050103172.htm

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[dsvick]

An interesting article, I was fairly impressed that it did not seem to jump right on the doom and gloom bandwagon like a lot of other ones do. This seemed to be more of a light covering of some of the issues, it actually left me sort of wanting for more detail.

My question is why do none, or at least very few, of these articles mention the Baen free library? It seems to me that that is the poster child for how it could/should be done - unless it is not working out as well for them as it would seem. Although, since they keep adding more books to it, I have to assume it is at least not hurting.

[Elfwreck]

Their big worry: Amazon will end up with the same kind of pricing power in books that Apple has in music, and that the book industry will suffer the same kind of bruising decline.

The good news: Books, unlike songs, are wanted as complete objects; people don't want to download "chapters 3 & 7 only." A lot of what's killing the music industry is single-track instead of album sales.

The bad news: It's coming anyway. Remove the costs of print & distribution, and the public is not willing to pay as much for the product. Publishers who've been using those to mask their profit-gouging are going to find a disillusioned marketplace that's perfectly willing to shift to their competitors or bootlegs rather than pay what they think are excessive prices.

[tapar]

I mostly agree but I could see people wanting to perhaps buy only 1 or 2 stories in an anthology and not buying the rest.

[=X=]

@elfwreck. I think the real point is the price control and not the product. The music industry controled the album price by adding a few good songs filled with a bunch of junk songs. They added enough good songs to warrent buying the album. The additional songs have the illusion that there was value in buying an album.
In reality it was those few songs that people where paying for.

In thr book industry its the same difference with hardbacks and paperback. Selling a hardback gives the customer the illusion that they are getting more thus the huge price differences are warranted.

Apple controlled the price by controlling the market and keeping the price down. Albums wher not effectively priced they where overpriced. Think about it right now it is still cheaper to buy an album than to buy each song individualy. If the albums where properly priced the music industry would not be hurting but making even more money as people are more willing to spend a few bucks buying what they want versus paying full price for a few songs.

The point I'm trying to make us that apple squeezed out the premium the music industry was use to making and athast is why they are hurting. And now amazon is also threatening to squeeze out the publishers huge premium as well. The problem here is that while the music industry was taken unaware and consumers benifited from this.

the publishers have learned from history and are fighting hard to prevent this if amazon wins that means better prices for us all if the publishers win we not only pay the high prices of paper books but also lose the right of ownership

=X=

[garygibsonsf]

I'm a little wary about that whole thing regarding 'selling' more ebooks on Christmas Day than regular books. Apparently most of those 'purchased' books were freebies, which dominate the Kindle's top 100. Which makes the whole story a big fib in the first place. People were just testing their Kindles out with stuff that didn't cost them anything.

[John Bailey]

Originally Posted by garygibsonsf

I'm a little wary about that whole thing regarding 'selling' more ebooks on Christmas Day than regular books. Apparently most of those 'purchased' books were freebies, which dominate the Kindle's top 100. Which makes the whole story a big fib in the first place. People were just testing their Kindles out with stuff that didn't cost them anything.

It's PR fluff. Just as the Kindle outselling everything else is PR fluff. Amazon are the only ones who keep releasing "information" about the success of the Kindle. So nothing to really compare it to.

Press releases are usually half truths at best. And very misleading in general.

[cian]

Do Amazon sell many books on Christmas day? I'm guessing not... So yeah, even if people paid for those books, it was simply so they had something to read on their new toy.

[cian]

@X: Publishing isn't terribly profitable, so I'm not sure its fair to accuse publishers of profiteering. And Amazon is, arguably, abusing its quasi-monopoly position with regards to publishers. Publishers have been struggling for a while, and while this is partly their fault due to too much consolidation (Publishing seems to work best, and be most profitable, at a fairly small scale - and the owners of publishers expect ludicrous returns, and have geared up on debt accordingly) and short term thinking, there still are costs and benefits associated with publishing. They're not like the music industry,

But selling ebooks at hardback prices is stupid. A more sensible approach would be to gradually reduce prices. Those who can't wait and have to the book now would pay more (just as they now buy hardbacks), while the backlist would become far cheaper than current books (which is reasonable, as there'd be no cost to keeping them in print, and the production costs would either have been met, or are never going to be met anyway). Most of the money on books is made in the first couple of years and this should work. And there would be new possibilities for selling short stories, and perhaps charging slightly more for books customised to particular needs (large print for a [Brand] [Model] whatever) and even renting books out.

And while revenues might go down due to things like piracy, costs are also going to fall significantly also. And I suspect the bigger problem with piracy will not be piracy, but genuinely free content. Piracy may well be the least of it.

[devilsadvocate]

Originally Posted by Elfwreck

The good news: Books, unlike songs, are wanted as complete objects; people don't want to download "chapters 3 & 7 only." A lot of what's killing the music industry is single-track instead of album sales.

True, so maybe a better analogy might be video game sales?

Valve co-founder Gabe Newell announced during a DICE keynote...that [a] half-price sale of Left 4 Dead resulted in a 3000% increase in sales of the game, posting overall sales (in dollar amount) that beat the title's original launch performance.

It's sobering to think that cutting the price in half, months later, made more money for Valve in total than launching the game at its original $49.95 price point. (And, incidentally, that's the price I paid for it. No worries, I got my fifty bucks worth of gameplay out of this excellent game months ago.)

Source: Jeff Atwood, http://www.codinghorror.com/blog/archives/001293.html

I can very easily see the same thing happening with ebooks. Publshers will initially begrudge the digitization for perceived lost profit, but it'll come down to survival of the fittest.

[eGeezer]

I was particularly taken with this observation, presented in the same casual (non-hysterical) tone as the rest of the article:

Harlequin CEO Donna Hayes says electronic books account for about 6% of total sales now, but she expects that to double in a few years. She says digital sales appear to be adding to the company's revenue, rather than cannibalizing traditional sales. Harlequin's revenues rose 7% over the first nine months of the year, while U.S. book sales were up 3.6%. "It has grown our business so far," says Hayes.

A sentiment oft mentioned in these forums.

[rhadin]

Originally Posted by =X=

In thr book industry its the same difference with hardbacks and paperback. Selling a hardback gives the customer the illusion that they are getting more thus the huge price differences are warranted.

X, I'm one of those mislead consumers who thinks he gets more value for his money by buying hardcover rather than paperback. I only buy hardcover p books, and I buy quite a few of them at my local B&N. In 2009, I bought nearly 100 hardcovers. The value is the life expectancy of the book; that is, whereas my paperbacks, when I used to buy them many years ago, began to fall apart after the first reading and became "ratty" looking quickly, my hardcovers remain pristine and thus are in good enough condition to hand down to my grandchildren, perhaps even to retain as collectibles in some cases. Which is, BTW, another value. Some hardcovers actually do increase in value because of their longevity, for example my first edition of Sinclair Lewis' It Can't Happen Here. Haven't yet met a paperback version that did (where the book was published in both soft and hard cover forms).

Originally Posted by =X=

the publishers have learned from history and are fighting hard to prevent this if amazon wins that means better prices for us all if the publishers win we not only pay the high prices of paper books but also lose the right of ownership

I think eventually you will see publishing devolve into two forms: the hardcover version and the ebook version; paperbacks will go the way of the dinosaur. Some books simply are much better in p form than e form, at least in the current state of formatting capabilities and ebook reading devices, and I think there will always be people who see value in hardcovers -- and not because of the smell of the paper.

[rhadin]

Originally Posted by garygibsonsf

I'm a little wary about that whole thing regarding 'selling' more ebooks on Christmas Day than regular books. Apparently most of those 'purchased' books were freebies, which dominate the Kindle's top 100. Which makes the whole story a big fib in the first place. People were just testing their Kindles out with stuff that didn't cost them anything.

Aside from the freebies issue, you have to consider what constitutes a sale. Amazon, like all legitimate retailers, counts a sale when the credit card is charged and the credit card is generally not charged until the day the item is shipped. With no ability to ship p books on Christmas Day, I'm not surprised that ebooks, which "ship" immediately outsold pbooks.