Cheaper e-books will kill us, says publisher

[jridley]

Originally Posted by pdurrant

Cory Doctorow seems to me to have got one thing completely wrong. He asserts that because digital stuff is so easy to copy, no-one will be able to make money selling ebooks, because they'll just be downloaded for free from the 'darknet' by everyone.

I have to agree. I have only had my reader for less than a year, and I'm a slow reader without a lot of time to read, but even so, twice now I've done what I've done many times for MP3s and movies: I got a copy on the darknet, liked it, and went out and bought a copy to give the author money. And in both cases, I not only bought THAT book, but I bought the rest of the series on eBook format too.

I only do that if I can get a reasonably-priced, DRM free version. Unfortunately, right now that means that it only really happens with Baen books, though I'll look elsewhere too.

[jridley]

Originally Posted by BuddyBoy

Actually Gudy, MMPBs do cannibalize hardcover sales, which is why they aren't usually released at the same time as the hardcover.

I know people of all three classes. As for myself, I NEVER buy hardcover, unless it's on remainder. I don't give a damn what the format of the media is, I just want the words. And I'm perfectly willing to wait a year or two to read anything. Heck, I'm a pretty big Harry Potter fan, and I didn't get around to reading book 7 for 6 months, even though we had TWO copies in the house.

If there's nothing but hardcover available, I won't buy it at all. These days, if there's not an eBook copy available, I won't buy it at all, because I have PLENTY of books already on my reader that I need to get to. If you want to sell me a book, it's going to HAVE to be an ebook.

I also know people who are fans of the media; they insist on buying first-edition hardcover copies of all their favorite authors books. They will do so even if there's a paperback right next to it for 1/4 the price. They're on the other side of the equation.

Then I suppose are the majority of people who, as you describe, are just looking for the book ASAP and will buy whatever version is available. In some ways, selling them hardcover is kind of a rip-off. I think of a hardcover as being a more permanent copy; it's what you buy if you want to keep and re-read the book many times. Publishers are just using it as an excuse to get another 10 bucks from impatient people. They could just as well make a paperback copy and put a special gold seal inside and say they're charging $10 for that.

Really you're just asking the people not willing to wait for the paperback to defray all the editing and publishing costs, and paperback sales are just gravy. Few of the people who buy the hardcover actually care that it's a hardcover. Or at least, that's what it seems like to me.

[Charbax]

Originally Posted by Xenophon

The first and most important service provided (to us end-users -- readers) by publishers is that of filtering for quality.

You are extremely mistaken if you think that Web 2.0 cannot provide us with that filtering of quality.

I much prefer my filter be provided by a web 2.0 tool taking advantage of the wisdom of all online users, rather then the filter being by some filthy rich publisher from his golf cart smoking his cigars.

Publishers only care about profit. They turn good books into commercial crap. They need to completely disappear, be exterminated.

When I download an ebook, I want 100% OF THE PROFITS going in the pocket of the author. Publishers taking 75% of my ebook money or tax dollars for free ebook downloads intended to the author, publishers need to die.

There is absolutely nothing that a publisher can do which Google Books and other free ebook repositories cannot do. Web 2.0 is the new publisher, and THAT ONE SHALL NOT be controlled by any filthy publishing corporation. Go away.

[yagiz]

Oh please not "Web 2.0"!!! That nonsensical term wrecks my nerves...

Let's just say a "community-driven Web application" .

[rhadin]

Originally Posted by ficbot

I think it is a false assumption to assume that any e-sale replaces a print sale. I know that I, for one, have never bought a hardcover book in my life. It is too expensive.

I buy lots of hardcover books written by authors I particularly like or on subjects that I am particularly interested in and wish to expand my library holdings about. By the same token, in the case of fiction, a book that is written by a favorite author means 2 sales: one for the hardcover version for my library and an ebook version. But most fiction I buy is just the ebook version -- at least to start. If I find I can't resist the ebook author's writing, then that author gets added to my hardcover buy list. So not all ebook sales replace pbook sales for me.

[Xenophon]

Originally Posted by Charbax

You are extremely mistaken if you think that Web 2.0 cannot provide us with that filtering of quality.

It probably can. But who's volunteering for the slush-pile diving? I'm sure someone will, eventually. Get back to me when the community filtering is up and running... What? You say it'll be a while? That's nice, I'll stick with my favorite publishers for the moment.

Originally Posted by Charbax

I much prefer my filter be provided by a web 2.0 tool taking advantage of the wisdom of all online users, rather then the filter being by some filthy rich publisher from his golf cart smoking his cigars.

Publishers only care about profit. They turn good books into commercial crap. They need to completely disappear, be exterminated.

Of course you are free to have whatever preference you like. But... "Filthy rich publisher from his golf cart smoking his cigars" ??? Which one would that be? Are we talking the publisher of Baen Books? First Jim Baen (RIP), now Toni Weisskopf. Filthy rich certainly ain't the right picture here. Although they're the 2nd largest publisher of SF/Fantasy in the US (after Tor), they're not a giant company -- we're talking fewer than 10 full-time employees. The only people "getting rich" are the few authors who consistently produce best-sellers. And even they are only getting modestly rich. Filthy rich requires Steven King- or Rowling-like sales.

Or did you mean William Schafer of Subterranean Books? His company produces beautiful limited editions of SF and Fantasy titles. And I'm pretty sure that no one is getting rich over there, either.

Sounds to me more like you're doing the smoking, and I'm beginning to wonder what's in those cigars.

Originally Posted by Charbax

When I download an ebook, I want 100% OF THE PROFITS going in the pocket of the author. Publishers taking 75% of my ebook money or tax dollars for free ebook downloads intended to the author, publishers need to die.

There is absolutely nothing that a publisher can do which Google Books and other free ebook repositories cannot do. Web 2.0 is the new publisher, and THAT ONE SHALL NOT be controlled by any filthy publishing corporation. Go away.

The above intemperate language leads me to believe that you are not entirely in touch with the realities of publishing. Certainly, some publishing houses are subsidiaries of large corporations. Tor, for example, is a subsidiary of the Holtzbrink conglomerate. Even there, however, the folks at Tor (many of whom I've met in person, btw) are good folks who are out to produce a quality product. They certainly aren't "filthy rich publishers" who "care only about profit." (Note: I can't judge the folks up at the top of Holtzbrink -- I have no direct experience there.)

Nor does the publisher get 75% of your book-buying $$. In practice, the retailer takes 50%+. The distributor takes another cut that ranges from 20% to 50%. So 75% of the money is gone before the publisher sees the first dime. What you should really be getting excited about is that the Web can remove at least one and sometimes two layers of middlemen. And THAT change gives us (the customers) a 2x to 4x improvement in efficiency. It's not unreasonable for us to expect to split that efficiency improvement between customers, publisher/editors, and authors -- yielding better prices for the customers, higher profits for the publishers and more income for the authors (a win-win-win situation!). I note that your hypothetical Web 2.0 site (that doesn't exist yet!) gets at most another factor of 2 or 3 in financial efficiency. This is not trivial. But it's also no larger an improvement than just dropping the middlemen.

As for "There is absolutely nothing that a publisher can do which Google Books and other free ebook repositories cannot do.", well...

What about the publicity, marketing, and other professional services provided by (successful) publishers? How about the fact that publishers take on a significant financial risk by paying authors an advance against future royalties -- which the author DOES NOT have to pay back if sales do not materialize. Are you suggesting that the authors should take on that risk too?

Consider, as an object lesson, the fact that Lois McMaster Bujold (whose books routinely make the NYT best-sellers list) switched publishers from Baen to EOS because EOS could afford to give substantially larger advances. Everyone involved agrees that the eventual return from her books would be about the same when the dust settled. Baen might even pay more over time, because they 'get' the eBook market and EOS doesn't. But the financial certainty of a big advance is awfully hard for an author to pass up -- even when they expect that the deal with the smaller advance would (probably) be a financial winner over the long haul. I suspect that you'll find most (although perhaps not all) successful authors would be quite reluctant to give up the certainty of advances for the possibility of better returns. In your "Web 2.0" market, which participant is going to assume the risk of fronting the advance money? And how are they going to be compensated for that risk?

If you are thinking in terms of "filthy publishing corporations," you're probably failing to see the full complexity of the issues. So, I must respectfully decline to "go away." Instead, I'll finish by saying "I suspect your facts are... um... uncoordinated."

If you'd like to engage in reasoned conversation on the subject, feel free to do so. Bringing up real examples, actual data (or at least substantiated anecdote) would help bring light to the issues rather than just heat.

Xenophon

[Charbax]

You know very well that the bulk of the books and newspapers industry revenue goes to huge corporations. Niche authors are not read by anyone in the current system and are not viable business for a moms and paps small niche publishing company.

Retailers, distributors, publishers, editors must go. We all know they are completely irrelevant.

Advance payment, publicity and marketing, lawyers whatever else is also completely irrelevant with the advent of Web technologies.

Advance money is managed by Web 2.0 quite simply by proven track record of popularity, quality and number of fans. And that Web 2.0 money is going to be financed through a tax that is much more efficient and which basically is the same as a global standardized subscription plan.

See more at https://www.mobileread.com/forums/showthread.php?t=38831

[Xenophon]

Originally Posted by Charbax

You know very well that the bulk of the books and newspapers industry revenue goes to huge corporations. Niche authors are not read by anyone in the current system and are not viable business for a moms and paps small niche publishing company.

Retailers, distributors, publishers, editors must go. We all know they are completely irrelevant.

Advance payment, publicity and marketing, lawyers whatever else is also completely irrelevant with the advent of Web technologies.

Advance money is managed by Web 2.0 quite simply by proven track record of popularity, quality and number of fans. And that Web 2.0 money is going to be financed through a tax that is much more efficient and which basically is the same as a global standardized subscription plan.

See more at https://www.mobileread.com/forums/showthread.php?t=38831

I presume that you intended all of the above to be either prefaced with or followed by a great big IMHO, yes? In case that acronym isn't familiar to anyone out there, it stands for In My Humble Opinion.

Anyway... Here comes some more of my NOT so humble opinion.

You wrote: "Niche authors are not read by anyone in the current system and are not viable business for a moms and paps small niche publishing company."

Well, anyone who write SF, Fantasy, Romance, Western, or any of the other "genre" fiction fall right in your "small niche publishing company" dis. And yes, actually, those books are read by people in the current system, and are a viable business both for "moms and paps small niche publishing company" and for much larger businesses. You'll find Baen books in the SF/Fantasy section of any bookstore in the US that's large enough to have such a section. Ditto for books from Tor, etc. Heck -- they're even in airport news stands and (some) grocery stores. Businesses with national distribution have certainly grown beyond the "moms and paps" stage.

As for the idea that "we all know" that retailers distributors, publishers and editors are completely irrelevant. Hmmm... I've provided you with examples (admittedly anecdotal, but verifiable and indicative). You've responded with assertions of what "we all know."

"Advance payment [...] is completely irrelevant with the advent of Web technologies." Beautiful assertion there. I've provided with at least one example where they were not irrelevant. In your other thread, I've given another (Lee & Miller and their "tip jar" novels). How about some actual examples that illustrate your point. Not assertions about how wonderful everything "is going to be" in some nebulous future -- but rather real examples now.

Your last paragraph (starting with "Advance money is managed by Web 2.0 quite simply by proven track record of popularity, quality and number of fans.") seems to be more unfounded assertion. I'm sure that Steve Jordan and Jeffrey Carver (both are authors who participate here at mobileread) are eager to hear from you exactly how and where they can get their advances for their next books based on their "proven track record of popularity, quality and number of fans." Or did you mean to suggest that is how things will be -- or perhaps "may be" -- in some future that hasn't arrived yet?

I eagerly and respectfully await your real-world examples, complete with authors, web-sites, and actual (not hypothetical) results.

Xenophon

[Charbax]

I don't need to prove to you that you can measure hits, measure trafic, monitor user activity on the Internet. Don't you think Google Books has pretty accurate statistics on the number of time each page of each ebook has been loaded on their site? Don't you think Amazon has a pretty good idea how many times the ebooks have been loaded on the Kindle store? Don't you think BitTorrent trackers can count amount of times the files are downloaded? Don't you think that authenticated server statistics can be reliably monitored? Don't you think that a new type of Open Android Connected E-Reader can report statistics of actual reading time on each page voluntarilly to a Government supported independent statistics measuring system?

Simply take that, you've got a way to pretty accurately give money to the artists from a subscription model or from a tax model based on the popularity of their works. Same thing for advanced payments. Would you like me to make you a drawing?

Sure the publishers, distributors, retailers aren't dead yet. Sure the Obama art tax hasn't been introduced yet. That's what this forum is for, discussing what has to happen with ebooks in the future.

I just did a couple of Google searches, I cannot find statistics showing which shares of the current overall book publishing industry revenue that goes to the 10-man Science-Fiction publishers and which share goes to the major publishers for commercial books. I've heard it before and it makes sense, and you are welcome to do the research and post the real statistics here. The bulk of the publishing industry revenue goes to a few large publishers publishing a few very commercial books. That very few, probably fewer and fewer authors are able to make a living under the current system. That more and more 10-man Science Fiction publishers have to close down shop and that those authors aren't going to be published at big publishers unless they are sure to be making huge profits.

[Steven Lyle Jordan]

So: Your "solution" is absolutely perfect, 100% transparent and unhackable web technology and artist's welfare.

Good luck with that.

[Xenophon]

Charbax:

Of course those things could be done -- it's just a SMOP (small matter of programming). But that's a very different claim than you were making earlier. There's a world of difference between "these parts <list of pieces> could potentially be combined to make it possible to..." and "Advance money is managed by Web 2.0 by..." (I added italics to your wording to highlight the key problem point.) You do see this difference, right?

And I most definitely and deliberately include the usual cynicism heard when calling something "just a SMOP." It's much like the difference between "I think that the Web can be used to disintermediate middlemen so that customers can get books (and many other products) quickly and cheaply -- it's a small matter of programming" on the one hand, and "I'm Jeff Bezos and I've built Amazon.com" on the other.

On to your second paragraph. Combining those things would be only the barest beginning to "pretty accurately give money to the artists from a subscription model or from a tax model based on the popularity of their works. Same thing for advanced payments." To achieve the "pretty accurately" part, you need to figure out how to keep people from gaming the system. See problems with internet voting. And click fraud. And on, and on. And even after you get that part done, you still need to take on issues of privacy, security, authentication and authorization, and far more. And with the billions of dollars that are at stake (all of it Other People's Money, by the way) you'll have a much harder time than (for example) Amazon and eBay have now. After all, if I try to fraudulently boost the popularity numbers for a book at Amazon right now, I have to actually pay them to do so. But if it's just clicks and OPM, well...

And after all of those issues comes the politics. How are you proposing to keep Mrs. Grundy (excuse me, that's Senator Grundy) from deciding that <fill in your favorite type of novel here> is just too extreme to be supported by public money? And how do you plan to keep the government's nose out of the records to avoid problems like the ones I alluded to in your other thread? And will your solution work when <fill in your least favorite politicians here> are running the government? Remember, it's not the good guys who are the problem, it's those other evil types from the other side of the fence (whichever side you're not on, that is).

And let's not forget that the defenders of High Culture (TM) will insist that their favorite art forms should receive more funding than the popularity numbers warrant. As will the defenders of low, middle, and off-the-wall culture! You'll have to fend them all off somehow too.

For your last paragraph, "share of book publishing industry revenue" is a very very different question than your original "Publishers taking 75% of my ebook money or tax dollars for free ebook[...]." Some simple arithmetic that fits on the back of a napkin will demonstrate that the publishers never even see anything close to "75% of my ebook money." Even in (most of*) the ebook industry, there's a distributor and a retailer. Each of those parties gets their mark-up -- typically 35% to 60%, but sometimes as much as a 2x markup. Quickly applying a little arithmetic, we see that the publishers gross is somewhere between 55% and 39% of the retail cost (25% with the least cost-efficient retailers and distributors). If you're talking straight revenue, that's the end of the story. If you're talking profits, you need to remember that the authors get paid out of the 25-55%. So do the editors, and the publicists, and the guy that formats the books, and the tax accountants, and the secretary who really keeps the place running, and on and on. Aside: yes, I know that the marginal cost of the next ebook sale is much lower than for the next paper book sale. Bits are wonderful that way. But they don't (yet) make up a large enough fraction of total sales for that effect to seriously kick in.

Lastly, far from "more and more 10-man Science Fiction publishers have to close down shop," the one I've been using for my real-world example has been growing (measured by unit sales, by gross revenue, and by profits) at better than triple the rate of the rest of the publishing industry. They even grew in the past year while the rest of publishing (broadly speaking) shrank. And they have an average sell-through of around 80% (If you don't know what that means -- and how unusual it is -- ask one of the authors who show up here to explain it to you). Oh yeah -- they're also one of the very few in the publishing industry who understand that eBooks should be inexpensive and DRM free because that combination maximizes sales and profits for the publisher AND royalties for the authors AND benefit for the customers. They've put their money where their mouth is (and have gotten lots of my money as a satisfied customer as a result).

So please, do us all a favor: Be careful to distinguish clearly what is proposal, opinion, hypothesis, future direction (or whatever) from how things are now. That means -- as an example -- phrasing things like "Advance money is managed by Web 2.0 quite simply[...]" as something more like "It seems to me that advance money could be managed through a suitable measurement system using measured popularity to compute the size of advance an author would (hypothetically) receive from the tax money pool I've proposed that we should create." (or something like that). Your original wording makes it sound like authors should be running outside with buckets 'cause it's raining money -- right now! Being clear about that distinction might help you to avoid sounding like you've been hitting the Kool-Aid too hard. And then -- just maybe -- we could have a useful discussion with more light than heat.

Xenophon

[Xenophon]

I missed filling in the *-d note in the above message. Here it is:

*Some publishers have been smart enough to cut out one or more levels of middlemen in their eBook stores, and have arranged better terms with their retailers. So this picture isn't quite correct for the entire industry, just most of it.

Which brings me to my alternate proposal. Why not use the Web for what it's good for (disintermediation, that is) and wipe out the distributors (mostly) and the retailers (to some degree). The need for those levels of the current system (especially the distributors!) is far smaller than the need for the important part of what the publishers do. Cutting out those levels of the distribution chain would free up somewhere between 50% and 75% of the current price of ebooks. Splitting that money between authors, publishers, and consumers would leave all three parties better off, with no need to involve government or tax $$ at all!

Hint: This approach is already being used very successfully by some of the publishers in the eBook business. It works. They make more money. We spend less. Authors get more. What's not to like? Remind me why we needed to drag government into it?

Xenophon

[Alisa]

Originally Posted by Xenophon

I missed filling in the *-d note in the above message. Here it is:

*Some publishers have been smart enough to cut out one or more levels of middlemen in their eBook stores, and have arranged better terms with their retailers. So this picture isn't quite correct for the entire industry, just most of it.

Which brings me to my alternate proposal. Why not use the Web for what it's good for (disintermediation, that is) and wipe out the distributors (mostly) and the retailers (to some degree). The need for those levels of the current system (especially the distributors!) is far smaller than the need for the important part of what the publishers do. Cutting out those levels of the distribution chain would free up somewhere between 50% and 75% of the current price of ebooks. Splitting that money between authors, publishers, and consumers would leave all three parties better off, with no need to involve government or tax $$ at all!

Hint: This approach is already being used very successfully by some of the publishers in the eBook business. It works. They make more money. We spend less. Authors get more. What's not to like? Remind me why we needed to drag government into it?

Xenophon

I do think this is the future of publishing. Instead of these huge behemoths that got to grow and expand their bloated bureaucracy through their positions as gatekeepers to an expensive and arcane process, publishers will be more of a partner with the author. They will provide services that authors need: editing, formatting, publicity. Houses like Baen's and Tor have proven you can do this with far fewer people and do well while being fair to the customer. You don't need layers upon layers of executives and middle management. These people exist in the current publishing world because it can support them, not because they're necessary for maximizing profit. The fox is guarding the henhouse. The people in charge of making the decision to pare down aren't going to admit they need to cut themselves. However, just because the big publishers are bloated messes doesn't mean all things a publisher can offer are worthless.

Will cheaper ebooks kill the dinosaurs? Probably. Will they kill publishing? I doubt it. I think a good publisher can out-compete the proposed Web 2.0 free-for-all. Books are lengthy affairs. It's not like an article or video you spend a minute with and then reddit or digg. The vast majority of books that did not have the benefit of a critical editorial eye would get downvoted in the space of one page. I doubt many people would endeavor to edit them from the goodness of their hearts. I don't think I'd spend many of my precious hours sifting through the haystack for that one sharp, shiny needle. I already have a job. In this system authors would be turning to editors and publicists to raise their book up anyway. Editing isn't just checking for typos. It's giving the author another perspective on all sorts of aspects of the book from pacing to plot to characters to clarity. These days, even small businesses hire consultants to raise their ratings (and sometimes lower that of competitors) on places like Yelp.com. The idea that we'd escape that with books is a bit overly optimistic IMO.

[starrigger]

Good answers, Alisa and Xenophon.

[ProDigit]

Loooong answer Xenophon...
I don't think I could follow exactly what you where trying to say, but nevertheless... Thanks for sharing!