John Grisham speaks out on the future of pbooks and ebooks

[zacheryjensen]

Originally Posted by Kali Yuga

Sure. But let's not forget we're also in an era where Jane Doe in Anytown USA can share her entire music collection with millions of her closest Internet Buddies.



It isn't. It's a business model based around the reality that it takes a fair amount of resources to write and distribute a book, even in an electronic format.



Then their "knowledge" is flat wrong. In most cases, an ebook only costs 10-12% less to make than a paper book.

Why? Because whether in paper or electronic form, costs include: Author's advance and royalties; research; editing; proofreading; design and layout; agents' fees; legal fees; marketing and PR; international costs (e.g. translations and rights); retailer's cut; payment processing costs; customer service; taxes; and other overhead costs for publishers and retailers.

Most books don't even make a profit, it's the blockbusters that pay the bills.



That's nice, but it doesn't make the fundamental costs of producing and selling books go away.








I have no problem with you having that approach to reading -- for yourself -- but it's a very narrow vision. Plenty of people (including yours truly) re-read books, or read large books that take a great deal of time to finish. You really need to account for a variety of reading styles and reader's behavior when developing a theory of how to make over an entire industry....

Besides, subscription services for electronic goods are not always a home run. Netflix may do fairly well, but Rhapsody has not taken the market by storm. I don't necessarily object to a subscription service, but I don't think you will change enough people's minds on it to make it work. I suspect it would also be a contractual nightmare, since all the contracts would need to be re-written (again...) to cover subscription royalties.



I fully support public domain. But you can't just release all books for free without utterly decimating the industry.

And finally, I don't see a problem with treating ebooks like any other market. The price is what the market will bear. If Grisham has to learn to live with that reality, perhaps others do as well.

I'm amazed at how expertly you failed to properly comprehend most of what I said, and then proceeded to completely extricate it from context when making your uninformed responses.

Hopefully others who are better at reading were wise enough to refer to the original post which was not colored by your mistakes. However, since that may be too assumptive, I'll clarify a couple of your errors here.

The major points are...

- You seemed to completely misunderstand that I was talking about public perception, not actual costs. If you knew anything about markets you would know that it matters little what things actually cost to produce when setting prices, but, it matters greatly what people are willing to pay. If you intend to change price structures, you have to convince the market that the change is worthy, particularly if prices are going up, which they need to in the case of eBooks. The public perception of paying for a copy needs to be replaced by the perception of paying for the service that was provided from author to distribute for the production of that IP.

- Subscription access is just one of many models that should or could be employed. Not to mention I made it quite clear that it was my own preference.

- I feel my statement about artificial supply constraints is important enough to correct your reading comprehension error there. The presentation of sales of electronic media, especially books, is one of individual item purchases. "Buy." And since it is made in an analogous manner to physical sales, it promotes the public perception that they are paying for copies, not license to access. They are then led to believe it should be FAR CHEAPER THAN PAPER because it's just so cheap and easy to make an electronic copy. Obviously this is a misperception and was a major aspect of my entire point that you missed. But it's a perception that exists and needs to be changed and that's a primary challenge for this industry now. It's evident in the response of retailers to lower their book prices to compete with amazon's kindle prices.

I'm fairly certain if you tried reading again with a little more thought you'd see that your contradictions are misplaced.

[GA Russell]

Grisham is a lawyer, not an accountant. If his comments were made by someone who had audited Grisham's publisher, I would give them some credence.

But as it is, I'll withhold judgment until I read the observations of an auditor who has seen the books of one of the major publishers. (Fat chance!)

One other thing to consider: There is a growing demand for eBooks. Yet I contend that the public (buying or no) sees eBooks to have less value than physical objects, just as the public sees music downloads to have less value than a CD. Thus I believe that the growing demand for eBooks is dependent upon their costing less to purchase.

So whatever the publishers' fixed costs, they're squeezed by their fixed costs to produce an item the public doesn't value highly.

PS - I see that while I have been writing this post while also watching the World Series for the past half hour, Zachary has dealt with my point about the public's perception of the value of eBooks.

[nomesque]

Originally Posted by charleski

You also need a layout artist who can ensure the text is consistently rendered and can add the stylistic touches that readers expect from a professional product. This is perhaps even more true for eBooks than paper ones, as they need tricky CSS coding for anything out of the ordinary.

Now this is an interesting point...

I'll quite happily read bog-standard Times New Roman, left-aligned, no drop caps, a double line-break to indicate a new paragraph. I don't think my reading experience is degraded any by it. However, give me 'stylistic touches' that interact badly with whatever stylesheet I might have made default (because hey, my eyes aren't as good as they once were and I might want that Times New Roman font to be 18pt), and I probably WILL get annoyed.

So... what DO you do for ebooks? I don't mean that nastily, I'd genuinely like to know.

[DawnFalcon]

Quite. Fonts should be freely swapable. Heck, you could easily sell a number of fonts for different reading preferences...

[kindlekitten]

Originally Posted by DaleDe

Yes, I suggest that to Astak some time ago. I even outlined how it would work. They build Kiosks that could easily be adapted to the the job. However, the manager didn't think it would sell.

Perhaps if a few more would jump on the bandwagon they might be convinced.

Dale

I think that is a great idea, but put it back into a bookstore environment with a bbookstore "feeling"

[jbjb]

Originally Posted by DaleDe

Well, yes both are sampled so Magnetic Tape is the real master however there are problems with both CD and MP3. CD falls down on the quiet notes with the number of bits to record the volume is only 4 or 5 while MP3 is lossy and loses high frequencies first. A higher sample can improve the high end. At lower frequencies MP3 is basically perfect and doesn't decay as the volume gets lower.

Dale

The reduced singal to noise ratio for CDs at low amplitudes isn't necessarily any worse than the SNR for vinyl at the same amplitude - the level of CD quantisation noise isn't necessarily any higher than the analogue noise that comes from vinyl.

/JB

[jbjb]

Originally Posted by Elfwreck

Heh. My husband sneers at CD music, insists it can't capture the harmonics that vinyl can have.

I suspect he really means (whether he know it or not) that CDs don't generate the harmonic distortion that vinyl can.

Many people do have a preference for the sound of vinyl, but that's not due to any superior accuracy of reproduction with vinyl - quite the opposite. Vinyl playback generates all sorts of distortions, some of which can sound pleasant.

For example, acoustic feedback of low frequencies from the speakers back to the turntable can cause mechanical vibrations in the cartridge which can sometimes generate a "warmth" to bass notes which some find attractive.

/JB

[kennyc]

Originally Posted by zacheryjensen

I'm amazed at how expertly you failed to properly comprehend most of what I said, and then proceeded to completely extricate it from context when making your uninformed responses.
...
I'm fairly certain if you tried reading again with a little more thought you'd see that your contradictions are misplaced.

I'm amazed at that lack of conciseness. I could have read a couple of novels instead of all this.

[Format C:]

Originally Posted by DaleDe

Publishers are also promoters. You can put a book on your own web site for a long time before anyone notices.

Dale

Talking about Grisham and today, I think that if HE puts online hist site (or facebook/twitter/myspace/whatever blog)with direct ebook selling, he'll be noticed.
He'll get the news without even paying for it just for being the fist one!

Obviously it will work just for the first 5-10 who goes like that, but eventually, in the immediate future some big name not too tightly tied to a publisher, will go online by him/herself and make some good money.

When the game no longer works, authors will have to group themselves and replace publishers with "guilds", selling to today's publishers exclusive rights for printed editions which won't include ebooks rights.
The two markets will go hand in hand, everybody making profit.


Right now publisher are profiting selling printed PD books available online for free..............

[kennyc]

Originally Posted by nomesque

Now this is an interesting point...

I'll quite happily read bog-standard Times New Roman, left-aligned, no drop caps, a double line-break to indicate a new paragraph. I don't think my reading experience is degraded any by it. However, give me 'stylistic touches' that interact badly with whatever stylesheet I might have made default (because hey, my eyes aren't as good as they once were and I might want that Times New Roman font to be 18pt), and I probably WILL get annoyed.

So... what DO you do for ebooks? I don't mean that nastily, I'd genuinely like to know.

Agreed, and I thought similarly. I think the previous comment is getting perilously close to that slippery typesetting-as-art slope.

[Format C:]

Originally Posted by kennyc

Yes and no, It takes more than just an author and an online store. It requires someone to format the book appropriately (perhaps the author) and someone the manage the sales(the online store perhaps) but the other big piece that is pretty much required is marketing, sales, (including getting reviews, articles, publicity, setting up author interviews etc. etc.). You've got to get the word out or the sales will be limited.

Oh, yeah and what the elf said about editing.

Agents will have to work more.
But they can do it!

[llreader]

Originally Posted by Shiren

I don't understand how can an author think like that. Ebooks are great for authors because they remove the need for a publisher. That means more profit for authors and more authors for us. How many great books never got printed because publishers thought it wouldn't make money?

Very true. Grisham is in the privelegded position that he is already famous, and millions will buy his books, no matter what. He could "make" a small epublishing site all by himself (Smashwords, or whatever). Hell, for someone like that, they probably wouldn't even charge, or take a loss. Can you imagine the traffic he would drive to a small site? At $10 a book, he is in the catbird seat.

Of course, who knows what kind of special treatment he gets from publishers, but it seems like he is better positioned to take advantage of e-publishing than almost all other writers.

[kennyc]

Originally Posted by llreader

..it seems like he is better positioned to take advantage of e-publishing than almost all other writers.

I think this is true of any of the top (bestselling) writers, but they are probably under contract as well.

[Kali Yuga]

Originally Posted by zacheryjensen

- You seemed to completely misunderstand that I was talking about public perception, not actual costs. If you knew anything about markets you would know that it matters little what things actually cost to produce when setting prices, but, it matters greatly what people are willing to pay....

Well, it's a tad more complicated than that. Unless someone threw 2/3 of macroeconomics out the window while I wasn't looking.

For example, it was not necessarily "perception" that caused a spike in global food prices in 2007 and 2008, it was a sudden shortage in certain specific staples (e.g. rice) that reduced supply, thus driving up prices. Or did the perception of how hard it is to grow food change for no apparent reason in 2007? Or, are prices in Zimbabwe spiraling out of control based on perception, rather than a disastrous fiscal policy? And if the demand for a Hannah Montana concert ticket vastly overwhelms the available supply, the resulting prices aren't all that influenced by the perception of the "right price" of the concert.

Further, if your price and/or pricing structure results in revenues too low to cover the cost of doing business, your business is unsustainable and will fail.

Conversely, if the "perceived right price" is so much higher than your costs that you are raking it in, in the absence of some other force or limiting factor (e.g. Miley Cyrus can only do 100 concerts a year, or patent laws allow for only one manufacturer), it's highly likely that a competitor will undercut your price. E.g. Walmart has a perception of "value" and "low prices," to the point where they don't have to be cheaper than everyone on every item and will still get the sales. But they couldn't charge 25% or 50% more for flat-screen TVs than Best Buy and maintain that reputation for long.

Mind you, I do not think there is necessarily "one right price," that the market is hyper-efficient, or that consumers are always rational. However if you *cough* knew anything about markets and economics, you'd understand that perception is only one factor among many, its influence varies depending upon the situation, it's often less critical than supply, demand, and the cost of producing a good.

Originally Posted by zacharyjensen

The public perception of paying for a copy needs to be replaced by the perception of paying for the service that was provided from author to distribute for the production of that IP.

It's a charming idea, but seems extremely difficult for an industry that is somewhat hazy on what form it will be in 10 years from now, and is far from uniformly supporting the transition to ebooks, to "educate" its consumers to a new business model -- especially if you happen to be trying to teach people to pay more for something, and need to keep the other 95% of your business going, and plan to make a case for ebooks in the first place. Even if it was somehow possible to do so, I don't see how the book industry has the resources to launch a massive "Pay More For Books" education campaign, let alone have it come across as anything other than an act of greed.

I might add if you could devise an education campaign that can convince your customers to pay 50% or 100% more for your product as they initially thought it was worth, pretty much every industry on the planet would launch one ASAP, regardless of the merits of such an argument.

Not to mention that while a good business wants as many customers as possible, and I concur that it won't want to price itself out of the market if it can help it: not every customer is worth having. If Joe Shablotnik is offended by the very idea of spending more than $5 for a new book, and you need to price it at $10 or you'll go out of business, what kind of resources are you really willing and able to expend to make Joe your long-time customer? No amount of education is going to convince Joe that he should pay $10 when he wants to pay $5, and a business model that "tricks" Joe into paying $10 when he wants to pay $5 is unlikely to last very long or result in a satisfied customer base.

Originally Posted by zacharyjensen

- I feel my statement about artificial supply constraints is important enough to correct your reading comprehension error there....

Uh huh. I guess I missed the point of your dissertation on that point because it doesn't really apply.

The book industry isn't basing their prices on the scarcity of paper and ink; it's based on their estimations of the costs of publishing and distributing titles. Even the hardcover/softcover pricing differentials are not really based on "artificial scarcity," it's more about making a physical wrapper for the higher demand for a brand-new book.

The only "artificial" elements to current ebook pricing is that a) wholesale prices don't reflect the slightly lower cost of making the ebook, and b) publishers don't want cheap new books eroding the *cough* perception of the value of their wares. (There is also the very real concern that cheap new books may erode their already-thin margins.) I don't see how any sort of "scarcity" model is really coming into play here.


Also, my comments on subscription-type services is that I don't think it will actually work -- with some notable exceptions (see below) -- for a few reasons. One, as mentioned above, I don't think it will be possible for the book business to change everyone's mind about "what it means to buy a book." One and a half , you've now doubled your educational workload; consumers aren't used to the idea of a book subscription, so now you have to teach them to pay more AND to understand and accept a whole new way of getting books. Two, afaik you'd have to rewrite any contract that doesn't already have some type of subscription rights in it, which obviously drives up the cost and will restrict availability (as some authors undoubtedly won't go for it). Three, books are a poor fit for this type of model, as they take much longer to "consume" than movies or music. Four, subscription models have a mixed success record even in mediums where it's a better fit. Five, subscriptions eliminate one major potential benefit of an electronic business, namely the ability to quickly modulate the price of a good without having to (physically) relabel everything. Six, changing to a subscription model doesn't reduce the costs of doing business, so it will still need to result in generating the same revenues as the per-book model -- e.g. you can't necessarily market it as a "good deal" for consumers.

Subscriptions may work fairly well though for one fairly popular and lucrative wing of publishing: genre fiction. For example, many readers of romance novels will consistently buy 2-3 books a month, the publishing costs are fairly predictable, and there are enough authors to generate a consistent supply; the books are for all intents and purposes a commodity. But this hardly requires a major education campaign -- e.g. all Harlequin says, and needs to say, is "you get your books faster and cheaper." They don't have to bog their customers down with esoteric explanations of the nature of intellectual property or royalty payments -- nor would that be particularly good for their business, IMO.


I may have missed some of the thrust of your argument, but it's still the case that a) price is clearly based on more than just perceptions and beliefs about the "right price;" b) educating people to increase what they believe is the fair price for a good and/or that "books are a service" almost certainly won't happen and/or will not succeed, and c) subscription models are a bad fit for books (other than genre fiction) and probably won't work.

[Elfwreck]

Originally Posted by eGeezer

Well, I hope I made it plain that I have no idea how the money flow works in publishing, so I am assuming that your friend's example is that it is more that the author is on a commission instead of the retailer.

I assumed the author would get a given amount of the wholesale price, and the retailer messing around with the gap between wholesale and suggested retail (or below) would have no effect on that, since once the retailer pays the price, they can't go back and say "I'm not going to pay that price because I chose to sell it for less."

It's not a matter of commissions & wholesale/retail pricing.

If Amazon sells her book in hardcover, new, she gets a royalty check. If they sell it in paperback, new, she gets a royalty check for a bit less. If they sell a used copy of it, she gets nothing.

And she understands that people are mostly going to buy the used copies, that most people, given a choice between $19.95 hardcover and $2.50 paperback, will choose the paperback.

Ten years ago, people almost never that choice in the same shop. Now, Amazon has made used copies (which don't trigger royalties) widely available, and it's killing the midlist authors.