Backlash against Author Douglas Preston

[dmaul1114]

Agreed it will still be a while.

I still buy CDs and not MP3s--and I pretty much only listen to MP3s I rip off the CDs. I just like having the physical copy, and a better sounding copy for the car, home stereo etc.

Books, I go with the e-book for leisure reading as I only read stuff once most of the time and it's nice to not have a physical copy around. Albums I'll listen to periodically for years, so I like having a physical copy as a back up if nothing else.

[Elfwreck]

Originally Posted by Kali Yuga

Before I answer that, a quick disclaimer: I don't work for a publisher or retailer, so I don't have precise figures.

Blurry figures fine. If someone wants to jump in with verified statistics that such-and-so publisher has a return rate of exactly 27.5%, we can go with that, but otherwise, I'm content to work with the numbers that get bounced around in the news articles & editorials.

In addition, the paper costs of a book are only 15% or so of the total costs. I assume this includes returns, but if it doesn't then with a 50% return rate, paper costs are still around 22% or so.

And there's 7% that could be forwarded to the author without the publisher losing any money on the sale, if the ebook is set to the same price as paper.

Paper costs don't include shipping, storage & inventory costs, all of which take a cut out of the profits and therefore are figured into the price.

Ebook readers presumably loathe the idea of spending more than $10 for any ebook, even a brand-new one.

For fiction and "editorial" books, yes. Because the majority of fiction readers are paperback readers, not hardcover readers, and they expect a book to cost less than $10. One of the communication disconnects is publishers expecting ebooks to substitute for hardcovers, not paperbacks, in buyers' minds. (This may be because of the cost of ebook readers, and before that, the relatively high income expected of computer owners.)

For technical or educational nonfiction, more than $10 may not be a problem... if they make the ebooks usable. (Read-aloud enabled, copying permitted, printing enabled, etc.)

(That may not end up being the case, if the agency model genuinely engages in dynamic pricing, and visibly lowers cost as books age.)

The agency model is likely to wreak havoc on publishers, as they can't react to consumer trends fast enough. They can't drop the price for a weekend sale, or because the movie's soaring at the box office. And contracts may mean they can't drop the price temporarily at all.

If that's the case, then the public want publishers to cut their prices by 50-66% -- though to the consumer this looks more like a 30% cut.

The public wants ebooks at paperback prices. And windowing ebooks would likely not get complaints--if the late-release ebooks were offered at $10 or less. The reason offered for the late release was to keep the prices high enough not to directly compete with hardcover sales.

I'm quite confident that it does not cost 2x or 3x as much to print a hardcover as it does a softcover. This is why the hardcovers are "high margin" sales.

I think it does cost 2-3x as much to print. I've heard costs as low as $1 each for printing paperbacks; I'd be surprised if hardcovers cost less than $2.50 to print. But it doesn't cost that much more to ship, store, and track sales of.

I.e. the actual costs of a book are the elements that people don't consider, are not aware of, and/or do not value: advances, editing, retailing, overhead and so forth.

Paperbacks have all those, and manage to sell at under $10.

And again, in a few years the idea of basing prices relative to paper costs will be largely moot, as paper gets sidelined.

Only if publishers start paying attention to ebook formatting and display options. Novels in paper may shrink drastically over the next decade, but reference works are going to keep a strong paper presence, because ebook readers just can't do a lot of what people use reference books for.

You can't open an ebook to three different sections and zip back-and-forth quickly between them. You can't flip through the pages looking for "that chart with the big red section on the left." Can put bookmarks--but can't put red flags for "supports my theory" and yellow ones for "legal issues" and post-its for "re-read later."

Most of what's do-able with print is do-able with ebooks, but the software hasn't evolved to allow it yet. Those features will have to be a lot more developed before ebooks seriously threaten print for anything other than entertainment reading.

[Barcey]

Originally Posted by Kali Yuga

Uh huh. Most big publishers have profit margins ranging from 8-15%, hardly an extortionate rate -- in fact, right around the same range as a typical author's royalty rates. Meanwhile, the public is demanding that publishers both slash their prices by 30% (far more than what they save by going electronic) and increase their costs even further by doubling, or tripling the royalties.

Would you like it, by the way, if your boss decided to slash your salary by 20% because he found out you moved to a cheaper apartment? After all, your costs are now lower, so why do you need the extra money?

My employer is off-shoring jobs to places without minimum wage, no retire plans and no health care. You're argument isn't going to garner any sympathy.

My argument was that the author's effort and risk is exactly the same between a physical book and an ebook and their compensation should not change. You've said nothing to refute this.

Originally Posted by Kali Yuga

• Authors don't necessarily get a "raw deal." The publisher invests a lot of time, money and other resources into getting a book published and distinguishing it from the other 250k new books (not including another 250k of short-run and on-demand titles) published every year.
• Authors don't take 50% of the financial responsibility or risks involved in publishing the book. As such, the standard royalty rates -- while perhaps not perfect or ideal -- are far more fair than you assert.
• No one is forced to sign a contract. If an author doesn't like the deal, and they sign anyway, that is their own responsibility.

On average I would guess that a typical author spends 6 months to 2 years of effort to write a book. The majority of them do this for no guarantee of income and make nothing. That's the largest financial risk they can make. They are forced into signing bad contracts because they're already risk vested.

I'm tired of hearing about the enormous risks that publishers make. It's their job. The personal risk that an author is taking is huge compared to the risk the publisher is taking to their company.

Originally Posted by Kali Yuga

What ebook readers will not accept is that it actually costs money to produce an actual professional book, or that prices are based as much on demand as anything else. In a few years, the idea of pegging an ebook's price to a paper copy will be an absurdity, since paper will be largely gone.

Again I disagree. Dan Brown sold 100,000 ebooks in a market that everyone keeps saying is insignificant compared to physical books. At $9.99 that's $1 million which is enough for producing a quality product. It's very easy math for publishers to pick authors that they are confident will sell enough copies to recover costs.

Originally Posted by Kali Yuga

Incorrect, especially with an agency model.

$15 cover and list price for an ebook; retailer gets 30%, author gets 10%. Revenues (not profit) are $9. From that $9 you have to repay the investment in the book (advance, editing, proofreading, marketing, special promotions, maybe a book tour), pay taxes, pay your overhead, pay your staff and so forth. And of course, many books just don't sell, and something needs to fill that hole in the ground. The publisher's profits -- what's left over after all that -- is much smaller; as I mentioned, it's around 15%.

1) I wasn't talking about the agency model.

2) According to another post in this thread you're saying the same thing. The retailer pays 50%. Are you incorrect?

[dmaul1114]

Originally Posted by Barcey

My employer is off-shoring jobs to places without minimum wage, no retire plans and no health care. You're argument isn't going to garner any sympathy.

My argument was that the author's effort and risk is exactly the same between a physical book and an ebook and their compensation should not change. You've said nothing to refute this.

Two things I'd say to that:

1. I agree with the latter, authors should make just as much per copy sold of an e-books as a physical book. They did the same amount of work, and should get the same pay. The publisher did less work by not having to pay to print and ship as many physical copies, so they can afford to take a smaller percent as their costs are lower per copy.

2. You're comparing risk of losing a job, vs. the case of having to do the same job for less money which is what we've been talking about.

That it would suck for successful authors to get less $$ per copy for the same quality work just because of a switch from paper books to e-books.

A parallel in other industries would be what Circuit City pulled before going under with firing all employees making a certain wage, and offering them their old jobs back for several dollars an hour less than they were making before. Thus they were asked to do the same work, for less pay, despite having been good employees and having been with the company for years to get raises and promotions to make what they were making before.

That's what happens to authors if they suddenly start getting say $2 per copy sold instead of the $5 they got before because people feel e-books should cost less than paperbacks, or that ebooks must be $10 at the launch of the hardcover and cannibalize their sales.

So yeah, I'm going to feel bad for the authors if that happens, just like I felt bad for the Circuit City employees. In a world of constant inflation, people should never see their wages go down while their doing a good job and expected to keep working just as hard.

And of course I feel bad for anyone that gets laid off etc. as well. But it's one thing to lose your job, it's another to say "you're doing a great job, but we're going to pay you less anyway."

[maggie*]

Originally Posted by Kali Yuga

Incorrect, especially with an agency model.

$15 cover and list price for an ebook; retailer gets 30%, author gets 10%. Revenues (not profit) are $9. From that $9 you have to repay the investment in the book (advance, editing, proofreading, marketing, special promotions, maybe a book tour), pay taxes, pay your overhead, pay your staff and so forth. And of course, many books just don't sell, and something needs to fill that hole in the ground. The publisher's profits -- what's left over after all that -- is much smaller; as I mentioned, it's around 15%.

There is something I don't understand here... How do you pay 10% to the author and advances from the same book?
And I'm yet to see "special promotions" in ebooks from the publisher...

[kacir]

Originally Posted by maggie*

There is something I don't understand here... How do you pay 10% to the author and advances from the same book?
And I'm yet to see "special promotions" in ebooks from the publisher...

Simple.
Author receives $40000 as an advance.
The cover price is $20 with author receiving 10% = $2 per book. (*)
Until at least 20000 books are sold the author does not receive any royalties. From the 20001st book the author receives her/his first two bucks, and from that point on she/he receives 2 bucks per each sold book (**).
A lot of authors never get to that phase. They never "earn out their advance". At the moment the "shelf life" of a book is ridiculously short in modern bookshops. Often the unsold books are returned to the publisher for a full refund after a few months to make space for the newest fad.

Please note, that from that 40000 advance the author has to pay his agent and a few other things.

(*) Those numbers are quite generous. You have to be an established author to get such a good deal.
(**) Some authors learn at that point that there is lots of small print in their contract and even more copies must be sold before they start receiving additional money

[maggie*]

Of course, that's what I thought, so from the same ebook you can't count authors royalties and advances already payed from the publisher. Until the 20000th sale you only have the "advances" cut. If it's the 20001th sale you have authors royalties.

[Elfwreck]

Originally Posted by maggie*

And I'm yet to see "special promotions" in ebooks from the publisher...

What do you think the Baen Free Library is?

And many publishers offer temporary free ebooks:
Harlequin Celebrates 60 years with 16 free ebooks

Free Books From Random House (Promotion is over; these are no longer available. But Random House regularly offers small selections of free, DRM'd ebooks--and they run the Suvudu free library.)

Tor.com gave away free ebooks, 1/week, a bit more than a year ago, as a promo for launching the new site. (Can't find direct links, and it doesn't matter 'cos they're not available anymore.)

While none of these cost money-per-book to distribute (unless you count the bandwidth of the downloads, which sane people don't), they do cost money to promote; they have to inform news outlets and find ways to get social media sites interested in passing along the info.

[llreader]

Originally Posted by maggie*

Of course, that's what I thought, so from the same ebook you can't count authors royalties and advances already payed from the publisher. Until the 20000th sale you only have the "advances" cut. If it's the 20001th sale you have authors royalties.

I think it is worth mentioning that the publishers do not necessarily lose money if the author does not make back their advance. The publishers break-even point is unknown, but it is not tied to the point at which authors pay back the loan they got based on the collateral of their manuscript.

[TallMomof2]

I would be willing to see ebooks priced the same as the physical equivalents only if the ebook is not infected with DRM. DRM on a digital file puts too many restrictions and really is only a lease unless the DRM is removed. DRM, IMO, makes an ebook worth far less than the physical equivalent. As it stands if I want to be able to share a book or resell it I am restricted to the physical book. For me that makes an ebook worth less.

[maggie*]

Originally Posted by Elfwreck

What do you think the Baen Free Library is?

And many publishers offer temporary free ebooks:
Harlequin Celebrates 60 years with 16 free ebooks

Free Books From Random House (Promotion is over; these are no longer available. But Random House regularly offers small selections of free, DRM'd ebooks--and they run the Suvudu free library.)

Tor.com gave away free ebooks, 1/week, a bit more than a year ago, as a promo for launching the new site. (Can't find direct links, and it doesn't matter 'cos they're not available anymore.)

While none of these cost money-per-book to distribute (unless you count the bandwidth of the downloads, which sane people don't), they do cost money to promote; they have to inform news outlets and find ways to get social media sites interested in passing along the info.

Ok, you're right. But you must agree that those are exceptions that make the rule, specially Baen. And of course it costs money to promote a new book/ebook, but what I mean is that most of the "special promotions" are for pbooks.

[Ben Thornton]

Originally Posted by maggie*

Ok, you're right. But you must agree that those are exceptions that make the rule, specially Baen. And of course it costs money to promote a new book/ebook, but what I mean is that most of the "special promotions" are for pbooks.

I think that the US-based stores have more promotions - fictionwise, for example. From Europe, I would agree that the book sellers are not (on the whole) promoting their ebooks. As the market grows, no doubt there will be more competition for our business.

[pricecw]

Originally Posted by dmaul1114

Two things I'd say to that:

2. You're comparing risk of losing a job, vs. the case of having to do the same job for less money which is what we've been talking about.

That it would suck for successful authors to get less $$ per copy for the same quality work just because of a switch from paper books to e-books.

Actually, this is happening in a lot of industries right now. Big corporations cut salaries by 5-10% and your choice is take the cut or leave.

This is really nothing new, a lot of times it is temporary, but recently it has been permanent (about a year ago it was 5% for the company I work for).

--Carl

[radamo]

Originally Posted by Kevin2960

I Agree 100%

I will give you 90%... That is I would be very supportive of ebooks (non-DRM) being price at 90% of the current paper version... So when hardcover only then 90% of hardcover cost. When in paperback and bargain shelf the price should be adjusted accordingly. However, if you are trying to tell me that a DRM crippled copy of a book has the equivalent value to hard cover or paper back I wholeheartedly disagree. My 2c.
RA

[dmaul1114]

Originally Posted by pricecw

Actually, this is happening in a lot of industries right now. Big corporations cut salaries by 5-10% and your choice is take the cut or leave.

This is really nothing new, a lot of times it is temporary, but recently it has been permanent (about a year ago it was 5% for the company I work for).

--Carl

It's still rare relative to layoffs, and yes it sucks. And it's taken a near depression in the economy to cause. My points more we all feel terrible when it happens to us. Hell, it happened to me this year as all university employees in my state had to take furlough days this academic year which amount to about a 5% pay cut as well. Next years state budget doesn't look good either, so I expect the same or worse next year.

Yet will any of us piss and moan when it happens to us, some bash authors for worrying about taking pay cuts on their work just because a book is sold as an e-book rather than a physical book (i.e. nothing to do with the economy, their publisher struggling to stay in business etc.).

I was upset about my furloughs, so it would be pretty hypocritical for me to say the authors should just "suck it up" and do the same work for less pay.

The solution is to just scrap DRM (or at the very least make it much less restrictive) and price e-books close to the level of their current print counterpart. Price is higher when on the the hardcover is available, and when the paperback comes out drop the e-book price to at or a little below that price.

Without DRM the e-book should have the same value to a reader as the physical book, so not many should have issues paying the same or a little less for the paperbook like they do now. Some will still of course, but you can't please everyone.