Interesting article on book pricing and why it might rise

[BearMountainBooks]

Just to throw another opinion in on the 30 percent Amazon takes...I have to say they are probably worth it. The value add is the eyeballs. Right now they (and Apple) have a huge number of eyeballs and search engines and tools (such as the those who bought this also bought.)

I don't think any other retailer competes with that. Now, I'd like to say they don't deserve it, but before they came along with their offer of 35 percent--there was NO competition for publishers. There was NO efficient way for an author to offer her backlist. NONE. And if the author wanted to go to the trouble of reprinting it herself, the upfront costs had to be made back. If the author found a publisher to reprint, that author wasn't going to get 1. eyeballs easily and 2. even 35 percent.

That is not to say I think Amazon rules all and is the wonder of the ages. Right now they are in a VERY lucrative position that is a positive for authors. Several other retailers decided that 70 percent was TOO MUCH to give to authors--and they offer 60 or 60...or even 50 percent. None of those sites get the traffic of Amazon at this point. Will that change? Sure. But right now, that 70 percent happens to be the most generous in the industry--for the most bang for the author's effort.

[DMcCunney]

Originally Posted by GA Russell

Not so fast, Dennis. I think that it was Napster that changed the music industry, not Apple. For that reason I think that books and music can be directly compared.

You have a point, and I had indeed forgotten Napster, but Apple's effect isn't the same as Napster's.

When I was growing up, pop music was all about the single. Kids bought 7" 45 RPM records, with an A side and a B side, and Top 40 radio stations played the top 40 songs of the moment. Albums were what parents or relatives bought you as a present, and consisted of the (hopefully) hit single songs plus filler of varying quality. Many of the pop artists didn't write their own songs, but recorded stuff written by others. Some of those writers went on to fame, like Carole King, who began as half of the Goffin-King songwriting team writing pop songs to be recorded by others. And the artists made their main living performing.

In the mid-60s, the Beatles were the spearhead of a fundamental change. They wrote their own songs and played their own instruments. While the single was still important, albums became increasingly dominant. Bands were expected to write their own material, and albums got rated in part by how well the individual songs maintained the overall quality level. Some bands recorded "concept" albums, where all the songs revolved around a common there or were part of an over arching story.

The album became the "product", and a tour was something a band did to promote the album. The goal was to become popular enough that you made your main living from album sales, and went on the road only when there was a new album to promote.

Apple changed that model because you didn't have to buy the whole album. You could cherry pick and get just the songs you wanted, import them into iTunes and create custom playlists.

In some respects, it put music back the way it used to be. Individual songs became important, not albums. And the album was no longer the "product". While it was still important, you didn't tour just to promote the album. You toured because more and more, you made your actual living playing live gigs. The album became a souvenir of the show, and not the reason the show was put on in the first place.

This is what I'm talking about when I say music and books aren't directly comparable. Unless the book is a collection of short stories, you aren't going to see people cherry picking bits and pieces. They'll get the whole book or not at all. And authors can't exactly go out and perform live as their principal income. Their money comes from book sales.
______
Dennis

[GA Russell]

Originally Posted by DMcCunney

...Apple changed that model because you didn't have to buy the whole album. You could cherry pick and get just the songs you wanted, import them into iTunes and create custom playlists.

In some respects, it put music back the way it used to be. Individual songs became important, not albums. And the album was no longer the "product". While it was still important, you didn't tour just to promote the album. You toured because more and more, you made your actual living playing live gigs. The album became a souvenir of the show, and not the reason the show was put on in the first place.

This is what I'm talking about when I say music and books aren't directly comparable. Unless the book is a collection of short stories, you aren't going to see people cherry picking bits and pieces. They'll get the whole book or not at all. And authors can't exactly go out and perform live as their principal income. Their money comes from book sales.

Well, I'll agree that currently authors don't have much prospects in making a living going on tour.

My point is this: It was not Apple who changed the model of being able to select a few tracks. Again, it was Napster. What iTunes did was show that in a world when the big companies wanted $18.00 and the kids were paying nothing by going to Napster, people were willing to pay 99 cents when they could get what they wanted for free.

So in this sense I believe that music and books are comparable. If most books (I'm thinking that most books are back catalogue) are available for $2.99, people will pay rather than get a pirate edition for free. But if forty-year old books like Catch-22 are going to be $12.00, people will go the pirate route, and the authors will get nothing.

By the way, one concept I haven't seen discussed here at MR is the idea that official editions should be perfect quality and pirate editions should be imperfect. I am referring to being proofread, mostly.

Consider forty years ago when one could make a cassette tape of a friend's record. The tape wasn't as good sonically, but its price was only the cost of the blank cassette. It seems to me that it would not be unreasonable to have a situation where the free pirate edition is loaded with typos while the $2.99 official release is perfect.

In that scenario, I believe that most people would pay the $2.99. But if the eBook is $10.00, I believe that many will choose to tolerate the typos and go for the free edition.

[Elfwreck]

Originally Posted by GA Russell

It seems to me that it would not be unreasonable to have a situation where the free pirate edition is loaded with typos while the $2.99 official release is perfect.

In that scenario, I believe that most people would pay the $2.99. But if the eBook is $10.00, I believe that many will choose to tolerate the typos and go for the free edition.

Doctorow said something like that in his "Close Enough for Rock 'n' Roll" article:

This is the pattern: doing something x percent as well with less-than-x percent of the resources. A blog may be 10 percent as good at covering the local news as the old, local paper was, but it costs less than 1 percent of what that old local paper cost to put out. A home recording studio and self-promotion may get your album into 30 percent as many hands, but it does so at five percent of what it costs a record label to put out the same recording.

But this doesn't translate well to ebooks--because, although the pirate-typo version may be more widely available, in time it'll be replaced by the pirate-official version, because unless the typo version is *entirely legal* to distribute and the other is not, there's no reason to hand it around instead of the fixed version.

What prevents some enterprising fan from fixing the typo'd version?

[GA Russell]

Elfwreck, yes, I can see your point regarding a specific title.

Perhaps the two markets, legit and pirate, should be compared as a whole.

I suspect there are more pirates than there are personnel of the big publishers devoting themselves to back catalogue. I believe that we see books which are available at the pirate sites but not legitimately (ie, Perry Masons) because there are more pirates working at it.

Let's say the publisher offers a perfect back catalogue edition for $2.99. I believe that many customers will limit their selections to low-priced editions which they know are in perfect condition rather than consider other titles (the pirate books) which probably have typos.

I can see people struggling through a few poorly proofread pirate books, and deciding that they'll never bother with another pirate book again so long as there are legitimate books they want to read which are priced low.

[Kali Yuga]

Originally Posted by GA Russell

I suspect there are more pirates than there are personnel of the big publishers devoting themselves to back catalogue. I believe that we see books which are available at the pirate sites but not legitimately (ie, Perry Masons) because there are more pirates working at it.

There are several forces at work here.

• Not all authors / estates have authorized ebook editions to be released. In some cases this is an issue about who owns the rights, in others the author is holding out for higher royalties etc

• No one is paying the pirates or directing their work. At least some of them see what they are doing as a "social good" and, despite the fact that they are currently working for a salary of $0.00/hour, they would likely walk if offered the same job for $7.25/hour. And when you have to pay people and (theoretically) offer a higher standard, that requires infrastructure, overhead costs, proofreading, etc etc it's going to take time to crank out the backlist.

• Demand for backlist is, with a few notable exceptions, fairly low. For every On the Road there are hundreds of nearly forgotten titles that can barely justify more resources than a cursory Google-style unedited OCR scan.

Originally Posted by GA Russell

Let's say the publisher offers a perfect back catalogue edition for $2.99. I believe that many customers will limit their selections to low-priced editions which they know are in perfect condition rather than consider other titles (the pirate books) which probably have typos.

People are going to pirate no matter what.

The idea that a higher prices and/or DRM will drive people to piracy is a misperception. We currently have multiple retailers of DRM-free and cheap digital music, and music piracy is still rampant. It's not clear that music going DRM-free made so much as a dent in piracy rates.

Offering a $3 backlist title also undercuts the value of their wares. That might be a viable price for a reprint of a crappy dime novel, but not for more popular backlist titles.

[DMcCunney]

Originally Posted by GA Russell

So in this sense I believe that music and books are comparable. If most books (I'm thinking that most books are back catalogue) are available for $2.99, people will pay rather than get a pirate edition for free. But if forty-year old books like Catch-22 are going to be $12.00, people will go the pirate route, and the authors will get nothing.

How are you defining back catalog? If you equate it with "out of print", the publisher may not have the rights to issue the ebook - they reverted to the author when the books went out of print.

And assuming everyone will go the pirate route is questionable. Don't assume the readership of MR are representative of the broader market. By definition, we're early adopters and more savvy about this stuff.

You might not pay $12 for an electronic version of an older book, but enough other folks might to make it a viable price.

By the way, one concept I haven't seen discussed here at MR is the idea that official editions should be perfect quality and pirate editions should be imperfect. I am referring to being proofread, mostly.

Tell that to Amazon. In many cases, there wasn't an electronic file to start with, so the Kindle edition is produced by scan and OCR of a hardcopy by an outsourced operation in India. The result odf the scan and OCR is what gets packaged at the Kindle edition. There is no editing and proofreading to catch errors. That costs money.

In more and more cases, proofreading isn't being done even when there is an electronic file. Publishers are omitting the step. It costs money.

You want your ebooks cheap. Where does the money to pay for proofreading come from?

Consider forty years ago when one could make a cassette tape of a friend's record. The tape wasn't as good sonically, but its price was only the cost of the blank cassette. It seems to me that it would not be unreasonable to have a situation where the free pirate edition is loaded with typos while the $2.99 official release is perfect.

Given the quality of the playback equipment, you might not even have noticed the difference in quality. (A radio station I listened to back when had an "Album for lunch" show. Come noon, they'd play an entire album, straight through, no commercial breaks, and broadcast a Dolby test tone first so people could calibrate their recorders. Ah, the good old days...)

In that scenario, I believe that most people would pay the $2.99. But if the eBook is $10.00, I believe that many will choose to tolerate the typos and go for the free edition.

What folks will pay will depend on the book and how badly they want it.

You're focused on back catalog, because there are things you would like to see that are out of print. There are an assortment of reasons, mentioned earlier, why this might be the case. But the biggest one will be the least palatable: maybe there simply aren't enough people interested in seeing those works returned to print to make it worth doing. That's certainly the case for a few things I wouldn't mind seeing back in circulation: I may be one of the two people I know who has ever heard of it.
______
Dennis

[EricDP]

Originally Posted by GA Russell

It seems to me that it would not be unreasonable to have a situation where the free pirate edition is loaded with typos while the $2.99 official release is perfect.

In that scenario, I believe that most people would pay the $2.99. But if the eBook is $10.00, I believe that many will choose to tolerate the typos and go for the free edition.

I agree. Unfortunately, today, even the $14.99 eBook is full if typos and formatting errors.

There once was a time when books were manually typeset. Did the publishers hire trained professionals, or hacks? Obviously they hired professionals. When books went to electronic typesetting, but printed on paper, they still got good people. Somehow, eBooks don't get the same quality. Most seem to be just dumped from the electronic typeset version with no proofing, and sold for full price - sometimes more than mass-market paperback. I'm getting pretty sick of having to proof and edit the books I've bought.

[Andrew H.]

Originally Posted by Barcey

For the record I don't believe that Amazon deserves 30% for the value they're adding either.

Of course you don't. And you shouldn't. Because they are not adding any value *to you.*

They are adding value to the publishers/authors, however. And if those people believe that Amazon adds enough value to make 30% reasonable, they will happily pay it.

It's easy to figure out how much value amazon adds, though: (sales*price)-costs= total profit. Based on this, Amazon either adds enough value to be worth the cost or does not.