Tuesday, February 02, 2010

And How Does This Make Sense -- c.anne.gardner

I ran across a couple of interesting articles last week, and while they might not seem related, they most certainly are. First, we have an interview with a book pirate over at The Millions posted by By C. Max Magee on January 25, 2010

TM: What changes in the ebook industry would inspire you to stop participating in ebook file sharing?
TRC: This is a tough question. I guess if every book was available in electronic format with no DRM for reasonable prices ($10 max for new/bestseller/omnibus, scaling downwards for popularity and value) it just wouldn’t be worth the time, effort, and risk to find, download, convert and load the book when the same thing could be accomplished with a single click on your Kindle. Even in this situation, I would probably still grab a book if I stumbled across the file and thought it might interest me – or if I wanted to check it out before buying a paper copy.

Then we have a commentary on the Macmillan/Amazon debacle by Cory Doctorow posted on January 29, 2010 in response to the NYT article.

If true, Macmillan demanding a $15 pricetag for its ebooks is just plain farcical. Although there are sunk costs in book production, including the considerable cost of talented editors, copy-editors, typesetters, PR people, marketers, and designers, the incremental cost of selling an ebook is zero. And audiences have noticed this. $15 is comparable to the discounted price for a new hardcover in a chain bookstore, and it costs more than zero to sell that book. Demanding parity pricing suggests that paper, logistics, warehousing, printing, returns and inventory control cost nothing. This is untrue on its face, and readers are aware of this fact.
Now one might, on the surface, think that these two articles are unrelated, but in the book industry, they are related. Readers are well aware that it costs more to make a physical book than it does an ebook. And with the reduction of cost by the elimination of printers, delivery systems, warehousing, and the cost to deal with the pulping of remainder books the consumer, and with good right, would assume that that cost savings would be passed along to them via a reduced retail price. It makes sense. I am not getting a physical book, so why should I pay for one???? Why on earth can’t traditional publishers understand this and let go of their old-fashioned economic business practices? $15 dollars is too much to pay for an ebook. It’s as simple as that, and sticking fast to this outdated pricing structure only perpetuates piracy. Not to mention, I would be willing to read a lot more books and a lot more books by unknown authors if the price was reasonable. I am certain that I am not alone in my logic here. As for holding back on ebook releases, well, that too is absurd. I'll friggin wait you morons, while I watch you shoot yourself in the foot. And don't get me started on DRM. DRM is another manipulative tactic to strong arm the consumer, and again, another tactic that makes piracy seem like an economical choice, which is why Amazon’s decision to allow Kindle publishers to choose whether or not they want DRM was tactical brilliance on their part. I opted out of the DRM as soon as they made it available.

Now I am not trying to diminish the labor and talent it takes to create a book. I am an Indie author, so I know what things cost: ISBNs, editorial services, software, distribution costs, etc., and I am also a literary appreciator to the magnitude of thousands of dollars a year. Authors deserve to get paid, as do all artists. Publishers, editors, and everyone else along the way also deserve to get paid, but you cannot use the same cost to profit ratio and rational for digital content. They are different, and so the retail pricing structure has to be different. It’s not about the value of the thing in an abstract sense. Putting a price on art is difficult at best, but putting a price on a commodity that has quantifiable costs related to it is a much easier calculation to make. If Stephen King were to sell a million ebooks at an appropriate adjusted retail price, then everyone would make the same as if he had sold a million physical books. And in actuality, there would be less waste and more readers. The adjusted retail price would attract more readers and the paradigm would shift. More readers means more books sold, less piracy, and more profit. Reduced retail price does not = less profit. Not when in comes to digital content. Even I, of the economically challenged, can make sense out this. As for Macmillan, I guess they haven’t realized that they are not strong-arming Amazon, they are strong-arming the consumer, and we won’t stand for it. They can charge $15 bucks for an ebook, but I certainly ain’t gonna buy one, especially if it’s DRMed and I don’t technically own it.

That, my friends = less profit. Less readers for the author and less profit for all. Seems like Amazon understands this as it states in their recent letter:

"We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, we will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books. Amazon customers will at that point decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book. We don't believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced e-books as an alternative."

So hoorah for Amazon! They may have had to concede here, but their self-serving principles, despite their big-brother tactics, are in line with the consumer. As a shop owner, if Amazon feels they cannot sell a product because it's priced too high, they have the right not to stock it as far as bandwidth space is concerned. Sure Macmillan can charge whatever they want, it is their product, but as far as this consumer goes, they can take their $15.00 per ebook pricing structure and shove it where the sun don’t shine. The readers have the final say.

Cheryl AnneGardner


Anonymous said...

Sorry, but I am not buying the pirater's line. There are plenty of ebooks priced below $10 that are non DRM and are still being pirated.

Cheryl Anne Gardner said...

Oh I agree and I am sure there are. I suppose it depends on why the pirate decides to be a pirate: Are they the damn the man anarchist who will pirate because he can and it's a fun challenge, or are they the sort of pirate that just thinks prices could be better and wants the best deal? He thinks he is being ripped off.

Anarchist or deal grabber. I don't know. Nothing will eliminate piracy altogether of course. The anarchist is making a statement, but I do thing reasonable prices will cut down on some of it.

There are a lot of reasons why people steal and economics certainly won't address all of them. so i don't think there is a magic salve for this sort of activity, but even one less thief in the world makes a better world. So if a reasonable price stops some of it, then it's worth it, IMO.

Floyd M. Orr said...

I think that any publisher has the right to price his books at whatever level he wishes. If nobody buys the book at that price, then it's the publisher's loss. When Amazon forced the POD publishers to use their own BS printer, POD authors were outraged by the bullying. I am no fan of corporations, but this is bullying, too, on Amazon's part. As far as publishers not releasing a Kindle or other e-book version simultaneously with the hardcover, why should they? That's why trade paperbacks and MM paperbacks were invented. Let them charge $15. I'll just keep releasing my little vanity press POD books at Kindle and Smashwords at much lower prices.

DED said...

The book publishers should learn from the mistakes made by the music industry and (to some extent) Hollywood. There's a perceived value to entertainment (irregardless of the medium) and if the retail price is too high (in the consumer's opinion), then there will be "theft" (provided that the perceived risk of getting caught doesn't exceed the value of the stolen merchandise).

Emily Veinglory: said...

I agree with Floyd 100%.

Cheryl Anne Gardner said...

I too agree with Floyd on that, it is the publishers right to set price, and I also don't agree with what I called in the article Amazon's self-serving big-brother tactics, even if they had the consumer partially in the back of their mind.

The readers will decide how much they are willing to pay and the readers will also decide if they are being ripped off and want to steal the content instead. It's unfortunate, but as a shop-owner, Amazon also has the right to decide what it will or will not sell based on their own business model.

It's gonna be a long hard haul for ebooks. Ain't no doubt about it. I didn't buy a kindle for the same reason. I, as a consumer, will not be locked into a limited format or purchasing option. Sony got my money instead. I won't buy and iPad for that very same reason.

Anonymous said...

From what I've seen, making something available cheaply, without DRM and with some guarantee of official quality is a good antipiracy measure. Most of what's pirated on the file-sharing networks these days isn't music anymore; it's HD video ripped from Blu-ray.

I just have the feeling the booksellers are going to repeat the exact same set of mistakes as the music companies, and in the same order. Eventually they're going to realize that some lost sales are better than a lot of lost sales, but not before a lot of their business -- and a lot of authors, and a lot of readers -- are hurt in the process.

Cheryl Anne Gardner said...

Yes, my husband and I were talking about that last night. The old publishing model is on it's way out. Just like the old music publishing model went out when Mp3became popular. The digital age is here, and a new model has to be created to deal with that. You can just tweak the old one, but only temporarily. It has to change and drastically, and for that to happen, the thought process has to change. Clinging to outworn old school thinking and refusing to embrace the change will be their demise. Both Amazon and Macmillan are guilty of attempted price fixing, but Amazon's rationale was the correct one. They shot themselves in the foot taking such an aggressive stance, obviously. They should have just let Macmillan fall on their face. They should have stated their argument but let the consumer decide. The consumer will decide. I certainly have. I won't 14.99 for virtual content. Hell, I rent movies through netflix for a couple of bucks each and movies cost way more to make than books.

We've been talking about this over on ditchwalk.com. You can see my comments regarding packaging there, and a nice discussion on content theft.