Monday, October 26, 2009

Power to the People

Due to an unforeseen Internet outage, Laura and I were unable to bring you your Saturday round-up here at PMN. A thousand apologies, dear readers, and I promise to make it up to you this week with some additional content (as well as answers to your questions).

Since we were round-up-less last week, we weren't able to give our scheduled shout-out to Lit Drift, so I'll do it now: Lit Drift (http://www.litdrift.com), a "brand-spanking new blog, resource, and community dedicated to the art & craft of fiction in the 21st century," is now open for business. They've got all kinds of awesome content, including daily creative prompts and (get this!) FREE BOOKS on Fridays, so be sure to check them out post-haste.

Oh, and before I forget—they also accept reader submissions, so if you'd like to contribute anything (fiction, bar napkin doodles, manifestos, original power ballads to your grandma, &c), send it along!

Now then. As you may recall from last week, I mentioned the price war between Amazon, Walmart, and Target being a source of worry for many of us here in the book publishing industry. Well, on Thursday of last week, the American Booksellers Association drafted a letter to the Antitrust Division of the United States Department of Justice, asking that the USDOJ investigate these practices to be sure they don't break all sorts of laws. I applaud the ABA's move because I agree that these price moves are predatory, that they are harmful to the market, and that, to quote John Grisham's agent, David Gernert, "If readers come to believe that the value of a new book is $10, publishing as we know it is over."

To be clear: I do not think Walmart will single-handedly kill publishing. But I think that if Walmart economics are applied to the book publishing industry, the speed and the immensity of the changes that will be involved will almost certainly change it for the worse. Nobody's going to bail out the book publishing industry if it starts to founder. E-books will soon totally and permanently alter its landscape, and if we add the financial stress of a major bidding war among Walmart, Amazon, and Target for control of the bestseller marketplace—and remember, gentle readers, that's where the money is made—we could see a drastically different book market in the next five years.

12 comments:

  1. Eric,
    I really like your site and check it everyday. Thanks for the link.
    Christi
    http://christicorbett.wordpress.com

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  2. Now that Barnes and Noble has matched Amazon's pricing structure, the two largest brand name ebook retailers have established a market standard. New books DO cost $10. They do digitally. And once ebooks become a larger sales factor, the industry will have to cope with the change in profit.

    Kristen Nelson last year posted about a house reducing royalty percentage for electronic books because of the overhead. Having worked on ebooks for a major publisher, I know how much bunk that is and have railed on it ever since. The current profit model won't hold up with ebooks dominating sales and offsetting that loss by reducing author revenues will only lead to more serious efforts at self-publishing or community-run sales and electronic distribution.

    Publishers will need to engage in major cost cutting or begin selling ebooks directly, maximizing gross to net ratio. Of course, right now the ereaders are being built by book sellers and not book publishers, so B&N and Amazon have little impetus to design machines for books they don't sell. Thus you'll end up back on smart phones and similar electronics that can run files created by publishers directly.

    Of course, that requires publishers creating the infrastructure to accomplish that, and we know how fast that will happen.

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  3. holy shit this is all insane.

    Should I even bother trying to get published anymore?

    - Jody

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  4. One would think since the American president is a successful author he might be able to do something about Walmart and friends. Like a serious slap-down!

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  5. Thanks so much for the link to the new site!

    And WOW I'm scared of what might happen if the price of our books get knocked much lower. As a soon-to-be-published author, I want to make SOME money dagnabbit! Let's hope the ABA is successful in its quest.

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  6. I hate to say it, but I downloaded my first e book over the weekend. "Darkly Dreaming Dexter." Started reading it on my iPhone while I was sitting in the car while the kid and his mom were shopping. I definitely prefer a real book, but it's very convenient, being able to simply whip out my phone and read whenever I have a few minutes. I hope I'm not contributing to changing the face of publishing. That's how this kind of thing works, though: they make it irresistible. You see, the problem is that while I was cruising the Kindle For iPhone site, looking for a book to download, I stumbled across the $9.99 new release titles and I thought, "Eh...I wasn't planning to buy any of these, but for ten bucks...I'd kind of like to read Crichton's pirate story..." You see what I'm getting at? I'm probably going to buy one of those super marked down books! I don't want to do it, but they're making me an offer I can't refuse! I've been bamboozled and now I'm part of the problem! Gaahhh!

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  7. I've also heard the rumor that Google is planning to get into the e-book market all over the world. I mean like selling new books. And they plan to make it possible to download them on our computers, not just on an e-gadget.

    There is also something about a deal with B&N on this.

    I haven't checked all the sources yet, but Eric or anyone, have you heard about this?

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  8. Isn't our Presidant an author? Does he know what's going on? If President Obama, being the literary man that he is, were informed of the bending disaster in the publishing world...I would NOT rule out a bailout.

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  9. Forgive me for not researching anything before posting this, but is Wal-Mart planning on stocking uber more amounts of titles in the future, all priced below the competition? Because right now, their selection pretty much sucks. Not to mention, I think places like Borders and Barnes & Noble have a leg-up on even distributors like Amazon, since you can pre-order stuff online or put it on hold, then go to the store down the road and pick it up at your convenience...no shipping & handling fees (or ordering something extra to qualify for free shipping--no such thing as free, really), no making sure you're home to catch the delivery guy because, yes, you still have to sign for those packages, etc, etc. If Wal-Mart and/or Target make that particular amenity available and carry the bulk of their selection online, THEN we are in trouble. Maybe.

    Personally, I still like the bookstore atmosphere better and, as my local Borders employees will gleefully vouch for me, I never leave the store empty-handed. Online, it's way too easy to hit that little X in the corner and not feel like you've lost anything. (Okay, I may have gone tangential on that topic. It all relates, though. Kind of.)

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  10. Lydia, you're the voice of reason! I think what has everybody freaked out, though, is the possibility that with the highest profile titles, the ones even non-readers will buy, marked down so low it will "reset" public perception as to how much a book should cost. Since these titles bring in all the money for publishers, it hurts the broader selection if people grow unwilling to pay more than $9.99 for a hardback bestseller. It also hurts booksellers who can't compete because they aren't selling a box of Tide and an industrial sized Cheerios along with the loss leading title.

    4th quarter sales are critical and in an already bad year the gift-y books are all available for fifteen to twenty dollars less at non-bookstores. This is definitely going to hurt B&N, BAM, etc. I don't know if it qualifies as officially anti-competition but it makes me very nervous.

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  11. Laurel,

    That makes sense, and yes, it's a bit unnerving. Somehow, though, I still have this underlying feeling that everything will balance out at some point. Call me a blind optimist, if you must. ;)

    Something I don't completely understand, however, is why we even still have hardcovers being produced. If they're so damn expensive to make, what is the point? I've purchased paperbacks (and not the itty-bitty ones) that have better binding than a hardcover. No creases. Ever. And the covers are extremely durable. I read a 500-page paperback recently (8.3 x 5.4 in.) and the thing still looks brand new. It was also ten dollars cheaper than the hardcover.

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  12. I think the bricks and mortar stores will continue this deep discounting strategy. They used to do it with DVDs but since people get those online or pirate them, books are what's left to drive foot traffic I assume $10 books (for some very popular authors) are here to stay. The literature in economics indicates that offering loss leaders is a sustainable strategy only for retailers that sell a diverse line of products. So Wal-Mart, etc. can make it work but BN and others probably can't.

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