Battle for the Future of E-Books

Since e-books came up in yesterday's comments and I have yet to talk about our upcoming E-lysium/new e-reading devices this year, I figured I'd take a moment to tell you what I really think the future is: this.

Now, before I accidentally incite a PC/Mac war, let me be clear: I'm not necessarily putting my money on Apple as the leader of the New World Order (Microsoft will be a contender, along with the canonical trifecta of Amazon, Google, and Walmart). What I am saying is this: as much as we hear about eyestrain and the doom associated with backlit screens, this is not a dealbreaker for all of us, and further, I'm fairly certain the all-in-one package will soon beat out the dedicated device.

Imagine it: a Mac or PC tablet that integrates full-color books into the existing super-device that is the smartphone (Internet browsing, calling, texting, app...ing, you name it). My bet is that this model will be far more popular than a black-and-white device like the Kindle that only serves one purpose. Sure, Apple (or whoever becomes the Tablet King) will have to overcome obstacles like existing market/mindshare, infrastructure, DRM, &c, but they're a smart bunch. As a result, I don't think Amazon will be quite as monolithic in the e-book industry in five years as they are now.

That said, I'm still interested in the new e-ink models coming out this spring. Sure, you can't watch a video on them or use them to look up that obscure literary reference you just read, but some of them (such as the Skiff and the Que) look pretty sweet. I don't think they'll last in the long run, but I think they're a key part of the ongoing print-to-digital (r)evolution (analogous to Zip disks, laserdiscs, HD DVDs, and so on).

Basically, it comes down to this: I think the Kindle and other dedicated e-readers are necessary to the future of publishing, but they are not going to be carrying the torch for very long; e-books will outlive these types of e-readers by a significant margin.

Next up: dozens of angry commenters who got or gave Kindles for Christmas thronging the comments section! Details at 11:00!

Are You... Going Rogue?

A little over a month ago, I posted on the then-upcoming (now recently released) memoir of one Sarah Palin. I also mentioned that I didn't know of anyone who would read it and was skeptical as to how well it would sell.

Well, apparently, it's selling. And while I did admit that I expected significant sales outside of so-called liberal bastions like New York City, apparently it's also selling well in cities like New York. And, as usual, I have a couple of theories as to why.

• I massively underestimated the number of curious independents—and even liberals—willing to shell out to read about Sarah Palin. Whether they're just angling for her side of the story or looking for a (relatively) inexpensive way to feel better about themselves, people are picking up her memoir.
• There's more controversy surrounding the book than even I expected, and I expected a fair amount. I figured, however, that Mrs. Palin wouldn't want to write anything that might endanger a potential presidential bid in 2012, so the book itself would be fairly boring and drama-free. Not so! Palin takes shots at McCain staffers, apparently stretches the truth, and may well still be gunning for the presidency. Quel fromage.
• Both Amazon and Walmart.com are selling the book for just $14.50. Sure, it's not the low, low price of $9.99 we've been hearing about, but it's still relatively inexpensive, especially if it's being bought as a gift. Books are the new gift, people! Write that down.

So, yes, I did ask this in my last Palin Post™, but it bears asking again (especially since I get the feeling opinions may have changed): are you going to buy Going Rogue? If you answered last time and are changing your mind this time around, why? Have you been surprised by friends' or family members' requests for the book for Christmas? Hanukkah? Kwanzaa? Festivus?

Walmart.com: Part Deux

As I recall, there was some disagreement in the comments section of last Tuesday's post re: the Walmart vs. Amazon imbroglio, so I wanted to clarify a couple of points.

I agree with those of you who (correctly) pointed out that retailers like Walmart and Target don't stock title counts anywhere near comparable to those sported by the major chains or independent book stores. They generally only take expected bestsellers (books by big-name authors like Patricia Cornwell or James Patterson, or by existing celebrities, most of them actors or politicians). I remain concerned, however, for the following reasons:

· The price war is over bestselling titles, which is where publishers make a significant amount of revenue. Should a company like Walmart gain a significant majority of market share in those bestselling titles, they may (and I think they will) use that opportunity to dictate discounting and pricing to the publishers and for the rest of the industry. As I previously mentioned, I think this is potentially disastrous for the major chains and independent stores, some of which are barely turning a profit in the current economic climate as it is.
· In my opinion, Amazon's primary advantage over Walmart.com is their superior selection. Should discounting escalate beyond the current handful of bestellers, though—e.g. into romance titles, children's books, and so on—or if pricing continues to drop on currently discounted titles, say to $8.49, then to $8.00, then to $7.99, then I think the industry is going to be in serious trouble.
· While you, gentle readers, do represent an important subsection of the book-buying market, you are not necessarily representative of the much sought-after bestseller buyer. These are the folks who are going to determine who wins The Great Book War of Aught Nine: the men and women buying The Scarpetta Factor, The Lost Symbol, Going Rogue, The Secret, and so on. If they hand Walmart victory, it's going to be a rough time for the chains and the independents.
· Finally, as was also mentioned last Tuesday, the advent of e-books is going to completely reconfigure the pricing structure of books, which (in my opinion) the industry is, to its detriment, trying to put off dealing with as long as possible. As I said on Monday, I think forcing the industry to not only negotiate the transition from print books to e-books, but to simultaneously completely alter its long-held pricing structure for those print books, is going to be more stress than it can bear in the short term. Maybe I'm not giving them enough credit, but I really think that this kind of change needs to be enacted slowly (not publishing-slowly, but still slowly), and Walmart et al are not going to sit around and lose market share waiting for that to happen.

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.

This Week in Doom: Walmart.com

Thanks to everyone who left feedback in the comments section of yesterday's post; I'll be checking it for a few more days, so if you've got a question or request, feel free to chime in. Answers soon to come!

As you may have heard over the past few days or weeks, there's a price war going on between Amazon and Walmart in the wond'rous (and occasionally terrifying) arena of cyberspace. Both retailers are vying for the much-coveted title of Lord of the Lowest Prices—otherwise known as The Biggest Loser, since both parties are buying their books from publishers at traditional discounts and selling them at a loss—and with Target now getting in on the action, it's going to be a very interesting fight indeed. Popcorn, anyone?

In all seriousness, though, this series of (perhaps soon-to-be unfortunate) events has just about everyone in the industry worried. While publishers aren't losing any money on books at the moment—on the contrary, increased sales of the selected $8.99 hardcovers are only going to boost publishers' sales—they are concerned about the long-term implications of what Walmart, Amazon—and now, Target—are doing. Here are a few of the problems:

· None of these retailers are specifically book sellers, so they can afford to lose money on books while making an overall profit through the sale of other goods. Major chain stores like Barnes & Noble and Borders, as well as smaller independent book stores, can't afford to do this and may either be substantially downsized or actually driven out of business by these sales tactics.
· Should Amazon and Walmart achieve the majority of the large publishing houses' market share, they will eventually be able to collectively demand that publishers sell to them at a steeper discount (such that they can continue to sell books at low prices without hemorrhaging money). If you remember the Walmart/Rubbermaid debacle of a decade or so ago, this won't seem too far-fetched. This could further decrease publishing houses' already slim profit margins.
· Even if Amazon and Walmart don't push for increased discounting, their potential statuses as the country's largest book retailers will make it more difficult for publishers to secure promotional space on their websites (or, in the case of Walmart, brick-and-mortar stores) simply because publishers will be competing not only with other houses, but retailers of completely different goods and services.

Walmart already has a stranglehold on our tupperware, our Kraft dinners, our small kitchen appliances, our dorm furniture. Will books be next?