Q&A Tuesday

Do you have a lingering question about the industry that I've thus far neglected to answer? A definition of a term (this industry is rich with fancy jargon, if not actual money)? An explanation of a process? A query about... queries?

I won't really be of much help to you on that last one, but if you've got questions... well, that's understandable. Ask in the comments before the stroke of midnight tonight, and I'll answer in tomorrow's post!

And Then There Were Three

(Image courtesy of Gizmodo)

In the continued battle over the price of e-books, Hachette has joined Macmillan and HarperCollins in adopting Apple's agency model over the existing wholesale model. (You can read their letter to agents here.) That leaves Simon & Schuster, Penguin, and Random House (not pictured) as the odd men (and women!) out.

First, I've received a few e-mails from you asking what, exactly, the agency model is. In short, it's a sales model predicated on the theory that the publisher is selling directly to consumers, and that any agent (oftentimes a retailer like Amazon) conducting a sale on the publisher's behalf is entitled to a commission on that sale (under Apple's model, roughly 30%).

The wholesale model, on the other hand, is based on the theory that the retailer is the only one selling directly to customers, so publishers are essentially out of the picture once they sell their goods to said retailer (usually at a 50% or so discount). This means that the retailer can then turn around and sell their books at pretty much whatever price they want (in Amazon's case, $9.99). Amazon lost money under this model because they were buying new e-books from publishers at roughly half the retail price ($15 or so). This was fine with Amazon, since they were selling books as loss-leaders for their Kindle devices and building significant mind and market share while doing it.

While there are some, like TechCrunch blogger Paul Carr, who believe the agency model is an anti-competitive throwback to the UK's Net Book Agreement of 1900, most believe that with publishers earning more money per sale and shelling out less in terms of overhead (printing, binding, shipping, &c), the agency model could translate into significantly higher profits for houses and, in turn, higher royalties for authors (no guarantees as yet, though).

What do you think, mes auteurs? Is the agency model the way of the future?

Superbowl Pre-Game Round-Up

To my consternation, Ms. Ombreviations has snagged the 150th PMN post from me. Alack! From Combreviations, we have Laura to round up the week:

Hello hello, reader types, and welcome to Friday round-up. Things I should talk about include Macmillan and Amazon, but I'm really kind of bored of the discussion, and have said what I have to say about it (as has Eric, as have you), so I think we can safely skip.

While we've discussed Salinger some, I think we can do it some more, as interesting things are still coming out. I already highlighted the pitfalls of responding to Salinger's fan mail, but there was a reason the man was so popular. While young narrators often sound phony, a lot of teens still find something to love in Salinger's work. I bet if we re-did this list of books most read by college students a month from now, it would include some Salinger works. So let us all sing these Salinger songs, and hope that the books he may have written don't get shredded.

You know what we might have to shred? The Bible. Because apparently, the Bible is way raunchier than we were led to believe. The book about John Edwards, however, is just as raunchy as we were led to believe. And, speaking of politicians doing questionable things, Sarah Palin apparently spent $63k of donations on her own book. But don't worry, she's not a politician anymore, so it's not illegal. Maybe we should keep her off this list of writing ladies and their processes, some of whom were hypochondriac writers. It's too bad they didn't have distraction-free, ambient noise writing before now.

While we're on politics, I should mention this article about Terry Pratchett's stance on euthanasia, and this new book about the military's "don't ask, don't tell" policy. There's also the coal company co-opting the Lorax, and this list of great literary stepmothers—they're not all bad, you know. Don't be a hater.

See you all next week, and don't eat too much Superbowl junk food (unless you are inviting me over, of course).

Good Idea/Bad Idea

If you ever watched the '90s cartoon show Animaniacs, you probably saw a segment in the program called "Good Idea/Bad Idea." If you've never seen Animaniacs, here's a two-minute compilation of some of the Good Idea/Bad Idea sketches (courtesy of Youtube). Hilarious!

Now then: in the publishing world, there are very often scenarios in which what would otherwise be a great idea is actually a terrible idea due to one or two crucial detail(s). As part of your (and, frankly, my) continued education in this industry, I present to you the following examples:

Good Idea: Venting to your friend, spouse, significant other, &c about a negative review of your book.
Bad Idea: Venting to Twitter, Facebook, the Internet at large, &c about a negative review of your book.

Good Idea: Following an agent's guidelines when submitting your novel.
Bad Idea: Following an agent to his or her office/car/home to submit your novel.

Good Idea: Reading industry blogs to improve your writing and querying.
Bad Idea: Reading industry blogs instead of writing or querying.

Good Idea: Selling yourself in order to promote your novel.
Bad Idea: Literally selling yourself in order to promote your novel.

Good Idea: Setting aside a specified block of time to write each day.
Bad Idea: Setting aside your family, friends, and day job to write each day. (May lead to the above scenario.)

Feel free to create your own good idea/bad idea in the comments!

If They Use These Names, I Want Royalties

A quick run-down of the numbers as they currently stand, ladies and gents: about 70% of you think that Macmillan won the first round of what will soon come to be known as the First Battle of E-Book Run; 20% of you think neither Macmillan nor Amazon won; and the remaining 10% of you voted for either Amazon (around 7%) or "Other."

Interesting.

As was mentioned in yesterday's comments, however (thanks, Bron!), there is one major player whose motives and strategy we have yet to discuss: Apple.

The computer company is pushing for an agency model that will 1.) help them undermine the tremendous market share that Amazon currently holds in the e-book universe and 2.) allow them to participate in the market while actually turning a profit. While some have questioned the wisdom of the iPad device (and in many instances, rightly so), I think there's a market that is being seriously overlooked by various critics. One that involves young eyes that have grown up on and are unafraid of backlit screens. One that involves diagrams and photographs that come to life in brilliant color. One that involves one of the biggest rackets in the industry.

Textbooks. (Or, as I like to call them, Nextbooks™. See title of post.)

Yesterday, Apple Insider reported that publishers have tapped ScrollMotion to help develop textbook applications for the iPad. Personally, I think this genius. If Apple moves to develop applications for textbooks quickly and manages to shut other e-readers (black-and-white dedicated devices like the Kindle, Sony's e-reader, the soon-to-come Skiff and Que) out of the market, they're golden. Maybe they'll even make a model aimed at the educational market (the ePad™*?) equipped with only the basics and priced even more affordably than the current models. Apple makes bank, textbook publishers make bank, and school districts save a lot of money in the long run.

What do you think, gentle authors? Does Apple secretly (or not-so-secretly) have its sights set on the e-textbook market? Will it, like the music industry and the shiny-things-I-can't-afford industry, soon be in their spotless white pocket?


*Again, see title of post.

Prithee, Inform Me: Amazon vs. Macmillan

Based on the comments on yesterday's post, it seems we are not in agreement over who "won" the Battle of E-Book Pricing Hill—Amazon or Macmillan. Generally I determine winners and losers by divine fiat, but in this case, I think I'll conduct (you guessed it): a poll.



Have at it!

Round One: Macmillan

If you haven't already heard, a small war broke out in the publishing biz over the weekend. It went something like this: Macmillan had a round of talks with Amazon about increasing the price of their e-books from $9.99 each to somewhere between $12.99 and $14.99 each. When Amazon said they wouldn't do it and it was clear Macmillan wasn't backing down, Amazon responded by pulling all Macmillan titles from its e-shelves on Friday. Macmillan cried foul and, late yesterday, Amazon caved. Macmillan titles sold through Amazon will, starting next month, be priced between $12.99 and $14.99.

[EDIT: Apparently only hardcovers and new releases will be in the $12.99 to $14.99 range; Macmillan titles may appear on Amazon for as little as $5.99, as reported by Macmillan CEO John Sargent.]

What do we make of all this?

It's important to understand that Macmillan's move is based on the long-term goal of keeping e-book prices in the same ballpark as print book prices (as well as their recent deal with Apple), whereas Amazon's goal is to deflate the price of e-books to 1.) sell more Kindles and 2.) gain enough electronic market share to be able to dictate to the publishing industry what books will cost. As we've just seen, Amazon doesn't (yet) have that kind of clout, but that doesn't mean that day will never come.

To quote the Times article: "Book publishers, meanwhile, are volunteering to limit their digital profits. In the model that Amazon prefers, publishers typically collect $12.50 to $17.50 for new e-books. Under the new agency model, publishers will typically make $9 to $10.50 on new digital editions." Publishers are willing to take a short-term loss in order to maintain the status quo; their fear is that if consumers become accustomed to a $9.99 price point for new books, they'll eventually believe that's simply what a book costs, which just isn't true for their print counterparts (hardcovers). Whether this will be the case remains to be seen.

Some are concerned that Macmillan will start seeing a drop in sales if their e-books are priced in the $12.99 - $14.99 range while the rest of Amazon's e-books are sold for $9.99. Although Macmillan may see some shortfall due to lower rate-of-movement and lower profits per book (see above), I don't really think they're going to be hurt by their pricing model in the marketplace. This is chiefly because, unlike vegetable oil or aluminum foil or ball bearings, books are not fungible—that is, one book is not more or less identical to any other and therefore readily exchanged for another. Sure, individual copies of the same title are fungible—you would trade one brand-new hardcover copy of The Help for another brand-new hardcover copy of the The Help—but books in general are not (you wouldn't buy The Help for $9.99 on Amazon simply because it's cheaper than The Gathering Storm at $12.99).

Buying books is not like buying tupperware; consumers do not automatically go for the cheapest product that will get the job done. For this reason, I disagree with anyone that believes Macmillan's breaking Amazon's $9.99 standard will hurt them or the sales of their books; after all, they've competed just fine in brick-and-mortar stores where prices vary significantly from title to title already.

Finally, it's important to realize that neither publishing companies nor Amazon are charities. While both are looking to provide consumers with goods they will purchase (thereby earning profits for the companies involved), none of them believes that they "owe" customers low prices or that they should lose money to keep everyone satisfied. Most importantly, Amazon's imposition of a uniform price should not be misconstrued as the result of market pressure. Regardless of whether the market could tolerate, or even favor, a higher price point—and we'll soon see whether it will—Amazon has made its position clear. We'll see whether their predictions bear out.