Amazon vs. IPG dispute

[Spring Bass]

Do you care about authors? Do you care about reading good books?

I care about authors, but not publishers. I honestly couldn't name the publisher for any of the fantasy series I'm following right now except for Wheel of Time (Tor), and I don't particularly care for what arrangement of publishers ends up surviving the transition to e-books.

What Amazon is doing is de-valuing the product that is a book (whether physical or electronic). This will force costs to be cut - so, authors will make less money, editors will be utilized less (or not all), copy-editing (proofreading) will go away, there will be less marketing/promoting, etc.

Using your clout as a retailer to lower prices isn't "de-valuing" a product, anymore than Wal-Mart "de-values" the products it carries. Or than any big retailer "de-values" products when they replaced the costlier small shops they drove out of business.

Besides, it's not as if the publishers can't push back, particularly when Amazon has competition in the form of Apple, Google, and Barnes & Noble. The very fact that Amazon is using Agency Pricing to sell e-books is proof of that.

This will erode the overall quality of books. It will all but insure that only the biggest names in writing will be able to make a living writing (most writers already need to have a 'day' job). This will make writing less viable of a career. This will be a roadblock to new writers entering the market.

Writing full-time has always been something that only a minority of authors could ever afford to do. I fail to see how simply lowering prices is going to destroy our ability to produce good books, especially since that didn't happen during the previous wave of change in the industry (when the big chain stores destroyed most of the independents).

Writing itself will probably change too. The reason novels are so dominant is because a novel can be sold as a product by itself while a short story can't. Once paper copies are gone that's no longer the case. I'd expect a shift away from novels and towards novellas and short stories.

We're already seeing some of that in Non-Fiction, so it wouldn't be a stretch to see it spreading to fiction. On the other hand, e-books eliminate a lot of the inconvenience that came with door-stop books.

[fionwe1987]

One of the things the publishing industry's apologists don't seem to grasp is that an ebook isn't just a pdf version of a printed book. With an ebook the publisher no longer has full control over how the text looks because that needs to be decided (at least to some degree) by the device it's read on. The parts of the production process that deal with that sort of thing will go away. Forget about bound volumes and the text formatting done for that form of publication. We are going back to scrolls.

Writing itself will probably change too. The reason novels are so dominant is because a novel can be sold as a product by itself while a short story can't. Once paper copies are gone that's no longer the case. I'd expect a shift away from novels and towards novellas and short stories.

I'm actually hoping serialized novels make a comeback.

[Spring Bass]

I'm actually hoping serialized novels make a comeback.

Same here. They seem like a logical response to the threat of piracy, although actually selling the chapters directly might not work (Stephen King tried that, and abandoned it when the number of people buying the chapter dropped below a certain threshold). Many web-comic authors already do something like that.

[Maia]

As someone who regularly buys hardcover textbooks on programming and history, seeing people complain about a 15 dollar ebook makes me want to kick a baby. People are greedy asshats.

IMHO, it is the publishers who are greedy and stupid when they price ebooks above mmpbs (once mmpb of the title is out, that is). This is complete nonsense that needs to go away ASAP. Also, there should be reasonable discounts on ebook of the same title for people who buy hardcovers. The publishers should never forget that they are competing with "free" and shouldn't try to fleece people who are willing to support them.

[unJon]

Before the flame war gets this topic closed, I just wanted to point out that it is super hilarious and ironic that stores like B&N are being defended and the demise of Borders is being bemoaned by the same arguments that were used to attack the national bookstores no more than a decade ago. Borders and B&N were evil back then and were going to destroy the publishing industry by squeezing margins and putting authors out of business. Literally the same arguments as are being thrown against Amazon.

[Seli]

Before the flame war gets this topic closed, I just wanted to point out that it is super hilarious and ironic that stores like B&N are being defended and the demise of Borders is being bemoaned by the same arguments that were used to attack the national bookstores no more than a decade ago. Borders and B&N were evil back then and were going to destroy the publishing industry by squeezing margins and putting authors out of business. Literally the same arguments as are being thrown against Amazon.

The interesting bit is I don't see anyone here defending the likes of B&N, I see people defending (small) publishers and the idea that they are a net positive to authors and readers.

[Lummel]

...The publishers should never forget that they are competing with "free" and shouldn't try to fleece people who are willing to support them.

How do you mean? Because people can borrow the book?

I think competition in bookselling has been made more complicated by the appearance of ereaders, partly because the reader has an extra medium to choose from but also because of competition between different devices.

But in any case publishing has long been a very flexible type of business, you see a lot of big changes, a lot of adaptation and still see new players joining the market or changing their approach. Amazon is hardly the only on line book retailer anymore either.

[Spring Bass]

True. As of 2011, Amazon represented 38% of the e-book market. That's a lot, but it's not a majority. Publisher sites themselves account for 25% of all e-book sales.

The interesting bit is I don't see anyone here defending the likes of B&N, I see people defending (small) publishers and the idea that they are a net positive to authors and readers.

Good point, particularly when you consider that the demise of Barnes & Nobles physical bookstore business would be a far greater blow to the current set-up of how the publishing industry promotes and sells books.

[Shryke]

I think what people are failing to note is that it doesn't matter that the actual printing and distribution of hard-copy books isn't that expensive, its other services like design, editing, etc. What matters is that to the average customer, 14.99 for an ebook is an absurd price. Especially with the DRM, the inability to share that book, or resell it.

Why is it an absurd price?

This whole issue seems to revolve around this weird idea that ebooks are worth way less, despite the cost of making one not being much cheaper.

[Shryke]

I care about authors, but not publishers. I honestly couldn't name the publisher for any of the fantasy series I'm following right now except for Wheel of Time (Tor), and I don't particularly care for what arrangement of publishers ends up surviving the transition to e-books.

Publishers are the business model that supports authors.

Using your clout as a retailer to lower prices isn't "de-valuing" a product, anymore than Wal-Mart "de-values" the products it carries. Or than any big retailer "de-values" products when they replaced the costlier small shops they drove out of business.

Actually it does. Wehn a retailer gains a large enough share of the market, they can force conditions on the suppliers (publishers in this case), forcing them to lower their prices beyond what the supplier can afford. This causes cutbacks and restructuring in the supplier.

In book terms, this means less authors and less risky authors. When you need to squeeze your costs down, you go conservative and you cut the stuff that isn't making huge margins.

Besides, it's not as if the publishers can't push back, particularly when Amazon has competition in the form of Apple, Google, and Barnes & Noble. The very fact that Amazon is using Agency Pricing to sell e-books is proof of that.

And the whole point that started this thread is that they can push back but that doesn't mean they can necessarily win.

Writing full-time has always been something that only a minority of authors could ever afford to do. I fail to see how simply lowering prices is going to destroy our ability to produce good books, especially since that didn't happen during the previous wave of change in the industry (when the big chain stores destroyed most of the independents).

You fail to see how making writing books a less well paying and less available career will leed to less books? That's an interesting kind of "thinking".

Also, big chain stores don't change the business model a ton. They just leverage a bit lower prices from buying in bulk.

[Spring Bass]

Publishers are the business model that supports authors.

Yes, but that's not an argument for a specific arrangement of publishers, like the set we currently have today. As I said above, I don't particularly care for what arrangement of publishers survives the transition to e-books, since the effect will still be to produce books for sale.

Actually it does. Wehn a retailer gains a large enough share of the market, they can force conditions on the suppliers (publishers in this case), forcing them to lower their prices beyond what the supplier can afford. This causes cutbacks and restructuring in the supplier.

That also forces the supplier to discover how to be more efficient, and to change obsolete business models. Besides, the publishers are the ones setting the prices in the current market.

In book terms, this means less authors and less risky authors. When you need to squeeze your costs down, you go conservative and you cut the stuff that isn't making huge margins.

No, it means a different arrangement of publishers and less reliance on the big publishing houses than there used to be. Unless you have proof that the absolute number of authors getting published has significantly declined.

And the whole point that started this thread is that they can push back but that doesn't mean they can necessarily win.

So? It's not in the consumers' interest for them to "win" - we need them to push back and eventually reach some sort of equilibrium with Amazon and other retailers on price and availability.

You fail to see how making writing books a less well paying and less available career will leed to less books? That's an interesting kind of "thinking".

Arguing for higher book prices by saying it will generate more books is an "interesting" type of thinking as well. Why aren't you arguing for subsidies for publishers, then? Or perhaps a price floor?

In any case, I question whether we've actually seen less books being written in the current environment. Particularly since actually writing a book has never been easier due to technology.

Also, big chain stores don't change the business model a ton. They just leverage a bit lower prices from buying in bulk.

That's exactly what Amazon was doing before e-books hit in force. Which means that the disruptive factor are the e-books, not Amazon. E-books and the online retail environment in general are what is drastically changing the traditional business model in the publishing industry, and that would have happened if Amazon had never existed. You just would have had Google or Apple being the ones to develop the whole "e-books plus e-reader" business model.

[Mr. E]

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In any case, I question whether we've actually seen less books being written in the current environment. Particularly since actually writing a book has never been easier due to technology.

I personally don't doubt that there are more books out there than ever, mostly due to the technology. However, I also don't know if this is necessarily a good thing--everyone fancies themselves a literary genius, and everyone has their magnum opus on their hard drive--but ten years ago, these things would never see the light of day, save for a few friends if the book were self-published.

But I can just imagine a paradigm where every lame, derviative, and deluded novel on every USB drive in every office of America could suddenly be published online at the same time, with no publisher to edit it, format it correctly, weed out the less quality cases...:shivers:

So maybe there are more books than ever, but I would argue more stingently that there just might be less good books.

That's exactly what Amazon was doing before e-books hit in force. Which means that the disruptive factor are the e-books, not Amazon. E-books and the online retail environment in general are what is drastically changing the traditional business model in the publishing industry, and that would have happened if Amazon had never existed. You just would have had Google or Apple being the ones to develop the whole "e-books plus e-reader" business model.

I agree, and I think the industry does have to change. But I also think, like others have ennumerated, that publishers still, and always will, have a purpose. We may not like that purpose, and publishers in other industries (not really the book industry though, oddly) might do some pretty shady things, but they do have a purpose. I think most people don't like them, though, because a publisher will basically state "Your work sucks and doesn't deserve to be seen," which is not something people like to hear.

[Spring Bass]

I agree, and I think the industry does have to change. But I also think, like others have ennumerated, that publishers still, and always will, have a purpose. We may not like that purpose, and publishers in other industries (not really the book industry though, oddly) might do some pretty shady things, but they do have a purpose. I think most people don't like them, though, because a publisher will basically state "Your work sucks and doesn't deserve to be seen," which is not something people like to hear.

It's not that I think publishers serve no purpose, just that we really shouldn't be up in arms about the present arrangement of publishers.

I'm also not one of those people who think that e-books are "supposed" to be cheaper than the print versions. I know that most of the cost isn't in the actual process of making a physical copy on the printing press. I just don't hink think it's a bad thing if the big e-book retailers push for cheaper prices, since that's what most mass-market retailers will do.

[Willie McBride]

Why is it an absurd price?

This whole issue seems to revolve around this weird idea that ebooks are worth way less, despite the cost of making one not being much cheaper.

It's the publishers' fault: they set up a market based on the same contents available in hardcover format at 25$ or in mmpb format at 8$, with all the rest happening behind the scenes. If the average reader has been trained for decades to think that reducing the size of the thing and the quality of the binding and of the paper makes the price change so much, could you seriously blame him if he feels ripped off if an ebook (a file!) costs more than 10$?

[Lummel]

Seems like a re-run of the same arguments that there were when supermarkets started to sell books or the end of the net book agreement in the UK.

[Shryke]

Yes, but that's not an argument for a specific arrangement of publishers, like the set we currently have today. As I said above, I don't particularly care for what arrangement of publishers survives the transition to e-books, since the effect will still be to produce books for sale.

Will it? Will it to the same extent?

You are assuming it will, but there's no guarantee. Business model changes aren't always for the better.

That also forces the supplier to discover how to be more efficient, and to change obsolete business models. Besides, the publishers are the ones setting the prices in the current market.

No, it means a different arrangement of publishers and less reliance on the big publishing houses than there used to be. Unless you have proof that the absolute number of authors getting published has significantly declined.

It's like you didn't read what I wrote.

You understand that "efficiency" here means cutting back on things like, to quote an actual fucking author, commissioning, editing, marketing, publicity, design, production and so on. There's nothing else to the business. That's what publishers do.

There's always inefficiencies to be removed from a business model but at some point you stop trimming fat and start trimming muscle.

You seem to think really poorly of publishers because you don't understand their place within the book market.

Arguing for higher book prices by saying it will generate more books is an "interesting" type of thinking as well. Why aren't you arguing for subsidies for publishers, then? Or perhaps a price floor?

No, saying higher book prices will generate more income for publishers who can then hire more authors is called "basic economics". Although the obvious caveat is that high prices also reduce sales, but that only counts if you have some proof the market is currently charging too much for books.

In any case, I question whether we've actually seen less books being written in the current environment. Particularly since actually writing a book has never been easier due to technology.

Writing a book as in "putting words into a word-processor" is as easy as it's been since the invention of the word processor. Like, decades ago. Nothing else about making a book has really changed though. Virtually everything else that goes into publishing a book hasn't really gotten any cheaper.

Where are these cost savings you are talking about coming from?

That's exactly what Amazon was doing before e-books hit in force. Which means that the disruptive factor are the e-books, not Amazon. E-books and the online retail environment in general are what is drastically changing the traditional business model in the publishing industry, and that would have happened if Amazon had never existed. You just would have had Google or Apple being the ones to develop the whole "e-books plus e-reader" business model.

No, Amazon was saving money because they have no physical retail space. Amazon saves money the same way every internet retailer does, because all you need is a website, a warehouse and some sort of distribution chain. This is why even physical stores will charge you a different price in store then on their website.

The lack of physical retail space is a HUGE cost savings compared to big box retailers and a fundamental shift in the market. It is nothing like the move from small local bookstores to big chain bookstores.

[Seli]

Big chain retailers were a disruptive force before Amazon, they were large enough to bypass the big distributors and buy directly from the publishers. This helped them destroy the small independent stores. Their true disruptive effect was or actually is in their order system. Looking intensely at past sales in their decision on how many books to pre-order, while ignoring how many books you actually need in a store for people having a proper chance to find and buy them. This way of pre-ordering has lowered print-runs, decreasing margins for the publishers and hurting (midlist) authors while not increasing sales. Amazon and big box sellers have increased this effect.*

Ebooks are a whole other kettle of fish, with a whole different sales model.

* reconstructed from a bunch of posts and comments from people in the field from these last years

[felice]

This whole issue seems to revolve around this weird idea that ebooks are worth way less, despite the cost of making one not being much cheaper.

Printing, shipping, and warehousing of physical books is not an insignificant cost. They aren't the only costs - ebooks shouldn't be free - but the profit margin on an ebook is much bigger than that on a paperback at the same price.

[fionwe1987]

Why is it an absurd price?

This whole issue seems to revolve around this weird idea that ebooks are worth way less, despite the cost of making one not being much cheaper.

Did you read what I wrote? Ebooks cannot be resold, I cannot lend them out (unless I own a Nook and so does my friend), and I have DRM preventing me from opening it in any software I choose. All of that reduces the value of the ebook for ME, the customer. Did the author and the publisher spend nearly as much to create an ebook as a physical book? Sure. But till they invent a physical book that sticks to you, can only be opened inside the store you bought it from and is illegal to resell or lend out, you can't charge me more for an ebook that does less for me.

But I can just imagine a paradigm where every lame, derviative, and deluded novel on every USB drive in every office of America could suddenly be published online at the same time, with no publisher to edit it, format it correctly, weed out the less quality cases...:shivers:

So maybe there are more books than ever, but I would argue more stingently that there just might be less good books.

That's ridiculous. Nothing like that happened to the music industry with the arrival of youtube. Are there appalling music videos from random teenagers out there? Yes, but there's also tons of cool innovative stuff, some of which would never have seen the light of day if the music labels were still ruling the roost as they did on their heyday.

The same happened when blogs and internet news sites challenged traditional news sources. For every shitty blog with biased info, you have one that exposes stories that no mainstream media source will look at twice. And with the internet, you have the power to weed out the crap from the good.

What ebooks will do its give the reader more choice. Suddenly, your reading choices are not confined to what a few people think is worthy of publishing. You get to decide for yourself.

And ebook stores have the additional advantage that they don't have to worry about physical space or losses incurred by ordering too many copies of a non-formulaic book. When I enter one, I won't be confronted with 50 copies of a crappy bestseller, when the book that I actually should be reading is a single copy hidden behind a discount stand of NYT bestsellers. It would mean publishers can take bigger risks with the novels they publish since they won't be confronted with retailers refusing to preorder risky titles.

And I find it absurd that people think the presence of ebooks means no one will use editing, graphic design and text formatting!

Take the software Caliber, for example. I can take a word file or a pdf of my work, and convert it into a very well formatted epub or mobi file with complete control over everything from line spacing to paragraph indentation to spacing between chapters. And the software is free and constantly updated.

Then there's Apple's new e-textbook writing app. How long before something like that comes up for novels, so writers, editors and designers can collaborate over the internet and create great books?

And that could mean massive changes to the publishing industry. Maybe instead of publishers, you have editors co-ops, designer co-ops and so on. How do prospective authors pay them? With Amazon's Kindle Direct Publishing allowing you to get as much as 70% of sales in royalties, authors can trade a percentage of that, perhaps. Or better yet, use Kickstarter. Get your funding from future readers, pay the guys who'll make your books better, then reap richer rewards than you currently can.

To be sure, this is just one, highly optimistic, model that could replace the current model. Not every author can succeed this way. But the beauty of ebook publishing can be that there are multiple ways to get your work published and make decent profits.

The more choice there is, the less constraint economics will place on literature as an art form. And for that to happen the current, middlemen filled, publishing model has to die.

[Spring Bass]

Will it? Will it to the same extent?

You are assuming it will, but there's no guarantee. Business model changes aren't always for the better.

There's no guarantees, but I think it's absurd to argue that no one will be trying to sell books. Besides, this isn't the first time that we've had innovation in the form of drastically cheaper books. The advent of mass-marketed paperbacks didn't destroy the publishing industry.

It's like you didn't read what I wrote.

You understand that "efficiency" here means cutting back on things like, to quote an actual fucking author, commissioning, editing, marketing, publicity, design, production and so on. There's nothing else to the business. That's what publishers do.

There's always inefficiencies to be removed from a business model but at some point you stop trimming fat and start trimming muscle.

Or you change the business model instead of constantly trying to cut your losses on the existing way you do business. Many of those expenses are based around a specific set of ideas on how to properly market and develop books.

No, saying higher book prices will generate more income for publishers who can then hire more authors is called "basic economics". Although the obvious caveat is that high prices also reduce sales, but that only counts if you have some proof the market is currently charging too much for books.

"Charging too much for books" is subjective, whereas the caveat you mentioned is also basic economics. I might also add that higher prices are a greater incentive for piracy as well.

More specifically, lower prices for books are a direct and obvious gain for the consumer. Whereas you've claimed that the lower prices are hurting authors and publishers, indirectly hurting consumers by reducing the number of books being sold - higher book prices are indirectly benefitting consumers, something for which I've seen little proof in this thread. By how much does this perceived greater offering outweigh the decreased ability of consumers to afford to buy any of it in terms of consumer benefit?

Writing a book as in "putting words into a word-processor" is as easy as it's been since the invention of the word processor. Like, decades ago. Nothing else about making a book has really changed though. Virtually everything else that goes into publishing a book hasn't really gotten any cheaper.

I said it was easier to write a book, not that it was cheaper to put it through the existing publishing set-up.

No, Amazon was saving money because they have no physical retail space. Amazon saves money the same way every internet retailer does, because all you need is a website, a warehouse and some sort of distribution chain. This is why even physical stores will charge you a different price in store then on their website.

The lack of physical retail space is a HUGE cost savings compared to big box retailers and a fundamental shift in the market. It is nothing like the move from small local bookstores to big chain bookstores.

Conceded.

Their true disruptive effect was or actually is in their order system. Looking intensely at past sales in their decision on how many books to pre-order, while ignoring how many books you actually need in a store for people having a proper chance to find and buy them. This way of pre-ordering has lowered print-runs, decreasing margins for the publishers and hurting (midlist) authors while not increasing sales.

Interesting.