Something Is Rotten In The State Of E-Book Publishing [Updated]

old books

The publishing industry has a problem. The old guard haven't innovated. And neither their business models nor their products embrace the digital books revolution. 

Take the ongoing and complicated spat between Apple and the Justice Department over the agency pricing model and alleged collusion which ended up with consumers being forced to spend more than they needed to. The battle may expand internationally, in fact. Apple tried to expand its 30% revenue share model, which has done very well in the billion-dollar app economy, into books. It also pushed publishers to agree to a very different way of selling their products: Instead of buying books traditionally, at a pre-agreed wholesale price and then pricing them as Apple saw fit in the iBookstore, it would let the publishers set their own price and extract its usual fixed share of the income ... as long as the publishers wouldn't sell e-books elsewhere.

It was a bold move, and one that could and did shake up the industry a bit. Amazon, the publishers contend, had established a monopoly on e-books, and was selling their wares at overly discounted prices. With Apple's model they could choose to price e-books lower than physical books cost (appeasing consumers who expect to pay less for a non-physical product), and yet extract more money due to the cost-savings of e-publishing.

The DOJ disagreed, and says Apple's deal meant consumers ended up spending much more than they needed to, hence its action against Apple and a laundry list of the bigger U.S. publishers. Amazon is now free to renegotiate deals with these publishers and push cover prices lower, which will save consumers cash but may both eat into publisher's profits and, ultimately, author's payments.

As such, it's not a wholly well-received decision as Scott Turow, president of the Author's Guild, recently noted: "Today's low Kindle book prices will last only as long as it takes Amazon to re-establish its monopoly. It is hard to believe that the Justice Department has somehow persuaded itself that this solution fosters competition or is good for readers in the long run." Because when Amazon does re-establish its monopoly, and nudges prices upward, it'll be operating on the wholesale model--with the extra money sunk into its coffers, not the author's or the publisher's.

But as novelist Barry Eisler notes in the Guardian newspaper, there is actually a glimmer of hope in the DOJ's decision. Amazon could, by sheer pressure of business, force a breakup of the old guard of publishers in the U.S., and make them adapt to the new digital realities or face extinction. In short, they'll have to radically adjust their business models, and also embrace writers who can deliver new rich-media books, if they're to keep the book-buying public enthralled and thus make money. Amazon's quick-growing self-publishing enterprise is an example of how the publishing business may evolve without them if they don't do this.

And what do we, the book-buying public, want? Cheaper prices, as ever, but we're also all expecting books to move beyond dead text and into something much more dynamic, something loaded with rich media, something that makes use of the color and graphics of our tablet screens, and perhaps the social networking powers they also sport as apps. Because those kinds of books sure as heck aren't in Amazon's top-selling Kindle list right now.

Update: The New York Times has a story today that shows just how fraught with ridiculousness (in terms of sensible business practice) the ebooks game currently is. Author Buzz Bissinger recently had a shock when Starbucks chose to promote his $2.99 book "After Friday Night Lights" as a Pick of The Week promotion via Apple's iTunes. Customers taking part in the promotion got the book for free, but Bissinger still got $1.50 in royalties from the loss-leading promo. But Amazon then automatically slashed his book price to $0 in reaction to the promotion. And that prompted his publishers, Byline, to pull the title from Amazon because it would've lost money, and because it thought it would damage the author's reputation (Byliner noted it was to "protect the author's interest".) Amazon have since responded, saying their price deal protects consumers when a price is lower elsewhere, but it still doesn't seem fair to gamble with a writer's income in this way. 

[Image: Flickr user dno1967b , and Isriya Paireepairit]

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5 Comments

  • Thad McIlroy

    This is a good summation of where things stand, and there are indeed troubles in the relatively quiet land of book publishing. But I stumbled pretty quickly when I hit your statement "neither their business models nor their products embrace the digital books revolution." It --sounds-- smart and on-target, but what exactly do you mean? What is "the digital books revolution" if it's not this stumbling, frustrating, experimental and litigious world in which we find ourselves?

  • B.Petersen

    The assertion that making books more interactive will make people buy them is pure bunk. Two words: pop-up books. Those were an "innovation" that make dead text more dynamic using colors and graphics. But guess what? They didn't entice someone to buy more books. As far as making e-books some sort of interactive medium that would replace the 'dead text'. Why? There is no purpose beyond lame marketing b.s. No amount of flashy graphics, soaring music scores and animated clips will make a story better if the story & writing are bad. In fact, trends show that many people are willing to put money down for those special editions and custom runs, paying premiums them. Much like LPs never disappeared, neither will the physical book. It doesn't need recharging, doesn't need "apps" to make it facebook fun, it doesn't make the reader suffer from screen fatigue, and it won't be obsolete in 5 years time.

    The beauty of reading is that it is already one the most interactive forms of content we have. The richness of the text comes from the readers' imaginations. Why do you think fans criticize movie adaptations? Because that interpretation doesn't hew to what they had imagined. Each person's experience with a book is unique yet tied to the shared understanding of the text. 

    The problem with the publishing industry isn't the death of the printed book or the fact that struggling authors can't break into the industry with 6-figure advances, it's that the book industry, much like the record companies has been slow to react to changing markets and flattening of those markets by small presses, vanity publishers, e-books, etc.

  • Ashwin

    I can't comment on the fairness of business models, but there is innovation happening in the e-books space. Publishers should strive to replicate story experiences like this:   http://kck.st/HcFFRI

  • Rusty Neff

    Wow...so many assumptionsd presented as fact. Scott Turow makes one whopper when he says "Today's low Kindle book prices will last only as long as it takes Amazon to re-establish its monopoly." Really Scott? When did Amazon charge high prices for ebooks? I think never would be the correct answer.

    And who knows definitively we all want "books to move beyond dead text and into something much more dynamic, something loaded with rich media, something that makes use of the color and graphics of our tablet screens, and perhaps the social networking powers they also sport as apps." I for one don;t I really enjoy reading without the distraction of video and noise.

    Reading is an intensely personal experience. It is not a social experience unless someone is reading to me. And if I wanted that I'd get an audio book.

    It's so hip to trash Amazon. All they did was make ebooks popular and priced them at points where they actually sold.

    I get why the Authors Guild is opposed to Amazon. They fear a break-up of the current systemn which allows for huge advances to current best-selling authors. But it;s also a system that is EXTREMMELY hard for new authors to break into. And THAT's something I see Amazon doing something to change in a positive way.

  • Thomas Moore

    I agree with the no distraction part of reading text only publications.

    The truth is that some eBooks are priced highly on Amazon, costing more than the same book in hardback. A quick look on Amazon can easily confirm this, I was just about to buy a kindle touch until I found it for myself.

    Also eBooks count as services, and as such are subject to VAT (UK) which pushes the price up further. Oh well I'll just keep on buying physical copies which can be lent to friends or sold after reading, they also look good on the shelf above my desk.

    From what I've read from other sources, the blame is on Apple for letting publishers set the prices. But who ever is to blame its the consumer feeling the pinch, I'm not going digital until the industry sorts this out.