Skip

Monopsonies and Monopolies
April 21, 2012 6:44 PM   Subscribe

Why book publishers will give up on Digital Rights Management. Short answer: because they are more afraid of Amazon becoming a monopsony than they are of consumer piracy. I don't know if he's right, but it's an interesting discussion of the immediate future in book publishing, and the way the Kindle has changed everything.
posted by Chocolate Pickle (105 comments total) 34 users marked this as a favorite

 
Because I had to look it up: Monopsony
posted by briank at 6:59 PM on April 21, 2012 [3 favorites]


The point is, the big six publishers' Plan B for fighting the emerging Amazon monopsony has failed (insofar as it has been painted as a price-fixing ring, whether or not it was one in fact). This means that they need a Plan C. And the only viable Plan C, for breaking Amazon's death-grip on the consumers, is to break DRM.

Time for plan C is probably over and done. In the rush to screw over a small fraction of book-reading Apple/iBooks users in the guise of protecting competition, the DoJ action was a gift on a plate to Bezos, handing over the book market to Amazon. People love the Kindle platform for the same reason that people flocked to iTMS: it's easy, cheaper, and flexible. None of the other formats can really offer all of that to consumers, even for lack of DRM, which is of technical and political interest to only a very small fraction of book readers, and maybe some librarians, whose role in society is in decline, perhaps, but most certainly still in great flux. Amazon can beat DRM concerns, I think, because they can and do still offer a better value.
posted by Blazecock Pileon at 7:00 PM on April 21, 2012 [2 favorites]


Which is to say, getting rid of DRM wouldn't have made the publishers' business model of charging more for digital product any more attractive to readers than their onerous strategy was back with iBooks.
posted by Blazecock Pileon at 7:03 PM on April 21, 2012 [1 favorite]


Plan C allows for some other device to supplant the Kindle as the ebook reader of choice, which opens the door to supplanting Amazon as the storefront of choice. Whether that can happen in enough time to make a difference is another question.
posted by Holy Zarquon's Singing Fish at 7:09 PM on April 21, 2012


I dunno, BP. People are slow to rile but if the majors make a concerted effort to promote the fact "you don't own your Amazon eBooks" and present an alternative through iTMS or whatever, the message will sink in relatively quickly. The joyous thing is that stripping DRM doesn't take a world-wide fleet of trucks; it's a bit to be flipped. They need to make a decision, and that's about it. And I wouldn't be at all surprised if Apple doesn't help them get it done.

I could be an optimist. On the other hand, I do know the only eBooks I ever bought were those that lacked DRM (thanks, Baen). And as the more or less proud owner of one of the original Rocket eBooks (still in fine working condition), I've had a long, long time to form a purchasing strategy, and a long long time to stick to it.
posted by seanmpuckett at 7:09 PM on April 21, 2012


Is there even a viable non-Kindle, non-Nook eReader at this point, though? eInk is the only thing I could see myself reading a novel with... but the Kindle is the only half-decent one available at a reasonable price, as far as I'm aware.
posted by sonic meat machine at 7:17 PM on April 21, 2012


In the rush to screw over a small fraction of book-reading Apple/iBooks users in the guise of protecting competition, the DoJ action was a gift on a plate to Bezos, handing over the book market to Amazon.

Do you have any evidence that the DoJ has any type of anti-Apple bias? This is a bold and recently oft-repeated claim (repeated mostly by pontificators with little or no understanding of US antitrust jurisprudence) for which I have seen not a single shred of evidence.

Moreover, this argument appears mainly in sequences of argument alleging other types of persecution of Apple and/or Apple users (a distinction usually left obscure for rhetorical reasons) that likewise appear to be based on no evidence whatsoever.
posted by Inspector.Gadget at 7:18 PM on April 21, 2012


Do you have any evidence that the DoJ has any type of anti-Apple bias

Their anticompetitive argument is founded upon a consumer base that only buys 10-25% of eBooks, depending on whose numbers you believe. Going after a non-monopoly is circumstantial evidence either of bias or horribly misplaced action. But to deal with the subject of thread, if the publishers get rid of DRM while charging the same or more for their eBooks, how does that appeal to the majority of readers, who have in the time frame of this lawsuit likely already bought into the value proposition that Amazon has put forth? What more can publishers offer? That's the question that remains unanswered. If you ask most people on the street what DRM is, I suspect you'll get a puzzled look, nine times out of ten. Of those nine, I suspect none of them would think Kindle is too restrictive a platform.
posted by Blazecock Pileon at 7:32 PM on April 21, 2012


the DoJ action was a gift on a plate to Bezos, handing over the book market to Amazon.

Bezos got that gift from the publishing industry, not the DoJ. This lawsuit can be very simply summed up: if you give somebody a present last week, trying to steal it back this week is still stealing.

Stross made an interesting point in there that "By foolishly insisting on DRM, and then selling to Amazon on a wholesale basis, the publishers handed Amazon a monopoly on their customers—and thereby empowered a predatory monopsony."

That line came back to me when I was reading this article in the New York Times about how upset some publishers were at the lack of a Pulitzer Prize winner in the fiction category:
"The fate of an entire industry seems to hang on the fate of every book, and the feeling is perfectly understandable," said Leon Wieseltier, the literary editor of The New Republic. "People who know how to publish books are in danger of being put out of business by people who don’t but think they do."
So: out of fear of piracy, at the same time as the cost of publishing (not printing, mind you, but publishing) has gone through the floor, the publishing industry collectively made the decision to hand near-total control of their customer base to Amazon wrapped in a neat little DRM-colored bow. And then they tried to recover from that staggeringly shortsighted business decision with engaging in criminal business practices.

And this suit arrives just months after one major publisher's CEO registered this astonishing complaint::
David Young, Hachette’s chief executive, says: Publishers can’t meet to discuss standards because of antitrust concerns. This has had a chilling effect on reaching consensus."
You read that right: the chief executive officer of a major publisher said, in the business section of the New York Times, that laws prohibiting collusion and price-fixing are having a “chilling effect” on attempts to collude and fix prices. It's like seeing a letter to the editor from a loanshark, saying that laws against charging ridiculous interest and breaking people's kneecaps is making business difficult. It's hard to know how you could make an easier target of yourself.

Whatever you think of Amazon, if this is the sort of forward-thinking decision-making prowess at the top of the major publishers of the world, if one Pulitzer not being awarded in one year is enough to cause this kind of panic, then Wieseltier has got this exactly backwards. The people who are running publishers out of business, who think they know how to publish books but don't, are the publishers themselves, and the publishing industry has had this coming for a long time now.
posted by mhoye at 7:38 PM on April 21, 2012 [24 favorites]


The current episode of WNYC's On The Media has a great deal to say about DRM, Amazon, etc.
posted by ocherdraco at 7:40 PM on April 21, 2012 [2 favorites]


Going after a non-monopoly is circumstantial evidence either of bias or horribly misplaced action.

No it isn't, and I'm stunned that anyone can say this with a straight face.

Horizontal price fixing has long been of special concern to both antitrust enforcement authorities and antitrust law scholars, and antitrust jurisprudence to date reflects this.

This is exactly what I refer to above - only people with an axe to grind see the DoJ's pursuit of the publishers and Apple as an anomaly. Going after colluding competitors is a central (arguably the central) role of antitrust enforcement authorities.
posted by Inspector.Gadget at 7:44 PM on April 21, 2012 [5 favorites]


"People who know how to publish books are in danger of being put out of business by people who don’t but think they do."

This statement is self-refuting. If the "people who don't know how to publish books" are winning, it can only be because the landscape has changed sufficiently that the knowledge of the "people who do" has been rendered irrelevant. The internet is, first and foremost, a relentless and implacable disintermediator.
posted by Horace Rumpole at 7:46 PM on April 21, 2012 [10 favorites]


Going after a non-monopoly is circumstantial evidence either of bias or horribly misplaced action.

That's kind of a crazy thing to say.
posted by mhoye at 7:51 PM on April 21, 2012


This statement is self-refuting.

Not necessarily, and the crux of it revolves around quality and what's considered a good job - really good editing, typesetting, binding, etc.

If you've seen what a fantastically crappy job of editing, proofreading and typesetting gets done to some books, electronic or no, you understand what somebody who cares intensely about getting that stuff right likely means by "knowing what they're doing". So I actually sympathize with the argument quite a bit, despite the fact that it (like a lot of the arguments around publishing these days...) suffers the very basic flaw of conflating "the act of publishing a book" with "the business of publishing".
posted by mhoye at 7:56 PM on April 21, 2012 [2 favorites]


I'll admit to being a little perplexed by (some) authors' apparent fear and loathing of Amazon. I can understand some of the fear side, because a monopoly/monopsony player is definitely a concern due to the potential for abuse of market power.

But I'm not seeing criticism of Amazon's getting there through shady business practices, for the most part. They appear to have been very successful, almost single-handedly making the ebook market popular and profitable, by being better at business than everyone else. The whole idea of being able to order a book over the Internet and have it arrive days or weeks later was because of them. As a reader of books, this has been a tremendously great thing for a host of reasons.

If anything, my loathing is reserved for the publishers. They've done all they can to try to preserve their old ways of doing business while Amazon runs rings around them strategically. That hasn't been good for me as a reader. B&N, Borders, and everyone else didn't make as big a bet on the Internet thing. Amazon did, and won. They did it again with ebooks. If their product had sucked, they'd have gone out of business.

Amazon isn't unassailable. Create something better, that benefits the ultimate funders of the book industry: readers. I'd love to see a group of publishers do a joint venture with a tech company to create an alternative to the Kindle marketplace with no DRM, and where I get to keep the book. And can loan it to friends. And from a library.

Or does the fear and loathing thing come down to "I just don't trust what Bezos will do with all that power"?
posted by But tomorrow is another day... at 8:03 PM on April 21, 2012 [5 favorites]


I'm only into ebooks because I recently won a Kobo Touch in a raffle (and it's working nicely for me so far)

As a new e-book consumer, but an experienced pulp-cutlet-type book consumer, I think that ebook prices, DRM or not, are improperly high. I think that as a rule of thumb the price of a new and popular ebook should be on the order of a third the cost of the print version.

Market, work your magic...
posted by Artful Codger at 8:04 PM on April 21, 2012 [4 favorites]


If the Big Six believe that accurate proofreading and attractive typesetting will preserve their business model of Fifth Avenue office buildings and six-figure celebrity tell-all advances, they are desperately mistaken.
posted by Horace Rumpole at 8:04 PM on April 21, 2012 [3 favorites]


Is there even a viable non-Kindle, non-Nook eReader at this point, though?

They exist. If my Sony 505 ever dies (doesn't seem likely, that thing's a tank), I'm probably replacing it with a Kobo.
posted by asperity at 8:06 PM on April 21, 2012


It's kind of like inflation and deflation in economics. Inflation is bad deflation, its opposite, is not good, it's simply differently bad.

Most people have a slightly more sophisticated understanding of inflation. We could really use some higher inflation right now in the United States to reduce real interest rates further since nominal rates are at the zero bound.


I'm not going to lecture you about Jeff Bezos either, although I do want to note that he came out of a hedge fund and he's ostensibly a libertarian; these aspects of his background make me uneasy, because in my experience they tend to be found in conjunction with a social-darwinist ideology...

Indirectly calling Bezos a "social-darwinist" is pretty outlandish and irrelevant to his argument.
posted by euphorb at 8:07 PM on April 21, 2012


That's kind of a crazy thing to say.

The Sherman Act was meant as a control on monopolies. IBooks is no monopoly, and never has been. But, again, that's immaterial to the clear and obvious benefit that this lawsuit has and will continue to provide to Amazon's existing monopoly on electronic book distribution. Getting rid of DRM won't change that on the consumer end, unless the publishers do something else to tip the balance in their favor, such as lowering prices. I don't see that as a realistic outcome. They never wanted to cut prices, in the first place. Maybe they will agree to undercut Amazon, but then they'll likely end up in front of a judge again for collusion. Which just helps out Amazon once more.
posted by Blazecock Pileon at 8:12 PM on April 21, 2012


This isn't about Apple, it's about the publishers colluding. Apple wouldn't be named in the lawsuit at all if they hadn't helped facilitate the collusion of suppliers to raise prices, which ai exactly what the Sherman Act is intended to prevent.
posted by anotherpanacea at 8:15 PM on April 21, 2012 [3 favorites]


It's sad but true: the things that you think are important in making a book valuable? Millions and millions of people do not care about them, and they will be perfectly happy consuming lots of books that have not received high quality "editing, proofreading and typesetting".
posted by benito.strauss at 8:22 PM on April 21, 2012 [4 favorites]


I'll admit to being a little perplexed by (some) authors' apparent fear and loathing of Amazon... As a reader of books, this has been a tremendously great thing for a host of reasons.

It's a little uncomfortable to say this, because both authors and readers tend to be in the category of "people MeFites like, and often are." But it's not so clear how aligned the interests of the two groups are. It's in the interest of the reader to pay little or nothing for books, and it's in the interest of authors to get paid a lot for books.

Now you can certainly make the argument that it's not in either group's interest for publishing houses to make a lot of money off books. And you can imagine some kind of gloriously disintermediated future in which each author is her own small business, making her own illustrations, editing herself, doing her own publicity, or choosing from a variety of vendors who'll carry out these services for her in exchange for a cut of the revenue. That version of the future has plusses (it's at least possible the author ends up getting more money per copy sold) and minuses (most people don't want to run a small business, so making that a requirement for writing a book makes it more unpleasant to write books.)

But is Amazon moving us towards that future? Or a future where they're the well-compensated middleman instead of Random House?

I don't think the celebrities who write tell-all memoirs (or the people who write tell-all memoirs for and about them) have much to worry about. But I think Robert Caro, and Nicholas Lemann, and people in the future who want to write the kind of books they write, probably have something to worry about. If you want to write a book that takes years of full-time work to research, someone has to pay you to do that research. Will it be Amazon?
posted by escabeche at 8:27 PM on April 21, 2012 [4 favorites]


Is there even a viable non-Kindle, non-Nook eReader at this point, though?

Are they even viable on their own?

-- Sent from my iPad
posted by ChurchHatesTucker at 8:32 PM on April 21, 2012 [2 favorites]


From MeFi's own cstross!
posted by pmb at 8:34 PM on April 21, 2012


Ebooks from the big six haven't been getting good typesetting editing proofreading anyway. At least the ones I've been buying lately haven't been. I bought a Kindle Fire because I had an urge to reread some Rex Stout murder mysteries I used to own. These are books which were originally published in the 1930's and 1940's, mostly, and in paper form long since paid back the original cost of editing etc.

The Kindle format is text, not pictures, and in order to create the Kindle versions of these books, they've been using OCR. But no one bothered to go through and check the result. I've been spotting all kinds of things I would ordinarily call "typos" in the text. Frankly, it looks like they spent the absolute minimum time and effort they could manage in digitizing these.

And they've been charging me anything between $8 and $12 each for them, which is usually the same price as for the paperback version. (Amazon always includes a note to the effect that the price was set by the publisher. "Don't blame us because Random House is gouging you!")
posted by Chocolate Pickle at 8:38 PM on April 21, 2012 [6 favorites]


Ebooks from the big six haven't been getting good typesetting editing proofreading anyway.

Man, I'm not saying they're right - I'm saying I have a lot of sympathy for the argument that it's important to be really good at something, even when it's plainly no longer true.

I mean, if you were a foresighted illuminator when the Gutenberg Press first came out, you'd be rightly be looking around the cloister at your brother monks thinking "well, that's the end of that" in latin.

That didn't mean illuminated books suddenly weren't beautiful things that have much to recommend them. But even then, people knew it was the words inside the book that were important.

Today, forward-thinking printers are running that same calculus, and it will be to much the same result. In a decade, print-on-paper will be dead as a popular media format, relegated to the same bins as vinyl records: something niche enthusiasts will go to specialty stores to to spend far too much money on.
posted by mhoye at 9:01 PM on April 21, 2012


Blazecock Pileon: "But, again, that's immaterial to the clear and obvious benefit that this lawsuit has and will continue to provide to Amazon's existing monopoly on electronic book distribution."

It's surprisingly easy to circumvent this monopoly, if it is a monopoly. I, for one, have never bought an eBook from Amazon, despite buying many things from them. I usually buy from B&N or directly from publishers and authors, and occasionally from other eBook stores, including Google.

It is true that some eBooks are only available for Kindle, but isn't that only the case for books Amazon digitized or whose authors/publishers have freely chosen to make available only on Kindle?

And saying that horizontal price fixing in non-monopoly markets hasn't long been seen as one of the cornerstones of antitrust enforcement is just plain ignorant. The DoJ has a long history of stepping in when they find evidence of price fixing. I realize it's difficult for you to not see Apple as a victim here, but they're really not.

Maybe Amazon will develop a monopoly in the eBook market and use anticompetitive tactics to perpetuate it. Neither of those things have happened yet.
posted by wierdo at 9:09 PM on April 21, 2012


In a decade, print-on-paper will be dead as a popular media format

I get this -- but my question is, why do we think "authors geting paid" is going to survive as a popular media format? Thirty years ago, people who were willing to write for free had no means of distributing their work broadly. Now they do. Why will readers pay for what they can get for free?
posted by escabeche at 9:38 PM on April 21, 2012


But why would writers write for free if people are willing to pay? I won't read a bad, free book, and I will pay to read a good book... I don't understand why that would change if ebook prices were not set above paperback prices and sometimes even hardback prices (Rule 34, I'm looking at you. *sigh*), or if ebooks were the common publishing medium.

But maybe I'm misunderstanding what you're saying?
posted by taz at 10:37 PM on April 21, 2012 [1 favorite]


Why will readers pay for what they can get for free?

Written work isn't fungible. If I want to read what a particular author writes, and can only do so if I pay for it, then unless I consider the price to be exorbitant I will pay. The fact that some other work by some other write is free won't change that.
posted by Chocolate Pickle at 10:39 PM on April 21, 2012 [2 favorites]


Is there even a viable non-Kindle, non-Nook eReader at this point, though?

Kobo has the largest share of the market for ereaders in Canada, Australia, and Europe too, I believe. They aren't pushing heavily into the US Market because they are selling well elsewhere (and probably don't feel like going up against the kindle and the iPad), but still sell more devices in the US than the Nook.
posted by jb at 10:50 PM on April 21, 2012 [1 favorite]


In a decade, print-on-paper will be dead as a popular media format

I'd be willing to take that bet as long as "dead" was well defined.
posted by Justinian at 11:33 PM on April 21, 2012 [1 favorite]


It's in the interest of the reader to pay little or nothing for books, and it's in the interest of authors to get paid a lot for books.

But note that these are not mutually contradictory goals. Both these things can be true at once, through the magic of copying bits, which is free. Publishers can sell a million copies for about the same cost as selling ten copies. Given sufficient volume, books can be cheap, and authors can do very well for themselves. This will be especially true once the publishers aren't in the middle of the transaction anymore.

Authors only make something like fifty cents on a book anyway. If they sell through an electronic store that takes 30%, they can set their prices at a dollar a book, and make WAY more money.

The reason we're having this fight is because PUBLISHERS don't like this, because they get squeezed out. Well, you know, they need to come up with a business model where they are ACTUALLY providing value, instead of PRETENDING to provide value by copying bits, which anyone with a computer can do, themselves, for free.

Charging thirty cents to make a copy of an e-book is, perhaps, reasonable. Charging $15 to copy a few hundred K of data is clearly insane. If your legacy cost structure requires you to charge that much money, then your legacy cost structure needs to go away, full stop.
posted by Malor at 12:18 AM on April 22, 2012 [2 favorites]


Is there even a viable non-Kindle, non-Nook eReader at this point, though?

Are they even viable on their own?

-- Sent from my iPad


Funny. But many people (myself included) find reading books on back-lit screens unpleasant. I'm happy to read a 2000 article on my iPad. But for a 100,000 word novel, I want my Kindle or a paperback.
posted by rhymer at 12:25 AM on April 22, 2012 [4 favorites]


People love the Kindle platform for the same reason that people flocked to iTMS: it's easy, cheaper, and flexible.

OTOH, I've just ditched my Kindle for an iPad. I've had three Kindles up and die on me this year -- that's one a month. My previous one, I'd had for just under a year, and when that died, at least the symptoms were completely different from the three that died this year, all of which had a half-frozen, half-operable screen covered in horizontal and vertical lines.

So far, I'm much preferring my iPad. It might be heavier than the Kindle, but pdfs are legible, the internet is usable, the keyboard is viable -- and I can still buy Kindle books if I want them.

Plus I can ditch my laptop.

So, the Kindle might be cheaper -- which was why I bought it in the first place -- but it was a false economy.
posted by PeterMcDermott at 12:36 AM on April 22, 2012


It pisses me off that eBooks can cost more than hardbacks, but Stross and Scalzi frequently make the point on their blogs that the market value of an item has little to do with its marginal production cost. For many people, an eBook is (much) more convenient than a paperback, it has greater utility and could therefore reasonably attract a higher price.

The value the publishers notionally provide is not the copying of 300kB of data to you or slapping some ink on cheap paper, it's fronting some at-risk cash to authors so that they can write a book. Most books don't earn out their advance and the publisher takes a loss; that loss is recovered by making what looks like a great margin on the books that do sell well. In other words, publishers are insurance agents / market-makers. The fact that they're not rolling in cash speaks to the fact that their large margins on a few popular items is a gouge only when you look a the smaller picture.

I'd be interested to see if crowdfunding can replace the publisher model. It's viable I'm sure for big-name authors but I suspect it's not a way for a no-name to get funded on their first book. Therefore, I think there will always be a role in the market for someone to front cash at risk and profit from it so that aspiring authors that aren't independently wealthy can start out.
posted by polyglot at 12:45 AM on April 22, 2012 [5 favorites]


Everybody making flip comments on how eBooks "ought" to be 1/3 the price of the hardback or authors "only" getting 50p per book needs to go and read cstross' series of articles on publishing.
posted by pharm at 1:31 AM on April 22, 2012 [6 favorites]


That is what ended up happening with the Music industry and Apple. Apple had DRM, but that meant their music could only be played by iPods, which meant it could only be sold on iTunes, which basically fucked them. Good times.

The problem, though, is that the publishers are themselves an oligarchy. They compete with eachother, so it's not totally one sided, but they have way more power then the authors. Not that it was ever as bad as the music industry, but they still had a ton of power.

A DRM free system, open to all would allow independent authors to bypass them and sell ebooks on their own. Amazon, of course already allows that (but takes a big chunk). So the publisher's dillemea is actually a bit more complicated. Either they go DRM free and create a world where Amazon matters a lot and they matter a little, or create a world where Amazon doesn't matter that much, and they don't matter at all (other then for the services they legitimately provide to authors who don't want to do the marketing work on their own)

Another key problem, though is that even without vendor lockin, Amazon already dominates by owning the Kindle platform, and the Amazon site itself with it's recomendation system.

Even with DRM free e-books, Amazon still ends up laying a major roll. So basically, I don't see a lot of good options for the publishers to continue to exist, other then as service providers for Authors, rather then being the ones who have the power in the author/publisher relationship.
posted by delmoi at 2:04 AM on April 22, 2012


I'm not going to comment on the comments[1]. but ...

That blog entry earned me a very interesting phone conversation with the CEO of one of the big six. Who had read it, and who zeroed in on the weakness in it: that I hadn't explained why I thought dropping DRM would be good for his business.

So I spent last week working up a position paper for him, and once he's had time to digest it I'll be blogging it.


[1] Because after fielding 730 comments on my blog, of which about 10% were well-informed and the rest ranged from well-intentioned through deluded to bugfuck crazy, I have no desire to waste another day or so. Got a novel to finish!
posted by cstross at 3:45 AM on April 22, 2012 [13 favorites]


Maybe Amazon will develop a monopoly in the eBook market and use anticompetitive tactics to perpetuate it. Neither of those things have happened yet.

That's debatable, maybe, but Amazon already does this with printed books:

“Amazon is squeezing everyone out of business,” said Randall White, EDC’s chief executive. “I don’t like that. They’re a predator. We’re better off without them.”...

EDC does not produce e-books, but saw exactly this happening with its physical inventory. Amazon was buying EDC’s books from a distributor and discounting them to the bone, just as it does with everything it sells. This might have been a boon for readers, but it was creating trouble with other retailers who carry the company’s titles, as well as with EDC’s network of independent sales agents, who market its books from their homes.

“They were becoming showrooms for Amazon,” Mr. White said. “We were shooting ourselves in the foot.”


It's not a wild idea to see how they might control the eBook market in a similar fashion, especially once they complete the process of becoming publishers, themselves.
posted by Blazecock Pileon at 4:27 AM on April 22, 2012


Well, you know, they need to come up with a business model where they are ACTUALLY providing value, instead of PRETENDING to provide value by copying bits, which anyone with a computer can do, themselves, for free.

As someone with a book coming out in a few months, I can say without question that publishers do provide value, both to readers and authors, especially the latter.

Start with the reader side. My co-author, MeFi's own jedicus, and I got a lot of invaluable feedback from our editor when we first submitted our manuscript. He made some suggestions about clarity and structure that were invaluable. And once we made those changes, we did a round of copyediting which caught a whole ton of stuff we'd just missed. Not many typos, but usage corrections, clarifications, etc. Then the thing went to design, which sent us back some really nice-looking proofs about what the final product is going to look like.

All of those are a huge benefit to us as authors, because not only is that stuff we don't have to do for ourselves, which saves us time for things like our day jobs, but because they're things we probably couldn't have done ourselves. We submitted what we thought was a good product. The book is unquestionably better having been in our editor's hands.

And that's why publishers are good for readers too: better books. Authors need editors. Yes, there are some more-or-less successful self-publishers out there, but I guarantee you, even their books would be better if they had an editor. So if you, as a reader, care not just about reading anything but about reading something worth reading, publishers are your friend.

Publishers are also the most efficient way of doing these things. On top of our advance, which was quite nice, we've interacted with six people at the publisher who have worked on our book so far. All of them are employed full time doing this stuff. But the only reason they can do that is because the publisher is using them for a bunch of different projects. It would cost way more for us to have to pay them directly as freelancers.

So if you think that all publishers do is move bits around, disabuse yourself of that notion at once. It's not true. If you're satisfied reading what amounts to fanfic always and forever, enjoy your publisher-less future. If you're not, quit bashing publishers.
posted by valkyryn at 4:50 AM on April 22, 2012 [16 favorites]


Hey, that's great valkyryn! Did you know each other before MEfi? What's the book on?
posted by anotherpanacea at 5:30 AM on April 22, 2012


MetaCommentary: a lot of people don't seem to understand the difference between a publisher and a printer. Which is a bit like not getting the difference between an airline and an airline pilot. It's all about the externalities ...
posted by cstross at 5:45 AM on April 22, 2012 [4 favorites]


Remember that the publishing industry as it exists today did not exist until the 20th Century. Great books still got published.

Furthermore, the fact that Amazon can discount its books hugely and still turn a profit doesn't show that they are fundamentally evil, crushing the little guy – it shows that book prices are insane (I will never pay over $15 for a novel). That impacts other bookstores, but maybe it also shows that Amazon's business model – give people a catalog to pick from and keep the books in a faceless warehouse until shipped – is better than the B&N-style coffee shop + five foot high shelves + half the books turned cover-outward.

Now, a big issue is that eBooks do eliminate the used book market, and used books are the best thing ever. I just bought eight novels for less than $30 from Amazon's used sellers. This is part of the reason that I'm leery of the things, and I find that much more disturbing than the idea that publishers might not be able to afford to be located in Manhattan.
posted by sonic meat machine at 6:06 AM on April 22, 2012


I work in publishing, doing something people always complain about-developing new editions of textbooks. I get told that educational publishers are greedy because we charge so much for our books and because we constantly bring out new editions. There's just so much misinformation out there that it makes me laugh and hit my head at the same time.
Firstly: no one goes into publishing to squeeze money out of authors. I have a pretty high level job at a very well regarded and well established university press and have had several promotions and pay rises. I earn less than most graduates in any other field. People work in publishing for love, not money. Generally speaking, people in publishing are passionate about books.
Secondly, people complain about the high cost of books-because clearly without the printing, warehouse and shipping costs, what else do publishers really have to spend their money on? That doesn't account for most of the costs in the book itself. Say your average textbook for a student studying to be a teacher: to bring the book about, the publisher, development editor and so forth will spend a long time researching the subject area. Say it's a book on teaching maths- they'll study the competition texts, work out what they do well, what they don't, and so forth. They also look at the courses around the country: who teaches, what is taught, what year are the subjects covered? Is it taught more first semester or second semester? Who are the experts in the field? A very detailed proposal is written up and potential authors are approached. The publishing team work closely with the authors while they are writing, organizing up to three rounds of peer reviews (which are paid for). Covers and internals are designed. Any supplements are also commissioned and organized-it's standard for most textbooks to have some resources for teachers or students. This can be power points or student revision questions to exam questions and tutorials. Again, these are paid for and can be very expensive. Once the MS comes in we comb through it and find any quote or figure, diagram or photo and check to see if we have the rights to reproduce, and if not, seek permission to print them. Some items are more than $500 each and permission costs for a book can be over 10k alone. There's also the editing and proof reading and indexing. The typesetting and up to 5 rounds of page proofs too. The production controller manages all the stages of production and our internal editors style the manuscript so that when it's typeset the headings appear as headings and the margin notes look like margin notes etc. printing etc costs not that much, in the grand scheme of things.
I mean, sure authors could do this stuff themselves, but I doubt they'd have the time to or the money to organise freelancers to do it. But you really can't say that we sit there twiddling our thumbs and getting rich off authors and readers.
posted by jonathanstrange at 6:21 AM on April 22, 2012 [5 favorites]


OTOH, I've just ditched my Kindle for an iPad. I've had three Kindles up and die on me this year -- that's one a month. My previous one, I'd had for just under a year, and when that died, at least the symptoms were completely different from the three that died this year, all of which had a half-frozen, half-operable screen covered in horizontal and vertical lines.

Uh...if I can just ask, what exactly are you doing to your Kindles? The one I bought three years ago is still going strong, and the one I bought last summer is the same. (It's too soon to say anything definitive about the Fire I bought a couple months ago.) That you've had four (!) up and die on you seems kind of weird to me. They haven't been on the market all that long.
posted by kittens for breakfast at 6:48 AM on April 22, 2012 [1 favorite]


jonathanstrange, I could be wrong, but my feeling is that university presses aren't the primary culprit when people complain about educational publishers. Instead, at least in my mind, it's mostly related to the large conglomerates. When I was teaching (computers), I would often use industry texts and prepare my own exercises, as opposed to using textbooks precisely because the price for my students was so high. It simply wasn't possible for my students – at least the ones who weren't receiving financial aid – to buy two $200 books per semester for my classes, which wasn't unheard of in other classes within the department. In departments like nursing, the situation was even worse, with books often totaling more than $500 for one course.

The fact is, there is no justification for a yearly edition of a textbook on an academic subject like computer programming. Nursing, perhaps. In most cases, however, the core material doesn't change at all year-to-year, and a calculated attempt to ruin the value of the used market is clearly profit-driven rather than aimed at improving student outcomes. I don't think that the yearly textbook shuffle necessarily leads to improved materials, either, as I've seen several books in my field, published by a leading textbook company, which were flat-out wrong on key points for multiple editions.

Furthermore, I am willing to pay for good books. I regularly pay $40 or $50 for texts in my professional field, because that's the price point where the excellent Addison-Wesley Signature Series, the Manning "... in Action" books, and the O'Reilly "animal" books usually sit. I do not, however, think that a terribly bound, barely-edited edition of J.Q. Random Author's Newest Shit deserves a $35 price tag, and if that's what it takes to keep publishers and bookstores in business, something is wrong with the model.
posted by sonic meat machine at 6:53 AM on April 22, 2012 [7 favorites]


An example: Course Technology's Web Server Administration, which is literally wrong on the first page of the first chapter, and costs $100.
posted by sonic meat machine at 7:00 AM on April 22, 2012


I value editors and proofreaders and designers – I'm just not sure why ebooks can't be handled in a similar way to paperbacks. When books first come out in hardback, paperback versions are not available, so the reader either chooses to pay the hardback price or wait for the paperback. At this point the ebook price can be the same as the hardback. When the paperback is introduced, the ebook price should fall to the same as the paperback. Whatever sales model or feats of arithmetic the publishers are using to make ebooks more expensive than paperbacks and (sometimes) hardbacks just looks like overpricing in order to slow the adaptation of ebooks, which seems like a pretty weak long-term business strategy.

If someone can explain why this isn't reasonable/possible/fair, I'd love to know.
posted by taz at 7:11 AM on April 22, 2012 [2 favorites]


pharm: Everybody making flip comments on how eBooks "ought" to be 1/3 the price of the hardback or authors "only" getting 50p per book needs to go and read cstross' series of articles on publishing

Since I wrote the 1/3 comment...

I haven't said publishers do nothing, though other comments highlight some current ebook publishing fails like terrible OCR and poor proofreading. But can we not assume there's substantial cost savings to formatting and distributing an e-book vs those of a physical book: design, typesetting, proofs, printing, binding, physical distribution, returns, remaindering and so on?

There's also been little mention of author's returns. My uninformed guess is that ebooks can still return the same amount per book to the author and still be sold at 1/2 or less than the price of a popular paperback... and both the author and publisher could potentially do well because of increased volume (due to the lower price).

We also have to expect change in the publishing model. Many of the publishing processes - editing, fact-checking, proofreading - could be performed by small specialist companies, so the actual 'publisher' is now more of a marketing company, or the author themselves.

As I stated I'm new into e-books, and when I mentioned the 1/3 point, I'm only providing a consumer insight, not a rational economic argument. Right now the price of ebooks makes me wince and question the value vs a print book; the consequence is that I don't buy many ebooks. If the price of a current popular ebook was 1/2 or lower the cost of the print edition... that would cross a threshold with me, I would be much more likely to buy books on impulse and 'convert' alot of my print library to ebook.

If prices were lower and alot of consumers behave like me (rational or not), the ebook market would explode., wouldn't it?
posted by Artful Codger at 7:41 AM on April 22, 2012 [1 favorite]


> People work in publishing for love, not money. Generally speaking, people in publishing are passionate about books.

You're talking about low-level folks like yourself (and me, an even lower-level copyeditor). We are passionate about books; we also do not run the publishing industry and we do not set prices. I understand your irritation at people who do not understand the value-added provided by the much-maligned intermediaries (here, let me quote from a message from an author about my copyediting: "that chapter had been read in different forms by no fewer than 5 people in the field and no one caught any of those awful mistakes!"), but I do not understand your identifying with the greedy bastards who ultimately pay your salary. You write: "I get told that educational publishers are greedy because we charge so much for our books and because we constantly bring out new editions"; I have bolded the incriminating pronoun. If you're not choosing the prices and the policies, why do you feel compelled to defend them? The prices charged for textbooks are insane, and way out of line with the supposed justifications you adduce: permission costs, editing, proofreading, and indexing are required for all books (above the level of disposable mass-market junk), and yet other publishers manage to sell their books for much less and still turn a profit. You can defend the industry without sounding like you drank the Kool-Aid, you know.
posted by languagehat at 8:00 AM on April 22, 2012 [2 favorites]


From cstross's excellent series about publishing, this one in particular provides a detailed breakdown of the current publishing process.

But, really, the current process is chock-full of expensive paper-based anachronisms that would mostly go away in a 100% ebook future. In this transition period, where the ebook release of a popular title is in addition to the print version, a high ebook price is the publisher's way of saying "I'd much rather not sell you this, but if you must...". Not exactly a growth model.
posted by Artful Codger at 8:07 AM on April 22, 2012 [1 favorite]


Artful Codger: "But can we not assume there's substantial cost savings to formatting and distributing an e-book vs those of a physical book: design, typesetting, proofs, printing, binding, physical distribution, returns, remaindering and so on?"

You still have to do design and typesetting work, because a good eBook is not just a string of text & you'll need to have a decent cover regardless of what format you publish in. (Printed books have been typeset electronically for years and years now, so there's no savings there.) Physically printing a book costs very little per copy these days when printing in quantity.

There are savings to be had in other words, but they are not substantial & eBook delivery has costs too, just differently structured ones. The main costs embedded in the price you pay for a book are human ones: marketing, editing, writing, art, proof reading and so on. None of these magically get cheaper because the final version is delivered electronically.
posted by pharm at 8:39 AM on April 22, 2012 [1 favorite]


sonic meat machine: "An example: Course Technology's Web Server Administration, which is literally wrong on the first page of the first chapter, and costs $100."

Just reading that first paragraph is painful. So much wrongness squashed into so few words.
posted by pharm at 8:40 AM on April 22, 2012


The current process is also chock-full of the assumption that location matters. Random House, McGraw-Hill, and other large publishers are all located in Manhattan, which has the most expensive real estate and cost of living in the U.S. Even Tor, which produces 300 books a year with 60 staff (per cstross' figures) is located in the Flatiron Building. Why? In a period when almost all editing and pre-press can be done digitally, such that an author in Wyoming could send a manuscript to an editor in Charlotte, who could send it out to copyeditors in Idaho, Arizona, and Alabama with no more turnaround time than walking it down the hall, why should publishers think it's important to be located on 5th Avenue?
posted by sonic meat machine at 8:40 AM on April 22, 2012


My only major complaint with the Amazon model is that they don't seem to get it in the same way Apple did with music. Apple locked everyone in to their hardware and store by building a better product, then opened the door to easier sharing by removing DRM* and implementing features that made it dead simple for me to buy a song and share it with other people in the same household. Anything I buy from Apple is also on my wife's computer, iPhone and iPod.

Amazon keeps failing at this. We both have Kindles, but any book that I bought must be re-purchased by her if she wants to read it, as there is no "home sharing" equivalent. Even dumber, it isn't like they can't do this: They already have a sharing model for e online store. She has paid for Prime membership, which she shares with me, so I can order stuff with free shipping off of my Amazon account. But she is the only one who gets the one free book a month, and it apparently only works on one device - whereas books I bought show up on my Kindle, iPad, iPhone, and laptop.

She has friends who each have Kindles, one of whom is a Prime member, and his routine approach is to strip the DRM off of every purchase or free download specifically to allow him to share it with his wife, which anyone can do with a physical book at any time. It's not like I want the right to re-sell the damn thing, but if it comes out of the bank account my wife and I share, why shouldn't we both benefit from "owning" it?

They fail in more than just eBooks too. Prime members get free streaming video. Our TiVo streams Amazon video. There is no way to stream free Prime videos to the TiVo, we have to pay for content that should ostensibly be free. Oh, we can play it on a Fire, but even if I owned one, why would I want to watch video content there instead of on the big 1080p flat screen in our living room? And the Kindle app for iOS... You can't buy books through the app. And you can't buy eBooks through the Amazon mobile app for iPad! You get a message saying you must save it to your wish list and then log in through the web interface to continue purchase. How can they be so successful when they are so bad at selling me their own products?


*whether this was intentional or due I market pressures is not important to my argument
posted by caution live frogs at 8:43 AM on April 22, 2012 [2 favorites]


It's in the interest of the reader to pay little or nothing for books, and it's in the interest of authors to get paid a lot for books.

I'd say it's in the interest of readers to have a selection of good, new books available, be able to find them and pay little for books. Many readers want new books either for novelty, to reflect current times, to support certain writers, because they enjoy the social aspects, to appear well-informed etc. People pay for new books, not just for good books: Otherwise a lifetime isn't enough to read the classics (I think Umberto Eco provides calculations to that effect in Why Read the Classics?).

Finding books is also important. Publishing houses are far from perfect and have their own biases, but they complement internet sources and crowd sourcing. I am willing to pay a bit extra for that because it's easy for good books to get lost. The laughable percentage of translations and many semi-original fanfics that are better than published books but get lost in the crowd are good examples.

OTOH, I've just ditched my Kindle for an iPad. I've had three Kindles up and die on me this year -- that's one a month. My previous one, I'd had for just under a year, and when that died, at least the symptoms were completely different from the three that died this year, all of which had a half-frozen, half-operable screen covered in horizontal and vertical lines.

Did you try resetting the Kindle by holding the on-off switch to off for 10 seconds (or more for a factory reset)? When I loaded my Kindle with a ton of data this happened at times.
posted by ersatz at 8:56 AM on April 22, 2012


And the Kindle app for iOS... You can't buy books through the app.

That one's because otherwise ~30% would go to Apple. Is Amazon's entire markup much higher than 30%?
posted by nobody at 8:57 AM on April 22, 2012


pharm: There are savings to be had in other words, but they are not substantial & eBook delivery has costs too, just differently structured ones.

... I question this, but lack the data to make a case.

Just one example -'typesetting' and designing an ebook is simpler than a book (or should be), because these are often overridden by the device constraints and user prefs for font, size, etc.
posted by Artful Codger at 9:05 AM on April 22, 2012


cstross: "So I spent last week working up a position paper for him, and once he's had time to digest it I'll be blogging it. "

Time for some new business cards Charlie?
  C. Stross, management consultant at large.

posted by pharm at 9:05 AM on April 22, 2012 [1 favorite]


Artful, what makes you think printed books are typeset by hand these days?
posted by pharm at 9:07 AM on April 22, 2012


Artful, what makes you think printed books are typeset by hand these days?

I know that they're not; I'm only guessing that the typesetting choices and requirements for a printed book are substantially greater than that required for an ebook.
posted by Artful Codger at 9:20 AM on April 22, 2012


Written work isn't fungible. If I want to read what a particular author writes, and can only do so if I pay for it, then unless I consider the price to be exorbitant I will pay.

This is only true in a world without the internet. Right now, text, music and video - the work of any creator in those fields, specifically - may not be fungible in the sense of being arbitrarily interchangeable with other goods, but they are infinitely reproducible for zero cost, so fungibility may not matter.

The only situation in which media is neither fungible nor infinitely reproducible is when it either hasn't been digitized or doesn't actually exist yet. This is why I think the patronage model (crowdsourced or not) will ultimately be the only one that's viable in the long term.
posted by mhoye at 10:03 AM on April 22, 2012 [1 favorite]


Sonic Meat Machine: Even Tor, which produces 300 books a year with 60 staff (per cstross' figures) is located in the Flatiron Building. Why?

Speaking as someone who's seen the view from Tom Doherty's office window at sunset (hint: the Empire State Building, unobstructed) let me point out:

1. Skills. As long as publishers need physical office space, it kind of helps if it's within commuter distance of a big pool of people with the necessary skills—not just editorial but production and marketing and sales. NYC is traditionally the hub for publishing in North America, which means a higher density of experienced workers than you'll find anywhere else.

2. Contacts. Because of #1, all the other major publishers work out of the same city.

So they could save on rent by moving to Montana, but they wouldn't be able to get the staff. And without the staff they don't have a business.

3. Why do they need physical face-to-face meetings? Well, being able to wander down the hall and stick your head around $COLLEAGUE's door really makes things work a lot more smoothly than having to email them, then hope they read their mail and reply the same day. Seriously, if you've ever tried to work in a business where management tried to run it across multiple time zones as a single integrated enterprise, you'd know what I'm talking about. (Been there, got the scars.)

4. Cheap real estate. The Flatiron, cheap? Well, it's an old, cramped, badly-designed building by modern standards. Tor occupy one and a half floors, and if you've ever visited their offices, you'd probably be appalled at their working conditions. Cramped barely begins to describe it. (In any event, they're not likely to be there for many more years; my understanding is that the landlord wants to sell it to a hotel chain for redevelopment.) If you want posh, you need to go visit Penguin, who occupy a floor in the same office block as Saatchi and Saatchi, in the South Village.

I've no idea where Tor are going to move if the developer finally gets the go-ahead to turn the Flatiron into that luxury hotel, but I bet it won't be as charismatic as the Flatiron.
posted by cstross at 11:06 AM on April 22, 2012 [2 favorites]


nobody: That one's because otherwise ~30% would go to Apple. Is Amazon's entire markup much higher than 30%?

Yes.

Amazon buy wholesale from publishers or authors who don't have the leverage to impose the agency model on them (a straight 30% commission). The discount they buy at starts at 60% of SRP and goes as high as they can get—I've heard of Amazon starting negotiations asking for 85% off SRP, which is not terribly publisher-friendly considering the author's cut is over 15%.
posted by cstross at 11:09 AM on April 22, 2012 [1 favorite]


caution live frogs Amazon keeps failing at this. We both have Kindles, but any book that I bought must be re-purchased by her if she wants to read it, as there is no "home sharing" equivalent.

You must not have your kindle connected to her account. I share books with my husband all the time via amazon's whispernet. I love how convient it is. I only wish I could add a few friends without giving them access to my stored credit card info.
posted by [insert clever name here] at 12:37 PM on April 22, 2012


cstross: My argument, however, is that the value of personnel – editorial, marketing, production, and sales – is historically inflated. People with editorial skills exist everywhere. You can pay someone $30,000 a year to edit your manuscript and, if they live in rural Virginia, that's a great salary. Production is similar, especially with eBooks, where you're not laying out type page-by-page anymore.

Sales and marketing are different, and I can understand having salespeople in a central location like New York, but it doesn't follow that the rest of the production staff needs to be there.

I think that, if they're going to stay viable, publishers will need to pare their business down to the real functions they provide, and maybe give up some prestige in the process. The era when publishers could rely on their status as gatekeepers to provide income is long gone, and it's not coming back. Once published electronically, a book is available forever and in infinite quantity. The only way to monetize that availability is to price it reasonably and make the product easy to find and use.
posted by sonic meat machine at 1:56 PM on April 22, 2012


Everybody making flip comments on how eBooks "ought" to be 1/3 the price of the hardback or authors "only" getting 50p per book needs to go and read cstross' series of articles on publishing.

Mr. Stross and I have talked in the past about this, and he fundamentally just misses that, in the ebook market, you're no longer selling books. It constantly startles me that someone who is so forward thinking in other areas could just miss this so completely, but I think this may be another case of not understanding something because your paycheck depends on it. A lot of currency shows up in Mr. Stross' account every month, telling him that the old models are still working, so my lone voice isn't terribly persuasive. Yet.

In the physical book realm, the publisher was in the charge. Making a print book is hard. Not just because of editing and typesetting, which are both difficult, but because physically making a book out of paper is hard. So that fundamentally puts all the power into the hands of the people with the capital to access printing plants, and the expertise to run them. In that market, books are sold on their terms, or they're not sold at all. They are the bosses.

Ebooks change that completely. The instant that you publish an ebook, the very first customer that knows how to strip the DRM is now also a potential competitor. You have no monopoly access to book factories anymore; every customer in the entire world that can buy an ebook also owns a fully functional publishing system with instant worldwide access.

Take me, for example. Using just the equipment and net bandwidth I already have and pay for, I could "manufacture" a million books a month, without even noticing the impact on my systems. It would just disappear into my existing overhead.

If we assume that most books are about 500K raw (which is probably high), that means they should compress to around 50K with most algorithms. (text data generally gets about a 10:1 compression ratio.) That means that, with my admittedly unusually fast (100Mbit bidirectional) home connection, I could "manufacture" roughly 200 books a second, and keep that rate up 24/7/365. That means I can produce, at home, roughly (30 * 24 * 60 * 60 * 200) half a billion books a month. I figure my additional cost to do so would take no more than 200 watts of power consumption, which would be about $10/mo, plus an impaired connection for other uses. (A million books a month just disappears into the noise, but five hundred million books would probably slow my normal uses somewhat.)

Or, I could pull a gigabit of mediocre (Cogent) bandwidth into my colocated box for $650 a month, and could move, in raw data terms, about five billion books a month. That machine is just a Core 2 Duo, so I'm not sure it could move that much bandwidth itself, but I'm sure it could do the same half-billion I can do at home, for $65/mo.

In this kind of environment, when you can get enough bandwidth to give just about every person on earth a copy of a given book for $650/mo, the entire publishing model changes. You're not really buying ebooks anymore, because you can get them pretty much anywhere, for free, and you can generate copies for everyone you know or even vaguely interact with, also for free.

In this kind of an environment, customers dictate the terms of engagement. We are the people with money. We can get the product for free, and make the product for free, no matter what the publisher thinks about this. We don't have to give anyone money to get or share e-books, beyond our normal monthly overheads. (ie, homeless people can't dictate terms here, but anyone with a domicile can.) Our 'purchase' of an e-book is entirely voluntary. It's not really a purchase anymore, it's a donation.

And publishers and authors had better understand this -- that they need to price ebooks to move, because they are moving anyway. Whether they like it or not, hard physical reality means that the relationship between producers and consumers of digital data is now different. Customers are in control, not publishers, and not authors. The smartest authors will adapt and thrive. Others may refuse to adapt, and may even do well for some time, until the rest of the world realizes that the balance of power has changed. It will, however, eventually internalize this, and a new relationship between producers and consumers will come to pass.
posted by Malor at 2:23 PM on April 22, 2012 [2 favorites]


I'm not so sure it will go like that, Malor. The music industry has had some success in demonizing the folks who do high-volume traffic. The publishers will enlist the services of law enforcement and the civil courts to go after the folks who go directly into competition, a la library.nu.

What's more, I think book lovers will much more easily see this from the perspective of their favorite authors, whose skill with words and familiar voices make them particularly persuasive. If Stross was living like Jay-Z, I think it'd be easier to pirate his work. As it is, well, I'm not going to pirate a guy who I know from the internet, even if that violates the pure rational choice model.

So instead we see lots of soft piracy. I grab a pdf of a book chapter from Scribd and share it with my students rather than having a coursepack made. Some of my very savvy students find and distribute ebook versions of the textbooks to friends, but they're cautious so it barely makes a dent in sales. The music industry took a pretty massive hit in gross sales, but few people treat the $10 billion that's left like it's just a charity. Plus booksellers have always had major competition from libraries, so the quantity of "free-readers" (is that a thing? like free-riders, but for books? if not, I call dibs) is maybe already accounted for.
posted by anotherpanacea at 2:51 PM on April 22, 2012


Using just the equipment and net bandwidth I already have and pay for, I could "manufacture" a million books a month, without even noticing the impact on my systems.

See, no you couldn't. You could transmit a bunch of books that someone else created, but the books still have to be written, edited, copyedited, formatted, etc.
posted by valkyryn at 4:38 PM on April 22, 2012 [2 favorites]


Valkyryn, I think you are being obtuse. "Manufacturing" a paper book means running a printing and binding plant. Manufacturing an electronic book means copying a pile of bits.

Printing and binding plants are large and capital intensive. Copying bits is so easy and cheap these days that pretty much anyone who owns a personal computer can do it.

Creating the bits originally is a different matter. Yeah, they have to be written. They don't have to be "edited, copyedited, formatted, etc. Maybe that makes for a better product, but it isn't mandatory that those things be done.
posted by Chocolate Pickle at 5:00 PM on April 22, 2012


Rats. I left out a closed-quote. That last paragraph again:

Creating the bits originally is a different matter. Yeah, they have to be written. They don't have to be "edited, copyedited, formatted, etc." Maybe that makes for a better product, but it isn't mandatory that those things be done.
posted by Chocolate Pickle at 5:01 PM on April 22, 2012


Valkyryn, I think you are being obtuse.

No, I'm not. Indeed, the people who insist that all publishers are really doing is printing books are being obtuse. True, the printing aspect of what they do is less necessary than it used to be, but the editorial services they provide are, if anything, more important than before, because now any idiot with an internet connection can publish any damn thing and there it is on your Kindle.

What we're seeing is that publishers had been using the obvious capital-intensive part of the process, i.e., the making of physical objects, as a way of justifying the non-obvious but no less capital-intensive parts of the process, i.e., the creation of books worth reading.

Look, I just co-wrote a book. It's not easy. And in terms of man-hours, it wouldn't surprise me in the slightest if the publisher is spending more on this project than my co-author and I combined.

So I say that while this process may not be "mandatory," it is in fact necessary.
posted by valkyryn at 5:08 PM on April 22, 2012 [3 favorites]


But it isn't necessary. It may be helpful, even desirable, but Amazon is already selling self-published ebooks which didn't go through that process. And some of them have sold extremely well.
posted by Chocolate Pickle at 5:35 PM on April 22, 2012


The economics of this situation aren't that rosy for anyone not a consumer here.

As others have alluded to above, customers have a certain willingness to pay that may not reflect the actual costs involved in producing a book, physical or electronic. That's a problem, because if it costs you more to produce something than people are willing to pay, you go out of business. Amazon makes it worse for you, because they took out a lot of the costs through dis-intermediation, economies of scale, and training customers to expect lower prices. You have to produce something cheaper, somehow.

Sure, publishers do marketing, type-settings, editing, and they spread risk over many authors, etc. It might be that people don't care as much about that stuff as they used to, even if they should according to some of us. I value good type-setting and editing, but I am not the world. I don't like Dan Brown novels either, but many people do. Am I wrong?

Amazon is backwards integrating as a publisher. If I were a publisher, I'd be looking very hard at how I could restructure things to deliver value to customers that they are willing to pay for, bypassing the supply-chain control of Amazon if I could.

Dealing with Amazon, at all, is probably not in a publisher's long term interest if they wish to have any power over the supply chain. Amazon makes life better for the people with the money to buy books, and worse for the people who produce books. Publishers will have to radically transform themselves to stay in business, and I believe that will ultimately be a good thing for readers and, yes, probably authors, too. They may just be different authors.
posted by But tomorrow is another day... at 7:23 PM on April 22, 2012


As others have alluded to above, customers have a certain willingness to pay that may not reflect the actual costs involved in producing a book, physical or electronic.

That works both ways, though. Engage your fans and they'll be willing to pay much more than what a liquidator would asses your product at.
posted by ChurchHatesTucker at 7:36 PM on April 22, 2012


Right -- but understanding that, in the modern world, it's customers that have the power, not distributors. They can choose to give you money, or not choose to give you money, and their ability to use your bits is not particularly impeded if they don't. So you really want them to like you.

It doesn't matter whether YOU like it or not. You're just about irrelevant. No matter how fantastic a book you've created happens to be, everyone in the world can now have it for free, your finger-wagging notwithstanding. They have the money AND the printing press. All you have is words. Once you've created and given out a few copies, any further money that comes in is a gesture of goodwill, not really a sale. They're buying warm fuzzies and maybe convenience from you, not books.

In the physical world, readers have to either exchange money for a hunk of paper, or else steal it, depriving the other owner of the use of that paper. In the digital world, copying a book deprives nobody of anything.

I saw a good metaphor not too long ago, associated with one of the founders of the country (maybe Jefferson). It went something like this: if we each have an apple, and I give my apple to you, and you give your apple to me, there are still only two apples. But, if we each have an idea, and trade them, now we both have two ideas.

This is the reality of the digital age. You just spent a year of your life coming up with a pattern of bits -- a very large number. That's it. You've got a number on offer. Anyone can copy that number, so someone who pays YOU to copy the number is being nice. They can get that number elsewhere, and if they do, you still have your number, and can still sell it.

Since they can get the number anyplace, your price needs to be reasonable. People will definitely pay you for your number, but it's not worth as much as a paper book. And, again, your opinion about this is irrelevant... all that matters is their opinion, because they're the people with the dollars and the magic, world-spanning, universal number duplicators.
posted by Malor at 8:10 PM on April 22, 2012


It doesn't matter whether YOU like it or not. You're just about irrelevant. No matter how fantastic a book you've created happens to be, everyone in the world can now have it for free, your finger-wagging notwithstanding. They have the money AND the printing press. All you have is words. Once you've created and given out a few copies, any further money that comes in is a gesture of goodwill, not really a sale.

I don't know whether you're right, Maior, but assuming you are, you understand why authors aren't enthusiastic about this, right? You say "People will definitely pay you" despite the fact that they can have your book for free. I doubt it. People who hope to sustain themselves, or their kids, on gestures of goodwill are called beggars, and most people don't want to be beggars.

I think in your world, if that's the world that's coming, writing becomes a hobby, and a lot of people who would otherwise do it just don't.
posted by escabeche at 8:21 PM on April 22, 2012


I don't know whether you're right, Maior, but assuming you are, you understand why authors aren't enthusiastic about this, right? You say "People will definitely pay you" despite the fact that they can have your book for free.

This is hard truth, escabeche. There's hardly a book out there that you can't get for free, at least not if it's vaguely mainstream. So they're already paying for things they don't need to pay for.

Hell, I do it all the time myself with computer games.... I've bought a ton of games from GOG, even though they don't DRM anything. I could get those from the Pirate Bay practically instantly, for nothing. But GOG is cheap, convenient, and has long-term storage of games in case something bad happens. And I buy games from Steam all the time, both full-price, and especially on sale.

Get books under five bucks, make them DRM-free, and I'd buy a hell of a lot more than I do now. I buy a few books from Amazon, but not very many, because they're just ridiculously overpriced. I have to be pretty desperate for entertainment to sink $8 or $10 into a 400K, DRMed text file. I generally check Amazon first when I'm interested in a book, and if it's at the usual ridiculous pricing, I look for another source. But, say, Baen books? They're quite cheap, and DRM-free, so either I buy at their price, or I don't read their books.

Treat me well, and I'll go way out of my way to treat you well. Abuse me, and I'll return the favor. I suspect that a great many people behave very similarly... they just do it quietly, instead of being vocal about it like I am.

As more and more of the computer game publishers are realizing -- piracy means you have an under-served market. You're overpricing or putting onerous restrictions on what you're selling, and the market is, collectively, flipping you a bird.
posted by Malor at 8:49 PM on April 22, 2012


And keep in mind, I want authors to get fabulously wealthy. I think that's great. Louis C.K. pulling in as much money as he did was wonderful. I hope many many more people do the same thing.

But authors and publishers just need to fundamentally understand that they are no longer in charge of the transaction. The customer is. In the digital age, paying for mass market books and movies is voluntary. Short of destroying the Internet and general purpose computing, this will continue to be a hard truth for as long as humanity exists.

Opinions about this are irrelevant, exactly as opinions about gravity are irrelevant. Like it or not, agree with it or not, at sea level you will be accelerated toward the Earth's center of mass at 9.81m/s^2, and people can copy your special snowflake number for free.
posted by Malor at 9:07 PM on April 22, 2012


> I do not, however, think that a terribly bound, barely-edited edition of J.Q. Random Author's Newest Shit deserves a $35 price tag, and if that's what it takes to keep publishers and bookstores in business, something is wrong with the model.

If there's a market for Newest Shit at $35-- one sufficiently active that it keeps publishers and bookstores in business--, then $35 is an excellent price.

If you don't think Book B "deserves" Price P, it's possible you're not the intended customer.
posted by darth_tedious at 10:07 PM on April 22, 2012


If you don't think Book B "deserves" Price P, it's possible you're not the intended customer.

Perhaps not, at that price point. The thing is, that just doesn't matter any more.

It's essentially a "set your own price" market at this point, where digital goods are concerned. Now, we can either recognize that and try to convince our customers that there's some value in approaching our prefered price, or try to enforce a draconian scheme that attempts to ensure that every bit is accounted for.

I know which I prefer.
posted by ChurchHatesTucker at 10:25 PM on April 22, 2012


Most books deals don't earn out their advance investment and the publisher investors take a loss; that loss is recovered by making what looks like a great margin on the books deals that do well. In other words, publishers are insurance agents / market-makers hedge funds.

Not so warm and fuzzy when viewed that way, are they? But that's the reality of it, which they seem to be resisting.

If you need a big advance in order to write a book, you should probably go write a business plan and find some (gullible, if possible) investors just like everybody else. An 'advance' is just a business loan by another name.

At the end of the day there's nothing particularly different between somebody with a great idea for a book that's going to require $X to write and will sell Y copies, from someone with a great idea for a piece of software that's going to require $X to bring to market and will sell Y copies. Or really, from someone who has a great idea for a restaurant that's going to require $X to open and will generate Y gross profit. Sure, each one requires different people experienced in that area to figure out the risk/reward and decide what sort of terms are reasonable, but fundamentally they're all investments.

Historically, publishing was monopolized by a bunch of large firms due to the huge capital investment required for paper-based printing and distribution. That's no longer the case, and those firms rightly deserve to be up against the wall in the name of progress (right after we get done hosing the blood of the music labels off of it) if they don't want to change. In the long term, they need to realize that their place is going to be a very narrow one, in brutal competition with everyone else with enough money to toss at an author, constantly searching for the next big thing -- just like investment groups in pretty much every other modern industry.

The disintermediated future that Amazon is bringing about -- not, of course, out of altruism, but because they're making a killing in the process -- will be a very good one for readers (once the DRM business gets straightened out, as it mostly has with music), and could be a good one for authors as well: While it will probably never be particularly easy for a new author to get an advance out of the gate, in the same way that it's not easy for a new software developer or restaurateur to get a line of credit, there will likely always be lots of money looking for anyone who has a track record of developing profitable products.

In fact, going out on a bit of a limb, it would not totally surprise me if within the next decade or so -- once the DRM and platform-factionalization stuff gets settled -- there isn't a publishing bubble (or maybe more properly, an "author investment" bubble) when the I-banks and funds realize that there's still lots of money in books, hidden under the decline of the old publishing houses with all their baggage.
posted by Kadin2048 at 11:56 PM on April 22, 2012 [1 favorite]


Is there a market for J.Q. Random Author novels at $35 sufficient to keep publishers and booksellers afloat?

Neither Amazon (the nation's largest bookseller) nor Barnes & Noble sell them at that price; they're 40% off, day one. Only the brick and mortar retailers try to keep them $35, and the excess that they print always ends up on the remainder table for $3.95 a year after the book is published.
posted by sonic meat machine at 4:18 AM on April 23, 2012


Software isn't books, but I do want to note that my image processing software is explicitly sold under a pay-what-you-want price scheme (though $0 isn't an option). People can choose $5 increments, with a suggested price of $25. Slightly more than half of purchasers choose $25, the remainder choose less; few choose $5, however. There's always a free, unlimited use but slightly restricted functionality version that makes it clear exactly what you will get for your money.

For entertainments like books and movies, I'd rather pay after consumption than before, so I can pay an amount that genuinely reflects my enjoyment. But that model doesn't seem to be on anyone's radar, oddly.
posted by seanmpuckett at 6:32 AM on April 23, 2012


the balance of power has changed.

The balance of power has always favored readers. You don't like the hardback suggested retail price? Wait for the paperback. Still too high? Wait for the remainder. Still too high? Get it from a library.

At least with physical copies there was a physical limit to how far a copy could last before someone had to buy a new one. With unlimited e-copies, even that power is lost to the author/publisher.

As to Books Cost Too Much, well, consider that for the price you're getting hours of pleasure. A movie, you get maybe ninety to a hundred and twenty minutes. A concert, ditto. Music download, even less. The sheer glut of printed material out there tends to color over that fact.

Just something to think about.
posted by IndigoJones at 7:01 AM on April 23, 2012


nobody: "That one's because otherwise ~30% would go to Apple."

That makes sense, I suppose. But it seems weird anyway. They don't take a cut of physical goods purchased using the iOS app? I guess that's because they aren't competing with Apple on those items.

[insert clever name here]: "You must not have your kindle connected to her account. I share books with my husband all the time via amazon's whispernet. I love how convient it is. I only wish I could add a few friends without giving them access to my stored credit card info."

That's exactly my point. We shouldn't have to link them to the same account. We each have a Kindle, we share one bank account, but we each have separate Amazon accounts. I am not going to tie my Kindle (which I have had for years, with a ton of books already purchased) with her account, nor is she going to tie her Kindle to my account (as she has Prime, and likes getting the free books).

Amazon allows between-account sharing but not for Kindle. We can share the Prime benefits between accounts, much as Apple lets me turn on "Home Sharing" and authorize her computer (and her iTunes account) to automatically share all music and app purchases between devices. But Amazon won't let me share a library between Kindles on different accounts. It's like me having a huge bookshelf in the living room, but if she wants to leaf through one of the novels she has to go to the bookstore and buy her own copy. Some books can be loaned ONCE for 14 days. I read a lot faster than she does, there are books she may wish to read but between work, kid, and daily life, there just isn't enough time for her to get through some novels in 2 weeks. And re-reading a book is broken anyway; if I read a book on my Kindle and then later on she tries to read it on hers, it will try to sync to where I was reading* - the end of the book, meaning she either has to read it on one device and remember to disable syncing, or not read it at all. She can't pick it up on her iPhone when she doesn't have her Kindle handy, for example.

*It should sync to the LAST page read, not the FURTHEST page, but that's another beef with the company and their weird rules. I had one book that had the table of contents as the last page - so after I opened the TOC link on page 1, it forever tried to sync me to the end of the book on resuming reading. Dumb.
posted by caution live frogs at 9:34 AM on April 23, 2012


Malor has spoken more eloquently and intelligently than I ever could about the power-shift to the consumer.

Nonetheless, I don't share the opinion that the publisher is now irrelevant. When everyone can now publish, knowledgeable and trusted curators are more important and this is what will keep publishers around.

We've been making cost/price arguments, but with no specific figures. Leaving aside the printing and distribution costs... what does it cost to produce the average book? Or if it varies so wildly, what are the average costs to produce a specific type of book?
posted by Artful Codger at 11:11 AM on April 23, 2012


When everyone can now publish, knowledgeable and trusted curators are more important and this is what will keep publishers around.

Well, those who realize what their new role is. If history is any guide, it'll be very few of the current players.

Leaving aside the printing and distribution costs... what does it cost to produce the average book?

Huh? Are we talking ebooks?
posted by ChurchHatesTucker at 11:37 AM on April 23, 2012


We can share the Prime benefits between accounts, much as Apple lets me turn on "Home Sharing" and authorize her computer (and her iTunes account) to automatically share all music and app purchases between devices.

Honestly, I think they are both pretty terrible for households. They just stick their head in the sand and say "we don't want to deal with this complication." Yes, there is Home Sharing, but that doesn't really do much good in a post-PC era, where I don't even bother to sync with iTunes for weeks.
posted by smackfu at 12:20 PM on April 23, 2012


what does it cost to produce the average book?

This is an interesting question. I admit that, despite reading a lot of books, I don't really have a firm grasp of what the underlying costs are like, either. Certainly they must range quite wildly depending on the nature of the book.

But for fun, I decided to do some back-of-the-envelope calculations to see what a book would cost if you just wanted to hire the various people involved, i.e. if it wasn't anyone's labor of love but just a straightforward business proposition:

If we set aside research costs and think of a hypothetical 300 page paperback-equivalent fiction book, it's probably somewhere in the neighborhood of 100,000 words. At a pay scale equivalent to a freelance magazine-feature writer ($200 for a 1000-word feature; though I don't know if this is currently realistic) that's $200k just for the writing. And then you'd have editing -- the EFA gives as a guideline for "Basic Copyediting" 1250-2500 words per hour, $30-40 per hour. So that's anywhere from $1200 to $3200 for basic editing, and then you'd need proofreading (about the same or a bit less on their scale). I don't know what typesetting and assembly of an ebook costs, but if we say it's about the same as editing again, then round up to $10k worth of post-manuscript production costs.

So if everyone involved were being paid freelance rates, a fiction book might represent $210k worth of investment -- to sell it for $9.99 on Amazon, given their 65% commission (so, net $3.50 per sale), you'd need to move almost 60,000 copies to break even. Of course, if sold directly (net $9.99 per sale), it's "only" 20,000 copies.

I don't really have a point here, I just thought the hypothetical economics are interesting. Writing books for a niche audience (less than tens of thousands of buyers) doesn't seem likely to ever be a good way to make money, although if you are reasonably assured of making it over the profitability threshold (as might be the case with series books, or celebrity memoir-type stuff) then it's probably no worse than a lot of other speculative business ventures.
posted by Kadin2048 at 12:53 PM on April 23, 2012


Yes, there is Home Sharing, but that doesn't really do much good in a post-PC era, where I don't even bother to sync with iTunes for weeks.

That's what iTunes Match is for, for our new cloud-based, post-PC era.
posted by Blazecock Pileon at 1:07 PM on April 23, 2012


Amazon's royalty rate on $9.99 self-published books is actually 70%. So you would net $7 per sale.

The 35% royalty rate is only if you charge over $10. They really want people to charge under $10.
posted by smackfu at 1:08 PM on April 23, 2012 [1 favorite]


That's what iTunes Match is for, for our new cloud-based, post-PC era.

Yeah, but if I have an iTunes store account, and my girlfriend has an iTunes store account, how does iTunes Match play into that? It seems like my purchases are my purchases, and hers are hers, and now there's zero way to get her stuff on my phone.
posted by smackfu at 1:11 PM on April 23, 2012


I don't know, I don't use it. But I know I can share apps bought with my husband's Apple account, and vice versa. Maybe sharing works for music, as well.
posted by Blazecock Pileon at 1:52 PM on April 23, 2012


Nonetheless, I don't share the opinion that the publisher is now irrelevant.

Note that I didn't say that, not quite. Publishers will likely still have a place in the new book market.

Rather, what I said is that their opinion is irrelevant. The only opinion that matters is that of the customers. Publishers are selling numbers, to customers that have super-specialized number-duplication machines, all linked together in a worldwide network. In this world, the relationship between someone who creates a number, and someone who uses that number, is very different from the world of producing and selling physical copies of media. It is completely voluntary on the part of the customer, where it was much less so before.

I think, in this world, you're not going to have 'publishers' anymore; you're going to have collaborators. The need for expensive machinery and access to capital to make copies is just gone, while the need for curation, editing, and marketing will still exist. Authors and 'publishers' will cooperate to do these things, but authors may become the driving force, rather than the other way around.

I don't know how the successful relationships will be structured, but it seems quite clear to me that middlemen are being eliminated, and that only the creative and marketing parts of the process will still be renumerated in any significant way. And THAT part of the deal will, ultimately, be controlled by the end users, because they're the ones with the money and hundreds of millions of number duplicators.
posted by Malor at 5:24 PM on April 23, 2012


that's $200k just for the writing[...]So if everyone involved were being paid freelance rates, a fiction book might represent $210k worth of investment.

Since it represents 95% of your back of the envelope calculations, it's probably worth pointing out that the median advance for a novel is surely much, much lower than $200,000. But I see: you're not figuring out how much a book costs to produce now, you're thinking of the hypothetical future without publisher's administrative, office rental, editor salary, etc. costs, right?
posted by nobody at 5:34 PM on April 23, 2012


I think, in this world, you're not going to have 'publishers' anymore; you're going to have collaborators.

That's a better way to look at it. "Marketers" is probably more accurate, since that's the service authors/creatives will value.
posted by ChurchHatesTucker at 5:55 PM on April 23, 2012


Tom Doherty Associates, publishers of Tor, Forge, Orb, Starscape, and Tor Teen, today announced that by early July 2012, their entire list of e-books will be available DRM-free.
posted by seanmpuckett at 10:00 AM on April 24, 2012 [2 favorites]


"DRM-free titles from Tom Doherty Associates will be available from the same range of retailers that currently sell their e-books"

Does that mean Amazon supports selling DRM-free books?
posted by smackfu at 10:05 AM on April 24, 2012


you're not figuring out how much a book costs to produce now, you're thinking of the hypothetical future without publisher's administrative, office rental, editor salary, etc. costs, right?

Right; I don't have nearly enough information to speculate on what it costs now, but I was curious what it would cost to create a book in a brave new world where everyone currently involved in the publishing chain was working as a freelancer / independent contractor.

The $200k for writing part is definitely high, in the sense of probably being above what the market would deliver or support, but I thought it was interesting. Clearly, the price per word for novel writing is substantially less than magazine feature writing. Not having experience in either job, I'm not sure if that's because it's actually any easier, or just because current supply/demand favors freelance feature writers over novelists. But if we wanted to have a system where authors were compensated reasonably well, it seemed like a good benchmark to start from.

If someone with more experience wanted to give some reasonable numbers for how long it actually takes to write a novel, it would be interesting to see how many copies at a reasonable price you'd need to sell to make minimum wage, a good living wage, a level-of-education-equivalent wage, etc. My guess is that it's not as many copies as my hypothetical, but still quite a few.
posted by Kadin2048 at 10:19 AM on April 24, 2012


It took me about a year of mostly full-time work to write a novel.
posted by escabeche at 11:01 AM on April 24, 2012


Stross: More on DRM and ebooks
posted by Artw at 12:26 PM on April 24, 2012 [1 favorite]


New thread
posted by Artw at 3:42 PM on April 24, 2012


« Older Clearly, he was on fire at the gym   |   Team Rwanda Newer »


This thread has been archived and is closed to new comments



Post