Unless you’re a writer, I imagine you haven’t been paying quite as close attention to the publishing industry and all its weirdness as I have, and that’s a shame, because it’s been really entertaining.
Actually, entertaining isn’t the right word. It’s been insane, but the kind of insane that’s unreasonably fun to watch from a safe remove. Like watching a man stop traffic to cross against a green light by shouting, “I’ll bite your car!” As long as it isn’t your car he’s threatening, it’s sort of funny.
You might imagine that as an author with published works for sale, I am not at a safe remove when it comes to the publishing industry. That’s sort of true, but only sort-of.
Here’s a superb example of the madness of which I speak, and why I’m not concerned that anyone will be biting my car.
In 2014, there was a drawn-out dispute between Amazon, and Hachette. The latter is one of the largest publishers in the world, and Amazon is a company that sells things, such as books. The essence of the dispute was that Hachette—and all the other publishers we affectionately refer to as ‘the Big 5’—wanted more control over the list price of their e-books on Amazon.
That sounds thoroughly reasonable, and it sort of is, but please let me explain because the crazy is in the details. What was happening was that Amazon was discounting the price of the ebooks, and it may seem like this is something the Big 5 would want to stop, except the markdown was coming off of Amazon’s end. In other words, if Hachette wanted to charge $15.99 for an ebook, and Amazon marked it down to $9.99, Hachette was still paid their cut of the full price of the book.
More people will buy a book at $9.99 than at $15.99, so essentially, the Big 5 was coming out ahead in this arrangement in every conceivable way. They collected royalties at an unreasonably high price point while moving the number of units that corresponded to a lower price point.
So of course that had to be stopped right away.
Hachette fought for, and won from Amazon, the return to something called the Agency Model, whereby they set their price and Amazon wasn’t allowed to reduce that price. So that $15.99 book stayed at $15.99 until Hachette decided to change it.
Soon after that contract was signed, the other Big 5 contracts came due, and they all asked for the same Agency Model arrangement. Thus, the finest minds in publishing—or one might assume—negotiated themselves out of an arrangement whereby they sold more units at a lower cost without suffering the financial impact that comes with a lower unit cost.
This isn’t even the crazy part.
After securing the right to price their ebooks unreasonably high and having those prices stick, the first thing the collective brain-trust of the Big 5 did was raise their ebook prices even more. Often, the prices were higher than the price of the print edition, which is just fundamentally insane.
(We can go back and forth about how even an ebook has editorial and marketing costs to recoup, but not this week. Besides, even if true that doesn’t justify a higher cost than print. Print editions have per-copy costs that set the price floor: paper, binding, shipping, etc. Ebooks have no such per-copy cost, aside from the tiny expense of electronic transmission.)
It should come as very little surprise to you that after jacking up the prices of their ebooks at the start of 2015, the Big 5 sold fewer ebooks.
Now here’s the fun part, the part that just makes me shake my head and giggle and wonder how I can live in such extraordinary times. After six months of depressed ebook sales, the Big 5 announced that the ebook market was slowing down.
Not: “we priced ourselves out of the market and stopped selling as many books”. No no no. The ebook market! Is slowing down!
This was celebrated!
I mean it. One article after another, from the New York Times on down came news pieces declaring that print was making a comeback at long last, and the long national nightmare was over.
All it took was the biggest publishing companies in the world deliberately murdering their own share of the market. And it wasn’t even true.
Here is why I can laugh at this from a safe remove: I don’t have a contract with a traditional publisher. If I did, I’d be hopping mad, because what I just described above is an entire industry trying to take away a viable (and lucrative) sales channel for their own authors’ work. And I can laugh because the ebook market isn’t slowing down. The sales that would go to that $15.99 book are going to lower-priced books from indie authors and self-published authors, like me. (Note: I’m both an indie-published author and a self-published author—a hybrid— right now.)
If the Big 5 are under the impression that they can strangle the ebook market, they’re mistaken. All they really can do is strangle their corner of it.
If you’re wondering, driving readers toward print and away from ebooks is actually the idea behind this madness. Given the overhead costs of one versus the other, it makes almost no business sense, except for one detail: the Big 5 can exert a lot more control over print and distribution of paper copies than they can over electronic copies. So if you’re looking for logic in this scheme, that’s probably where you’ll find it. A true resurgence in print could mean a revival of physical bookstores and a resumption of Big 5 control over the publishing industry as a whole. And maybe a pony, a recipe for no-calorie fudge, and a cure for male-pattern baldness.
Here’s how short-sighted this idea is. The Big 5 raised their ebook prices, created an artificial resurgence in print sales of their books, and thought they proved print-is-not-dead. (They actually proved the consumer will buy the cheaper option, but okay.) One might even think they stuck it to Amazon, somehow, by doing this.
The only problem is this: the largest seller of print books right now happens to be Amazon. Guess who saw an uptick in print sales in 2015?
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