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Friday, January 29, 2010

Holy Moly! It's a Fight!

I was going to blog about something else but since there's a major controversy going on in the publishing world, I'm going to blog about that instead.

Here's the details as I know then now. FYI: Things may change as this is ongoing.

1. Wednesday (Jan 27) Apple introduced its iPad. This touchpad computing device does a bunch of stuff. For this issue, you need to know it includes iBook -- kind of like iTunes for books -- and Apple's answer to the Amazon Kindle. Reader and writer types noticed right away that the book prices were pretty high. $14.99. For the most part Amazon sells Kindle books for $9.99 and below. They take a loss on books for which the publisher actually charges more.

2. Soon after the iPad announcement, video surfaced of computer techno-maven Walt Mossberg speaking with Steve Jobs. They talked about books and their pricing vis-a-via the Kindle and Steve Jobs told Mossberg that "They will be the same."

Now that's interesting, I thought when I saw that clip. How does Steve know that? Does that mean they're lowering their price to match the Kindle? (I am at times sadly naive.)

3. The CEO of MacMillan Books has said some pretty uninformed stuff about eBooks, mostly about the price Amazon is charging. The basic issue is that hardcover books, as you probably have noticed, cost a lot more than $9.99 which is what the Kindle version of the hardcover costs. Hardcovers are VERY profitable for publishers. Mass Market Paperbacks (MMP) are not as profitable, don't cost as much and sell in far greater numbers, excluding the odd blockbuster everyone buys in hardback because they just can't wait.

4.MacMillan, in particular, has been very vocal about this. They, and other publishers have done things like publish in hardback but delay the availability of the Kindle version because they don't want to loose a hardback sale to a (cheaper) Kindle sale.

5. Today, Amazon pulled the Buy Now button from all MacMillan titles. This includes Tor and St. Martin's Press, by the way. This means you can no longer buy these books at Amazon unless you want to buy them used and that means NO money going to the author.

Here are the links to check out:


My Take on This


There are several things wrong with this. The first is the assumption that but for the availability of the Kindle version, book buyers would buy the hardback. This appears to be an egregiously wrong assumption. There is, to my knowledge, no evidence that a Kindle owner would be a hardback buyer if she didn't own a Kindle.

I think it's much more likely that a Kindle owner, if she didn't have the device, would wait for the MMP rather than buy the hardback. The MMP would be priced at $7-8. But the Kindle owner, instead of waiting for the MMP, pays a bit more for the book right now. Instead of waiting. By the time the MMP comes out, she's not going to want to pay $9.99. So what's actually happening is the Kindle buyers represent BRAND NEW customers with respect to this release. MORE people buy this brand new book because there are two formats. And the cheaper one comes with some well known and much hated limitations.

But anyway, that's what the publishers are thinking. They think this because they haven't informed themselves about the changing landscape of book buying. (which is different from the changing landscape of book SELLING) They are not only technophobes, they are techno-idiots. They don't understand the digital world and they don't understand the people in it. Instead, they're running around yelling The sky is falling instead of listening to the consumer, some of whom are NEW consumers, tell them what they want.

Instead, they're trying to force consumers, who are new and/or different than they used to be, to behave in the comfortable way that matches the spreadsheets they've already got. Which are about selling something these consumers would rather not buy in the manner it's being sold to them.

Publishers need to hire someone who actually understands technology. Someone who grew up with it or enthusiastically threw themselves into it when the world changed. And it did, people, it did. And then they need to actually LISTEN to that person. Any C-Level employee who didn't personally take a look at Twitter when the buzz started is automatically disqualified from this position.

That's my personal line in the sand, by the way. If you weren't curious to know what Ev was doing over there, you're not the right person to help lead Publishers out of the Analog world. If you don't know who Ev is, you're really not the right person.

FYI: Ev is the person who started Blogger. After Google bought Blogger, Ev went off and tried a couple things that were neat but not neat enough. Then he did Twitter with some buds. Blogger, by the way, does not look significantly different than it did shortly before Ev left Blogger (post acquisition). There was one big upgrade, then Ev left.

Carolyn's Demands


  • Stop wishing this digital stuff would just go away. It won't.

  • Believe in your heart, because it's true, that pissing off your customers is not a sound business practice.

  • Start listening to what READERS want.

  • Forget territorial rights. They are now only a fiction. (heh) Concentrate on translation rights for your eBooks. If someone in Singapore reads English well enough to prefer buying books in English, let them. If I decide I want to buy a book in French, even though I live in California, let me. You will sell more books that way.

  • Do some fucking research about piracy. Fund it if you have to. Pick an academic to do the work. Get some real data instead of the fake data, knee jerk assumptions you're using.

  • Listen to your tech person about how to get people to buy legally. Oh hell, I'll just tell you now:
    1. Make it easy
    2. Don't rip me off
    3. Don't break my shit doing it.


  • Keep in mind that you sell stories. Authors write them. If we have to, we'll write them without you. Your (fiction) business goes away without the stories.



Update


Thanks for the comments. I appreciate people weighing in on the issue. I thought I should clarify a few things.

First, I don't write for MacMillan, so my books are still on Amazon. I write for Berkley (Penguin Putnam) and Grand Central (Hachette Books) I do, however, read lots of authors who do write for MacMillan.

Also, I have the Kindle app on my iPhone and have purchased and read a lot of books that way, including books from MacMillan. I also read books on Stanza, another iPhone app, because the Kindle isn't always the best way to go. Especially when my author friends send me their books to read before they're published (Oh, I am so lucky!)

At Christmas, I bought my 82 year old mother a Kindle. She and my dad have both read books on it. I loaded it up with free books and helped my mother buy a book she was interested in reading.

So, that said, this post is not about DRM (Digital Rights Management). I happen to think it's a mistake, particularly as DRM is typically implemented. So far, in my opinion, DRM does far more harm than good because it breaks stuff for the consumer.

This post also isn't about piracy. I've posted about that a few times on this blog. My books have been pirated. What frosts me about that is the people who pirate my books and then sell them. Yeah. They steal my stuff and then sell what they stole to other people. That is wrong. Other than that, there's only one person (Brian O'Leary) who is actually studying piracy with any rigor at all.

Therefore, my position on piracy is aside from the obvious issue of stealing, I don't know for sure yet.

BUT!

Please don't think I am totally on the side of Amazon here. I'm not. I'm not a lawyer but I'm not clear on what agreements were made about pricing for iBook, the Kindle or anything else. Was there a smoke filled room and nefarious dealings? I don't know.

I think Amazon removing MacMillan from its site is pretty silly. They're screwing authors and readers to make a point with MacMillan and, probably, Apple. It's possible to view Amazon's pricing decision, and its $9.99 price point as predatory in effect. They know what publishers charge. They're willing to take a loss on these books in order to create a market at at price point less than publishers charge.

What happens when Amazon decides it doesn't want to take a loss any more? History suggests they won't be raising their price. History suggests they'll go to the publishers and say, hey, we won't carry your books unless you charge us less. Publishers have seen it before: from the big chains and from Wal-Mart. That's a fundamental change in the economic landscape. Price isn't set by the cost of the product + markup - what consumers will pay. Price gets set by the retailer and the seller has to suck it up or else. In MacMillan's defense, that's scary. But it doesn't excuse publishers lack of understanding.

Hopefully, I've been clear that I think publishers are making decisions based on misinformation and misunderstanding and that can just lead nowhere good.

And, as usual, let me say that in an emerging trend, the facts are fluid, not everything is known. All I can say is this is what I think so far, but I stand really and willing to hear more facts and opinions and change my mind accordingly.

Labels: , , ,

posted by Carolyn @ 1/29/2010 09:27:00 PM Permalink

Comments:
A. & MEN. That is all.
I understand your position but since buying an ebook from Amazon includes a DRM (you don't own it and you paid for it?!? wtf?) they've lost me anyway. And you may be biting off your own paycheck if the higher price enables publishers to take on less conventional/newbie/odd but good authors and books. Check out the Making Light blog for a different take. I'm not affiated with ML in anyway, btw. Just sayin'...
Great post. I saw this linked on Kindleboards. I'm not much of a romance reader, and I confess I had never heard of you until this post. As soon as your books are back, I'll buy one and read it. I do understand where my bread is buttered.

Elaine
Norman, Oklahoma
EXACTLY!!

thanks
Wow! Nicely done.


Publishers need to do more than wring their hands and cry poverty. They need to put on their big boy pants and move into this dynamic and rapidly changing environment with the rest of us. They need to address their current business model. It is archaic and will ultimately fail. It is on their shoulders, not ours. Amazon has placed itself in a position to succeed while publishing firms have not.
One point on piracy. Most of the pirated books that I've seen were scanned from a hard copy of the book, not an ebook. I agree that publishers need to study their market AND hire someone that actually understands readers, NOT just business
Great summary, great post. I will say that I do think I'm with Amazon on this one. I haven't yet seen an analysis of the marginal cost savings of ebooks to publishers, but I have to imagine it's substantial. Think about it--printing, paper, binding, packaging, shipping, shelving, bookstore overhead, etc. The consumer does not incur those costs for the publisher, and the publisher shouldn't charge for them. This brings to mind whether authors shouldn't be getting a higher margin on ebooks (what, after all, is the publisher providing now but a marketing channel?). But that's another discussion.

Thanks again for the great summary. I saw this link on Rachael Herron's FB feed and linked it on Kindleboards since it's the most complete and intelligent take on the issue I've seen so far.
Carol:

You get it! You're right on the money when you say that many of the e-book buyers are NEW customers. Before I got a Kindle, the only books I bought were used or paperbacks - or I borrowed them from the library.

Simply put, the more e-books cost, the fewer I can afford to buy, so my Kindle will be used only for vacation. I wanted to buy the Kindle version of the latest Marian Keyes book, but the Kindle version was $14.27. Instead, I'm reading the library copy. Just saying!

Right again about publishers being stuck behind the times. Anyway, I liked your blog so much I'm going to Amazon to look up your books - I like the way you think and write. May we all live happily ever after!!
Wow, great post and summary Carolyn. I pretty much come out on all this stuff like you do. I received my kindle as a gift the month they came out, and I love it. I also like my kindle app. I was talking with a few other authors about how quickly the $9.99 price for a hardback became an expectation for me as a consumer. Once established it's hard to change. It will be interesting to see how all this falls out.
Way to go!

I too will be picking up a book of yours on our next paydate. I love to support authors with common sense!
I think the punlishers need to know I dont buy hardcover books, and now having just received a kindle, I dont buy paperback books anynore either.
Carolyn, indicate:
"Publishers need to hire someone who actually understands technology. Someone who grew up with it or enthusiastically threw themselves into it when the world changed. And it did, people, it did. And then they need to actually LISTEN to that person."

They actually don't need to look far, Harlequin is a great example. They Do get it!
Deb: I agree, Harlequin has been very intelligent with its digital strategy. They certainly do "get it" more than other publishers. I thought their hire of Angela James for Carina Press was very smart.
I opened this post with trepidation in my heart. More often than not lately I've read insanely pro Publisher rants from authors. I wonder do their editors call them and demand a post?

Thank you for a thoughtful post that recognizes that readers are who the Authors, Publishers, & Bookstore serve. And for being very correct in stating that there is plenty of wrong to go around.
@seriouslykooky here.

I just wanted to say I'm relatively new to e-books as only received my e-reader 2 days ago. I've been getting hold of books from writers who are as yet published, such as quirky sci-fi stories, and traditional classics. I still love the feel of a real book and love to share these around. However, I can get through a book or more a day, especially when on holiday so the e-reader is perfect for packing.

I think there is room for digital and printed copies and I, for one, will continue to purchase both versions, just not both versions of the same book.
Carolyn, you are so right about so much of what you said. The one thing I'd add is that pre-Kindle, I didn't wait for the paperback - I waited to find it in a used book store or I got it at the library - so every Kindle book I buy now is money in the author's pocket, and the publisher's, that they didn't get before. To assume that every Kindle (or Sony, or Nook) sale made is a hardback sale lost is just as wrong-headed as it can be.
I too will be looking for your books - Kindle edition, of course - as I like the way you think, and write.
Excellent thoughts, Carolyn. I am similar to the Kindle owner that you described.

For one reason, the print size in MMP is too small for me to comfortably read, yet I'm not ready for large-print editions. Hardbacks or trade paperbacks are usually perfect, so I almost totally relied on the library in my pre-Kindle days. Books that were only available as MMP just didn't get read. But Kindle's six font sizes have solved that problem. So while I would never buy a new release in hardback, I am buying many other backlist books on Kindle, most under $7, rather than solely using the library or PaperBackSwap.

Here's something I don't understand: Why did MacMillan and other publishers enter into this agreement before seeing how successful iBook sales would be? The iPad's (I hate that name) color screen may be great for newspapers and magazines, but the serious reader won't use a backlit screen, in my opinion. I have very simple tastes - a plain cell phone for talking (no camera, even), a laptop for computer needs, an iPod for music, and a Kindle for reading.

It hasn't been that long ago that Jobs said the Kindle would be a failure because people weren't reading anymore, or something to that effect, so I credit Amazon with increasing our desire to read. May this standoff be resolved soon, for the benefit of both authors and the readers who delight in their books.
Carolyn,
Your latest blog concerning the Amazon-Macmillan rift was written well, supporting my current stand of purchasing ebooks rather than hardback/paperback books. I will continue to read what I can obtain on my ereader at reasonable pricing. The current notice today was Amazon was going to let Macmillan books be sold on Amazon again,at whatever price Macmillan publisher wants to assign, that gives the buyer the choice to buy or not at a certain price. Amazon brought the issue to the head, now readers can make a choice.
Cathy
I have another post about today's resolution.

@Cathy: You can be sure other publishers will follow Macmillan's lead in this. See my post about my fears about this.

@Carole: Macmillan didn't want to wait to see what happened with the iPad because that's not really the issue. The issue for them is Amazon pricing Kindle version of new hardbacks at $9.99 and thus, in their minds, competing with hardback sales.

Now we wait and see.
Something the publishers don't consider - when I buy a book on my Kindle, I can't then share it with friends after I read it. If I was buying the actual books, I would be passing them on to friends who wouldn't have to buy them.

That's one of the drawbooks to buying books on my Kindle - but the $9.99 price helps even things out.
Carolyn,
I enoy reading, books,papers, magazines and your blog. Thank you for your honest, heartfelt thoughts on current publisher issues and Amazon.
I will be checking out this site often.
Cathy
Hi Carolyn,

Thanks so much for such a rational take on this issue. Hope the publishers give your thoughts some consideration!

Over the past two years, we have gradually purchased four Kindles for our family. My husband, who rarely read before, is fanatical about reading now. I, a fanatic about reading to begin with, should just sign over my husband's paycheck to Amazon - food and utilities (except for electricity) really aren't that necessary, right? :-)

Anyway, your observation about Kindlers being "new customers" and not a former "hardback book purchasers" is entirely correct, at least in my experience. I always bought paperback books, avoiding anything over 10 bucks. Now I am an ebook purchaser, ready and willing to push the BUY button on a 9.99 book in a New York minute - a acceptable price point higher than before. I now pay more for my books than before. Ebooks have definitely made me more willing.

My point is I have spent more money than ever on ebooks than I ever did with paperbacks. My purchases didn't steal any hardback sales, just from future paperbacks, which are priced lower.

But now, with higher prices AND the fact that the publishers and Jobs have really pissed me off, they can just kiss my money good-bye. (Don't delay ebook versions of King's newest book and expect me to be happy with it either! And then raise prices across the board - goodness gracious.) Unfortunately, that means no iPad for me too. Ah, well.

I will support Amazon by avoiding the Big 6 publishers and purchasing from everyone else on their site with reasonable prices (9.99 and under). I will be sure to check out your books.

(The funny thing is if they had just sort of sneaked the price increase gradually, I probably would have accepted it begrudgingly and gradually. Not now!)

Thanks again.
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