What do publishers bring to the table these days for an author, particularly a novice?
What they used to bring was capital - capital that authors often lacked - to get a book professionally edited, printed, distributed and publicized. Publishers were in a position to call the shots for most authors, because authors could not get these services elsewhere.
Enter the e-book.
E-books are a mortal threat to the publishers’ traditional role because they make it economical for even beginning authors to create a respectable product and get it into the hands of readers.
While this is good news for authors, readers, and retailers such as Amazon, it is bad news for traditional publishers that want us to continue paying a premium for their services and products.
This week, the Justice Department is facing off against Apple in a New York courtroom. The government claims that Apple and five traditional publishers conspired to raise e-book prices, violating antitrust law in an attempt to counter Amazon’s hold on the e-book market. The feds are portraying Apple as the “ringmaster” of the movement from wholesale pricing - in which publishers sold e-books at a discount to vendors, who could then price them as they wished - to agency pricing, which allowed publishers to set their own retail prices for e-books. In practice, this meant that newly released mainstream books began to sell at $12.99 or $14.99 each, up from Amazon’s former practice of charging $9.99 for most new titles.
Whether the Justice Department wins or loses against Apple, the case demonstrates how book publishers have failed to absorb the lessons painfully learned by major record labels. Steve Gottlieb, a former independent record label president who moved on to an online startup, wrote last year, “Industry after industry has faced dramatic technological change driven by the consumer preference for convenience and efficiency that the internet provides. In no case I can think of, has ‘pushing back’ or market share leverage of the strongest players proven to be a successful strategy to anything other than being able to cut costs and weather declining margins better than the competition.”
E-book retailers, spearheaded by Amazon, have unyoked publishers’ traditional roles from one another. Authors no longer must bundle all of those roles together by default; a book need not be edited, printed (or digitized), packaged and marketed all under one roof. Publishers are only hastening their own downfall by insisting otherwise.
My brother, retired police Sgt. Craig Elkin, wrote a book (a collection of strange-but-true things that happened to him on the job). It is now available on Amazon, though not for $14.99. Craig set the e-book’s $1.99 price, using Amazon’s guidelines - no publisher necessary. While he did create a physical version of his work, for the most part he only printed as many copies as people ordered. (The rise of print-on-demand books suggests this may be the future for first-run titles by all but the most famous authors.) Craig hired his own illustrator, freelancer Adam Talley, to design the cover and interior artwork. He happened to have family members with the skills to edit his manuscript, but if he’d needed to, he could have hired a professional for that too.
As for marketing, Craig is an engaging and funny local personality, and he has no shortage of Connecticut news and broadcast outlets eager to interview him. In fact, a senior citizens home in the area paid him to come and tell his stories in person (which is more than his former-journalist brother can boast).
Are publishers completely valueless yet? No. But I think we will continue to see a fragmentation of the publishing industry. Many authors may find it more practical to buy each of the services the big publishing houses used to offer from independent vendors as needed. One of those services - distribution - will be handled by all sorts of websites or other electronic venues, as we can already see today. Once considered a lesser option, self-publishing is rapidly gaining a foothold as a legitimate alternative to traditional publishing.
At its core, the Apple antitrust suit is a dispute about the efforts of publishers to hang on to a dying business model. If publishers mean to survive, they need to take a good look at the unique value they can or can’t offer - and they need to give up on the idea of pricing new e-books as if they are new hardbacks, preferably before the market forces them to do so.
Whether the Justice Department wins or loses, the days of the $15 e-book are numbered.
Posted by Larry M. Elkin, CPA, CFP®
photo by Pavel P. on Flickr
What do publishers bring to the table these days for an author, particularly a novice?
What they used to bring was capital - capital that authors often lacked - to get a book professionally edited, printed, distributed and publicized. Publishers were in a position to call the shots for most authors, because authors could not get these services elsewhere.
Enter the e-book.
E-books are a mortal threat to the publishers’ traditional role because they make it economical for even beginning authors to create a respectable product and get it into the hands of readers.
While this is good news for authors, readers, and retailers such as Amazon, it is bad news for traditional publishers that want us to continue paying a premium for their services and products.
This week, the Justice Department is facing off against Apple in a New York courtroom. The government claims that Apple and five traditional publishers conspired to raise e-book prices, violating antitrust law in an attempt to counter Amazon’s hold on the e-book market. The feds are portraying Apple as the “ringmaster” of the movement from wholesale pricing - in which publishers sold e-books at a discount to vendors, who could then price them as they wished - to agency pricing, which allowed publishers to set their own retail prices for e-books. In practice, this meant that newly released mainstream books began to sell at $12.99 or $14.99 each, up from Amazon’s former practice of charging $9.99 for most new titles.
Whether the Justice Department wins or loses against Apple, the case demonstrates how book publishers have failed to absorb the lessons painfully learned by major record labels. Steve Gottlieb, a former independent record label president who moved on to an online startup, wrote last year, “Industry after industry has faced dramatic technological change driven by the consumer preference for convenience and efficiency that the internet provides. In no case I can think of, has ‘pushing back’ or market share leverage of the strongest players proven to be a successful strategy to anything other than being able to cut costs and weather declining margins better than the competition.”
E-book retailers, spearheaded by Amazon, have unyoked publishers’ traditional roles from one another. Authors no longer must bundle all of those roles together by default; a book need not be edited, printed (or digitized), packaged and marketed all under one roof. Publishers are only hastening their own downfall by insisting otherwise.
My brother, retired police Sgt. Craig Elkin, wrote a book (a collection of strange-but-true things that happened to him on the job). It is now available on Amazon, though not for $14.99. Craig set the e-book’s $1.99 price, using Amazon’s guidelines - no publisher necessary. While he did create a physical version of his work, for the most part he only printed as many copies as people ordered. (The rise of print-on-demand books suggests this may be the future for first-run titles by all but the most famous authors.) Craig hired his own illustrator, freelancer Adam Talley, to design the cover and interior artwork. He happened to have family members with the skills to edit his manuscript, but if he’d needed to, he could have hired a professional for that too.
As for marketing, Craig is an engaging and funny local personality, and he has no shortage of Connecticut news and broadcast outlets eager to interview him. In fact, a senior citizens home in the area paid him to come and tell his stories in person (which is more than his former-journalist brother can boast).
Are publishers completely valueless yet? No. But I think we will continue to see a fragmentation of the publishing industry. Many authors may find it more practical to buy each of the services the big publishing houses used to offer from independent vendors as needed. One of those services - distribution - will be handled by all sorts of websites or other electronic venues, as we can already see today. Once considered a lesser option, self-publishing is rapidly gaining a foothold as a legitimate alternative to traditional publishing.
At its core, the Apple antitrust suit is a dispute about the efforts of publishers to hang on to a dying business model. If publishers mean to survive, they need to take a good look at the unique value they can or can’t offer - and they need to give up on the idea of pricing new e-books as if they are new hardbacks, preferably before the market forces them to do so.
Whether the Justice Department wins or loses, the days of the $15 e-book are numbered.
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