December 16, 2009

Another big publisher comes out against Amazon

by Dennis Johnson

Add another of the New York big six to the list of publishers standing up to Amazon‘s severe discounting of book prices: Macmillan — owners of Farrar, Strauss, Giroux, Henry Holt, and Picador, among others, says not only will it be delaying the publication of some ebooks, a la the policies recently announced by Simon & Schuster, HarperCollins, and the Hachette Book Group, it will also be selling some ebooks for more — I say more — than the price of its hardcover version.

As Jeffrey A. Trachtenberg details in a Wall Street Journal report, the company “said it will issue books it expects to be best sellers in an enhanced electronic-book format, starting in the first quarter of 2010,” and that “The special editions, which will include author interviews and other material, such as reading guides, will carry a list price slightly higher than the hardcover edition. (Hardcover books typically list for at least $25, while e-book versions of best sellers can go for as little as $9.99.) The new e-books will go on sale on the same day as the hardcover. After 90 days, the special edition will be replaced by a standard e-book.”

Says Macmillan CEO John Sargent, “Our goal is to give the consumer what they want, when they want it, at a fair price.”

Dennis Johnson is the founder of MobyLives, and the co-founder and co-publisher of Melville House.

8 Comments

Rob at 12:44 pm on December 16, 2009

Hm… limited edition ebooks? Could be dangerous. After the special edition has been deleted, I suspect that people will be tempted to pirate that—rather than buy the regular one—so as to access the special features. The pirated version will actually have more content than the one that’s for sale!
Rob at 12:44 pm on December 16, 2009

Hm… limited edition ebooks? Could be dangerous. After the special edition has been deleted, I suspect that people will be tempted to pirate thatâ€”rather than buy the regular oneâ€”so as to access the special features. The pirated version will actually have more content than the one that’s for sale!
Jim at 10:49 am on December 18, 2009

I don’t understand why eBooks which avoid printing, inventory, distribution and return costs and disposal shouldn’t cost a lot less than printed books.
Jim at 10:49 am on December 18, 2009

I don’t understand why eBooks which avoid printing, inventory, distribution and return costs and disposal shouldn’t cost a lot less than printed books.
Dennis Johnson at 11:25 am on December 18, 2009

Jim — They don’t lose many of the expenses you seem to think they do. They still need to be distributed to the various retail outlets, for example, so there are indeed distribution fees. The only production cost that’s obviated is printing, which is not as big a percentage of final total costs as you might think — out of the $30 or $40K you may have to put up for a moderate print run, that’s maybe $5K of costs. So you’ve still got lots of production costs, such as editing, copyediting, proofing, design, layout, and typesetting, and now, electronic reproduction costs (turning the print files into ebooks). There are still promotion and publilcity and marketing costs (in some ways, conceivably higher as it’s tough to promote a non-corporeal object). And overhead is still the same. In short, while ebooks in some ways costs less, many costs remain, and some new ones apply.
Dennis Johnson at 11:25 am on December 18, 2009

Jim — They don’t lose many of the expenses you seem to think they do. They still need to be distributed to the various retail outlets, for example, so there are indeed distribution fees. The only production cost that’s obviated is printing, which is not as big a percentage of final total costs as you might think — out of the $30 or $40K you may have to put up for a moderate print run, that’s maybe $5K of costs. So you’ve still got lots of production costs, such as editing, copyediting, proofing, design, layout, and typesetting, and now, electronic reproduction costs (turning the print files into ebooks). There are still promotion and publilcity and marketing costs (in some ways, conceivably higher as it’s tough to promote a non-corporeal object). And overhead is still the same. In short, while ebooks in some ways costs less, many costs remain, and some new ones apply.
Edward G. Talbot at 11:51 am on December 18, 2009

They’re joking, right? They used the word “list price” so maybe they’ll offer discounts big enough that the ebooks in practice cost less than hardcovers. If not, though, they’ve got the Uzi on auto aimed at their feet.

I’m not one who suggests that big publishing is either going away or is unnecessary. But it’s a fact that it is less necessary than it used to be. And the continued resistance to being on the forefront of a changing marketplace is going to cause one or two of the Big 6 to fail or be absorbed I suspect. They can complain all they want about costs, and I don’t deny that if all you do is take the current paper system and translate it to ebooks with a couple minor tweaks, many of the same costs remain.

That is of course totally irrelevant if the buyer’s perception is that ebooks should be cheaper. The changing marketplace is already beginning to provide smaller competitors with the ability to produce higher quality product at a lower price. The only thing saving publishers currently is their relationship with distributors and especially book stores. Distributors have seen the writing on the wall and are embracing whatever they can in an effort to remain relevant. Bookstores are dying, and eventually those that survive will figure out that the suicide pact they have with big publishing is not a sustainable model any more.

There are a lot of unknowns right now, and I certainly can’t blame publishers – an inherently conservative lot – for having difficulty figuring out what to do. But most of the signs are pointing to pretty substantial changes in how people produce, distribute, buy and consume “books”. Other than for a few books where enhanced material offers far greater value than just the basics, trying to charge more for ebooks is about as tone deaf to what’s been happening as anything I’ve seen to date.
Edward G. Talbot at 11:51 am on December 18, 2009

They’re joking, right? They used the word “list price” so maybe they’ll offer discounts big enough that the ebooks in practice cost less than hardcovers. If not, though, they’ve got the Uzi on auto aimed at their feet.

I’m not one who suggests that big publishing is either going away or is unnecessary. But it’s a fact that it is less necessary than it used to be. And the continued resistance to being on the forefront of a changing marketplace is going to cause one or two of the Big 6 to fail or be absorbed I suspect. They can complain all they want about costs, and I don’t deny that if all you do is take the current paper system and translate it to ebooks with a couple minor tweaks, many of the same costs remain.

That is of course totally irrelevant if the buyer’s perception is that ebooks should be cheaper. The changing marketplace is already beginning to provide smaller competitors with the ability to produce higher quality product at a lower price. The only thing saving publishers currently is their relationship with distributors and especially book stores. Distributors have seen the writing on the wall and are embracing whatever they can in an effort to remain relevant. Bookstores are dying, and eventually those that survive will figure out that the suicide pact they have with big publishing is not a sustainable model any more.

There are a lot of unknowns right now, and I certainly can’t blame publishers – an inherently conservative lot – for having difficulty figuring out what to do. But most of the signs are pointing to pretty substantial changes in how people produce, distribute, buy and consume “books”. Other than for a few books where enhanced material offers far greater value than just the basics, trying to charge more for ebooks is about as tone deaf to what’s been happening as anything I’ve seen to date.