The Way of the Buggy Whip

No, this isn’t about a bondage cult.

As you can imagine, the whole Amazon-Macmillan kerfuffle has had a lot of us here at Casa Book View talking amongst ourselves, not just because Macmillan, through its subsidiary, Tor Books, publishes a lotta-lotta SF and Fantasy (ritual disclaimer; I’m a Tor author, and used to be a Tor employee).  We’re writers, and we’re very interested in where publishing is going and whether it’s going to take us along for the ride.  So we’ve decided that if we’re going to talk about this, we might as well let readers hear the wide range of opinions and ideas the BVCitizens have on the matter.  And I’m going first.

When technologies change there is fallout. It’s inevitable–both the change and the human costs; that’s one of the things science fiction has always spoken to. When the horseless carriage came in, one bit of fall-out was the buggy whip industry. Okay, it wasn’t a huge industry, but there were people making buggy whips and suddenly there was no market for their product.  Jobs were lost, people couldn’t feed their children, pay their rent, etc.  If you were in the buggy whip biz it was a bad time.

Right now (as the recent upheavals suggest) the publishing industry is going through some “buggy whip” shakeouts.  And one of the defenses of Amazon’s “Every e-book $9.99 or less!” policy I’ve been seeing from posters on the ‘net is: why do the publishers want more than that?  It costs them nothing to produce an e-book!”

Okay, let me breathe slowly.  This may take a moment…

First: e-books don’t cost publishers “nothing.”  While unpublished writers may rail at the “gatekeeper” system of publishing, let me promise you: you as a reader want those gatekeepers in place.  You want an editor who sees something in a book and fights to buy it and get it in the schedule.  You want that editor to help the author make the work as good as it can be.  You want a copyeditor to go through the book and make sure it’s consistent and says what the author thinks it says.  You want proof-readers to check over the text.  All of this happens before paper and printing presses and binderies come into the process.  All of these people have rents and food; all of them need a living wage (and the wages of publishing are traditionally on the low end of the spectrum).  That’s one cost.

Second: there’s the cost of acquisition.  If Macmillan buys a book by Madeleine Robins it’s not going to cost them much, comparatively speaking.  Certainly not the kind of money that they’d spend for a Stephen King or Joanna Rowling. The cost of any acquisition is spread over the various editions (which means that, at least as far as the publisher is concerned, an e-book version might have some author advance money to make up; or not, depending on how they account things).  Publishers know they can’t make back the money on Stephen King’s books in the hardcover edition, even with a bajillion sold; they have to calculate the trade paperback and mass-market editions–and any sub-rights sales that King’s agent has let them retain the rights to–to edge into the black and to profitability (they need profits so they can invest in authors like, oh, Madeleine Robins).

Third: there’s the time factor.  Time factor? Macmillan buys my current-almost-finished book, The Salernitan Women*, as the second book in a two-book contract.  First I write and turn in the first book.  Then I write, finish, and turn in the second book.  Then it takes some months for the editor to read and edit it; then a month or so for me to make the requested changes.  The book goes into the schedule–maybe it is (for reasons having nothing to do with the author or editor) not scheduled for a year.  The book goes into production (for the industry average of nine months between “start the production ball rolling” and “look! it’s on the shelves at Borders!”).  It’s possible for Macmillan to pay me the first part of my advance five or six years before they have any hope of recouping that money.  Yeah, they knew the job was dirty when they took it, it’s the way the business works.  But this adds additional cost to the book: the company calculates interest on money paid out and not yet earned.

Oh, and fourth: as any member of Book View Cafe can tell you, crankily, massaging original text  into a format useable by a Kindle, a Sony Reader, a mobile phone, even a PDF download, is full of pitfalls and takes longer than you’d ever think.  In other words: there are costs to everything, even the stuff that looks transparently easy.

As a writer, I want my publisher to be able to make enough profit on my work so that my editor and the people in production and the person who painted the cover art and the book designer–not to mention the people in accounting who cut my check, get paid.  I do not want them going the way of the workers in a buggy whip factory.  Right now we’re in a period of flux where books are available in all sorts of formats, but even if and when e-books rule the earth and paper and ink books go the way of the dinosaurs and the buggy whip, they will not cost “nothing” to produce.

Okay.  I got that out of my system.  I could say more–like about Amazon’s tendency to loss-lead prices on e-books to maintain their Kindle price policy, but I’ll let someone else do that.  Next?

_____

Madeleine Robins is a founding member of Book View Cafe, and the author of Point of Honour, Petty Treason, and many short stories available on her bookshelf.  *She is currently working on The Salernitan Women, an historical novel set in medieval Italy.

 

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About Madeleine E. Robins

Madeleine Robins is the author of The Stone War, Point of Honour, Petty Treason, and The Sleeping Partner (the third Sarah Tolerance mystery, available from Plus One Press). Her Regency romances, Althea, My Dear Jenny, The Heiress Companion, Lady John, and The Spanish Marriage are now available from Book View Café. Sold for Endless Rue , an historical novel set in medieval Italy, was published in May 2013 by Forge Books

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The Way of the Buggy Whip — 14 Comments

  1. Picturing my editor and publisher in a buggy whip factory—not pretty. I definitely don’t want to be the horse!

    I know in this economy, everyone wants everything to be cheap. When I was a student, I ferreted out used bookstores and lived in libraries for my reading fix. I get that. But this brawl between Titans isn’t about readers getting cheap books by a long shot. It’s about which Titan gets to control the market.

    And let no one misunderstand–whichever Titan wins, the reader and the author will not come out on top. That’s why a free market works best, so all parts of the market have freedom to pick and choose. Amazon tried to stop that free market by fixing prices where they wanted them. That’s a no-no. Just take a look at the prices here on BVC–how many do you see that have a price as high as $9.99? But if Amazon fixes expensive books at a low price, let your imagination fly–what do you think will happen to the low prices to compensate?

    If you said they’d go up, you’d be right. Free market, no monopoly, no buggy whips!

  2. Clash of the Titans. Yes, that’s about what this amounts to. What’s interesting is that we are observing the changing of the guard here. I don’t know who or what the new guard will be, but have noticed that Amazon always seems to get what Amazon wants. They may be capitulating on the surface at this point, but they are probably no doubt working something out for the future. And I’m sure it will have something to do with putting some competitor out of business.

    I sit back and watch because I don’t make my living from writing. However this plays out will probably make little difference to me. It will definitely change the world works, but I’ll continue to see out books and other materials from the little players. The little authors, the little publishers, the little bookstores. Living in the crack as I do, I’m safe from the storm.

  3. The internet is still a wildcat region, like the Alaska gold fields in their early decades. There are no rules to speak of, and most of the “rules” are merely conventions, honored by some, mostly unenforceable as yet.

    That’s how it always is. First a huge new economic opportunity opens up. Then everybody runs hell-for-leather for the gold fields, anyone who can get together a pan and a backpack. Little guys show up thinking they’ll find gold and get rich, but they go broke and starve. Little guys show up and instead of getting rich finding gold, they get rich selling camping supplies to prospectors. Little guys establish small businesses and get bought out, or just shot and killed, and their businesses are devoured by big guys.

    This happens more and more and more until there are mostly just big guys. Then the big guys jockey for position, first with guns, then with economic sanctions, and last, last of all, with laws.

    Because nobody wants laws in their way at a time like this. They’re too busy grabbing land, grabbing market share, shutting out the little guy, screwing Eskimos out of their rights, and establishing precedents which they will use later when they themselves (wait for it) write the laws that will sort-of govern this brand new industry. And those laws will not favor anybody with less than three railroads in his pocket.

    At a time like this, amazing stunts get pulled. Google decides to flout coypright. Amazon defies anti-trust law. Publishers squeeze authors, changing royalties from “percentage of cover price” to “percentage of net.” Pirates big and small download everything, neutralizing Digital Rights Management engineering faster than it gets developed. There are still little guys out there panning for gold and selling camping supplies, hopeful, dauntless, sometimes starving.

    We’re living in interesting times. Again.

    As an author I’ve got a ringside seat, by virtue of my New York publisher’s royalty statements. I get to watch the seesaw from print royalties to ebook royalties as my print books go out of print and my ebooks sell. If I want an even better seat, I publish online myself, slap “30% off! stickers on my ebooks for a weekend, count the hits, weigh the profits against the marketing benefits. I join with other authors–like those at Book View Cafe–where the group mind comes up with new ways, every day, to improve our claim in the gold fields.

    So when the titans start butting heads, I never stop thinking, How’s this going to affect the future? What laws are being challenged? Which titan will get to rewrite those laws based on who wins this battle today? How much money will it take out of my grubby little prospector’s pocket, somewhere down the road?

    One thing I know for sure: neither of the titans in today’s battle is interested in increasing the content provider’s share. Both would be happy to reduce that share to near-zero. It’s not personal. It’s about money.

  4. I came here to speak up, and everyone’s already been erudite before I’ve had my first cup of coffee. That’ll teach me to go to the gym, first.

    Three things that I think seem to be getting lost in the various outrages and PR pushes on both sides.

    1. the Amazon/Macmillan dispute had nothing to do with pricing, and everything to do with control. If we try to make it about pricing, then we’re missing the larger, more dangerous point: market control. Amazon wanted it, to the point of being able to dictate to publishers what they could or couldn’t do with what they produced. Macmillan — and others — said “you pushed us too far this time: no.”

    Pricing was just one tool being used, much as POD was used in previous arguments Amazon has had with publishers (specifically small press and self-published authors, so we can’t say it’s a “titan against titan” war entirely).

    Readers are just pawns in these battles. It pays to pay attention and read between the lines (like politics: the spin ain’t always the action)

    2. Amazon is squalking about not being allowed to price all book all the time at $9.99, and Macmillan wants to price books at $14.99. Oh, how terrible of them! But what Amazon isn’t talking about — and Macmillan’s press release did — is that the proposal wa for sliding scale, exactly as exists now: if you want a bestseller right now, you pay a premium. If you are willing to wait, you pay less, all the way down to $5. The market (that’s us) will decide what becomes popular, not Amazon setting a single price for everything.

    3. Publishing, in order to survive, and produce more books, has fixed costs. Above and beyond the cost of each individual book to produce, there are salaries and insurance and building rent and health care and all the daily bits of running a business that these books have to contribute to — no matter what their format. You/I want a book? Then you/I as reader must shoulder some of those costs, too. But only a tiny portion, spread out over every single format a book is published in. That is the way production works — from the cars we buy to the books we read, whatever the model or make or format.

  5. It’s been years since I had to deal with a P&L statement, Laura Anne. Your data is probably more up-to-date than mine, and I’d love to see estimates of what all these costs are.

    The other thing no one seems to mention in all of this is that Amazon doesn’t pay cover price (or whatever that means when the cover is virtual) for the books they sell. Amazon pays something like 50% of the cover price and makes up its costs (and derives its profit) from the difference between what they pay and what the customer pays. As it is right and meet that they should. If Macmillan wants to charge $15 for a brand new book by a bestselling author, they’re only going to see a part of that, not the whole, from which to make up the various costs and hopefully make their own profit.

    It’s just not simple. But it is about control.

  6. I do believe this upheaval is related to the iPad, but only tangentially. The game-changer is not the iPad itself, but the opening of iTunes as a major e-book store.

    iTunes is the only online retail outlet that can at this time really rival Amazon in terms of reach. For the first time, the major publishers have a genuine distribution option. Jobs and his Smart Guys knew this and offered a deal to the publishers that looked good after years of being, erm, bent over by Amazon. IMHO, what’s happening right now is Amazon is trying to recover from being sucker-punched by people they were previously, erm, bending over, and they’re not doing it very well.

    Another point, not original to me, but, the reason Amazon so desperately wants to keep ebooks as cheap as possible is to lure people into buying Kindles. Folks might think a little longer about buying a $500 tethered, unitasking device if the price of the content for that device goes past a certain psychological high-water mark.

  7. You’re right, Sarah, in your last paragraph. I was about to buy a Kindle, at least, a Kindle 2, at $259 USD, which is at least now in my price range, and will work here in Australia. Not least for that, but second, because I’m sick of carrying 5kg of paper books onto international plane flights,when the Kindle reputedly can keep you in reading for days at a fraction of the weight, and the batteries will last, and you can change the font size however you like.

    I also was leaning heavily to Kindle because here in Australia book prices are relatively through the roof. *Mass market* pbs cost $21 and $22 AUD a go. Hardbacks cost anything up to $50, and that’s just the brain candy stuff. Last week, serious theory books in Readings, the best book store in Melbourne, and the only one outside University bookshops to carry such, except Glebe books in Sydney, started in tpb at $80.00 a go.

    I simply can’t afford those prices, and I’ve almost stopped buying new books as a result. It’s more economic, read surviveable, to wait and buy a print book secondhand from Abe, even before they whapped on free international shipping.

    Kindle promised to return me the freedom to buy a book on spec from an unknown author, something I hardly ever do nowadays, maybe the freedom to buy theory books I cd. actually afford, both liberties I seriously miss. As a writer who’s now sometimes getting published, I don’t agree with price drivedowns, and I dislike Amazon’s monopoly, but as a reader, I was ready to buy more books as well as the Kindle, and now, I will at least be waiting, if not looking elsewhere.
    If not saying, A plague on all E-readers’ houses, and going back to secondhand print.

  8. Wow, Sylvia. Why are the prices so high? Our textbooks are in that stratosphere, but everything else is relatively cheap.

    Something I keep thinking when I read all the excoriation of “greedy authors” is that authors are readers, too. We write because we love to read. We’re major consumers of books, so we’re well aware of the economics on that side. And lord knows, almost none of us are rich. What’s the average income of a writer, even counting the Grishams and Kings? Is it still something under $5K a year?

    That, and the fact that we have no control over pricing, cover art, or anything else but the words that appear on the page (and even those are subject to debate), seems to be very little known among readers. We’re the visible face of the industry, the name on the book, so we catch the flak for anything the reader doesn’t like about the way the book is presented and sold.

    This particular clash of the titans will probably do the writers little if any good. I feel for Macmillan authors with book releases this week. It’s critical now to sell as many books as possible in the first month, or you get dropped–and even if you don’t get the dumpage for bad sales, your next book advance will be set according to what you sell in the first two months. This corporate game of chicken won’t do the companies much harm, but it’s going to hurt the authors caught in the middle–which may not matter much to the readers, until they want the next volume of the saga or the next book by a favorite author, and can’t get it because the author has been dropped.

    Ironically enough, this may drive even more authors into alternative formats, including e-formats. Can’t sell those buggy whips? Get to work making gearshafts.

  9. Ah, yes. Thor Power Tool. For those who don’t know, it was a legal decision that, when applied to bookstores says any inventory the store has leftover at the end of the fiscal year is taxable. So, bookstores go to great lengths to have very little left over at the end of the fiscal year. This, among other things, means letting as many books as possible go out of stock and not restocking. Which is what makes it so tough to find book 1 of a series when book 3 is on the shelf.

    It is this situation that greatly contributed to computerized ordering and The Death Spiral.

  10. Not just bookstores, Sarah: publishers as well. Which is a big part of the Backlist Death Spiral. Publishers get taxed on warehoused inventory too, which means smaller print runs for non-guaranteed-bestsellers, and less willingness to reprint.

  11. When you mention the Thor Power Tool decision, you must spit on the ground in order to show your disgust.

    I’m starting to wonder why people see such an uncrossable divide between print and e-books — and why so many people assume that you MUST choose one or the other to defend. They both have pluses and they both have minuses, and in a perfect world they’d exist to supplement each other, not supplant.

    Of course, in a perfect world $25 would get you a nice paper edition and the digital text that you could read on any hardware that was registered to you (so you could transfer it within the household, but not to anyone you weren’t willing to loan your hardware to).

    I’d like to live in that world…

  12. A quick return to Judy’s post on my post – I’m not sure why books out here cost so much, Judy, but I think it has a lot to do with the decision to put on a GST tax in Australia. And possibly some form of excise.
    Whatever it is, it’s pricing me out of the print market, and, sadly, it’s backlashing on bookstores, at least in my case. My local Dymocks (chain) carried the latest McCall Smith at $32.00 for a tpb. I walked 500 meters down the mall to Big W, the supermarket equivalent of Walmarts, and there it was at $22.00. Guess which one I bought?

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