Recently several authors, including people like Cory Doctorow and J.C. Hutchins have reported that Amazon.com has gone to war with Macmillan Books, pulling their entire library off its virtual shelves. The New York Times reports that the reason behind this “ban” is a dispute over pricing of eBooks. The story is that Macmillan wants Amazon to increase the base price for eBooks to $15 US, up from $10 US and in response Amazon has stopped selling Macmillan’s products.

Has Amazon Gone Too Far?

Herein lies the problem with allowing Amazon to become so powerful as to dictate to publishers what they will be charging for the items that they’re selling. For years publishers have been telling authors just how much they would be selling the author’s works for and now the tables are turned. The average cost for a first-run hardcover book is approximately $30 US, or about $38 CAN if you live in Canada like I do. Authors receive royalties based on the selling price of the book, so a lower cover price means less money for the authors. Publishers never seemed to have a problem with giving authors less money for their books—the average selling price for a hardcover book these days runs around $20 US despite the $30 cover price. People just don’t seem interested in buying books at the current cover price so publishers are constantly dropping that price in order to get more books off the shelves which means that authors are getting less and less money back in royalties. For years books have been perceived as “disposable” by many people which is a huge problem in itself. Now that Apple has released it’s new “larger iPod Touch” (ie: the iPad), there are more options for publishers besides Amazon’s Kindle and Barnes & Nobles Nook.

Amazon has thrown down the gauntlet and said, “We will sell your books on our terms or we will not sell your books at all.”

Publishers Not Without Fault

Publishers print thousands of copies of their books knowing that they will never be sold because it’s almost as cheap to print 75,000 copies as it is to print 50,000 copies—once the book is on the press and running, it really doesn’t take much more effort to print more copies. However all of these extra copies must also be transported and stored, and the paper doesn’t come cheap either so printing thousands of extra copies doesn’t really make sense. I’ve also read somewhere that Publishers feel that consumers will buy more books if they see more books on the shelves and that they commonly pulp (destroy/recycle) up to 40% of the books that they’ve printed! An article by the BBC in 2001 suggests that, “300,000 books are shredded in Britain every week.” A more recent article by the UK Daily Mail suggests that, “Publishers are quietly disposing of around 77 million unsold books a year.”

This is insanity.

eReading Devices Are Inherently Flawed

Now back to the problem of eBooks and eReading devices. The main problem with these devices is that most of them rely on DRM and closed operating systems to keep their customer base. This forces the user to purchase a closed device to consume closed content and only the closed content provided by the retailer. In other words, once you start adding to your Kindle or Nook library you are pretty much stuck in buying only the content that Amazon or Barnes & Noble sells because you cannot read this content on another device, you cannot resell it and you cannot lend it to someone else. And, as I’ve said before, you aren’t even purchasing the content that you’re getting, you are RENTING it. This makes the provider happy but it doesn’t do much for the end user.

Amazon’s End User License Agreement states;

“Use of Digital Content. Upon your payment of the applicable fees set by Amazon, Amazon grants you the non-exclusive right to keep a permanent copy of the applicable Digital Content and to view, use, and display such Digital Content an unlimited number of times, solely on the Device or as authorized by Amazon as part of the Service and solely for your personal, non-commercial use. Digital Content will be deemed licensed to you by Amazon under this Agreement unless otherwise expressly provided by Amazon.

Restrictions. Unless specifically indicated otherwise, you may not sell, rent, lease, distribute, broadcast, sublicense or otherwise assign any rights to the Digital Content or any portion of it to any third party, and you may not remove any proprietary notices or labels on the Digital Content. In addition, you may not, and you will not encourage, assist or authorize any other person to, bypass, modify, defeat or circumvent security features that protect the Digital Content.“

Which would make you think you own the content you’re purchasing, but while it says you can keep a “permanent copy,” it is a “permanent DRMed copy,” and we’ve already seen that Amazon can, at any time the wish, remove this “permanent copy” from your possession without you even knowing it. Also when someone owns an item, they generally have the right to resell it. Not so with Kindle eBooks.

A very useful annotated version of the Amazon EULA can be found here.

It is also common knowledge that Amazon is quietly compiling information on everything you read on your Amazon Kindle.  This includes any websites that you may be scanning via your Kindle, except that up here in Canada the websurfing ability of the Kindle has been locked out with the exception of popping over to Wikipedia because we know that Canada is on another planet and we should not be allowed to surf the web up here. Amazon also knows where you are on the planet when you’re surfing or downloading information to your Kindle by pinpointing you through the 3G mapping feature and Google Maps. So if you’re using your Kindle, Amazon knows. Common sense would also imply that devices such as the Nook and the iPad will also have these tracking features quietly included in their core software.

An article by Cory Doctorow on BoingBoing entitled “EFF’s ebook-buyer’s guide to privacy” states;

“…your Kindle will periodically send information about you to Amazon. But exactly what information is sent? Amazon’s wording—”information related to the content on your Device and your use of it” —reads so broadly that it appears to allow Amazon to track all content that users put on the device, regardless of whether that content is purchased from Amazon. Some security researchers have indicated that the Kindle may even be tracking its users’ GPS locations. Is this the future of reading?”

Which begs the question, “Do we have the right to privacy when using our eReading devices?” The answer should obviously be YES… but is this the real answer?

Some Possible Solutions?

With the Amazon vs. Macmillan in the news, now is the time for other publishers to step forward to say, “Yeah! We want more money for our products!” Amazon can’t pull them all off their shelves otherwise they won’t have any products left to sell.

Secondly, Publishers need to rethink how they sell and publish books. Consumers enjoy the immediacy of an eBook but do not want the draconian DRM measures that come with a book in electronic format. You need to find another way to provide this content without DRM. You also need to look at new ways of providing physical books to the consumer—Most consumers only want to read the book, they don’t care if it’s a hardcover, trade, or mass market paperback. You should be providing them with choices from the get-go. Printing up 75,000 hardcover books in order to sell 25,000, sell off 10,000 as remainders and pulp the other 40,000 is just stupid and insanely wasteful. You need to start offering the consumer choices of format—Bibliophiles will be happy to pay $25 for a hardcover version of your publication which most other people would probably rather have a trade version or a paperback version. Sure you will end up selling books at a lower price, but you will sell MORE books in the end.

You also need to start providing the consumer with an electronic copy of the book when they purchase the premium version (hardcover/trade) of the book. When the Apple iPod first came out, people could take ANY CD, pop it into their computer and put it onto their iPod, this is what we need from publishers for eBooks. Providing a CD with each book may not be cost effective, but you could certainly provide a PIN number in each book and allow users to log onto a website to download the electronic copy onto an eReading device of their choice.

Finally eReading devices need to be as universal as iPods, but cheaper. If you want people to use your device then it needs to be open, and it needs to cost between $100 and $150. We also want the right to privacy and the expectation of not being tracked and scrutinized while we use the device that we’ve purchased. Retailers have no right to invade the consumer’s privacy by tracking their reading and surfing habits. It’s only a matter of time before a lawsuit pops up because of this.

Purchasing a current eReading device is like purchasing an automobile that will only run on a specific kind of fuel that is provided only by the car manufacturer. For the consumer to buy into this is just plain stupidity and shortsightedness, but then that’s what retailers like Amazon are relying on. It’s about time that we, as consumers, start speaking with our wallets and stop being stupid because of the sheer convenience of immediacy.

Use your head for more than a hat rack, people!

Is Reading a Lost Art?

The other day I was having a discussion with some people about how reading was becoming a lost art, and how publishers could sell more books to more people. This also led to a discussion about hardcover books vs trade paperbacks vs mass market paperbacks and the amount of resources each format uses, which in turn led me to thinking about things like eBooks and eBook readers. Book publishers are finding it more and more difficult to sell old-fashioned dead-tree books in today’s world.

“But Herne,” you think, “I’m reading right now.”

Well, yes, you are reading, but are you thinking as you read? Chances are you aren’t thinking about a whole lot as you read. Our current level of technology has taken a lot of that cumbersome thinking stuff out of our hands. For the most part, most of us use very little of our brain’s power or imagination in day-to-day life, we certainly use less of our imagination than we used to anyway. With our level of technology and the Internet, we don’t need to imagine what we’re reading about, the Internet provides us with convenient pictures and narratives to tell us what we’re thinking. So is the Internet and technology making us more stupid?

No, the Internet and technology is not making us as humans more stupid, but it is making us more lazy.

Book Formats

But back to the discussion at hand—Publishers want to sell more books, how do they do this? First of all, let’s briefly take a look at the different book formats; Hardcover, Trade Paperback, Mass Market Paperback, Audio Books, eBooks, PDFs, and Podcasts (Podiobooks).

Hardcover books: Pros—Durability, better paper therefore longer life, higher markup for publishers. Cons—Higher costs, more (paper) resources used, larger format means the product is heavier, less portable, and therefore more costly to ship.

Trade Paperbacks: Pros—Durable though not as durable as hardcovers, often better paper used therefore longer life, price markup for publishers decent, lighter than hardcovers so shipping costs are lower. Cons-Still cost more than mass market paperbacks, resource use still fairly high, larger size means less portable than mass market paperbacks.

Mass Market Paperbacks: Pros—Cheaper for consumer, small format means several can be shipped for the cost of one hardcover, fewer resources (less paper) used to create them. Cons—Lower price point means less money for the publisher (and author), less durable, cheaper paper used.

Audiobooks: Pros—Often more palatable to the consumer because they don’t actually have to read the book themselves, more portable. Cons—Production requires the use of voice artists or readers, which increases production costs, not to mention the costs of getting the audio files to an audio medium so that the consumer can purchase it.

eBooks, PDFs, and Podcasts: Pros—Very few resources used to produce the content, self-publishing is a breeze. Cons-Harder to control the distribution and copyright, also requires some sort of technical device (eReader, computer, MP3 Player) to consume the content.

The Secret to Selling Books

So you want to know how to sell more books? Well, let me give you my opinion, one simple bibliophile’s opinion on how to sell more books. I purchase and read a LOT of books per year, and you know what entices me to buy more books? Content and pricing.

“Well duh!” You say, “Of course content and pricing is going to influence how many books people buy!”

Well here’s the thing… You want to sell more books and I want to buy those books, but I am not going to purchase a “fluff” fiction book for the same amount of money that I would spend on something like a technical computer book or a high quality photography or art book. So here’s the secret to selling more books: Give the consumer what they want for the price they want to pay! Duh!

I am more than willing to spend $30, $40, $50 for technical books on computers, or guides for software, or for instructional books on photography, but I am not willing to spend that sort of money on the next “New York Times Bestseller” or some other kind of frivolity that is here today and forgotten tomorrow. I’m also smart enough to know that publishers spend a fair amount of money to get their products on these lists, so I’m not falling for that old gag. So how about we sell books at prices that people want to pay? Whoa! Simple concept! Publishers don’t seem to grasp it, though.

Publishers historically release new titles to the market in hardcover at the highest price point and hope that they’ve generated enough interest in (or spent enough money on) their product that people will be willing to shell out around $35 (on average) to purchase this product. Yes, books will sell at this price because there are always people who are willing to purchase first run hardcover books; libraries, institutions, people who follow “best seller” lists without thinking, etc. So publishers will spend a bunch of advertising revenue to get their new books on the “best seller” lists and sell 20 or 25-thousand copies of the book at this price and about 6 months later they’ll often come out with the trade paperback version of the title. Many of the people who wanted the book when they first saw it come out in hardcover will now look at the trade paperback, now at around $20 (on average) and think maybe they should buy it now. So the publishers will sell another 25 thousand copies or so of the trade paperback. Then, finally, after about a year after the book first appeared on the shelf as a hardcover the publisher will produce the mass market paperback edition of the book, now priced around $10 (on average) hoping to persuade the hold out readers to purchase their product. This would traditionally also be the time to introduce the next hardcover book in the series, assuming that the first edition did well enough to warrant a second edition.

This “traditional” schedule of publishing worked well in the past, but consumers have come a long way in the last 10 or 15 years. Now we have the Internet and electronic devices and we want instant gratification for everything! If you’re waiting a year to get your book into the hands of Joe-average consumer, then you are losing sales hand-over-fist. Publishers need to wake up now, take a hard look at what’s happening on the Internet and in the “new media” environment that is so commonplace today if they want to keep selling books in the future.

As I said, I am a bibliophile—a book fanatic—and I’m not going to wait a year to purchase your book. If I’ve seen your hardcover book and it seems interesting to me I might make note of it to look it up later or purchase it secondhand but I am not going to shell out $35 for your average fiction book, and chances are I’m not even going to remember your publication when you’ve decided to publish it as a mass market paperback a year later.

If you want to sell more books then you need to produce more titles in more formats so that people who wish to purchase them can do so more easily. Sure, you can certainly continue to produce books in hardcover format because there will still be those people willing to pay more for this perception of a “better” product, but most people like myself who consume a lot of content are smart enough to realize that “premium” does not always mean “better.”

You need to start offering your products simultaneously rather than consecutively. I would much rather see the hardcover and trade paperback editions released simultaneously followed shortly, say within three months, by the release of the mass market paperback edition. I think you would sell a lot more books if you gave the consumer what they want to consume rather than making them wait for it.

Premium Content vs. Premium Pricing

When I think of “premium content,” I think of more content or something special that’s not included with the regular, lower-priced model.

So how about we add a little carrot to those hardcover sticks we want to sell? How about we start including an eBook version of the book with every hardcover book we sell? Think of how little that might cost versus the large gains you would get back. Most publishers are using a page layout program such as InDesign or QuarkXPress, so it costs them nothing to export a second copy of the postscript file off into a PDF creation program. You take that PDF and you burn it on to a mini CD, and you include that CD with every book! Now we’re talking! Now I might be willing to spend that extra bit of money to purchase your book so that I have the option of reading it on my eBook reader of choice, but I’ll leave that for another blog post.

In that blog post I want to talk about why eBook readers like the Amazon Kindle and the Sony Digital Reader could be amazing products, but are not making the impact on the market that they could because of the huge price points, the lack of a standard eBook format, and the paranoia called “rights management.”

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