Once again, Jenny Milchman asked some good questions and made me think hard. So I’m publishing her email and my (much windier) reply here because I don’t want them just getting buried in Comments.
The most intelligent summation I’ve read yet. Thank you for clarifying Amazon’s position.
I disagree on one point–the cost of an e book in terms of physical product does go down. But that doesn’t mean it costs nothing for the traditional publisher. That book still needs to be acquired, edited, designed, laid out, and marketed. I would say only a fraction of the cost is in actual print and distribution.
Jenny, I’m not saying there are no costs whatever – I’m saying there are virtually no additional costs above and beyond what they’ve already spent to produce the hard and softcover editions. By the time they put out the ebook, they have a completed proofed manuscript, cover art, etc. All they’re doing is posting files on a server to be downloaded.
A great deal of the price of a Big Six ebook is subsidizing the costs of print publication and supporting the people – editors, proofreaders, etc. -that go into the making of the completed manuscript. Those skilled folks earn their money – their labor shows in the finished product – but readers resent underwriting the costs of warehousing, printing, etc. when they’ve bought a product that requires none of it.
I realize now, looking at what I’ve written above, that it’s not entirely true. The reality is that ebooks are the tail wagging the dog. They make the profit that keeps the business alive – all the growth in book sales for several years now have been in ebooks. But publishers continue to treat them as an afterthought to print books, encouraging the kind of thinking above. Just another place where they do themselves no favors.
Most analyses see ebooks as taking the place of the old mass-market paperback. Which would suggest a cover price in the $5.99 to $9.99 range, just where Amazon wants to target them – and likely where they will settle when this all shakes out.
By trying to force prices up artificially, publishers over-reached and did so foolishly, in a way that blatantly breached anti-trust law.
I am truly convinced this doesn’t have to be the end of the publishing business – but publishers will have to make real changes to their physical infrastructure and customs and to the pay scales and staffing levels they’ve gotten used to. There will be a lot of people working on a project basis or earning less than before and I say that knowing the amount of pain those words camouflage. But the business model is bloated by today’s standards.
David Morrell stood up in front of an audience of writers at ThrillerFest last year and said that, unless publishers adjusted their contract terms and pricing regarding ebooks, he couldn’t sign a publishing contract today. When publishers hear things like that, they should be listening – and changing.
My point, I suppose, is that Amazon isn’t killing them; by stubbornly refusing to adjust to new realities, they’re committing suicide. I sincerely hope they don’t.