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On the Price of Publishing

There’s an interesting article in the Guardian that considers the real price of a book, and there are some paragraphs I wanted to share:

…it turns out that “publishers only spend $3.50 to print and distribute a hardback”. (Let’s say it’s £3 in Britain.) So when, this autumn, you go into your local bookshop and spend £30 on that gorgeous copy of Claire Tomalin’s long-awaited Dickens biography, you really are just putting a large amount of profit into the hands of her publisher, with some knocked off for the retailer. Right?

Well, yes and no. If you think of books primarily as physical objects, then off course they’ll seem a rip-off, because printing and distributing them is cheap. But as Levine points out, what you’re really paying for when you buy a book is something different. You are buying the “text itself”. And why is that so expensive? Because the publisher will, in many cases, have paid the author a considerable sum for the right to sell it. And because that same publisher will also (if they’re any good) have ploughed considerable further resources into editing and marketing it.

In other words, publishing is a business that incurs high fixed costs. And it’s this, to return to my initial question, that accounts for the high price of (indeed the very existence of) hardbacks. The publisher needs to maximise revenues in order to defray its outlay. Some people are prepared to pay top dollar to have the premium product – a hardcover copy that comes out, crucially, months before other versions. So it makes sense for the publisher to offer it to them.

I remember being on a panel with Dan Abnett and Al Reynolds at Alt Fiction, in which we covered the culture of digital publishing, and discussed how there was a kind of an intellectual void on what your money actually pays for when you buy a book. All of us were very worried about the impact of piracy, too, in being part of a culture that encourages the attitude that people should get a book for nothing (and once they do, they become reluctant to buy books, which is a vicious circle in itself).

Anyway, it’s worth reading that article – there are a few things I don’t fully agree with, but it’s certainly hitting the right notes. It ends on an worrying point:

It’s still early days in the ebook story, and no doubt there’ll be many disputes and disruptions along these lines in the future. But here’s a final thought for now. Was it wise to allow a situation in which a single company – Amazon – became market leader in terms of both a digital product (the ebook) and the hardware through which it’s delivered?

Keyword related posts:

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  3. On The End Of Publishing
04
Aug 2011
AUTHOR Mark Newton
CATEGORY

discussions, writing & publishing

COMMENTS 12 Comments
  • http://www.wordtipping.com S. Eric Rhoads (WordTipping)

    I don’t think anyone allowed Amazon to become a market leader so much as just failed to act. eBooks have existed for 10+ years. In that entire time, no one capitalized on the market. Publishers were actively hostile in regards to the format.

    If publishers had embraced the format, set up their own market places, and partnered with early hardware pioneers like Sony…they market could be very different place. Instead publishers allowed an outsider to come in, seize the market, and begin wresting away and owning the customer relationship.

    To me, this is very analogous to Apple’s App Store and the wireless carriers. The wireless carriers had years of de facto monopoly control of the market and accomplished nothing. In two years, Apple turned the industry on its head and now owns the customer relationship.

    Publishers in the book world are now in the same position. They must face an entrenched market leader, Amazon, with intense user loyalty. To make matters worse, they face not only Amazon but Barnes & Noble and Google who also have a dedicated user-base and unique digital marketplaces. All as a result of the publishers failure to act. No one allowed Amazon to become a market leader, Amazon simply took the initiative.

  • http://markcnewton.com Mark Charan Newton

    Yeah, that’s a very good point indeed. It was very much head in the sand time for a long time – though, to be fair, publishing is a slow beast to move at the best of time. (Long cycles of a getting a book published in the first place.)

    Though I’d dispute that final point – surely it was this inaction by everyone that allowed them to become a leader? But to be fair again, what’s going on with Amazon is spectacularly more complex and aggressive, especially if you’ve seen what power Amazon have behind the scenes.

    Also, and this is a really important point: the Kindle is shit. This isn’t market innovation like in the sense of Apple, no Adam Smith invisible hand guiding us to a wonderful e-reading future. We’ve got a terrible product that happens to be a market leader.

  • Neil P

    That’s one of the few remaining issues I have wrt buying a kindle. I’m uncomfortable with the fact that only amazon appears to sell kindle ebooks and that it’s not super straight forward to convert other ebooks. While it’s cheap now I do worry a little bit about owning a product where there’s essentially no competition to keep prices down. Although you could argue other e-readers are the competition in that sense. I agree that it smells of Apple but I can’t really blame Amazon for doing it. Fingers crossed they will (be made to) allow other companies to sell kindle-books. Then I’d be happy to buy one.

    Your point on the vicious cycle of downloads is interesting. If you take that logic at face value though, aren’t amazon already encouraging illegal downloads by having a vast library of “free” books? I was lucky enough to win a copy of your new book, does this mean I might be less inlined to buy other books by you? Don’t worry I actually bought a copy (as i’ve never won a competition before) and then gave the extra copy to a friend who has now went out and bought books 1+2 so he can read the “free” one. Beautiful marketing :)

  • Hélène

    I agree that “buying the text” should cost more than 0,99$ but what I can’t accept is that e-book could be more expensive than material ones.

  • Hal Duncan

    …we covered the culture of digital publishing, and discussed how there was a kind of an intellectual void on what your money actually pays for when you buy a book.

    I reckon we should be talking of the book as a *ticket to a service*. What the reader’s getting is this carefully crafted (one would hope) experience, the effect of an articulation on their imagination as and when they read it; the book is just the ticket they purchase that allows them to access that service.

    It’s like the membership card to a gym where the exercise involves you being led in real time through the detailed choreography of a dance by someone expert enough (again, one would hope) to make it as easy as if you were a pro with the Bolshoi, or as if you were just cutting shapes in a club on a Saturday night. And the music is unique to that gym, written and performed with that exact choreography in mind. That’s the real service. The ticket itself is worthless until it’s used. The text is worthless until it’s read. You’re not buying a membership card just to decorate your wallet. You’re not buying a book just to sit in your library.

    The service is not passive, not zero effort — you do have to engage, to be active in reading — but the exercise should be fun, and it should make you come away feeling buzzed, maybe even in better shape for it. Some readers are more up for a *crazyhard* work-out than others, natch; they’re specifically looking for the services that will push them to their limit. Others just want the fun. Neither approach is wrong. You look for the gyms that suit you.

    With the right composer/choreographer, that service can be such a cool experience you want to relive it. But hey, lo and behold, your ticket is a Golden Ticket; it lets you do that. You can go back to that gym anytime you want and do it all again, might even get more out of it the second time around. That’s what you’re paying for with that one-off payment of however many quid. It’s *permanent* membership.

    With a hardback, you’re paying a premium which does get you gold-plating on the ticket — ooh, it’s pretty! and durable! — but what you’re *actually* paying for is instant access to a *brand new* service. (As per your Guardian quote.) The costs of setting up the service have to be recouped, which is no mean feat, with most gyms never breaking even. Luckily, some will pay a rate the publisher might actually survive on just to get the service as soon as it’s ready. They’re not paying for the higher cost of a prettier ticket; they’re paying to get in the second the doors open. No matter how fancy-dan the acid-free paper is, the ticket is still just a bit of fricking paper. It’s access to the service you’re paying for — in this case, access to the service *ASAP*.

    Still, if you’re not willing to pay that premium, you can just wait. After it’s been out for a year, say, the publisher drops the price, prints *marginally* cheaper tickets, and offers the service dirt-cheap to try and eke what they can from a massive crowd whose interest is casual; thing is, that wider audience can really only be brought in by a ticket price that’s effectively an unprofitable pittance. They only get the discount (eventually) because they’re not willing to buy into the service *until* it’s discounted… quite possibly to the price of a coffee. Again, no matter how cruddy the toilet paper it’s printed on is, the ticket is still just a bit of fricking paper. It’s access to the service you’re paying for — in this case, access to the service *whenever*. Which is to say, whenever the publisher is willing to go down as low as you’re driving them to.

  • Hal Duncan

    Only… now we’re in the era of e-tickets. Now readers are looking at the physicality of even the discount ticket as gold-plating. This is the problem with thinking of the book as a *product*, regardless if you say it’s “the text” or whatever. It’s only natural to then think the pricing is related to the different costs of different *product qualities* — prestige, standard & digital. But you are, and only ever have been, paying for a ticket to a service. You’re not buying a mass-produced statuette of Michelangelo’s David that comes in platinum, plaster or plastic. You’re buying a lifetime ticket to the Uffizi that comes in All-Hours (you can use it now), Weekends Only (you have to wait) or Virtual (it’s simply not a physical ticket).

    So a lot of gyms are offering virtual membership cards now. You buy this single ID card for a few hundred quid (i.e. an e-reader) and every gym you sign up to, they update that ID so it works as membership card — there and anywhere else you’ve joined. Yes, you’re no longer getting a gold-plated card on acid-free paper. Yes, you’re no longer getting even a cheap-ass laminated card on toilet paper. This means next to *nothing*. You’re still, as you always were, paying for the service, with the ticket a mere mechanism to grant you access. If you want that access ASAP, expect an ASAP premium price. If you want a discount price, don’t expect the premium ASAP access.

    We can quibble over whether losing the physical costs of gold-plating or lamination means a Virtual All-Hours ticket to the Uffizi should cost a bit less than its physical equivalent and a Virtual Weekends Only ticket should cost less than *its* physical equivalent, but this *is* just quibbling. If we were dealing with moleskin journals, spiral-bound notepads and empty Word docs, sure the cost of production of the physical product is what counts. If they were filled with pretty gibberish produced by a computer program, you’d have your prestige, standard and digital editions which one could expect to be priced according to production costs. This is not the case. This is not what you’re paying for. The medium of the ticket is a superficial factor at best in the pricing of a service.

    Ultimately, *as* a service, it comes down to how much X is willing to pay for what Y is willing to offer, how much Y is willing to offer for what X is willing to pay. Readers need to understand that ASAP access is premium service. Actually they need to understand that the “standard” service (mass market paperback) is really a *discount* service offered to the mass of hold-outs who really don’t value the service very highly and are therefore willing to wait. An ebook is as valuable as a hardback if it has the same ASAP availability (so it’s the same premium service at heart) which is valued by dedicated readers. It is less valuable to readers who value the physical medium for other qualities, but it is *more* valuable to readers who prize, say, ease of storage, portability, instant delivery — all of which is to do with when, where and how you can access the service.

    Those are different service packages basically, I’m saying, and because it’s different strokes for different folks, the package with a virtual ticket will be as valuable to some as the package with a physical ticket. It will in fact be more valuable because of the particularities of how that package reconfigures access to the service. The price of any such service package will ultimately be a reflection of how much and how widely it’s valued; that’s how services work. It’s got very little to do with production costs because it’s not products we’re dealing with.

  • http://markcnewton.com Mark Charan Newton

    Hal – thanks for the huge comment explaining that metaphor to its fullest. And yes. A very big yes to that being how, from this day forward, we now equate books.

    It is an absolute mind-shift for many, though. Would it be too much for some to swallow? Can people ever switch their minds from viewing things they hold as physical product?

    I mean, subconsciously, everyone perhaps treats it like a service package, and buys in to the whole process in varying degrees, but all the discussions really are about end product or even in terms of format. Perhaps ever since the book was first created. And it even links in with the kind of fetish people have towards the finished product, treating them sometimes more importantly than the contents within; and we all know that readers are drawn to pretty covers etc. We don’t help ourselves by treating books as such desirable items. Everything skews towards the physical rather than the ethereal.

    Anyway, I’m not sure I’ve added anything to what you’ve said. Other than ‘yes’.

  • Alex

    Sorry to go off on a tangent, but:

    “the Kindle is shit.”

    Mark, I’m thinking of getting one, and as far as I know they’re not shit. It’s the only eReader that currently works outdoors, in direct sunlight, like a real book. Pretty soon they’ll bring out a colour Kindle too.

    The iPad, on the other hand, is a ludicrous piece of overpriced luxury/prestige tech (an oversized iPod touch) which needs everything loaded to it through Apple’s shitty proprietary software (iTunes) and/or through their store. You can’t even read it outdoors, which makes it completely useless in terms of my main use for an eReader, which is to be able to bring lots of books on holiday with me easily and read on the beach / by the pool / on the train if there’s a lot of light coming through the window.

    And,

    “market innovation like in the sense of Apple”

    Apple is not your friend, and they aren’t innovators. They’re just a company trying (and succeeding) in ripping people off with their trendy, overpriced, luxury tech, and trying to take over the market and completely ruin computing (as I grew up with it) while doing so. Most of their “innovations” are only a way of putting users in a gilded cage and putting them further under Apple’s control – e.g. closed box hardware, forcing users to use their software/stores, and so on.

  • http://markcnewton.com Mark Charan Newton

    Well, we can go back and forth and say it is and isn’t. But it is, in my opinion, a terrible, 80s looking piece of shit, that has a terrible screen and a terrible transition between pages.

    That you’re anti-Apple is fine! I’m fully aware of what they do, but it’s not overpriced if people are prepared to pay that money for a luxury product. It’s functionality is incredible – I use both a Mac and a PC each day, and the difference is breathtaking. The fact that it’s closed-box and own-software is WHY it is good in the first place: because it allows an incredible amount of functionality that just wouldn’t work in another business model.

    When I first held the iPad – as a skeptic – I was blown away.

    When I first held a Kindle I mourned for the book industry.

  • Alex

    Well, let’s look at it this way:

    Kindle = an affordable, dedicated eReader that offers almost all the functionality of a physical book.

    iPad = a tabless, Flashless web-browser and Angry Birds platform priced at half the average Brit’s monthly salary that can’t be used outdoors.

    So I think I’ll wait for the Kindle Colour, meant to be coming at the end of the year, and continue avoid Apple as much as I possibly can.

  • Hal Duncan

    Would it be too much for some to swallow? Can people ever switch their minds from viewing things they hold as physical product?

    If only. I don’t know though; we’re totally primed to think of it all in physical terms. It’s probably even a monkeybrain thing, the tendency to metaphorise the abstract as the concrete. But the last half century or so has *maybe* pushed us toward thinking of entertainment in terms of service packages (i.e. TV and internet provision). And the gym metaphor likewise is part of a broader “service culture.” So this generation or the next might be more equipped to get their heads round it, I reckon, if the paradigm is explained. One of the problems, I suspect, is that writers and publishers *themselves* still think and talk in terms of product.

    It makes piracy a whole lot easier to discuss sensibly too, by the way. It’s not “theft” of some fuzzy thought-pattern in the aether… that’s nonetheless left exactly where it was because it’s just being copied. It’s the production of illegitimate tickets — forgery, fraud. It’s a copy-shop culture where you and your gang scam your way into gigs for free; one person buys a ticket and photocopies it at the dodgy copyshop where you all hang, distributes fakes to everyone else. If there’s a dozen of you, the eleven usable but illegitimate copied tickets aren’t acts of “theft”; they’re just forgeries used to obtain access to the service in breach of the terms under which it’s offered.

    That allows for a somewhat less histrionic questioning of the ethics of “piracy” — cause sneaking into a gig, using your twin brother’s railpass, that sort of grifting is not *BURGLING THIEVING RAPINE OF MY INTELLECTUAL PROPERTY*(!!!) just… well, ligging, *grifting*. Which might actually be the sort of approach that gets through, if art grifters start to see that what they’re doing is… like standing outside the door of a small venue gig by a struggling band, offering to stamp the hand of anyone who wants in so they don’t have to pay a few quid on the door (in return for one of them doing the same for you at another gig.)

    I’m saying this from Glasgow, so my view may be skewed by the ubiquity of the music scene here, but I suspect the demographic we’re talking about is young and hip enough to have mates in bands and a sense of the ethics of mutual support that’s at play in that sort of culture. Reckon they’d think the person shafting a mate’s band so they came away with sod all door money after playing an epic gig was just a fucking cock.

  • http://gavreads.co.uk Gav Reads

    Well, we can go back and forth and say it is and isn’t. But it is, in my opinion, a terrible, 80s looking piece of shit, that has a terrible screen and a terrible transition between pages.

    Which isn’t in itself a Kindle problem. It is a limit of the technology when coupled with the need for a ‘cheap’ product.

    I do like the all-new Nook. This is an interesting comparison.

    http://www.youtube.com/watch?v=zpaPVzm3-eI&feature=related

    I’ve been following the tech and it’s like starting the beginning as the lovely iPad is a light emitting screen that doesn’t respond well in bright light unlike reflective e-ink that shines.

    And Sony vs Nook’s way of using touch with the Nook you don’t need to have actual contact due the infra red.

    Now can Waterstones licence the damned thing?

    When I first held the iPad – as a skeptic – I was blown away.

    When I first held a Kindle I mourned for the book industry.

    In an ideal future world you’d have an e-ink screen that works like and iPad.

    According to Amazon the 80s influence of the design isn’t doing anything to harm sales of their device.

    Even Adobe has upped their ebooks on PC/Mac reading experience with an update to Adobe Editions:

    http://labs.adobe.com/technologies/digitaleditions1-8/

    But those are just access devices. Of course Apple are trying to limit you to using their distribution channel to consume your ebooks – no more buy in-app for Kobo, Google Books (which we don’t get), or Kindle.

    Ofcourse Amazon wants to now only be your device, and your ticket but also your sole source of product – truly locking you in.

    The easy way of combating that is that other channels need to sell .mobi (or epub if we are being anti-Apple, pref both epub/mobi in the same download) DRM free version of the books directly to consumers that allows the reader to decide in the future what device they want to use without having to lock themselves in forever.

    The interesting problem with ebooks is that it is being driven by price rather than name. This might be because we are used to buying books that are usually more than functional and we don’t appreciate the filtering that goes on.

    I wonder how publishers are going to respond and how they are going to make their brands have impact online. Brands like Tor.com and the new SF Gateway or interesting hubs with one more directly selling books than the other.

    But where does that leave imprints like Vintage, Penguin etc who do more literary works will they transfer online?

    Interesting times.