Friday, October 23, 2009

The price of book publishing

Some notes on an industry in transition

When the reading group to which I belong provisionally decided recently that our next book would focus on origins of the financial crisis, I suggested we take on William Cohan's House of Cards, which I had heard was a compulsively readable account of the collapse of Bear Sterns. My friend Dan countered the next day with Andrew Ross Sorkin's Too Big to Fail, a more general account about the near-collapse of the economy generally in 2008, a book about which I knew nothing. That was not particularly surprising, given that it had been published that very day. What was surprising is that when I looked the book on, the first three reviews were resolutely negative. And negative for the same reason: Readers were outraged the the price of the e-book was higher than that of the hardcover. Instead of charging what has now become a customary $9.99 at Amazon's Kindle store, (the price of House of Cards), Too Big To Fail was listed about about twice as much, though still considerably less than its list price of $32.95 (which is what it would cost if you bought it an an independent bookstore, which is why there probably won't be independent bookstores much longer).

Intrigued by this reaction, and thinking I might like to write about it, I returned to the web page the next day, upon which I saw that two key things had changed. The first, in effect, was a counterattack: not only were there a string of positive reviews for Too Big to Fail, but a number of reviewers chastised earlier reviewers for complaining about the price, which these reviewers regarded as irrelevant to evaluating the value -- I noun I use advisedly here -- of the book. But the other was that the price of the Kindle edition had changed to $9.99. Whether this was a matter of correcting an earlier error or responding to the criticism, Too Big to Fail was now towing the orthodox price line that comported with consumer expectations.

I found this little incident interesting in light of recent press stories that, Wal-Mart and Target were engaged in a price war to offer forthcoming blockbuster titles in hardcover for under $9 to customers willing to pre-order them, a discount on the order of 65%. A number of sources in this story fretted that such tactics would damage the viability of the publishing industry. And yet the next day, a day which featured a Times story on the unveiling of Barnes & Noble's "Nook," an e-reader that will compete with Amazon's Kindle, the Times also ran a story suggesting that e-books could revitalize publishing by encouraging readers to buy books in greater volume by allowing them to do it easily and quickly. It remains to be seen whether this will be the case. (The sheer number of these stories in the paper in these two days alone reflects the ongoing interest in this as a technology, business, and cultural phenomenon.)

What's beyond doubt is that the book business, from textbooks to bestsellers, is on the cusp of a transformation. The fact that only a tiny minority of readers currently use electronic texts is beside the point; such texts are nevertheless exerting an enormous gravitational pull both in terms of perceptions of the future as well as pricing in the present on traditional books no less than electronic ones. Moreover, that tiny minority of e-readers is relative, not absolute: According to the story on the Nook, Kindle sales are closing in on a million units (the Sony E-Reader has sold about half as many). I myself read e-books on my iPod. Critical mass is at hand.

Book discounting is nothing new, of course. Retailers have been doing it for a long time, and the entrance of online bookselling in the 1990s made the list price of a book akin to the sticker price on a car: not something to be accepted at face value. Up until now, however, it's been the retailers who have typically absorbed the cost of such discounts, to the point of considering them loss leaders, which is certainly the case in the Amazon/Wal-Mart/Target price war. That's true of e-books, too. But it won't be forever. Sooner or later -- and stories like the one above suggest it will be sooner rather than later -- publishers will be under terrific pressure to slash production costs, of which paper, glue and shipping are only a part (how much a part is still unclear). Actually, it's conceivable that retailers themselves could become publishers, something that Barnes & Noble has been tinkering with for many years with out-of-print titles. Whether or not this happens, the business is going to be iTuned (if not Napstered), with implications that remain unclear.

Let me be clear: I don't think books won't go away any more than records have. They're too useful a technology to disappear, in part because you never have to charge them, for example. My guess is that cherished books -- by definition, a minority -- will be ones you have in print form the way you have enlarged or extra prints of beloved photographs (or, to shift the analogy, books printed and bound will be like photographs framed and mounted). There may even book bookstores like there are photo stores, or machines in other retailers, like drug stores, that can print a book. But such a model portends vast, if still unknown, changes in what it means to be a writer, editor or publisher in ways that are as likely to be encouraging as dismaying.

The presses will be stopping. And you can be sure the revolution will not be televised. You will, however, be able to download it -- at what one hopes will be a modest price.