The New Publishing Era: Is It All Just Economics?

There has been a bit of recent buzz through the publishing blogosphere recently about the Department of Justice’s impending suit against Apple and the Big Six publishers over their Agency Model agreement. What it comes down to is the notion that they conspired, i.e. worked together as a group, in order to fix the prices of ebooks at a certain level.

There have been lots of “OMG!” statements made, some positive and others not so much about this potential development. On the one hand, we have consumers (readers) cheering the notion that once again, the market (Amazon) can crank down ebook prices and make more mainstream authors available at lower prices. On the other, there are those who say that the inability to set prices at a margin that actually makes a profit will doom publishers as things currently stand.

Somewhere in this passing volley of  words, it has been mentioned that the ones who will suffer the most from this are the authors. This has been a fairly quiet voice, as most of the statements have been coming from the publishing industry and the consumers. There have been a few comments made (that I’ve seen anyway) about the effects on authors, mostly to the effect of either, it will have little effect, to they will lose money and the midlist authors will get squeezed out of the publishing world.

The problem with most of these statements is that there is little empirical data to back them up. And let’s face it, coming up with that kind of data is notoriously difficult in the publishing world. So, we get a lot of anecdotal evidence, opinion, some of which may have some merit or maybe not. It’s hard to tell honestly. Predicting anything in publishing is a crap shoot.

Some things we do know:

  1. Readers want to buy books as cheaply as possible.
  2. Readers want to get value for the money they do spend.
  3. Publishers need/want to make money. They can’t survive otherwise.
  4. Booksellers want to make money. They can’t survive otherwise.
  5. Authors want to make money from their work. Their creativity deserves compensation.

It’s pretty basic economics at this level. It’s the two basic forces of a market competing against each other. It’s how they interact that gets very complicated and difficult to sort out. Some people will say that attempting to limit the market is a fool’s errand, that given free reign, markets in a time of change will at some point settle at a new level. There will be winners and losers in this changing time, with those who embrace the change generally coming out ahead.

Where things will settle down the road is difficult to prognosticate on. If trends are any indication though, we can see that books, at least on a digital level are coming down in price. We have the upper end of $10 (more or less) down to the bottom level of free. The DoJ is on the side of consumers in this battle. You don’t sue for price-fixing unless you believe consumers are being put at a disadvantage. In a consumer driven economy such as ours, the consumer rules all. If you asked any reader if you’d rather pay for your books or get them for free, the vast majority are going to say free. What a consumer wants and what a consumer perceives as being a valuable commodity worth paying for can and often are two different things.

In the world of books, most readers will tell you that some books are worth their weight in gold, while others aren’t worth the paper they’re printed on or in the digital case, the memory they take up on the ereader. In the case of this battle, we aren’t talking about value though. The DoJ is saying simply that consumers should not be inhibited by anyone from getting the lowest possible price for their product.

It’s important to note here: value is not a part of this equation. The DoJ is not concerning itself with books. It’s not their place to determine what a book’s value is, merely to make sure the market is not restricted by businesses when it comes to consumption. What do you do though, when that protection is destroying the value of the commodity, when protecting the consumer, in fact, helps destroy the very business providing the product?

Yes, I’m predicting here, and not based on any hard facts. But here is what I do know:

  1. Books have value, some more than others obviously, but they do provide a valuable service to consumers.
  2. A valuable service/commodity should be paid for. In the case of books, this means they should not be free.
  3. Perception is a powerful force in the market. If the dominant forces in the market tell you that something is worth X amount, then over time, the public’s perception of that something is going to be X.

In the book market, Amazon is the dominant force, holding the largest market share relative to everyone else. They are the dominant force in the changing of the book world. They have inserted themselves into the traditional chain of author-publisher-bookseller-reader. They are attached to the reader/consumer. They sell things, a LOT of things. Their entire modus operandi is to bring consumers in and have them buy things from them. Nothing wrong with this at all. They do it very well and have every right to do so. But they are amoral when it comes to books.

They don’t sell books because they have value. They don’t care if a particular book will change your life or make you hurl it across the room in disgust. They don’t care about art and culture and how they interact with one another. They’re a retailer. They don’t have to care, and honestly it’s not in their purpose to care. I don’t begrudge Amazon their indifference to creativity and what value it might have. It would be nice if they did, but I have no right to complain at them for not doing so. For them, it’s all economics.

And that’s the problem. This new era of publishing is devolving into little more than an economics game. Self-published authors put out books for free or $1 to attract readers. It’s become a viable option for some. Amazon wants this to work because cheap brings in the consumer. The closer than can drive a book’s value to free, the better business it is for them. I don’t believe they give a damn one way or the other what a book sells for or whether an author has much chance in hell of making any money off of their books, though they’ll certainly use the exceptional success stories to flaunt their model. Some will and do say, “So what? It gives everyone a chance to succeed.” It does, though percentage-wise I’d like to see any numbers that say your odds of success are any better than they were the traditional way. But the more people that can try, the more consumers it will bring into the store, and that is all Amazon wants/needs.  They want to sell things, and books aren’t one of them. Selling books is simply a gateway to get consumers into the store to buy other things, much like any store will entice consumers in with a particular sale item in the hopes of selling them other things. Only here we have an entire industry as the sale item.

It’s all economics for the Amazon’s of the world. Value is not a concern to them, at least when it comes to books, and as an author that really bothers me. We are the carrot being wagged at the door. As a whole, the reading public isn’t concerned with this or perhaps they would be if it was even on their radar. It’s not though. This is a problem far beyond economics though and a whole other post.

As an author, I take offense at being the carrot. It’s demeaning and says my creativity has no value other than it’s ability to entice consumers through the door. More people should be outraged over this fact, but they aren’t. It’s not something even in the public conscience. Creativity is a declining value in our society, and Amazon just happens to be the one reaping the biggest benefits from that. Their platform for books only proliferates this perception.

Don’t get me wrong though, I believe writers (or any artist) deserves a venue for putting their work out there for the public to see, value, and consume. But when I begin to hear the collective cheers for lower prices via things like the DoJ’s suit, I want to tell people to really look at what is going on here. The Amazon’s of the world are devaluing creativity and artistic works, not for the purpose of bringing art to the world, but to be used as a vehicle to access other commodities. It’s being done at the expense of those who do value creativity and art (and yes, try to make money from it as well, but there’s a big difference when you’re invested in the product yourself).

While I can’t say it will come to pass, there lies the possibility here, that the misuse of creative enterprise to further secondary consumption will in the end, destroy the creative enterprise. In other words, if Amazon keeps up this economics of devaluing books to get consumers in the door, it’s going to trash the art of writing, because in the end, artists are not going to want to produce their art if nobody values it.

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4 responses to “The New Publishing Era: Is It All Just Economics?

  1. When I lived in the city in a small rented flat, I spent thousands on books, too – sometimes expensive illustrated books – and many novels. When I moved to my own place in the country, this book buying ceased. One, I was too far away from stores; two, I could no longer afford books.

    I, too, have had a fairly prolific creative output: two musical plays which I’ve also composed and orchestrated; three childrens’ novels; one novel for adults which I’ve also illustrated and composed music for. For my creativity I’ve hardly seen a cent, so I don’t think just because we create, we can expect to be reimbursed. We should be reimbursed if there is a market who are willing to pay for the product we’ve created at the price they’re willing to pay. I don’t think anyone baulked at paying whatever price for the Harry Potter books or the Twilight saga. It’s supply and demand. If we can supply the demand, then we get paid.

    Just my two, of course 🙂

    • Yes, I agree that if there’s a demand, we should get paid for supplying it. However, that demand also comes with a perceived value of the commodity. There’s all sorts of demand for $1 books, less so for $5 or $10 books. If consumers perceived $5 to be a great deal for a book, then we would have more demand. If the perception is that they are not worth that, then , obviously, the demand is going down. One of my main points was that Amazon doesn’t give a damn about the perceived value. The value of books for Amazon is entirely in their ability to bring consumers in to the store. For them, pushing the perceived value as close to zero as possible maximizes their ability to pull in the consumer. They don’t care or even expect to make money from books. Thus, authors and publishers are (or going to) get crushed, because perception is a very powerful consumer force. If they come to perceive that a story is only worth a buck, that is what they are going to expect to pay and anything more will be considered a rip-off. Digital publishing, while certainly wonderful on the one hand, is skewing the market by flooding the supply side, and when the supply is overly abundant, consumers don’t give it much value.

  2. I, like you, appreciate talent; especially literary talent. I’m 64 and trust me when I say: “I’ve read a lot of books.” OMG at the money I’ve spent on new books, used books, borrowed books, free books and a few stolen books in all the years given to me. I buy books and e-books from Amazon and their independent book sellers, brick and morter stores and Goodwill. Also, I’ve given away a lot of books to Goodwill and libraries, or just left them laying around hoping someone else will find the same value as I.
    All that being said: Books should not be free. Authors should not work for free. I wouldn’t want my talent to go on margin where the middleman gets the largest cut. I believe its up to the author where their work is distributed, unless they sell that right as part of the publisihng deal, then “all bets are off”.
    When I started reading, there were no such businesses as Amazon or Wallmart or any other massive retailers except Sears Catalog ( God bless their pointy little heads).
    My point being: There were starving artists then to. So, whats to be said?

    I enjoyed your blog. Your points are well made and the arguments you present are accurate. Maybe, somewhere in the future, life and liberty of finding one’s worth will be more equal.

    Best!!! G.

    • I am with you there, G. Here’s to life, liberty, and finding one’s worth. I really hope that things work out in the end for the authors and other artists. I’m just not optimistic at this point about how things are headed.