An American Editor

January 8, 2010

A Modest Proposal: A 21st Century Publishing Model

Publishers believe themselves threatened by ebooks, by the idea that ebooks are too easily shared, which will deprive publishers of revenue, and by the prospect of consumer expectations for very low ebook prices that will prevent publishers from recouping costs and making a profit. Many authors, too, are concerned, especially about ebook pricing and royalty share. Perhaps it is time to rethink the current publishing model and move toward a model for the 21st century. Thus, my modest proposal.

The current book model has three lives: hardcover, paperback, ebook. The weak link is the paperback because it is an unwitting benchmark and it should be excised. If we change the lives to hardcover and ebook, a publisher retains what it currently believes is its most lucrative (profit wise) format — the hardcover — and gains the ability to increase ebook profit and revenue (which will, in relatively short order, become the true profit center).

I propose that the hardcover precede the ebook by 3 months. When I worked for publishers, my experience was that the window for hardcover sales rarely exceeded 3 months; whoever was going to buy the hardcover as opposed to the paperback did so within that time frame, usually within the first month. I suspect that this remains true today.

Doing away with the paperback version and encouraging the ebook version means several things. First, the publisher doesn’t have to price compete against itself. Consumers expect an ebook to cost less than a hardcover, which in most cases it does, but also expect it to cost less than the paperback version, which often it does not. But if there were no paperback version, there would be no benchmark other than the price of the hardcover. Bingo!!

Second, the publisher would reduce its costs. Without a paperback version, there would be no secondary printing costs, no transportation or warehousing fees, and, more importantly, no returns. It would be difficult for a retailer to return the hardcover copies when there is nothing to replace it with. Even a retailer who sells both the print and electronic versions would need to keep some print inventory. Is this a bingo, too?

Third, with only two forms available — hardcover and ebook — it is likely that a publisher would see an increase in sales of hardcovers — after all, there would be no sense waiting for a cheaper paperback version that won’t be forthcoming — and would be able to charge a higher price for the ebook version because there would be no alternative but the higher priced hardcover version. Is this a win for publishers? Maybe. I’d give it at least half a bingo. But . . .

. . . the price point for the ebook would still be contentious. Convincing consumers to pay a publisher’s “reasonable” price for the ebook has its own problems. It probably wouldn’t be as difficult if it weren’t for DRM (Digital Rights Management) that essentially locks a book into a single device and prohibits sharing. Here’s one solution: Instead of one level of ebook, offer consumers two levels, with one level being several dollars less expensive than the other. Burden the less expensive ebook with permanent DRM and the more expensive ebook with temporary DRM, that is, DRM that will automatically expire 2 years from the date of purchase. A better suggestion: Forget levels and simply sell ebooks with DRM that expires in 2 years, freeing the book for the consumer to do with as the consumer pleases.

What this model requires is the giving up of the idea of a frontlist and a backlist and instead making each book a profit center within 3 years. That will mean other changes in the publishing production cycle, not least of which is the lowering of author advance expectations. This proposal requires both a cultural shift and a paradigm shift. Are publishers and authors ready for a change? It will come eventually. Better to embrace it than to waste resources fighting a war that cannot be won.

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