An American Editor

November 23, 2011

On Books: The Shine of the Internet in the World of eBooks

As all of An American Editor book reviews (which are listed at the end of this article) imply, the Internet has opened reading vistas for me that otherwise would never have happened. I find that as a result of the Internet and places like Smashwords, I am being exposed to authors and stories that would not otherwise have been available to me. This has been the blessing of the Internet for readers, especially with the advent of ebooks.

The dark side remains the lack of gatekeeping and how finding worthwhile books to read is increasingly difficult. The easier it is for “authors” to find an outlet for their work, the harder it is for readers to separate the wheat from the chaff.

Unfortunately, although this problem has been discussed several times over the course of the past two years, no real solution has been forthcoming. I doubt there really is a single, good solution to the gatekeeping problem, except, perhaps, to not pay more than 99¢ for any ebook from an unknown author.

Even at that price point, I find myself waffling about whether to buy or not. That’s because my to-be-read pile is already several hundred books, nearly all of which I obtained free, and it keeps growing with free ebooks. I am unlikely to live long enough to celebrate the demise of my TBR pile even should I stop adding to it now.

Regardless, the rise of the Internet and the (relatively) recent rise of ebooks has worked wonders for multiculturalism. Exposure to literature from other continents and countries has broadened my perspective significantly. Previously, my exposure was to North American and West European literature. The geographical limitations imposed by contract between publisher and author limited opportunities to expand.

That geographical limitation combined with publisher gatekeeping, which had at least one eye, and perhaps more than one eye, focused on the bottom line, meant that exposure to other cultures was limited. (Of course, it doesn’t help that I am monolingual, which imposes its own fence.) As each day passes, the geographical and gatekeeping limitations fade a little more and increasingly seem to be only relevant to ebooks published by the big six publishers.

For all of this, the Internet should take a bow. The Internet shines at making what was previously unavailable available, and I, for one, am trying to take advantage of that ready availability. Alas, as noted earlier, that Internet shine does have a darkening tendency as well.

The ease of access has caused the lack of effective gatekeeping to cast its net much wider than just the Internet. Increasingly, traditional publishers seem to be publishing whatever they can get their hands on and in whatever condition they grabbed the book. The dark side of the Internet is the lowering of quality acceptance/expectations and the increasing demand for lower prices. This is not to say that as price increases, quality increases; there is definitely no upward correlation between the two as the Agency 6 prove on a regular basis. However, there is a correlation between lower price and lower quality — absent sufficient revenue, essential production services, such as editing, are bypassed. (Yes, I, too, can point to examples of outstanding quality ebooks that are free; yet being able to do so doesn’t negate the validity of the statement when discussing the broader ebook market.)

The lesson is that we need to work harder on figuring out a way to correlate price and quality and find that sweet spot that satisfies both. I expect that within the next few years we will come close to resolving the matter even though I currently have no idea as to what is a practical solution.

A large number of ebookers believe that publisher gatekeeping can readily be replaced by crowd gatekeeping. I wish this were true but the evidence so far, at least to my eye, indicates that too many of the crowd gatekeepers base their gatekeeping on factors other than quality of writing and quality of story. We still see all-too-many reviews in which price or geographical restrictions or some other unrelated-to-writing-quality criterion plays a role in deciding whether an ebook is a 2-star or a 5-star ebook.

In addition, I have found it difficult to find reviewers whose reviews I can consistently trust. (Part of the problem is that too many reviews are written by unidentifiable reviewers. Who is TommyGumChewer and why should I value his/her opinion? See Book Reviews & Reviewers: Deciding Which Reviews to Trust for an earlier discussion.) Many ebookers have developed their own criteria for evaluating reviews (e.g., dismissal of all 1-star reviews), which may work well for them, but leaves me unsatisfied. I have grown too accustomed to reviews like those in The New York Review of Books to find many of the reviews on the Internet helpful.

In the end, what I do is take advantage of what the Internet does best — make information available to me — and I “buy” ebooks whose descriptions interest me. I read (or try to read) those ebooks and act as my own gatekeeper, as inefficient a process as it is in this era of self-publishing. And, thus, what I “buy” is largely free, because with all the ebooks available, it would be very easy to spend a small fortune to find only a few excellent ebooks and authors.

How do you gatekeep?

(For those who are interested, the following are reviews I have written for An American Editor in order of newest to oldest:

I believe that covers all of the reviews on An American Editor. Happy book hunting!)

September 7, 2011

A Book Is a Book — Or Is It?

If we look back to the beginning of the agency model in ebooks, which began a little more than one year ago, we can find the publishers’ claimed rationale for changing models (which occurred with a mighty push from Apple): to protect ebooks from becoming mere commodities and to prevent consumers from establishing a mindset that $9.99 is the right price point. Okay, that was the rationale, coupled with a fear of Amazon becoming too powerful, that was bandied about. The question is: Were publishers successful in preventing the commoditization of books?

The reports from the Agency 6 indicate that ebooks are rapidly becoming a significant source of revenue for publishers, perhaps even their primary growth area. Latest reports show growth in ebook sales (Barnes & Noble reports 140% rise in digital sales; Hachette reports ebooks as 20% of U.S. sales and 5% of worldwide sales; Penguin and Simon & Schuster report digital as 14% and 15% of revenue, respectively; Bertelsmann/Random House reports digital sales in the first six months of 2011 as exceeding all digital sales in 2010);  and a significant decline in mass market paperbacks (down 14%). Profits are up slightly, even though volume appears to be down somewhat. All of which seems to favor the notion that the publishers did the right thing.

What we don’t know, of course, is how the sales are breaking down by price point. I can relate anecdotal evidence that the agency pricing scheme is a failure on several levels, but no data has been released that enables a careful analysis.

I’ve mentioned it before, yet it is still true: Whereas before agency pricing I bought a lot of hardcover books and ebooks from the Big 6 publishers, my purchases have declined since the institution of agency. Whereas I used to visit my local Barnes & Noble at least once a week and buy a few books each time, it has been nearly five months since I last visited the store and bought an Agency 6-published book.

If the Agency 6 intended by their action to make me accept spending more than $9.99 for an ebook, they have failed — and failed miserably — because I am pretty unwilling to accept even $9.99, let alone a higher price point, as the sweet price point. Instead, I’ve gotten used to the indie author price points of $5 and less, with less being the dominant word.

I still occasionally “buy” an Agency 6 book, when they offer it for less than $5 or offer a bundle, such as three ebooks for $9.99, but more often when they offer an ebook for free. Agency pricing has backfired not only with me but with nearly all of my acquaintances who buy ebooks. The principal hurdle for the Agency 6 to overcome is the lack of physicality of the ebook.

Even though I and my friends have transitioned to ebooks and much prefer reading on our electronic devices to reading the pbook version, we have not made the price transition, and it is that transition that the publishers need (want?) us to make. Yet it is the publishers who have made the problem worse.

Publishers do not accept the idea that a book is a book is a book, regardless of whether it is electronic or print. In contrast, consumers like me have always thought that a book is a book is a book, regardless of form. We understand the difference between a hardcover and a paperback because we can both see and feel those differences; consequently, over decades we have become accustomed to paying more for a hardcover than for a paperback, perceiving — rightly or wrongly — greater value in a hardcover than in a paperback. (In fact, it was this perceived disparity that brought about the rise of the trade paperback. The trade paperback is perceived by consumers as offering less physical quality than a hardcover but more than a mass market paperback, and thus worth a price between the two.) But we continue to have difficulty wrapping our heads around the idea that, even though it lacks physicality, the ebook is worth more than the paperback and the hardcover (ever note how many times the ebook price is higher than the hardcover price or so close to it that there is little price differential?) at worst, and worth more than the paperback and only slightly less than the hardcover at best, or that it is worth the same as the trade paperback.

Because we have difficulty wrapping our heads around the agency pricing continuum, we have spent more time and money buying indie books, which seem to be priced more logically. Thus, I suspect that our experience is the experience of many ebookers; that is, we buy more indie ebooks than agency ebooks (with some exception).

The Agency 6, however, can point to the rise in revenues, and sometimes even in net income, they are experiencing, which is occurring even in the face of declining volume numbers and is attributable to increased ebook sales at the higher agency price. It is mixing, I think, apples and oranges in the sense that I suspect the biggest growth in volume and dollars is occurring in the indie/non-Agency 6 ebook market, not in the Agency 6 market. So the question not being asked or answered is this: What would the Agency 6 ebook sales volume and profits be if they had let the market do the pricing? Would their growth be significantly higher than what is being reported and would their net income be more marginal?

Also not asked and answered is what effect the commoditization has on consumer buying habits. Ultimately, will this cause even hardcover sales to decline significantly? This takes us back to the questions raised earlier in Clashing Perspectives: Coming Home to Roost and leaves us in the same place.

I used to “revere” books that I purchased. After all, I paid a lot of money for a hardcover and I treated it reverently. Take one off my library shelf and it appears in virtually the same condition as when I bought it. I wouldn’t let my children borrow one of the books until they learned how to handle them gently and carefully. None of this matters with my ebooks. Even if an ebook is accidentally deleted and the bits and bytes written over, I can replace it for free from my backup and have it in the same condition as when I bought it. There is no need to be reverent. Thus, the ebook is viewed as a commodity — a book is a book is a book.

May 16, 2011

The Buying Conundrum: pBook or eBook?

In a recent post on the Teleread blog, Joanna, a contributor to Teleread, vented about being tired of pbooker’s “economic snobbery.” She wrote,

If you read any ‘ebooks versus print books’ article, you’ll soon come across the print fetishists. These are people who acknowledge the rise of ebooks—grudgingly—but then insist that ‘real’ book lovers surely prefer paper, or that paper is ‘nicer’ or a ‘better experience’ or in some way superior. I am starting to get really annoyed with these people! Overlooking the obvious ‘print and pixel really can co-exist and there is no need for an either/or mentality’ argument, I am starting to grow a little offended by the economic snobbery that I perceive in some of these arguments.

What I think a lot of these ‘paper is superior’ people fail to consider is that even in this modern day and age, having a large paper library is still an economic luxury.

(For Joanna’s complete post and the comments it generated, see Print Fetishism, Economic Snobs and the Price of Real Estate at Teleread.)

Needless to say, I couldn’t keep my fingers off my keyboard and so I wrote a response. But after thinking about it, I decided that a more expansive response here at An American Editor might be appropriate, so here it is.

Joanna essentially makes a generational argument. She is in the same generation as my children, those just starting their careers or a few years into it, whereas I am at the other end of the spectrum. I agree that this makes (or should make) a difference from the financial perspective. But that has always and will always be the case.

When I was Joanna’s age, decades ago, I learned to prioritize how my money was spent. At her age, I didn’t make a fortune and had to decide between, say, spending a few dollars to see a movie or to buy a book or not spending it at all. Yet even in those hard-pressed days, when I lived in a studio apartment whose rent surpassed 50% of my net income, I bought books. Unlike spending money to watch a movie, I never considered book buying to be frivolous — reading was (and is) the primary method for learning.

I am not dismissive of the economic woes and realities of my children’s generation, but everything has to be dealt with in perspective. I remember my parents, for example, paying a mortgage of $30 a month, at a time when they earned only $15 a week. Gas also cost less than 25 cents a gallon, the New York Times was a nickel, you could buy a Coke for 5¢, and so it went — and the take home pay reflected that cost of living. I don’t know anyone today who has a mortgage or rent of $30 a month!

Of course, in those days, ebooks existed only in the imagination of science fiction writers. Personal computers hadn’t yet come on the scene and the Internet, as we know it today, didn’t exist. To buy a hardcover book required a significant investment. In proportion to earnings, hardcover books were luxury items back then and a bargain today. Paperbacks were the “poor person’s” access to literature. How things have changed with the passing decades.

eBooks are the next step in the evolution of personal libraries. Some day — but not today — pbooks will be a true luxury item and part of antiquity. Someone will recall them but be unable to produce in hand an example.

eBooks have lots of benefits for readers today, but not financially. Yes, they are the way to build a collection when you are hard pressed for real estate to house a pbook library, but that problem existed 25 years ago, 50 years ago, 100 years ago — some people had homes large enough to house vast libraries whereas others lived in cramped studio apartments, some less than 100 square feet in size with everything communal but sleeping quarters. Yet, people read, bought books, and endured. And they learned to love the pbook, especially the paperback, which brought reading to the masses by making it more affordable.

I admit I actually prefer ebooks to pbooks for reading. If I could, I would buy every nonfiction book that I buy in hardcover also in ebook form so that the hardcover could go on my library shelf and I could read the ebook. But pbooks do have seven things that ebooks currently do not have:

  1. When I buy a pbook, I own it; when I buy an ebook, I rent it.
  2. pBooks are resaleable on a secondary market and/or rise in value as they become scarce; ebooks are never scarce and have no secondary market in which I can recoup some of my investment.
  3. Nonfiction pbooks tend to be less expensive to purchase than the ebook version and are available for significantly less on the legal secondary market, which includes the legal remainders market.
  4. pBooks can legally be cooperatively bought, thereby reducing the price to individuals even further (I have bought in cooperation with my son several books over the years that we have shared the purchase cost of).
  5. My pbooks can be lent to other readers innumerable times; if I’m lucky, an ebook can be lent once for 2 weeks to another reader (after being lent that one time, the ebook cannot be lent again to anyone).
  6. Once I buy a pbook it remains mine; unlike the ebook, no one can remotely remove the pbook, replace the pbook, or do anything that interferes with my ownership of the pbook.
  7. As my collection of hardcovers grows, I, too, may run into the space situation. At that point, I can reevaluate my pbooks and remove some from my collection, and I either sell them on the secondary market (see 3) or, more likely, I can donate them to my local library, which is happy to obtain them as they are in pristine condition, giving me a charitable contribution deduction on my taxes at the fair market value, which is the average price in the used book market. I can’t sell or donate no-longer-wanted ebooks to anyone, let alone to my local library.

The day when ebooks have a universal format and DRM scheme, like videos do, some of these pbook advantages will disappear. But at least from a purely economic perspective, pbooks — at least those from the Agency 6 — have a greater economic value and are a better bargain than ebooks. eBooks shine on portability and ease of reading on the electronic device, but that’s about it — ebooks often cost more, sometimes much more, than the hardcover, so from an economic viewpoint, ebooks are no bargain.

It seems to me that the person struggling with finances would be better off buying a pbook version than an ebook version of an Agency 6 publication. The initial cost and the subsequent ability to recoup some of that cost seems to me to create an unbeatable combination for the frugal. Of course, free and low-priced indie ebooks change the calculation, but then those aren’t the pbooks I buy.

Joanna is right only in the sense that real-estate challenged readers have a hurdle to face and overcome with pbooks that they do not have with ebooks — the storage problem — but she loses the argument when she dresses the problem in economic terms. For the real-estate challenged reader whose disposable income is limited, the person Joanna describes, buying less-expensive pbooks is a better deal than buying the ebook because the pbook can be read and then sold on the secondary market. No need to tie up valuable real estate with a pbook collection, plus you pay less to begin with.

Seems to me rather than being peeved at those of us who still like pbooks, she should be thinking about how to maximize her purchasing power by buying and reselling pbooks. (I will concede, however, that once we move away from the Agency 6 and from the economic issues, ebooks are the better choice.)

March 7, 2011

Sarah, Where Are You? Capitalism in eBookville

Sarah (Palin, that is), where are you? America desperately needs you and Michelle (Bachmann) and Glenn (Beck) and Rush (Limbaugh) and all your Tea Party compadres to save it from creeping socialism.

I never thought I’d say it, but you may be America’s first defense against the Murdochian (Rupert, that is) subterfuge to convert America from out right Wild-West-type capitalism to socialism. And, if you don’t take a stand now, how much longer will it be before Rupert starts pushing America down the path to socialized medicine plans sold under the Murdoch brand? Your buddy, Rupert, has taken that first step down the path to destroy capitalism and you are silent. Now is the time to speak up loudly and tell Murdoch you won’t stand for this subterfuge!

We know it all began with talk radio that transformed into talk TV and that became branded as Fox “News.” Murdoch established his credentials as a right-wing conservative who abhors socialism and embraces capitalism. He then suckered you and your colleagues into believing you had found a bully pulpit to protect America from creeping socialism, a mount from which you could castigate the poor for being poor and for needing government assistance. (Interestingly, you never castigated the rich corporations for needing — nay demanding — government assistance, but then no one is perfect.)

But now eBookville desperately needs you to stand tall and protest the socialization of ebooks, a charge being led by Murdochian forces. As you know (and preach), the basis of capitalism is to let the market dictate success or failure, profit or loss, unfettered by either government or private manipulation. Under capitalism, it is the end consumer who is supposed to decide the fate of a business. In contrast, under socialism, the market is hamstrung so there is no truly free market and no market can dictate success or failure, profit or loss — to each according to his want.

And so it was in eBookville until the advent of the agency system, a system put into place with the help of Murdochian forces (HarperCollins ring a bell, Sarah?). The free market was telling Murdoch that his ebooks were overpriced and to cut the prices until the market found its equilibrium. Alas, the dark forces were not satisfied and the Murdochians decided that the free market in ebooks shouldn’t be so free, and the agency system was founded in collusion with other socialist forces.

Where are the protests from you and your conservative colleagues? Is it that you fear having your paycheck cut? Or is it that you believe in a free market only when it benefits you and strangles others? Or is it that stealth anticapitalism from a fellow conservative is OK?

We ebookers need your help to straighten out this stealth attack on what we value most — free market competition. We need you to stand up to the Murdochian forces and lead them back to the path of competition. We need you, Sarah, and your colleagues to demonstrate that you are much more than empty shills for capitalism; that you are not quitters when it is your paycheck on the line; that you really believe in capitalism, in the free market, and in competition; that you are not simply Murdochian puppets in disguise. We ebookers need for you to be that grizzly mom who defends our public libraries from Murdochian overreach.

Come, Sarah, prove America wrong — prove that you really believe in capitalism. Tell your Murdochian compadres to tear down the wall of socialism with which they have surrounded ebooks; to tear down the wall of anticompetition in ebook pricing; to tear down the wall that hems in eBookville’s free market.

Sarah, give those yearning masses of ebooks their freedom.

March 2, 2011

Waiting for Common Sense — Not: The Agency 6

It used to be the Agency 5, now it’s the Agency 6 as Random House has caved and instituted agency pricing. This further changes my book-buying habits.

Let me start by saying that I am not outright opposed to the agency system. What I am opposed to — and appalled by — is the pricing. Granted that Agency 6 pricing clearly demonstrates lack of competition bordering on price collusion (Isn’t it amazing how similar the Agency 6 ebook pricing is across the board?), but that isn’t the primary problem I have: The primary problem is that the selected price points are extortionate considering the restrictions imposed in the license (and note that it is a changeable, revocable license). Compound this with Rupert Murdoch’s greedy ploy, through his HarperCollins subsidiary, aimed at libraries, the last bastion for education of the poor, and what you have is a devil’s cabal.

(In an interesting aside, Murdoch’s Fox News has been denied access to Canadian TV because of its lack of impartiality. See Regulators Reject Proposal That Would Bring Fox-Style News to Canada. Maybe that is why he feels he needs to bleed American libraries — to make up for lost revenues and bias outlets.)

In the past I have spent significant sums of money building both my hardcover library and my cache of ebooks. It wasn’t so long ago that I could be counted on to spend $5,000 or more in a year on such purchases. The Agency 5 put a big dent in that spending. I felt compelled — if not honor bound — not to buy books, p- or ebooks, published by the Agency 5 (except where necessary because I already had several volumes in an ongoing series). So I focused my purchases on self-published, indie presses, academic presses, and Random House books. The consequence was that my expenditures on new releases dropped by more than 50% last year.

With Random House now part of the Agency cabal, my habits will shift yet again. If I want a new release in hardcover, I will wait to buy it on the remainder or the used book market, when I know that neither one of the Agency 6 nor their author will receive any compensation. But my ebook buying will (and has been) change even more dramatically.

A good example of the change occurred yesterday. Yesterday, the long-awaited second volume in Patrick Rothfuss’ Kingkiller Chronicles (the first volume was The Name of the Wind; the second volume is The Wise Man’s Fear) was released. My previous practice was to buy both the hardcover and the ebook versions; not this time, however. This time I bought just the hardcover because of the agency pricing (the ebook is virtually the same price as the hardcover and no ebookseller can sell it for a price lower than $14.99, which is exorbitant).

That is but one example. Increasingly, I am only “buying” free ebooks and ebooks that cost $2.99 or less, and those I am buying from Smashwords. The reason I buy from Smashwords is that most authors let you sample their work before you buy, some offering up to 75% of the ebook as a free sample. I admit that in the case of the free ebooks I don’t sample them, I simply download those that seem interesting, but for those that do cost some money, I generally read a portion of the sample before buying.

At Smashwords I discovered several self-publishing authors whose works are excellent. Granted they do not have the cachet of a Stephen King, J.D. Robb, or Robin Hobb, but they do know how to write a compelling story. A good example is Safina Desforges’ Sugar & Spice, a 99¢ mystery/thriller that compares well to any P.D. James novel.

The point is that the setting of exorbitant pricing by the Agency 6 has compelled me to look elsewhere for book purchases. Money that I previously spent supporting the traditional publishers is now going elsewhere — and it is costing me less yet giving me comparable enjoyment.

Yet there is one more thing that has to be said about the agency system. Currently, it is limited to ebooks. But that doesn’t make a lot of sense to me over the long run.

Under the more traditional wholesale system, the publisher sets a retail price for a book and the bookseller pays to the publisher approximately 50% of that wholesale price for each copy sold, regardless of the price that the consumer pays. (Yes, there are more wrinkles in the system, but I’m simplifying it for this discussion.) This is how it started with ebooks. The excuse for going to the agency system where the publisher sets the retail price below which no ebook can be sold and which pays the bookseller a fee for each sale was that low ebook pricing devalued the book and its content.

If that is a valid and sustainable argument, how does low pricing of the hardcover not devalue the book and its contents, too? Logically, there can be no difference. After all, a book is bought for its content, not for its package, and supposedly the content of the p- and ebooks are identical.

What this means to me is that we are the road to a major shakeup in the book industry. I think the agency system is only beginning with ebooks and will either have to be abandoned for ebooks or spread to pbooks. Although agency pricing has not been a big win so far, spreading it to pbooks could solve a major problem for publishers — the problem of returns, which would also solve the problem of excessive book print runs and remainders, and minimize the secondary market.

With the Agency 6 controlling more than half the publishing market overall and probably 75% or greater of the nonfiction market, the path they take could well become — and quickly — the path that smaller publishers take. The bulwark against the spread of agency pricing is the self-publishing market, but that market has to find ways of uniformly increasing its standards before it will supplant the traditional publishers.

In the end, it is clear that the Agency 6 lack common sense. At the same time that one or more of the Agency 6 publishers expects ebooks to grow to as much as 20% of all book sales in 2011, they try to thwart the one avenue of growth by imposing extortionate prices and limiting competition. Simultaneously, they allow the wholesale model to continue for pbooks, thereby devaluing their product and its content. Some day they will get it together; unfortunately, when that day comes, I expect it will not be to the consumer’s advantage.

In the meantime, I’ve changed my buying habits significantly and may well represent an unrecoverable customer loss for the Agency 6.

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