The eBook Wars: The Price Battle (II) — Starbucks 1, Publishers 0

On January 23, 2010 The New York Times had a front-page article titled, “On Kindle’s List, the Best Sellers Don’t Necessarily Need to Sell.” The article went on to discuss the phenomenon with which most savvy ebookers are familiar: many of the “bestsellers” on any ebook bestseller list are free titles. More important to publishers is that many of those bestsellers are always-free public domain books, not paid-for ebooks being given away temporarily as promotions.

The article went on to discuss publisher approaches to freebies, how freebies are promotional, and other good reasons why giving away an ebook is good and/or bad. (Sadly, the article neglects to mention some of the best sources for free ebooks such as MobileRead and Feedbooks. Free ebooks at these two sources are well-formatted and generally well-edited by a caring community.)

Let me say upfront that I like free ebooks–afterall, who doesn’t like free. Free ebooks have introduced me to authors whose work I never would have read otherwise. But let me also say that with rare exception, I have not proceeded to buy other books of the new authors I have liked. (I do, however, buy a lot of ebooks and hardcovers — more than 100 of each type in 2009.)

Free ebooks are a two-edged sword for publishers and authors. On the positive side, it introduces readers to authors they might not otherwise have read. In my case, it introduced me to David Weber, author of the Honor Harrington Series, and now I buy all of his books in hardcover. On the other hand, it also introduced me to Fiona McIntosh, author of the Quickening Series. I liked her writing but have not bought either of her newest two books (books 1 and 2 of her Valisar Trilogy) because the publisher set the ebook prices higher than the paperback prices.

So, problem #1 is that many publishers still have no clue about what differentiates an ebooker from a print copy buyer. In the case of David Weber, Tor/Baen gave away older Weber ebooks and reasonably priced new ebooks, thereby gaining a new reader, whereas for Fiona McIntosh HarperCollins/Eos gave away the ebook then threw away the reader with excessive pricing.

Problem #2 is that publishers are creating reader pricing expectations. Readers expect that sometime down the road an author’s newer books will become freebies too, so why buy now, especially at exorbitant pricing. Once the impulse buy is lost, readers tend to forget the author and move on. Yes, the Times article quoted some success stories, but remember this: It is still very early in the ebook revolution (ebooks account for only 5% of the current book market) and what happens today doesn’t indicate what will happen tomorrow. Let me repeat: The ebook bestseller lists are stacked with freebies, not paid-for ebooks.

Let’s consider consumer thinking for a moment. Many people rush to their Starbucks and plop down $4 for a coffee. Within minutes the coffee and the $4 have disappeared, neither to ever be seen nor savored again. This is the Starbucks law: Make the product a one-time consumable and require new payment for the next one-time consumable.

Contrast consumers’ willingness to buy the coffee with their willingness to pay for ebooks. An ebook, unlike the coffee, can be savored over many hours and can be resavored 2 years later. Read that $5 ebook 5 times, and each reading has cost $1; try drinking that same cup of coffee twice let alone 5 times — it simply can’t be done. The coffee is $4 for a one-time thrill whereas an ebook is multiple thrills that cost less each time. This is the anti-Starbucks law: Make the product consumable multiple times  with each consumption costing less. Yet, consumers balk at paying for an ebook and publishers feed the freebie frenzy.

Clearly, publishers aren’t making their case about value very well. Isn’t there something amiss when Starbucks can convince someone to part with $4 for a one-time, short-lived thrill but publishers can’t convince anyone that their product has greater value because it is a long-lived thrill. Perhaps the time has come for publishers to demote the bean counters and promote those who give value to their product. There is no financial future in free books for any publisher or author.

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Publishers vs. Editors & the Bottom Line: Readers are the Losers

In 1966, William Baumol and William Bowen described the economics of the performing arts. The point of their study was that some sectors of an economy have high labor costs because they tend not to benefit from increased efficiency. Baumol and Bowen illustrated this proposition using a 1787 Mozart string quintet: that quintet required 5 musicians and a set amount of playing time in 1787 and today still requires 5 musicians and the same amount of playing time.

Like Mozart’s quintet, there is a limited amount of efficiency that can be gotten in the editorial process. A 500-page manuscript still needs to be read page by page, paragraph by paragraph, sentence by sentence, word by word, when edited.

Years ago the reading was done on paper with pencil and editors used a limited number of markings to signify elements of the manuscript, such as a chapter title or a bulleted list. Today, the coding has become more complex and most manuscripts are read on a computer. But editing is still as labor intensive today as it was 25 or 50 or 100 years ago. Perhaps even more labor intensive as editors have assumed responsibilities that they didn’t have back then, such as removing author inserted styling. And some publishers now want editors to use XML codes and advanced, expensive software like InCopy. Editors are now doing much of the work that typesetters did as near ago as the 1980s, in addition to dealing with issues of grammar, spelling, syntax, and organization. (For a discussion of what an editor does, see Editor, Editor, Everywhere an Editor.)

Yet, unlike other labor-intensive professions such as nursing, garbage collection, and teaching, wages for editors haven’t grown; instead, they have declined. (Imagine paying a nurse or a teacher today what they were paid in 1995, let alone what they were paid in 1985 or 1975.) In fact, in contrast to what would be expected in the normal course of events, publishers have decided to make editors their sacrificial lambs on the altar of quarterly profits and are now paying rates that are the same as they paid in 1984 or, in some cases, less, while demanding that more work be done in a shorter timeframe.

One book packager (a packager is a company hired by a publisher to handle most or all aspects of the editorial and production phases of publishing a book) recently solicited experienced American editors to do high-quality editing (and wanted a no competition agreement, too!) in the medical field. High-quality medical editing is slow and careful, with editing at a rate of 3 to 5 manuscript pages an hour the norm, especially if the mansucript requires a “heavy” edit. In exchange for the editor’s effort, the packager offered a rate of 80 cents a page, or $2.40 to $4.00 an hour — not even minimum wage let alone a wage commensurate with the skill and knowledge levels required for this kind of editing. Would you want your doctor to rely on such a low-quality book to prescribe your medications?

Not all publishers or packagers pay such a miserly sum, but this packager doesn’t stand alone.  In fact, this packager is surrounded by myriad other packagers and publishers who pay poverty-inducing wages. Such low offers are increasingly being seen by American professional editors.

Who loses when editors are hired at such poverty-inducing rates? The book buyer loses because it means that an unskilled editor will be hired to do a very cursory editing job. When you buy a book that is riddled with errors, an increasingly common occurrence these days, put the blame squarely where it belongs: on the shoulders of the publishers who have lost any sense of pride in the quality of their books.

As with any profession, editors deserve a fair wage for their skill and knowledge, with specialized skills deserving higher compensation. Publishers have lost the book buyer’s trust because of high price with low quality. One way to regain buyer’s trust is to raise quality. To raise quality, a publisher needs to hire experienced, skilled editors at a fair rate of compensation.

The hue and cry for quarterly profits doesn’t mean that costs should be contained regardless of what is sacrificed. Rather, it means that publishers must change their business model and become more efficient in those areas where efficiencies can be obtained. Editing is not one of those areas because a lower price for editing does not equate with higher efficiency or quality. Editing is labor intensive — a computer cannot take over an editor’s work. Someday publishers and packagers will realize that false economies are a sure path to extinction.

For the Lack of an Editor, the Debate Changed

We all know that a controversial topic today is climate change. Yes, this is about climate change, but no, it isn’t about whether there is global warming or not. Instead, this is the story of what happens when the editor goes missing.

The story begins with a 2007 report by the Intergovernmental Panel on Climate Change (IPCC), a United Nations-affiliated group. Five glaring errors were found in the report, errors serious enough to warrant an apology from the scientists who wrote the particular section under scrutiny.

The section dealt with glacier melt in the Himalayas and the prediction that the glaciers could all melt away by the year 2035. Alas, that prediction missed the mark by several hundred years — the year should have been 2350, not 2035. The scientist who discovered the errors admitted that the errors are neither significant in comparison to the findings of the whole report nor intentional, but they are significant enough to raise questions of credibility regarding the whole report. As a reader, imagine if this had been the drug book your doctor consulted when prescribing medication for you.

Isn’t credibility at the bottom of every author’s book and every publisher’s name? When a new Stephen King novel is published, King’s credibility as an author whose books are worth reading is on the line, as is the publisher’s reputation for publishing interesting and readable (i.e., quality) books. If the new King novel is poorly written and edited, King’s reputation suffers, as does his publisher’s. Consequently, it behooves both King and his publisher to hire professional editors for a high-quality, professional edit. And what is true for fiction is trebly true for nonfiction!

In the case of the IPCC, the scientist who publicized the errors noted, “It is a very shoddily written section. It wasn’t copy-edited properly.” Is this a cautionary tale for publishers and authors? It should be. Instead of focusing on the science behind the report, the focus has shifted to the poor editing and via the poor editing to overall credibility.

Similarly, in the world of ebooks the debate about quality (or lack thereof) has shifted the debate from the author’s story to the shoddy craftsmanship of the ebook sold by the publisher. The “story” is no longer how good or bad a particular book’s storyline is, but how riddled with editorial errors it is. What is it about publishers that makes it difficult for them to grasp the simple fact that to get professional editing, one must hire professional editors and that professional editors do not work for minimum wage! (I say this because publishers will retort that they do hire editors; what they don’t confess is that they hire the least expensive editor possible regardless of whether or not the editor is otherwise qualified.)

Editing is a skill. Bad editing, as the IPCC discovered, can lead to disastrous results. Publishers are learning the same thing as the litany of complaints keeps growing. And, as publishers have also learned, when the focus shifts to poor quality, publishers lose the debate — even the opportunity to debate — the core issue: value. That occurs because poor editing leads readers to believe there is no value; something with no value cannot command a high price. (It was not so long ago that Princeton University Press had to recall a book’s entire press run because of complaints about shoddy editing and in 2009 the American Psychological Association replaced first printings of its new style manual for the same reason.) Remember the Yugo automobile, the poster child for poor quality and little value?

Publishers are on that same Yugo path — slogging their way to becoming the new poster child for poor quality products. Too many books are replete with errors — factual, grammatical, syntactical, and spelling — with individual paragraphs having multiple errors, and most pages having several errors. This problem has become more acute within the past quarter century, there seeming to be a causal relationship between consolidation of publishers into mega media companies and a concurrent decrease in editorial funding.

There was a time when “pride of authorship” referred not only to the author’s pride but to the publisher’s pride. Publisher pride seems to have waned as the focus on quarterly profits has waxed. For the want of a professional editor, the errors in the IPCC report have caused a tectonic shift in the climate change debate from whether global warming is fact to whether or not the fact-finders are credible purveyors of fact. Lack of professional editing in ebooks is causing a similar tectonic shift as ebookers debate the value of ebooks compared to the pricing.

Professional editing is not the panacea for all that troubles the publishing industry, but a return to using professional editors to edit books will allow the debate to refocus on concerns other than wholesale lack of value.

Professional Editors: Publishers and Authors Need Them (Part 2)

As noted in Part 1, one way to distinguish between a professional editor and your neighbor who poses as one, is by their style guide library. The professional knows that to do a good job one needs to have good resources and to be familiar with them. The Internet is not a substitute for a professional editor’s library.

In addition to style manuals, a professional editor’s library includes usage books, that is, books that discuss and provide guidance on correct usage of language. For example, my library includes Garner’s Modern American Usage; Merriam Webster’s Dictionary of English Usage; Mathews’ Dictionary of Americanisms; The American Heritage Guide to Contemporary Usage and Style; Brown’s Composition of Scientific Words; The BBI Dictionary of English Word Combinations; The New Fowler’s Modern English Usage; H.L. Mencken’s multivolume work The American Language: An Inquiry into the Development of English in the United States; and Sheehan’s Word Parts Dictionary, among other language resources.

We haven’t even gotten to the dictionaries and grammar guides, or the books about language cognition and origins, all of which form a part of a professional editor’s library. The editor’s resource library is an important facet of what distinguishes the professional from the casual editor. Another facet is the professional editor’s skill with and knowledge of these resources.

Authors and publishers who care about the quality of their books care about the professionalism of their editors. They recognize that a professional editor is skilled and knowledgeable and brings something important to the book: the firming of the communication link between the author and the reader.

It is this communication link to which the usage guides are inextricably connected. Usage guides help an editor choose the right word. Is it Arkansan, Arkansawyer, or Arkie? How about aren’t I vs. amn’t I vs. an’t I? Given the choice, which of the following is the superior phrase: catch fire or catch on fire? Or cater-corner vs. catter-corner vs. kitty-corner?

A professional editor considers who is the intended audience for the book. If a book is being written for a local audience, then localisms may be excellent word choices, although not so fine for a national audience. But what about a term that has been broadly heard but little understood?

Recently, I read a news article that used the term mugwump. How many readers understood the term or its origins? A professional editor would look at the context and apply the correct definition. Before the 1880s, mugwump meant an important person, the high-muck-a-muck. In the 1880s, it became transformed to refer to Republicans who supported the Democrats’ presidential candidate. Today it means an independent. Is this important? If you are writing a book whose events take place in 1884, don’t you want your readers to understand what the term meant in 1884, not what it means today or meant in 1801?

So we return to the question of book quality. It is these skills and knowledge that professional editors bring to a manuscript. But publishers are increasingly less interested in those skills and knowledge because their accountants see no financial gain in emphasizing editorial quality. And authors too often believe that their manuscript as given to the publisher is “perfect”; they see no gain in paying for a professional editor, much less any editing at all.

A book’s quality is amalgam of multiple endeavors, not least of which is the author’s original creativity. Equally important, however, is editing by a professional who respects his or her profession enough to invest time and money to continuously acquire the skills, knowledge, and resources that distinguish the professional editor from all other claimants to the editorial mantle. Publishers and authors who fail to recognize that distinction — between professional and nonprofessional editing — embark on the road to mediocre quality at best.

This mediocrity brings with it a backlash from consumers who are unwilling to pay the wanted price, who do not buy future books written by the author, and who give negative reviews. This backlash is increasingly evident in the ebookers’ revolt over pricing and quality in ebooks.

Publishers need to recognize that they cannot continue to pay slave wages and expect professional editing — the two simply do not go hand-in-hand. Professional editing and quality do, however, go hand-in-hand.

Professional Editors: Publishers and Authors Need Them (Part 1)

One way to distinguish between a professional editor and your neighbor who poses as one, is by their resource library. The professional editor knows that to do a quality job one needs to have good resources and to be familiar with them. The Internet is not a substitute for a professional editor’s library (would you trust your doctor’s drug guide to Wikipedia?). Professional editing does equate with a quality book.

Professional editors are familiar with and use style guides, for example, The Chicago Manual of Style; Scientific Style and Format; AMA Manual of Style; and Publication Manual of the American Psychological Association. There are more — lots more. It seems that every professional and academic discipline has its own style. They also own and use language usage guides, which are discussed in Part 2 of this article.

Style guides are important because a good author is a storyteller but not necessarily a good writer. Good writing includes logical organization and making sure that there is a flow and consistency to a story. It does no good, for example, to begin a chapter in the year 1861 and suddenly, three paragraphs later, the year is 1965, unless the between paragraphs transition the reader from 1861 to 1965. 

Think of the chaos there would be if a book’s references were formatted willy-nilly, or capitalization shifted all over the place, or spelling changed page by page, or compound adjectives (the hyphenated kind) were sometimes hyphenated and sometimes not. How would meaning be transferred from author to reader?

English was a language with no rules until a few hundred years ago. Then authors began to realize that they could no longer read and understand writings from 100 years earlier, and wondered whether their work will be readable 100 years later. Thus began the quest to standardize English. English is still an unruly language, thus the need for style guides — style guides bring order to chaos. Style guides help ensure consistency so that authors can write and know that how their book uses language will convey the author’s meaning — today and tomorrow — because everyone is on the same page.

True, the average reader doesn’t sit with the Chicago Manual of Style next to them. Most readers don’t know it exists. It is the publisher and the editor who need to know and need to apply the rules — as arbitrary as they may be — to the author’s manuscript. Why? So that a diverse population with diverse linguistic skills can join together and understand the author’s work. The style guides provide a common meeting ground and act as arbiters of language, broadening the ability of the audience to read and understand the author’s words. More importantly, by bringing order to chaos the rules heighten quality — something publishers need to do in the age of ebooks.

The professional editor is a master of the relevant style guides and knows the rules of grammar, syntax, spelling, and other language conventions. Professional editors continuously invest in the tools of their profession and tend to read widely. Professional editors know that their primary responsibilities are to ensure consistency, accuracy, and universality, by which I mean that the author’s work meets and embraces language conventions that ensure the widest possible audience can read and understand the author’s work: The professional editor is a communication enhancer who firms up the link between the author and the reader.

Alas, publishers and authors often look for the least expensive way to produce a book, which means that professional editors with skills, experience, and knowledge are often not hired. Why? Because the professional editor’s work is not readily discernible. A professional editor’s work is like polishing silver — adding shine and luster, not replacing the silver. 

A smart author will insist on the publisher hiring a professional editor; a smart publisher will insist on hiring a professional editor and pay a professional price, recognizing that poor editorial work tarnishes the author’s — and publisher’s — silver. A professional editor’s sure hand can make the difference between an also-ran and a bestseller.

Both authors and publishers should recognize that there is more to being a professional editor than simply calling oneself an editor.

Tomorrow the discussion continues with a look at language usage resources and why they are important parts of an editor’s library.

From the Frying Pan to the Fire: Amazon to Apple

Let me begin by saying this: I just don’t get it. What hallucinogen are publishers imbibing? The music industry would love to trump Apple and the publishing industry would love to trump Amazon; but only the movie industry is thinking the matter through.

There are lots of problems with publishing’s looking to Apple for salvation; here are a few: First, if there is a bigger control freak in the media industry than Jeff Bezos, it is Steve Jobs. Have publishers forgotten that the music industry was unhappy with iTunes pricing but couldn’t budge Jobs? Publishers can’t budge Amazon’s $9.99 pricing, what are they going to do when Jobs demands $6.99 pricing?

Second, if rumors are right and that what Apple is bringing to the table is a tablet and not a dedicated reading device, what makes publishers think tablet buyers will suddenly become book buyers? Why do publishers think the tablet will be the Damocletian sword over Amazon’s head? Or do publishers plan to simply cut out Amazon altogether even though it commands 20% or more of the book-buying market?

And what about the expected premium price for the Apple tablet? If book buyers are complaining now about what a Sony Reader or Amazon Kindle costs, what makes publishers think they’ll jump at Apple’s pricing?

In addition, studies show that when a multimedia device, which the tablet will be, is used, the user’s time is spent listening to or watching audio and video media or playing games, not reading books. All a publisher needs to do is read the most recent Kaiser Family Foundation study of children and teens ages 8 to 18 years and how they use their multimedia devices for the publishers to know they are barking up the wrong tree.

Third, are publishers so lacking in imagination that they have to give up control of their industry to not one player but two? What are they going to do when Google starts throwing its weight around? Close their doors?

Yes, there has been drooling by some ebookers for the Apple tablet, with pundits assuming its arrival will cure whatever ails all media businesses. But what ails publishers is not curable by any device. It’s like having a fever and assuming that a thermometer will cure it — it isn’t going to happen. If anything, publishers are setting themselves up to fail and fail mightily, especially if there is an initial but unsustained burst in book sales concurrent with Apple tablet sales.

Let’s assume that publishers get very favorable terms from Apple. How long do publishers think that honeymoon will last? My guess: until Jobs decides that people really do read books and realizes that he needs to do to publishers what he did to the music companies. This may be a win for consumers, but not for publishers.

As each day goes by, I worry more about the world of publishing. Publishers have been important to the spread of quality literature and of knowledge, but they are rapidly marching to their funeral pyres. Publishers need to recognize that their salvation lies in their own hands, not in the hands of the Bezos’ and Jobs’ of the world.

If publishers need a role model to emulate, look to the video industry. The Economist reported that 5 of the 6 big studios (Disney is working on a similar solution by itself) want to join, along with some other firms and retailers — but not Apple — to create a single download video format and a single firm to track purchases. They are looking to create what I called a repository in an earlier Modest Proposal. The consumer will buy the video online at a partnering retailer who will then link the buyer to the repository. According to The Economist, “Consumers will be able to buy a film once and then play it on different gadgets….[The] initiative aims to stop a company doing to film what Apple has done to music and Amazon threatens to do to electronic books.” At least the movie industry is thinking with its brains and not sitting on them. Shouldn’t publishers be doing this?

Publishers need to grapple with their problems themselves and not look to external fixes by companies and persons that they ultimately can neither influence nor control. Trying to use Apple to thwart Amazon is jumping from the frying pan of to the fire — it is the tolling of the death bells for the big publishers.

A Modest Proposal III: Dying Days of Giant Publishers (Part 2)

In yesterday’s post, I gave four reasons (five if you want to count returns separately) why the giant publishers are on their funeral march: they are too big to react quickly to market conditions; they haven’t learned the Dell lesson; they let others sit in the catbird’s seat of deciding industry policy; and they haven’t come to grips with who are their future customers. Essentially, the giant publishers are early 20th century behemoths who have yet to adapt to 21st century technology and consumers.

These are interrelated problems, all stemming from the same root, which is the giant publisher having ceded industry leadership to outsiders.

In a way, the Dell lesson — Tell the customer he can have it his way and then limit the options — was tackled in my end-the-paperback proposal. Publishers have to learn to create their markets, not be led by markets imposed on them. This is the difference between Amazon, Apple, Google, and the giant publishers.

Amazon led the market by creating the Kindle and Kindle editions, and Apple and Google are inventing their own book markets. The giant publishers are trying to catch up. But Amazon (soon to be joined by Apple and Google), by leading the market defined it and is setting the terms. Amazon is also applying the Dell lesson: You can have an ebook in any format you want as long as it is a Kindle format. The giant publishers, who should have led, instead fumbled so badly that they are in disarray over how to catch up. More importantly, perhaps, for the publishers is that Amazon is turning them into the bad guys in the public relations war for the consumer soul. It’s the problem of the giant publishers being a sumo wrestler when a ballerina is needed — and not recognizing the problem.

To survive the days ahead, the giant publishers need to lead the marketplace, not follow it. If it is true that ebooks are the wave of the future, then publishers need to grab hold of this market and lead it or prepare their funeral pyres.

Publishers need to gain the upper hand in the pricing, geographical, DRM (digital rights management), and format wars. They have started by slowly adopting ePub as the uniform format, but otherwise are in disarray.

My solution: Create an international book repository owned and operated by a consortium of publishers!

Publishers should unite and create a single international repository for every ebook published by member publishers and by self-publishers. Membership should be open to all ebooks with an ISBN. All books would be kept on the repository’s servers. Consumers would buy a book once from a bookseller such as Smashwords or Barnes & Noble, but then be able to read the book on any device they own, without the need to transfer the book from device to device.

Publishers would create a single software system so that if a buyer started reading a book on his dedicated device at home, he could continue reading from the place he bookmarked on his smartphone while commuting to work, on his computer during lunch, on the smartphone for the commute home, and on his dedicated device at home. The repository would also give consumers the option to download a copy of the purchased book to a single device, just as is done now.

This would benefit both consumers and publishers in multiple ways. Here are a few: Because the books would be held remotely, they would be device agnostic. Publishers could use a single uniform format with a single uniform DRM scheme that every device manufacturer could use royalty free. Publishers could enable consumer sharing on a book-by-book basis by allowing, for example, the book buyer to give some number of named individuals access to the book, giving buyers some reasonable ability to share ebooks; different books could have different sharing limits. Consumers could buy a book and access it anywhere at anytime on any device capable of displaying the text — today, tomorrow, and for 99 years into the future. 

The idea is not to replace booksellers. Rather, the bookselling world could continue as is but when an ebook is bought, access to the book would shift from the bookseller to the repository. It could be done as “smoothly and flawlessly” as done now, even with automatic wireless downloading.  With the repository, publishers will lead the ebook marketplace and enhance their survival prospects.

A Modest Proposal III: Dying Days of Giant Publishers (Part 1)

In two earlier Modest Proposal posts (A 21st Century Publishing Model and Book Warranty) I offered suggestions for changes publishers could (and should) consider to their business model. The first proposal, to make ebooks the new paperbacks and to publish only hardcover and ebook versions of books, was not well received by consumers. (Interestingly, some of the most vocal opposition to demising paperbacks came from people who claim to only buy ebooks!) The second proposal was much better received, probably because everyone loves perfection and loves the idea that something comes with a warranty.

Now comes my third modest proposal, which begins with a prediction: The big, multinational book publishers have begun their funeral march. Within a decade or two, possibly sooner, there will no longer be giants of publishing; instead there will be a reversion to the preconsolidation era with numerous small (by comparison to today’s Hachettes and Random Houses) publishers dominating the industry.

Before getting to my suggestions about what today’s giants can do to stave off their funeral orations, let’s consider why they are now walking that funeral path. What follows are a sample of publishing’s self-destruct problems.

First, they are too big to react with grace and ease to changes in the publishing world. Imagine a sumo wrestler dancing Swan Lake. Decisions that need to be made quickly and locally cannot be made because there is always another corporate level to consult. It’s hard to survive when you need to turn on a dime but can only turn on a half dollar.

Second, they haven’t learned what I call the Dell lesson: Tell the customer he can have it his way and then limit the options. Dell always touted how customizable their computers were. Yet try to really customize a Dell computer — you can’t; Dell has limited options for particular computer models and you can’t take options from one model line to another. This is no different from what the automobile industry has done for decades. To get one feature you want, you have to buy an option package or do without. Or, better yet, cable TV. Few choices there. You pay for sports channels whether you want them or not. Unlike other industries, publishers let others dictate what they will do and offer. Publishers need to rethink this action model.

Third, publishers haven’t yet recognized where they are in the policy-setting chain. Although they should be in the catbird’s seat, instead it is the distributors and the retailers who drive publisher policies. What is the single most hurtful policy to publishers’ bottom line today? My guess is the returns policy. Who does this policy help: distributors and retailers because they do not have to pay for ordered product. No other industry has such a policy and no industry — including publishing — offers such a system to the consumer. This policy of returns for books started decades ago for a reason that was valid decades ago but is no longer valid or sustainable, yet publishers can’t stop killing themselves — it’s the fear of being first.

Publishers need to regain the catbird’s seat and immediately do away with returns. If, say, Random House were to unilaterally declare an end to the current returns system, most publishers would soon follow. Unlike computers and automobiles, there is no substitute for a Dan Brown best-selling novel that would give a competitor a leg up by keeping the return policy. Readers either want Brown’s novel or they don’t; no retailer is going to tell a customer that they can’t buy the Brown novel because the publisher doesn’t accept returns so the retailer won’t stock the book, but here is Joe Unknowns’ similar novel instead.

The returns problem highlights a fourth reason: Publishers are confused about who are their customers. Until recently, except occasionally, the giant publishers didn’t sell books directly to readers. Although the publisher has to produce books that readers want to buy, their immediate customers today are the middlemen between publishers and the readers. With the changes that ebooks are bringing to publishing, the giants will die on the vine if they do not rethink who their customers will be in the coming years and their relationship with them.

Alas, there is more to say, so this discussion continues in tomorrow’s post, wherein I reveal my modest proposal.

The eBook Wars: The Gatekeeper Role

A constant point of discussion and contention on ebook forums is publisher pricing. The discussion almost always devolves into a firm statement that publishers contribute little to the value of an author’s work and that the wave of the future is for authors to do everything that the publisher does themselves.

I don’t know if that is the wave of the future, but I do know that there is a definite misperception about what goes into the making of a successful book.

The argument against publishers goes along many threads, all fueled by objections to publisher release delays of an ebook, the ebook’s quality, and the price of the ebook, among others. (I offered a suggestion addressing the quality issue in an earlier post: A Modest Proposal II: Book Warranty.)

The do-away-with-publishers solution rests on the assumptions that authors can establish their own websites to sell their books, are willing to sell those ebooks at a lower price, and will provide the good book quality readers want, and that readers will find them, making both the reader and the author winners. Supporters of this solution cite already well-known authors who are doing this, but fail to indicate how currently unknown authors would become known. Finding a good book to read is the crux of the problem.

Publishers, for better or worse, serve at least as initial gatekeepers, helping separate some of the wheat manuscripts from most of the chaff manuscripts. Publishers have an incentive for doing so: the need to make a return on investment. Contrast this with an author. Yes, authors hope to make money from their endeavors, or at least not embarrass themselves, but it is the rare author who can objectively look at his or her 2-year-long writing effort and proclaim it garbage not worth publishing. Besides, what does the author lose by putting it up on the Internet for 99 cents? Even if the book is good, how does the author go about selling 20,000 copies? Can the author afford to spend money to market the book? Will an author hesitate, thinking about what happens if he or she does invest his or her life savings but only sells 250 copies at 99 cents?

If a publisher thinks an author’s writing has potential, the publisher invests in the manuscript and the author, maybe not hundreds of thousands of dollars, but certainly thousands of dollars.

This effort and a publisher’s imprimatur is not equatable with great writing or storytelling. Rather, it is equatable with better writing and storytelling. And that is just what publishers do — gamble their money on the commercial viability of an author’s writing.

Publishers gamble that the time spent reviewing the manuscript initially and the money spent on editing (Editor, Editor, Everywhere an Editor, an earlier post discusses editing), typesetting, design, marketing, and distribution will result in a profit for both the author and the publisher. (Disclosure: I am an editor and owner of Freelance Editorial Services, which provides editorial and production services to publishers and authors.)

What about the unknown author who goes directly to the reader? Granted that the self-publishing author’s job has gotten easier and cheaper with print on demand and the Internet, but easier and cheaper isn’t the same as manageable or successful, especially if the author wants more than to be able to say, “I am a published author.” Traditional publishers spend thousands of dollars on editorial and production related to a manuscript and on marketing. How many authors will reach into their own pocket to spend money that might not be recouped?

Publishers are selective. I agree that they do not always make a wise decision, but their screening makes my job as consumer infinitely easier. The Wall Street Journal recently reported on Authonomy.com, a slushpile website established by HarperCollins in 2008 where authors can upload their manuscripts and readers read and rate the manuscripts. HarperCollins editors then read the top 5 rated manuscripts each month. Since its start, about 10,000 manuscripts have been uploaded of which HarperCollins bought 4 (a rate of 0.0004%); everyone wants to be a great writer but not everyone is a great writer. I look at it as having saved me from at least 9,000 buying mistakes as a consumer. 

Publishers play a very important role as gatekeeper for most consumers. The notion that publishers should simply go away and authors should sell direct to consumer through their website is a great idea that isn’t viable, except, perhaps, for the already well-known author (who, it is worth noting, became well-known with the help of a publisher).

If you think a book you bought was bad and should not have been published, think about those manuscripts that didn’t pass the gatekeeper. Publishers save readers from the having to deal with the worst writing, not from dealing with bad writing.

The Guillotine of Change: Off With their Heads

It is an interesting phenomenon. According to a vocal group of ebook devotees, publishers must change their business model or die because they are not giving ebook consumers what they want: very inexpensive, perfectly edited and formatted, DRM-free ebooks released no later than the day that the hardcover version is released. Fail to give me what I want, then off with your head!

Amidst all this posturing there is a deafening silence from the publishers.

No industry changes overnight, so it is certain that publishers aren’t going to change their business model tomorrow just because a handful of people demand it. It’s like the digital rights management (DRM) argument. There is a group of Kindlers who demand that Amazon do away with DRM. If Amazon isn’t lying through its teeth, Kindles and Kindle edition ebooks with DRM are selling like hotcakes with few complaints about Kindle’s DRM and Amazon goes merrily on its own DRM way. Why? Because the clamor for no DRM is really a hoarse whisper. There are a handful of objectors out of the universe of ebook buyers. But the anger of the devotees, as few as they may be in number, continues and becomes increasingly strident, with neither side willing to “hear” the other.

How did we get to this point in the nascent war about ebooks? What is it that makes each side in the debate so planted in concrete that rational discourse is impossible?

I haven’t quite put my finger on the cause of this dissatisfaction other than recognizing it as the birth child of the Internet. A colleague who lambasts book publishers for their DRM and pricing, merrily goes along with his cable TV bill, even though he has no choice regarding TV provider but can choose from among myriad publishers, some with and some without DRM and objectionable pricing. Similarly, I go merrily along with publishers’ use of DRM and exercise my right to not buy a DRMed book, but I vigorously protest any attempt by cable to increase my TV cost. Perhaps the difference is that with ebooks I have a choice but with cable TV I don’t; there is competition in the ebook world, whereas there is no competition in the cable TV world, so I feel helpless in the latter but empowered in the former.

But perhaps we are at this point because of a more fundamental issue: The Age of the Internet has birthed a belief among some consumers that they are entitled to everything they want when they want it at a price they want to pay. This strikes me as being particularly true in the arguments of the ebookers. Although they demand, the questions remain: What entitles them to an ebook version of a book? What entitles them to a price threshold of $9.99? What entitles them to a DRM-free ebook? What entitles them to simultaneous release of an ebook and a hardcover?

Granted that the market can dictate terms. Eventually, the ebook market may require publishers to do away with DRM, release all book formats simultaneously, price no ebook higher than $9.99, and the like, but market-forced changes are significantly different than demands based on beliefs of entitlement. Entitlement says I have rights that are more valuable than your rights (or that you have no rights), whereas market-forced change says we both have rights and they are equally valuable, but one of us will give way because the market forced it.

I don’t know how this will shakeout, but it is clear to me that all parties will need to compromise. The ebookers have thrown down the gauntlet, the publishers need to pick it up and accept the challenge. Simply because some ebookers have decided that publishers have no role to play in the future ebook world doesn’t make it so. Publishers need to redefine themselves in 21st century terms, not rehash 20th century concepts.

Publishers do have a role to play, even if it is nothing more than preventing publishing from becoming wholly anarchic. But until publishers define their role in an ebook world, the call to off their heads will continue. If the call remains unchallenged long enough, it will become self-fullfilling, with publishers having no one to blame but themselves.