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.

17 Comments »

  1. I don’t see how taking away something customers want (paperbacks) is going to help publishers and authors make money. Perhaps the root of the problem is that publishers are always looking to change customer behavior rather than respond to customer desires.

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    Comment by Jon — January 8, 2010 @ 4:13 pm | Reply

    • Jon, the current problem is that publishers fear that consumers will want ebooks only at prices that are even less than the price of paperback and further fear that as ebooks gain in popularity, margins will be reduced. One way to ameliorate the possibility of this occurring is to replace paperbacks with ebooks. Fewer choices means less dilution of margins. What alternative do you suggest? Sometimes one cannot respond to customer desires and survive. Under the current model, to respond to customer desires in the case of ebooks would essentially mean doing away with publishers.

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      Comment by americaneditor — January 8, 2010 @ 5:57 pm | Reply

      • It’s not a fear, it’s a reality. Customers know that creating and distributing an ebook is much cheaper, and they know that an ebook is less valuable (You can’t resell it, and in the case of DRMed books, you don’t even truly own it). Basic economics dictates that ebooks should be cheaper.

        If one can’t respond to customer desires and survive, then one probably shouldn’t survive. Publishers don’t have some inherent right to make money if their services are no longer needed.

        That’s not to say that publishers aren’t needed. But they need to think about what’s going to happen when no one needs a publisher for distribution anymore. Any author with a website can distribute an ebook. And print-on-demand gets better all the time. Maybe publishers need to think of themselves more as marketers than book printers.

        As for alternatives, you can see one that I’m working on by clicking my name.

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        Comment by Jon — January 8, 2010 @ 6:41 pm | Reply

  2. […] Wilk (Don’t ignore the reader: E-book pricing models and theories of value); the other, from Richard Adlin (a proposal to kill off […]

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    Pingback by Two TeleRead e-book posts linked from The New Yorker’s site: One more reason to write for us? | TeleRead: Bring the E-Books Home — January 9, 2010 @ 2:13 am | Reply

  3. this is certainly left field thinking but unfortunately it is just that left field.

    It is based on a number of assumptions which don’t hold water.

    The consumer is willing to forgo the paperback for the ebook – why?

    The hardback 3 months is based on a release model that is not consumer centric but publisher profit centric and by continuing this ecoenomic discrimination you continue to miss the point that there is no differentuation today between H P and eB. Why are we merely replicating 250 pages? The assumption here is that the only difference between a, B and c is format. This is not how many would see digital evolving and is angain a publisher 250 page view of life.

    The paperback is a portable reader don’t kill it, the hardback is a collector item don’t kill it. The ebook is a comsumable limited life expectancy and restricted product and should be seen as such. Do you expect to see be able to read the ebook you bought today in say 20 years time? Books often become decoration, collections and define who we are and that is why hardbacks and paperbacks are great pbook readers

    I think you are mixing yesterday publishing thinking with today’s reality and trying to find a bridge that isn’t there
    4.

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    Comment by Martyn Daniels — January 11, 2010 @ 10:05 am | Reply

  4. The issue with ebooks is not that they bring in less revenue but that most publishers are shackled with legacy cost and business structures that they have to continue to finance (or else rapidly shed).

    Sadly your proposal, novel as it is, doesn’t answer the structural issue publishers face and it will therefore fail.

    How would a publisher be set of it jettisoned its distribution arm, outsourced its sales division retaining only the elements of its sales force that allowed it to get direct to consumers knowing as it did this for each book or genre how many readers desired hardback, paperback or ebook and producing at a price that suited them and the consumer and working with their customer and for their authors rather than for the legacy business structure that brings no value!

    The future of publishing is bright, maybe not so much for publishers but there are intelligent and relevant way for them to adapt and change, I humbly suggest eliminating one of the true (book related) innovations of the 20th centuries, is not one of them!

    Eoin

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    Comment by eoinpurcell — January 11, 2010 @ 10:25 am | Reply

  5. […] A Modest Proposal: A 21st Century Publishing Model « An American Editor 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. (tags: ebooks) This entry was written by delicious and posted on at 10:30 am and filed under delicious. Bookmark the permalink. Follow any comments here with the RSS feed for this post. Post a comment or leave a trackback: Trackback URL. […]

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    Pingback by thedigitalist.net » links for 2010-01-12 — January 12, 2010 @ 10:30 am | Reply

  6. The problem with DRM is that it does not support / is not supported by all the hardware.

    In fact currently we have Mobipocket and Adobe who are adopting exclusive policies – manifacturers can support either on their devices, but not both at the same time (source, the iRex website). Will then the publisher put out books in both formats, paying the fee for both? Or, for that matter, can they, or does a similar restriction apply to publishers as well?

    An expiring DRM does not solve these issues. I’m certainly not going to buy abook I will be able to read in 2 years’ time.

    Now I do own a device which cannot read most DRM protected books. A few years ago, when ereaders were still to come, I was using a browser which did not support the Adobe DRM technology of the time. As a result, I’ve developed an allergy of sorts to DRM, and will just simply not consider buying anything with DRM on it.

    To publishers I say, use watermark if you must, or just don’t bother – your entire catalogue is or will be readily available on “alternative channels” anyway. If I am to pay you, give me some value: an ebook I am sure I can use on any device I own presently or in the future.

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    Comment by Parvati V — January 12, 2010 @ 2:30 pm | Reply

  7. Ah, square peg in a round hole. Attempting to force a legacy business model into an innovative field will only serve to limit the effectiveness of publishers in a digital sphere while pushing more readers towards piracy by overlooking what the customer really wants.

    I point you to the examples of pressplay and MusicNet – they were attempts by the music industry (UMG and Sony with pressplay, EMI, Time Warner and BMG with MusicNet) to replicate the scarcity economics and boom-years of the CD within the digital sphere. Never heard of these companies? That’s because they were terrible. And when Apple came along with iTunes and created a stop-gap between abundant and scarcity economic systems, they sold over a billion songs.

    The lesson? A legacy producer, in this case the publishing industry, needs to be aggressive in pursuing the desire of the consumer in a digital world or risk someone else usurping control.

    Unless this was was written with a great deal of irony, referencing the Swift essay of the same name, then your proposal sounds a lot more like MusicNet than iTunes.

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    Comment by Bradley Robb — January 12, 2010 @ 3:22 pm | Reply

  8. Social comments and analytics for this post…

    This post was mentioned on Twitter by sell_ebooks: A Modest Proposal: A 21st Century Publishing Model: Publishers believe themselves threatened by ebooks, by the ide… http://bit.ly/6nifAY

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    Trackback by uberVU - social comments — January 13, 2010 @ 4:58 pm | Reply

  9. […] publishers, publishing business model, Random House, Sony 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 […]

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    Pingback by A Modest Proposal III: Dying Days of Giant Publishers (Part 1) « An American Editor — January 20, 2010 @ 1:57 pm | Reply

  10. Great post, will have to read the rest of the series (and add to my RSS reader)…

    I would say ebook readers would have to become a whole lot more ubiquitous before there could be any hope of killing the paperback.

    The other really interesting thing was your ideas for handling DRM, but I would simplify it even further. I’ve always thought of DRM as an absolute evil, but now I can see it more as simply another variable in pricing. Everybody knows that DRM only benefits the seller, not the buyer, so pricing should reflect that. I’ll accept DRM, but the book has to be dirt cheap (and I would fully expect to “throw it away” when I’m done). I’ll pay more for DRM-free, for books I actually want to keep long-term. It’s got to be simple and intuitive or it won’t get anywhere..

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    Comment by Dave — January 22, 2010 @ 2:45 pm | Reply

  11. I have to admit to preferring paperbacks, because I often read at night, snuggled into bed and lying on my side; hardcovers just aren’t comfortable for me. At this time, I have no interest in e-books or e-readers, although I realize that could change either in an instant or over time, and I understand the attraction to them.

    Regardless of my opinions and preferences, though, it is fantastic to see such passion about books in any format and the future of publishing in general.

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    Comment by Ruth E. Thaler-Carter — January 24, 2010 @ 5:55 pm | Reply

  12. I’m not sufficiently business savvy to comment on the economics of this proposal. However, I find paperbacks a highly useful and portable “information storage device”. Sure you can load thousands of books on an e-reader but what if it’s damaged, lost, or stolen? You’re SOL regarding those books unless you buy another e-reader. If I lose a paperback or it’s stolen, I can replace it for a reasonable cost. A damaged paperback is often still readable.
    Also your proposal implies that books are purely for information. On French scholar (unfortunately, I’ve forgotten his name at the moment) has stated that the very form of the book (binding, typography, paper, presence of absence of footnotes, indices, appendices, etc.) affects our interpretation of the book. E-books, at least to me, imply that books are good largely for short-term information. Scientific articles, white papers, news updates are perfect texts for e-books. But would Moby Dick, The Grapes of Wrath, Oliver Twist, and The Tin Drum still be classics if circulated solely as e-books?
    Further, could a medical student or a student in the sciences be reasonably expected to read lengthy technical monographs when in e-book form? Converting such manuscripts to electronic form is often more expensive than publishing a standard hard cover.
    Lastly many hardbacks have a shelf-life substantially longer than three months. Since Lord of the Rings was reissued in the late sixties, it has continually appeared as both a paperback and a hardback. Many highly significant academic books remain in hardcover simply because they are more durable.
    The written word, especially in codex form, has lasted for centuries. Kilobytes and megabytes of e-text can disappear in seconds. Can we trust our cultural patrimony to purely electronic form? I think not.

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    Comment by Lynn Kauppi — January 25, 2010 @ 3:30 am | Reply

  13. Generally I do not post on blogs, but I would like to say that this post really forced me to do so, Excellent post!

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    Comment by TSwain — February 1, 2010 @ 11:26 pm | Reply

  14. Your blog is so informative … ..I just bookmarked you….keep up the good work!!!!

    Hey, I found your blog in a new directory of blogs. I dont know how your blog came up, must have been a typo, anyway cool blog, I bookmarked you. 🙂

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    Comment by MrBarns — February 6, 2010 @ 11:50 pm | Reply

  15. This is thought–and comment–provoking. I say keep the paperbacks, ditch the hardcovers, and publish eBooks simultaneously.
    Moreover, I expect that publishing will be moving ever more quickly to POD so the economics of print aren’t hampered by the need to print and pay for thousands of copies that need to be warehoused expensively.

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    Comment by Newt Barrett — May 4, 2011 @ 9:58 am | Reply


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