eBooks: Are eBooks Commodities? Redux

Followers of An American Editor read the previous post, eBooks: Has Amazon Turned eBooks into Commodities?, and probably groaned at my sacrilegious point of view while frantically shaking their heads “no, neither ebooks nor books are commodities.” The argument regarding the commoditization of books is an “old” one for me. A few years ago, Jack Lyon and I made presentations at a Communication Central conference in Rochester, NY and drove to Poughkeepsie, NY together — a 4.5-hour drive. On that drive, this was one of the weighty matters we discussed. Jack was adamant that books are not commodities

I used to think the same, but books, particularly fiction books, have gone the way of athletes and soda pop and become commodities. (By the way, if you haven’t seen the movie Moneyball, starring Jonah Hill and Brad Pitt, which is the story of a major league baseball team coming to the realization that with free agency, baseball players are now commodities, I highly recommend you see it. A true story that is well done as a movie.) What follows is Jack’s response to my commoditization view.

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Books as Dish Soap
by Jack Lyon

In a previous post, Rich Adin discussed ebooks as commodities [see eBooks: Has Amazon Turned eBooks into Commodities?]. This ties into a discussion Rich and I had a couple of years ago about marketing. The conversation went like this:

Jack: I hate the whole corporate mindset that treats books as “product”—just a homogenous mass of words and pages. It’s like marketing dish soap.

Rich: That’s how books should be marketed.

Jack: What?!

Rich: Yep. Just like dish soap. How else would you do it?

I never did come up with a good answer to that question. Finally, I admitted that Rich was right—but I didn’t like it then, and I still don’t!

Let’s go back about 30 years to my first job as editor at a trade publishing house. I really admired the company president, who held not an MBA but a Ph.D. in English literature. Here was an executive who actually cared about books! In a speech to employees, I heard him say this:

“I love the opportunity we have to share what we do with others, to be able to face a customer and honestly say, ‘I love what I’m doing, and I can share something with you that can change your life forever. I can give you a friend that will never, ever leave you.’…It was at least ten years ago that I heard Charles Scribner say, ‘If books become obsolete, I will make candles.’ He didn’t explain his remark, but I think he had in mind that although the electric light has made candles obsolete, candlemaking today is a $100 million industry—not large, but it casts a lovely light, and, after all, books are candles.”

Shortly after that speech, the chairman of the board assigned the president a new position—as CEO of a department store. This man who loved books so much ended up selling kitchen appliances and underwear.

I see the commoditization of books as being analogous to the commoditization of everything else, including people. We no longer have personnel departments; instead, we have human resources. We no longer have leaders who understand a particular industry; instead, we have MBAs who are cranked out like sausages to manage corporations in any industry. With our narrow focus on the bottom line, we’ve ripped the heart out of our businesses—at least, those that used to have one.

So are books commodities, like dish soap? To some degree, yes. As Rich points out, if I can’t get my horror fix from Stephen King, I can easily turn to Dean Koontz. Their books are what economists call “substitute goods.”

If I can’t get Coca-Cola, I’m happy to drink Pepsi (although that’s not true of dedicated Coke drinkers like Rich). If I can’t use Dawn on my dishes, I’m happy to use Dove. Advertisers are aware of this, which is why they spend so much money promoting Coke over Pepsi (and vice versa). Other than the emotional appeal used in marketing, there’s not a lot of difference between one substitute good and another.

The same is true of many genre books, like romance, westerns, and science fiction. I’m usually just as happy to read Orson Scott Card as I am to read Gene Wolfe. But there are exceptions. To me, Wolfe’s There Are Doors is more than just your everyday science-fiction entertainment. Philip K. Dick’s Do Androids Dream of Electric Sheep speaks to me on a level that few other books attain.

And what do we do when a masterpiece like Moby Dick comes along—or The Adventures of Huckleberry Finn, The Little Prince, The Mouse and His Child? Don’t you have a handful of books that have changed your life? I know I do. Such books truly are candles, and their glow illuminates the world in ways nothing else can. In spite of marketers’ promises, I don’t think that’s something dish soap will ever do.

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Jack’s argument is less that books aren’t commodities than it is that some books rise above the level of being a commodity. But in the case of fiction, especially bestseller fiction of today, I still think books are substitutable. If they weren’t, what would I read in my favorite genres as I wait for the next book by a favorite author to become available? And what happens when that favorite author stops writing? Do I suddenly stop reading?

What do you think?

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eBooks: Has Amazon Turned eBooks into Commodities?

For a long time, publishers and readers have argued that each book is unique and thus one cannot substitute, say, a book by Dean Koontz for one by Stephen King. For years I accepted that — until ebooks and agency pricing and Amazon exclusivity. Now, in the case of fiction at least, I think the tides have turned and ebooks demonstrate books and authors are substitutable, that is, (fiction) books are commodities.

Until inflated agency pricing of bestsellers and Amazon’s concerted effort to dominate the ebook market, I would not have considered substituting one author for another author — at least not consciously. Yet the more I think about book buying and reading habits, the more convinced I am that between the criteria genre and author, it is genre that dominates.

Before the advent of ebooks on a wide scale, most readers bought (or borrowed) physical books to read. Physical books, except in the secondary market, were (and are) highly priced. A popular hardcover today, averages $25 and climbing. As a consequence, a reader carefully chose the book to buy and placed the emphasis on author and genre. For $25, the reader wants Tom Clancy, not Jack Unknown.

Amazon began to whittle away at that reader preference with its heavy discounts. Selling bestsellers at $9.99 rather than $25 meant that a reader who had already read Clancy’s latest novel could look for something else within the genre and take a chance on Jack Unknown. The investment was not overwhelming.

Today, Amazon has gone further with ebooks. Tom Clancy’s newest release may cost $14.99 in ebook form (and less in hardcover), but readers are increasingly finding ebooks at $2.99 and less in the same genre by unknown authors worth a try as they wait for the Tom Clancy novel to come down in price — or simply move beyond Clancy altogether.

Amazon, by aggressively courting the indie author and by aggressively pricing indie titles, has expanded what readers will search to find a good book to read. And Amazon has gone the further step with its Prime Lending program and Kindle Direct Publishing programs. Amazon has given its stamp of approval to indie books and authors. Although I think Amazon is not a bookseller to patronize because of its desire to monopolize the integrated book market, it deserves a great deal of credit for changing books into commodities.

I know that many of you will clamor to say that I am wrong, but I ask you to consider this: Once you have bought and read the latest release from your favorite author, do you stop buying and reading books until that author’s next release in 2 or 3 years or do you continue to buy and read books within that genre? And if you do continue to buy and read books, do you continue to be entertained by them or are you only entertained by books written by your favorite author? Finally, do you rush out to buy your favorite author’s newest release or do you wait for a less expensive edition to appear?

If you answer yes to the latter parts of each question (at least the first two questions), then books are commodities and substitutable. And this is the revolution that Amazon has wrought aided by the Agency 6 — the change in how readers view books, especially ebooks. What the Agency 6 claimed they wanted to prevent by instituting agency pricing, they have instead brought about by encouraging, through their actions, Amazon to legitimize the indie marketplace.

Prior to this legitimization, indie books and vanity books were synonymous. That is no longer true. Amazon has made it possible for known and respected authors to go indie and not be negatively viewed by readers. What vanity presses sought for decades, the Agency 6 gave them in months.

The commoditization of books is both good and bad. It is good because a wider range of authors are discovered. The Shayne Parkinsons, Vicki Tyleys, L.J. Sellers, and Richard Tuttles of the indie world — authors who write very well and excellent stories but who were unable (or unwilling) to break into the traditional publishing world — now have a chance to be discovered and claim the large and broad readership their writings deserve. I admit that prior to the commoditization of books, I would not have tried any of these authors. But once indie books were legitimized and books commoditized, I began to explore the indie world and found numerous gems, with some authors and books being better than what I could find in the traditional book world.

Commoditization is, however, also bad — bad for publishing, for authors, and readers — because in coming years the writers who currently make grand incomes from writing — the Stephen Kings and Tom Clancys of publishing — may well find themselves unable to attract an audience for their higher priced efforts. Granted that this is just the marketplace at work, but the pendulum can swing too far in either direction. As the market settles on a low price ceiling, that ceiling will become crowded and with the ease of entry into ebook publishing, it will become increasingly difficult to find the King and Clancy of the 2020s.

A balance is needed, but I have no idea how to bring it about or what that balance should be. Amazon deserves praise and scorn for commoditizing books, but more praise than scorn. In this, Amazon has done well.

A Modest Proposal II: Book Warranty

Part of the problem for publishers in the attempt to justify pricing for books, regardless of the form — ebook or print — is their inability to convince consumers that there is any relationship between the end product and the cost other than barebones greed. Because I am an editor (disclosure time: I am a freelance editor and am owner of Freelance Editorial Services, an independent editorial company), my perspective on what it costs to produce a book and what a publisher does differs from that I would have if I were solely a consumer; however, I am also a consumer of both ebooks and print, and not always a happy one (see my earlier post about why a good editor is important).

What a publisher brings to the table, other than high advances for authors like Stephen King, Dan Brown, and Sarah Palin, is well hidden from the consumer. What the consumer sees is only the end product. This is really no different than manufacturing an automobile or the latest pharmaceutical phenomenon or even a candidate for political office: all we consumers ever see is the finished product. And this is where publishers fail us and themselves: Publishers are doing nothing to instill consumer confidence in the publisher’s product!

Consumers are buying books that are riddled with errors and are frustrated; I really hate paying $40 for a hardcover that has missing footnotes, or $14 for an ebook that regularly confuses the characters names and whether a character is dead or alive. One consumer reported a mystery novel that had the University of Georgia located in North Carolina and Duke University in Georgia. I have bought books with sentences with mixed up homonyms like “It seams that the principal reason for there work was . . .” or with unclear phrases like “using the gene deleted mice” (does the author mean that the gene got rid of the mice or that the mice were missing a particular gene — but for the want of a hyphen there goes clarity), or, as noted earlier, with character names that change nearly as often as the pages are turned.

I’ll grant that there is no such thing as the “perfectly” produced book — human beings are imperfect and make errors — but there is such a thing as quality control and paying for quality. Too many publishers, to appease shareholder appetite for high quarterly profits, are forsaking quality in the editorial process believing that consumers don’t care, or if they do care, will only grumble and buy the next book in the series anyway. This lack of editorial quality is particularly evident in ebooks that created by scanning print editions that are thrust on the market without proofing first, riddled with errors that even a first grader would recognize.

So publishers are losing the public relations battle with consumers. The end product is not worthy of respect, and if the end product is not worthy of respect, neither is the publisher. Thus my second modest proposal: Publishers should warrant the quality of their books!

A consumer wouldn’t buy a warrantless car or TV or  computer or ebook device; consumers believe that a manufacturer’s warranty indicates quality or at least that the manufacturer is willing to stand behind its product. Perhaps it is time for publishers to join the 21st century and say: “We put a lot of care and effort into our books so as to produce a quality book. When you buy our book, we assure you that it is a quality product and if it isn’t, we’ll do something about it: We stand behind every book we sell!”

A book is a commodity, no different from any other commodity except that a book is a warrantless commodity. Consumers are conditioned as a result of years of it being this way, to accept declining book quality: How many books have you returned because of poor quality in the last year? If publishers warranted the quality of their books, there would be an obvious justification, albeit an incomplete one, for the price of books.

The biggest stumbling block is figuring out how to make a warranty work and what would be warranted. When a part fails on an automobile, it is easy to identify the problem and fix it. It isn’t so easy with a book. But there are possibilities. For example, a publisher could warrant that the book contains no more than 15 misused homonyms, no obviously missing text, no more than 15 misspellings, that characters are consistent throughout (e.g., Jane doesn’t suddenly become Jayne), that the book footnote 25 cites really does exist. I’m sure you and publishers could come up with other things worth warranting.

What happens then. Perhaps the way to deal with warranty problems is to have a warranty alert website for each book where readers could post found errors. The publisher would indicate whether the errors will be corrected (and if not, why not), and when a new version will be available (or if no new version, why no new version). The consumer would then have a choice: If the consumer bought an ebook, the consumer could redownload from the original retailer the updated version. Or the consumer could choose to do nothing. With printed books it would be harder, but a little creativity would come up with solutions (e.g., a discount coupon for another book from the publisher, or the return of the book for a refund based on the book’s condition, or something else).

Okay, I admit I haven’t worked out all the details, all the ins and outs. But I offer the idea of a quality warranty because publishers need to convince consumers that publishers aren’t just greedy corporations (see The eBook Wars: The Price Battle (I)) who have no concern for their customers; they have to convince consumers that they bring something worthwhile to the world of publishing, something that is not easily replaced, and offering a quality warranty could be one step in that process. What do you think?