The Merger Apocalypse

It has been a while since I wrote about ebooks and books in general. For the most part, nothing new or exciting has been happening once you move away from the hardware side of things. But the merger of Random House and Penguin is a comment-worthy event.

In the past, consolidation has been very bad for professional editors. Somehow these mergers and purchases needed to be paid for and with supposedly declining sales in bookworld, the way to pay for the merger was to cut expenses. The primary way to cut expenses has been to cut costs in areas that consumers do not see or notice until too late, thus primarily in editorial and book production.

Past consolidations have resulted in layoff of editorial and production personnel and in lowering of fees paid to freelance editors. In preconsolidation days, there was competition for editorial services, so freelancers could easily raise prices. In postconsolidation days, competition has been greatly reduced, there are fewer publishers to compete with each other for editorial services and thus the (successful) downward pressure on pricing. Freelance editors have little place to turn when where there was once two there is now but one job opportunity (publisher).

The merger of Random House and Penguin, who combined will account for approximately 25% of traditionally published (as opposed to self-published) books, is likely to spur a second merger, that of HarperCollins and Macmillan (or perhaps it will be HarperCollins and Simon and Schuster), who combined will account for at least another 20% of that market. And when pricing for freelancers is set, it will be set companywide — it will make little difference which imprint of the RandomPenguin colossus a freelancer works for, the pricing will be fairly uniform, and increasingly depressed. Or so experience says.

I understand why the merger is occurring: somehow a company has to combat Amazon and Apple and the most logical way is to make it so that Amazon and Apple cannot ignore the publisher’s demands because neither can forego stocking 25% of traditionally published books. (And let us not forget that Amazon is working to build its own publishing behemoth as a foil to these publisher tactics.)

Yet there is another possibility. What if one or both of these megapublishers — RandomPenguin or HarperMacmillan — decides to combat Amazon and Apple directly? It strikes me that the way to do it would be to buy Barnes & Noble. Buying B&N would give them immediate access directly to consumers. They could set terms for distribution with their captive company (bring back agency pricing) and tell Amazon and Apple they, too, can have access to these books but on the same terms as B&N. It would put the publishers back into control quickly, and B&N could be bought cheaply — a couple of billion dollars ought to do it.

Another possibility, although one that would likely have limited success, would be for publishers to start a “first edition” club only for brick-and-mortar stores. B&M stores would be given the exclusive opportunity to sell to consumers collectible first edition-first printing-author signed hardcover books that come with an included ebook copy. If done smartly, it could be an incentive for consumers to enter a b&m bookstore. I think, however, publishers would blow it simply because they seem to blow everything else.

The bottom line is that just as these consolidations are likely to be bad news for editors, they are likely, too, to be bad news for consumers and for sellers like Amazon and Apple.

The consolidation of the publishing industry has been ongoing for 30 years. The problem is that there are fewer large publishers to consolidate today than 30 years ago. It strikes me that if the Justice Department doesn’t think that Amazon dominates the ebook retail market in the United States and that it never did, it would be hard pressed to oppose these consolidations or even the purchase of B&N by a combination of the megapublishers because their market position would be less than that of Amazon.

Are we in for interesting times in publishing? I think more worrisome than interesting. If book quality is noticeably declining preconsolidation, what will it be postconsolidation? If editorial incomes are in decline, how much more rapid will that decline be postconsolidation? If book prices are on the rise, how much faster will they rise postconsolidation?

The question that comes to mind, however, is this: Would RandomPenguin have come about if Amazon were not acting like the Wal-Mart of ebook world? I have no inside information but I suspect that the answer is no, the merger would not have been proposed. I think it is fear of the Amazon vision of the future that is driving this merger, with the final straw being the court’s decision to approve the settlement in the agency pricing case. That settlement gives publishers little leeway against Amazon in the absence of controlling a large enough portion of the market that Amazon cannot do without that portion’s product, which would be the case with RandomPenguin controlling 25% of the traditionally published market.

The more I think about the megapublishers joining to purchase B&N, the more I think it would be a smart move. There are a lot of ways that publisher ownership of the chain could effect cost savings, and with good planning, the physical stores could be made relevant again. More importantly, B&N’s online store is already a well-established and well-known destination for books for consumers, which would relieve publishers of having to create a new online presence and drive traffic to it, a difficult task. And, as noted earlier, it would provide leverage for dealing with Amazon and Apple.

What do you think?

Why is the Book Market Different from the Art Market?

The United States Supreme Court recently heard oral argument in Wiley vs. Kirtsaeng, a copyright case that deals with first resale principles. The gist of the case is this: Kirtsaeng bought textbooks in developing countries where the books sell for less than in the United States and brought them to the United States for resale. (Sounds like the pharmaceutical scene here in the United States: The same drug sells for multiple times more in the United States than in any other country in the world so U.S. citizens get the privilege of subsidizing pharmaceutical sales to other countries. The same is often true in the textbook industry.)

Wiley sued Kirtsaeng for copyright infringement and won; Kirtsaeng has appealed. Kirtsaeng’s defense was primarily the first-sale doctrine, which allows owners to resell, lend out, or give away copyrighted goods without interference. This doctrine is a prime reason why every ebook comes with terms of sale that state that what you are “buying” is a limited license, unlike with a pbook.

Here’s the problem as I see it: If Wiley wins in the Supreme Court, it will be the death knell of all markets for all goods except the primary market, which is the original transfer from manufacturer/copyright owner to licensee. In other words, we won’t own anything, we will simply be licensees subject to the whims of copyright owners. If we don’t own it, how will we dispose of it?

It has always been assumed that the secondary market for artwork is legitimate. No one has tried to put an end to Sotheby’s auctioning artwork that is still under copyright, which, thanks to Mickey Mouse, seems to be never-ending. It is this secondary market that is the value market. It is the market that lifts art prices (value) across the entire spectrum, in both the primary and secondary markets.

Yet this case could spell the end of such secondary markets except for goods that are outside copyright, which means not in our lifetime for currently produced artwork.

More importantly for artists, publishers, and authors alike, all art — regardless of form — that is still under copyright will plummet in value if capitalism works correctly. Why would anyone pay a handsome price for art that they cannot resell 10 years from now. Copyrighted works will have limited market value because there will be real market.

Isn’t this the fight we are experiencing with ebooks? Publishers cry about how piracy and discounting devalues ebooks, but it is really neither that devalues ebooks; instead it is the licensing scheme that intentionally prevents a secondary market that causes the devaluation.

Of course, the counter to that argument is that ebooks are the fastest growing segment of the book market; yet, it remains a small percentage of overall book sales. It may be the fastest growing but it is not yet the majority of sales.

And there is something deceptive about the “fastest growing” statement. What is not disclosed and what I would like to know is how do sales stack up once you eliminate all ebooks whose sales price is less than, say, $5.99, which is the price below which you rarely see the big publishers price their ebooks, and once you eliminate the ultra bestsellers that are trading on the current value of the author’s brand. In other words, I want to know how ebook sales of midlevel books being sold at $7.99 to $14.99 or higher compare to the sales of their pbook versions. I know I’ll never be given that information, but that is really the information we need to determine how “valuable” consumers consider licensed ebooks.

(It probably would also be worthwhile to eliminate from the equation DRM-free ebooks and ebooks that do not have a pbook version except via print on demand. Both skew the numbers. DRM-free ebooks, although technically licensed, are really viewed by consumers [and probably by many authors] as owned in the pbook sense of owned. eBooks that do not have a trade-style pbook version should be excluded because there is not a comparable option against which to test value.)

I suspect that the book industry’s rejoinder to the art market comparison is that unlike a Monet or Edlund painting, which is a unique creation not massed produced, books are not unique and so the secondary market plays no role in setting value. But that, I think, misconstrues what is the secondary market. The secondary market for books includes the paperback version, the remainder, and the used book markets. Each works, in conjunction with the number printed, to limit the primary market for books, which is the hardcover market. It is hard to charge $100 for the new Stephen King novel when a consumer knows that eventually the book will be available as a mass market paperback for a lot less, as a remainder for less than the paperback price, and in a used bookshop for the remainder price or less.

But if you eliminate some of the secondary market in an attempt to shore up value, I think you will fail with books because they lack uniqueness, the one thing that truly sets the art market apart from the book market. It is hard to claim a high value for a book that is available in the millions (it is similar to lithographs of a Renoir in the art market: the lithograph is significantly less valuable than the original painting because it is a replica, not an original, and because there are multiple copies). In the absence of a secondary market for books, consumers will see even less value in the books.

In the case before the Supreme Court, the market in question is the student market, which is a captive market for publishers. It is a market that traditionally has sustained high pricing but has done so because of a confluence of multiple unique factors, such as a requirement to use a particular book in a course. It isn’t a free market. But any decision the Supreme Court makes is likely to affect the whole book market, not just the student book market. Even though Wiley and its cohorts pooh-pooh the effects of a favorable decision on markets outside the student textbook market, I think it is being done with naiveté.

The end of the secondary market in all goods would mean a devaluing of all goods. Either the first sale doctrine is upheld or invalidated; it would be difficult, if not impossible, to fashion a rule just for the student textbook market. As one Justice wondered, how would we dispose of an automobile we wanted to replace because automobiles have numerous items that are copyrighted. We couldn’t sell that auto in the absence of permission from all copyright holders, a difficult task in the absence of the first sale doctrine.

Wiley and friends may regret this action should the first sale doctrine be abrogated.

Are Free eBooks Killing the Market?

Every day I find another traditional publisher is offering free ebooks. Amazon has made a business out of offering free ebooks. And let’s not forget the many indie authors who are offering their ebooks for free.

What is this doing to the market for ebooks?

I admit that I may be atypical in my buying and reading habits, but I do not think so. I have watched my to-be-read (TBR) pile grow dramatically in the past couple of months from fewer than 300 ebooks to more than 1,100 ebooks. If I obtained not another ebook until I read everything in my TBR pile, at my current average rate of reading two to three ebooks per week, I have enough reading material for between 367 and 550 weeks or 7 and 10.5 years.

How has this impacted my buying of ebooks? Greatly! In past years, I bought ebooks regularly. Granted, I was buying mainly indie and low-priced, on-sale traditionally published ebooks, rarely spending more than $6 for an ebook, but I was spending money.

That has all changed. Now I rarely spend any money on an ebook. In the past three months, the only ebook I paid for was Emma Jameson’s Blue Murder, which is her sequel to Ice Blue (which I reviewed in On Books: Ice Blue), at $4.99. Otherwise, all I have done is download free ebooks.

I understand the reason for giving ebooks away for free. How else are authors to attract new readers? This is particularly true when one considers how many ebooks are published each year in the United States alone — more than one million. Some how one has to stand out from the crowd. But with the ever-increasing number of free ebooks, giving away ebooks is less of a way to stand out.

The problem is that too often all of the ebooks in a series (or at least many of the ebooks in a series) or older, standalone titles by an author are given away. All an ebooker need do is wait. Giving away the first book in a series makes a lot of sense to me. If I like the first book, I’ll buy the subsequent books. But when I see that if I have patience I’ll be able to get the subsequent books free, too, then I don’t rush to buy.

The giving away of the free ebooks has brought about another problem: the decline of the must-read author list. I’ve noted before that my must-read author list has signficantly changed over the past few years. In past years, I had a list of more than 20 authors whose books I bought in hardcover as soon as published; today that list is effectively two authors. My must-read ebook author list has grown, but that is a list of indie authors, not traditionally published authors.

Again, the problem is free ebooks. As a consumer, I like free. However, free has so radically altered my book-buying habits — and I suspect the book-buying habits of many readers — that I find it difficult to see a rosy future for publishers, whether traditional or self-publishers. It is because of this that I wonder what lies behind the thinking of publishers who give their ebooks away, especially those who do so in one of Amazon’s programs.

Publishers who participate in Amazon giveaways double hex themselves. First, they undermine their own argument that ebooks are valuable. Second, they antagonize ebookers like me who do not own Kindles or are not Amazon Prime members and thus unable to get those ebooks for free. I have seen so many ebooks available for free on Amazon that are not available to me for free as a Nook or Sony or Kobo owner, that I have simply resolved, with some limited exceptions, not to buy ebooks. Either I’ll get them for free or not at all.

The Amazon giveaways also tempt me to join the “darkside,” that is, if there is a book in which I am interested, to search for it on pirate sites. The publishers, by their action of giving away the ebook on Amazon, are enticing people to pirate by not making their ebooks free at all ebookstores. When publishers degrade the value of ebooks, their message is received by all readers and is acted on by many readers.

This is a no-win situation for everyone. Ultimately, even readers lose because the incentive to write disappears when there is little to no hope of earning any money for the effort. And even if authors continue to write, the quality of the writing will suffer because no one will see the sense in investing their own money in a product they are going to give away.

It is still early in ebook revolution, so no one really knows what eBook World will look like in a decade or two. But it is pretty clear to me that freebie programs like Amazon’s are detrimental to the overall health of the book market. Authors and publishers should rethink the giving away of their ebooks, other than, perhaps, the first book in a series, before they establish in concrete the reader expectation that “if I just wait, I’ll get it for free, so why pay for it now.” If nothing else, the giving away of ebooks is helping to depress the pricing of ebooks and perhaps driving some ebookers to the pirate sites. My own experience as a buyer of ebooks demonstrates this.

I know that ebooksellers like Amazon are reporting rising ebook sales, but the data I want to see are sales numbers without the one-shot blockbusters and the price levels. The current problem with sales data is that we are seeing only the macro information and so do not know what the real effect free ebooks are having on the market. We are also still in the era of growth in the number of ebookers. When that growth stops, we may get a clearer picture. In the meantime, I know that my spending on ebooks has declined from the thousands of dollars to the tens of dollars and is getting close to zero. I’m sure I’m not the only one who has experienced this decline in spending.

Why Aren’t Publishers Pushing eBooks?

In a post discussing a twit from author Brent Weeks, Nat Hoffhelder of The Digital Reader wondered, in his blog post “Not All of Us Drink a $4 Coffee, Mr. Weeks,” why publishers aren’t “trying to convert paper book buyers to ebook buyers,” considering that publishers make more money on ebooks than on mass market paperbacks. Setting aside the question of whether publishers make more money on ebooks than on mass market paperbacks, the question is truly piercing: Why aren’t publishers trying to convert readers to ebooks?

We can begin with the proposition that ebooks are clearly the tsunami of the future for reading. It is not that the demand for pbooks will disappear entirely, just that ebooks will become greater than a majority share of the book market. One would think that publishers would want to grab the brass ring early while they can still steer the market.

Under the current scheme of things, ebooks are a much better investment than pbooks for publishers. If I buy a pbook, I can share it with an infinite number of friends, none of whom has to buy his or her own copy as long as they are willing to wait. In contrast, assuming I don’t pirate the ebook, every one of my friends who wants to read the ebook has to buy a copy.

OK, I realize that I cannot just shunt aside the pirating problem as if it didn’t exist, but there is a certain reality to pirating — the very vast majority of readers do not pirate ebooks. Instead, they buy a copy and if they share it, it is shared only among immediate family, often by letting the family member borrow the reading device. It is a small number of readers who post pirated copies of books and a small number who go to the trouble of finding them and downloading them.

Offsetting, I think, what believe the cost of pirating to be — or at least a goodly portion of that cost — are that with ebooks, publishers have no physical inventory to maintain, no cost of returns (unsold and overinventoried pbooks are returned by booksellers), errors can be inexpensively fixed (i.e., books do not need to be destroyed and entire print runs lost; with ebooks, the errors can be fixed and the ebook replaced very inexpensively), and sales are certain (under the pbook wholesale model, the publisher sells pbooks to a bookstore but doesn’t know how much it will ultimately be paid for the pbooks because they are subject to returns by both the consumer and the bookseller; contrast this with how the ebook market works). I’m sure there are other offsetting features of ebooks.

The publishers have been focusing, I think, on the wrong numbers when they discuss pirating. They seem to focus on the number of books available rather than on the number of downloads. Haven’t the Harry Potter ebooks demonstrated the problem with piracy numbers? Before the release of the ebooks, pirated versions were available. But their availability doesn’t seem to have affected very much sales of the official-release versions.

Publishers should be pushing ebooks, trying to convert pbook readers to becoming ebookers. In fact, if publishers wanted to twist Amazon’s nose a bit, they could subsidize Barnes & Nobles’ Nook: Buy a Nook for $99 and receive $99 worth of popular books of your choice (not the publisher’s choice) published by XYZ Publisher. Yes, the publishers would probably lose a bit of money to start, but once people get in the habit of reading electronically, few, I think, would stop.

Electronic reading done on an ereader is addictive, or at least I, my wife, and our ebooker friends have found it so. We are reading at least twice the number of books we previously read, and we read a lot. What we are not doing is reading more of the Big 6’s books — in fact, we are reading significantly fewer of those books. The reasons are simple: the big publishers, often called the Agency 6, are not pushing us toward their ebooks but away from their ebooks by their overpricing and their use restrictions.

Yes, pricing is an old argument that keeps coming back, but the bottom line is that it is an argument that cannot be avoided. Brent Weeks’ new novel — regardless of how much time and effort he put into its authorship — simply is not worth $14.99 to many of us. He is not a must-read author. Each reader has his or her own set of must-read authors, that handful of authors for whom we will pay $14.99. But the kicker is that for many of us, we’ll spend that $14.99 on the pbook version, not the ebook version, because that is the way publishers are pushing us.

This is a strategic mistake. It would be better to push us to the ebook version at a significantly lower price so that we become accustomed to buying the ebook version at a “reasonable” price. I have found that my list of must-read authors has dwindled considerably over the past several years. The more ebook reading I do, the less pbook reading I want or am willing to do. Consequently, when a must-read author’s new book arrives, I rethink how “must-read” the author really is.

The more time I spend with my ereader, the less willing I am to pickup a pbook. Yet that unwillingness does not convert to a willingness to substitute the ebook for the pbook when the ebook costs as much or more than the hardcover pbook. Increasingly, I find that I just pass on that “must-read” book and the author becomes a former must-read author. My list of must-read-traditional-publisher authors has dropped from more than 20 authors to 4 — David Weber, Robin Hobb, Harry Turtledove, and L.E. Modesitt, Jr. — although I expect Hobb and Turtledove to be dropped from the list over the next few months. (I also have a list of ebook-only indie authors, like Emma Jameson, Michael Hicks, Vicki Tyley, Shayne Parkinson, Rebecca Forster, and L.J. Sellers, among others, who I consider must-read but whose ebooks are at bargain basement prices compared to what the Big 6 and Brent Weeks want.)

By not pushing ebooks, the Big 6 are shrinking their market rather than expanding it. They are losing a significant number of sales that they (and their authors) should be making. More importantly, from the publishers’ and the authors’ perspectives, they are causing must-read author lists to shrink. As I noted earlier, it is clear that growth in the book marketplace lies in ebooks. pBooks may have some small growth, but not enough to sustain the industry.

Interestingly, I think that if the Big 6 changed their focus and pushed ebooks, they could easily pickup some of the best indie authors and publish them in ebook-only versions. The biggest problem that the indie authors have that the Big 6 could solve for them is getting the word out that they have a new book available.

I think three changes need to be made. First, publishers need to wrap themselves around ebooks as their future and start pushing them and doing so by pushing readers toward ebooks.  Second, they need to come up with a way to make brick-and-mortar bookstores relevant as showrooms for ebooks. Failure to make these changes is likely to exacerbate the decline of the Big 6. Agency pricing at current levels is really only a stopgap measure, not a sustainable plan for the future. Third, the Big 6 have to change their attitude toward indie authors and start looking to become the publisher of the better indie authors by offering intensive, high-quality marketing (along, of course, with better royalties than the standard pbook royalty scheme).

The Uneducated Reader

I’m not an admirer of anonymous reader reviews at Amazon, Barnes & Noble, Smashwords, and other forums where “readers” can anonymously “critique” a book. Occasionally I will look at these so-called reviews, not for information purposes but for their amusement value.

What struck me during a recent perusal of reviews of a book that I think highly of, Shayne Parkinson’s Sentence of Marriage (for my review, see On Books: The Promises to Keep Quartet) were two particular reviews. The first review gave the book a 1-star rating, anonymously, of course, with the statement that the reviewer hadn’t yet read the book. The book wasn’t discussed in the review and if the reviewer’s words are taken as true, he/she had yet to read the book but still rated it, giving a rating that was deliberately designed to lower the overall rating of the book. If you didn’t read the book, why rate it? And why give it a 1-star rating?

The second review that caught my eye was one that several other readers found “helpful.” This review raked the book over the coals. The review gave the book a 1-star rating and was titled “Disturbing, sick, just plain bad.” Rather than summarize the review, I reprint it here:

The main character is stupid, for lack of a better word, and her innocence and lack of instinct when it comes to “Jimmy” is unrealistic, she’s 15, not 8, just clearing that up. This is one of the most disturbing, sad books I’ve ever had the misfortune of reading. I only got about 600 pages in before I skipped to the ending to confirm my suspicions; It doesn’t get any better, in fact, it gets worse. I’m not referring to the writing, that was good enough, but the story in general is just depressing and it serves no real purpose that I could find. This is a Warning, this book was just sad, it helps you fall in love with the characters and then it screws them over in the worst possible way, it’s [sic] doesn’t even have the benefit of being a horror story. There’s no suspense, no action, just plan [sic] and clear depression, it kind of made me want to kill myself….and the characters….

The above review was immediately followed by what amounts to another 1-star anonymous review, this one titled “This author is a sadist.”

To me, these reviews illustrate the problem of what I call the uneducated reader. The reviewers are upset because there is no suspense, no action, no Batman coming to the rescue. The reviewers think that 15-year-old girls in 1890s New Zealand were as streetwise as 10-year-old girls in 2012 New York City. The reviewers apparently lack familiarity with either the genre of the book (not all historical fiction is Vikings on a rampage raping and murdering innocents) or the social mores of the time depicted in the setting of the story.

These reviewers are the type of reader that is the bane of authors — the reader who is clueless and draws baseless and unwarranted conclusions and loudly trumpets his or her uninformed opinion on the Internet. More amazing and sad is that other readers claim to find these “reviews” helpful!

A scan of other anonymous 1-star reviews of Parkinson’s Sentence of Marriage convinces me that either these people never read the book or do not understand what they read or have no familiarity whatsoever with history. If they are writing about a book that they actually read, then they certainly read a book that was much different from the one I read. This is not to say that every reader of Sentence of Marriage has to agree that it is a 5-star book. But at least be honest and fair with any criticism.

Complaints about poor editing, for example, which was the subject of several 1-star anonymous reviews, simply isn’t true. You may find the characters standoffish, the story not compelling, or myriad other things wrong that are important to you as a reader, but in this instance, it is not legitimate to complain about the editing, which is excellent.

Although I have focused on the reviews given Parkinson’s book, the problem isn’t limited to her books. As I said before, the problem is giving free rein to anonymous reviewers who are unknowledgeable about the book being reviewed. This is not to suggest that to review 19th century historical fiction one must have a doctorate in 19th century history; rather, it is to suggest that a reader should be familiar enough with the general subject matter and history so as to not make false comparisons and thereby draw incorrect conclusions — or, if you insist on making comparisons, state what the comparators are.

I have often wondered about the need some readers have to “review” a book. It is not that I think if you have nothing good to say you shouldn’t say anything. Some books deserve negative reviews, but when you give one, be constructive, not just negative, and be factual, don’t make up false reasons.

Personally, I think anonymous reviews and reviewers whose identity cannot be verified should not be permitted to post reviews. I also think that negative reviews that are negative simply because of price should not be permitted. I also think that reviews that state upfront that the reviewer hasn’t read the book should be deleted because they unfairly distort a book’s rating.

Reviews serve an important purpose and reviews that are clearly unfounded or that are based on superfluous items, such as pricing, undermine the credibility of the review process. Perhaps this is why I so admire and enjoy the reviews I read in The New York Review of Books. They have credibility in a world that doesn’t seem to care too much about credibility (this is the disease of the Internet — the demise of the value of credibility).

The online reviews at Amazon, Barnes & Noble, and the like should be challengeable by other readers and by authors. For example, one should be able to challenge a review that gives a rating and the comment that the reviewer hadn’t even read the book. If the challenge is upheld, the review should be removed, especially if the review is anonymous. It is unfair to prospective readers and to authors to let such reviews remain.

The review quoted above that some readers found “helpful” is so far off target that it is ludicrous, yet some, if not all, of the readers who found the review “helpful” won’t have bought the book and read it, thus missing out on what they well may have found, as so many others did, to be a compelling, well-written novel. Such reviewers should be challenged and made to defend their review. More importantly, reviews should be only accepted from verifiable sources, sources that can be flagged if they abuse the review process. These uneducated readers who write anonymous, scathing reviews that bear no relation to the book being reviewed make it difficult, if not impossible, to separate the wheat from the chaff when it comes to indie-authored books.

What do you think?

The Disappearing Book — A Boon for New Authors?

Thanks to Nate Hoffelder at The Digital Reader, I came upon a video, called “The Book That Can’t Wait”:

The essence of the video is that the publisher put together a pbook anthology of new author writings and gave it away (it was in a sealed bag to prevent air from getting at it). The catch was that the ink would disappear in 2 months leaving a blank book.

The idea is touted as a way to force people to read a book rather than simply add it to their To Be Read pile. I’m not sure how effective it is, as the ink doesn’t disappear until the seal wrapping is removed, which means I could add the book to my TBR pile and get to it 12 months later — as long as I didn’t break the wrapping.

But I find the idea of having the ink disappear in 2 months intriguing as a marketing tool. As with most tools, it is double-edged. Because the ink disappears, it is unlikely that readers will pay for the book, which means the publisher has to give it away for free. The other edge is that it is expensive to create such a book, only to give it away for free without assurances that it will actually be read in the immediate future or that if it is read, that the reader will like the contents enough (or some of the contents since this is being used as an anthological introduction to new authors) to buy books written by one or more of the profiled authors.

It also suffers from the marketing problem of being a pbook in what is fast becoming an ebook world.

The advantage to the disappearing ink is that a publisher knows that the book is unlikely to be “harvested” by readers simply because the book is free. This harvesting problem is becoming cause for concern as readers, myself included, grab free books and add them to an ever-growing TBR pile. My TBR pile currently has more books than I could read in 3 years of doing nothing but reading books 12 hours a day, yet I still add to the TBR pile because I don’t want to let bypass me a book that could lead me to a wonderful new reading experience. If it is in my TBR pile, there is a significantly greater likelihood that I will read the book than if I need to try to remember that I am interested in a particular book.

In a way, this is the problem with the publishing industry overall — both traditional and self-publishing — especially ebooks. Every day dozens of new titles are added to the catalogues and a good number of those new additions are books that I might want to read and so want to add to my TBR pile. Perhaps it is the problem of being overwhelmed with choice.

The gimmick of the disappearing ink certainly is an eyecatcher. I suspect that this would be a good way to entice me to set aside what is currently in my TBR pile to tackle the disappearing ink book. I know from past experience that if I find a new author who I like, I will buy the author’s books immediately on finishing the sampler book. In other words, the disappearing ink book could act as an effective method of moving books from the bottom of my TBR pile to the top.

This tactic was done with a pbook but a similar tactic could be done with ebooks. Put together a collection of books by different authors and give it a 60-day life from moment of download. Links could be included to each participating author’s other books, and if you buy a book from a participating author using an included link, you get both a code that extends the lifespan of the disappearing ebook by 30 days and a discount on the purchased ebook.

The biggest problem with this marketing idea is that ebooks that are offered for free are continuously offered for free and thus even if the ebook expires, it is easy enough to redownload. The primary incentive for reading the ebook now would be the link to an expiring discount on other books by the author. Yet, again, the fact that the ebook could be redownloaded tends to negate that advantage as well.

Do you have any ideas on how to adapt the idea of the disappearing ebook to a marketing strategy that could be successful? Or is this really just an idea that is best used for pbooks?

The Value of eBooks: Is $2.99 The New Value

One excuse the big publishers used for going to the agency model of pricing was that Amazon’s $9.99 price for certain bestsellers was undervaluing the books and would establish expectations in ebookers regarding maximum pricing. So, if that is true, how do these very same publishers justify putting certain ebooks on sale for $2.99 or less?

This question popped to mind when Little, Brown, a subsidiary of Hachette, put City of Veils by Zoe Ferraris on sale for $2.99. This is the second mystery book by Ferraris featuring the same Saudi Arabian investigative team. (Although this is not a review of the book, it is worth mentioning that it is a 5-star book that offers both a fascinating insight into Saudi culture and a great mystery.) City of Veils is neither the first nor the last ebook by one of the Agency 6 to be put on sale for $2.99 or less; such a sale seems to be a regular happening. (The first book in the series, Finding Nouf, is listed as discounted to $11.16 from the list price of $13.95, with neither price being a price I would pay for a fiction ebook.)

Which makes me wonder about the “value of ebooks” and whether we are seeing the erosion of price to where, eventually, Agency 6 fiction ebooks will be regularly priced at $7.99 or less and frequently on sale for $2.99 or less.

There has to be something magical about this $2.99 price point. Why $2.99 and not $4.99? Or $3.99? Both prices would be substantial discounts off the list price and even off the standard 20% to 25% discount price. I suspect the answer lies in what experience is rapidly showing as the price point for maximizing volume of sales. I also suspect that publishers are finding that ebookers are unwilling to pay more than $2.99 for an introduction to a previously unknown author. Yet, I don’t see any evidence that after the introduction to a new author, ebookers are running to spend $11+ for other ebooks by the same author — I know I am not.

But regardless of the motivation, isn’t this $2.99 price point setting an expectation among ebookers as to what the correct price for an ebook should be? I find that it cements my belief that ebooks should be both DRM-free (which Tor, a Macmillan subsidiary, will be doing shortly) and list priced at no more than $5.99 and frequently discounted to $2.99 (or less). These Agency 6 discounts are also cementing my belief that I will only rarely pay more than $2.99 for any ebook.

The price point problem is exacerbated by other steps publishers are taking. I recently preordered Spycatcher with a bonus excerpt by Matthew Dunn, published by HarperCollins, one of the Agency 6, for 99¢. (The bonus excerpt is from Dunn’s forthcoming new novel Sentinel, which can be preordered for a whopping $12.99!) At the same time, Spycatcher without the bonus excerpt is available for $9.99. This type of discounting with bonus material included happens regularly. My question to publishers is this: Why would I ever consider buying Sentinel for $12.99 or Spycatcher for $9.99 — neither book nor the author being previously familiar to me — when I expect that at some future date I will be able to buy them for significantly less?  Doesn’t your offering one of the books for 99¢ create an expectation in me, the ebooker? And even if I can’t buy them in the future for $2.99 or less, why would I buy them at all — regardless of how good a read the introductory book is — at a price that has already demonstrated as far too high?

If there is any validity to the complaint of Amazon’s $9.99 price point setting consumer expectations at a price that is unsustainable by the publishing industry, how are publishers fighting that expectation by offering ebooks for $2.99 or less? Why is the publisher’s tactic sustainable but not Amazon’s?

Valuing of ebooks is difficult. Yes, there are costs that can be objectively measured but those per-unit costs diminish with volume sales. I grant that each ebook cannot be looked at in isolation as best-selling ebooks need to subsidize those that do not sell well so that overall there is an industry profit. Yet, where previously the argument was that no ebook should be sold below a price that sustained the industry, which price was somewhere north of $9.99, Agency 6 publishers belie that argument by demonstrating that at least some ebooks can be sold for significantly less without damaging the industry. That action reraises the issue of what is an ebook worth?

The industry has put itself into a straitjacket of its own making. Originally publishers planned to window ebooks. Windowing of ebooks allegedly would let publishers subsequently publish the ebook version of a pbook at much reduced price, more in line with ebooker expectations. But after much protesting from ebookers, publishers ultimately went to simultaneous release. Unfortunately, with simultaneous release, publishers decided they could not price the ebook much lower than the pbook for fear of cannibalizing pbook sales, losing money, and devaluing the book.

Then to shore up the value of ebooks, agency pricing was instituted. It was touted as necessary for the health of the publishing industry — from author to publisher. Now, within the past year, these same publishers are regularly pricing some ebooks at $2.99 or less, shattering the justification for the higher agency pricing.

In the end, I think publishers will find that $2.99 is the magic price point for ebooks. The combination of the self-publishing phenomenon that ebooks have produced, the use of the $2.99-or-less price point by self-publishers, and the apparent willingness of at least some of the Big 6 publishers to discount ebooks — even if for just a limited time — to that price point, will create an expectation in ebookers that publishers will be unable to combat. We may be a few years away from seeing that magic price point, but I suspect it is coming on fast.

The Business of Editing: Do You Want to Be Acknowledged?

On an editing forum, colleague Carolyn Haley asked a thought-provoking question about being acknowledged as a book’s editor by the book’s author if the editor is not satisfied with the quality of the to-be-published product. She wondered, “[H]ow big is the risk involved in allowing my name to be associated with low-quality books?”

Among the questions that are implicit in her question are these: (a) How much control over the final product does an editor really have? (b) Can an author credit an editor without the editor’s approval? (c) What can an editor do to prevent or get acknowledgment by the author? (d) What harm or good can an acknowledgment do? (e) Who determines whether the final book is of low quality or high quality? (f) Does an acknowledgment really matter?

Alas, none of the questions — explicit or implicit — have easy, infallible answers. Although I gave Carolyn a short reply, I thought her question and dilemma was worth exploring among authors, publishers, and editors, not just the editors that frequent the original forum.

I think analysis has to begin with the baseline question: Does an acknowledgment, or lack of one, really matter? I tackled this question by informally surveying some colleagues, friends, and neighbors about their reading habits. Do they read the acknowledgments page in a book? If yes, do they read it in both fiction and nonfiction, or just fiction, or just nonfiction books? As I suspected, 5% of the sample read the acknowledgments, and of that 5%, 75% read it just in nonfiction.

I grant that my informal survey is far from scientific, but I’d guess it isn’t far off the mark for the general reading public. Few of readers care that an author thanks her children for their patience and the many hamburger helper meals they tolerated during the authoring process, or the author’s spouse or parents or first grade teacher. We know none of these people and whether they were inspiring or not doesn’t make much difference to our reading of fiction.

I was more surprised at the lack of interest in reading the acknowledgments in nonfiction. (Let me confess that I have the “habit” of reading every page — including copyright, dedication, acknowledgments, table of contents, preface, and foreword — in both fiction and nonfiction, a habit I frequently regret, especially in fiction.) Acknowledgments in nonfiction can be very revealing about the effort an author has put into his or her research and even can provide a clue as to the quality of that research.

Regardless, I think the informal survey justifies the conclusion that an acknowledgment probably doesn’t matter. Even if it does matter, how does one judge whether a book is good or bad quality? I have been amazed over my 60+ reading years how many books received awards for quality that I wouldn’t consider quality at all. Consider James Joyce’s Ulysses. This book is considered an important piece of English literature; I wouldn’t give it a 2-dumpster rating, let alone a 2-star rating. I would never recommend anyone buy it or read it unless they wanted to commit mental suicide by reading. Yet, I can imagine that an acknowledged editor would be beaming. Book quality is in the eyes of the individual reader and I know few readers who would automatically say the editor must have been bad because the book is poor quality; readers are much more likely to blame the author, unless the book is riddled with basic spelling and grammar errors that even the least-competent editor should have picked up.

One also needs to consider what the average reader would make of an acknowledgement of the book’s editor. How many readers really have a clue as to what an editor does? How many really care? The growth of self-published editor-less ebooks demonstrates to me that readers are not equating good or bad quality with editor-no editor. I would be willing to venture that 99.9% of the positive or negative reaction to book “quality” by readers is aimed at the author and not to any editor. In fact, if the reader considers a book to be of poor quality, the reader is more likely to exclaim that the author should have hired an editor, and do so without having read the acknowledgments to see if an editor is listed.

In checking some of the ebooks I have in my to-be-read pile, I note that often the editor who is acknowledged is listed as “my wife,” “my neighbor,” “my beta reader”; in only one book was the listing such as to imply a professional editor. Consequently, I am not convinced that an author who is looking for an editor will suddenly start scanning acknowledgment pages to find an editor, not even of books that the author has read and liked. Nor is that author likely to recall who was named as editor of a book they liked but can no longer locate. Additionally, I suspect most authors are sophisticated enough to know that the final published form of a book does not necessarily reflect an editor’s work because the author has the final say and can accept or reject an editor’s work/suggestions.

So in the end, I come down on the side that says it doesn’t matter. With more than 1.5 million books published each year in the United States alone, it doesn’t even matter statistically. Unless the book garners a wide audience, in which case it would be a bestseller and the editor’s belief that it is of low quality matters not at all, it is unlikely that more than a few people will read the book, some of whom will believe it is a 5-star contribution to literature and some of whom will view it as a 1-star insult.

This leads, then, to the question of whether an editor can prevent an author from acknowledging the editor. Absent a contractual term that gives the editor that right, I’d say no. The editor can ask and the author should be willing to do as asked, but there is little else that an editor can do. Yet, if it really doesn’t matter, why make a mountain out of a molehill? An editor should always remember that one reader’s great literature is another reader’s trash.

The one caveat to all this is that I would be adamant about not being named if I had corrected misspellings and misuses of homonyms and language only to discover that the author rejected those corrections. Unlike the situation of the narrative — is it good, bad, or indifferent — the mechanics of spelling and word choice can reflect badly on an editor, except that I fall back to my original proposition, to-wit, few people read acknowledgments or remember whether a book was edited and by whom it was edited. Ultimately, even in this scenario, I’m not sure it matters.

I’m curious as to what editors, authors, agents, and publishers who read An American Editor think of this “problem.” What do you think?

The eBook Effect: Buying and Reading More

I have been reading ebooks for only a few years, yet there has been a steady shift in both how I read books (a shift away from pbooks toward ebooks) and the number of books I buy and read (I buy and read more books than when I was buying just pbooks) since I entered the world of ebooks.

Recently, I started a trilogy by indie author Joseph Lallo, The Book of Deacon. As was true for many of the ebooks I have bought and read, the first book in the trilogy, also called The Book of Deacon, was free. And like other books that I have enjoyed, I have purchased the subsequent books in the series, The Great Convergence and The Battle of Verril. I do not intend to review the books in this article, other than to say that this is a 4-star epic fantasy series, well worth trying.

I mention the trilogy, because it got me thinking about my reading habits and about numbers. The first book in the trilogy, I “bought” at Smashwords. I read it on my Nook Tablet, and when I came to the last page, immediately went online via the Tablet to the B&N ebookstore and purchased book 2. Book 3 was purchased the same way. What surprised me was that my Nook library, after purchasing The Battle of Verril, had 186 ebooks in it — and I have had my Nook Tablet for only two months! I wondered, how many ebooks have I purchased over the years?

From just three ebookstores — Smashwords, B&N, and Sony — I have purchased 722 ebooks (again, “purchase” includes ebooks gotten for free and ebooks that I have paid for). Add in the ebooks I purchased at Kobo, Baen, and several other ebookstores, the quantity rises above 900; add in ebooks obtained from places like Feedbooks and MobileRead, and the number climbs above 1,100.

I haven’t yet read all of the ebooks I purchased, but I am working away at the backlog, even as I increase the backlog by buying more ebooks. Since receiving my first Sony Reader as a holiday gift in December 2007 (the Sony 505), both my buying and reading habits have gradually, but dramatically, changed.

Before ebooks, I rarely bought indie-authored books. I also rarely bought novels. Nearly all my book purchases (at least 90%) were nonfiction, mainly biography, history, critical thinking, language, ethics, philosophy, and religion. I never cared much for the self-help books; I always felt that the only real self-help going on was the author helping him-/herself to my money. Books that I did buy either caught my eye on the bookshelf at a local bookstore, were reviewed in the New York Review of Books, The Atlantic, Smithsonian, The Economist, American Heritage, or other magazine to which I subscribed, or advertised in one of the magazines to which I subscribed. But the two primary sources for finding pbooks to buy were browsing the local bookstore and the New York Review of Books, including ads in the Review.

I didn’t buy indie-authored books because the authors were unknown and the books were expensive, especially as I only bought hardcover pbooks. Yet I did buy a lot of pbooks, rarely fewer than 125 pbooks a year (not including the pbooks my wife bought).

The advent of ebooks caused my reading and buying habits to shift. In the beginning of my personal ebook era, I continued to buy a large number of hardcover pbooks supplemented with a few ebooks. In the beginning, I was neither ready nor willing to simply move completely away from pbooks (which is still true). Nor was I ready nor willing to shift my focus from known authors and nonfiction to indie authors and fiction (which is no longer true). But as each month passed and I became more enamored with reading on my Sony Reader, I began to explore ebooks and with that exploration, came indie-authored fiction ebooks.

I am still unwilling to buy indie-authored nonfiction ebooks. I look at nonfiction books as both entertainment and sources of knowledge. Consequently, an author’s reputation and background remain important, and I still look to my magazines for guidance. However, where previously I rarely bought fiction and what fiction I did buy was not indie-authored, today I buy hundreds of indie-authored fiction ebooks. With the exception of perhaps a dozen nonfiction ebooks that I have purchased over the years (I bought the pbook first then decided to also buy the ebook version) and a handful of well-known fiction authors’ novels, every one of the more than 1,100 ebooks I have purchased are indie-authored fiction.

eBooks have had another impact on my reading in addition to the number and type of ebook purchases I make: I am reading more books than ever. Prior to ebooks, I would read 1 to 1.5 hardcover nonfiction pbooks each week (on average) over the course of a year. (I find that it takes me longer to read a nonfiction book than to read a fiction book; I tend to linger over facts and try to absorb them, whereas I consider fiction books to be generally a read-once-then-giveaway books.) Over my 4.5-year history with ebooks, the number of nonfiction pbooks that I purchase each year has steadily declined and it is taking me longer to read a nonfiction pbook, whereas the number of fiction ebooks I purchase has steadily increased and I read them faster than ever; I now read an average of two to three fiction ebooks a week — again, nearly all indie authored — in addition to my nonfiction reading.

Alas, not all is rosy in indie-authored ebookland. Sometimes I have to discard (delete) a goodly number of indie-authored ebooks before I find one that I think is worth reading from “cover-to-cover.” It is this experience that causes me to be unwilling to pay for the first ebook I read by an indie author. As those of you who are regular readers of An American Editor know, once I find an indie author who I think writes well, I am willing to pay for all of their ebooks that interest me. Indie authors that I have discovered and whose books I think are worth reading and buying include Rebecca Forster, Shayne Parkinson, Vicki Tyley, Michael Hicks, and L.J. Sellers. But finding these worthwhile authors is the difficult part, and ebooks have made the finding more difficult than ever.

The problem of ebooks, as the number of ebooks I have purchased attests, is that there are so many of them, which makes it hard to weed among them. I’ve lamented before that there is no gatekeeper for fiction ebooks. As poor as the gatekeeper system might be, it at least has the virtue of doing some preliminary weeding. True, sometimes gatekeepers do not distinguish between the wheat and the chaff, but at least with gatekeeping there would be some reduction in the number of ebooks that a reader would have to wade through to find the worthwhile indie-authored book. Under the current system, readers need to apply their own filters and hope for the best.

The ebook effect has altered the reading world by making more indie-authored books available to consumers, making gatekeeping a relic of the past, and making price a more important part of the reading-purchasing equation. eBooks change how readers relate to books. Whether ultimately this is for the better or not, remains to be seen.

To Design or Not to Design in the Age of eBooks

Whenever a discussion arises about how an indie author can increase sales, two things generally occur: First, regardless of the merits of the suggestion, the indie author defends by saying he or she cannot afford to spend the money to hire the professional (fill-in-the-blank) and second, with limited funds available for hiring a professional, it is hard to prioritize where to spend the money. There isn’t a lot that can be done about the first matter, but tackling the second matter, every indie author can do.

Years ago, when I ran a small publishing company, we worked under very tight budget restraints. As an editor, rather than a designer or artist, I believed that it was better to spend the money on editorial matters, even at the neglect of design. I quickly learned a valuable lesson: Aside from the story and quality of the storyline and writing, the most important facet of the production process was not editorial but cover design. If the cover design didn’t entice a reader to pick the book off the shelf, it mattered not at all how well written or edited the book was — there would be no sale.

The Age of eBooks raises this question yet again: Which is more important: professional cover design or editorial help?

Some ebookers dismiss the covers as being unimportant under the guise of content is king. I think that ignores how we buy products. Consider Apple products. If we look at the content, that is the inner works, of its devices, we find good — not outstanding, just good — components that will not win awards for being high quality; Apple products are basically, component-wise, middle-of-road. Apple’s real genius has been in design — the “cool factor.” People line up to buy Apple products because of the design; if they were interested in high quality components rather than design, they would consider alternatives. They don’t because design is what drives sales.

The same is true of an ebook. Look at how many ebooks of middling content are sold and read (or at least started). There is no consumer clamor for something to indicate that the content has been professionally edited; professional editing doesn’t drive sales although it can maintain sales momentum. Sales are generally visually driven.

Over the past few months, I have been consciously tracking how I make a decision to buy a particular ebook. I also have been tracking how my wife and a few of our friends decide to buy an ebook. I thought my discoveries would be earth-moving, but they aren’t; in fact, they mirror how pbooks are sold.

The two primary factors in the decision-making process (once we get past the genre/subject-matter obstacle) appear to be the blurb and the cover. Secondary factors appear to be reviews, price (especially the price-to-length ratio), and sample pages.

The higher the quality of the cover design, the higher the likelihood that the book will be looked at; the more informative and better written the blurb is, the higher the likelihood, when combined with a professionally designed cover, that the ebook will be bought.

After the initial sales, word of mouth becomes important, but not so important, in most cases, as to override the value of the cover and the blurb. My experience and my recent observations confirm to my satisfaction that a professionally designed cover is, after the quality of the writing and storyline, the most important investment an indie author can make in his or her book. This is not to suggest that this investment can be in lieu of investing in professional editorial help; just that it is an investment that is too often neglected and shouldn’t be.

A good author knows the value of professional editorial help. But it is fairly clear that ebookers are quite forgiving of editorial mistakes (or perhaps are unaware of the mistakes themselves), which means that if you can afford to invest in only one thing, that investment probably should be in the cover.

Remember that the very first thing an ebooker sees when scanning Amazon, Barnes & Noble, Smashwords, or any of the other ebooksellers, is the cover image. A great cover image can cause an ebooker to pause and read the blurb; a well-written blurb, combined with a great cover, can result in a sale.

Do not think that it is easy to create a great cover — it isn’t. Even the big publishers have troubles in this regard. Not only must the image be right and convey the story (remember that a picture is worth a thousand words) to the observer, but the choice of typeface is also important, as is its placement. Much too often it is impossible to read the type on an indie cover because the wrong typeface was chosen or because the image-typeface combination is simply wrong.

I agree that even the poorest cover-designed ebooks may still sell; the question is how many more copies would it sell if the cover were professionally designed and eye-catching? If you cannot capture a reader’s attention using the cover of your book, how much hope do you have that the reader will pause to read your blurb? There is just so much time and effort that a reader is willing to expend to find an ebook to read, and the most common sorting method that readers use is to scan cover images, pausing only on those ebooks whose cover has caught their eye.