The Billion Dollar Book

Tag Archive for business models

The Billion Dollar Book

May 2, 2011 Algorithmic Culture, Bookselling One comment

About a week ago Michael Eisen, who teaches evolutionary biology at UC Berkeley, blogged about a shocking discovery one of his postdocs had made in early April. The discovery happened not in his lab, but of all places on Amazon.com.abisgroup.ru

While searching the site for a copy of Peter Lawrence’s book The Making of a Fly (1992), long out of print, the postdoc happened across two merchants selling secondhand editions for — get this — $1.7 million and $2.2 million respectively! A series of price escalations ensued as Eisen returned to the product page over following days and weeks until one seller’s copy topped out at $23 million.

But that’s not the worst of it. One of the comments Eisen received on his blog post pointed to a different secondhand book selling on Amazon for $900 million. It wasn’t an original edition of the Gutenberg Bible from 1463, nor was it a one-of-a-kind art book, either. What screed was worth almost $1 billion? Why, a paperback copy of actress Lana Turner’s autobiography, published in 1991, of course! (I suspect the price may change, so in the event that it does, here’s a screen shot showing the price on Saturday, April 30th.)

Good scientist that he is, Eisen hypothesized that something wasn’t right about the prices on the fly book. After all, they seemed to be adjusting themselves upward each time he returned to the site, and like two countries engaged in an arms race, they always seemed to do so in relationship to each other. Eisen crunched some numbers:

On the day we discovered the million dollar prices, the copy offered by bordeebook [one of the sellers] was 1.270589 times the price of the copy offered by profnath [the other seller]. And now the bordeebook copy was 1.270589 times profnath again. So clearly at least one of the sellers was setting their price algorithmically in response to changes in the other’s price. I continued to watch carefully and the full pattern emerged. (emphasis added)

So the culprit behind the extraordinarily high prices wasn’t a couple of greedy (or totally out of touch) booksellers. It was, instead, the automated systems — the computer algorithms — working behind the scenes in response to perceived market dynamics.

I’ve spent the last couple of blog posts talking about algorithmic culture, and I believe what we’re seeing here — algorithmic pricing — may well be an extension of it.

It’s a bizarre development. It’s bizarre not because computers are involved in setting prices (though in this case they could have been doing a better job of it, clearly). It is bizarre because of the way in which algorithms are being used to disrupt and ultimately manipulate — albeit not always successfully — the informatics of markets.

Indeed, I’m becoming convinced that algorithms (at least as I’ve been talking about them) are a response to the decentralized forms of social interaction that grew up out of, and against, the centralized forms of culture, politics, and economics that were prevalent in the second and third quarters of 20th century. Interestingly, the thinkers who conjured up the idea of decentralized societies often turned to markets — and more specifically, to the price system — in an attempt to understand how individuals distributed far and wide could effectively coordinate their affairs absent governmental and other types of intervention.

That makes me wonder: are the algorithms being used on Amazon and elsewhere an emergent form of “government,” broadly understood? And if so, what does a billion dollar book say about the prospects for good government in an algorithmic age?

Bye-Bye Borders (in Bloomington)

January 13, 2011 Bookselling 5 comments

Just before Christmas I blogged here about the closing of the Borders Bookstore here in my home community of Bloomington, Indiana. Friday, January 7, 2011 was the store’s final day of operation. I visited it for the last time on Wednesday, January 5th and snapped a few pictures. Even for those of you who may never have set foot in this particular Borders location, you can tell that it was barely a shell of what it once was.

The montage of pictures above should give you a sense of what I mean by a “shell.” The image appearing there on the bottom-left is, incidentally, of what used to be the children’s section, which is a far cry from how it used to look. In fact, I have a quite vivid memory from the time I was researching The Late Age of Print. I hung out there practically all night on the evening of June 20th, 2003 in anticipation of the midnight release of Harry Potter and the Order of the Phoenix. Back then it was teeming with books, kids, caregivers, and energy. Not so much now.

These two close-ups illustrate the scope of the sell-off. It’s definitely an “everything must go” situation but more, no doubt a result of the chain’s economic woes, which extend far beyond this particular branch. The picture on the right shows a bookshelf that’s been transformed into a display for cleaning agents — yes, cleaning agents — that are being sold off along with the store’s remaining inventory of books, DVDs, etc. (Another display nearby held items from the café, including the mixes the baristas would use to make fancy drinks.) Speaking of books, the vast majority of titles left were either category fiction (romances, sci-fi, etc.) or books by/about celebrities. Note the unusually large stock of biographies of American Idol’s Sanjaya Malakar in the upper right-hand corner of the image at left. It was, in other words, pretty much the bottom of the barrel by the time I got there. Based on the uniformity of the inventory, I ‘d guess that most of the really desirable books had been carted off and redistributed to other Borders stores.

This final image shows a computer terminal located on what used to be the customer service counter. Instead of facing the customer service agent, it had been turned around to face the customers, as if to greet us as we entered the store on its final days. The display read, “Your Favorite Book Store. Now Digital.” I guess we know how Borders is imagining its future — assuming, of course, that it has one.

A Blue Christmas at Borders

December 13, 2010 Bookselling 7 comments

Three months ago I blogged here about the plight of the U.S.’s two major big-box bookstore chains, Barnes & Noble and Borders, both of which have been struggling due to the combined effect of the economic downturn and intensifying competition online. Of the two, Borders has been the hardest hit. Thebookseller.com reports that the chain may run into a “liquidity shortfall” early next year. In layperson’s terms that means Borders is practically out of cash, something that doesn’t bode well for its long term survival. The news isn’t much of a surprise, however, coming as it does on the heels of several rounds of layoffs this year and major changes in the company’s top leadership.infolio-rg.ru

Well, the situation at Borders is finally hitting home — and by home I mean my home, Bloomington, Indiana. About a month ago the company announced that it would be closing our local Borders branch just after the first of the year because it has been under-performing, relatively speaking. Here are some (quite depressing) photos of what the outside of the store looked like last week (the “B” got burned out in a recent fire):

Everything at the store is being sold off, including not only the books but also the displays, furniture, and fixtures. Companies only do that when they’re in grave trouble.

I’ve been patronizing this particular Borders since 2002. Back then the place was abuzz with people, energy, and, of course, merchandise. Shelves brimming with books. A crowded, non-stop cafe. Much meeting and milling about. I loved going there to shop, write, and even just hang out in the company of books — lots of them.

But sometime around 2007 or 2008 I started noticing a change. The shelves were becoming emptier, the cafe was quieter, and there seemed to be less and less traffic in the store. The whole ambiance had changed, and it was about then that I started seeking out other places in which to do my book shopping and writing.

In the end, I suppose I was part of the problem. I feel awful about the remaining employees, who are about to lose their jobs.

Not long after the Bloomington Borders opened in our Eastland Plaza shopping mall, in 1996, a nearby independent bookstore called Morgenstern’s shut down. I don’t know much about Morgenstern’s, admittedly, since I moved to Bloomington several years after it had closed. Having said that, I find that most of the non-chain bookstores here in town do a bad job of stocking books of interest to academics, which is surprising given all the Indiana University faculty who live here. In any case, I don’t want to attribute the store’s closing strictly to Borders (or to Barnes & Noble, for that matter, which opened a Bloomington branch later the same year), even though it seems pretty clear that Borders had something to do with Morgenstern’s demise.

With the closing of our local Borders, Bloomington is about to become something of a one-horse town — and by one-horse I mean, Barnes & Noble. There are other bookstores here, of course, including Boxcar Books (a non-profit), Howard’s Bookstore, and a great second-hand shop called Caveat Emptor. But the disappearance of our 25,600 square-foot Borders will be a tremendous hit locally.

It’s a sad state of affairs.

A little over a decade ago the bookstore chains seemed almost invincible. New branches of Borders and Barnes & Noble were opening practically by the day. Lots of indies fell by the wayside in the meantime, but at least there were large, well-stocked bookstores cropping up in their stead.

Today, it seems as if we’re headed in the opposite direction. Physical bookstores seem poised to become less a part of the experiential landscape of daily life. Call me a dinosaur, but I doubt that bodes well for the future of books and reading.

How Coffee Will Save the Magazine Industy

October 18, 2010 Electronic Reading, Quick Takes 3 comments

I’ve long been a reader of magazines, and so for several months now I’ve been intrigued to see lots of pro-magazine advertisements appearing in some of my favorite periodicals. Maybe you’ve seen them, too. Generally, the ads are filled with all sorts of upbeat facts about magazine circulation and subscribership. The campaign’s purpose is to correct the belief — mistaken, apparently — that digital media and magazines are at odds with one another, and that the former are slowly choking the life out of the latter.business-jour.ru

Well, this week I happened upon the cleverest ad of them all. “Will the internet kill magazines?” we’re asked. The response — given in the form of a question — is deliciously pithy. “Did instant coffee kill coffee?” What’s brilliant is how the answer operates so efficiently in two distinct registers. On the one hand, it conveys the message of complementarity that’s central to the campaign: just as there are markets for both instant and premium coffee, so, too, are there markets for internet and print-based publications. Everybody’s satisfied! On the other hand, the terms of the analogy offer a none-too-subtle dig at digital media, likening it to the unsatisfying simulacrum of the real thing: just as instant coffee is a quick-fix approximation of the good stuff, so, too, are internet publications little more than over processed conveniences for impatient people with undiscerning taste. Ouch. What one hand giveth, the other hand taketh away.

I could go on and on about “subject positioning” and “enthymemes” in an effort to explain what makes this ad tick, but for once I’m going to pull back. Instead, I’m going to do something a person like me — someone schooled in cultural critique — so rarely does: give credit where credit is due. Kudos to the folks at Young and Rubicam-NY for crafting such a pointed ad.

Will printed magazines survive? I don’t know, but I’d like to think so. The proof, I suppose, will be in the pudding…er, make that coffee.

Ambivalently Scribd

September 23, 2010 About the Book, Distribution, Electronic Reading One comment

You may remember back in March my announcing that The Late Age of Print was available on the document sharing site, Scribd. I was excited to see it there for many reasons, chief among them the Creative Commons license I’d negotiated with my publisher, Columbia University Press, which provides for the free circulation and transformation of the electronic edition of Late Age. The book’s presence on Scribd was, for me, evidence of the CC license really working. I was also excited by Scribd’s mobile features, which meant, at least in theory, that the e-book version of Late Age might enjoy some uptake on one or more of the popular e-reading systems I often write about here.

Lately, though, I’m beginning to feel less comfortable with the book’s presence there. Scribd has grown and transformed considerably since March, adding all sorts of features to make the site more sticky — things like commenting, social networking, an improved interface, and more. These I like, but there’s one new feature I’m not feeling: ads by Google. Here’s a screenshot from today, showing what The Late Age of Print looks like on Scribd.

Note the ad in the bottom-right portion of the screen for a book called, Aim High! 101 Tips for Teens, available on Amazon.com. (Clearly, somebody at Google/Scribd needs to work on their cross-promotions.) You can subscribe to an ad-free version of Scribd for $2.99/month or $29.99/year.

Now, I’m not one of those people who believes that all advertising is evil. Some advertising I find quite helpful. Moreover, on feature-rich sites like Scribd (and in newspapers and magazines, on TV, etc.), it’s what subsidizes the cost of my own and others’ “free” experience.

Here’s the problem, though. The Creative Commons license under which the e-edition of Late Age was issued says this:

This PDF is licensed under the Creative Commons Attribution-Noncommercial-Share Alike 3.0 License, available at http://creativecommons.org/licenses/by-nc-sa/3.0/ or by mail from Creative Commons, 171 Second St., Suite 300, San Francisco, CA 94105 U.S.A.

“Noncommercial” as defined in this license specifically excludes any sale of this work or any portion thereof for money, even if the sale does not result in a profit by the seller or if the sale is by a 501(c)(3) nonprofit or NGO.

I’m pretty sure the presence of advertising on Scribd violates the terms of the license, albeit in an indirect way. It’s not like Late Age is being sold there for money. However, it does provide a context or occasion for the selling of audience attention to advertisers, as well as the selling of an ad-free experience to potential readers. Either way, it would seem as though the book has become a prompt for commercial transactions.

As of today, the site has recorded close to 2,000 “reads” of Late Age (whatever that means), which would indicate that Scribd has managed to reach a small yet significant group of people by piggybacking on my book.

Honestly, I’m not sure what to do about this.

In software terms I’ve always considered the e-edition of Late Age to be more like shareware than freeware. That is, my publisher and I are comfortable with some folks free-riding provided that others — hopefully many others — go on to purchase the printed edition of the book. The e-edition is not, in other words, a total freebie. Columbia has invested significant time, money, and energy in producing the book, and if nothing else the Press deserves to recoup its investment. Me? I’m more interested in seeing the arguments and ideas spread, but not at the cost of Columbia losing money on the project.

In any case, the situation with advertising on Scribd raises all sorts of vexing questions about what counts as a “commercial” or “non-commercial” use of a book in the late age of print. This became clear to me after finishing Chris Kelty’s Two Bits: The Cultural Politics of Free Software (Duke U.P., 2008). Kelty discusses how changes in technology, law, and structures of power and authority have created a host of issues for people in and beyond the world of software to work through: can free software still be free if it’s built on top of commercial applications, even in part? can collectively-produced software be copyrighted, and if so, by whom? should a single person profit from the sale of software that others have helped to create? and so on.

Analogously, can the use of an e-book to lure eyeballs, and thus ad dollars, be considered “non-commercial?” What about using the volume to market an ad-free experience? More broadly, how do you define the scope of “non-commercial” once book content begins to migrate across diverse digital platforms? I don’t have good answers to any of these questions, although to the first two I intuitively want to say, “no.” Then again, I’m pretty sure we’re dealing with an issue that’s never presented itself in quite this way before, at least in the book world. Consequently, I’ll refrain from making any snap-judgments.

I will say, though, that I recently ported one of my wiki projects, Differences and Repetitions, from Wikidot to its own independent site after Wikidot became inundated with advertising. In general I’m not a fan of my work being used to sell lots of other, unrelated stuff, especially when there are more traditionally non-commercial options available for getting the work out.

Bye Bye, Big-Box Bookstores

September 8, 2010 Bookselling 8 comments

After more than a decade of dominance fueled by aggressive expansion, the leading big-box bookstore chains in the United States are hurting.

Borders is barely hanging on by a financial thread, with an almost $38 million loss near the end of 2009 sending the company into a tailspin. 2010 began with a round of layoffs, followed by restructuring and most recently the departure of its CFO, Mark Bierley. The cracks are beginning to show in its retail stores, too. Here in Bloomington, Indiana, where I live, the bookshelves at our local Borders are getting emptier by the month. It’s also now closed on Sunday, presumably as a way to cut operating costs.

Barnes & Noble seems to be faring better, but that’s a relative statement these days. For the better part of a year now it’s been fighting a takeover attempt led by billionaire corporate raider, Ron Burkle. But in some ways that’s not the worst of its worries. In an attempt to counter Burkle, Barnes & Noble CEO Leonard Riggio recently went looking for someone else — someone friendlier — to buy the company. He was met with this grim response by the financial press:

Before news of Barnes & Noble’s plan to explore alternatives, shares had declined about a third this year in the face of concerns that the growing digital-books market and competition from Amazon.com Inc. would squeeze out its 720 bricks-and-mortar stores while also leaving it with little market share in the digital world, where its Nook e-book reader followed in the footsteps of Amazon’s Kindle.

“It’s difficult to envision a buyer of this company given the structural issues it continues to face,” said Credit Suisse analyst Gary Balter.

Realistically, it’s probably an overstatement to say that nobody would want to buy Barnes & Noble. Someone with an interest in revamping the chain might well want to do so. Of course that would most likely mean, sayonara Barnes & Noble as we know it.

This isn’t a surprising development, and both Borders and Barnes & Noble should have seen it coming.

Remember Tower Records? Or all of those Virgin Mega-Stores? With the rise of digital music, most of the big-box music stores were forced to shut their doors. They just couldn’t compete with a business model premised on minimizing infrastructure and abandoning material goods. The same goes for Blockbuster and all of those other national video store chains, whose physical stores have been driven under by the double-whammy of Netflix and video on-demand.

E-books still have limited uptake, of course, which means that Borders and Barnes & Noble have yet to feel the digital squeeze to the degree that music and video stores have. Still, their lackluster forays into online bookselling have put both companies at a major disadvantage. Barnes & Noble used to have a fallback in the education market, with an exclusive lock on hundreds of college bookstores across the United States. Even that’s now being eroded by Amazon.com, however, which is actively courting students on its website.

There’s been some talk lately of how to retool the big-box bookstores to make them more competitive. Unfortunately, as a recent Publishers Weekly article noted, one plan would significantly involve “Taking the ‘Book’ Out of Bookstores.” In place of the physical volumes there would be an increase in what booksellers like to call “non-book product,” including journals, cards, fancy writing paper, reading lights, games, and that type of thing.

No doubt the profit margins on non-book product are attractive, and I suspect they help to create store traffic. But honestly, is this a viable long-term strategy? Does it make sense to save these bookstores by turning them into plus-sized stationery stores?

Here’s a different idea. Bowker, a leading book industry research and information firm, recently reported that women over the age of 40 comprise the largest segment of the US book buying market. Common sense would dictate that Borders and Barnes & Noble ought to pursue that aspect of the market even more actively than they do now, since that’s where the money is.

But it’s clear that now’s not the time for common sense; now’s the time for bold, unconventional thinking. What this means is that the bookstore chains ought to be courting those who aren’t your usual book buyers and working closely with publishers to develop titles that would appeal to them. That way they’d be broadening the market rather than simply reproducing it as it is.

I also wonder if now might be the right time to begin experimenting with smaller, shopping mall-based stores as well. Borders and Barnes & Noble closed most of their Waldenbooks and B. Dalton mall locations in the 1990s, in part to help finance the construction of their superstores. Nevertheless, people still love to shop at the mall, even in the internet age. The experience of being in pubic, hanging out, and poking around is something that online retailers can never hope to duplicate. And so here, again, is another untapped possibility. A suitable print-on-demand system could make mall stores even more attractive to book buyers, moreover, since then they wouldn’t have to wait for titles to be delivered from suppliers or sources online.

Maybe, in the end, it’s time to bid farewell to the big-box bookstore chains. Personally, though, I’d be sad to see them go, especially since they’ve been instrumental in making books available in places where, for the most part, they weren’t abundant — places like my hometown of Goshen, New York, for instance. I also think it’s important for printed books to remain a part of the experiential landscape of people’s everyday lives, both in the form of libraries and retail stores.

Indeed, what would it mean to live in a time when we couldn’t pluck a random volume off of a shelf and start reading, just for the sake of doing so? That’s the question we’re staring at now, not only because of the shakeout that’s been going on for the better part of 15 years in the retail sector, but also because of the cutbacks that are crippling US public libraries. But Instead of staring at this question, isn’t it about time folks started staring it down?

Cheap E-Reads

July 21, 2010 Electronic Reading One comment

This week, the big news in the world of e-readers is supposed to be Amazon.com’s announcement about Kindle book sales, which, the company reports, now outpace sales of hardcover books on its website. I won’t get into that claim — at least, not now — but I will direct you to an insightful piece from The Big Money that’s asking all the right questions.

For me, the real news in e-reading is at once more humble and potentially more significant: the launch of the Humane Reader project, which is spearheaded by an organization called Humane Informatics (HI). Its website is unfortunately sparse on information, but here’s what I can tell you. The goal is to improve literacy in developing countries by distributing e-book devices to folks living there. The centerpiece is a cute little nugget of hardware called the Humane Reader. According to HI, it should cost around US$20 in bulk.

That’s right — a e-reader for 20 bucks. I didn’t leave off the last zero.

HI is able to keep the price so low not only by building the Humane Reader out of inexpensive parts but by leaving off what’s traditionally one of the most costly aspects of any digital device, namely, the screen. The organization notes on its website that televisions are prevalent in developing countries, and so it’s designed its e-reader to connect directly with them. What’s more, the Humane Reader can store as many as 5,000 e-books using a tiny SD card. Oh — and did I mention that it’s built significantly around open source technology that can be freely licensed?

This is a brilliant project in so many ways. For months here on The Late Age of Print I’ve been prattling on about commercial e-readers and privacy rights. What I’ve inadvertently downplayed in doing so is the high cost of these devices. Even after the latest price war the cheapest Kindle will cost you $189, while a Nook will set you back between $149 and $199 depending on the model. Don’t even get me started on the price of an iPad. The point is, there are significant economic barriers to entry when it comes to e-books, which, if book reading does indeed go digital, threaten to freeze large swaths of the world’s population out of one of the most important vehicles for literacy. The Humane Reader attempts to address that threat proactively, even preemptively.

The Humane Reader project follows in the wake of initiatives such as One Laptop Per Child (OLPC), which has attempted to bring ultra-low-cost portable computers to kids in need all over the planet. It’s also open to criticisms similar to those levied against OLPC, including the fact that technology alone cannot bring about social transformation, much less secure justice or equality on a truly global scale. Nevertheless, I see the Humane Reader as an important piece in a much larger puzzle, and I’m happy to see HI looking to partner with individuals and groups who might help the project fit into a broader, more multifaceted campaign.

Humane indeed — and an especially intriguing development in light of what Julie Cohen, Richard Stallman, and I have been calling the “right to read.”

Cory Doctorow on the E-book Price Wars

March 29, 2010 Bookselling, Distribution, Electronic Reading 2 comments

I’ve been within Cory Doctorow’s “orbit” for awhile now, mostly as a follower of his personal blog, Craphound, and his collective endeavor, BoingBoing. Only recently have I begun reading his novels and published non-fiction works. (Little Brother was my go-to for the first few weeks of my infant son’s life, when I couldn’t fall back to sleep after late-night feedings and diaper changes.)

Well, anyway, this video came to my attention as something that Late Age of Print readers might be interested in. It’s a recording of a talk Doctorow recently gave at Bloomsbury, the UK publisher of the Harry Potter novels, in which he discusses the vexed matter of e-book pricing.

What I admire about Doctorow is the fact that he’s a successful print author as well as someone who’s unafraid to experiment with publishing’s longstanding economic and technological paradigms. It’s hardly a stretch to say that his success in print owes a great deal to his willingness to push the bounds online. I should acknowledge, moreover, that the free, Creative Commons-licensed PDF of Late Age wouldn’t have been possible had it not been for him and others who are similarly committed to the belief that book publishing is at its best when it refuses to rest on its laurels.

Anyway, enjoy the video. I’d be curious to hear how you would weigh in on his proposals.

Pirate Pedagogy

March 4, 2010 Distribution, Electronic Reading 3 comments

On February 10, 2010, a German court began what may well be the start of the book industry equivalent of the dismantling of Napster.

Earlier that month, six global publishing firms — John Wiley & Sons, McGraw-Hill, Macmillan, Reed Elsevier, Cengage Learning, and Pearson — filed suit against RapidShare, seeking an injunction against and damages from the file-sharing service for having violated the publishers’ copyrights. At the center of the suit were 148 e-books that the publishers alleged had been uploaded to the site and subsequently distributed without compensation to the rights holders. RapidShare, they claimed, had become a pirate vessel teeming with all sorts of illegal e-book booty.

The question I want to raise here is this: does it make sense at this particular juncture for book publishing to go the way of the music industry in chasing down websites that facilitate digital piracy?

I began pondering this question last week as I drove from Indiana to the University of Illinois, where I delivered a lecture at the Graduate School of Library and Information Science. The extended car travel gave me the chance to listen to the audiobook of Chris Anderson’s Free: The Future of a Radical Price, which I’d downloaded gratis shortly after the book’s release last July.

I was deeply intrigued by Anderson’s discussion of Microsoft’s anti-piracy strategy in China, where the illegal trade in the company’s products reportedly runs rampant. In the 1990s, Microsoft took a hard line against Chines software pirates — publicly, at least. Behind the scenes, however, company executives secretly understood that while software piracy may hurt them financially in the short-term, it had the positive effect of locking the Chinese market into its proprietary platform over the long-term. With China’s growing economic prosperity, Anderson reports, more and more people there have begun purchasing legitimate Microsoft products. “Piracy created dependency and helped lower the cost of adoption when it mattered.” In other words, it was piracy that significantly helped seed the ground for Microsoft’s present dominance in China.

Now, it seems to me that there’s a similar case to be made for e-book piracy. A little over a year ago, the Guardian’s Bobbie Johnson offered a pro-piracy argument for e-books, suggesting that publishers will only move into the digital realm in earnest once they realize there’s sufficient piracy going on there. Until they discover they need to control the e-book market, Johnson argues, there’s little incentive for them — and by extension, readers — to make the shift.

While I’m persuaded by Johnson’s thesis in principle, he doesn’t take it far enough. I’ve already commented on his amnesia about printed book piracy, which over the years has fueled many e-book initiatives. Now I realize there’s something else going on here, too. Johnson claims that the music industry embraced digital downloading only after pirates dragged the industry kicking and screaming in that direction. And where music publishing goes, says Johnson, so too book publishing must go.

The problem with this claim stems from the rather different material histories of sound recording and book publishing. Wax cylinders, forty-fives, LPs, eight-tracks, cassette tapes, CDs, mini discs, digital audio tapes: the fact is that music formats have changed significantly — indeed, regularly — over the last 50 or 100 years. Music lovers have long understood that “music” is not equivalent to “format.” Even before the introduction of digital music downloads, listeners were well disposed to format change.

The same isn’t true for books. With the exception of relatively minor disturbances — chapbooks and paperbacks come most immediately to mind — bibliographic form hasn’t changed all that much since the introduction of the codex. The result is that book readers are much less inclined to embrace format change, compared to their music-loving counterparts. And this inertia is, in part, what has held up widespread e-book adoption.

All that brings us back to RapidShare. What the presses who sued RapidShare don’t seem to understand is that if e-books do indeed represent the future of publishing, then you need to provide readers with significant incentive to embrace the change. That’s exactly what RapidShare and other file-trading sites have been doing: educating would-be e-book consumers in the virtues of digital reading.

It isn’t stealing. It’s pirate pedagogy.

It'll Be War!

February 8, 2010 Book History, Bookselling, Electronic Reading, The Future of Publishing 3 comments

By now most of you reading this blog probably know about the latest dust-up over ebook prices. For those of you who haven’t been following the news, here’s a brief synopsis followed by some thoughts on the history of book pricing.

A couple of weeks ago officials at Macmillan, one of the largest global book publishing firms, decided to put the screws to Amazon.com. For over two years now the retailer has insisted that $9.99 is the decisive threshold at which consumers will begin trading reading material composed of atoms for stuff made of bits. Reportedly it’s managed to sell three million Kindles and who-knows-how-many e-books, but still Macmillan begs to differ on the matter of pricing. Management there believes that a more flexible scale would be preferable to Amazon’s flat-rate, with new e-titles starting at $15 and older works listing for around $6.

Well, Amazon got so miffed by Macmillan’s proposal that it temporarily suspended sales of any new books published under its imprimatur, which includes such venerable labels as Farrar, Straus & Giroux; St. Martins Press; Henry Holt; Tor Books; and others. Macmillan responded by calling Amazon’s bluff, knowing full-well that Amazon’s decision to de-list the publisher’s capacious catalog ultimately would hurt the retailer’s bottom line more than it would help its cause of ebook pricing. With the door now open, other presses are jumping on the higher-priced ebook bandwagon.

This is a fraught issue, to be sure. As a frequent book buyer, I’m grateful to Amazon for doing its part to keep ebook prices low for as long as it could. The company clearly understands the psychology behind the pricing of digital goods. Consumers intuitively grasp that the marginal costs of producing any given copy of an ebook is next to nil, and so we’re understandably reluctant to buy up e-titles and expensive hardware when paper books can be had for a comparable enough price. On the other hand, I recognize that the promise of advances and royalties gives professional authors incentive to continue producing new work. Accordingly, they have a compelling interest in maximizing their return through healthy (read: inflated) prices.

We could go around and around all day about who’s right and who’s wrong here. As someone whose paycheck comes primarily from my work as a university professor and only secondarily from my publications, selfishly, I’m inclined to side with Amazon.com. But really there are no clear-cut good guys and bad guys here. The whole situation reminds me of a recent dispute between physicians at my local hospital and a major health care provider, each of whom accused the other of excessive greed and bullying. In the end, the only party who suffered was the people who, for the duration of the quarrel, had to drive 50 miles to get the health care to which they were entitled.

Anyway, this may well be the first major conflict over the price tag for ebooks, but it’s surely not the first time the book industry has gone to war over book prices. This has happened at least a couple of times before, first in the late 19th century and then again in the 1920s/30s. In both instances, a bunch of young, brash publishers decided to slash their prices as a strategy to gain market share. Older, more established firms responded by digging in their heels and waging a clever PR campaign designed to convince the public that it was in their best interest to pay more than they actually needed to for books. (You can read more about this history in chapter 1 of The Late Age of Print and in volume III of John Tebbel’s magisterial A History of Book Publishing in the United States.)

What might these earlier price wars tell us about the present situation? Anyone looking to establish themselves as leaders in digital publishing would do well to undersell their competitors by offering electronic editions at or below the $9.99 price-point. The goal should be to sell as many copies as possible, by finding a price so attractive that no one can resist. It’s funny: we hear all the time about how book reading is on the decline in the United States and elsewhere. Could it be that the falloff is attributable not only to the usual scapegoats (electronic media, waning attention spans, etc.) but also and significantly to publishers’ greediness over book pricing, electronic or otherwise?

Indeed, if history teaches us anything, then it teaches us that publishers who’ve made their mark selling low can succeed in the long run. Just ask Simon & Schuster and Farrar & Rinehart (yes, that’s the same Farrar of Macmillan’s Farrar, Strauss, & Giroux). They were among the upstarts of the 1920s and 30s whose decision to sell books for a buck sent the old-timers into a tizzy.

Ringing any bells, Macmillan?

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