More big news in the ever-evolving e-book landscape as two publishers, Hachette and Simon & Schuster, told the Wall Street Journal that they would be delaying the e-book release of some of their important upcoming titles, HarperCollins told the New York Times that they would delay “5-10 titles a month,” and Macmillan said they’d delay case by case.
Why are publishers doing this?
Carolyn Reidy, CEO S&S: “The right place for the e-book is after the hardcover but before the paperback.”
David Young, CEO Hachette Book Group: “I can’t sit back and watch years of building authors sold off at bargain-basement prices. It’s about the future of the business.”
One thing this doesn’t seem to be is a short term financial calculation on the part of the publishers. Right now, according to most accounts, including the NY Times, publishers are receiving roughly the exact same amount for every e-book sold as they do for new hardcover sales. Yes, Amazon and Sony and others are selling many e-books for $9.99, but that doesn’t mean publishers are making less money per title. The e-book retailers are taking loss leaders on e-books to sell more devices.
Instead this position seems to be borne out of fear of what’s over the horizon: publishers are nervous that people will begin to feel that $9.99 is what all books should cost, wreaking havoc with print pricing models, and that Amazon and others will start turning the screws and demanding a bigger share of the revenue. (UPDATE: Along these lines, Mike Shatzkin speculates that this is really about controlling Amazon).
So is a long term fear about what’s over the horizon worth potentially alienating some of your most motivated customers, the people who read so much and buy so many books that they plopped down $250 to buy an e-reader?
You tell me.
It seems to me that customers understand that there’s a difference between print books and e-books and that they should cost different amounts – people know that printing and shipping paper and ink should cost more than sending electrons through the ether. It’s understandable that publishers are frustrated that they can’t control what Amazon actually charges, but they can’t control actual retail prices for print books either.
And in the meantime, as we’ve seen repeatedly over the last decade, alienate digital consumers at your peril. People who read e-books want to read on their devices when they hear about a book, and the best deterrent against piracy is making a digital edition readily available for sale at a fair price. Resisting the conversion to digital sure didn’t work for the music industry, and publishers are extremely fortunate they’ve had a decade of breathing room and lessons learned to prepare for the e-book wave.
All that said, authors may well be motivated to delay e-book releases since they may be receiving a better royalty for hardcover sales than they do for e-book sales. So for some authors, it may indeed make financial sense to encourage/force publishers to delay e-book releases if e-book customers will be motivated to go out and just buy the (higher royalty generating) hardcover during the delay period. This probably only applies to the top authors with rabid fans – everyone else will probably want to strike with e-books while the publicity iron is hot. In that sense, a case by case approach may indeed be warranted.
What do you think? Is this savvy business or misguided?
anon-
"The Cleantech Group forecasts that e-readers purchased from 2009 to 2012 could prevent 5.3 billion kg of carbon dioxide in 2012, or 9.9 billion kg during the four-year time period. "
https://cleantech.com/news/4867/cleantech-group-finds-positive-envi
5.3 BILLON – 9.9 BILLION KG
But the Cleantech study disregards paper books being recycled or using farmed trees. They admit that they only considered books made from 100% paper when comparing to the ebooks.
anon-
That opinion is based on speculation by a nonexpert blogger though.
Persuasive how they use billions of kilograms to represent carbon numbers. Conversion: one kilogram equals 1/1000th of a metric ton. 5.3 billion Kgs = 5300 metric tons. 9.9 billion Kgs = 990 metric tons. Compared with 12.4 million metric tons. Or compared with the overall U.S. carbon emissions from human activity, 6 billion metric tons.
Whoops, make that 9900 metric tons.
Yikes, my rusty, late night addled brain let me down. 5.3 million metric tons and 9.9 million metric million tons. Sounds to me like Cleantech is projecting an e-reader market domination by 2012, including textbooks and published books in total.
Bring back the Net Book Agreement!
https://en.wikipedia.org/wiki/Net_Book_Agreement
I'm kind of split on this one… from the publisher's POV, they have to know that as eBooks become more popular that companies like Amazon will NOT be willing to take a loss to sale hardware… no way. Because if they lose a few dollars on each book I read they'll lose money at the point I read 25 books or so (counting hardware costs, overhead, etc). They will eventually push back to the publishers though, and can they say NO to amazon?
However, as a reader, I would like to see the books sooner than later… however, I've never been one to buy hardcovers – I wait for trade paperbacks (since I am cheap).
For authors? I'm torn. Joe Konrath has some great stats on his blog talking about for his "out of print" books, which he re-released as eBooks and has made substantial money on (at a very low pricepoint).
I don't see a problem with it, because they seem to intend to release it before the paperback anyhow… and before e-readers, most ppl used to wait for the paperback anyhow…
Marilyn:
It sounds to me like the big publishing houses are afraid to let go of the idea that paper books are "real" books …
Publishers are caught in the middle. For the time being. The paper book is still a "real" business and a large one.
The fabled-to-have-disappeared brick and mortar bookstores (and the crazy distribution system that supports it) remain the mainstay of a publisher's laydown for a new book.
Initial sales are everything (just like opening weekend for a big budget movie) for a big-budget book. If publishers simultaneously (don't delay) e-pub with the hardcover laydown, they are killing the bookstore (and their well-oiled laydown machine). Overnight.
I know a lovely bookstore in a lovely town that makes all its money off a few high-demand hardcovers just before Christmas.
Oh, that's every lovely bookstore in every lovely town.
Yes, the business model is changing. But it is a process. I don't think you can fault publishers for trying to survive the transition.
P.S. Anyone who thinks new hardcovers are too expensive can buy a "used book" very cheaply from dozens of reputable dealers who list at amazon.com usually within two days of the book's hardover release. Most popular novels that have been out for a while can be had for two or three cents plus shipping. This is yet one more reason why initial sales of a hardcover are still the bread-and-butter of big-book publishing.
Nathan: All that said, authors may well be motivated to delay e-book releases since they may be receiving a better royalty for hardcover sales than they do for e-book sales.
Yes, but MOSTLY in terms of earning back the advance. And what this really means is that publishers should offer much lower advances (50%?) if the royalties on a well-selling title are going to be substantially lower…
Since agents earn a percent of the author's earnigs… were you suggesting that ONLY authors and PUBLISHERS would be motivated to delay eBook releases?
As an obsessive reader and Kindle owner, it seriously pisses me off. Publishers seem to be completely missing the obvious–I DON'T OWN A KINDLE BECAUSE I WANT TO BUY AND READ HARDCOVERS OR MORE PHYSICAL BOOKS.
Delaying the release is not going to make me go out and buy a physical copy of the book. It's. Just. Not.
So I've gone to the library. I've even boycotted certain books. (I know it ain't gonna kill ya, Stephen King, but you really angered me.) And I'll admit it-do this enough, publishers, and even I, a writer who is morally opposed to it and is ashamed to admit it, would be tempted to go do bad piracy things just to get my fix.
Anon 3:32 said-"People have always had wait for the paperback after the hardcover (except mass market) so what's the big deal waiting for the e-version? "
Because, again, the assumption here is e-book readers would have bought physical copies. It's apples and oranges.
I am not. And I suspect several other avid e-book readers were not. In the last couple months, there have been several new books I could not order. I've had to wait because publishers are afraid it will hurt their sales if I don't.
They ALREADY lost the physical copy sale, though. I'm not going to buy a physical copy and never was. All they've done is irritate me and anger me, and driven me to go the library (or Heaven forbid, piracy). So now they've lost TWO sales-e-book and physical book.
Do this enough, to enough readers, and yeah-it's a big deal in lost sales, and piracy will take off.
Wow, I go away for a while, and I miss the big environmental discussion. That'll teach me to go to dinner with friends – drink too many beers – and fall asleep earlier than scheduled.
I know, I know, TMI, but we're all friends here, right?
P.S. Thanks, Terry! Glad I'm not the only befuddled one in the group. 🙂
I totally agree with everything you said, and posted the same thoughts on my blog yesterday. It seems to me that instead of finding REAL ways to innovate with the digital format, publishers are finding ways to make it confusing and difficult to adopt for the average person. I guess there hope is to slow down the ebook adoption until they can figure things out. Wrong move, as folks will just find other ways to read what they want, when they want.
I got the impression from JA Konrath over at his blog https://jakonrath.blogspot.com/
that he makes more on his ebooks (at least the ones where he controls the rights) than he does on his paper books. Probably not true for really big selling authors.
My opinion is that it's being done because of public perception. Publishers don't want the public to feel like new releases, those coming out in hardcover, are only worth $10. The ebook market is inching it's way into a noticeable share now. I think I read it's about 5%. It's not at the point where it's having much effect on hardcover sales. The numbers just aren't there, but they will down the road. Five years from now, when sales of ebooks holds a third of all sales, it's not so hard to see that publishers will be losing out.
I can't say I blame them for seperating hardcover and ebooks. I wouldn't want the general reader to start thinking new hc releases are only ten bucks. I honestly don't like the internet's tendency to push the value of content toward zero. While there is something to say for the lower price, higher volume mentality, to me this is more than just finding the optimal price point. Stories shouldn't really be disposable commodities. They have more value than that. Perhaps I am being sentimental here, but I'm not really against what the pubs are doing here. I don't know that it's the best answer, but I don't think they've figured out a better one yet, and they feel the need to put their foot down while they still have any power to do so.
What they need to do? I think they need to do what many have been talking about, which is creating premium digital content. People don't perceive an ebook as being worth the same as a hardcover. So, add some perks to make shelling out 20 bucks worth while. Bundle audio with the digital. Include author interviews, trailers, lost chapters/deleted scenes, etc. The movie industry does a lot with this value added stuff. As the digital market keeps growing, it's going to push in that direction. I'd almost put money on it (if I had any to bet). The hc and digital could be bundled together. Not sure why they aren't doing this now unless there are major logistic problems involved with retailers. Anyway, point is there are solutions to be found, but it will take some time, and while this current solution isn't permanent (and it's only on a few titles, not all), I'm all for protecting the inherent value of the story. It's not just about the packaging.
I think the decision is VERY misguided and based on the (false) assumption that e-book owners and paperback/hardcover readers are still lumped in the same market.
And really they're not.
People who own e-books are not necessarily in the market for physical books anymore. If I shelled out $250 on an e-reader, I'm just going to wait for the e-book version…and I'm going to be pretty ticked about it. But I'm not going out to spend $25 on a hardcover anymore. No way.
On the other hand, people who don't e-book readers would have no use for e-books. I think very few would read it on the computer. Most will still buy hardcover and paperback versions as they always have.
The publishing industry needs accept and embrace E-book owners have shifted into a new niche market and have a demand for a "new" product. Unfortunately, publishers don't get it.
They are taking a major risk in alienating e-book owners. Have you noticed how loud the Kindle uproars have been over Amazon's missteps? I can only imagine the deafening sound against publishers. Moreover, if all publishers aren't on board with this program, they can just read e-books by authors at other publishing houses. Ultimately, it'll hurt the authors. I believe, before long, they will see the err of their ways and release them as they should.
https://www.idpf.org/doc_library/industrystats.htm
$110 million e-book wholesale sales through 3rd quarter 2009.
$53.5 million w/sales 2008.
$31.6 million w/sales 2007.
https://www.publishers.org/main/IndustryStats/indStats_02.htm
$24.3 billion book sales 2008
$25 billion 2007
Book Industry Trends reports 2008 revenues: $40.3 billion book sales, e-book sales $113 million 2008, $105 million 2007.
"There are three kinds of lies: lies, damned lies and statistics"
Benjamin Disraeli, British Statesman
Nine out of ten books comprise 90% of all books.
I won't buy hardcover books, heck I won't even borrow them from friends – they're just too darn big and bulky. Holding back the digital release of a book won't force me to buy a hardcover, I'll wait it out or choose another title.
As to pricing for e-books, I think they should be slightly less expensive than the paper format currently available, but I don't expect a brand new release to be bargain priced.
I bought my e-reader for the CONVENIENCE of e-books, not just to get cheap books.
Misguided. As an author for a small print press that releases books in ebook formats FIRST and THEN in print form, my perspective is slightl different than many. I can tell you I sell far more ebooks than print; I can tell you some readers buy both formats (wish I knew how many, but I suspect it's nominal). I can also tell you my royalty is far greater for the ebook than print since the cost to produce it isn't as high.
The "Big Boy" publishers aren't getting it. Readers aren't going to stand still while they try to impose an outdated business model on consumers. Nor are authors going to be happy at the loss of royalties because of the sales they didn't get when the publisher decided to stick to that outmoded business model. They'll take their books elsewhere to publish and the Big Boys will lose again.
Jim,
You raise some interesting points about the value inherent in the story vs. quantity.
Really, how can you set the value on a story? It's completely unique, and, in many ways, priceless. But there is a question not only of what the story is worth, but what someone will pay for it.
For example, I believe a book is worth about 6.99. That's what I pay for a paperback. The publishers have not fooled me. I don't believe that a book is worth $25, simply because that's what they charge in hardcover. I pay 7 bucks, and that's about how much I'm willing to pay, although I'll go as high as 14 for one of the bigger paperbacks if I really like the author.
But, the point is, I buy lots of books.
Part of the issue is that entertainment is a luxury item, and there is huge competition for consumer luxury dollars. So, pricing it too high will mean that you reach less consumers. Pricing it lower makes it more affordable, and consumers will buy it.
So, it's not always a choice between getting consumers to value a book and pay more for it. Often, it's the choice of they will buy it or they won't.
The value of a story, I believe, is reflected in the market by how many people want to read it.
Quantity.
DG – I'll take your word for it. 🙂
As a restaurateur, I'd rather sell one $35 prime rib dinner than seven $5 hamburgers. Less labor, more profit. And the prime rib sells because it's not something fast food restaurants offer or home cooks typically prepare. Well-prepared, prime rib is a gustatory delight. There are vegetarian selections available, but profit margin on carbs and flora isn't high, labor costs are, though. They come for the prime rib.
Well, I'm not sure the examples are exactly equivalent, because you're implying that hardcovers are more valuable than paperbacks. I disagree. I don't like paperbacks. But I'll go with it.
First of all, you pay alot more for the one chef who can prepare delicious prime rib, so labor savings may not be that much.
Also, it's a recession, so people simply can't afford prime rib anymore, so they go somewhere else, and you've lost their business. A profit margin may be smaller, but it's still profit. You just lost that.
And then you have to deal with the competitor down the street, who is selling prime rib for $25 bucks.
Then, you've got to deal with me. I'm standing outside your restuarant, saying "What? $35 bucks for a prime rib dinner? Are you kidding me?? Who wants prime rib anyway? I prefer a hamburger, why don't you sell hamburgers? I'm telling all my friends not to come here, what a rip off. You don't even sell hamburgers. I'm going to McDonalds. I can get a hamburger there PLUS a happy meal with a toy for 4 bucks, top."
Whoops. I meant, I only like paperbacks. Important distinction.
I just noticed – I'm hungry. Sort of feel like prime rib, actually. 🙂
I agree with Karla. If I am anxiously awaiting an author's new release, I'd rather pay a little more to have it on my Kindle sooner. But I will wait to have it on the Kindle – especially if it's big and bulky. That's the whole point!
The longer I wait, though, the less I'll want to pay. When it's six months after the release, I will no longer be willing to shell out $15-30. The only reason I wanted pay that in the first place was to read the book soon, not for the pretty hardcover. If I have to wait, I expect to pay something closer to the price of a paperback.
I don't have an e-reader yet, but if and when I buy one, one of the big draws for me will be the ability to buy books that aren't out in paperback (or not yet). This is mostly because of the weight/space (I do a lot of my reading on the subway, so I avoid buying hardbacks). But if, say, I have to wait six months for the e-book vs. a year for the paperback, I'd be quite happy to buy the e-book.
Having said that, I can see why early adopters would be ticked off.
The mystery of prime rib preparation revealed. Let the meat speak for itself.
Simple spices, salt and paper, fresh garlic and mustard powder crusting the fat cap on top about a quarter inch thick. Slap it in the oven on a bed of aromatic carrots, onions, and celery at high heat for twenty minutes, reduce heat to 250 degrees and let slow roast about 2 hours or until internal temperature reaches rare done, about 115 degrees. Serve with au jus and fresh horseradish. Gravy and ketchup available.
Hamburgers are on the menu, so is steaks, chicken and seafood and pork, veal and lamb. Takeout too. They come for the prime rib.
Labor's not that big a deal for prime rib. I'm in the building most of the day anyway. I do the gourmet preparations. The cooks are talented short order cooks now that I've trained them, but they're just cut and paste and burn jockeys. And the tips from prime rib diners are better, and of course, prime rib diners want a robust red wine accompanying. Sirah, Bordeaux, or Burgundy. Build that check total!
Hah! Word verification: grilist
"Laura K. Curtis said…
Horrible mistake. I don't think they understand either genre fiction readers *or* financial concerns at all. Right now, they're making a LOT more money off me than before I bought my Kindle, and one big reason is that I am willing to pay $9.99 not to wait for paperback. "
QFT. Right now I'm spending money on ebooks that I used to spend at the local used bookstore (which means that both publishers and authors are doing much better out of the deal). Increasingly, though, if it's not available in ebook I just don't buy it. There are a million books out there, I'll read something I can read in comfort.
I also think that a lot of these "I don't want paper books to go away" folks are overestimating the threat posed by ebooks. I read almost exclusively electronically now, but I still shelled out the cash for the gold-trimmed leatherbound edition of Lord of the Rings. Both can coexist quite comfortably in my humble opinion, without making ebook readers into second-class (and irate) customers.
I think the publishers are being short-sighted. The person who buys a hardcover book and the one reading it on an ereader are two different readers. Have the format available for ALL your different types of readers at the same time. Put the book out there when the value exists: when I've heard about your book and want it.
I think Kate may have a better answer…which is to charge a small premium to get the e-book when it is first released. Then drop the price at the time that the e-book would have been released if they'd held it back.
Perhaps with a slight price increase at the initial release, they will end up the making the same amount as they would selling a hardcover.
That's a reasonable solution…so of course they won't adopt it.
Anon 10:05
Uncle.
You win. How can I argue with such a ruthless opponent?
"Simple spices, salt and paper, fresh garlic and mustard powder…"
Yum.
Who wants to argue anymore? I'm hungry.
Mira @ 11:16;
I'm sorry for coming off as aurgumentative. I was just making a clever darling comparison between one business model strategy and another. The prime rib model is taught in restaurant business courses.
I'm no longer working as a restaurateur, though. Life brings unexpected changes. I wish I could afford a prime rib dinner.
Writing that reply made my mouth water, like the stacks of books waiting for me to read after I get the day's editing workload out of the way.
The publishers sound scared to me and the word 'Canute', springs to mind. I could imagine e-books doing to publishing what downloads have done for music. Even so, I still have many friends who download an album, only to buy a CD later, if they really like it… something about having art work you can touch and hold.
Interestingly, I read recently about some chap who gave away his book free as a download. 7 years and 50,000 downloads later he was picked up by Orion. When the book was published in paper form, over 60% of the people who'd downloaded his book bought the hardback.
Still, try telling publishers that hey?
Cheers
MTM
Delaying the e-book release makes sense if you look at it as adding another tier to the hardback/paperback release series.
That said, many e-book readers seem to be avid book fans.
What about something like: you can purchase the e-book with the hardback for a small amount more, say $2, and if you want the e-book only, you wait for the e-book solo release.
Anon 11:25,
You weren't coming off as argumentive, we were debating!
Well, maybe we should pool our income. Together we might be able to afford that prime rib. If you're as hungry now as I am, it's only justice. 🙂
You're on, Mira. Say after the 2010 Nobel awards reception?
well it's all been said i guess but i might as well chip in. there are definitely certain things i would buy in hard cover (the re-release of Ariel for example)because i think they're pretty, but they are few and far between. i'm kind of coming round to the idea of e-readers and if i bought one it would be because i want to save money on books, with the amount i buy an e-reader would pay for itself fairly quickly. i think the publishers are seriously misguided about their readers if they think that people will be so desperate to buy books they won't wait a few months to get it cheaper.
however if i were ever to publish a book you can be damn sure that i want to see it on a shelf in waterstones with nice hardcover.
I think that delaying the e-book release a couple of weeks might make sense, but certainly no longer. I think that a publisher must price the e-book so that it generates the same financial rewards as the hard-cover. I also think it ludicrous to try to "control" Amazon. If "they" (big publishing) want to "control" Amazon, they would have to "buy" Amazon. If the big publishers who hold the top-rated authors don't like Amazon's discounts, then simply don't offer the book for Amazon to sell. That's my take on it, anyway.
Ebooks are here, and they are here to stay, and trying to lock down products to a proprietary format or device is not going to work, as the music industry AND Sony Reader have discovered.
Guys, you're all beating a dead horse.
The ebook subscription model is coming and coming fast and hard.
Starting next year eReaders won't be sold, they'll be given away free WITH THE PURCHASE of a 12-book-per-year SUBSCRIPTION to B&N, AMZN, and maybe even the major publishers (if they're smart).
After all, it's book people want to buy, not single-purpose bulked up gadgets.
The things that publishers don't get is that people like me who have made the transistion from paper to eBook are not going back.
I used to buy about 75 books a year in hardback and trade paper. In the last year I have bought over a 100 books — not one of them is paper.
Why the publisher would risk alienating people like me when they are just barely hanging on is a mystery to me.
Very short sighted and ultimately stupid
eReade devices are just too simplistic to make them worth carrying around. Netbooks, tablets–that's the way to go, because they can let you read ebooks AND do all the normal computing things, too, AND play vids and mp3s.
No way would I lug around some big gadget in the year 2010 that just displays books. How dumb!
MAYBE, as the above anon mentions, if I were getting the reader free with a subscription book service–that might change the game for some people, maybe even me–but the way it is now where you have to buy the thing for hundreds of $ AND then buy the ebooks too! You're sh**n me, right?
That is pure stupidity.
This topic is not as one-dimensional as many may think. Personally, I fall in the simultaneous/slight delay category. The reasons would be greed and the desperate clinging to old business models (I also still use vending machines and buy in bulk).
But, where I may sit on the fence about whether to delay or release e-books simultaneously, I can see the benefits of e-books. Authors will have fewer diminishing sales, for one. By this, I mean library/borrow from a friend/buy at a used book store.
Potential readers will be more compelled to buy books at the e-book price point. What needs to happen if the old business model crumbles (B & M businesses like B&N and Borders go tets up) is that publishers and authors/agents need to revamp the commission structure. The costs of doing business–manufacturing, delivery, marketing, admistration–will obviously be lower and therefore the author's cut should be expanded.
Besides, in the new model, the intellectual property and the electrons are all you are buying. No more paper (unless you print it yourself, Lord forbid). No more ink. No more binding. No more shelving, packing, storing, returns, and more. What the reader downloads is mostly owned by the author. The publisher just provides the venue and the marketing.
In fact, publishers would become almost obsolete. Scary. What a topsy-turvy world. Maybe this is what the publishing giants fear most and why they are clinging to ye olde press. And, personally, I don't blame them.
Agree with the above sentiment that ON THE SURFACE the current pricing model and narrowness of function for eReaders seems to be a showstopper.
But let's actually break down some numbers:
Take an average reader who is willing to buy 12 new paper books a year: 12 new harbacks at $25 ea = $300. $300 per year on books. And presumably they either give them away after done reading or store them on a bookshelf if they have room.
Going the e-route: $250 for the eReader + 12 x $10 for the ebooks = $370 to go ebook. That's only $70 more, and that's only for the first year. In subsequent years, they'd only be spending 12 x $10 = $120 per year, while the paper book habit stays at $300.
So I do see a point to going electronic.
There's an excellent post by Shatzkin about this, and I wish I had the link to it, but I think it's spot on. This issue isn't really about economics at all. Publishers aren't stupid. They understand what they're doing. They know this isn't a great short term solution. This is about Amazon. They want to nip Amazon in the bud before ebook market share gets strong enough for them to dictate pricing. They don't want 10 dollar new releases to become the norm, and this is where the future is heading. Public perception is a powerful force, and they're battling Amazon over this. Honestly, I don't think they're wrong.
JDuncan-
I actually added the link to the article yesterday afternoon. It's a good one!
Anon 12:42.
Okay. Although, personally, I'm not expecting to win the Nobel until 2011. But I'll go to celebrate your win! 🙂
"They want to nip Amazon in the bud before ebook market share gets strong enough for them to dictate pricing. They don't want 10 dollar new releases to become the norm, and this is where the future is heading." JDuncan
Saw it earlier, glad you shared it. It was a great article and important point-that this is about wrestling control from Amazon.
The problem? They're ticking off readers like me in the meantime. And as a reader, I'm already upset about paying $9.99 for an e-book. (Not paying more. Not now, not ever. Sorry.) Now they want to make me wait and make me feel like I'm not as worthy as hardcover customers? I hope they're not suprised if that leaves me, and others like me, thinking, "I hate the idea of piracy but can really understand it…hmmm…"