I want to offer a word of thanks to the American book publishing industry, or at least the traditional big companies that have dominated it in recent decades. They've helped me rediscover my local library and the used book stores in neighboring communities.
They've achieved this by exhibiting the qualities that come so naturally to corporate media giants: greed and arrogance – in this case, as applied to the way they've dealt with the digital world.
To understand what they've done, you need to understand a bit about how books are sold in America. Publishers have two major distribution methods. One is traditional wholesaling: sell the book to a middleman, who typically adds a mark-up to customers, but sometimes discounts a book below cost as a "loss leader" to attract more business for items that aren't discounted in this way.
The other model is called the "agency" system. In this case, publishers set the price and the bookstore merely handles the sale to the ultimate customer, for a set fee or percentage of the transaction.
The "big six" US publishers all sell their physical books via the wholesale model. After years of wholesaling digital editions as well, they moved to the agency model for ebooks, with Random House becoming the final publisher to switch early last year. The publishers had been increasingly angry about Amazon's selling of new bestsellers at the loss-leading price of $10 (actually, $9.99), worrying that the giant online company was setting customer expectations at a too-low price point and undermining the sales of physical books.
Apple played a role in this switch, by essentially telling the publishers it wanted the agency model for its own online bookstore, which services the iPad and iPhone. And Apple co-operated in what was the inevitable result for e-books everywhere: higher prices to consumers.
Not just higher prices, but vastly higher; many ebook bestsellers on Amazon (and in Barnes & Noble's Nook store) jumped 30% to 50%, from about $10 to $13 or $15 or even higher, as publishers imposed higher list prices for the digital versions. And in case after case, the ebook price for a new book was close to, and sometimes even higher than, the Amazon price for a hardcover. Remember, Amazon still has the right to discount from list price for physical books, as it has always done. Meanwhile, publishers have dictated that ebook prices will be the same as they charge for paperbacks (around $10 these days).
An ebook priced like a physical book is a terrible deal for the customer. Among other drawbacks, you can't resell – or even give away – an ebook in most cases. You don't really own an ebook; you're just renting it, even if the company you rent from says you can keep it, because that depends on the life span of the seller. Maybe Amazon will be around for a long time to come (I hope so, as a holder of a small amount of Amazon stock), but why would anyone count on that?
When new ebooks were $10, I was buying them all the time. In almost all cases, book purchases are impulse buys – something you want to have, right now. I was buying new best-sellers at a rapid rate, and happy to do so. (The books I bought this way tended to be mysteries and thrillers – the kind of book purchases I treated like movie tickets, to be read or seen once and then put aside.) No more. I still buy some e-books, but only at lower prices.
Sure, I can afford the higher prices. But the greed of the publishers has inspired me to make different plans. Now I reserve bestsellers at my local library – run by people who love books: imagine that! – and read them whenever they are available. What were impulse purchases of books that sent revenue to publishers are now impulse reservations that do not. If I have to wait a few weeks, no big deal. I should have remembered that all along.
I still buy some new physical books, especially by people I know or admire. These purchases are the kinds of books I know I want to own and keep, for future reference or to be able to pull off the shelf at any time. Ron Chernow's recent, brilliant biography of George Washington is one.
I recognize the publishing industry's dilemma. Like all media organizations, publishers are facing an uncertain world that has overturned traditional models. But the response – turning back the clock – is only turning me into exactly what they don't want: someone who thinks a lot harder before he buys.
