Libertarian think-tank the Ludwig von Mises Institute is carrying an article by self-published author Genevieve LaGreca about “Dead-Tree Luddites”. But it’s not, as you might expect, about those people who insist they love “the smell of books” and won’t ever read an e-reader, which is the image that phrase immediately brings to mind for TeleRead regulars (or at least for me). Instead, it’s aimed squarely at the agency pricing publishers and their insistence on clinging to the dead tree business at the expense of e-books.
The low pricing of ebooks, scorned by the traditional publishing interests, is the emerging writer’s new ticket of admission into the book industry. While readers may be highly reluctant to risk $25 in a bookstore to try a new writer’s hardcover work, they are buying the ebooks of new writers priced at or around $2.99 on Kindle. Writers are finding their fans and making money at these prices, and readers, judging by Amazon’s “customer reviews,” are happy with these low-cost books.
But then she gets her arguments a little mixed up, because she spends the first part of the article talking about how great it is that “writer-publishers” (in the grand tradition of great Americans such as Benjamin Franklin, who self-published Poor Richard’s Almanac, and Thomas Paine, who self-published Common Sense) have an outlet for their reasonably-priced books. But then she turns around to rail at publishers who pull their books out of Amazon or decry the antitrust actions that favor Amazon while restricting publishers’ ability to enforce agency pricing.
It doesn’t really seem to me that the two arguments have that much to do with each other. The agency pricing thing is only related to books from those professional publishers. There’s nothing in it that prevents self-publishers from selling their books for $2.99. In fact, those self-publishers are basically using “agency pricing” themselves, save that they’re choosing to set their e-book prices low enough for people to be willing to buy them. In fact, from the point of view of those self-publishing authors, it would probably be better if the publishers were allowed to keep their e-book prices high, because it makes their own books that much more attractive to consumers.
As an interesting side note, this isn’t the first time I’ve mentioned the Ludwig von Mises Institute together with e-books. Economic commentator Gary North noted that the Insitute found that giving away e-books for free increased the sales of printed copies of the same books, and used this as proof of what he called “Picard’s Syndrome”—the idea that people generally prefer reading printed books to e-books. But that has to do with that other kind of “Dead Tree Luddites” I mentioned in the first paragraph.
The article is interesting but not quite accurate. LaGreca writes: “What Amazon has accomplished is truly amazing. With Kindle, it has eliminated the industry middlemen who come between the writer and reader of a book — from agents to publishers to distributors to wholesalers to brick-and-mortar bookstores. Kindle has also eliminated the need for a physical inventory of books, with its high printing, warehousing, and shipping costs. These innovations have resulted in far less expensive books now available to consumers. And the new marketplace of ebooks has been especially advantageous for self-publishers unable to get their books accepted through the traditional channels, who now have an avenue open to them for reaching customers directly.”
Amazon hasn’t eliminated the middleman; instead, it has become the middleman as well as the ebookseller. Amazon has taken up the tasks of promotion and distribution. And contrary to her assertion, Amazon does not permit the authors to reach customers directly; if it did, then the authors would get customer information as well as gross sales information.
She also neglects to say that this revolution currently is really focused on fiction and has yet to really take over the academic-type nonfiction market. And rant as she will, pbooks still constitute 70% or more of book sales, which indicates that as great as the Kindle is, it still has a long way to go. (And FWIW, perhaps rather than praising the Kindle, she should be praising the tablet, which greatly outsells the Kindle and yet provides an ebook experience.)
I know that many ebookers are dismissive of pbooks, but there are still many subject areas where pbooks are leagues better than ebooks. The strength of ebooks currently lies in fiction, not in “academic” nonfiction. This will eventually change, but not tomorrow.
I read the article on a different site and found it an excellent explanation of the free market. Her point wasn’t publisher vs middleman vs Amazon, but criticizing the people who want the government to intervene in the market, either on the side of the publishers or on the side of Amazon.
A free market-based exchange is a seller offering an item for a price that a buyer is willing to pay. If most buyers are no longer willing to pay $20 or more for a physical book, but are willing to pay $2.99 for an ebook, then the seller of the ebook gains marketshare while the seller of the physical book loses it. If the seller of physical books wishes to stay in business, he has to change his business model to attract customers. It’s been the way of the world since the first human trade.
The problems start when the government starts to pick winners and losers by making laws that prefer one seller over another. The government can’t know all of the decisions made by individuals on whether a price is “fair” or not, only the seller and the buyer can determine that. The government can’t know what a buyer would have done with the money saved by purchasing a lower priced item.
No one is forcing a publisher to do business with Amazon. If they want some of Amazon’s success, then they should come up with an innovative way to make and sell books and ebooks that customers will buy. Amazon’s big advantage is that they look to the future, listen to their customers, and give them what they want. Publishers STILL see bookstores as their customers, not readers, and until they change that, they will continue to lose business to Amazon.
Thankfully Government are not staying out of it. That is because it is government’s role to make sure the market is actually a ‘free’ market and not a ‘rigged’ market. Left to it’s own devices it is too tempting for producers to conspire to screw the customer and fix prices and practices.
Amazon has cut out the middle men and deals directly with customer and puts the customer first. The stranglehold publishers had on the market is gone forever, and the market is now freer than it has ever been. Amazon itself doesn’t have the power to control the market either now that self publishing is is out of the bag. Anyone can enter this market with a relatively tiny capital and compete with Amazon. The trouble is the publishers haven’t got the cop on or the balls to do it and Amazon has been left to gather the market …. for now. But anyone who thinks Amazon owns this market now and that is the way it’s always going to be need a serious lesson in history.