bookbubHello, boys and girls, it’s that time again! Time to play PUBLISHER REALITY CHECK!

In the Wall Street Journal, Jeffrey A. Trachtenberg reports on publisher ambivalence toward “daily deal” book sale sites, such as BookBub or The Fussy Librarian. He talks to representatives from a number of traditional publishing houses, including our old friend Steven Zacharius from Kensington Publishing Corp. A number of these representatives express concern that, even though these promotions tend to be quite successful, they may be inculcating a generation of cheapskates who will only buy books when they’re on sale.

“We know we might be shooting ourselves in the foot,” says Mr. Zacharius. “But I can’t resist because it’s such a good way to stimulate sales.” Every promotion the company has run through BookBub has been profitable, he said, despite the steep discounts.

Stop. Hold it right there. Pardon the all-caps, but I just feel the need to yell.


Whew. I feel a little better now—but there’s still just so much to unpack here, even in just that one little paragraph.

Zacharius clearly recognizes that low prices are “such a good way to stimulate sales.” Every such promotion has been profitable, he says it right there. And then he adds, “despite the deep discounts.” But what’s with this “despite”? Shouldn’t it be clear by now? It’s not “despite,” it’s because of!

The writing has been on the wall for months now that the return of publishers’ agency pricing strategy is decreasing their share of the e-book market, and effectively handing it over to self-publishers who sell e-books at the prices consumers are willing to pay. Every bit of new evidence that comes in reaffirms that fact, including this news now that when traditional publishers drop their prices, they sell more e-books. And they don’t lose money on them the way they would on loss leaders—the promotions are “profitable.”

“It’s an industrywide concern,” said Heather Fain, director of marketing strategy at the Hachette Book Group. It’s hard to know, she added, whether readers who are dedicated to reading bargain books will ever spend as enthusiastically to buy full-priced titles.

So? There’s an easy solution there. LOWER THE PRICES. Perhaps these publishers should take a cue from smaller publishers, who seem more enthusiastic about the idea. For example:

“Nobody needs to buy a book,” says Jane Friedman, CEO of Open Road, which promotes its titles via “You have to make it appealing, and one of the best ways to do that is price.”

But these publishers just don’t seem to get it. Let’s not forget that Steven Zacharius wanted Amazon to segregate self-published books away from traditionally-published books, so as to reduce consumer confusion. It seems like consumers have already done a decent job of getting over that confusion—they’re buying self-published books in droves, while giving over-priced traditionally-published ones a miss. The evidence is right there staring him in the face that consumers keenly practice price discrimination, and he continues to worry that maybe he’s helping them form bad habits.

It turns out that this story also saw some discussion on The Passive Voice a few days ago (I somehow missed it until I thought to check just now) and once again, Zacharius showed up in the comments there to discuss it further. His further comments don’t suggest any greater insight into consumer behavior than his quotes from the article. For example:

Fortunately most people still are willing to pay the normal ebook price for authors they like or for a book that has good reviews. Most ebook sales are still from the bestsellers at normal prices. Look at the NYT bestseller lists and they’re almost always recognizable names of new releases. Even the Amazon lists are generally bestselling authors unless of course the book is at a severely discounted price. But then the total revenue is far lower than the traditionally priced ebook. Of course if it’s a self-published book the author is keeping 70% of the receipts if it’s over a given price.

Yet, this doesn’t take into account those Association of American Publishers and Bookscan figures from September showing (traditional) e-book sales declining considerably since agency pricing went into effect. If “most people” are still willing to pay those prices, how come industry sales are dropping overall? People haven’t just suddenly gotten sick of e-books—especially since indie sales seem to be ticking right along.

I suppose this will all end up one of two ways—either publishers are right, and they’ll continue to survive, or they’re wrong and they’ll either have to change or go out of business. I look forward to finding out which outcome turns out to be the right one.


  1. I wonder if you’re not oversimplifying this. By going for the small quick profit they’re almost certainly hurting themselves in the long run. Amazon is a good example of a company that’s done well by ignoring short term gain with an eye to growth and the future. It seems publishers are wondering if they should do the same, and that seems realistic.

    That’s not to say they’re wise to keep prices so high on best sellers but that’s a very different issue.

    Personally I like the sales. I get Bookbub and Book Gorilla and they help me find bargains and the more bargains I find, and they’re getting very easy to find, the fewer books I buy at full price. I still do buy one now and then. My current book cost $13 at Amazon but it was harder to talk myself into that than it was a few years ago, before I started watching sales so closely.

    I think the publishers have a valid concern. They probably would be better off if they’d reduce their leading book prices and they’d also probably be better off in the long run if they cut back on their large sales. Of course as a buyer I hope they do the first and not the second. 🙂

    I think there might be another issue as well. Let’s say 3 years from now the publishers decide to stop the big daily sales. Suddenly people who are used to paying low prices for books have to pay a lot more. How many of them will turn to pirate sites for books?


  2. There are a couple of points worth getting into the mix here.
    First, major publishers have every reason to want to maximize profits by pricing to the audience, regardless of print or digital format. While they may increase unit sales by offering promotional prices, they turn a blind eye to profits. Their shareholders are concerned with quarterly results. The reason why Amazon can thrive by earning only razor slim profits is that they’re after market share not margins–prices can always go up later. Large publishers can’t expand their market share in any meaningful way except through M & A. (Smaller publishers tend to privately held, which may explain their willingness to experiment.)
    Declining unit sales of eBooks from traditional publishers may be due to price competition from indie/self-publishers. It could just as easily be the case that reported eBook sales are going down not because of pricing completion but due to the volume of titles published. There’s no way to tell for sure because there is so little data on this category .

  3. This devaluation argument is best described as yet another Zombie Meme. It has at its heart two unstated fallacies.

    The first is that the value of books is equivalent to price, and therefore, because many books are “priceless” readers should be prepared to pay high prices for them. The use of the word “value” here seeks to introduce an element of emotion which is really irrelevant. Quite frankly, the best of the books that I have read in my lifetime are in a very real sense priceless, though this does not mean that I am prepared to go without food or water or shelter to read them or own a copy. Like many things, their “value” is not reflected in their price and is mostly irrelevant to that price.

    The second is that the proper “price” of books is that set by the large publishers at the time when both readers and authors had no alternative. It is like saying that the correct price of sugar or salt is their value on the black market during the Second World War, when of course supply was short and rationing in effect in many countries. The truth is, of course, that technology changes and so do markets.

    The large Publishers fears that books would be “devalued” by “discounting” was a valid one and has come to pass. The genie is out of the bottle, and the bottle has been broken. But, of course, what the large Publishers call discounting or deep discounting is often no more than the new proper price in the new market conditions. They would have readers put on blinkers and pretend the market has not changed so dramatically. That ebooks are a quaint fad, and even so justify a price tag the same as a paper book, despite the very real differences of licensing, drm, lack of a legal resale model etc. Personally, I think, like many industries facing their products going digital, large publishers hope was for a windfall. Prices the same but profit through the roof with negligible distribution costs and wastage, amongst other savings.

    No, books have not been devalued for me. They remain as valuable as ever. But I refuse to be ripped-off by ridiculous and anachronistic pricing practices designed to preserve a dead business model and price gouge other consumers and myself.

  4. Isn’t the purpose of daily deals to get people to buy and create buzz for their overpriced books? Do they also complain about every free copy they ship out to reviewers, and advertising in places like the New York Times Sunday Review?

    Would they rather have the cheapskates only buy used books at Amazon and other used bookstores or borrow them from the library?

  5. I know nothing of the status of Steven Zacharius’ limbs but your article (not the WSJ one) is built on a rant about what Zacharius did not say and therefore your argument does not have a leg to stand on. Zacharius was supporting the use of promotions as was every other person interviewed. Yes they are ambivalent as is Jeff Bezos. Why do you think that self-publishers cannot set prices to free on Amazon, or get charged double the retailing fee for books sold below $2.99? It’s all about maximising company profits and Amazon cannot survive as a purely bargain basement outlet. Nor can any publisher. The days of self-publishers becoming millionaires by selling all books at 99 cents are long gone, because Amazon wanted them gone.

    In terms of how supportive these publishers are of these promotions these are some of the books I have picked up via the likes of Book Bub: Cloud Atlas, Bone Clocks, Ghostwritten, A Thousand Summers of Jacob de Zoet, Hitchhikers Guide 5 volume set, and The Commitments. Books I’ve seen promoted but I already owned include Still Alice, Ancillary Justice, Lives of Tao, and Modern Women.

    There is nothing new about this. Back in the days of PDAs I signed up to Peanut Press in 2001 with the lure of Allen Steele’s Chronospace for free and a subsequent download circa 2005 of the Palm Digital Reader software netted me a free copy of J.A. Konrath’s Bloody Mary in the days before he went into self-publishing. Long live publisher ambivalence: its been alive since at least 2001 so I trust it to keep breathing.

  6. “when traditional publishers drop their prices, they sell more e-books. And they don’t lose money on them the way they would on loss leaders—the promotions are “profitable.””

    One reason the deep discounting involved in daily deals might be proving profitable is that under many if not most trad-pub contracts, the author gets severely reduced or even ZERO royalties if the price is reduced to a certain percentage.

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