Found via Nate’s Ebook News: Ben Bova, author of the Cyberbooks e-book satire novel (which recently became available as an e-book itself), has an editorial in a local Florida newspaper about the current e-book situation. Given that he was one of the first recent SF writers to consider the idea of e-books seriously, it is interesting to see what he has to say.
Bova writes that his premise in Cyberbooks was that “electrons are cheaper than paper.”
Ninety percent of a book publisher’s expenses are the cost of hauling paper across the countryside: from paper mill to printing plant, from printing plant to book distributors’ warehouses, from warehouses to book stores.
I figured that a book published electronically could go directly from the publisher’s office to the retail buyer, via the Internet. Publishers could save enormous expenses.
He goes on to talk about how e-books are now with us, but that just like in his satire, things are starting to go “drastically wrong.” Apart from people feeling uncomfortable reading on a screen (to which Bova. a long-time e-book enthusiast even apart from Cyberbooks, has a classic retort), he brings up the Amazon/Macmillan price feud:
Amazon wanted to price the books it offers on Kindle so low that they could corner the market on electronic books. Macmillan countered that they couldn’t make a profit on books sold at such low prices.
He then gets the order of events wrong when he says that it was Apple’s introduction of the new iPad that got Amazon and Macmillan to come to an agreement. In fact, it was the introduction of the iPad, and Apple’s agency pricing model, that kicked off the dispute to begin with when Macmillan decided they liked the idea and wanted Amazon to use it too.
Finally, Bova wonders whether, since the production costs are so much lower for e-books, authors should get a bigger share of the royalties than in the past. (In fact, Macmillan’s John Sargent has said that Macmillan will be looking at increasing the e-book royalty percentage to authors under the agency model.)
Amazon vs. Macmillan Redux
It’s interesting to consider the ways that “TeleReading” has changed things even in the lifetime of one author. And not even just the e-book aspect. Back when Bova wrote Cyberbooks in 1989, he probably could not have imagined that one day an editorial he wrote for a local paper might be read and discussed by people all over the world.
It’s funny that the Bova, whose work predicted the modern e-book market in a number of ways, still has a few misconceptions about the e-book industry. For starters, does he not see any irony in the fact that he starts out talking about how e-books should be a lot cheaper because they cost so much less to produce (a fact which many in the publishing industry would and do dispute) and then goes on to complain about Amazon selling e-books too cheaply for publishers to make a profit?
But I have to disagree slightly with Nate the Great’s response, too:
Um, no. Macmillan was making a profit on the ebooks. And I would argue that you are wrong about Amazon’s motive. They’re not trying to corner the market (which is impossible to do on the internet); they’re selling ebooks at the price that people want to pay.
I’d remind him that Macmillan was making a profit on them only because Amazon was selling a lot of them at a loss. They weren’t going to go on doing that forever, “price people want to pay” or not. And if they couldn’t “corner” the market, they could at least grab up a Microsoftian chunk of it.
Sooner or later, the publishers feared, Amazon might present them with an ultimatum: lower their wholesale prices to where Amazon could sell at a profit, or stop selling e-books. Of course, that’s all academic now.
Printing Costs vs. E-book Price
And publishers will tell you that e-books actually don’t cost that much less to produce, and that printing costs certainly aren’t “ninety percent” of them. If the publishers are to be believed, the printing costs for a hardcover are pegged at only a couple of dollars per unit, which leaves over $20 of price unaffected.
Hardcovers cost so much not necessarily because of printing costs, but because they’re the publishers’ first crack at getting a large chunk of the other production costs (editing, typesetting, advance, etc.) paid off—and because they are targeted at the crazy people who want to own their favorite author’s new book right away and damn the financial cost.
It is true that Baen sells its e-books at $6 each, but Baen’s execs seem to view e-books as a promotional side-project and apparently do not assign them a proportional tranche of the manuscript’s non-printing-related costs—so Baen can sell them cheaper without fear of cannibalizing its printed book sales.
(And even Baen sells a more expensive and less proofed $15 “E-ARC” version for people who just can’t wait—just like hardcovers are priced higher for people who “just can’t wait” for paperback.)
That’s quite a difference in philosophy from other publishers, and it is uncertain whether Baen will be able to keep it up when e-books are 50% or even 25% of the book market rather than 5% or less as they are now.
It is an interesting time for the e-book industry, and the future is still too hard to predict. But consumers are making it clear that they share Bova’s point of view that e-books should be less expensive, and how the publishers respond to sales figures from their new agency pricing model might make a considerable difference in how quickly the e-book market grows.
Maybe it’s time for a sequel to Cyberbooks.