8 1/2 Unanswered Questions about the Future of Publishing in the Digital Era

It's evident from what I have been posting here that like everyone in the book business I'm preoccupied by the changes that are happening so swiftly in it. I'm looking forward to attending the Digital Book World conference on Tuesday and Wednesday of this week, where some of the smartest people in and around the industry will be speaking. In the last 12 to 18 months we've started to get some sense of how new technology is going to reshape publishing but the crystal ball remains extremely cloudy.

I thought on the eve of the conference I'd put down a list of what strike me as some of the most critical questions that will determine how publishing evolves in the years ahead--questions that I have as yet no good answer to. I'm hoping I may learn something at Digital Book World that will start to answer some of these--but I suspect it will be a year, or two, or five, before all the answers come into focus.

1. How much will piracy damage the sales of books now that scanners and e-readers make it easy to share files? We know books are being widely pirated already, and we know it's going to become yet more widespread. We don't yet know whether the sales lost to piracy are going to be an annoyance or a crippling problem. 
2. How badly will the ongoing collapse of traditional media affect publishers' ability to market their titles? As a serious nonfiction publisher I've seen the number of reviews my books get take a nosedive in the last two years, for the simple reason that book coverage in newspapers and magazines is disappearing. This has certainly affected sales. I firmly believe that blogs, viral  word of mouth, and other internet-based publicity is a great, and growing, medium for book marketing, but if your book got reviewed on a couple of dozen blogs, that wouldn't equal the readership of the Los Angeles Times Book Review or the Washington Post Book World, to name two major review sections that have recently closed.
3. What prices will consumers be willing to pay for e-books? And how will that affect the price of printed books? Right now major publishers are desperate to resist rock-bottom pricing of e-books, fearing it will devalue printed books along with it. So what gets established as the fair price for an e-book is a key question. If Amazon is successful in making e-books very cheap, the business may evolve one way; if publishers can keep e-book prices closer to print books, it may evolve another way. There is of course a different strategy on e-book pricing from what the big houses are straining for: make'em dirt cheap. This viewpoint holds that we could all sell a lot more books if we charged a few dollars for a new book instead of $16 or $30. So my "half-question" on this list is, Can publishers sell a lot more books if they move the price point down to $4, or $3, or $2? Some enterprising publishers are certainly going to experiment in this direction. It will be interesting to see what happens?
4. Will "enhanced" e-books ever be cost-effective enough to be viable? As I've said here, I have my doubts about this. But some publishers are pinning their hopes for supporting high e-book prices on the idea they can "enhance" them with videos and other additional content. (They should read Kassia Krozser's post about this notion, first, though.) 
5. How long will it be before the line between book and magazine publishing is obliterated? I'm surprised I haven't seen more commentary on this point. In a digital marketplace, we're not tied to the constraints, or expectations, of publishing in book-length chunks. "Book" publishers have access to authors who can, and often do, write essays or stories or reportage that may be a few thousand words, instead of a few hundred pages, long. And we are no longer shackled by the incredibly long lead times involved in traditional, printed book marketing. Why not sell a short story, or topical article by one of your authors online, instead of taking 12 to 18 months to put it out in a book-length unit? By the same token, if you're the New Yorker or The Atlantic, why not take advantage of the eyeballs you already attract and sell readers a long-form work by one of your writers? We have already seen publishers making deals to ally themselves with news/magazine sites (such as Perseus and the Daily Beast). 
6. Is general trade publishing obsolete? The perspicacious Mike Shatzkin sees a stark future for the book biz as we know it. He argues that in a world where anyone with a modem can "publish" material, performing that function will no longer make a viable business, and that for publishers to survive, they must become the home for communities interested in a particular subject--"verticals" to use his term. If he's right--and I fear he may be--venerable brands like Knopf, FSG, or Norton are all at risk, and it's imprints like Tor.com and PoetrySpeaks, already aligned with core audiences, that will be the future of publishing. 
7. Is the explosion of e-reading actually expanding reading? Jeff Bezos and others I call "e-vangelists" claim that it's so easy to sample and buy new books, and so convenient to read them, on the Kindle and other devices, that people who own these gadgets are reading more books than they ever did before. At least two people I know--including one of my Bloomsbury colleagues who already reads a heckuva lot--report it's true. They are reading more books since they got their Kindles than they did before. This could be  great news for the book business. Maybe e-books will lead to a renaissance of reading! If e-reading manages to grow the market rapidly in the next decade, perhaps that will counteract all the other trends I worry about here. I'm not ready to count these chickens quite yet, however.
8. Are e-books going to kill retail bookstores? This to me is the $64,000 question--the one whose answer will determine the fate of large (and probably many small) publishers.  E-books are a tiny but rapidly growing share of the market. But even if they only become 10 or 20 percent of the market, that may be enough to make bricks & mortar bookstores unsustainable--a loss of that much business may be the difference between profitability and failure for many stores, possibly including the chains. And if bookstores go, billions of dollars in sales, and the book publishing industry as we know it, go with them. Even the expansion of reading contemplated in question 6 may not happen quickly enough to save big publishing if this happens. Mike Shatzkin's post "How to Handle a Smaller Print Book Business" is essential reading for anyone interested in the future of the business, though he doesn't foresee quite the apocalyptic scenario that I'm worrying about. 

These certainly aren't the only questions that will determine how the book business unfolds over the next several years, but they're the ones that I have been overheating my cranium pondering. What are yours?

The E-Book Wars Have Really Begun

It seems quite likely that we will look back on this week as the moment when the e-book wars officially began. We may have forgotten it, but electronic books of one kind or another have been with us for a couple of decades (beginning with ill-fated ventures into books on CD).  For most of that time, the actual market was negligibly small. In the last few years the e-book market became significant, but although it generated vast amounts of chatter—ranging from dark mutterings by publishers to utopian visions from technophiles—a sort of uneasy calm prevailed at the frontier where authors and agents, publishers, and Amazon and its competitors eyed each other warily.  There were occasional skirmishes and plenty of saber-rattling (over matters such as Kindle prices or Digital Rights Management) but no party seemed ready to make a move aggressive enough to start a real fight.

But that has now changed—inevitably, because the e-book market has exploded and digital books are the hottest (perhaps the only) growth area in the industry. The calm is over, and real punches are being thrown. You might say the first jab came from three houses (Simon & Schuster, Hachette, and HarperCollins) who announced they were going to delay releasing e-books of their titles until several months after hardcover publication. I agree with the analysis of Mike Shatzkin that these houses are not so much concerned over pub dates as trying to find some leverage to use with Amazon over the pricing issue. 

But the timing kerfuffle was minor compared to the dustup that broke out on Friday when Random House CEO Markus Dohle declared, with chutzpah one can only admire, that the house controls e-book rights for thousands of backlist titles whose contracts made no mention of such rights. This was drawing a line far out in the sand.  Dohle’s bold assertion is, essentially, that e-books are just another kind of “book,” so the contractual language that gives Random exclusivity over all editions of a work includes e-books—even though they had not been invented at the time most of these contracts were signed. 

It’s hard to believe Random can make this claim with a straight face. They went to court with this argument years ago and didn’t get very far. But you can see why they’re trying it on. At stake is potentially millions of dollars in backlist revenue that the house could lose out on if authors take e-rights of their old titles elsewhere.  Even though Random’s argument may be legally weak, by making a show of defending this territory they are presumably hoping to discourage authors from battling them for it. Agent Richard Curtis, who is himself a an e-publisher, observes at his blog, "Someone would have to have a lot at stake to be willing to spend hundreds of thousands of dollars to go up against Random House in court.”

Random may be betting that for individual authors, it won’t be worth the fight. But now that we are seeing explosive growth in e-book revenues, I believe there’s too much money at stake for authors not to contest this ground. The Authors Guild has already blasted back at Dohle, calling Random’s position on the backlist a “retroactive rights grab.”

The Guild also points out that Random House rewrote its contract boilerplate in 1994 and specifically added language to cover e-book rights, which wouldn’t seem to be necessary if they were already bundled in with the rights acquired. I worked at Random House at the time, and well remember sitting in meetings where we discussed the new contract language. I certainly don’t remember anyone saying, “well, we already have these rights, but let’s throw in some extra language about them just to make sure.” The conversations I recall were much more like, “Hm, our old contract language didn’t say anything about electronic books so we’d better make sure we get them from now on.”

In the end, just as the fight with Amazon over pub dates is largely about pricing, the fight over who owns backlist e-rights is largely about royalties. After all, Random House is a hugely potent marketer of books and content; to an author, it’s not clear there’s any company out there that’s going to do better selling your backlist title, and there’s clearly an advantage to marketing print and e-editions together. But Random is paying an e-book royalty of 25% of net receipts, while others offer a 50-50 split or better. That’s a lot to leave on the table.

And that brings us to the second roundhouse blow landed this week. I’ll talk about that in tomorrow’s post. 

(illustration: The Taking of Lone Pine  by Fred Leist) 

What E-Readers Will Never Replace

Mor liked to tear a book apart as he read it, breaking the back, thumbing and turning down the pages, commenting and underling. He liked to have his books close to him, upon a table, upon the floor, at least upon open shelves. Seeing them so near and so destroyed, he could feel that they were now almost inside his head.   
--Iris Murdoch, The Sandcastle

The Kindle and other e-readers have received an obsessive degree of attention in the press this year, with some people declaring the Kindle a great leap forward (see Jacob Weisberg in Slate) and others saying it's not nearly as good as a book. Nicholson Baker test-drove one for The New Yorker and found it disappointment: the screen "wasn’t just gray; it was a greenish, sickly gray. A postmortem gray." 

I'm a little surprised that so far, all the commentary I have read both pro and contra e-readers has focused almost entirely on the reading experience. Most people agree that a printed book--especially a well-designed, well-printed one--is more pleasurable to read, but Kindle partisans love the convenience of carrying many books in a one-book-sized package, not to mention the instant availability of so many titles. I was a Kindle early adopter and I can still remember the first time, stuck in an airport lounge, I zapped a book into my hands out of the ether. It felt like something out of Harry Potter. 

But as any book lover knows, the act of reading a book is only part of your experience of it. You have a relationship with the volume itself, not just with the text it contains. And the physical book, in fact, becomes the symbol of that relationship--in the precise sense that it partakes of what it signifies. When I sit in my armchair and look at my bookshelf across the room, the spines of each volume I've read summon up memories and sensations just as if I were going through a photo album.  

When I think of books I have loved, what comes to mind is not disembodied words, but the actual books. I can remember the way the type lay on the page, the feel of paper and binding in my fingers. But the intensity of my feeling for certain books isn't the product of their aesthetic quality--my disintegrating, shoddy paperback of Le Grand Meaulnes is just as numinous as four elegant hardcover volumes of Virginia Woolf essays that I have preserved much more carefully.

I have always felt slightly disappointed in myself as a reader because I treat books rather gently, unlike Iris Murdoch's Mor, who ravages his books in the course of reading them. It is only by almost destroying the printed pages that he gets them "inside his head." This passage captures something primal about how, in an almost literal sense, we consume writing. You can't consume an e-book quite the same way.

Don't get me wrong: I think my Kindle is great--and reading Kindle books on the iPhone, which I can carry in my pocket, is even better. For me, it's not while I read them, but afterward, that e-books fall short.  

Not only do I remember that magical moment in the airport lounge. I also remember when I turned, or rather clicked, the last page of my first Kindle purchase. Suddenly the book was gone--vanished back into the ether. Perhaps possessing books "in the cloud" alone is a purer way of appreciating literature. But I hope I will not be accused of Luddism or fetishizing print if I say that much as I love my Kindle, the satisfaction of closing a wonderful book and slipping it into a shelf in my library, where I can enjoy its company, will never be equaled by the satisfaction of watching a screen go blank.

(photo of Neil Gaiman's library via Shelfari.com)

Is Amazon Shooting the Kindle in the Foot?

Publishers are watching the current price war between Amazon, Wal-Mart and Target with misgivings. The retail and e-tail behemoths are offering loss-leader prices around the 9-dollar mark for many new hardcovers, and some fear that pushing prices on major titles down will devalue other books in consumers' minds.