Why Publishers Need to Learn to Talk to the Animals

I've been reflecting some more on the recent debate over e-book prices. Michael Cader's much-applauded post on the topic made the point that in general publishers have not done a good job of explaining either the reasons for their pricing policies, or even the basic facts about the marketplace. He's right, and the situation highlights a problem that the industry is still just beginning to grapple with: big publishers are not used to thinking of readers as their customers.

For a century, publishing has had (as Shiv Singh noted in a presentation at Digital Book World) a business-to-business orientation. Big publishers' customers were retailers, a few wholesalers, and libraries (mostly sold to by wholesalers again). On the rare occasions when an individual reader ordered a book from the publisher, fulfilling the order was such a hassle that the author actually got a reduced royalty because of all the extra costs incurrred.

True, publishers directed some of their marketing (such as advertising) to consumers, and we tried to reach individual readers with publicity. But even our publicity efforts were largely aimed at a small ring of intermediaries like book reviewers or radio/TV producers.  The idea of telling a story about ourselves or our industry to the reading public, or explaining to book buyers why our products cost what they do, wouldn't have occurred to most publishers a few years ago.

It has at least occurred to some houses by now (and some vertically focused houses and imprints are well along at this), but it's a long way from being fully absorbed by the industry. Publishers are a bit like Dr. Dolittle, slowly learning to "talk to the animals." I'm not being pejorative to either side in that remark. Dr. Dolittle loved the animals--but it took him a while to speak their language. Our readers were out there in all their wonderful variety; we loved them; in our way we took care of them--but we never had a conversation with them.

So, at the same time publishing houses are struggling to master the "disintermediated" marketplace where we can, and must, communicate with end users directly, on top of the old, hard work we have to do of telling people about our titles, we have to explain about how the industry works and why $14.99 for a great new novel is not a ripoff.

All of which gives one pause about the "agency model," where publishers set and enforce their own prices. Just as we have no expertise in talking to readers, we have no expertise in what prices work best for what kinds of titles when. Kassia Krozser notes that "price is an important tool in the arsenal of retailers" who are constantly in conversation with readers, and add their value by getting books into those readers' hands. 


Don't get me wrong--I don't believe in rolling over and ceding the job to Amazon or some other behemoth. Just as we have to learn to communicate with readers directly--that is one reason I write this blog--we're going to have to fool around with different pricing schemes and start to figure out for ourselves what works.  Doing so will involve a lot more talking to the animals. 

(Illustration by Hugh Lofting from Doctor Dolittle in the Moon)

Cutting Through Some of the Nonsense about E-Book Prices

I’ve been trying not to let e-books monopolize this page, but it’s a subject that’s hard to avoid with so much happening. This week we had a New York Times article about the ever-contentious topic of e-book prices, on which vast quantities of hot air are expended.

The Times notes that many readers are complaining, not to say outraged, about the idea of paying more than $9.99 for e-books—the price that Amazon has aggressively promoted in its effort to sell Kindles. 

At Publishers Lunch, his indispensable blog/newsletter, Michael Cader had a terrific piece yesterday debunking some notions implicit in the NYT article, and urging publishing people do to a better job of explaining to the public the widely held fallacies about e-book prices. I’ll write more about this myself, but his points are so cogent that I might as well start by quoting some of them:  

* $9.99 never was the top e-book price; people pay more than that every day
[When there was no Kindle, many e-books, including those for Sony Reader cost well above $9.99. And from the beginning of the Kindle store, plenty of titles were above that price. As Cader notes elsewhere, three recent surveys, two presented at Digital Book World, one this week by Goldman Sachs, strongly suggest that while price is important to e-book buyers, there are—as you’d expect--more important elements to a buying decision, such as author reputation.]

* The implicit, false promise of cheap e-books was made by the people who profit, at very nice margins, from selling the devices, not by publishers. Please blame them if you feel deceived.  [Right. Amazon has sold “millions” of Kindles by Jeff Bezos’s account. Which means, at the prices they charge, they are raking in hundreds of millions on Kindle hardware. Was it a coincidence that Amazon had its biggest profits ever last year?]

* Publishers are lowering their ebook prices
Most stories say publishers are raising prices. We in the trade know that publishers are preparing to lower their ebook prices by 50 percent or more, and reduce their own profit margins. But customers don't; they hear that publishers are raising prices. [Another key point. Publishers are actually looking to take less per book than they have been getting from Amazon. And in general e-book list prices are coming down.]

* The new "top price" is going to be $12.99 more often than not
[Cader notes that this will depend on what deals publishers arrive at with Apple, but in general we’re talking about a rise of a couple of dollars.]

Cader’s piece also makes one other important point:

Publishers are hoping to protect smaller and local retailers and ensure that customers have a wide range of real bookstores and online e-bookstores to choose from.

Right again. Low prices are a weapon used by big, deep-pocketed merchants, typically chains, to crush their small, local competitors. Publishers don’t want to see a marketplace that consists of nothing but Amazon and Barnes & Noble. This is, to be honest, partly because most of us in the business have a sentimental attachment to old-fashioned bookstores, the kinds of places where most book-lovers love to hang out.  It is partly because we know that it’s in those independent stores that surprise, hand-sold hits can catch fire and turn into bestsellers. But it’s also because we don’t want to find ourselves with nothing but 600-pound gorillas for customers.