Amazon "Fires Missile" at Book Publishers--But Is the Target Really Apple?

I had hoped to avoid writing about e-books for a while, not because I don't think they are interesting but because I'm reluctant to have one topic monopolize this page. But  developments are coming fast and furious in this quarter of publishing so you can expect to see a lot more about this here for the foreseeable future.  Witness two events of the last couple of days: First, we learned that Apple has been in discussion with the "Big Six" publishers about terms for making e-books available on their much-bruited new tablet computer. According to Michael Cader at Publishers Lunch, these discussions center around an "agency model" in which--unlike other e-tailers (notably Amazon)--publishers will own their book files and set prices while Apple will in effect take a commission on those sales rather than buy and resell the books to consumers. Although the functional difference between "reselling" and "licensing" is trivial, as Cader points out, it's huge to publishers because it gives them control over pricing and allows them to experiment in this area, instead of acceding in Amazon's attempt to commodify all titles at $9.99 or less. 

Almost simultaneously with this news, Amazon announced a new e-book model for publishers and authors, offering a 70 percent royalty (a big improvement on their usual terms) with certain key conditions--including a) the e-book must be priced no higher than $9.99 and b) it must be at least 20 percent lower than the printed book price.  

There seems to be some confusion about what this announcement means. Henry Blodget, at The Industry Insider, hollers that this move "fires a missile at the book industry" and will force publishers to cut their prices for e-books; also that it " should also solidify Amazon's already tremendous dominance of the ebook business" by enhancing the popularity of the Kindle. 

I think Blodget has it backward: Amazon is staring at the possibility, even likelihood, that a host of new e-readers--numerous models have been announced--will rapidly grab much of its share of the e-book market. Many readers, me included, actually prefer buying e-books via the Kindle store, then reading them on iPhones with their crisper more responsive display. When we can read them on a large-screen Apple tablet--and buy them via an elegant, simple Apple-designed e-book store (or through iTunes), we won't need either Amazon or Kindle. 

In other words, Amazon is trying to compete on price while Apple and others compete on quality and features. So far, Apple has been highly successful at that kind of contest. In short, I see this as a would-be preemptive strike by Amazon in anticipation of the Apple tablet. Amazon is going to be a major player in this market for the foreseeable future, but rather than being the game-changing "missile," their current move seems like an admission that they will no longer be a sole 600-pound gorilla. 

So far these events seem like good news for publishers. With several players competing to sell e-books to the public, we're less likely to be bullied by one of them, and with these differerent business models in effect we may be able to accelerate the necessary process of trial and error regarding pricing, timing and so on. 

Still, one aspect of the new Amazon pitch has the potential to further destabilize the marketplace and threaten publishers. The 70-percent royalty is surely meant to attract authors to make direct deals with Amazon, cutting out publishing houses altogether. Amazon may well offer even better terms to carry a certain e-book exclusively. This has already happened with one bestselling author, as I've discussed here. If this becomes a major trend, it could really damage publishers' profits and they can't afford to take this threat lightly. 

Where Do Authors Come From?

One question editors are frequently asked at cocktail parties is, "where do you find the books you publish? Do they all come from agents?"  Some editors, probably wiser ones than I, simply answer, "Yep." My answer is, you never know where you are going to find a publishable book or a promising author. True, the vast majority of titles I publish (probably 95 percent) come from literary agents. But a few come from other sources. When I was at Oxford University Press, many of our authors submitted their work directly, and an important part of an academic editor's job is maintaining relationships with important people in the field (whose graduate students may be the star authors of the future). I still, happily, publish some scholars whom I deal with directly.

I also believe that a good editor will create his own books: instead of sitting at a desk waiting for someone to send you something, you think of an idea for a book and go looking for the right author. Very often, that author has an agent, but creating a book this way is different from, and sometimes more satisfying than, leaving it to other people to bring you stuff.  I have published several titles, from how-to books to award-winning works of history, that came from me pitching ideas to authors.

Another happy occurrence is when authors refer their friends or colleagues to you. Some of my best authors have come to me through authors I've worked with who suggested a friend or colleague contact me. Again, often this connection involves an agent, but it's not quite the same as the agent flipping through her Rolodex and putting my name on a list. I always take referrals from an author very seriously whether or not an agent makes the submission.

But as I say, you might find an author anywhere. Many years ago, before internet shopping existed, I was an impecunious editorial assistant who bought shoes from mail-order catalogues. One day I phoned an order in to Land's End and found myself having a longer conversation than usual with the customer service rep. Hearing that my shipping address was "Persea Books," he said, "Oh, are you a publisher? I'm just learning about the publishing business now, because I'm writing a novel." This aspiring writer was working at Land's End to pay the bills, and while he actually had an agent, he wasn't going to miss an opportunity.  My shoes arrived promptly, with a literary fiction manuscript as a free bonus.

This story might be funnier if the manuscript were lousy, but on the contrary, it was quite well written. In fact, I thought it was too quiet and literary to sell, and turned it down--but a couple of years later, I saw the same manuscript was published by Simon & Schuster. Where do you find authors--or publishers? You never know.




P.S. This story is not meant to suggest I yearn for unsolicited and unagented manuscripts. I will write at another time about the slush pile, and why I don't read it any more.

E-Books: Do I Smell Another Rights Battle Brewing?

I don't know about you, but I can hardly bear to hear any more about e-books for a while, after a couple of weeks of hearing various experts' predictions for the future of publishing; hearing about the cornucopia of new e-readers being shown at the Consumer Electronics Show; and the incessant drumbeat of rumors about the Apple tablet, aka Unicorn. But a new wrinkle in the e-book rights tussle occurred to me as I was pondering Jonathan Galassi's New York Times op-ed that argued why e-book rights to backlist titles like William Styron's Sophie's Choice should remain with Styron's hardcover publisher, Random House, even though their contracts were written before e-books existed.

As I have written here before, there is legitimate (and spirited) debate about that assertion. But what I'm wondering about now is books whose contracts were drafted more recently. In the early 1990s, when the internet was starting to happen and books on CD-ROM were the hot new thing, publishers sensibly began revising their contract boilerplate to include electronic book publication among the rights granted by the author.  However, this new language drew a distinction between what's usually called "verbatim text"--i.e. the display of the author's words via some electronic device--and what was often called "multimedia"--i.e. something that included video, sound, or interactive elements (John Waters' Odoroma, perhaps) along with the written text. And in a large majority of contracts--I'd guess almost all contracts where agents were involved--multimedia rights were reserved by the author.

Most agents back then concurred with the general notion that the publisher ought to control any version of the book that involves reading it as you would the print edition. But most all of us, agents and publishers alike, thought of "multimedia" as something different from "book." (As I said in my last post, it is different from a conventional book and requires a different level of investment in content and editing.) Several agents also maintained that movie studios--agents had wrested movie rights from book publishers decades earlier--would refuse to acquire book properties unless they hoovered up anything multimedia-ish in the deal.

So from that day right up until now, most book contracts  grant "verbatim text" rights to the publisher and reserve multimedia versions to the author.

Are you seeing the problem here? Today, publishers are eager to publish "enhanced" e-books, and the enhancements include, say, author interviews on video. One company, Vook, has launched a business specifically to create versions of print books that include pictures, film clips, hyperlinks and so on.

This may not be an issue for new titles, where the enhanced edition is conceived when or before the contract is drawn.  But it's going to be very tricky for the last 15 years' worth of books. Unlike the situation with authors from the 50s or 60s, where publishers can argue the author's general grant of book rights included a form not yet invented, we're talking about contracts that explicitly do give the publisher the right to a Kindle-type, text-only e-book, but not to a Vook-type, text-plus-video/audio/Odorama version.  Even if the "enhancement" is a two-minute Q&A with the author, filmed with a Flip cam, one could argue that's multimedia.

I still believe e-book rights should stay with the original publisher, but we will have to revise our definitions of e-books and our boilerplate language to avoid a situation where the publisher could find his author issuing a competing e-edition on the grounds it's a "multimedia adaptation."

It won't be the main theater of operations, but this could be a new front in the e-book wars.

The Problem with "Enhancing" E-Books, or, Another Premature Obituary for Print

As I noted in my previous post,  Wired online recently previewed Ray Kurzweil's multi-platform e-reading technology called Blio. I think Blio is nifty but I stop short of sharing Wired's opinion: that it means "the end of the paper book. Right now, e-books are poor copies of paper books, with a single advantage: convenience. A book is just a container for text, not its natural home."


Wired is right that so far e-books are inferior replacements for books printed with ink on paper. For all their virtues, no e-text display is yet as pleasant or easy to read as an old-school book. This, I believe, is the main (not only) reason why consumers don't like to pay print-book prices for e-books. It's not that readers calculate, as various opiners have done, that publishers' cost of goods and distribution is lower with e-books and therefore we should lower our prices. Nor is it that Amazon has nefariously conditioned Kindle customers to believe $9.99 is what a book is worth. It's simply that, notwithstanding the ease of obtaining or carrying an e-book (and for some readers, the hugely useful ability to make the type larger), no e-book serves the purpose of reading (or browsing in, studying, or annotating) a text as well as its printed cousin.


But I don't want to rehash the e- vs. p-book debate here; I want to take up the implications of Wired's comments on Blio.  I assume what Wired means by the line quoted above is that what makes e-books now superior to printed ones is not that they do the same job better, but that they can present content in a way mere ink on paper cannot. They, along with Mike Shatzkin who has also posted about Blio, wax enthusiastic about the platform's capacity to add all sorts of multimedia goodies--videos, soundtracks, animations, hyperlinks--to book texts.


It's an alluring vision--imagine a history of World War II that includes not only a narrative, and the grainy photo insert such books have had for decades, but newsreel footage, FDR's or Ed Murrow's radio broadcasts, animated battle maps, or later interviews with survivors of Pearl Harbor or D-Day; it could include not just footnotes but hyperlinks to every source cited, or for that matter every New York Times article about the war from 1939 to 1945. 


Wouldn't that be cool? And you can imagine similar "enhanced" e-book treatments of all sorts of titles, from cookbooks to celebrity biographies. There's just one problem, and it's a big one. To create all this multimedia content is incredibly expensive. Leaving aside the cost of obtaining the rights, in my hypothetical WWII example, to newsreels, radio broadcasts, and six years of the New York Times--all of which could be prohibitive in itself--the time and energy involved in developing such material editorially (and which would probably involve both a book author and talented in-house staff) would be the equivalent of creating probably half a dozen text-only titles, or more. Simply creating hyperlinked footnotes--something I'd love to find in a digital book--could take up weeks of someone's time. 


Yes, digital publishing allows us to create vastly richer products. But richness doesn't come cheap. You can create an amazingly sophisticated straight-text book very economically, because the sophistication comes from the author's mind. To create an equivalently sophisticated multimedia book is far more demanding. It's like the difference between creating a floor plan and building and furnishing a house--and requires an equivalent increase in person-hours and resources. 


Don't forget, we've been down the road with multimedia books before--back then they were on CD-ROMs. Books on CD failed, not only because consumers weren't ready for the technology, but because very few of them, in my opinion,actually delivered on the promise of the medium. And those that did tended to be priced far higher than what readers were used to paying for books. 


In effect there are two ways to go with "enhancing" e-books. There's the low budget, easy way, where you attach some video or audio content alongside of what's basically conventional text. And there's the expensive, difficult way, where you really reconceive the work and develop the content in all the ways digital makes possible.  I can't see any means of making the latter economically viable without charging prices that are at least three or four times what hardcovers usually bring.  Now, we may find the market will bear such prices. Would you pay $75 or $100 for the fabulous WWII e-book I described above? As a history buff, I might. But unless I, and thousands like me, actually will, I think Blio and its kindred will remain an underutilized technology.  


Even if a high-end market is established for such truly enhanced e-books, it's hard to see them displacing straight-text display (whether that's a printed page or e-ink) for a long time. The written word is still by far the most efficient and economical way of conveying information. "Enhancements" may add value to it, but they subtract efficiency.