I did something unusual this week. I bought two recreational books.
This may not sound unusual and anyone who knows me personally is even more surprised, but I mean I bought two physical books, those old paper things with covers and all. One of them was A Programmers Introduction to Mathematics — and yes, I do read math books for fun, don’t judge me — the other The Typography Desk Reference. In both cases, it was because Kindle books can’t really cope with the topic. Kindles don’t handle math at all well, and a typography book rendered in one of the six fonts Kindles can process would be pretty pointless.
Other than those, and a couple of used books I bought that weren’t available on Kindle, I haven’t bought many physical books since I started using Kindles. I’m sure I’m not alone, and I’m even more sure that it’s scaring the Big Media Publishers to death.
Evidence of this is in the way many of the big publishers treat e-books. Here’s one I looked at the other day:
Yes, the ebook version is actually more expensive than the physical copy.
Seems a little nuts, don’t you think? Think about the economics of publishing books, which has a lot of similarities to the newspaper business we talked about recently.
For all that book publishers are using content to get people to buy their books, their real business, their major cost centers, all are centered around the manufacturing process: typesetting, printing, binding, warehousing, and shipping those big bricks of cardboard and paper pulp. Those account for literally 90 percent of their costs, while in general book publishers only net less than 50 percent of the price since they’re selling them to distributors and bookstores at a big discount.
What’s more, the initial process of publishing a book represents a pretty huge investment. You have all the editorial costs — and big desks and Manhattan skyscrapers don’t come cheap — plus to be economical, traditional publishing needs to create a substantial number of physical volumes to distribute: thousands to hundreds of thousands. About half of those are shipped out before the official book launch, what’s known as the “laydown”.
Now, whenever someone is doing something that seems really stupid, it usually does pay to think about why they would be doing it. In this case, especially after the BIG Media negotiated their settlement on the antitrust case, the publishers are now allowed to set their own prices. Since — we assume — the publishers realize that you usually sell more copies at a lower price, it seems like they must be setting those prices higher to encourage people to buy hardcopy. Which still doesn’t seem to make sense, because their profits on e-books have to be much greater.
Or if they somehow aren’t making more profit by selling something for which their per-unit production costs are effectively zero, then some stockholders are really getting screwed.
It’s not the additional costs of doing an ebook either. Making an ebook once you have the manuscript is really pretty easy — although if you look at the execrable results we see in, for example, Baen’s ebooks you wouldn’t think so. Illustrations are hardly ever done with pen and ink any longer, and for the same reason you wouldn’t publish a typography book on Kindle, the book design is pretty easy too.
Really the only explanation I can see is that they’re trying to protect their existing hardcopy book business from cannibalization. Now, at this point I’d like to propose the Donner Party rule: If you’re worried about cannibalism, the cannibalism is not your primary problem.
The truth is, the mass-market, printed on paper publishing business is dead. Rather like the people who play vinyl records through tube amplifiers, it’s going to become a slightly snobby hobbyist occupation. It won’t be too long before some new business model arises. Someone is going to start publishing with good production values and effective marketing but without the pulp-brick albatross hanging around their neck, and they’re going to clean up. But that won’t be the real game changer.
On Anna David’s podcasting course, she interviewed Paul Colligan, a podcasting guru. He said something important:
The Internet never has been, and the Internet never will be good for the middleman.
All publishing — even through Amazon — differs only in how many middlemen are in the middle. The real killer business model will be the one that gets content to consumers with the fewest, and least obtrusive, middlemen possible. And then Big Media publishers will be dead. But Publishing will live.