The Trouble With Consolidation: Part 2

After taking a few weeks of some pretty harsh criticism from publishers, indy book retailers, and more importantly, authors, Amazon has responded with a blog post on the Kindle forum where they try to explain their position reagrding their dispute with book publisher Hachette in more detail.

The bottom line is that Amazon wants the price of all electronic books to be $9.99. They want this price because as far as they are concerned, the cost of producing an electronic book is significantly lower than the cost of producing a print book. To a certain sense, this makes sense. There’s no printing, shipping, warehousing, showrooming or (if you’re lucky and have a hit) re-printing involved in electronic book publishing.

Amazon also produces some pretty “compelling” math and statistics to prove that you can sell more e-books at $9.99 at a higher price and that in the end, everyone would make more money.

That sounds nice. And I confess that after reading all this I stood up to take a few turns around the office, and said “Hmmmm” to myself.

As it is Audited Media filing week (formerly known as ABC Audit week) I’m a tad busy. I can’t spend nearly as much time on this as I’d like to. However, here are a few thoughts:

• Amazon is not the only e-book publisher out there. Who says they get to set the price?
• Does the price of anything always really reflect the cost of production? Why is that such a big argument when we discuss e-media? Bottled water, anyone? A “small” cup of pop at the movie theater? Does the production cost of a luxury vehicle really reflect the final price the buyer pays? Breakfast cereal? Please.*
• Continuing on that train of thought: If I want to buy the latest release of Brandon Sanderson’s “Way of Kings” series, I’m going to go to my nearest store and buy it (or download it) whether or not the price is $9.99 or $14.99 for digital or $28.99 for the hardcover, I’m going to buy it. Price sensitivity is important in publishing, but not that important. Although I will concede that I am thinking about established authors. Especially if we’re talking about established authors.
• And why would you want to set the “high-end” so low? That strikes me as remarkably short-sighted. Does this mean that in a year or two we’ll have Amazon arguing with another publisher about setting the e-book price at $7.99?
• I will also concede Amazon’s point about e-reading (and all reading) competing against many other forms of entertainment. In the year 2014, this mostly means electronic. But I don’t think price is the issue. It’s the other stuff. We’re a family of dedicated readers and there are books and magazines all over our home. But after a busy day the question is often: Reading or Netflix. You’d be surprised how often Netflix or On Demand win.
• It feels like Amazon is trying to position themselves as the author’s ally.
• But unless you’re an indy author self publishing on Amazon, an established author does business with their publisher. Why? Because Amazon is not the only retailer out there. And if you do self publish, then Amazon is both publisher and retailer so Amazon is the “middleman”. I know that must be a shock to all the fanboys out there who think the internet will be the end of all evil and dreaded “middlemen.”
• And, as I understand it, Amazon tells their indy publishers that they can change the terms of their contract at any moment. As a representative of magazine publishers, if a national distributor or wholesaler or retailer had that in their boilerplate and that was their starting negotiating position, I would look a little askance at that contract, the people who created it, and be very wary about how much business I gave them.

It’s important to retailers to develop their brand and create a look and feel for their customers. If they are smart, like Amazon, they have excellent customer service and a friendly shopping experience. One of the big raps on Borders towards the end of its life cycle was that shopping in the stores was not a pleasant experience.

Do readers really care about the publisher? No, they want a book by a particular author or a book in a particular genre. That will always be the case and that’s what makes this fight a hard one for Hachette. Authors are the brand. Their publishers promote the brand. Retailers can behave like a brand.

Authors, like magazine publishers, are the producers of a very specific, very unique product. It is not anything like toiletries, food, office supplies, dog food or kitty litter or any other retail product. Amazon has been succesful because they did cleverly take advantage of an industry that was complacent, short-sighted and didn’t understand the benefits of the nascent world of e-commerce.

A world of books (or magazines for that matter) that is dominated by only one or two retail outlets is a world that is dependent on the whims of a conference room full of people and their own objectives and algorithms. They may or may not be looking out for the producers or the consumers no matter what slogans they repeat.

And that is the trouble with consolidation.

*: Seriously, this whole “it costs less to produce a book, magazine, newspaper” on the web so the price should be $9.99 or $2.99 or $0.99 really drives me crazy. Since when? What’s the profit margin on your latte this morning?

And let me ask you, if and when Amazon or Alibaba or whoever might win it all owns 85% or 90% or more of the market, do you honestly think the price will remain there? Do you think the offer to the publishers or suppliers will remain where it is now? At what they deem “fair”? Do you really think your customer satisfaction will remain as high as it is today? I’m sorry, I don’t mean to be cynical, but seriously…Oh, look! A pretty unicorn….

On Digital Books, Apps and eReading

I was recently gifted with an iPad mini and it was interesting to see how big an improvement it was over the somewhat sclerotic first generation iPad we own. That machine, while very cool when we first got it, quickly aged and now spends most of its time crashing the Safari app or playing solitaire.

Right out of the box, everything is smoother on this new machine. Mail, calendars photos and music synched perfectly with the cloud and I was off and running in less than an hour.

Even better, while tablets still mostly feel like entertainment devices, the mini is capable of helping with work. When I’m working off campus with my MacBook Air, the mini often serves as a second screen. It can work successfully as a stand alone and mimic almost every program I use on either of my Macs. I even came across a shell app for Tel-Net access to a legacy IBM mainframe I work with on almost a daily basis (Yes, those still exist and are useful).

So it wasn’t too long before I downloaded the iBook app and decided to give digital reading a second try.

My conclusion is this: I’m fortunate to be part of a “straddle” generation. We’re the people who adapted to personal computing, made it part of our professional and personal lives. But we remember a time when computers were large, distant, and mostly used for accounting and launching NASA rockets.

And I want to say this: I laugh at digital apologists who frequently say how much “greener” eBooks are? Seriously? How do they think those shiny slabs of metal, plastic and lord knows what else are made? What do you think powers your Wi-Fi? Have you seen pictures of the air in Beijing and Shanghai? While there may be some green washing on both sides of the “debate” let’s point out that at least paper is created out of a renewable resource that is recyclable. Moreover, in my little shallow backwater of the publishing business (Newsstand Distribution), almost every single thing that enters a wholesalers’ warehouse is recyclable.

I did try reading on the iPad 1 early on and was displeased with how awkward and heavy the tablet felt after a while. So I was expecting a better experience with the mini. Meh.  We added what was supposed to be a “lightweight” cover to the tablet but in all honesty, at some point it feels just like a large book. Granted, it’s not like a Stephen King “Under The Dome” hardback, but still.

So how was reading with it?

The screen image is nice. The mini is the right size for reading. I liked the nighttime reading feature. That is certainly an improvement over a book light. Downloading books, presuming the books were in the iBook store was very quick.

On the flip side, it was a little odd finding that I could download books that are now in the public domain for free. I suppose I should be grateful for having free access to Shakespeare’s “Macbeth”, but it felt a little like stealing.

The ability to switch the screen to white on black for nighttime reading is one of the big pluses for me. In either daytime or nighttime mode, the screen is easily readable and switching out of iBook into other apps is, of course, easy. I didn’t find the iBook store any harder to navigate than I find almost any other digital store. Which is to say that I’m not that easily impressed.

In other words, I’m impressed with the technology. But still not the layout or ease of use. It’s not that any of this is difficult to use. I’m far from a technophobe. I just don’t like having to think about what I’m doing when I am reading.

The first book I downloaded and read through was “Discordia” by British journalist Laurie Penny and American artist Molly Crabapple. The short book is not available in print and was intentionally designed as an e-book. In its digital form, it was remarkably cheap. I’m a fan of Molly Crabapple’s art work. It’s sort of cross between neo-Victorian and Steampunk. The book is a journal/artistic rendering of the time Crabapple and Penny spent in Greece during the financial and social meltdown in the summer of 2012. Laurie Penny’s prose is a modern take on Hunter S. Thompson and gives a lot of weight and empathy to the plight of the upcoming generation of the underclass. Her writing is direct, forceful and thought-provoking.

Discordia, By Molly Crabapple and Laurie Penny

In my first read through the book, I was stuck by how either I couldn’t, or couldn’t figure out how to zoom in on the images. I Googled my problem and found many unhelpful suggestions. Once again, tech was in the way of reading. The latest version of iOS seems to have resolved this. Or I may have stumbled across the solution without realizing it.

Another issue I ran into was one of bookmarks and controls. I found getting the controls for bookmarks and scrolling touchy at times. If I tap the screen accidentally, the page will turn on me. Are there comparable issues with an old-fashioned print book? Yes, but whether reading for pleasure, learning or business, I don’t want to be thinking about technology.

And then there’s the public library. If I want a book at the library, I go there and get it. If I’m lazy, I sign in remotely, reserve the book, then go get it when it gets placed on the shelf for me to pick up.

If I want a digital book from the library, well that’s an entirely different story. Opponents of the ACA (aka Obamacare) have been having fun laughing at the web site. If they want to see a real horror, check out digital public libraries. Go see for yourself.

I did download a more contemporary novel and found layout and ease of navigation pretty fair. In other words, there’s not a lot to complain about and anything I did complain about would sound like so much nitpicking.

But I also downloaded what you could call a “legacy” book. Something that had been in print for some time: American author Tad William’s “Memory, Sorrow and Thorn” series. This is a set of fantasy novels and if you’re a fan of the genre, you know that this means maps, glossaries and lots of turning back and forth to pick up complex and convoluted threads.

What was interesting here was that the final book in the series had originally been published in two volumes. At the time, the publisher explained that they split the book in two because of the size (It’s very long) and they did not want to sacrifice publishing quality. In the digital world, that’s not an issue. So why are they sold as two books digitally? That’s a rhetorical question, by the way.

To Green Angel Tower Part 1 & 2 By Tad Williams, Published by Daw Books. Cover art by Michael Whelan

Perhaps negotiating tablets and digital reading will become as second nature to younger generations as flipping a page and scanning an index is to our “straddle” generation. But given the tendency of hardware and software developers to fiddle with their designs, I wonder. What do I mean? Well, which version of Office is in your office? What do you think of the latest one you have? How long did it take for you  to get “used” to it? Why do you have to get used to it?

If I was filling out one of the endless customer surveys that are pushed at me after my latest web or bricks and mortar purchase, I would click on the number five: I neither “Like nor dislike” the experience. It’s OK. It’s nothing great. At times it is pleasant. At other times, I’m frustrated and wondering why I’m spending time with this.

When reading becomes all about the tech and not the word, you’ve lost me. When the tech fails to enhance the word or image you’ve missed a wonderful opportunity. A contemporary novel, or even a “legacy” one is fine digitally. I would have loved to spent hours looking “Discordia” in print.

My conclusion is this: The recently reported plateauing of digital book and magazine sales is might be the pause we see while the early adopters wait for the rest of the populace to catch up. We will see usage grow and new technologies change and adapt what we’re doing.

None of this is going away paper lovers.  But I hope (hope being the key word), that the tech will not overwhelm the importance and pleasure of the written word.