Upfront, I'm not an economist, nor do I hold an MBA. But I'm fairly widely read in areas other than romance, and I did manage to stay awake and pay attention during my econ classes.
Now that my absolute lack of credentials is in place, here's where my opinions and frustrations come in. Obviously. eBook pricing and publisher costs and all the associated legalese is still a hot topic, and it has been for probably the better part of a decade now. There are plenty of arguments on both sides related to costs and value. Dear Author has been covering this topic for a number of years and the reader discussions have typically been interesting and evenhanded. Some days though are more frustrating than others, and this was one of those days when a comment ostensibly made by the CEO of a major traditional publishing house stepped right into a discussion of whether or not we're turning into a culture of buying instead of reading.
"The entire price discussion was brought on by publishers by themselves. There used to be a set progression and pricing structure of first releasing a hardcover, for bigger authors. If the reader was a real fan, they would pay the $25.00 for the book at a retailer. Then Amazon started discounting the hardcover edition to around 13.00 and sometimes even below cost. Next came the iPad and Apple insisted that publishers not be allowed to “window” the release of the book. This means that they had to release the ebook edition at the same time as the print book. This helped the huge book in ebook sales and caused the huge decrease in physical sales. In turn, this caused bookstores to closes and the cycle continues. It used to be the voracious romance readers or other category readers wouldn’t mind waiting for the book to come out in mass market. Even though most of the mass market books are now $7.99, they are discounted at Walmart, Target and other retailers too. There was never the complaint heard about overpaying for these books because ebooks weren’t available for $.99-3.99. There weren’t self published books competing for the reader’s attention either. The market has to settle out yet and it will still take some time for publishers to figure out how to handle pricing. But the price of the ebook has no correlation to the price of manufacturing. It has to do with making sure the publisher recoups their investment in the author.
Steven Zacharius
CEO-Kensington Publishing Corp."
Now obviously, I have no way of knowing if this is the real Steven Zacharias from Kensington, this could be Joe Blow from down the street rabble-rousing just to cause friction and animosity. But it does seem to be the sort of things publishers say, and Steven Zacharias has a history of connecting just like this in the public sphere, so unless I hear differently, I'm going to assume it's genuine.
And here was my response:
"Except when we bought those hardcovers or even paperbacks, we knew we could share that book with however many like minded friends we had, and could in turn borrow from those friends, splitting the overall costs of the book to a minimal level. And when everyone was done that book could be sold or traded for more books, again reducing the overall costs of reading. Plus there were always used book stores. Ebooks completely changed the sorts of strategies that frugal people employ, and many people are frugal. And if the costs of manufacturing have nothing to do with pricing I’m not sure how else one would quantify “making sure the publisher recoups their investment in the author”. Every single industry I’ve worked in, the cost of manufacturing had a significant impact on every single aspect of pricing and business planning. To discount the costs of manufacturing in business seems somewhat foolhardy."
To expound on that, the author, or perhaps more truthfully the actual story *IS* in fact a manufacturing cost. There's no way around that. In order to have a business in publishing you actually have to have stories to sell. Now I've never been precisely certain if this is a direct labor or direct materials cost of manufacturing books, an actual economist would probably be a better judge of that, but to dispute that it is in fact not a manufacturing cost is asinine. The reality is that there are publishing costs, and there are costs involved that most readers don't acknowledge, like the costs to create the different formats, the costs of dealing with all the different vendors that have distinctly different upload and digital management and maintenance systems, and all the additional computer and internet related costs. And this is the eBook costs that are on top of all the things that are done to and for the book regardless of what format it's going to be published in. Things like paying the author, editing, covers, marketing, and probably myriad other things I can't even think of. No, ebooks are emphatically not a zero cost item. The other side of the reality is that these are sunk costs either way.
So we as readers are saying we don't understand why eBooks are priced the way they are. We are saying we don't necessarily value the convenience factor over the loss of rights that comes with leasing a digital edition rather than purchasing a physical copy. We don't appreciate the DRM that limits us in ways that are so frequently very frustrating. We say that we aren't getting the value that we want and are taking our dollars elsewhere.
What are traditional publishers saying? That they can't afford to do anything about it and that they won't and that we just don't understand. And in this particular case we get an inaccurate comment that seems to imply (considering the audience it was with and the publisher in question) that fiction readers in general and romance readers in particular, are too stupid to understand business.
And that's what frustrates me a good bit of the time when publishers complain. I'm in fact not stupid and I do have at least some understanding of business. And none of the other readers in my life (digital or live) are stupid either, and a good many of them have a fine grasp of business and economics.
So we say, "We don't value this", and they say "Suck it up, we're not going to change". There's two basic ways to satisfy the consumer; either give them what they'll perceive as being valuable OR convince them what you are offering has the value they want or need. Denigrating your consumers and treating them as though they're stupid is a remarkably poor tactic, particularly when they have so many other options for spending their money. It's akin to a small child saying they're going to take their ball and go home just because the other children won't bow down to arbitrary demands.
Again, I can't tell you for sure if this particular comment is directly from the real CEO's fingertips, but it's certainly in line with other tone deaf comments made in the past. Like this article on the myths vs. realities of self publishing:
"In a perfect world (okay, in my perfect world) there would be a separate section on Amazon or B&N.com for self-published e-books, maybe even separate websites. I truly believe that it would help the reader distinguish the books as well. Readers don't purchase books based on who the publisher is and don't necessarily care. As a result, they might not even know if they're buying a book that was professionally edited versus one that was self-published."
He got a few things right. I really don't care if a book was professionally published or edited, I just care if it's good or not. And again, I'm not stupid. I can read reviews and sample chapters and decide if it's something I'm interested in reading or not, and I can decide if the price fits my level of interest. I do this with every single other aspect of my consumer life, and my reading consumption is no different.
Steven Zacharius is not the only traditional publishing executive to irk me like this (I honestly can't think of a single publishing house that doesn't have something like this attached to it), he's just the one who did it today, and in a space I wasn't particularly expecting it to happen. But I'm about damn tired of being treated like I'm stupid.
