Everybody involved in publishing spends some time discussing the future of books and eBooks with their colleagues. A lot of passion goes into these discussions; passion for books, passion for being right, passion for making a living. I derive around 20% of my gross sales from eBooks, unlike most publishers who haven’t gotten to 1% but talk about 50% being around the corner. I’m skeptical that the current crop of eBook reader devices will benefit any of the existing business models, and that’s coming from a guy who wrote what may have been the first apocalyptic eBook reader story back in 1993.
The following is an edited version of my side of the correspondence with a colleague from last week. The discussion focused on the discount eBook model, and it turned out we agree that established trade publishers are better off staying away from competing on price, albeit for different reasons. We also argued about the recent Publisher’s Weekly viral issue.
I don’t think all of the large trade publishing executives are as stupid as the ones who run around to media outlets talking about how half their sales will be eBooks in a couple years. Some established fiction publishers will figure out that losing money on every sale isn’t a business model and keep their prices higher to achieve the same margins they net on paper sales, as many already do with nonfiction. If fiction publishers are going to net 75% less on their books, they need to sell 4 times as many, and I don't see it happening. Talking about zero manufacturing cost is dumb when they are paying six figure advances. The problem for established trade publishers isn’t obscurity, it’s making a profit, and the main profit centers for years have been bestsellers and backlist. It can only hurt them to lower those prices.
Aggressive discount eBook publishing isn’t a viable long-term model for large fiction publishers. The only way to sign up name authors would be to grant deals even better than the 50/50 some superstar authors already get for print, with rights sweeteners thrown in and big advances. Successful authors have no reason to work for free, even if their publishers are that dumb. The surviving fiction houses will be the ones with smart managers who don't blow all the income from their backlists running up debt trying to make ridiculous business models work. All they have to do is play it cool and hold the line on pricing and they'll survive the next wash-out. Then they'll be the only ones left with deep enough pockets and pedigree to attract authors.
I don't agree that the current system creates scarcity. There is incredible selection in fiction and always has been, through all manner of channels, with and without gatekeepers. The problem isn't scarcity, it's human nature. The Long Tail head (80/20) turns out to be an underestimate for fiction. The more selection you offer, the more the commercially viable sales clump at the very top, because the second tier authors never get the momentum required to support anybody. If the penny eBook model wins, which I don't believe it will, all but a handful of bestselling writers will be retired hobbyists or people living Social Security disability because nobody else will be able to afford being a writer. Don't expect a new Eden peopled by independent fiction authors who stay free of “the system.” Any new authors that do break through will be wooed and won by the big trades, or at least, the big agents, because they don't really want to sit in out-of-the-way places working on an Internet connection and making a fair wage. They want to be BIG, and FAMOUS.
Wisdom is having a sustainable business model. Giving things away and hoping for the best is not a sustainable business model. If you were a stockholder in a publisher with hundreds of millions or even billions in sales, you'd be right to sue if they started giving away all their books in hopes of gaining market share. They should dig in their heels and stick with selling hardcover fiction and trade paperbacks based on their current lists, and if it means losing some sales over the next few years, so be it. Their option is to follow the path of the newspapers which turned themselves into permanent money pits by rushing into web publishing without a sustainable business model. The big trades will definitely have to focus on print, but they can do eBooks as well, they'll just do them at a premium and if people don't want to pay it, they can read free stuff. Just like the Internet.
The whole concept of underselling is irrelevant to fiction, it’s only making noise in self publishing circles at the moment because there’s a limited number of penny titles available for multi-hundred dollar eBook devices. The fiction market doesn't compete on price and there's no reason to suspect it will. Starting free and raising prices works for introducing products that people use and replace on a regular basis, not for products that they use once, or in the free Kindle downloads case, products that they look at once and never use. Judging by the hundreds of thousands of authors who are paying to get books printed every year, there will be essentially infinite input stock for free and penny books on Kindle when the idea catches on - if Amazon continues to allow it. Just wait for the first success story and then it will be all over. These new futures are all funny one time only.
Most viral book marketing is about tricking people into showing brief interest in something they wouldn't have bothered with otherwise. Works once for each genre, then it's dead. Free and dirt cheap eBooks for proprietary readers as a way to break through the noise fall into this category, because nearly everybody will try it. It’s all great fun for little publishers and unknown authors who are just trying to get noticed, but it would kill the large trade fiction business model if enough people owned eBook readers. Free eBooks are a good promotion model for the first few unknown fiction writers who get discovered that way, but as soon as the market floods, nobody will rise above the noise without a promotion campaign that would have worked regardless of price. Free eBooks in and of themselves are neither new nor compelling.
The reason the majority of viral promotion these days is happening on Facebook and Twitter is because it's painless to try. There’s no cost (other than time) and no real rejection since it’s not really face to face. It might work for one in ten thousand goes, but it’s not going to be a business model for anybody other than the gurus and consultants who promote it and charge for advice. It's just more "new economy" speak that will turn into "what we're we thinking?" If you count on the Internet to run popularity contests for new fiction talent, it will be worse than the teenage vampire stuff that dominates today. It will be teenage dominatrix vampire stuff, and only the top two authors will earn a dime.
I don’t accept the notion that normal people want to buy cheap eBooks just to have them on a device in case they feel like looking at them. There may indeed be a small percentage of the population willing to shell out small amounts of money to have a lot of titles loaded on a device because they feel insecure about running out, but that's not how most readers live. People buy fiction books with the expectation of being entertained for a fixed period of time, and that’s why they prefer above all buying thick new books from bestselling authors they have read in the past who write with some reliable formula and won't let them down. I'm guilty of the same thing, though instead of bestsellers, I read books from the 1800's that were popular enough with somebody to survive on the shelves in collected editions. I stopped reading contemporary fiction fifteen or twenty years ago, despite the fact it was a short walk to the library, because I hate sitting down with a book for the evening, struggling not to give up, and finally laying it aside in disgust. The cost isn't dollars and cents, it's in time, just like Chris Anderson preached in Free. Does anybody walk through the supermarket and take one green bean and one pea in the organic section because it doesn't really cost anything and it doesn't matter that they aren’t a meal because you're just going to throw them away? Normal people are not going to spend money downloading eBooks just to check them out. Not people that I know. And reading a few pages is no big investment? I value my time more than that.
There has always been a subculture of people involved in computers who invest tremendous time and effort into downloading “free” software and fooling around with it. There was freeware even before the PC was invented, before Microsoft and Apple existed, and some of it was very good. But most people don't want to spend their time rummaging through random collections of software, and the same is true for books. That’s why bestsellers exist, why name authors exist, why Hollywood stars command premium salaries and why people go to see aging rock stars in football stadiums. People place great value on their leisure time and are willing to pay a premium for reliable entertainment. Readers are much more willing to take a chance with nonfiction, when they are searching for answers or professional help.
I’ve spent some time looking at the rankings of Kindle books on Amazon, and I’ve seen a number of publishers experimenting with “spare change” pricing for both original and classic fiction. Some of those books are downloaded in huge numbers. But when I look up the print editions of the same books from the same publishers, they aren’t selling at all. The only Kindle bestsellers I’ve seen paralleled by print bestsellers are instances where the print version would have been a bestseller on its own. The one thing the free Kindle version earns the publisher is a place on a conference panel for one of the employees who can claim involvement in the “success.”