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Lakeshore - [publishing] An open letter to Kindle enthusiasts and ebook activists
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Jay Lake
Date: 2010-02-02 05:18
Subject: [publishing] An open letter to Kindle enthusiasts and ebook activists
Security: Public
Tags:amazonfail, books, green, mainspring, personal, publishing, writing
Hello there —

My name is Jay Lake. Many of my novels are published by Tor, a division of Macmillan, including the Mainspring series, and the Green series. Over the past few days, as the controversy between Amazon and Macmillan has unfolded, I've been paying a lot of attention to what the Kindle community is saying about the situation.

Many of you are very, very angry at the prospect of seeing ebook prices rise. Many of you are blaming Macmillan for corporate bullying, and I've seen a number of calls for personal or large scale boycotts of Macmillan titles. I've also seen a number of calls for Macmillan authors to move to another publisher, or accept responsibility for Macmillan's supposed misdeeds.

I'd like to ask you to think about several things as you continue to respond to this situation. Perhaps by the time you read this an agreement will have been reached, and it will all seem moot. Still, this is worth discussion, because the underlying issues behind the dispute of the past few days are not going away.

First, every other one of the big six publishers wants and needs to do what Macmillan has done, simply to have continued viability. They're struggling economically, have been for years. The idea in the Kindle community that Macmillan is playing some unique game here, and therefore should be punished via boycott in favor of the other five publishers among the big six, is almost certainly an error. Macmillan jumped into this issue first, which makes them either the bravest or the most foolish. But every single one of the rest of the big six is watching this very closely, and their own business needs and goals are very similar to Macmillan's. If you as a reader are going to blame Macmillan, perhaps to the point of forgoing their titles, pretty soon you're going to run out of trade fiction to read as the other publishers follow Macmillan, wherever this leads. This strikes me as an unfortunate perspective for a reader to adopt, as the majority of fiction published and the vast majority of 'name' authors published are from the big six.

Second, Amazon in their letter to the Kindle community cited the high end price point of Macmillan's proposal, but didn't cite the low end of $5.99 or talk about the dynamic pricing. This would include older books reaching that much lower pricing point and staying there, which means over time an increasingly large number of ebooks, and eventually most Macmillan titles except the very latest, would be priced well below $9.99.

That second point seems to be an important factor that's being ignored in the outrage by the Kindle community. Many seem to assume that Macmillan is simply lying about lower prices, but why would they? That dynamic pricing model is exactly how print books are priced today, as they go from first release hardback to mass market paperback to backlist. The publisher knows how to manage that, the book buying public knows how it works. And they want your business as a book buyer, whether ebooks or print. Why would they lie about this?

So far as supposed corporate lying goes, note that Amazon was quick to inform you of the high side of the Macmillan proposal, but not of the part of the proposal that benefits you. That's lying by omission, and it certainly fanned the rage of the Kindle community quite effectively. That's a piece if corporate spin which has kept you from seeing the long term advantages to Kindle owners of what's been proposed.

The $9.99 promise was from Amazon, not the publishers. As ebook sales grow in market share, that pricing expectation kills publisher's margins. There's a reason hardbacks aren't priced like paperbacks, and fundamentally it's so publishers can afford to put out the books in the first place. I know from watching your discussion group a lot of Kindle readers will say good riddance to the dead tree dinosaurs, and bring it on, but the big six is where a great deal of the good fiction you read every day comes from. If they gave up, you'd have a lot fewer good books from good authors. The indie press and the self-publishing world are important, but they don't have the financial or administrative resources to publish big name authors, and provide the overall quality of editing and production that the trade press does. Not in sufficient volume to make up for the absence of the big six. Rooted as it is in older business models, the publishing industry simply has not yet produced a viable alternative to the current system. It probably will in time, but that's not the case today.

Third, much of the anger I see is from people who assume that ebook prices are a rip-off because an ebook obviously costs much less than a print book. This is not true on the plain face of the facts. The actual physical costs of a print book — paper, printing, binding, packaging, warehousing, etc. — are less than 10% of the cover price, even in small volumes, and drop to less than a dollar per book for large volume titles such as bestsellers. [ETA: These numbers apply to the trade press. Independents can see physical costs up to the 20-30% range due to lower economies of scale, as well as production quality decisions.] The money that goes into a book is dominated by acquisition costs, editorial costs, production costs, layout and design, art, marketing and business overhead. Ebooks must bear all those same costs as print books.

This doesn't pass the common sense test, I know. Frankly, much of publishing economics doesn't pass the common sense test. I've been a pro for nearly ten years, and I'm constantly baffled by how things work. That doesn't mean it's not true, it just means that if you do care passionately about book pricing, there's a lot to learn before you can understand the ins and outs of it.

People look at the physical object of a print book and see what they're spending money on. But a book is really a story, whether it's being delivered in printed pages, via audio, on a Kindle or other e-reader, or by an author standing up in a bookstore to read. And making those stories available costs money. Just as publishing economics are obscure and nonintuitive, even from the inside, so is the editorial process.

If you don't understand why it costs a lot of money to make a story into a book, go learn about it. You'll be surprised at how many people work very hard to put that story in your hands, whatever your preferred format. And every one of those people has to eat, pay rent, and get through life, just like you do. That means they need to be paid, and that means the book costs money, regardless of the publishing format. Even disintermediation and 21st century publishing models need to account for those processes. Trust me, as an author, the last thing I want to do is deliver my manuscript directly into your hands. What Tor does for my book improves it immeasurably between my keyboarding fingers and your reading eyes.

This is a much more complex issue than Amazon's $9.99 price promise. No one is out to rip you off, or anyone else. Why would I as an author or Macmillan as a publisher want to alienate you as a reader? When we lose you, we lose our audience, and ultimately our ability to make a living telling stories. I don't know who's right and who's wrong about the underlying questions of pricing and distribution. Frankly, neither do Macmillan nor Amazon. Everyone is trying different models, different approaches. This is market innovation in process.

The only way you lose, Kindle readers, is when you turn away from the books and authors you love.

Best,

Jay Lake
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anghara
User: anghara
Date: 2010-02-02 22:43 (UTC)
Subject: (no subject)
*Sigh*.

let's try to keep it civil, shall we, with regard to the fact that this is somebody else's blog and if you feel this much of a need to rant from a soapbox it would probable be more polite to do it from one of your own. But see, here's another thing - I am not #746 on the list of the world's richest people either. I have to be careful how I spend my money, too. As such, I will make necessary compromises when I need to. But for all your vaunted "I don't do this to hurt any author! I would like authors to earn more!" attitude as professed here in this blog, you then go on to demonstrate - in the very next sentence - that you don't have any of these concerns at all: "When I choose not to spend $15 on an ebook, I don't do so because I want to hurt MacMillan. I don't do so because I want to hurt Jay Lake or any other author. I do so because it is much smarter for me to buy a used book instead. My entertainment dollar stretches further that way." What this boils down to (and don't tell me I'm putting words in your mouth, YOU said it, I'm interpreting it from my own point of view) is simply this: "I want what I want, and if I can't have it I won't play at all". Please note that your alternative to not buying the $15 ebook is not buying the cheap(er) paperback edition new when it comes out about a year down the pike from the hardcover. You're buying - and I quote - "a used book instead". Because your "entertainment dollar stretches further that way". You do realise, don't you, that in this particular scenario this means that the person who created the "entertainment" on which you are being so discerning in your spending gets *NO ROYALTY AT ALL*? You DO realise that used books garner no revenue for the publisher OR the author?

You say, "How about instead, MacMillan and the other publishers think of other ways of generating income?"

Terrific. Have you got any ideas on that score - ones that don't involve the income being generated from end-consumers paying for the product in question (and not buying it used and second hand thus generating no income stream for the content profiders or the publishers at all)? There WAS one option in play. It showed a short-term benefit but was long-term unsustainable. In effect Macmillan IS thinking of other ways of generating income - the sliding scale of prices. For the last time - nobody is FORCING you to shell out the $15. Wait a year or two and it'll drop to $5 or %6. But no - wait - or rather, that being the point, you don't WANT to wait. You want the magic bullet. You want a system where the AUTHOR makes tons of royalties, and the PUBLISHER makes a decent margin, and the DISTRIBUTOR can afford to stay in business - which is wonderful, and generous, and we all thank you - but WHERE IS ALL THAT MONEY COMING FROM?...

Not from people whose "entertainment dollar" doesn't go towards covering those costs. ANY of those costs.

Your idea of backlist-titles being avalable as e-books is a great one. But even THOSE books have to be prepped and repackaged for an e-book platform. They might work out for the publishers as a long-term investment but from the amount of e-books currently being bought (and there are records out there; most titles are lucky if they hit the high four figures in e-format) it's going to take quite a while for those publishers to recoup those investments. And then there are the ramifications of the book going technically out of print - which will NEVER happen, under these circumstances - which means that some of those backlist titles whose rights have reverted to the authors and which might, therefore, get re-issued if the rights can get re-sold by the author to a different platform... those rights go bye-bye, and instead of getting an income stream from their own intellectual property those authors with e-books in perpetual "print" will have to be content with selling two or three hundred copies a year, if they are lucky, and probably more in the region of 20-50 copies a year. Earning maybe a dollar on each sale. Fifty bucks a year, for the writer who produced the book which you would like to invest your "entertainment dollar" in...?

Anyway. SOrry, Jay. I'll stop now.
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ygolonac
User: ygolonac
Date: 2010-02-02 23:04 (UTC)
Subject: (no subject)
Really? There have been used bookstores around since books started being created and look at how many books are still being printed.

I suppose I shouldn't buy a used car either because then Ford won't get any money for the work they put into building the car.

And why are you implying that I am not being civil? Have I cussed you out? Have I even written in all caps? Just because I say something you disagree with doesn't mean I'm not being civil.

I still buy new books. But they are awfully expensive these days and I read a lot, so many of my books come from a cheaper source.

I am really baffled by your 'no royalty at all' comment. Do you expect a farmer that sells his cow to a butcher to get another payment when the butcher sells steaks to a restaurant and then another share when the restaurant sells a complete meal to a final customer? The author got royalties the first time the book was sold. Would you ban libraries too?

It's easy to get my money. Provide a quality product at a reasonable price. If you can't do that, don't whine to me that your royalty payment is too small.

Also, if so few ebooks are being sold, then why are they so worried about jacking the price up even more?

In the end it doesn't really matter to me that much. I am a lover of books. The idea of having a bunch of them on a small device like a Kindle appeals to part of me, but when it comes down to buying a real book or buying an electronic file for just about the same price, I'll go with the real book every time.

" Fifty bucks a year, for the writer who produced the book"

Isn't that better than zero for a book that has been out of print for 20 years?
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brni
User: brni
Date: 2010-02-03 03:27 (UTC)
Subject: (no subject)
Isn't that better than zero for a book that has been out of print for 20 years?

Actually, no. When it is officially out of print for X amount of time, I can get my rights back. then i can find a publisher to put my book back into print in a new edition, release a "director's cut" version, self publish it, release it for free or pay-what-you-will, or whatever I want. If it's stuck in perpetual low sales e-print, then I'm just screwed.




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ygolonac
User: ygolonac
Date: 2010-02-03 03:47 (UTC)
Subject: (no subject)
That sounds pretty screwy. All these industry types going on about how expensive it is to put out a book, the editors, the typesetters, the guys-who-get-the-coffee and all that, and here is a finished book that is just allowed to languish, after all the money has been put in to it and it is ready to start 'filling in that hole'.

Besides, as many people have said here, the actual physical cost of the book is fairly minor, so why aren't books kept in print longer?

I really don't understand the point of letting a book collect years of dust before putting out a new edition the way you describe above.

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Jay Lake
User: jaylake
Date: 2010-02-03 04:17 (UTC)
Subject: (no subject)
Besides, as many people have said here, the actual physical cost of the book is fairly minor, so why aren't books kept in print longer?

That would be the Thor power tools decision, which really screwed up publishing's ability to keep backlist in inventory. See:

http://en.wikipedia.org/wiki/Thor_Power_Tool_Company_v._Commissioner

I really don't understand the point of letting a book collect years of dust before putting out a new edition the way you describe above.

It has to be moving fast enough (that's called "velocity" in the trade) to justify keeping the inventory. If not, it's out of there. That's how remainders happen.
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brni
User: brni
Date: 2010-02-03 04:37 (UTC)
Subject: (no subject)

I'm pretty low on the scale - I have a few stories out and a book under contract, not yet in print, by a small press. Still, it's been an interesting ride, and a serious learning curve. I'm in no way an expert, but I can tell you what I've seen. So, in order:

1) Turning something into an e-book isn't free. One friend actually asked his e-book (of his debut novel) to be pulled, because it was so poorly done. Things look different in print than on a screen, and the labor of having this done costs money. A publisher needs to have reasonable expectations of making back its investment before bringing back their backlist.

2) Re: why things go out of print so quickly - I suggest you google "thor power publishing" or at least read through http://www.sfwa.org/bulletin/articles/thor.htm

3) 20 years ago the technology of publishing was very different. Current printing technologies allow for very small print runs (laser printed vs offset, but the print quality is a fair trade against the cost), and some authors are finding homes for their older books with small or micro presses.
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anghara
User: anghara
Date: 2010-02-03 04:56 (UTC)
Subject: (no subject)
really don't understand...

Apparently.

We've been trying to explain.
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ygolonac
User: ygolonac
Date: 2010-02-03 04:59 (UTC)
Subject: (no subject)
No, you haven't. You strike me as a drama queen looking for a throne.
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anghara
User: anghara
Date: 2010-02-03 05:04 (UTC)
Subject: (no subject)
[smothers giggle]

Uh... that might be a *mirror* you're staring into.
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Jay Lake
User: jaylake
Date: 2010-02-03 05:08 (UTC)
Subject: (no subject)
Alma, you know I adore you, but let's let this one cool off, ok?
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Jay Lake
User: jaylake
Date: 2010-02-03 05:05 (UTC)
Subject: (no subject)
Come on guys, take it easy. This is a complex and emotional topic, I know (look at some of the stuff I've said), but let's be cool here, ok?
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anghara
User: anghara
Date: 2010-02-03 05:08 (UTC)
Subject: (no subject)
Again, sorry, Jay. I already said up above that I'd kind of lay off. I will, now. He can have the floor.
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ygolonac
User: ygolonac
Date: 2010-02-03 05:50 (UTC)
Subject: (no subject)
Sorry. I find her tone very annoying. I'll just ignore her from here on out.
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