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.