I Almost Bought a Book Today: Why I’m Friends With Amazon

Peter Brantley -- February 28th, 2012

The majority of my fiction recommendations come from my father, a retired literature professor. He recently suggested that The Time in Between by the Spanish author Maria Dueñas was a worthwhile read, and so I scurried online to check it out. It’s available as an ebook at $12.99. That’s an agency price; the book is published in the U.S. by Simon & Schuster. I didn’t purchase it; digital books beyond $10.00 are generally unacceptable to me. (My partner bought a copy of the title in Spanish, El Tiempo entre costuras, for $9.99 for the Kindle; this edition is not distributed by Simon & Schuster).

There’s a backdrop to this story, as I did wind up getting the book another way. Both my father and I (as his digital tech support) are moving from Sony Reader to another platform for various reasons; my father was happy with his Sony device but it is breaking down. That’s a hard decision for me, because I am supportive of open standards; have labored for an open competitive marketplace in ebooks; and have served as a board member of the IDPF, which is responsible for EPUB and EPUB3, the dominant open standard for ebooks.

But as a consumer, I have to think about where my books are coming from and under what terms. No corporation works for me – they work for investors and shareholders – but sometimes interests more or less align. Amazon wants to sell things; the more things the better. Part of their strategy includes providing great customer service; putting downward pressure on prices; and generally providing an increasing number of services through the Amazon Prime subscription offering. That works for me; Amazon has my back as a consumer, at least for now. I would dearly love them to have a meaningful competitor, but that’s largely a longer term worry.

But Amazon can’t set pricing for titles from agency publishers, and I didn’t buy a copy of Time in Between for the Kindle – the book was muy caro. And, although my father is going to be moving with me to Kindle, he had already bought a copy on Sony. Since I am backing up all of his purchases on his behalf, I decided to read his Sony copy before retiring his device for good. What does that mean for Simon & Schuster? Lost sale. What it means for Maria Dueñas is less revenue.

When I heard that Amazon had decided to pull buy access away from Independent Publishers Group (IPG) Kindle titles in an attempt to get better terms, I assume that those better terms, if achieved, would ultimately be reflected in lower prices. Indeed, IPG has publicly lamented that they find it difficult to sell digital titles for less than $10.00 given their current cost structures. Yet as Jane Litte has observed, IPG is not offering anything in exchange to Kindle customers to convince us that the IPG strategy is better for me, as a consumer. In this case, my response is, “Go, Amazon!,” because as a consumer, I want a market that doesn’t treat digital books as the most holy manifestation of creative art ever conceived.

Some commentators have suggested that agency publishers seeking to keep ebook prices high are acting in their self-interest because the “price per read” is inevitably going downward. Higher ebook prices may retard the growth of ebook acceptance, preserving a larger relative share of print revenue, and thus granting larger publishers time to maneuver themselves into a stronger digital position.

But interests are not aligning well right now, and it is not just between publishers and libraries. Because we are living through a moment of a deep technologically-driven social transition, there’s much more conflict between all the sectors in the book economy. Previously stable organizational dynamics have been disrupted and outcomes are hard to predict. As Frédéric Filloux states in his Monday Note on ebooks, “The Giant Disruption“: “In less than a year, the ground has shifted in ways the players didn’t foresee. This caused the unraveling of the book publishing industry, disrupting key components of the food chain such as deal structures and distribution arrangements.”

For readers, high price points for ebooks might drive them to a library, except that publishers have withheld titles from libraries. Therefore, some readers might turn to pirated digital editions; others might turn to other forms of entertainment; others find cheaper books on Amazon. It has a dark beauty: through the combination of usurious pricing strategies and their undeclared war on libraries, the largest publishers have unerringly drawn their customers – readers with whom they’ve never cared to have a direct relationship – closer into the arms of the retailer whose market power and influence they most fear – Amazon. So much for a strategy of self-interest.

Many publishers and distributors must see themselves in a light quite different than the one Jeff Bezos casts on Amazon. Amazon is not merely seeking lucre for its balance sheet; it boosts its profits by delivering a positive consumer experience, because that is its uniquely competitive edge. As a consumer, that makes me a friend of Amazon. And, because publishers are not working in alignment with my interests, their marketplace goals have moved into conflict with mine. Maybe publishers have decided that pitting digital readers against their revenue goals is an acceptable trade-off. It doesn’t work for me; I didn’t buy a book today.

31 thoughts on “I Almost Bought a Book Today: Why I’m Friends With Amazon

  1. CC

    Interesting reading, both in the posts and the comments. I buy at Wal-Mart because it long ago pushed prices down via its market control strategies and pushed small stores locally out of business. I no longer have a choice where I live to shop for many items. Wal-Mart with its former “Made in America” strategy of years gone by, now sells so many made-elsewhere products that I can no longer find the same quality goods I once did. I find myself thinking …. wondering whether book publishing and books in general via Amazon’s strategies will become “Wal-Marted”. Will we have more titles at that $9.99 or less price point…but fewer of the great quality “good reads”? Will we be complaining, like I often do about the plethora of cable channels and not much worth watching, there is nothing much worth reading?

  2. Ian Randal Strock

    I look at e-books as just another format, because we’re not buying the e- or the covers, we’re buying the story, the contents of the book. Collectors may be interested in the hardcovers; those who expect to reread the book many times will probably be interested in the trade paperbacks; those who want the story now, probably once, and aren’t interested in keeping the physical thing usually go for the mass market paperback. And now there’s also the electronic book, which provides that “readable without being collectible” form while also not suffering the degradation of the physical thing.

    But in all those formats, why is it only the electronic book of which people consider the price first and the content second? Peter wrote: “I didn’t purchase it; digital books beyond $10.00 are generally unacceptable to me.” But I’ve never heard someone say “I didn’t buy the trade paperback, because it was priced at $15, and I’ll only spend $14.99 for my trades.”

    1. Kaleberg

      Many people think this way, otherwise everyone would buy the hardcover first release rather than waiting for the paperback, trade paperback, library or used copies. Price has always been very important in book purchasing decisions. Ebook pricing is still in flux, but it is subject to the same pressures. It just doesn’t have a set spot on the tradeoff curve yet.

  3. Gayle Carline

    Will someone please explain to me why any e-book is priced over $5? An e-book is an electronic file, uploaded ONE TIME, and sold OVER and OVER again. It is available for sale PERMANENTLY. The idea of having a book hit the shelves, peak, then fade away, are gone. There will always be the potential for new readers, and a constant stream of revenue for publisher/author/etc.

      1. Mark

        Sorry – my last post was poorly phrased / off the mark. What I mean is – if an author / publisher is providing really good content, why shouldn’t they be paid more for it than someone who puts dreck out there?

    1. Peter Glassman, owner of Books of Wonder

      A DVD of a movie costs pennies to create. That’s a digital file as well — it’s just stored on a DVD instead of your hard disk. The price of a DVD isn’t based on the cost of producing the physical DVD. It is based on the cost of producing the movie AND the relative commercial and artistic value of the movie. That’s why some DVDs sell for $5.99 and others for $25, though both may have had similarly huge budgets.

      Books — whether printed or e-books — are the same. The value in the book isn’t in the cost of printing and binding or transmitting the electronic file. it’s in all the work that goes into a) writing the book; b) editing the book; c) designing the book; d) proof reading the book; e) creating a cover design for the book; f) promoting, marketing, and publicizing the book; and g) selling the book into stores — both online and brick-and-mortar — so you can buy it.

      All those people work very hard and are essential to creating the books you enjoy reading. Nearly every author I know — and I have been very blessed to meet some of the very best in my 36 years as a bookseller — say they would never want to be published without that incredible team of people working with them.

      If publishers could sell as many hardcover books as they used to before e-books and then enjoy e-book sales as an extra sale, maybe e-books could be $5-$10 each. But as long as most e-book sales are in place of a hardcover sale, then the price of e-book has to support all the hard work that goes into creating the book. The paper, printing, and binding are a tiny fraction of the cost of the book. It’s the incredible team behind its creation that is the real expense. And still, even in hardcover books are generally an amazingly good value!

      1. Kaleberg

        Wow, are you entitled. A reader really only wants to pay for (a), but will pay for (b) and (d) to avoid getting an incoherent mash, though sometimes that’s what seeps through anyway. They might pay for (c), but that depends on the book. Sometimes they’d pay to avoid (c). Everything else is overhead and structural inefficiency.

        Publishers want to charge the same for ebooks and paper books, arguing that the consumer has already agreed to a price.

        I know something about host pricing and credit card clearing costs from managing web sites, and I’m know that selling one copy of an ebook is much cheaper than selling one copy of a paper book, even if you factor in the per copy costs of (a), (b), (d), and sometimes (c). Server farms are just cheaper than book stores. I also know that I cannot resell an ebook, unlike a paper book. Like most consumers, I expect the lower production and delivery cost and the lack of a salvage value to be factored into the price. Otherwise, it just appears that publishers are trying to raise their profit margins. Are they?

        Why don’t we do an experiment and bring in a forensic accountant and see?

  4. dana

    can we add to this discussion the working conditions in amazon’s warehouses? can we move away from what’s best for consumers and toward what might be best for humans? or is that too simplistic for these days and times?

  5. Melissa

    Out of curiosity, how did you determine $9.99 as the price ceiling for what you would pay for any e-book? Does the content itself have only limited value to you?

    In the interest of full disclosure I do work for a publisher (albeit not a trade publisher so our customers’ needs are different). I hear the $9.99 price ceiling a lot in discussions like this – but why? Is it because Amazon first threw down the gauntlet to say that $9.99 or less was it? Or did you come to that decision yourself? What is the price ceiling for a physical book?

    I’m genuinely curious – I think publishers need to find a way to meet their customers’ needs, but at the same time a pricing model that is not sustainable for the author or the publisher isn’t really going to work either.

    1. Richard Adin

      My ceiling price for an ebook is $7.99, not $9.99. The reasons are these: (1) I don’t own the ebook; it is licensed to me. (2) Unlike a pbook, it has no secondary market value. (3) Because it is licensed and licensed only to a specific platform, I cannot lend it to family members nor can I be assured of having access to it 10 years from now. (4) Most ebooks are riddled with errors, errors that do not appear in the pbook version (I’ve bought several books in both formats and have noted the problems). Consequently, ebook quality is not assured. (5) pBooks do not come with DRM. DRM means that I have to accept the ebook as provided by the author or publisher. I can’t, for example, without stripping the DRM change the font size so that the ebook is easier for me to read. And I cannot tell in advance how readable an ebook will be. (6) Figures, drawings, photographs are nearly impossible to read in ebooks. (7) If I buy a different reading device tomorrow that does not use the same DRM format scheme, the DRMed ebooks I previously bought will not be accessible.

      There are other reasons but I think this gives you an idea of why ebooks are not worth more than $7.99 to me yet the pbook (in hardcover) is.

  6. Mark

    “I assume that those better terms, if achieved, would ultimately be reflected in lower prices. ” Given that Amazon is a for-profit company, this feels like a big assumption to make.

    I would hope that consumers, especially those who are also in the book industry, will keep in mind that publishers sift through mountains of submissions, pay to acquire books, pay to edit them, and only then sell them for their “profits”. For the same profit, or in some cases, more profit what does Amazon do? They deliver them.

  7. Alyson

    You’ve expressed my feelings as a consumer/reader exactly! There have been many times I have become interested in a book only to find the kindle price too high. I will not pay $12 or more for a digital version. It is ALWAYs due to agency pricing. I do not buy the book. And most of the time, I do not go back months later to check to see if the price has gone down. The sale is lost at that one moment and not regained. I have plenty to read on my kindle and will not miss those few overpriced books. It is a shame that the author is not getting my attention or money.
    I agree that the big publishers are pushing consumers right into Amazon’s arms…and we are being taken good care of there.

    1. Peter Glassman, owner of Books of Wonder

      Why won’t you pay $12 for a digital version? Is the writing, the story, the content less valuable because it is in a digital file and not on paper? Do you have any idea how little printing and binding actually costs? It’s all the work that goes on before a book is printed and bound — and after — that are the true costs a publisher needs to cover. And those are the same if they’re in print or e-book form. And let’s not forget the author. Don’t they deserve to be paid for the value of their writing? Isn’t that value the same whether you read their words on a screen or on paper? Sounds to me like you just want a bargain. And I can certainly identify with that. I love a bargain! But I don’t expect one just because I want one.

      1. Kaleberg

        If this is true, you really need to demonstrate it somehow. Hollywood accounting is notorious, and most of the public believes that book publishers use the same accountants.

  8. Kitti

    I would like to bring up a larger question: What is the profit margin in the book industry? Second question: How does it compare to the average profit margin of American business?

    My understanding is that the book industry already has a ridiculously low profit margin. You don’t find many self-made millionaires in this business. It’s a humble trade sustained largely by love of the product.

    If you’re busting publishing for the costs on its product and not focusing on cutting costs in other parts of your budget, you’re scrambling for pennies and tossing dollars.

  9. Joni Rodgers

    Thanks for this excellent article, Peter, particularly the early on recognition that the author suffers the loss of every sale — probably more keenly than the publisher because our margin is so much smaller.

    As an author, I’m stepping off the map into a hybridized traditional/indie pub career. My indie books priced at $2.99 – 4.99 are making far more money for me than my Big 6 books priced at $9.99. The author-friendly interface Amazon has established for publishing, promoting and selling our books is unparalleled. So yeah, I’m a fan.

    As a reader, I’m discovering some of the best new fiction I’ve read in years — books that take the creative risks traditional publishers can’t afford to take. (Hint: Avoid the 99 cent amateur mosh pit. A lot of terrific, well-established authors — a la http://www.LeagueOfExtraordinaryAuthors.com — have gone indie. There’s tons of great quality books out there for under $5.) Again, this is what Amazon hath wrought.

    It’s a thrilling time to be in the book industry, but a delicate balancing act continues. Art/commerce. Tradition/innovation. Amazon is not the enemy. Greed is. I remain hopeful that ultimately what will rise is the idea that our literary culture depends first and foremost on the welcoming facilitation of readers and the proper care and feeding of authors.

    Thanks again for the thoughtful piece. Sharing far and wide.

  10. Richard Adin

    I love the sentences: “That works for me; Amazon has my back as a consumer, at least for now. I would dearly love them to have a meaningful competitor, but that’s largely a longer term worry.” They reflect exactly what is wrong with the consuming public and why supporting Amazon may be the path to self-destruction.

    Your approach reminds me of Martin Niemoller, who is alleged to have said:

    “First they came for the Socialists, and I did not speak out —
    Because I was not a Socialist.

    Then they came for the Trade Unionists, and I did not speak out —
    Because I was not a Trade Unionist.

    Then they came for the Jews, and I did not speak out —
    Because I was not a Jew.

    Then they came for me — and there was no one left to speak for me.”

    By the time Amazon decides that putting the screws to publishers and self-publishers isn’t generating enough income to satisfy shareholders, and it decides to come for the consumer, it will be too late. There will be no competition for Amazon because consumers couldn’t or wouldn’t see past the dollar bill.

      1. Donald Em

        Well stated. Also, the author and some of his $9.99 cult followers take themselves way to seriously. Do they draw similar lines when shopping for a cup of coffee or a bar of soap? Do they quibble with the cable company because access costs $40.99 instead of $39.99? Or are they sitting in their car stealing their neighbors internet?

    1. Kurt

      There’s a cost to those low prices. How insulting to say to an author that their work is never worth more than ten bucks. There is no mention of quality. It’s all about the price point. Never mind the effort behind the words. Amazon cares about Amazon, nothing else. Nice response to his short sighted views.

    2. Kaleberg

      Amazon could put the screws on the self publishers, but it’s too easy to route around them. If anything, there is a glut of server farm capacity in the making and the same forces that give Amazon its power also comprise its big weakness.

  11. Dean

    With the greatest respect, Peter–because many times you say things that are very very thoughtful–in this posting you are, sorry, clueless. Amazon sees IPG as a a competitor. IPG isn’t a publisher, they are a distributor. They distribute a whole slew of small and independent presses. Some very small–basically one-person shops. These are exactly the sort of people that Amazon would rather see come directly to them for publishing and distribution services–to use CreateSpace for physical books and to publish straight to the Kindle. They are not really after better terms, they are after IPG’s customers, which are small publishers. It will be years–maybe decades–before Amazon can directly challenge the big publishers, but the little guys that use IPG? Those folks are ripe for the picking.

  12. Edward Renehan

    Digital native publishers routinely provide quality eBook editions below $10, and do so quite profitably both for themselves and their authors. At New Street, our highest priced eBook edition is $9.95, with $3.95 and $4.95 being the norm. And our titles – such as H.R. Stoneback’s HEMINGWAY’S PARIS: OUR PARIS? – have been critically hailed. We, like other digital native imprints, are able to price appropriately because we do not have to cover the legacy costs of the old-market distribution paradigm – bulk print runs [and inventory taxes on same], warehousing, distribution to dying brick and mortar establishments, etc. – as do the Big [but quickly shrinking] Six. The eBook agency pricing demanded by traditional publishers is a gross disservice to consumers, while Amazon’s efforts to exert downward pressure on pricing is a great service to them.

  13. Shelly

    Sean, I obviously can’t speak for Peter, but I’m not interested in sustaining an industry that’s not interested in my needs as a consumer.

  14. sean

    Perhaps you should consider purchasing from a business that you’d like to sustain, instead of the lowest common denominator (price). Pricing is not going to come down significantly on quality digital content, as there is significant value that both the creator of content and publisher provide. Perhaps you should just resign yourself to buying the endless supply of $2.99 titles available @ Amazon

    1. Kaleberg

      This is the same issue as with music. People want to sustain the musicians (and authors), not the music business or book business. Sheet music nearly killed the minstrel trade and records and radio did in tin pan alley, but somehow we still have music and people making their living from producing and performing it. I’m sure that authors will be able to find a way to tell their stories and make some money doing it.

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