Why This Sign Makes Me Mad
Historically speaking, stopping people from doing what they want to do isn’t generally successful – look at what happened with music downloads. Hay-On-Wye, the upmarket book town, is fighting back against Amazon, according to a rather spurious article in The Times. While I support the sentiment in principal, because I believe in booksellers, but there’s a disingenuous element to the press ‘story’, which reckons that shops are fighting back with ‘free coffee, readings and comedy nights’.
Did somebody suddenly just wake up and notice that Amazon was there? For as long as I can remember, bookshops have been suffering. They have always had a problem; high rents, the cost of employing knowledgeable staff, small stock capacity, poor profit margins, competition from charity shops, the lack of advertising by publishers.
Independents have always held certain keys to upping their game – interactive involvement with customers, unique selling opportunities in the form of targeted stock, special offers, themed nights.
Amazon owes UK corporation tax, and it’s wrong of them to damage author sales by taking action against Hachette. But it’s also, whether we like it or not, supported by the public who have made it the market leader, like Sky, which fields banks of lawyers to fight its cases. I am against Amazon encouraging the illiterate to publish direct. But are they actually killing books by making them more affordable?
The above sign is jokey of course, but it does represent a naive overreaction to the Kindle, which is proving to have a fairly finite audience. It’s not a mutually exclusive choice – nobody’s going to come around and break your fingers for picking up a book again. I use a Kindle but buy more hard-copies now than I ever used to. Kindle gives you private use of a book – you don’t lend it to friends – whereas paperbacks are sold and resold and pass through endless users who don’t pay authors a single penny. Also, Kindle has brought thousands of authors back from the brink of extinction, and has returned thousands more to print. As someone who writes about forgotten authors, I’ve watched thousands of lost books returning from the wilderness.
The Times says ‘In Hay-on-Wye, the 25 secondhand bookshops were busy yesterday catering to visitors who still believe in the printed word.’ I love secondhand bookshops, but authors receive f*ck-all from secondhand printed words.
Nobody wants Amazon to have a monopoly – but the story is more complicated than the lovely touchy-feely one presented in the press. While bookshops host reader nights they’re often under-attended unless there’s a media star involved. Competition comes mainly from other forms of entertainment, other pressures on our leisure time.
The Bookshops VS Amazon debacle is following the lines of the artisanal bakery debate – the public can choose where they want to shop, and they won’t pay twice as much for a better quality loaf just because it’s the nice thing to do. Online competition has transformed every consumer industry whether we like it or not, and we have to deal with it.
Amazon has now taken the extraordinary step of contacting authors directly. They remind us that the first paperbacks were taken up by readers and blocked by bookstores. It’s worth quoting part of their long letter;
Many bookstores refused to stock them, and the early paperback publishers had to use unconventional methods of distribution – places like newsstands and drugstores. George Orwell came out publicly and said about the new paperback format, if “publishers had any sense, they would combine against them and suppress them.”
It’s the e-book’s turn to be opposed by the literary establishment. Amazon and Hachette are in the middle of a business dispute about e-books. We want lower e-book prices. Hachette does not. Many e-books are being released at $14.99 and even $19.99. That is unjustifiably high for an e-book. With an e-book, there’s no printing, no over-printing, no need to forecast, no returns, no lost sales due to out of stock, no warehousing costs, no transportation costs, and there is no secondary market – e-books cannot be resold as used books. E-books can and should be less expensive.
Perhaps channeling Orwell’s decades old suggestion, Hachette has already been caught illegally colluding with its competitors to raise e-book prices. So far those parties have paid $166 million in penalties and restitution. Colluding with its competitors to raise prices wasn’t only illegal, it was also highly disrespectful to Hachette’s readers.
The fact is many established incumbents in the industry have taken the position that lower e-book prices will “devalue books” and hurt “Arts and Letters.” They’re wrong. Just as paperbacks did not destroy book culture despite being ten times cheaper, neither will e-books. On the contrary, paperbacks ended up rejuvenating the book industry and making it stronger. The same will happen with e-books.
Many inside the echo-chamber of the industry often draw the box too small. They think books only compete against books. But in reality, books compete against mobile games, television, movies, Facebook, blogs, free news sites and more. If we want a healthy reading culture, we have to work hard to be sure books actually are competitive against these other media types, and a big part of that is working hard to make books less expensive.
Moreover, e-books are highly price elastic. This means that when the price goes down, customers buy much more. We’ve quantified the price elasticity of e-books from repeated measurements across many titles. The lower price is good for all parties involved: the customer is paying 33% less and the author is getting a royalty check 16% larger and being read by an audience that’s 74% larger. The pie is simply bigger.
We recognize that writers reasonably want to be left out of a dispute between large companies. Some have suggested that we “just talk.” We tried that. Hachette spent three months stonewalling and only grudgingly began to even acknowledge our concerns when we took action to reduce sales of their titles in our store. Since then Amazon has made three separate offers to Hachette to take authors out of the middle. We first suggested that we (Amazon and Hachette) jointly make author royalties whole during the term of the dispute. Then we suggested that authors receive 100% of all sales of their titles until this dispute is resolved. Then we suggested that we would return to normal business operations if Amazon and Hachette’s normal share of revenue went to a literacy charity. But Hachette, and their parent company Lagardere, have quickly and repeatedly dismissed these offers even though e-books represent 1% of their revenues and they could easily agree to do so. They believe they get leverage from keeping their authors in the middle.
We will never give up our fight for reasonable e-book prices. We know making books more affordable is good for book culture.
This is all somewhat disingenuous, of course, but what you would expect from a corporation. If Amazon steamrollers publishers into bargain-bin selling, they will cut their own throats – we know what happened to Woolworths. But it’s the public who ultimately decide. In the UK, one in eight people owns a digital reader, but book sales are not being marked by the same level of drop-off.
There’s no use pretending that there won’t be fewer booksellers, but in economically tough times of course consumers will shop around. The music industry failed to embrace change and lost everything. It’s worth stripping away the emotive, illogical element of the argument to find a positive way forward, and pretending the Kindle doesn’t exist isn’t it, no matter how many cups of coffee you’re willing to serve.
What surprises me is how few bookshops reach out to authors, who are always willing to help them promote – the argument is that personal appearances don’t make a big enough difference to sales. Authors could work with independents to find new ways of creating markets. After all, thinking out of the box is what we do.