Why This Sign Makes Me Mad

London

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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.

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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.

 

9 comments on “Why This Sign Makes Me Mad”

  1. Jon Masters says:

    Well said, Admin. I have long given up on bookshops in favour of online shopping, not because of price but because of availability. Gone are the days of trudging round bookshops for books which I know to have been published but which are not stocked because they’re not “mainstream” enough ( in the past that has even included Admin’s own works !!). The final nail in the coffin was being let down twice on ordering books from shops for presents to have them (a) not available on the promised date or (b) the order being cancelled for no valid reason.

    I would neve have thought myself an e-reader either, until being loaned an I=pad through work. Now I find myself using it to get those books I’ve wanted to read which are out of print, or to try out books and authors I would not normally consider. I still buy physical books to keep, I still use my local library, so using an e-reader has increased my book buying and reading, not diminished it.

    Now I just need someone to invent a way of giving me much more time to actually read these things…..

  2. slabman says:

    I’m looking forward to visiting Haye with my Kobo.

  3. Helen Martin says:

    I don’t know enough to critique Amazon’s letter but some of the statements seem a bit off, like the statement about authors’ royalties. Jon’s comment makes sense. I realise that authors don;’t get anything from second hand sales, but often something bought from a garage sale will trigger an interest and create new book sales. I have bought far more books since I started giving them away (Jo, the one I originally had for you turned up in our case when we got home. I’ll blame my poor functioning). I am at a loss as regards charity shops, however. I bought the collection Chris appeared in at the charity shop. That store had good used, new, and seriously collectible volumes. How are they a threat? All I can think is that the staff are volunteers (?), and/or the prices are lower.

  4. admin says:

    Update: It’s been pointed out that Orwell’s remark has been taken out of context by Amazon, who actually continued:
    “The Penguin books are splendid value for sixpence, so splendid that if other publishers had any sense they would combine against them and suppress them.” It’s a compliment, not a manifesto.
    It is, of course, a great mistake to imagine that cheap books are good for the book trade. Actually it is just the other way around. If you have, for instance, five shillings to spend and the normal price of a book is half a crown, you are quite likely to spend your whole five shillings on two books. But if books are sixpence each you are not going to buy 10 of them, because you don’t want as many as 10.”

  5. Jo W says:

    Hi Helen! Never mind about the book. With all the travelling you had been doing,I would have had trouble finding the suitcase. Hope you are getting better 🙂

  6. snowy says:

    I wanted to read the original article, but it’s behind a paywall, surely some irony there!

    The person behind the banner is a slightly notorious self publicist, but if the intention was to garner column inches and get publicity for town it seems to be working. The fact he owns three of the bookshops might colour his view slightly?

    Amazon’s PR department has a very slight relationship with mathematical accuracy. ‘Data never lies’, but if you torture it long enough it will tell you what you want.

    [Hachette are not the pure guardians of the literary flame, they have recently conspired to nail the reanimated corpse of Enid Blyton to the Golden Arches in return for a few pieces of silver.]

    Independent bookshops are a bit doomed at the moment and will remain so until there is more money slopping about in peoples pockets. Mixing books and coffee is so last century, Ottakars tried it and it didn’t save them. Running events, [outside of ‘World Book Day’ or launching the latest Rowling], are so outside what they are geared to do and is why the events don’t always flourish. The problems are more marked outside cities without the inherent, larger catchment area. [Authors can evolve beyond the bookshop, I’ll come back to that after I’ve mulled it a bit*.]

    The dimmer would-be economists will argue that if someone buys a second-hand book that represents a ‘lost’ sale. [I promise I’m going to keep this bit a short as I can!]

    Might be true for used cars or bananas, not true for books.

    Retailer gets a few pennies, Publisher gets nothing, Distributor gets nothing. Author gets nothing? Not quite the author gets a reader, at the expense of his/her royalty payment on that one book.

    Having got that reader, if the author is good that reader will seek out more of their work, [especially if that book is part of a series, not looking at anyone in particular]. Books don’t turn up in the second-hand market on demand, so what must the reader do if the want more by the author? Either go to the library, [PLR although small is better than nothing], or buy from a bookshop at full price.

    A second-book sale is not a total loss, it might even be effective marketing! How much do publishers spend per reader promoting a new book these days? And whose slice of the pie does that come out of?

    [Given enough time, red glasses and a shiny suit I’m sure I can convince some idiot that channelling remaindered stock into charity shops is a really excellent and devastatingly cost efficient promotional technique, I’m thinking of positioning as ‘cutting edge’, ‘radical’, ‘out of the box’, ‘iconoclastic’ and ‘bold’.

    As long as it gives me enough time to cash the cheque before it all falls to bits.]

    *
    [I am going to mull this, there are a couple of ways some authors might make a small bundle if they are good enough.]

  7. John Griffin says:

    Hachette can go and **** themselves – they took over the premier UK maths educational programming company, killed it dead and made my stepson redundant (losing flat, girlfriend – a bonus IMO – and job in one week). It did that to other companies in the business, but fell flat with outsourcing. NO big company does good except when it gives shareholders a return.

  8. snowy says:

    Not many people will read this, but I said I’d mull and I don’t like leaving things unfinished.

    A quick bit of ‘back of the envelope’ maths suggests that:

    The right author with the right material could take somewhere between; £3000 and £300 for 3 hours work. There are a few ifs and buts, the figures are the extremes. And bad weather or something ‘meaty’ happening on ‘stenders could even reduce the figure below £300.

    It all depends on the author in question, taking our host as an example, [sorry Admin but you are easy], using the pre-written material and from a ‘standing start’, six weeks very part-time to polish and add a bit of stardust. And you’d be ready to go.

    Now before we talk about what, lets talk about my commission. I was thinking about 20% of gross. 😉

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