Tag Archives: capitalism vs cultural preservation

Should Books Be Discounted?

Should Books Be Discounted? Image from businessblog.winweb.com.

I had a call the other day from David Streitfeld, who often covers the publishing business for the New York Times. He wanted to know if Amazon was discounting the books that IPG distributes at a lesser rate than they used to. There has been widespread concern in the publishing community that Amazons’ game plan is to steeply discount everything until the competition is wiped out, at which point they could put prices way up and start coining money.

It is true that Amazon has discounted very aggressively, and has been content to accept a very low profit margin if this would mean a rapid increase in market share—which it has. If titles are now being discounted less, this might signal that Amazon is turning to Part Two of its strategy, the part where the prices start to go up. In the article that Streitfeld published in the NYT on the 4th of July, one of his sources expressed the view that the discounts were in fact decreasing, especially on independent press and scholarly titles, which would be disastrous for sales.

My take on this issue is quite different. I have no inside information whatsoever about Amazon’s game plan, but I know what I would be doing if I were in their position: I would be experimenting with discounts and mining the sales data to see what effect different levels of discounting would have on the sales of various kinds of books at each stage in their life cycles. Streitfeld quotes me as saying:

“‘They [Amazon] are wondering, “If we knock off only 10 percent as opposed to 35 percent, where do we come out ahead?”‘ Mr. Matthews said. ‘They don’t care how many books they sell. They want to know how many dollars they get.'”

My grammar is regrettable, but the idea is from Business 101: Find the place where the price and volume lines cross on the graph, the balance that yields the most dollars.

Many people are offended by the very idea of discounting books.  After all, books have a list price printed right on the jacket flap or back cover.  Almost no other products have the price printed on them during manufacture. Doesn’t this mean that, for books, the list price is somehow the right price? And aren’t discounted products usually cheap knockoffs of better things? Perhaps Amazon has done a disservice to the special stature of the book as a cultural icon; perhaps all this discounting has convinced many consumers that paying list price for a book means you are a bit of a chump, like the little old lady who pays full sticker price for a new car. Or, it may be that the book is not quite the cultural icon it used to be—for reasons that have little to do with discounting.

I will confess that I was a happier book buyer in the days before they were routinely discounted. The printed list price assured me that the title I wanted would cost the same in any bookstore, and that no one would get a better deal than I did. But perhaps a lower price justifies putting up with a little low-level anxiety of that kind.

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Who Will Stand Up for Books as Books?

orig image theamazingworldofpshychiatry.wordpress.comThe word around the blogosphere assumes that publishers are angry about the state of the book marketplace because their superannuated business model is about to be blown away, and that’s a good thing because that old model makes books too expensive, excludes too many fine authors, and makes too much money for greedy owners. Most of this sounds like sour grapes, or misinformation, or as I pointed out in a previous blog, a way for dot-com start-ups to make money.

But what’s really driving publishers crazy is the fact that the big movers and shakers in the book business at the moment—Amazon, Apple, and now here comes Microsoft—are not really in the book business at all. Amazon uses books as a loss leader to sell more expensive things. Apple really cares about electronic devices. Microsoft wants to make Windows an eBook reader operating system. The publishing industry is being batted around like a shuttlecock by players who don’t much care about, or even care for, books. Who is standing up for the book itself?

While it is true that in terms of sales, each of these companies generate more than the total of all of the book publishing conducted on our planet, aren’t books important enough in their own right to be the focus of an industry? Aren’t we courting cultural disaster if books become just a means of selling something else? Is economic power the only legitimate measure of everything?

Despite all the cynical commentary on many blogs, publishing professionals are not just worried about keeping their jobs. Most of them care deeply about books and are easily talented enough to make a better living doing almost anything else. Serious publishers, distributors, editors, designers, booksellers, book reviewers, librarians, author agents: these highly trained specialists bring an enormous amount of expertise to the making and distribution of good books. People who really know and care about books should be in charge of the business of books.

Curt Matthews
CEO, IPG/Chicago Review Press, Incorporated

Curt Matthews is the founder and CEO of Chicago Review Press, Incorporated, which is the parent company of Chicago Review Press and of Independent Publishers Group (IPG), the first independent press distributor and now the second largest. Curt has served on the Independent Book Publishers Association (IBPA) board and has also served as its president.

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Should Any Ebook Reseller Be the Custodian of Our Literary Culture?

In the last post to this blog I pointed out that the Big Six publishers have about 51% of the overall market for print books, and that this percentage was just fine. The 49% left over for independent publishers is easily enough to support a vibrant literary culture.

But to what extent do the Big Six dominate the market for eBooks? At this point nobody is compiling reliable numbers, but since print bestsellers and eBook bestsellers are usually the same titles, a good guess is that the Big Six have about 50% of the eBook market too.

This degree of dominance in the eBook market is to my mind also just fine: in addition to the Big Six, there are thousands of independent presses keeping every conceivable cultural pot boiling. No, the real worry is that just two or three online resellers are going to be allowed to dominate the distribution of eBooks, and that they will be guided purely by the crassest sorts of commercial considerations: the desire to achieve overwhelming market share; the ability to set prices; the power to crush competition; and a financial interest in keeping inconvenient or unprofitable content from reaching the market at all.

Why should publishers cede all of this power to these new players in the book business? It is obviously true that producing good content is the hard part of making a good book, no matter how that content is captured. How much credit do we give a printer for manufacturing a book we enjoy? Some credit surely, but nowhere near as much credit as we give a book’s author and the editorial team that polished the text. Is the important thing about an eBook the fact that it turns up on the latest new device? The distributors of eBooks have gotten way ahead of themselves when they suggest that their systems or devices are more important than the content they deliver. This is the tail wagging the dog.

We should also keep in mind the danger of censorship. In the case of printed books we have been over this ground time and again. Do printers control what books are printed? Do booksellers decide what ought to be sold? No, they do not, although at various stages in our history they tried to. Should an electronic distributor be allowed to restrict what we read? As a society we have faced these censorship issues again and again, and in all instances we have said NO except for very extreme cases involving pornography or the protection of children.

The real danger may be even more prosaic. Those of us little guys who have had to deal with large corporate entities know that getting inadvertently stepped on is the serious problem. If you are a mouse sharing a stall with an elephant, at some point that elephant will need to scratch its rump against the rough boards of its stall and you may be in the wrong place at the wrong time.

Nothing personal about it, you’re just squashed.

The eBook distributors of this world may intend no evil, but then again they intend no particular good either—except perhaps to generate favorable profit margins for their stockholders and senior executives. But books are not widgets, and a purely commercial standard of corporate virtue is just not good enough when the viability and vitality of our literature and culture are at stake. No monopoly is ever a good thing, even in the case of widgets. A monopoly on book content, whatever the intentions of the monopolist, would be a cultural catastrophe.

Photo: Curt Matthews, CEO, IPG/Chicago Review Press, Incorporated. Courtesy of The Chicago Tribune Curt Matthews
CEO, IPG/Chicago Review Press, Incorporated
Curt Matthews is the founder and CEO of Chicago Review Press, Incorporated, which is the parent company of Chicago Review Press and of Independent Publishers Group (IPG), the first independent press distributor and now the second largest. Curt has served on the Independent Book Publishers Association (IBPA) board and has also served as its president.

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