No, Readers Have No Obligation to Support a Publisher’s Flawed Model or Bad Decisions

6988181354_9384f994eb_bWith four of the five major publishers going back to agency, ebook prices are bound to remain high and will continue to incite arguments between readers, publishers, and authors as to the best price for an ebook.

This is a debate which will never end, but in the interests of moving it forward I would like to address one argument I hear, namely that traditional publishers have to price their ebooks higher because they have more overhead.

For example, author Jody Hedlund posted this argument on her blog yesterday:

Traditionally published books have more people involved in the publication process, thus need to generate more revenue in order to pay everyone who had a hand in the book: two or more editors, office staff, the cover design team, the cover model, photographer, the marketing staff, publicist, sales representatives, and more. And let's not forget, the author also has to be paid! No, Ebooks may not require the same "print" costs that a hard copy or paperback may incur, but as you can see, the costs of traditional publication go beyond the price tag of paper and ink.

While this might have some weight on the publisher side of the debate, it is viewed with contempt from the reader side - and with good reason.

It asks the reader to offer our charitable support to multi-national, billion dollar a year publishing conglomerates (Hedlund has books with HarperCollins and Penguin Random House). We're asked to make up for a publisher's poor business decisions, including the decisions to:

  • buy and maintain Manhattan offices,
  • hire too many people, and
  • grow beyond any reasonable scale.

When you put it that way, the conclusion is obvious. Readers have no moral or financial obligation to support a publisher's bad decisions  or flawed business model.

Publishers don't have to be based in Manhattan, they don't have to hire huge staffs, and they don't have to operate inefficiently.

The fact of the matter is, folks, books simply don't cost that much to produce. Much of what is spent at the major publishers goes to overhead costs, including Hachette's open floor plan office and the Big Five's candlelit dinners at expensive Manhattan restaurants, to name a couple examples.

Strip away the inefficiencies and you'll discover that the actual cost of producing a book is a lot lower than you might think. And it's not just indie authors saying that; there are publishing startups saying the same thing.

Last week at BEA 2015 I sat down with Enrique Parrilla, the CEO of Pentian, and discussed that startup's crowd-funded business model. Pentian invites readers to back a book, and once it is funded Pentian publishes the book both as an ebook and as a print book (also, sometimes, an audiobook).

Pentian's ebooks are priced between $5 and $9 in the Kindle Store. Of that $9, 10% goes to Pentian, 40% goes to the author, and 50% goes to backers.

Here's the fun part: Pentian's production costs are usually in the range of $3,000 to $10,000 per book (an audiobook costs around $6,000).

Yes, Pentian, which lacks the overhead of the legacy publishers, can publish a book for under $10,000 and still pay authors a better royalty than just about any major publisher.

Could someone tell me again why I should pay for the bloat and inefficiencies of a major publisher?

I don't get it.

image by Philip Taylor PT

About Nate Hoffelder (11593 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

33 Comments on No, Readers Have No Obligation to Support a Publisher’s Flawed Model or Bad Decisions

  1. More significantly for me is the quality issue. I am happy to pay ‘retail’ prices if I can be assured of retail quality. But considering that every book I have ever returned to Amazon for a refund due to typo and OCR issues has been from a big publisher, all I have to say to people like Hedlund is ‘give me $10 worth of quality and I will happily pay $10.’

  2. The traditional publishers lost me a long time ago when they first did the agency model. I thought it was ridiculous that online retailers like Amazon couldn’t discount ebooks but grocery stores could still discount paperbacks. When I abandoned those books, I discovered lots of indie authors that I like even better. I’m happy to pay some of them about what I was paying for paperbacks because I love their books.

    I only get traditionally published ebooks if they’re in the $1.99 sale and it’s something I really want, which is rare. For new ebooks, we have a great public library that carries a lot of them, I just have to wait a while sometimes. I get an email when my book is available, check out through Amazon directly to my Kindle, and I can put holds on 30 books at a time with a checkout limit of 20.

    • With the exception of one author that my library doesn’t have, my limit is $3.99 plus tax for anything published by a price fixer but now that the one author has moved up the best seller list, his new releases have jumped from $7.99 to $13.99. I expect it to be a long wait before I get around to purchasing book eight in the series. In the meantime, like you, I have found plenty of good indie authors to keep me occupied.

    • Here’s my dirty little secret:

      I may be pro-indie author but I am still hooked on a number of legacy authors. I have to keep reading them, so I end up spending time in my local public library.

  3. If I thought they were worth the price, I’d likely pay for their bloat and inefficiencies but I just don’t think they are. My last two library borrows had huge problems with the copy editing and one of them must have never crossed the desk of a developmental editor. One is priced at $7.59 digitally and the other $12.99. If you want that kind of money, it had better be a better quality book.

    Anyway, I think the only moral obligation you owe an author is to acquire your reading material in a legal manner. Sometimes that means picking up the used pb for a penny.

  4. As a consumer, one of my biggest annoyances with ebook pricing is that they are charging me almost the same amount to lease me an ebook, or sell me a physical book.

    With the digital restrictions management (DRM) that is imposed, you do not own ebooks. They are leased to you and as has been demonstrated, can be yanked at any time.

  5. The health of our whole economic system depends on exposing producers of all kinds to competition from those who may be able to meet our needs cheaper or better. Publishers (and authors) are no different and there surely is no justification for still more legislation to shield them from competition. There are cases where it doesn’t work well to let the market decide but I can see no reason to imagine that publishing is one of them. Technology now allows a wide freedom to experiment and I feel confident, both as an author (both conventionally and self published) and reader, that as in many other industries this will result in the end in a better system.

  6. The Agency model helps independent authors. I have 1 legacy author (Sherrilyn Kenyon) I buy on audible. I dropped all other legacy authors I did read the last time agency was in play. I’ve been very pleased with the indy stories I’ve bought and it probably wouldn’t have happened had the big five not forced Amazon(and everyone) to legacy model.

  7. There’s another way to look at this. Which is that most of the big publishers are owned by big media companies who are focused on building libraries of intellectual property. They are more than willing to lose money on most of their titles in the hopes of creating franchise properties that will have value across several revenue streams, including movies, television and hopefully merchandising.

    They justify (I think falsely) having big offices in NY and paying high salaries to tons of middle people by saying they need to be able to scoop up the best material. They also justify books that don’t seem likely to make money as necessary to nurture writers who might eventually produce more popular work, and to provide prestige that will appeal to authors making deals with them. And to a limited extent, there is some logic there.

    My point being, that you can’t look at the cost of of a huge multi-national producing an individual book in terms of calculating it’s price. These companies have tons of money left over from Harry Potter, Game of Thrones, 50 Shades of Grey, etc. that they are sinking into building large libraries and gambling on the next hot book or hot writer. These companies make their business decisions based on the idea that only one out of so many books will make a big profit.

    So why should readers be expected to think any differently? Why should they say, oh, this book only sold 10,000 copies and cost $100,000 to produce so it’s okay for them to charge $9.99 per copy. Why shouldn’t readers, like the publisher, say, “Well, they can use some of those Harry Potter profits.”

    In fact, why not take it a step further? Early readers are extremely valuable in building any new franchise. If a company is trying to build the next Harry Potter series, why shouldn’t early readers expect to get the book for a little less so they can help get the word out?

    Once again, this is the way the big companies think. They will deliberately spend a ton of money to build a long term property, give away copies, have sales, do promotions. But readers are supposed to sit back and think about individual per book costs? And if a big publisher knows they are supporting a property with a limited market (like a literary fiction book) but doing so because they want the prestige value, or to develop a writer, (or simple nepotism) why should readers be expected to bear those costs in building the publishers brand?

    To me, it’s pretty simple. Publishers should charge for ebooks whatever they want, based on their business interests (including trying to rig it so people buy print books). But don’t lecture readers about what they should be willing to pay. It’s bunk and its not good business.

  8. I recently bought the entire Lymond Chronicles series by Dorothy Dunnett in mostly used paperbacks (two were bought new because the used price was not significantly cheaper) because I refused to pay $15 for the Kindle versions. I would have preferred Kindle. But these books have been out for decades, the author is no longer alive, and it is just pure greed to charge that much.

    I also bought the first two books in her next series used – they were ridiculously inexpensive. I do have some guilt about buying used books, but after all this time – no mass market or reasonably priced Kindle versions. No.

    I don’t have a local library that carries many English books or that would have been my first choice.

    • Oh, wow, you’re not kidding. The first book in that series costs $14 on Amazon as an ebook. And it was published over 50 years ago.

      I’m not sure this is greed, though; it could just be really poor judgment. But either way, it is an excellent example of publishers asking readers to provide charitable support for a bad business decision. It’s like they don’t realize how many of us used to rely on used paperbacks because books cost too much, and that we can go back to cheap paperbacks if we have to.

      • Converting these old books to an electronic format is more expensive than you realize. The last big project I did cost $24K to digitize 64,000 files but cost somewhere between $120-400K (depending how you count) and a bad back to index and proof it.

  9. You could be right about the greed part. I wanted to have the same edition for the entire series since the trade covers (the 1997 editions from Vintage) are rather nice. I probably would have bought them all new but some of them were also too high-priced. I was able to get good condition used ones of the first four books for around 6 EU (including shipping). That was too good to pass up. I notice the used price has gone up on a couple of them since my purchase. Hmm.

    The series is fabulous, by the way. Much much much better than GoT and with twice the intrigue. Characters die, but it’s also somehow reconcilable with the story. 🙂

    • I can get the paperback in like new condition for a penny plus shipping. So i did, just to see if the series is any good.

      • Now I’m worried. The first one is challenging, but the plot is really superb. Dunnett has a lot of obscure literary type references (as relayed through her antihero Lymond), but I didn’t let that bother me. 🙂 She settles down with the second book.

  10. Even if we accept that traditional publishers have higher costs and therefore must charge more per ebook (even say those costs are just due to improving the quality of the work via editors, proofreaders, and photographers/illustrators whatever) – agency model does not accomplish that end.

    Agency model has usually led to publishers getting less money per copy and Amazon getting more money per copy, just to make sure that the customer pays more money. It basically just ends or limits Amazon’s ability to discount which only effects Amazon’s bottom line.

    Agency is not about more money to the publishers/author per ebook sold to recoup costs, it is about keeping the price the customer pays for ebooks artificially inflated so they leech fewer sales from print and/or subsidize the print business.

    • Agency is not about more money to the publishers/author per ebook sold to recoup costs, it is about keeping the price the customer pays for ebooks artificially inflated so they leech fewer sales from print and/or subsidize the print business.

      This is true, but even without agency the big 5 had ridiculously high ebook prices. That’s why I didn’t touch it.

  11. Are people really so petty that they don’t want to fork out 9.99 for a book by an author they love? Now I’m well aware publishers charge way more, but if you really think that a book is ONLY worth 1.99 or whatever, you’re a cheapskate, plain and simple.

    As to the article

    buy and maintain Manhattan offices – most companies congregate
    hire too many people – yes because publishing hasn’t laid off thousands over the last however many years.
    grow beyond any reasonable scale – as above, publishers have definitely streamlined

    Now of course there are a ton of processes yet to improve, and I am totally for ebooks being at least half the cost of a b format, but the commenters here just come across as penny pinching thieves who demand the cheapest.

    Also, to the first commenter, would you seriously return a print book if it had a typo? The definition of petty.

    • Before I adopted ebooks, I frequented the used book stores. I very rarely forked over $10 for a book then, and I’m sure as heck not going to pay that much for a license now.

      Remember, we’re not buying ebooks so much as we’re getting a license. It’s not worth as much as the paper book, which can be resold.

  12. And you know the crazy thing? People STILL fork out 20 bucks for an ebook! Absolute lunatics, but they do it!

  13. Given that secondhand books are a) often physically worse off/smell/etc and b) have a resell value of not very much for what you paid for it (and that secondhand books are sometimes QUITE expensive comparatively, you can get a penguin paperback for less or about the same most times), my mentality is that you are paying a set amount for the opportunity to read it. Sure, anything over 9.99 is absurd, but let’s not be too stingy?

    • The value in a used book isn’t its material condition but in the content. And anyway, I’ve never encountered one which smelled any worse than musty.

      “have a resell value of not very much for what you paid for it”

      Now they don’t no, but back then used p-backs could be rotated through the used bookstore readily. And thanks to the internet, used books can get incredibly cheap (penny plus shipping, a lot of the time).

  14. Ok let’s unpack a few things.

    If it’s just the content that is valuable, remind me exactly why anyone is complaining about ebook prices? Again, I still think lower is better, but not too low. Some people here have a whinge over a few typos, well boohoo, reserve your ire for those ebooks that were scanned and never proofread (I’ve read a few of those horrors). Typos happen.

    Yes it is true used books online are great, but really, might as well use a library, I assume secondhand books are mostly for collectors. I think that’s the only true value.

    Revealing an interest in secondhand books also shows utter contempt for the author, publisher, editor, distributor, cover designer, etc etc etc and the only person making a buck is the weird old guy sitting under a mountain of classic Penguin crime novels. Oh great you read the book and tweeted about it, I’m sure the author really appreciates it. This is OK for authors that are dead, such as Aristotle.

    Finally, why is everyone up in arms over agency? That just let’s the playing field be even when we all know Amazon just undercuts for the sake of it. Why should ebooks be discounted? It’s perfectly fair the publisher sets the price – they should just set it lower and let the author get more royalties. The real problem, at least in Australia, is non-agency books that are 20-30 dollars for the ebook on iBooks/Kobo/other indie retailer. You can literally get the trade paperback delivered to YOUR DOOR for less than the ebook. Note: THESE ARE NOT ON AGENCY MODELS!

    • “If it’s just the content that is valuable, remind me exactly why anyone is complaining about ebook prices? ”

      The two have nothing to do with each other, but I’ll answer it anyway. Because publishers are intentionally forcing prices higher, and we can see it happening.

      “Revealing an interest in secondhand books also shows utter contempt for the author, publisher, editor, distributor, cover designer, etc etc etc”

      You know, I used to read comments like this and think that whoever made it simply didn’t get it, but lately I’ve come to wonder if this is a sign of a refusal to accept the validity of an opposing argument.

      The recent ad blocking debate inspired many rants against ad blocking from people who could not accept that users were protecting themselves from malvertising and were improving a bad web browsing experience by blocking adverts and trackers. Those ranters instead framed ad blocking as unethical, and in doing so tried to cast ad blocking in a negative light.

      In this case, my point would be that you cannot accept that people are being fiscally responsible in searching for the best value, so you instead try to cast it in a negative light by saying that it shows contempt.

      Your argument is actually worse than the claim that ad blocking is unethical; you’re impugning the motives of consumers. That is literally insulting your opponents.

      That argument also doesn’t work, you know, even if it weren’t an insult.

  15. Trust me, I get it, I straddle the fence here (and most arguments). Sorry to have offended!

    Quickly on the content thing: yes I get the price thing, but paying for content is paying for content, if that’s all that matters in the end. I’m not necessarily happy paying rock bottom just for content. And as I said, it isn’t just the agency model that pushes prices up.

    If I explain further, it seems to me that the arguments have mainly been publishers are greedy and stupid, and as a result they aren’t helping their authors. Hence, go self-pub, set your own price, make money. But secondhand buying is then selfish, let’s say if you wait until there is a secondhand edition of a newish book. Similar to paying for a VPN to download pirated movies. Now I get why someone would buy secondhand books – to save money – and I don’t mean to offend you or anyone else for their monetary decisions. I was doing it for a while until I realised they were still stupidly expensive and, yes, the right people weren’t getting my money.

    I love your site and commentary by the way, I’m just putting forward my ideas. I don’t see how my argument doesn’t work, but then I am a moralistic person, I cannot justify lowest price for the sake of it in any of my purchases. I have never pirated a thing, so maybe that explains my mindset. Is that being foolhardy with money, or spending ethically?

  16. “…secondhand buying is then selfish, let’s say if you wait until there is a secondhand edition of a newish book. Similar to paying for a VPN to download pirated movies.”

    They aren’t similar. The first is legal and the second is not. The first-sale doctrine was established in U.S. law over a century ago. Purchasers of a paper book have the right to resell that book without further compensating the publisher or author. They just don’t have the right to make additional copies of said book. If you don’t feel right in purchasing used books, then don’t.

  17. I’d like to state, for the record, that the “Thomas” posting above is not the same Thomas (Me) who has posted infrequent comments here for the last several years. His opinions are not mine, and are much more loquacious. I’m a fairly terse fellow.

    I have to say that equating buying used books with downloading illegally copied material is ludicrous. If you believe that reading a used book is unethical, I hate to think how you feel about public libraries. Most writers would laugh at the idea that used books and libraries are major threats to their livelihoods. The biggest problem most writers have is obscurity. A lot of people who aren’t willing to plunk down full price for a book by an author they haven’t read will pay less to give one a try. I once bought a used book for a dollar that led me to purchase more than twenty others at full price.

  18. ‘They aren’t similar. The first is legal and the second is not. The first-sale doctrine was established in U.S. law over a century ago.’

    No doubt, but they are precisely similar in terms of looking for the cheapest way of getting content while paying a – let’s admit it – undeserving third party. But whatever, no skin of my nose, let the market decide.

    ‘Purchasers of a paper book have the right to resell that book without further compensating the publisher or author. They just don’t have the right to make additional copies of said book.’

    We aren’t talking about that.

    ‘If you don’t feel right in purchasing used books, then don’t.’

    I might, I might not. You are cherry picking. I am trying to understand the argument. Is it that publishers are greedy and raising the price hurts authors, or is it ‘screw you, I’m the consumer and I want content for next to nothing’? I come at this from a completely author centric point of view. Work out which it is, and be honest, because I’m thinking the latter.

  19. ‘I have to say that equating buying used books with downloading illegally copied material is ludicrous. If you believe that reading a used book is unethical, I hate to think how you feel about public libraries. Most writers would laugh at the idea that used books and libraries are major threats to their livelihoods. The biggest problem most writers have is obscurity. A lot of people who aren’t willing to plunk down full price for a book by an author they haven’t read will pay less to give one a try. I once bought a used book for a dollar that led me to purchase more than twenty others at full price.’

    I don’t disagree with a single thing you said.

  20. Wish I could edit…

    I should also say I don’t necessarily disagree with the post. The Pentian model is the way forward.

  21. Although a bit late here, i have to chime in. As soon as Amazon caved to accommodate the publishing houses, their prices skyrocketed through the roof. This includes the price of ebooks that were previously released with lower prices or that were available at an indie price that was lower before being scooped up. In the “good ol’ days”, paperbacks were ofered at lower prices than hardbacks. Now we have ebooks costing as much (or more in a few cases) than the hardcover versions. The “cost” for ebook sales to the publisher is not even appreciable and it their pricing for them is for two reasons: a FAST way to rake in cash with no requirement for overhead advertising and expense (it’s already rolled into the hardcover advertising and promotion) and a way to keep ebook prices overall higher so as to make hardcover sales competitive.

    I’ll read my hardcovers at the library and I’ll never buy an artificially inflated cost ebook. Some science fiction novels cost more now than hard cover academic research books. It’s ridiculous and no one should settle for it.

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