Bob Lefsetz posted a pithy commentary on ebooks and digital publishing last week, and as usual he’s not wrong.
But his view of the ebook market is incomplete:
They’re killing the book business.
The old guard, the ones married to paper and indie bookstores, the publishers afraid of big bad Amazon, have achieved their goal, they’ve killed the e-book. That’s right, e-book sales are down by 21.8%, the entire book business has declined by 2.7%, this is what happens when Luddites living in the past refuse to enter the future. This is what would be happening in music if the insane artists screaming about streaming were able to get their way.
Alas, music is far ahead of the book business, with everything available for one low price, with streaming burgeoning, sales are up by 8.1%.
E-books used to be under ten bucks. Now, in some cases, they cost more than the physical iteration. That makes no sense, with no printing and shipping. The book business is making the same mistake the record business once did. Believing it was entitled to profits. That it was all right to sell an overpriced CD with one good cut, that the public didn’t mind, but that proved untrue.
But at least people wanted to steal music. They don’t seem to want to steal books, they just want to ignore them, that’s the real disaster, how the book business has marginalized itself.
So the book business defeated the techies. The supposed rapists and pillagers who cared not a whit about the value of content. They brought Jeff Bezos to his knees.
But Bezos doesn’t really care, because books are a de minimis part of Amazon’s overall market.
The supposedly smart people, standing up for the lowly artist, did a disservice to everybody involved. E-books were the future, priced to reflect the advancement of digital distribution. But they couldn’t survive, because the writers and publishers were afraid of change. …
He’s mostly right, but Lefsetz still missed a few nuances, and that has lead him to the wrong conclusion.
For one thing, he falls in the classic trap of misinterpreting AAP and other trade group revenue stats as representing the entire book publishing industry rather than just the legacy industry.
He’s not the first to make that mistake, and it really doesn’t matter here because it doesn’t change his broader point – that the legacy industry is killing itself by fighting against the future, against what consumers want.
Readers want to get their content in a form which is quick, cheap, and easy to access. Thanks to the legacy book publishing industry’s insistence on DRM, and on high prices, their ebooks only meet one of the three criteria.
eBooks are quick, but traditionally published titles are not cheap or easy to access, and that is driving consumers to alternatives.
And this is where Lefsetz is most wrong. He thinks that people “don’t seem to want to steal books, they just want to ignore them, that’s the real disaster, how the book business has marginalized itself”.
I don’t think that’s the case.
Instead, high ebook prices are driving people to buy used books, and to visit their libraries and borrow (paper) books.
Edit: And as Felix points out in the comments, consumers are also shifting their buying habits to lower-priced indie ebooks.
They are ending up at their public library’s website, where they get on a waitlist for a book which costs $14 in the Kindle Store.
Or they’re going on Amazon, finding a 20-year-old title selling for $15, and then flipping to the used category to buy an old copy for $4 or $5. (It is that easy, yes.)
And that last point is the real tragedy of high ebook prices: the legacy book publishing industry missed their chance to kill the used book market.
When ebooks are quick, cheap, and easy to access, consumers will choose them over a paper book. If consumers had the option they would prefer immediate delivery of a cheap ebook over waiting for a paper book to be mailed to them.
Many in the legacy industry fear what that would do to new print sales, but if the prices were low enough then the same preference would also affect the used book market.
The thing about the used book market is that Amazon has effectively set the floor price for online sales ($4), and thanks to the way the internet lets sellers congregate on marketplace sites market pressure drives the price down whenever supply exceeds demand.
Imagine what would happen of the Big Five priced their 5- and 10-year-old backlist ebook titles at $5 to $7 instead of $12 to $15. Consumers would compare a $7 ebook (which they could get in a second) with a $5 used book, and they would buy the ebook.
That would cannibalize the used book market, shifting sales to the ebook market and boosting publisher revenue at the expense of used book retailers.
And that is the really crazy part about high ebook prices. Not only do high prices go against consumer demand, but they also foreclose the possibility of killing off the one thing publishers should hate more than ebooks.