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eBooks Die While Used Print Book Sales Live On (It Didn’t Have to be That Way

11357281573_93f131f0b5_hBob 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.

image by Texas State Library and Archives Commission

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DaveMich September 26, 2016 um 11:01 am

Once you get used to buying used books online via Amazon, you eventually find AbeBooks, where the floor price is even lower.

Amber September 26, 2016 um 3:46 pm

As well as (I love the free global shipping)

Nate Hoffelder September 26, 2016 um 6:23 pm

Probably not. It’s too easy just to buy the used books at Amazon.

Feda September 26, 2016 um 11:17 am

DRM is what’s killing e-books. Digital music has flourished since dropping DRM.
For me, if I can’t find an e-book DRM free I buy a used book. The only exception is a series that I started with hard covers for which I still buy HC when a new book comes out.

Amber September 26, 2016 um 3:47 pm

My best friend showed me a way to remove it via a program called Calibre.

Feda September 27, 2016 um 7:21 am

I know that it can be removed but it is illegal, and I just don’t want to support authors and publishers who use DRM.

Ben October 3, 2016 um 2:47 pm

I understand the sentiment and if I had my way no ebook I publish would have DRM, but sometimes the decision isn’t made by the publisher, sometimes the DRM is applied after by the distributor. I currently have a title in precisely that situation because it’s the only way the distributor can cover the territorial restrictions (it can’t be sold in two countries currently; those two aside, distribution is global). As for why I’d go with them in the first place, well, it’s either them locally for global market access at 40% of the retail price or Amazon at … wait for it, 5% (even at a price that would result in an American receiving 70%).

That’s not a typo, by the way, five percent. Don’t even get me started on those xenophobic idiots at B&N.

The 5% may theoretically be increased, but never above 30%. In which case it’s still better to stick with the local 40%. That’s even in a country which has a free trade treaty with the USA.

Fjtorres September 26, 2016 um 12:09 pm

Everything Nate said is true but he skipped over the bigger issue (probably intentionally): high tradpub prices (of both digital and print) don’t just drive readers to zero revenue sources like libraries, used books, (and in some cases, piracy) but they also provide a substantial pricing umbrella to Indie publishers, whether they be self-publishers, hybrids, or digital-first small press.
So not only are they doing a poor job of delivering revenue to many/most of their contracted authors, they are also providing a welcoming environment for the rise of lower-priced competitors which provides even more pushback from readers.
Still, regardless of the long-term consequences, they are still meeting their traditional profit margins and as long as they can blame the shortfalls on the election or Amazon or a hurricane or three they’ll stay the course.
Which, in the greater scheme of things is best for the market.

Nate Hoffelder September 26, 2016 um 12:39 pm

That was an oversight; I was focusing just on how high ebook prices affected Big Five sales.

I forgot to take a second step back and look again, darnit.

Fjtorres September 26, 2016 um 2:46 pm

That’s okay: you kept the debate on his turf.
But their is an added dimension that isn’t getting quite as much attention as the other two: by underperforming in their overall book sales and creating a favorable climate for Indies they are also encouraging writers to skip them altogether, which is reflected in their regular whining that the submissions they are seeing aren’t as good/don’t sell as well as they used to.
And if recent gossip about the Randy Penguin dropping authors left and right are reflective of the other BPHs all they are doing is forcing more authors to go Indie. A spiral in the making, possibly.

author/reader September 26, 2016 um 2:23 pm

History predicts the future. Between 1890 and 1910 there was a short time when you saw horses and carriages on the street mixed in traffic with automobiles. It did not last. Why would it?

BDR September 26, 2016 um 2:53 pm

It’s not hard for someone unwilling to pay for overpriced ebooks to find them online, for free. Usenet, for instance, is one giant shopping site for ebooks (and every other kind of content) and what Usenet doesn’t have, a half-dozen other websites dutifully provide. Want something NOT there? Just ask and it automagically turns up.

While it might *look* like ebook readership is down and while the Big 5 are happily trumpeting that throughout the land, the fact is that the data they cite capture neither that activity nor (even) indie Amazon sales.

The Big 5 are a lot like Donald Trump: What they don’t outright lie about, they distort until the truth is simply a construct of their spin. Goebbels would be proud. The thing is, though, that spin is *not* the truth and, sooner or later, lies will bury you. Just ask Adolph. Or Trump on November 9. Or Amazon, when they’ve crushed the Big 5 in about 20 years

Fjtorres September 26, 2016 um 4:19 pm

Careful with those comparisons.
Godwin’s law and all that.
Plus, there’s no telling what November (and Wikileaks) might bring.

Tom S September 26, 2016 um 3:14 pm

Another thing about eBooks: they are 'calorie free': shelf space is infinite, and below a certain price threshold, there is no buyer’s remorse and appetite for future purchases remains undiminished. The BPH’s should be exploiting this 'human weakness', not fighting it.

Amber September 26, 2016 um 3:49 pm

I do love the comfy convenience of shopping for books in bed with kindle/kindle app and matching my search with Goodreads reviews. I tend to buy more this way.

Davemich September 26, 2016 um 11:31 pm

Storybundle. DRM-free curated content at great, fairly distributed prices. I’m a fan, and yeah, those purchases are invisible to the ASP.

Feda September 27, 2016 um 7:24 am

I love book bundles but I’ve run into a problem with some of them. A lot of bundles are "first in a series" books. They come DRM free but in a lot of cases, when you look up the sequel it is sold with DRM.

Richard Adin September 27, 2016 um 4:17 am

OK, I’m the naysayer again. I joined the ebook "revolution/evolution" and bought 2 Sony and 2 Nook devices and began buying ebooks. I still have 1 Sony and 2 Nooks, but they gather dust for the most part. I found that I prefer to read print books. It’s that simple. It has nothing to do with DRM or price, although when I think about buying an ebook they do come into play. It is simply that I prefer to read hardcovers.

Sure there are lots of good reasons for ebooks, but the arguments here always assume that these arguments — such as taking up no living space, portability — are so compelling that any sane person would always buy ebooks over print if only ebook pricing were lower and DRM disappeared, using music to make the point. But those arguments ignore that music is listened to on-the-go, making portability a major issue, whereas books are not. Music lasts a few minutes before the next song comes on so you need dozens of songs to fill commute time. In contrast, a book can take hours, days to read from beginning to end so only 1 book is needed to fill the commute time. Music is not a good comparator for ebooks.

The other thing that the ebook arguments miss is that too many ebook buyers have bought too many poorly written ebooks from indie authors — books that would never make it to print and thus not see daylight. The ease of ebook publishing of what is essentially crap acts as a turnoff to many book buyers. While print publishers also put out lesser quality material, there is at least some gatekeeping, and serious book buyers often appreciate at least that amount of preservation from crap. eBooks are wonderful for those who want them; for people like me, however, they will never replace print books. I like being able to look at my library shelves and see my books. But I like even better when my grandchildren come to visit and they immediately run to the library bookshelves and start looking for books to read and borrow — they have yet to do that with ebooks, because ebooks are not an eye attractor.

Nate Hoffelder September 29, 2016 um 10:24 am

I can understand why you prefer print, but here’s the thing.

Your premise that people are moving back to print does not explain why print sales are down, and so are total trade revenues. My explanation does account for the decline by showing that the market is more complex than Lefsetz had realized.

Nirmala September 29, 2016 um 11:25 am

There are good reasons to prefer paperbooks, but a used book or library book fulfills all of those criteria just as well as a new copy. I am pretty much format agnostic and buy whatever is cheapest: ebook, used book or, rarely, a new book. Then I give away or donate all of my paper books once I have read them, as I do not want or like to have bookshelves full of books.

Olivier September 27, 2016 um 8:16 am

I never gave much thought to the used book market, not being much of a buyer myself (only when there is no alternative, that is). How big is it really: any solid figures about that?

Nate Hoffelder September 27, 2016 um 8:43 am

I don’t think anyone really knows.

Amazon might have a clue, but that’s it.

Caroline September 27, 2016 um 8:31 am

I just bought a new ebook(Magic Binds), after checking on amazon the hardcover is cheaper. Where is the common sense?

Smart Debut Author September 27, 2016 um 6:26 pm

Don’t forget that Amazon print sales exploded from 2015-2016 — growing something insane like 15%-20% last year, while brick-and-mortar bookstore sales tanked across the US.

But wait, you say… that doesn’t sound right.

Didn’t Bookscan claim that "bookstore sales" were up about 5% overall?

Yep, they sure did.

That’s because Bookscan’s "Retail & Club" sector, in which those bookstore sales are found, is also where online sales get included.

Pretty wack, huh?

In fact, right now sales make up nearly 50% of Bookscan’s reported US print sales total, while B&N is slipping down into the teens.

And when you go to an print-book product page, the used-bookstore options and prices are listed right below.

Used print books are going to be around for a looooooong time because of that. 🙂

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