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Why Aren’t Publishers Pushing eBooks?

August 22nd, 2012 by · 17 Comments · opinion

In a post discussing a tweet from author Brent Weeks last week Nate wondered, in his blog post “Not All of Us Drink a $4 Coffee, Mr. Weeks,” why publishers aren’t “trying to convert paper book buyers to ebook buyers,” considering that publishers make more money on ebooks than on mass market paperbacks. Setting aside the question of whether publishers make more money on ebooks than on mass market paperbacks, the question is truly piercing: Why aren’t publishers trying to convert readers to ebooks?

We can begin with the proposition that ebooks are clearly the tsunami of the future for reading. It is not that the demand for pbooks will disappear entirely, just that ebooks will become greater than a majority share of the book market. One would think that publishers would want to grab the brass ring early while they can still steer the market.

Under the current scheme of things, ebooks are a much better investment than pbooks for publishers. If I buy a pbook, I can share it with an infinite number of friends, none of whom has to buy his or her own copy as long as they are willing to wait. In contrast, assuming I don’t pirate the ebook, every one of my friends who wants to read the ebook has to buy a copy.

OK, I realize that I cannot just shunt aside the pirating problem as if it didn’t exist, but there is a certain reality to pirating — the very vast majority of readers do not pirate ebooks. Instead, they buy a copy and if they share it, it is shared only among immediate family, often by letting the family member borrow the reading device. It is a small number of readers who post pirated copies of books and a small number who go to the trouble of finding them and downloading them.

Offsetting, I think, what believe the cost of pirating to be — or at least a goodly portion of that cost – are that with ebooks, publishers have no physical inventory to maintain, no cost of returns (unsold and overinventoried pbooks are returned by booksellers), errors can be inexpensively fixed (i.e., books do not need to be destroyed and entire print runs lost; with ebooks, the errors can be fixed and the ebook replaced very inexpensively), and sales are certain (under the pbook wholesale model, the publisher sells pbooks to a bookstore but doesn’t know how much it will ultimately be paid for the pbooks because they are subject to returns by both the consumer and the bookseller; contrast this with how the ebook market works). I’m sure there are other offsetting features of ebooks.

The publishers have been focusing, I think, on the wrong numbers when they discuss pirating. They seem to focus on the number of books available rather than on the number of downloads. Haven’t the Harry Potter ebooks demonstrated the problem with piracy numbers? Before the release of the ebooks, pirated versions were available. But their availability doesn’t seem to have affected very much sales of the official-release versions.

Publishers should be pushing ebooks, trying to convert pbook readers to becoming ebookers. In fact, if publishers wanted to twist Amazon’s nose a bit, they could subsidize Barnes & Nobles’ Nook: Buy a Nook for $99 and receive $99 worth of popular books of your choice (not the publisher’s choice)published by XYZ Publisher. Yes, the publishers would probably lose a bit of money to start, but once people get in the habit of reading electronically, few, I think, would stop.

Electronic reading done on an ereader is addictive, or at least I, my wife, and our ebooker friends have found it so. We are reading at least twice the number of books we previously read, and we read a lot. What we are not doing is reading more of the Big 6′s books — in fact, we are reading significantly fewer of those books. The reasons are simple: the big publishers, often called the Agency 6, are not pushing us toward their ebooks but away from their ebooks by their overpricing and their use restrictions.

Yes, pricing is an old argument that keeps coming back, but the bottom line is that it is an argument that cannot be avoided. Brent Weeks’ new novel — regardless of how much time and effort he put into its authorship — simply is not worth $14.99 to many of us. He is not a must-read author. Each reader has his or her own set of must-read authors, that handful of authors for whom we will pay $14.99. But the kicker is that for many of us, we’ll spend that $14.99 on the pbook version, not the ebook version, because that is the way publishers are pushing us.

This is a strategic mistake. It would be better to push us to the ebook version at a significantly lower price so that we become accustomed to buying the ebook version at a “reasonable” price. I have found that my list of must-read authors has dwindled considerably over the past several years. The more ebook reading I do, the less pbook reading I want or am willing to do. Consequently, when a must-read author’s new book arrives, I rethink how “must-read” the author really is.

The more time I spend with my ereader, the less willing I am to pickup a pbook. Yet that unwillingness does not convert to a willingness to substitute the ebook for the pbook when the ebook costs as much or more than the hardcover pbook. Increasingly, I find that I just pass on that “must-read” book and the author becomes a former must-read author. My list of must-read-traditional-publisher authors has dropped from more than 20 authors to 4 — David Weber, Robin Hobb, Harry Turtledove, and L.E. Modesitt, Jr. – although I expect Hobb and Turtledove to be dropped from the list over the next few months. (I also have a list of ebook-only indie authors, like Emma Jameson, Michael Hicks, Vicki Tyley, Shayne Parkinson, Rebecca Forster, and L.J. Sellers, among others, who I consider must-read but whose ebooks are at bargain basement prices compared to what the Big 6 and Brent Weeks want.)

By not pushing ebooks, the Big 6 are shrinking their market rather than expanding it. They are losing a significant number of sales that they (and their authors) should be making. More importantly, from the publishers’ and the authors’ perspectives, they are causing must-read author lists to shrink. As I noted earlier, it is clear that growth in the book marketplace lies in ebooks. pBooks may have some small growth, but not enough to sustain the industry.

Interestingly, I think that if the Big 6 changed their focus and pushed ebooks, they could easily pickup some of the best indie authors and publish them in ebook-only versions. The biggest problem that the indie authors have that the Big 6 could solve for them is getting the word out that they have a new book available.

I think three changes need to be made. First, publishers need to wrap themselves around ebooks as their future and start pushing them and doing so by pushing readers toward ebooks.  Second, they need to come up with a way to make brick-and-mortar bookstores relevant as showrooms for ebooks. Failure to make these changes is likely to exacerbate the decline of the Big 6. Agency pricing at current levels is really only a stopgap measure, not a sustainable plan for the future. Third, the Big 6 have to change their attitude toward indie authors and start looking to become the publisher of the better indie authors by offering intensive, high-quality marketing (along, of course, with better royalties than the standard pbook royalty scheme).

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17 Comments so far ↓

  • P Riehl

    ‘Pickup’ is a truck, not a verb conjugation.

    • Xyzzy

      I just figured that was a typo…no?

      On the other hand, the use of “ebooker” makes me twitch — it ignores the site’s own linguistic logic (pbook & ebook to show they’re variants of the same thing, yet we’re only readers if it’s a pbook), the way English evolves -er nouns from the verb action we perform upon/with another noun, and that we read more than one kind of content on our devices rather than just ebooks. :-p

  • Chris Rogers (@fullcapstwit)

    Charging less for the ebooks will not necessarily sell more ebooks. What if there is a natural ceiling for ebook buyers? Print sales are falling, but ebook growth is stalling. Seems to suggest that for the time being at least this may become the case.

    Instead of selling lots more ebooks, very likely publishers will just make less money selling a few more ebooks. It’s a big risk. Perhaps a happy medium can be found. Remember that, in the UK at least, there is no VAT (sales tax) on print books, but is on ebooks.

    Difficult to steer the market without buy-in from vendors. Device manufacturers are not moving at the pace that publishers would like. Vendors are becoming competitors which doesn’t help.

    Brick-and-mortar stores may take exception to publishers purposefully turning them into showrooms. Need their buy-in too.

    Devices are still too expensive. Tablet user doesn’t equal ebook buyer etc etc.

    What I’m trying to say is the picture is more complex than you suggest. Please don’t believe that the big six are ignorant of the fact that ebooks are ‘the future’. Plans will be being put in place everywhere. The fact that business models may not move at the pace you imagine could be down to lots of different factors.

  • Puzzled

    Rich makes good points.

    One possible reason why the publishers aren’t pushing eBooks is that it’s harder to manipulate author royalty statements with eBooks. From comments I’ve seen from a number of authors, current royalty statements are confusing, inaccurate and impossible to confirm correctness. EBooks are much simpler to account for.

  • Gary

    I think that the publishers are really struggling to adapt to the changing market today. The very last thing that a publisher would want to do is to accelerate the change, so that the publisher has to adapt even faster.

    The publishers probably think that it would be wonderful if the ebook share of the total book market were to grow at no more than 2% per year, giving them another 40 years to fully deal with the end of paper books.

  • Thomas

    One thing to remember is that publishing is a huge industry. There are a lot of different steps involved in turning trees into books and getting them to customers. A lot of those steps are removed when it comes to ebooks. That means that a publisher is getting a lot of pressure from people who are worried about losing their jobs and want to maintain the status quo for as long as they can. Note that the rise of self-publishing means that the publishers themselves may be among the unemployed if they aren’t careful.

    • Tyler

      You bring up exactly what I feel every time I read posts about why the publishing industry doesn’t do this….

      I don’t think bloggers, including the ones that post here, realize how long it takes to change an industry. Granted, the publishing industry should be ahead of the curve after seeing what happened with the music and film industry in the past decade.

      Job loss and millions invested in infrastructure are not things easily discarded. I also think they worry about how to promote books once Barnes and Noble and the other superstores are gone. That is one of their main places to promote to the masses that do not want to download books.

  • Peter

    Opportunity cost.

    Think about sales over time.

    When a publisher acquires the rights to a book, they have those rights for decades. But when they sell someone an ebook its a one time deal- that person will never buy that title again for the rest of their life.

    So yeah, a publisher could run out and sell a whole bunch of ebooks for $3 this year, cannibalizing all your paper sales in the process. But then what? They’ve burned up the audience.

    Or you can charge $12 this year, sell just a handful of ebooks but a good number of paper books (while you still can). And maybe they can still get those “lost” sales next year when they cut the price a little, or a decade from now when perhaps the bookstores are closed and they cut the price a lot. Remember the prices will go up with inflation.

    I’d love to criticize publishers for this tactic, because, you know, it would be convenient for me if it didn’t work. But I just can’t see any problem with it from a business standpoint. Distributors have to worry about networking effects if they move too slow and don’t build a digital audience for their format, authors can make a name for themselves by putting a cheap self-pub work at the top of the bestseller list, but publishers? I can’t think of any real first mover incentive. They mainly just need to watch their cash levels so they’ll have the cash to swoop in and pick up lots of former self-pubbers for pennies on the dollar when the ebook market hits the inevitable speed bump.

    • Peter

      Wow, I was really inconsistent with “you” and “they” in that comment.

    • Nate Hoffelder

      “But when they sell someone an ebook its a one time deal- that person will never buy that title again for the rest of their life.”

      That’s not true. I’ve bought a number of ebooks a second and third time because I lost a copy. And while the repurchases might not be as common as with paperbooks, it still generates income for publishers. The extra paper copies were generally used, not new.

      • Tyler

        Lost a copy? I have redownloaded the same copy from my booksellers over and over. Who are you buying from that only lets you download it once.

      • DavidW

        I backup my ebooks to dropbox and my external hd. My digital music are in cloud storage with Amazon and Itunes and also backed up to my external hd. I think that redundancy is important with digital content. As you said those files are not that permanent.

  • Joel

    I think there are plenty of major publishers pushing ebooks and looking into different business models for how to make this transition. I’m running a digital imprint (the first of its kind in Australia, and, I think, quite unusual anywhere in the world) for Pan Macmillan, and we are actively working to keep our ebook prices low (most are around $4.99) and ‘pushing’ ebooks. The more people we convert to reading ebooks, the better for our model. We also sell print on demand p-books for much higher prices – and we can see what the massive difference in pricing does to the sales of print. However, Momentum doesn’t have the same relationships with physical retailers as the traditional publishing model and we don’t have the same overheads. Give big publishers a chance – many more than you think are trying experiments similar to ours, and those lessons are certainly being passed back into the traditional part of the business (which still makes almost all of the money despite the changes).

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