Another Nail in the Coffin – Part 2

Last week, I wrote about how publishers and agents were crying “FOUL” over news that Amazon would be publishing some 120 over the last few months and yet few were talking about how Perseus was going to “help” authors self-publish.  My basic points regarding these two pieces of news were that publishers wouldn’t have to worry about authors leaving them IF the publishers and agents were really doing the job they said they were.  I honestly thought that would be the end of the post and I’d move on to something different this week — of course, it is never that easy.  So, to continue from where I left off, sort of. . . .

Publishers were busy puffing out their chests and declaring that e-books were reaching a saturation point in the market when July’s sales figures were released.  After all, hard cover sales had increased 33%.  At the time those figures were made public, a number of people — yours truly included — wondered if that was an anomaly caused by the sell-off of stock held by Borders.  Well, confirmation, at least partial confirmation, of our suspicions came this week when the Association of American Publishers announced the sales figures through August.

From Publisher’s Weekly:  For the first eight months of 2011, e-book sales increased 144.4%, to $649.2 million, from 18 reporting publishers to the AAP monthly statistics program. Sales were off by double digits in all trade print segments in the January-August period, although sales in the religion category were up 9% in the year to date at the 22 reporting houses.

GalleyCat has the complete breakdown:

With regard to the August figures, for the month, hard cover sales declined 11% and adult paperback sales declined close to 6%.  According to the AAP (again from Galleycat), “Strong, continuing revenue gains from digital formats in the Trade market – both e-books and downloaded audiobooks – helped offset declines in revenue from physical formats, resulting in only nominal, near-identical decreases vs the previous year’s and YTD’s figures

So, for the first eight months of the year, e-book sales are up 144.4%.  It is this increase that kept the figures from looking truly abysmal.  The only other areas to post gains are religious books and downloaded audio books.  If you’ve been tracking the figures for the last year plus, this follows the trend.  Even I, who run far and fast in the opposite direction when someone tells me I need to do math, can see that the figures for July when hard covers posted a double digit increase were not the start of a new trend.  Instead, it was an artificial increase in sales caused by the discounting of merchandise during the Borders bankruptcy sale off.

And yet, even with the figures staring them in the face, legacy publishers refuse to admit that e-books are not only a viable part of the marketplace, but all that is keeping some of them afloat right now.  Just think how many more units they might be able to sell if they simply lowered the prices of their new releases below hard cover prices.  Oh, I know.  They tell you they have to price e-books at near hard cover prices in order to make a profit.  Bull!  Remove DRM, admit that once they have the final text, all they really have to pay for above cost of setting the book for print is the conversion price and then the cost of having someone do a check of the conversion files to make sure nothing got screwed up.  Lower the price to even $9.99 — a price point most e-book buyers will pay for a new “best seller” — and they will sell more copies and that, eventually, will lead to more profit.  Not to mention more good will for the publisher which will also lead to more sales.  More sales equal more money.  Makes sense to me.  But then, I’ve never been a bean counter, much less one in a rarified office in NYC.

Going back to the cries of anguish last week caused by Amazon, there was a deafening silence this week when Kobo announced it would now start publishing books.  For those of you not familiar with Kobo, it’s an online presence, not unlike that for Amazon or B&N when it comes to e-books.  When Borders still existed, Kobo was associated with it for e-books.  This isn’t a self-publishing venture for authors.  No, according to the article, Kobo will do editing, design, marketing and the selling of the books.  Sound familiar?  So, why no hue and outcry by the publishers?  Simply put, they aren’t scared of Kobo because its name isn’t Amazon.  It doesn’t matter that Kobo is offering the same service as Amazon.  All that matters is that Kobo isn’t the 800 pound gorilla.  The publishers have forgotten about the tortoise moving slowly and surely toward the goal.

So, does all this mean the end of publishing as we know it?  Eventually.  Even if legacy publishers were to suddenly understand the importance of e-books and reasonable pricing, the snowball has already started rolling down the mountainside.  Publishers — and agents and authors — are going to have to adapt to the changing expectations and demands of the reading public.  Just as publishers had to change as technology and society changed in the early to mid 1900’s, they are going to have to do so again.  If not, the publishers will perish.  But, in their places will be new publishers, those flexible enough to adapt to the changes.  In other words, there will always been books and short stories.  It’s just the format and pricing that may change.

Cross-posted to the Naked Truth as well as here.