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No, the sky isn’t falling

Ah, the gnashing of teeth has one more begun. Between the comments being filed in response to the proposed settlement of Department of Justice’s price fixing suit against Apple and the five publishers and news that e-books have outsold hardcovers, the old guard in publishing is looking to the sky to see if it is falling. I’d be laughing if their reaction wasn’t indicative of what is wrong with the industry right now. It is much the same reaction I had to the link in Dave’s post yesterday where the author is lamenting the loss of books because books are status symbols. WTF?!? Maybe in her mind, but not in mine. But that’s another post.

The beginning of the this latest round of teeth gnashing and chest beating began with the news that e-book sales for the first quarter of this year surpassed the sales of hardcovers. According to figures released by the Association of American Publishers, adult e-book sales for the first quarter came in at $2821.3 million. That’s up from $220.4 million for the same time last year. Hardcover sales for the first quarter of this year were reported at $229.6 million, up from $223 million for first quarter 2011.

Instead of noting that sales are up for hardcovers over the same period a year ago, the industry — and media following the industry — is warning us that it is now time to say good-bye to our neighborhood bookstores. They fail to take into account that, in some ways, they are comparing apples and oranges. Instead they are playing Chicken Little and screaming that the sky is falling.

Is this the tipping point for e-books? I think so. But it isn’t the death of print books. What it does show, at least in my opinion, is that publishers needs to take a look at what’s happening and why. First and foremost is the fact that a lot of us can’t afford $20 or more for a book. Even if we can, a number of us have quit buying as many hardcovers as we once did. Why? Because the gatekeepers have abdicated their duty and we don’t automatically trust them when they say, “this is the next best, greatest thing”.  Then there are the authors who were once an automatic buy who have stumbled and are merely rehashing plots from previous books or are writing on autopilot. There are also those like me who have simply run out of room for more books.

E-books offer us the same entertainment and education as physical books. I was amazed when I received my Kindle at how quickly I adapted to using an e-book reader. I enjoy being able to carry a few, or many, books with me without having to risk dislocating my shoulder doing so. The ability to have tens or hundreds of books at my fingertips is essential when, like now, I’m writing a novel that requires historical and geographical accuracy. Yes, I’ve been to Russia. I speak and read Russian — admittedly not as well as I once did. I know my Russian history. But there are still little tidbits I need for this novel, or that I want to be sure I have right, even as I write. If I had to rely solely on print books, I’d be tied to the library or my house. With my Kindle, I can go wherever I want and have all the books with me.

Part of me understands why the legacy publishers are scared stiff by these latest numbers from AAP. For the last few years, they’ve been saying they were scared e-books would cannibalize the sales of hardcovers. They’ve willingly sacrificed the sales of mmpb and trade paperbacks in order to try to save hardcovers. Why? Because they, the publishers, make more per unit on hardcover sales than they do with other sales per unit. So, they have gone with a business model that tries to emphasize something that is no longer on most readers’ buy-list, the hardcover, instead of looking to see how they could maximize sales across the board.

Look, folks, how many of your favorite authors, those wonderful mid-list authors who are our comfort food of books, are never published in hardcover? Why are they being cut by publishers now? Because they aren’t making as much money as their hardcover darlings. It doesn’t matter if they are outselling in number of units. Those sales per unit don’t make as much money, so just because they sell more units isn’t enough.

Yes, my brain now hurts, but it gets me back to my original point. Publishers are scared and trying to cause a panic among booksellers and readers by saying these latest figures mean bookstores are going to suddenly disappear. This is simply another verse of the same song we’ve been hearing for so long. What’s interesting is if you really look at the trends, you’ll see more and more small, indie bookstores are opening. Not all of them make it, but some do. Some are thriving. But those aren’t the stores that really matter to the legacy publishers. Not at all. No, they are worried about the Barnes & Nobles, the Books-a-Millions because the legacy publishers are so interconnected with these big box booksellers that they don’t see life without them. They’ve forgotten the days before the big box stores when they relied on the locally owned stores, relied upon them and did well.

But, like Chicken Little, legacy publishing is running around yelling, “the sky is falling”.

It’s not. In fact, if they would just accept and adapt, they’d see the possibilities opening before them. I’m no math major. Math usually makes my head hurt. It really does today as I come off a multi-day migraine. But consider the average price of e-books. Now consider the average price of hardcovers. How many more e-book units had to be sold to make the monies reported by AAP than hardcovers for that reported number? It is clear that is where the demand is. Why continue to fight it?

There’s more. E-book apps (I’m not going to say e-book readers because most aren’t ready for this yet) allow for enhanced e-books. OMG, think about the possibilities, especially for non-fiction works. You can embed videos, music, external links. Graphic novels and children’s books are now not only available in e-format, but beautifully done. Pricing for for these enhanced e-books can and should be more than for the standard e-book. Hence, another revenue source.

But, no. E-books are still the ugly stepchild as far as legacy publishers are concerned. They fill them with costly DRM that does nothing to prevent piracy but does piss off the legitimate readers who want to read the e-book they just bought across different platforms. They insist that what we buy when we purchase an e-book isn’t the book itself, just a license to read it. I don’t know about you, but I’ve never seen the  EULA for an e-book from a major publisher. I don’t know what’s in the license agreement. All I do know is that they want to limit the number of devices I have it on. They want to be sure I can’t sell it or loan it to anyone, and heaven forbid that I want to give it to someone — all things we can do with a physical book.

So, no, the sky isn’t falling. This isn’t the end of books as we know them. Not really. Sorry, but books are more than the medium on which they are printed. Books are the words that are written, the images that are used. The packaging is just that, packaging. It is the work of the authors and artists that should matter most, not the format we eventually read.

Does this mean the status quo will survive? Hell no. There are going to have to be changes made or any number of publishers will go under. Big box stores will continue to suffer, at least for awhile. They simply have too much overhead and not enough responsivity to their customer base due to regional and national purchasing instead of local purchasing of stock. We will see more smaller, locally owned bookstores cropping up and surviving. They will do so because some will fill niche points in the markets. Others will do so because they will be willing to think outside the box. They will let indie authors and small presses sell their books through them. Maybe it will be by installing expresso print-on-demand machines. It may be by allowing these indies and small presses to sell e-books through their stores. There are any number of different ways these small bookstores and indies/small presses can help one another.

So, don’t panic when you see headlines like “It’s the end of books as you knew them” or warnings that you’d best bid goodbye to your local bookstores now that e-books have outsold hardcovers. The truth of the matter is, e-books have been outselling them for a long time. This is just the first time when the dollar amount has shown it and, let’s face it, the almighty dollar is what publishers look at. If there is any change we are likely to see, at least from legacy publishers, it is that there will be even fewer mmpbs on the shelves now as they try to find more and more ways to push hardcover sales. So be prepared for even more mid-list authors to be cut loose.

That, my friends, is what we should lament.

*   *   *

Book 1 in the Nocturnal Lives Series

Now for the promotional spiel. Nocturnal Origins (Book 1 of the Nocturnal Lives Series) can be purchased through Amazon. Nocturnal Serenade (Book 2) and Nocturnal Haunts (a novella set in the Nocturnal Lives world) can be purchased through Amazon, Barnes & Noble and the Naked Reader Press webstore. And, because I was rightly chastised by someone for not pointing this out, authors get a larger slice of the pie if you buy your copies from the NRP store. Finally, as always, there is no DRM added to any of the Naked Reader Press titles.

16 Comments
  1. ppaulshoward #

    Idiots (the publishers).

    June 19, 2012
  2. Don’t lament. We’ll be doing fine 😉

    June 19, 2012
    • I hope so.

      June 19, 2012
  3. Melvyn Barker #

    And in the UK, Waterstones – our equivalent of B&N – has announced a deal with Amazon to sell Kindles instore and provide wi-fi access so that customers can browse and buy ebooks instore too. It is widely believed that the chain will get a rake off from Amazon on ebooks sold via links from its stores.

    June 19, 2012
    • If that’s the case, it is a win-win for all involved. Fingers crossed it works.

      June 19, 2012
  4. TXRed #

    I could see a small bookshop doing well with indie authors and presses, and offering PoD for old volumes and back lists. Think of the turn-of-the-century or WWI and WWII memoirs that you could sell to re-enactors, for example. “You want to do civil war stuff? Have I got some fantastic diaries and accounts for you. Cowboys, Indians, and trappers? Ditto. Don’t like to read on a computer? For $2 or $3 more you can buy a hard-copy, well bound on acid-free paper. And if you want to meet other people who liked that book, you can sign here for my Civil War mailing list and news of the bi-monthly get-together at the coffee shop.”

    June 19, 2012
    • Possible upgrades:
      Paper that looks and feels like parchment.
      Font changes (that diary you bought– want it to look like handwriting?).

      Good heavens, I’m dreaming of a copy of Lord of the Rings, all in one unit, on thick, creamy paper, loopy print and with a suede cover….

      June 19, 2012
      • I have only one thing to say the LotR volume, YES!

        June 19, 2012
    • Absolutely. I can think of times when I’d have killed for that sort of selection in the local store.

      June 19, 2012
  5. 'nother Mike #

    “It’s the end of books as you knew them”…
    And the beginning of books as you never knew they could be?
    I wonder if Gutenberg had people saying that without that hand-lettering, it was the end of the illuminated manuscript. Or what about the end of those great cuneiform clay tablets? Or…
    Yes, change is scary. But there’s a new beginning just beyond that edge. What do you call that, a leap of faith?
    JUMP!

    June 19, 2012
  6. While I appreciate your mention of the report I produce and distribute, many of the statements and assumptions you’re making based on it are incorrect. Among them:
    –You are not quoting from our report about first quarter 2012 but, instead, from one of the many articles/blog posts that reported on or interpreted our report – in many instances, incorrectly. The AAP report noted very clearly that both ebooks and hardcover books had increased year-to-year. What we also highlighted, which was generally omitted by others in their zeal to promote the growth of ebooks, was that Trade paperbacks continued to outrank both formats, in Q1 2011 and Q1 2012, by a healthy lead.
    –Also, the link you provide above goes to a May 2012 AAP report on foreign sales of US editions, not last week’s report. If you didn’t read the export sales press release, it’s worth noting that the statistics in it demonstrate that both print and e-format US editions are growing significantly worldwide.
    –While the ebook phenomenon is certainly true, there remain seasonal buying habits in books and the Q1 figures fully reflect that. We always see strength in Q1 figures for e-formats because of e-reader sales at the holidays and people buying books (mainly in January and February). We see hardcovers and paperbacks dominate in other quarters. That will certainly continue to happen.
    –Finally, two assumptions you make are simply baffling. First, publishers are among the strongest advocates of booksellers, particularly independents, since they are our partners in encouraging the joy of reading and literacy. Our work with them, both public (such as bringing World Book Night to the US) and private, supports that statement. And there are numerous reports and analyses out there, including from AAP, that independent booksellers weathered the recession and digital transition with renewed strength due to expansion into e-commerce themselves as well as other innovative branding and marketing.
    –Also, “legacy publishers,” as you call them, are leading the digital transition: they are the companies creating new formats and new ways to offer content, generating distinct social media marketing and reader outreach, developing new titles and cultivating new authors to serve digital readers. These publishers are creating staff jobs for people with digital skills – jobs that didn’t exist only a few years ago – and directly start-ups and other small businesses and individuals who work in digital formats. There is not one AAP member publisher that is not producing books in every print and digital format. It is unclear why you would assume that publishers would not be embracing new ways to reach even more audiences and keep the industry healthy.
    Andi Sporkin
    Association of American Publishers

    June 20, 2012
    • Thanks for stopping by MGC and for your comments. I am at my work computer right now, so I don’t have all the material I used in the research of my post. I will review everything later and, if misrepresentations were made, will correct them.

      However, I will disagree — strongly — with your statement that the legacy publishers are leading the digital transition. They aren’t and never have been. They laughed for years at Jim Baen for first offering e-books and then for offering them without DRM. They continue to try to lock their e-books with DRM, thereby preventing readers from buying a book on BN.com and reading it on their kindle, or vice versa. Just because Tor/Forge is now saying they will go DRM-free doesn’t make a movement. Too many of us remember the time Tor offered DRM-free e-books through Baen’s webscriptions site and thyen suddenly pulled thjem because corporate had a change of heart.

      I will review all you posted later today. Any corrections that need to be made, will be done so at that time. However, I will fully respond to your comments in my next post on MGC, which will be Tuesday of next week.

      June 20, 2012

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