*Hopefully I have now put this under Cedar’s post. Sorry guys. I was so EXHAUSTED last night that I wrote this on the wrong blog. I encourage you to go over to According To Hoyt and discuss it there.*
You know, it will never cease to amaze me how people — and by people, I mean most people, right, left or center — continue to swallow “surveys” and “statistics” that say what is plainly not the truth, and then entire business plans, governmental courses, elections, are decided on the basis of what amounts to the media following a pre-scripted narrative that makes them happy.
I’ve in the past accused various people of drinking their own ink. On the subject of ebooks versus paper books, man oh man, I just hope that ink isn’t poisonous, because good heavens, they’re slurping it by the bucket-full.
Remember some weeks (months? My life has been such a whirlwind that some things have gone a bit fuzzy around the edges) ago, when we heard that due to a report that ebook sales were down, the publishers were convinced that paper books were making a comeback and were building more warehouses to house all those books they’d need to distribute to– Who the heck knows?
The report was obviously twaddle — I’m linking this and this, and yet this and this because I’m not covering again ground covered by my colleagues at Mad Genius Club — because it doesn’t measure ALL ebooks, only the ebooks put out by traditional publishing. Which has seen its ebook sales fall more than its paper book sales. And which is therefore basing its entire economic future on the certainty people really prefer buggy whips paper books, not those newfangled automobiles and planes ebooks. Because ebooks fell faster.
Of course ebooks from traditional publishers are a) unreasonably priced (No, really. There is a book I’m dying to get. It’s $17 for ebook. It’s $32 for the hardcover. You know, I have KULL subscription and the indie books aren’t as good as this particular book should be, but it takes a lot of not as good at 9.99 a month to compare to those prices.) b) often stupidly formatted/edited c) even more often on themes/by authors I have no interest in. (Other than Baen, I currently read two other authors. Period. Oh, and one in mystery.)
Or to put it another way, traditional publishers went to war with Amazon to be allowed to price their books astronomically high. Amazon let them. They priced books at same price as hardcover or a little under (a very little.) E-book sales fell, compared to what they were when books were tops 9.99. Um….
Let me see if I can explain this as I would a child: your little friends love and adore your cupcakes. So you decide to set up shop and make a batch in your easy-bake oven, and sell them for ten cents a piece. Since your friends’ on average have an allowance of a dollar a week, you sell out of the whole batch in hours. So you think “Hey, I can make more.” You set the price at a dollar per cupcake. No one buys them. Your conclusion is “My friends no longer like cupcakes and prefer to eat vegetable sticks.”
Would anyone but a two year old buy that narrative? Well, according to publishers this is a perfectly sane thing to say. I mean, if people won’t buy your overpriced ebooks, it must mean they are going back to paper. Happy days are here again. Let’s build warehouses for all those books we’ll be shipping out to the no-longer existent big-chain bookstores! We’ll be able to control what books make it by our push again! We’re rich, rich, I tell you.
But it’s not just publishers. A friend sent me this article, and I scratched my head and frowned at it and said, in my deep thinking way, “Wut?” This is sort of like if you told your mom your friends’ refusal to buy your $1 a piece cupcakes was because they liked celery more and she said “Sounds legit. For your birthday party we’ll have ONLY celery.”
Print is not dead: Amazon goes brick-and-mortar as e-books falter
You see that forehead-shaped dent on my desk? That’s what happens when I read obviously crazy stuff. Remember how we thought the publishers were spinning this story but even they weren’t stupid enough to believe it? Oh, geez guys, I wish we would stop being wrong about how crazy-and-stupid people with supposed educations and world experience are.
First of all, there is that headline. Ebooks falter? Poppycock. Publishers just can’t sell cupcakes at $1 a piece. Among those of us who are also indie it’s not a secret that the lower you price your book, the more you sell. Yes, there is a trade off and below 99c people suspect it of being cr*p, but at around 2.99 you’ll sell a lot more than at 6.99. (Yes, I will lower Witchfinder when Witch’s Daughter comes out, which it will when I finish this … well, I’ll explain later.) And frankly, I’ll bite the bullet and spend 6.99 for a book by a known author I know I love. BUT no power on Earth can convince me to spend $15 for an ebook, even if I like your work. H*ll, even if I LOVE your work. (Even with Pratchett, I’d usually buy the audiobook instead of the ebook, because I have a subscription and it’s more reasonable.)
Does this mean I’m going back to buying paper books? Oh, h*ll no. Not after this move, and with another move looming in a couple of months. And not anyway. We read too much for our floor joists.
So what happens to those overpriced books? I find other authors I like to read. I mean, I might make an exception for my favorite two or three, but for most books? Bah. Double bah. I just find something else to read. There was this medieval mystery series that was pretty good. Not amazing, but pretty good. I bought the first two at $2.99. And then got ready to buy the third, and hello $12. No. I found another — indie — mystery to read. Now (I’m not being coy) I can remember neither book name nor author name.
So, ebooks falter my sore foot. “Overpriced ebooks don’t sell, but that doesn’t help paper books” as far as I can tell is the accurate headline.
And then there’s the crazy part of “Amazon goes brick and mortar.” Yep, ladies, gents, cats and small dragons. Amazon opened ONE brick and mortar bookstore. ONE. This is hardly “going brick and mortar” and more “making an experiment with brick and mortar.” I mean, if Amazon were opening ten such stores it still wouldn’t be going brick and mortar, it would just be diversifying. And why shouldn’t it? Borders is gone. Barnes and Noble has become Barnes and Toys. There would seem to be a niche there for a bookstore, that, you know, sells books, and offers a way for bookish people to gather. Note, that the store is said to be, mostly, for “showcasing Amazon products.” But I could see a model where they have what indie stores used to have: knowledgeable sales personnel who actually read and handsell books, and perhaps a discount for books downloaded when on the premises, all the while selling the various kindles, as loss-leaders to get you addicted to ebook crack.
Oh, sure, and paper books too. I mean, yeah, sure, paper isn’t going totally away. For instance, next week I’m buying three of those to give as a gift. And I do still buy used books, if they’re $1 or $2 and they are “disposable” “popcorn” books. I buy them, then trade them in at two for one, until eventually I have zero. But the rest of the time? The rest of the time I buy ebooks.
Now Amazon won’t be selling used books (I don’t think. They might. They sell them on line.) but I can see them having a machine that will print any of the create space books in each store. That and knowledgeable staff might make all the difference. I still think it won’t ever be the main part of Amazon business, much less “goes brick and mortar.” (Though I’ll admit that because investors tend to believe these cooked reports and Amazon is savvy, this might just be a ploy to quiet investors’ fears. In which case we’ll see maybe ten Amazon stores, and no more throughout the country.)
Now is this true of most people? I don’t know. Anymore when I’m out in public, everyone is reading on their phone. Even on planes, if you see someone reading a paperbook they’re almost always from abroad. My friends who also epublish haven’t seen any big drops in income. (Not like the dead summer of two years ago.) Bookshelves are now ridiculously cheap (this is actually a good indicator. I knew dvds were going out, when we started seeing dvd storage cabinets being given away on craigslit or its equivalent.) And used bookstores are feeling the pinch. I keep seeing campaigns to “save x or y” bookstore. Oh, yeah, also most of us who sell our accumulated bookery (totally a word) on Amazon have given up because the movement there is ridiculously slow anymore. It didn’t use to be like that.
And yet, the New York Post, not a progressive newspaper, has fallen for this story and run with it even though two minutes thought would show it to be insane.
I remember Heinlein once said that no event he’d lived through and seen reported in the Times had been reported with any degree of accuracy. From those events I lived through, I can tell you I agree with him. And yet, newspapermen who are notoriously bad at analyzing numbers, will run with these narratives pushed at them from above. And the man on the street (and investor on the street) will buy it because it’s everywhere.
So… so we come back to, remember when you thought publishers were just saying they were building warehouses and that print was coming back? That this was just spin to make themselves sound better?
It would appear you were wrong. They really believe this. They feed the story to the media, then read it back and think it’s validated.
Drinking your own ink wrecks the brain.
Just before Halloween my husband was talking about kids’ costumes (our favorite was when older boy was a dragon and younger boy a knight, with a plastic-sword-of-smiting brother. Good thing I padded the dragon head) and asked what I’d worn as a little girl. I pointed out we didn’t dress up for Halloween in Portugal and he asked what we did. So I started, “On Halloween night, you go to the cemetery–” and he said “Stop it. No story that starts like that ends well unless you’re Buffy.”
But scary as that beginning might be, it’s not nearly as scary as “Publishers raised their prices which made THEIR ebooks sell less, so they thought paper books were coming back and invested big in those.”
I guess they’re just whistling past the graveyard.
Mad Genius Club 
c4c
So, wait, were there supposed to be two MGC posts today? I’m confused.
No. I was so out of it, I posted on MGC.
How does anyone with experience in running a business get that arrogant about pricing policies? Did they not take Basic Economics? Do they not understand the implications of a supply-demand graph?
Though admittedly, that simple graph — “sweet spot” where the two lines intersect, where the “market price” will be found that generates maximum profit (if there is any profit) from sales — is remarkably difficult for some people to accept, since they want to believe that either they are being cheated by the Evil Seller (if they are buyers) or that they can cheat the Stupid Buyers (if they are sellers). On a grander scale, this is how the US auto industry drove itself from world market domination to near-ruin in just one generation, ~1960-1980. They must have had economists on staff. Probably well-paid ones. So maybe it’s just a human tendency.
there were multiple issues with the US auto industry (Still are). They refused to think the foreign stuff could be as good as theirs (it wasn’t, it was far better in many respects, especially the “economy models”), they had lacking designs, then put together at elevated costs by union workers who cared not a whit about how well they did their jobs (still a major problem) and to match the other brands, the cars are worth about 1/4 to 1/3 less. The management and apologists liked to claim the American workers couldn’t build cars as well as the other nations, yet Honda was known for higher quality and for a time every Civic sold in the world came out of the Ohio plant. Meanwhile Chevy tried to foist the pushrod Cavalier on Toyota as the import to Japan and Toyota sent the cars back as unsellable. The optional OHC motored replacements sold poorly, very poorly, and were known for their poor quality During that time GM’s best sellers were a Toyota model, a model from Isuzu, and one from Suzuki. The Toyota one is known for it’s own quality issues (though not reliability ones) because it was built in a former GM plant by the same UAW workers who helped it close as a Buick assembly plant. The plant later helped Toyota become the least profitable foreign brand building cars in America. About the only Car industry with less realist outlook at the time was the Leyland/commie built British cars.
I’d guess what Amazon *really* opened was a front end for one of their warehouse distribution points, under the theory that since they make a lot of deliveries in that area (to the point that it’s cheaper to run a retail store than to pay Fedex) — why not get people to come to us instead? You can bet Amazon didn’t do it out of some fantasy that “paper books are on the rise”.
The U.S. auto industry was driven into the ground not by stupidity in the marketplace, but by labor unions who figured they still had no competition and could gouge as usual (I’ve personally seen a union destroy a huge business by demanding higher wages despite that costs were up, profits declining in the face of cheap imports, and what were already the highest-paying jobs in town). Consider tradpubs as union bosses, and all is explained.
Oh, I’m fairly sure Amazon didn’t do it out of that illusion, but apparently mainstream publishing and MSM REALLY believe this.
I’ve never worked for a publisher. I don’t know publishing, What follows is an outside looking in opinion.
Each year I have make a forecast of what our load will be in the future. Officially it’s for ten years, but I run it out to twenty. The hardest thing is tossing assumptions that no longer work. It’s hard because in the past they did, and when confronted with data anomalies, you don’t know if something’s changed or if it’s just a statistical glitch. The second hardest thing is detecting anomalies in data collection, particularly if you didn’t collect the data yourself.Both are complicated by a tendency to retain assumptions that worked in the past simply because they were once valid, and there’s a hesitancy to move off in a different direction, even if the data supports it.
This is an incredible “gotcha,” and I speak as someone who’s been caught by it before. But the most staggering thing is not every utility – or business – goes through this process. As a result, they get caught flat-footed by major changes.
Yes, it looks incredibly stupid for traditional publishers not to figure out changes, but I know how long it’s taken me and others to make sense of changes that are obvious when you realize what is happening, but hard to see when you’re immersed in old assumptions. Maybe some of it is putting a bow on the pig to show it to investors. Maybe some of it is whistling past the cemetery. Or maybe it’s just plain ol’ can’t see the forest for the trees.
If they can figure it out, fine. If not, well, life’s tough all over.
BTW, on Amazon’s brick and mortar store: Watch it closely. Amazon long ago move beyond books, which is likely why Wal-Mart dropped Kindle devices but kept the Nook. Would not be surprised if this thing is more electronics and retail than books. If it is, it probably won’t be the last one to go up.
They SAID it was to sell their electronics/as a showcase.
I think there might a better explanation for the new warehouses. While a sudden outbreak of stupidity among the traditional publishers is certainly possible, it just doesn’t appear likely in this case.
First, the reason that publishers have few warehouses are tax rules: When a publisher claims that some books are slow-moving, and therefore have become worth less, and therefore reduce his taxable income, the IRS doesn’t believe him unless he has actually destroyed the books that he claimed to be unsellable.
So when multiple publishers suddenly build more warehouses, without also increasing their capabilities to publish more titles, I deduce that they want to increase their (unsold) inventory. Which means that these tax rules have changed, or are about to change. Can anyboy confirm this?
I’ll see your alternate explanation, and offer an alternate to that. With shifts in book distribution patterns and changes in technology (not to mention mergers & acquisitions within the industry), it becomes a cost-saving measure to open a new warehouse requiring fewer workers for more volume, especially in a lower-tax state… and later, quietly close the old warehouse.
I expect cost-saving on the logistics end of the company long before I’d expect them to have a hotline to changing tax structures. (If such a change were impending, the publishing industry would be lost in the mad rush for distribution centers by many other industries.)
“(Even with Pratchett, I’d usually buy the audiobook instead of the ebook, because I have a subscription and it’s more reasonable.)”
Amen to this.
While I will still shell out the major bucks for Dresden Files and MHI, I have bought Butcher’s and Larry’s latest novels from Audible for this very reason.
I buy y’all’s books (esp when you tempt me with the sales) but for those popular hot shots-the library is around the corner from my house, and another branch is 2 blocks from where I work. I put the full price books on hold from the library and they call me and send me a email when it is waiting for me. Thats if they don’t have the e version ( that yes I prefer) in which case I get it magically while I sit in my chair next to DH.