Tuesday, October 5, 2010

The Paradox of E-Book Pricing

Interesting article in the Wall Street Journal a week or so ago about how Authors Feel Pinch in Age of E-Books.   My first instinct about E-Books is that they should be a boon for writers, because the costs involved with producing them are so dramatically lower than traditional printing options. But, as the article points out, the cost savings do not seem to reach the authors who are attached to large publishing houses. In fact, the opposite is true. Because the top line is lower, the way the current structure works, authors are making substantially less.

In addition to explaining how E-Book pricing is impacting literary authors and describing several other topical issues (about overcrowding in the book market, smaller advances all around, and dramatically smaller ones through independent publishers), the article also touches upon how difficult it is with these new  economics to make a living as a literary writer and how the current system makes it unlikely that the careful nurturing of fiction as art form will continue -- gone are the days of patiently developing the careers of such writers. (Though already-famous writers and those producing work considered more commercial are likely to do well with the E-book.)

All of these issues are fascinating and need to be considered. But the article underplayed one of the most interesting angles in the whole evolution, which is who makes money and why. It mentions that the Authors Guild and several literary agents are pushing for authors to get a higher percentage of E-Book revenue, but also that publishers are resisting. And I do understand why they are resisting -- their cost structures are so out of whack that they surely feel justified in retaining a dramatically higher percentage of revenue than the artist gets. To them, they probably need it to keep the lights on. But this seems fundamentally unfair to the authors, especially given the different economics of producing an E-Book. As E-Book revenues grow disproportionately to hardcover and paperback, they will be propping up the outdated and outmoded business models of their print brethren until such time that this revolution works itself out. In the meantime, the real trick for independent and self-publishers is to figure out how to replicate the still-substantial value created by the web of professionals that populate traditional publishing, but without the insane overhead. That's certainly what I hope to do.


  1. Nice post, Michelle. This makes me think of an excellent article I just read in the New Yorker called "Talent Grab" (Oct. 11, 2010, by Malcolm Gladwell). Gladwell describes a few paradigm shifts (in professional sports, professional modeling, and publishing) where the "talent" (players, models, and authors, respectively) used to get a sliver of the proceeds and the capitalists (owners, modeling agencies, and publishing houses, respectively) used to take the lion's share, but then that flipped and the talent started getting a significantly larger share. I think it's worth checking out, as the current e-book situation you described seems similar to the situation in each of these other domains before the tipping point was reached. What's different, I think, is that the walls are coming down for authors to get published, but people don't yet have good ways yet of connecting authors to their audiences. Crack that problem and you may usher in the revolution you mention.

  2. Thanks for the suggestion, Mike. I will check out the article as soon as possible. (Funnily enough, I was just publishing my latest post here and referenced the tipping point before seeing your comment.) Does Gladwell think that players and models are connected to their audiences moreso than authors? That would surprise me but I look forward to checking it out. And I wholeheartedly agree that there is a disconnection in publishing. Thanks for your comment!