Sunday, May 13, 2012

A Troubling Situation

This might not be the smartest post I've done, especially seeing as I'm a newbie who has yet to get any serious consideration from the publishing world.  In fact, I might be committing career suicide just by bringing it up in the way I do, but I wouldn't be me if I stayed quiet.

I recently ran across two blogs by writers that I've just added to my blogroll - According to Hoyt by Sarah Hoyt, and A Newbie's Guide to Publishing by JA Konrath.  Both are fairly well established in the Author Universe, and both have recently brought up a situation that I was unaware of.

There are a few small, independent publishing houses out there, but most of what we see on the shelf is controlled by the "Big Six" publishing houses - Random House, Simon & Schuster, Penguin, HarperCollins, Hachette, and Macmillan.  These companies have divisions within their firms - Random House, for example, has familiar names like Doubleday and Crown Publishing as part of its American division - but that only makes it seem like there are more companies out there than actually exist.  Trust me, if you've bought a book in a Barnes and Noble or the now defunct Borders, you've more than likely bought it from one of these giants.

Most writers I know dream of being published by one of these companies.  To be so would make the author seem as if he or she had made it to the "big time."  That's right - we'd be in the major leagues, or dreams of professional glory only inches from our fingertips.  We'd have finally arrived.

Unfortunately, there is a teeny tiny problem.  Whereas there were once dozens of firms out there and prospective authors had greater choice, these six control the industry and have squeezed out competition.  This in and of itself wouldn't necessarily be a bad thing if they still competed aggressively against each other, which would, of course, keep the market vibrant and help the consumer.  Alas, these six have begun to act more like an oligarchy rather than separate firms focused on their place atop the market.  How could that be?  Well, it seems the Department of Justice is in the process of reaching a settlement with these big boys due to allegations of price fixing with regards to e-books.

The e-book phenomenon is changing the industry.  This should be good - thousands upon thousands of people who wouldn't normally be avid readers can now download the latest title and not be burdened with a cumbersome load of books they won't look at again after they read them.  This, one would imagine, would overjoy both authors and publishers since it should open up fresh new markets.  However, one side of that equation isn't happy with everything, and that side is publishers.

It seems publishers are upset they're having difficulty charging the same amount for e-books as they do for traditional books.  You see, people won't pay $12.99 for an e-book.  When the market is allowed to react to this, prices would normally come down to what consumers would pay, and a new equilibrium would be established.  However, this would mean that the Big Six would lose control and not be able to overcharge people, so they allegedly got together and have tried to force distributors - mainly Amazon - to charge a certain price.  Were one company to do this, there'd be little problem.  Amazon could simply tell them, in a very businesslike way, to "go screw themselves."  However, when all six do it, it becomes an illegal infringement on the market.

The cry of the publishers is that Amazon, by cutting prices initially when they were sold this stuff wholesale as opposed to the Agency Model the Big Six wanted, has jeapardized the existence of books themselves.  I've spoken before about the changes the industry is currently undergoing, as well as the fact that publishers have to find a way of adapting, or they'll go the way of the horse and buggy.  But it seems that instead of changing, they'd rather ride that plane all the way into the mountain.

Simon Lipskar of Writer's House has written an open letter to the DOJ where he tried to make the case that this isn't all that bad.  In this, he makes several flawed arguments that treat the average reader like an idiot.  Mr. Lipskar writes that the alleged collusion harmed no one because although it wants to force e-book distributors to raise the prices on some books, the prices of others would fall, so we'd all be able to meet in a happy middle.  I thought about this for a moment before asking, "What if I just want to read certain titles and don't care to read the ones you want to reduce in price?'

This is where the next, in my opinion, laughable argument comes in.  Mr. Lipskar's letter claims that books are "fungible."  I had to look that up, because as learned as I am, that word escaped my vocabulary.  When I found out what it means, I shook my head - it basically means that you can substitute one for another and there's no discernible difference.

Have any of you ever been reading Harry Turtledove and suddenly thought, "This is just like a Nora Roberts book!"?  When I decide to read a particular book, it's because I'm attracted to that book, not because I think it's just like every other book.  In fact, it's the differences that make me want to read them.  For a supposed industry expert to claim something so absurd means he either honestly can't tell the difference between Gone With the Wind and Ramona the Pest, or he thinks we're all such stupid sheep that we'll be placated by anything put in front of us, and, dammit, we'll like it because our masters have told us to do so.

By doing these kinds of things, publishing houses are unwittingly driving more and more people into the arms of self-publication.  Amazon has made it very easy to publish an e-book, and by trying to get the online company to charge unrealistic prices, publishers are driving people away from the market.  If an author can't sell, he or she makes no money.  A 15% royalty on 0 is still 0, but if that same writer publishes an e-book for $2.99 and gets to keep around 70% of it, well that might open up the market.  Further, the allure of traditional publishers has been their brand name and ability to get the author's work in front of a larger audience, but the Internet has started to bridge that gap.

I've remarked on my own decision process currently underway on whether or not to self-publish, and this tale, stacked on top of some true horror stories I've heard about how the big houses treat their newer and less established writers, has gone some way towards pushing me even further in that direction.  Price fixing so folks can't sell, and then treating the consumers like morons, isn't the way to increase market share.

So yes, by writing this critique, I may have slit my own throat in the "traditional" world.  If that's the case, then so be it - I might as well go in all the way.  Wait until my next post which will discuss a disturbing letter written by a group that is supposed to represent writers, but seems more interested in maintaining the status quo.


  1. Reminds me of the music industry. With new technology there are new opportunities for marketing. But the 'industry' wants it both ways! I totally agree with you BUT is the government overreaching here by interfering or regulating big business?

    1. The last thing I want to do on this blog is bring a lot of politics into it - that will eventually drive us from the topic at hand, which is writing.

      That said, I don't this is overreach, b/c being the referee and keeping the market fair is exactly what they are supposed to do. Price fixing harms the consumer and removes fairness. Without the alleged fixing, one of the companies would probably get the bright idea to undercut prices so as to draw a larger share of the business, but this alleges they have made a tacit agreement to not compete, which violates the anti-monopoly principles that protect readers.

  2. I think the publishing industry is reacting the same way any industry would when the consumer is beginning to get the upper hand - cut throat. Sad as it is, I am hoping they change their ways.

    1. Unfortunately, change within any industry is usually difficult, with the old guard trying to hold on to what they have. I don't think they'll change out of altruism, but rather only when they can be shown how it would be in their economic interest.

  3. Very eye-opening post here. I had no idea that there was a lawsuit trying to raise e-book prices. That just doesn't make sense to me. If it costs less to publish (and it does b/c there is no ink and paper) then it should cost less for the consumer.

    Also, to say that books are all the same and can be substituted is craziness to the reader.

    Great post. Thanks for the info.

    1. Vanessa - I agree. One would think they'd be open to a new market with potential new readers, but they're afraid that e-books will cost them profits they make from more traditional books. In reality, the practice of raising e-book prices to levels that we've seen with "regular" books will shrink the market, not expand it. I've personally waved off on two books that I wanted to read but the e-book price didn't justify the purchase.