fiction files redux discussion
On Writing
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why ebooks must fail
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This stuff really fascinates me. I love the statistics and probabilities. Seems the movie industry is going thru the same shock. Interesting how the DVD comes out six months later but has extra content. I'm expecting some similar strategy from ebooks.
Mod
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I think it is a joke. I mean, the guy is so biased that it is fun. There is not only way to publish a book, not just the effort of two individuals, e-book are not necessarily without income (and you can not fight technology, so airplanes will fly), so far everyone fighting with the digital world is finding his way, and literature started with the majority of people could not even read and oral storytelling was the tech, only possible, etc. I can see this guys coming to Homer and say "why writing will fail, because there is no market for reading" and Homer(s): fuck, you. I like to write, you dumbass, it is art, not a piece of clay and animal coth.
Mod
we are talking about going from significant cashflow (the advance) to dribs and drabs as front end purchases are made - the product took 1? 2? 3? years to create and complete and now? here's a buck, there's 2 bucks. anything today? nope. Hey 3 bucks today! yay... nothing today?
and there remains the issue of filtering your product from amongst the myriad of other books available, of raising the visibility of your product so that people will know it is there and will be interested in reading it. This is going to have to be done by some agency (if not the publisher then who? the author will be just another voice in the wilderness without some backing). what is their cut?
musicians dont really make all that much money on their product anymore they have to tour and put on shows to collect their paydays - it will be the same with authors only who is going to pay $200 for front row seats at staples center to hear Jonathan Lethem read?
Mod
I think that this is a major issue in the 'information age' the wide availability of an increasing amount of products isn't necessarily a good thing. without publishing houses to throw some weight (money) into the promotion of a title it would be very, very hard to filter your product.
I think some parallels can be drawn from the self publishing world. There is a massive amount of self published books out there and a good deal of the are likely garbage. There may be a gem hidden here and there but what is missing is editing and promotion.
It is likely going to put more of a burden of finding the 'good shit' onto the consumers shoulders much as it is with searching the internet for specific information.
Please note I do not mean to say that only edited and promoted books are the only one's worth reading, or that I need to be spoon fed by companies what I should read. I rely on the people of this group to do that for me. Alright I gotta stop rambling...
Mod
I think this phenomenon is actually largely responsible for the evolution of Web 2.0.
Lots of information, very little wisdom or intelligence.
If you accept that Web 2.0 is at least in part about intelligence of the collective being superior to the intelligence of one. Or, replace intelligence with experience, discernment, education, or hell, willingness to express opinions. Do that, and you get Yelp, and a hundred other sites. I forget what that one site is, where people who know everything about purses help you pick one... and so now, we have a proliferation of those sites... multiple places for you to tell me about what the best shit is.
Every day of my life is an effort to separate wheat from chaff, to find the good shit.
The grocery store is a perfect example. A bewildering array of products. I wish stores would get smaller. I want them to choose the best paper towel for me - give me, say, 5 options at different price points, not present me with 500 types of 10 different brands. Or toilet paper. Or dishwashing liquid. Or orange juice.
Well, so far E-books are just like other books, when they should not. What will happen when some real genius find the difference and produce a text that will show the way? The Cervantes, Homer, Joyce, Poe, etc... guys who manipulated the limit reggardless of the medium limits... there will be nothing to be done and will probally be interesting.
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Mod
something to think about vis proposed e-libraries"
. . . wow, who knew? fascinating stuff . . .
"Why Ebooks Must Fail
This piece is about consumer or “trade” publishing as we call it in the industry. To begin, let’s review how a book becomes a book. A writer gets an agent who peddles a manuscript to an editor who buys the book. The Publisher then pays an advance against the future royalties. (N. B., trade books advances are often, if not nearly always, greater than the actual royalties earned.) The publisher edits, designs, produces, prints, binds, warehouses, and finally, distributes the book to resellers (retailers and wholesalers). Concurrently the publisher is out pre-selling in an attempt to get as many units shipped to resellers as possible.
Of all the work cited above, there are two, large-scale, out of pocket investments made by the publisher to create a trade book, the advance and the manufacturing. Advances should be viewed as controllable expenses, but in the competitive world we live in (well, used to anyway), Publishers outbid each other on a regular basis to get the rights to a title. Think of its as sports fans think of free agency (in the US) or transfer fees (in Europe) - everyone thinks they are outrageously high but short of colluding, there seems to be no way to control them.
As to the manufacturing costs, most publishers have spent the last decade focused on systematically driving down costs in manufacturing. However, no matter how much efficiency is achieved, there is only so much that can be driven out of any process that requires skilled people and non-renewable materials. The impact of advances and Manufacturing is frontloaded in the economics of book publishing. In other words, before a single dollar is earned, these costs hit the publisher. This has been the way publishing has worked for more than 100 years.
So how do publishers manage this difficult economic situation? We work extra hard to frontload sales by focusing marketing efforts on front list titles (Front list means this years new titles, as opposed to backlist which means everything publisher prior to this year). Big advances (in this sense meaning lots of orders in advance of the shipping date) drive up the number of copies shipped, which is when publishers “count” the income for a book - when it is shipped from the warehouse. However, savvy readers will notice a chink in the armor - books shipped do not mean books sold.
Trade books are pre-sold in far, far larger quantities than they will actually sell in a given period of time. In fact, the bigger the title, the greater the ratio of advance to sold units. The more copies advanced, the more it will sell - but the efficiency of sales falls as the number of advances copies increases. It’s a bedeviling issue for publishers as we generally sell front list to resellers on a returnable basis.
Trade publishing economics is predicated on the ability of retailers to mitigate their risk and return unsold inventory for full credit. (NB, not all retailers are designed this way - but the majority of bricks and mortar retailers in particular, are… especially the big box stores such as Costco who take huge positions on a relative handful of titles). So the publishers are in a funny position. To get top authors, they bid against each other and drive publishing costs through the roof. To recoup this investment, they have to pre-sell very hard and get too much inventory out onto the market, in order to bring in the cash to cover the investment. Then after some time, the unsold inventory comes back for credit, which forces us to publish more books in order to sustain our position! The cycle is never-ending and sounds all too similar to certain less than legit investment portfolios featured in recent headlines.
So what does all of this have to do with ebooks?
Well, for starters, ebooks don’t follow these rules. Ebooks are effectively sold on a consignment basis - meaning the money for the sale is distributed after the sale is made, not up front. Stores don’t buy inventory, they put the file in a database and distribute copies as they are sold. This means that ebooks don’t have a huge returns problem, but it also means they cannot generate short-term cash flow like print books do.
Furthermore, when you look at the pricing models that trade ebooks have engendered in the market, you see that publishers have allowed pricing to be controlled by forces that are looking to control over an emerging market rather than those who need to fund the content creation. Ebooks (at best) are selling for less than 50% of the hardcover price - often at 35-40%.
On the other hand, ebooks don’t carry the same costs of print books. There are clearly no manufacturing or printing costs. However, publishers still have to buy the rights to a book no matter if that is an ebook or a print book - paying advances against royalties. There is still the need to edit, design and produce the content. In fact, many think that there are greater development costs for ebooks as electronic media opens the work to connections to the world of the web and an incredible amount of related and enhancing content - all of which needs to be managed and edited.
Ebooks will still have to be sold and marketed, just in different ways as there will be far less reliance on an upfront advance buy-in, but far more reliance on ongoing marketing through the use of content and metadata - as well as user-generated content and promotion tools to get the book marketed. These are completely new expenses for publishers who traditionally think of marketing as publicity and display advertising for new books, not ongoing support and marketing for long-term sales.
Finally, the content and its metadata all need to be warehoused electronically which requires investment in technology and staff to manage the technology - be they in-house or a third party entity. Clearly ebooks aren’t free - they are perhaps as expensive or in some cases more expensive than print - yet they do not create large, short term cash flow to cover their costs. Ebooks, if successful, will sink the trade publishing industry.
And therein lies the dilemma… how does the publishing industry fund the creation, editing, design, production, marketing, e-warehousing, and sales of ebooks, if the income isn’t there? How do ebooks cover the huge advances needed to buy books if we cannot generate the cash, especially at their extremely low, discounted prices, cover the advances that an entire industry has come to require? The answer is that ebooks, alone, cannot.
What this means is that unless a very different model evolves, ebooks can never become the dominant version of content sold by book publishers. It means that ebooks will always be priced to sell, but sold as an afterthought, not as the primary version of a work. It means that the need for blended e plus p models will evolve, in order to take advantage of all the great qualities of ebooks, while providing the financial support and structure that print offers. It means that consumer ebooks, as a stand-alone version of an intellectual property, must fail.
In a future post, I will explore potential models that address the issues explored above… one such model even enables us publishers to have our Ponzi scheme and ebooks too!"
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