by Judith Curry
Here’s a little real talk about the book publishing industry — it adds almost no value, it is going to be wiped off the face of the earth soon, and writers and readers will be better off for it. – Matthew Yglesias
Vox.com has a provocative article by Matthew Yglesias: Amazon is doing the world a favor by crushing book publishers. Summary excerpts:
What is indisputably true is that Amazon is on track to destroy the businesses of incumbent book publishers. But the many authors and intellectuals who’ve been convinced that their interests — or the interests of literary culture writ large — are identical with those of the publishers are simply mistaken.
Books are published by giant conglomerates. Wisdom on this subject begins with the observation that the book publishing industry is not a cuddly craft affair. It’s dominated by a Big Four of publishers, who are themselves subsidiaries of much larger conglomerates. Simon & Schuster is owned by CBS, HarperCollins is owned by NewsCorp, Penguin and RandomHouse are jointly owned by Pearson and Bertelsmann, and Hachette is part of an enormous French company called Lagadère. These are not tiny, helpless enterprises.
Amazon faces lots of competition. It is undeniably true that Amazon has a very large share of the market for e-books. What is not true is that Amazon faces a lack of competition in the digital book market. Barnes & Noble sells e-books, and does so in partnership with a small outfit called Microsoft. Apple sells e-books and so does Google. And since these are companies that are actually much bigger and more profitable than Amazon, there is absolutely no way Jeff Bezos can drive them out of business with predatory pricing. Amazon’s e-book product is much more popular than its rivals because Amazon got there first, and the competition has not succeeded in producing anything better.
Publishers are superfluous. In the traditional book purchasing paradigm, when a reader bought a book at the store there were two separate layers of middlemen taking a cut of the cash before money reached the author: a retailer and a publisher. The publisher, in this paradigm, was doing very real work as part of the value-chain. A typed and printed book manuscript looks nothing like a book. Transforming the manuscript into a book and then arranging for it to be shipped in appropriate quantities to physical stores around the country is a non-trivial task. What’s more, neither bookstore owners nor authors have any expertise in this field. Digital publishing is not like that. Transforming a writer’s words into a readable e-book product can be done with a combination of software and a minimal amount of training.
Book publishers are terrible at marketing. When I was a kid, my father was a novelist as were both of my grandparents. So I heard a lot of stories about how useless publishers are at marketing books. Then I got to know other people who wrote books and they had the same complaints. Then I wrote a book, and their complaints became my complaints. But it’s easy to whine that other people aren’t marketing your product effectively. It took the Amazon/Hachette dispute to conclusively prove that the whiners are correct. The real risk for publishers is that major authors might discover that they do have the ability to market books.
A bounty of affordable reading. Of course a world where more people can get more books more conveniently is a better world. It is true that some individual authors may earn less in the new era, while others authors may earn more. As Amazon and other digital distributors gobble up some of the publishers’ slice of the revenue, it’s likely that authors will also get a share and see their total income rise. In the new regime it will be easier for writers to find readers and reach larger audiences. They just won’t find them through the exact same set of middlemen who currently sit astride the pipeline. Tough on them.
The New Republic responds with an article What Matt Yglesias doesn’t understand about book publishing. Excerpt:
A publisher’s list of books is in essence a risk pool, a term most often associated with health insurance. In the insurance business, the profits from the healthy people outweigh the big losses from the sick ones because the healthy outnumber the sick. In publishing, it’s the opposite, yet the underlying concept is the same. Most books lose money, but the ones that make money earn enough to cover all those novels that didn’t sell.
The publishing scenario that Yglesias is advocating is a world without health insurance. (Ironic, I know.) In a system without the publisher operating as middleman, where the author takes his life’s work and just posts it to Amazon, each book becomes a lonely outpost in the stiff winds of the marketplace, a tiny business that must sell or die. “So what?” Yglesias might say, because that’s the kind of ruthless neoliberal thinker he is. “If people didn’t buy the book, that’s just proof of its worthlessness.”
Salon has a rebuttal, excerpts:
The battle between Amazon and the Big Five publishers is complicated by the fact that neither “side” is exactly easy for authors and readers to be on. No one who cares about a diverse and healthy literary marketplace, where new ideas and writers can reach a wide audience — and even non-blockbuster authors are paid enough for their work so that they can continue doing it — can reasonably side with Amazon.
But the publishers have botched so many opportunities in recent years, and have been so maddeningly slow to adapt to the digital marketplace, that it’s hard not to feel that they deserve some kind of comeuppance.
Paul Krugman has an article Amazon’s monopsony is not ok, excerpt:
Does Amazon really have robber-baron-type market power? When it comes to books, definitely. Amazon overwhelmingly dominates online book sales, with a market share comparable to Standard Oil’s share of the refined oil market when it was broken up in 1911. Even if you look at total book sales, Amazon is by far the largest player.
So far Amazon has not tried to exploit consumers. In fact, it has systematically kept prices low, to reinforce its dominance. What it has done, instead, is use its market power to put a squeeze on publishers, in effect driving down the prices it pays for books — hence the fight with Hachette. In economics jargon, Amazon is not, at least so far, acting like a monopolist, a dominant seller with the power to raise prices. Instead, it is acting as a monopsonist, a dominant buyer with the power to push prices down.
Well I definitely know nothing of the world where authors of books get an advance from the publisher. I assume advances are for the type of books that you would buy in an airport (blockbuster type novels), plus the more literary works from established writers. Writers of science books, even popular science books, probably don’t get any advances (I’m somewhat ignorant here), but I do know that textbook writers don’t get advances from the publisher!
I’m a hardcore e-book/Kindle/amazon fan, and amazon’s marketing of books is sheer genius (relative to conventional publishers, who seem in any event to rely on amazon for their marketing). I think Yglesias pretty much gets it right, although there seems to be something to Krugman’s monopsony concerns.
I would like to discuss here what this means for popular science and academic publishing. I’ve seen a number of popular climate/environment science books self-published on Kindle, or published electronically by an e-publisher. Not sure to what extent e-publishing is dominating in this sector?
With regards to textbooks, the dilemma is this. There typically isn’t much value added by academic publishers, but getting any ‘academic credit’ for writing a book depends largely on getting it published by a prestigious press. Textbooks are enormously important in educating not only university students, but also scientists within and outside the field, and the interested technical public. Writing a text book requires integration and weaving together loose ends, an activity that is very different from primary research. Such skills should be more highly valued in the academy than they are.
I have to say that my publishing experience with Academic Press for my text Thermodynamic of Atmospheres and Oceans hasn’t been great. I submitted a camera ready, fully formatted/indexed/page numbered book, there was no editing or formatting done. The original (1999) price of the book was $66; the price on Amazon is now $115 for hardcover and $59 for Kindle. I have received minuscule royalties for this book; I received full royalties (which were rather small anyways) only for books sold in the UK (where the book was published). I am under contract to do a 2nd edition (and I will not be giving them a camera ready version).
Our experience with our new book Thermodynamics, Kinetics and Microphysics of Clouds, published by Cambridge University Press, so far has been somewhat better. CUP did a serious job of editing, and did an excellent job with the page layouts and indexing. The price is relatively reasonable: $89 for hardcover, and $63 for Kindle (Dan Hughes has been extremely helpful in pointing out bugs in the Kindle version). One disappointment is the font size for hardcover: 9 point eye strain. This small font was used because the book was slightly longer than our original estimate, and an effort was made to keep the costs down. With regards to marketing, it is not really clear what CUP is doing – most of the effort (and presumably the majority of the sales) is from my blog post and tweets and Vitaly’s extensive emailing to cloud physicists worldwide.
Any further books that I write (apart from the under contract 2nd edition) will be published electronically only, and probably self published. I would be happy to sell the books for $1 (the royalties for publishing technical books are minuscule anyways). Electronic publishing opens up the possibility for nontraditional formats, with hyperlinks, etc. The internet – email, blogs, twitter – is remarkably effective for marketing books. About half of the books I’ve read recently have been spotted from twitter. So the question is whether the institutions (e.g. universities) will decide they value textbook writing and affordable texts, and whether they can figure out a better way to evaluate the impact of a book beyond the press that published it.
Here’s to hoping for saner models for publishing scholarly books in the 21st century.