Let's review the problems that plague publishing now.
First, aftermarket reselling of books is decreasing the time window in which publishers and content creators can make money. A book retailing initially at $20 can sell used for 25 cents or less within a year or less (to the detriment of the author's royalties.) The biggest beneficiary of the "aftermarket" is none other than Amazon.com, with its ever-increasing transaction fees (although shopbots like isbn.nu could eventually squeeze these fees down).
Despite efficiency improvements in inventory management and production, books are going out of print just as rapidly, with the slack borne by --you guessed it--aftermarket booksellers (and increasingly, file sharers). Writers lucky enough to find publishing deals find that after a lackluster period of sales, publishers will just let the book go out of print while retaining the copyright. In fact, as Larry Lessig has argued, current copyright law creates a perverse incentive for copyright owners to prevent the market from being flooded with unprofitable and older public domain works.
Curiously, in an age of widespread literacy and access to all kinds of books, people are reading fewer books and when they do, it is the same old crap everybody else is reading . People have offered explanations: competing entertainment choices, the decline of independent bookstores, the abundance of books tied in with other media properties. I still shudder when recalling my brief 1997 stint at a retail bookstore where every display in the store was screaming Titanic and Jurassic Park and Tiger Woods. Litblogging has gone a long way to counteract this narrowing of tastes by exposing people to a wider variety of writers (the same has been happening in the world of MP3 Bloggers) . But mainstream success is still defined by the public as coverage in Big Media, which is increasingly focused on its own media properties.
So where does Amazon.com come in? Although dwarfed in size by Barnes & Noble, Bertelsmann and Time-Warner, Amazon.com still plays a key role in book distribution that all the majors have to deal with. In terms of online market share, Amazon.com is still the de facto marketplace for books.
Up until now, Amazon.com has done well selling content by the big media companies, although it remains open to independents wanting to sell physical content online. Right now, content creators need a way to sell and distribute content with less restrictive licenses (i.e., Creative Commons or Founder's Copyright). People are using more liberal licenses not just to be "nice" but to make it easier to publicize and promote their works. Audience building lies at the heart of the problem. As publisher Tim O'Reilly once wrote, "Obscurity is a far greater threat to authors and creative artists than piracy."
By acquiring a Print-on-Demand (POD) company and an ebook software company, Amazon.com is retooling itself to offer a complete publishing solution to authors disenchanted with the current state of publishing. We may soon live in a world where authors can upload content into Amazon's content management system, which then can sell it on demand as a physical object or digital ebook.
People have been predicting ebooks and ebook readers for at least two decades, but here's why now is a good time for Amazon.com to start pushing consumers towards ebooks. Digital content doesn't require warehouse space or an intricately inefficient system of handling returns. Printing in small runs makes it difficult to keep prices competitive, but if you're not even turning on the printing presses, that's no longer a problem. Backend content management systems are becoming more robust and easier for ecommerce companies to maintain; and content creators are becoming more comfortable with handling the tasks of designing and formatting (just look at the diversity of layouts in weblogs).
Independent content creators are ready for do-it-yourself ebook solutions. But what about big publishers? In fact, these guys would like nothing more than a way to kill the aftermarket, and selling ebooks would do precisely that. With ebooks (like iTunes and other forms of digital distribution) nothing goes out of print or out of stock. Copyright owners could potentially have more flexibility about setting the price of content over the duration of the copyright and not have to compete against resellers.
In fact, the only group resistant to ebooks is consumers. Many consumers, never having actually seen or touched a dedicated ereader before, mistakenly think that the only way to read an ebook is on your computer or cell phone. Ebooks published by big publishers aren't significantly cheaper than physical books and are often cost more than the same book in the aftermarket. It makes little sense to buy an MS Reader ebook version of Mark Haddon's Curious Incident for $10 when the used paperback is available on Amazon.com for $5.50. Of course, that ignores the fact that "no namers" could offer their own ebooks at a price closer to "chump change" (i.e., a price regarded by consumers as trivial). It also ignores the benefit of having access to the increasing amount of free ebooks and public domain classics from sites like blackmask and Project Gutenberg .
It's also hard for consumers to wade through the mess of incompatible formats. Although PDF ebooks are ubiquitous, their print-ready formatting makes them ill-suited for ebook readers. Whereas some formats (MS Reader, Mobipocket and Plucker) are readable on more than one kinds of device, others have been designed with specific hardware in mind (Ebookwise 1150, Hiebook). This past year marked two watershed moments in the ebook world: a grayscale ebook reader (Ebookwise 1150) began selling near the $100 range, and a high-end reader (Cybook ) capable of reading most ebook formats began selling near the $400 range. Both devices allow importing of .txt, .rtf and .html files.
Amazon.com's buying of Mobipocket signals two things. First, Amazon.com is poised to stand behind a single ebook format and perhaps to promote it as well. That could be enough to encourage hardware makers to build a device specifically for viewing Mobipocket files. Amazon.com could conceivably be partnering with one or two manufacturers to showcase such a device (selling in the $100-200 range) by next Christmas. Amazon.com could promote the manufacturer, and the manufacturer could then in turn promote Amazon.com as the default seller of Mobipocket ebooks.
It also could mean that Amazon.com's POD service (Booksurge) will start designing and publishing ebooks for formats other than PDF. Perhaps integrating the POD workflow (which is more MS Word/PDF based) into the ebook workflow (which is more HTML/CSS based) might allow Amazon/Booksurge to make publishing services like Booksurge a better deal for writers. At the moment, Booksurge (like other PODs) offers a variety of services to writers, ranging from editing, cover design and marketing.
Booksurge's prices fall in the $500-1500 range, depending on which extras you choose. (Those of Iuniverse.com and Xlibris are similar). On the other hand, after ponying up initial POD costs, writers get a better chunk of royalties, retain rights, stay in print longer (and even get a guaranteed listing on Amazon.com). Plus, there is always the option to "sell out" to a bigger publisher (using POD sales figures to convince them of a book's marketability).
The main disadvantage of POD (aside from the difficulty of promoting them) is the price structure. (Here are the rates for Booksurge, Iuniverse and Xlibris (pdf)). The POD companies price POD books 10-20% higher than traditional publishing. Price isn't always the primary determinant for choosing whether to buy a book, but it is a significant factor when the author is unknown.
But with ebooks, won't the rules completely change? Printing costs depend on the size of your print run, but if there's no print costs at all, you're only dealing with initial fixed costs (plus a transaction fee). In my opinion, that gives the author enormous leverage in setting his or her own prices. Maybe Random House wants to sell ebook versions of Da Vinci Code for $10, but I want to offer my ebook novel for sale at $2 (a price closer to the "chump change" threshold). But would Amazon.com want to sell it?
I would argue that Amazon.com would and should. Sure, giving independent content creators the ability to undersell big publishers might bring down the price of all fiction. But it would also increase the value of Amazon.com's online real estate, providing endless opportunities to sell "virtual end caps" or other marketing extras to those willing to pay (as long as it doesn't interfere too much with the overall user experience).
Amazon.com is already offering digital content for free (see its free mp3 download page) . Its online tipjar (called Amazon honor system) charges 2.9% plus $.30 transaction fee, a rate content creators could certainly live with. Amazon.com is already well-equipped to distribute low-cost digital content and handle micropayments. Of course, Amazon.com could just be waiting for the market to mature and continue selling ebooks from big publishers in the meantime. But the "play it safe" strategy runs the risk of letting a niche player like fictionwise grab the emerging market before there is time to react.
Here are a few things to look out for as the ebook market emerges:
- Are ebook software companies continuing to sell reasonably-priced client applications to produce ebooks? (Right now, Mobipocket Publishing Standard Edition costs $150). If these client applications are abandoned, or if the prices go up significantly, that could be a sign that the software company (and accompanying web distribution site) are wrapping the formatting magic into the server product. That's bad for content creators because it allows the publishing/distribution channel to "own" the tools for layout and design.
- Will the number of ebook file formats increase or decrease? Ebook enthusiast Cory Doctorow keeps 20 different versions of his first ebook . For most people, maintaining this many versions of the same content would add significantly to the time, cost and aggravation of self-publishing.
- Will OS's and hardware companies shift away from supporting software and towards supporting standards? An industry body has set up the Open Ebook Publication Structure Standard (OEBPS) (a simplified version of XHTML and CSS). Current ebook reader software supports the earlier specifications , although support for the more recent and robust OEBPS 1.2 is lagging (partly due to a sluggish market). To simplify the adoption of open ebook standards, two separate groups are working on an open source ebook browser (Openreader ) and open source ebook creation tools. These two projects may become more useful as website owners try to repurpose their web content and blogs into downloadable ebook form.
I haven't mentioned the "problem" of anti-piracy and digital rights management (DRM). Cory Doctorow has already given the definitive analysis about why DRM is counterproductive . I'll add two things here. First, commercial interests will pretty much guarantee that ebook devices will employ some kind of DRM.
But DRM doesn't really matter for the little guy. It matters mainly for mega media companies who have made significant capital investments (in thousands, if not tens of thousands of dollars) and need to recoup their investment by selling tens of thousands of copies. The pricing strategies of big publishers have pretty much been "anti-chump change." In other words, set a retail price that no one seriously will pay (aside from library institutions) and then gradually lower the price until the merchandise starts moving somewhere (even if it is only to the remainder table).
But for the independent content creator (say a popular litblogger who is selling ebook novels on his website) the pricing strategy is different. His strategy is not necessarily to maximize price, but to maximize audience. His strategy is to guess the price point readers would regard as "chump change" (so insubstantial that people used to getting things for free won't be bothered by paying it). This may not be the route to becoming a millionaire, but publishing royalties now aren't much better, and at least the poet or novelist doesn't have to wait forever to convince a publishing company to take a risk selling his work.
In an article about self-publishing, Tim O'Reilly writes "technology just changes the middlemen." Ecommerce and emerging ebook technology might just make Amazon.com the new middleman (if it plays its cards right). With ebooks, the independent content creator might gain more control, but end up paying more to third parties (like Amazon.com or Iuniverse) for editorial or promotional services. Maybe the thought of this sounds horrifying. After all, if Hermann Melville or Frank Kafka had to devote time and money to marketing and design, what effect would that have had on their literary output or reputation? On the other hand, putting in a bit of one's own money to literary projects might give writers a reality check about what literary works actually sell these days and help them to appreciate the difficulties of getting noticed in a world dominated by books about dead pontiffs, right-wing loudmouths and More Chicken Soup for Dummies ™.
Robert Nagle (aka idiotprogrammer) is a Houston-based writer who writes frequently about artist advocacy and copyright reform issues. He writes web fiction under various pseudonyms and will be publishing ebook versions of his literary works this summer. This essay (and all his online writing) are available under a Creative Commons license.