The Value of a Book

On Friday, Amazon removed all Macmillan books from its site after what is believed to be a year-long dispute over ebook prices. Macmillan wants titles to be listed closer to $15 while Amazon wants to retain the $9.99 price–despite the fact that this is hurting publishers and writers. Sort of a strange move for a company that got its start in book sales, but it makes sense when you look at the many-headed monster that Amazon has become and realize that losing one publisher will hardly bring the company to its knees.

Amazon is no stranger to negative press. Back in April 2009 the hashtag #amazonfail dominated Twitter (and then blogs and the press) after Amazon removed all gay and lesbian titles from the search and ranking features on its site, citing their policy of wanting to keep adult content out of the public eye, though they later claimed it was a glitch despite the fact that while books such as Heather Has Two Mommies lost its sales rank, items such as vibrators were left in the search. Then, three months later, Kindle users who had purchased certain Orwell books had the books removed from their devices. Yes, the books were sold illegally (the company who added the books did not own the rights) and yes, customers were refunded, but Amazon chose to act first and notify later, leaving customers (and non-customers) confused and angry, not least because one of the titles was 1984. A 17-year-old high school student ended up suing Amazon over the removal since he had been using the Kindle to take notes on the book and subsequently lost his summer homework. Not to mention allegations of Amazon removing legit book reviews or the fact that it owns at least a piece (or all) of every link of the chain that gets books to readers.

But what about the price wars, such as they are? What does this really mean for authors and publishers? When companies like Amazon, Target, and Walmart all start slashing prices of bestsellers, who really wins? We live in a climate during which most bookstores took hits for selling Harry Potter books on or around the release date. There’s something seriously wrong with the industry–I don’t think even industry people deny this anymore, but we haven’t yet reached a consensus on what the right path is. Is it discounted ebooks or does it rely on the continued existence of brick and mortar bookstores? Is Amazon the future of book buying and selling? And what is the real value of a book?

19 Comments

  • Asa says:

    Great questions Kathryn. I think Amazon has set the standard for online book commerce, but I don’t know if they’ll be the future of book buying. I think people will still want stores where they can go in and physically touch what they are buying (similar to stores vs. online shopping for other products). Most likely, physical stores that want to stay in business will have to add a strong web presence (Powell’s business model comes to mind) and also add things that customers can’t get online (story time, author appearances, book groups, etc). As far as “the real value” of a book, it so depends on who is buying it and what they are buying it for. In the context of textbooks, I think the prices are way out of line in terms of the value of the book, especially since the publishers seem to “update” their addition at least every other year without adding value to the book or pertinent information, but yet the price increases by a huge percentage. My students pay $80-150 for books that are used for only one quarter. Sure, they can find it cheaper online, but it’s still a market that seems ridiculously overpriced. I think ebooks will make a huge difference in the textbook business, which may contribute to price changes in the non-textbook market since many publishers use their textbook division to offset the losses they take on the regular market because of the giant sellers slashing prices.

  • Sam Ligon Sam Ligon says:

    I don’t like this business of the retailer insisting on determining the price. So what if MacMillan wants to charge $15, instead of $9.99 for digital? If people don’t want the books at that price, they won’t pay. And it’s not as if the books will be taking up warehouse space.

    • Kathryn Houghton Kathryn says:

      That’s my thought exactly. I don’t like the idea of Amazon pushing publishers around just because they want to advertise the lowest prices.

      • Marcus says:

        This is how the entire American retail business works! Target, Wal-Mart, ShopKo, etc. are all competing, and the way they do this is by lowering prices. (I’ve accepted the fact that customer service has gone out the window and is no longer part of a product’s price.)

        Why is this situation different from any other retail pricing issue?

    • Marcus says:

      What if Samsung decided that someone who uses their phone should have to pay $100 a month? AT&T should just say, “Fine, we were charging $70, but whatever you want. After all, you make the product.”?

      (Different market, but interesting to think about.)

  • Kathryn Houghton Kathryn says:

    Also, lit agent Kristin Nelson has a nice post on the Macmillan/Amazon scuffle, including statements from Macmillan, Amazon, and The Association of Authors’ Representatives. Most troubling to me is Amazon’s claim that Macmillan has a “monopoly over their own titles.” That’s incredibly misleading.

    http://pubrants.blogspot.com/2010/02/amazon-macmillan-kerfuffle.html

    • Sam Ligon Sam Ligon says:

      From Nelson’s above linked post: “To make a long story short, John Sargent, CEO of Macmillan, met with Amazon last Thursday to discuss moving to the agency model/commission split structure for Macmillan eBooks starting in March 2010. Amazon was in disagreement in terms of that being the only structure.

      “In response, Amazon pulled the buttons for all Macmillan titles on Amazon.com. Buyers could still purchase the books from third parties but not directly from Amazon. The buttons were pulled for ALL books—not just the eBooks.”

      That’s stunning.

    • Kathryn Houghton Kathryn says:

      It’s not so much that I think this is the be-all-end-all, but Amazon does have a history of making these types of decisions, and at some point it makes you wonder how much they actually care about their products and the people that make those products.

      That link is a statement they released last night, and from my reading it’s mostly a lot of pointing the finger at the publisher. There’s nothing in there about coming to a compromise that benefits the publishers (who own the material) and the authors. And all the while, Macmillan books cannot be purchased through Amazon.

      I would hate to be a Macmillan author releasing a book today, yesterday, or tomorrow.

      • Marcus says:

        From the statment: “ultimately, however, we will have to capitulate and accept Macmillan’s terms” and “we will want to offer them to you even at prices we believe are needlessly high…”

        That doesn’t sound like they’ve come to a decision to acquiesce to Macmillan?

        Yes, it’s surrounded by pro-consumer whining, but I’m not sure how you could read that and think they’re not giving in.

        The point is Amazon’s mistaken if they don’t think other publishers are going to follow suit. They’ve shown weakness, and publishers are going to pounce on it.

        • Kathryn Houghton Kathryn says:

          You’re right, I sort of let what I was trying to say get all jumbled. I didn’t see a compromise so much as a “Well, since they’re not leaving us any choice but we’re going to hold out and whine about it for a few days anyway.” I was getting more at long-term solutions. And it’s been 24 hours and they still haven’t remedied the situation. I don’t know, it just seems so immature to me.

  • Marcus says:

    Here’s what’s interesting to me. Yeah, we’re all pissed at Amazon (and rightly so) for being a bunch of dillweeds and pulling the titles of a publisher. And we’re mad because they’re trying to keep prices low.

    If these were toasters we were talking about, would we be upset that one of America’s largest retailers was trying to keep prices low?

    Of course we’re not talking about toasters. But the point is, Amazon is losing sales every day they keep Macmillan’s titles out of their online store. They’re going to make more money because Macmillian’s ebooks will cost more, thus giving Amazons a larger payout. This is even more odd considering the recent Amazon royalty change; Macmillan could, theoretically, price ebooks at $9.99 and get a 70% royalty on the ones Amazon sells. Now, they’ll get 35% of $14.99 or $12.99 or whatever.

    The more I think about this the weirder it seems. I can’t figure out who is playing who. Both parties were trying to avoid making more money, which means there’s something else at stake, something more important than money (which for corporations is saying something).

    Is Macmillan really sticking up for its authors (by putting consumers in the lurch)? Is Amazon really sticking up for consumers (by ostracizing publishers)? Or is Amazon trying to keep its ebook prices low so it can establish market dominance in the e-reader marketplace? And is Macmillan trying to protect a pricing scheme that allows them to capitalize on a handful of successes against a huge backdrop of failures? As a consumer, a reader, and a writer, I’m torn here.

    Most important to me is if we’re so concerned about publishers/writers making money, why aren’t we concerned about authors of nonfiction work, such as science, philosophy, and history? While average prices for fiction and literary nonfiction have remained relatively stagnant for the last few years, the cost of a math book or a philosophy text continues to increase at several percent a year. This tells me we’re not worried about books, but about a subset of books. This all points to the reality that we (and by this I mean those of us who complain about Amazon’s “bullying”) are selfish, too. And when people don’t do what we want, we whine.

    Which sounds a lot like what Amazon’s doing. Mirror check.

    • Kathryn Houghton Kathryn says:

      How I’m interpreting this is that publishers want a long term sustainable solution that works for the industry. Because if consumers come to expect to pay $9.99 for a bestseller, how do you ask them to pay $24.95 or whatever for a physical book, which, I guess, gets at my question of the value of a book. But less money into the publishers, especially off of bestsellers, can mean that publishers take fewer chances on new writers, thus limiting the industry.

      What I think separates publishing from phones or toasters is the fact that, theoretically, anyone can write and publish a book whereas you have a small number of organizations that make toasters. Ultimately I find Amazon’s practices bad for the long-term well being of authors (which I hope to become). You should check that post I linked in the comments above, or the Writers Beware Blog’s take on the matter for bigger picture (if you haven’t already).

      Also, I like that you used the phrase dillweeds.

      • Marcus says:

        Theoretically anyone can order a build of toasters from a factory overseas, just like anyone can order a print run; the difference is scale, and you’re right that books are easier to be had.

        I’m interested in the question your title poses, which is the value of a book. To me, a book is never worth $25. I just don’t see how it can be. I know, I love literature and I’d love to support artists, etc., but I don’t know what to compare it to. How do we set the price? There’s no guideline.

        It used to be that a handful of movie studios made a couple dozen films a year. Now there are hundreds of films put out by dozens of studios. Ticket prices have gone up, but availability has exploded. There are dozens of screens where there once were one or two, and films are here and gone in a couple of weeks. What’s the difference between then and now? Acting quality hasn’t improved drastically. Neither has directing quality. What’s changed is the distribution model, and society as a whole (more disposable income, love for Red Vines, etc.). I’m not saying the book business is Hollywood, because that’s ridiculous. But can the book industry learn from film? Can it create a product that will demand to be bought?

        Also, this whole argument seems largely self-centered (not just here; lots of places). It’s bad for authors. But it’s good for consumers, right? If the post office decided to raise first-class stamp prices by 50% the way Macmillan wants to raise their book prices, wouldn’t there be massive uproar, even though it would be good for postal employees?

        All of which raises the question: what right does a writer have to an expectation of income? Is the writer supposed to accept infinite destitution in exchange for his/her art? Or is there some kind of base pay, a minimum wage for writers like we have for baristas and bus drivers? Now there’s a social movement I’d like to see.

        • Sam Ligon Sam Ligon says:

          Macmillan is not raising prices. They’re refusing to lower them to Amazon’s price point.

        • Kathryn Houghton Kathryn says:

          I guess this is one place where we’re different, because I totally don’t mind paying $20 to $30 for a book, and I never buy used. And I also think that this lowering of prices is bad for long term sustainability of the industry and, therefore, the customer. So it becomes a question of long term versus short term. Yeah, it’s great if I can buy a book for over 50% off the hard copy cover price, but in the long run, if that reduced price changes the industry (which it is doing) then I have a potential to lose. So I don’t find the argument self-centered at all.

          And I don’t buy the articles you see on an almost weekly basis about the end of the publishing industry. I think they do produce a product that is in demand, and I really don’t think changing the price from $9.99 to $14.99 (for a hard copy that sells for $25 in stores) is going to result in customers fleeing from books.

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