Publishers ask: how to deal with e-books? follow the music industry!

Well, apparently the publishing industry isn’t completely behind the curve of adapting to e-commerce like the music industry was. Unfortunately, their goal isn’t to find new revenue streams and ways to make their product more attractive to an online audience, but to just preserve their price structure.

So while Apples and other e-music retailers have effectively led the way in altering the music industry’s way of doing business (like by selling .99 songs and allowing you to buy an album for less than $20), the publishing industry, or at least Harper Collins, is hoping to broker deals that allow them to maintain current prices.

But there’s a problem with that. The problem is that the price would be artificially high to cover costs that no longer exists. Gone would be the costs to physically print the book. All of the people needed to run the printers, binders, etc., the costs of the materials, the costs of the storage and shipping, etc. There’s no justification behind charging $30 for something when the cost of making it has fell the comparative floor because, suddenly, all you have to cover are the costs of the editor and the writer. If need be, I’m sure that Apple or whoever could even provide a conversion application for changing over a .doc file to whatever file type they dream up to include some sort of encryption code.

This artificial price point will bloom into a larger problem, a problem the music and movie industries have already encountered and were left reeling from. At least some of the appeal of a digital reading device IS the price point. After shelling out a couple of hundred bucks for a reader, the books better damn well be a few bucks cheaper – and they are. But what happens when the price point explodes and the costs go through the roof – especially when they’re coupled with a move to a more expensive (though likely more versatile) machine like an Apple tablet PC?

Just a guess but I’m betting the same thing happens that happened with the music industry charging $20 a CD and the movie industry trying to pull $10 a ticket at the theater – people will pirate the stuff. While the industry’s worry about WalMart’s momentary flirtation with $10 hardcovers setting a new price point was somewhat ridiculous, considering how entrenched hardcover prices were and how other forces help dictate the costs so much, the price for an e-book has become equally entrenched.

Not only that, but anyone buying an ebook sees the cost savings involved as they can just as easily forward a massive text document to anyone in their address book for nothing. They don’t have to buy ink, buy paper, pay s/h, etc. They just attach and hit send. So seeing the price for their reading material jump from $10 to $30 is not going to go over well.

And, despite whatever encryption is thrown into any file document or how secure any device is made, once it is put out to the public, someone will be working to get around it and spill all of its secrets out across the web or a youtube video. So the biggest obstacle to people pirating books – a simple lack of availability unless some individual types or scans the book themselves, vanishes. So while the publishing industry simultaneously attempts to adapt to the digital world and use it to maintain a cost point that no longer makes any sort of sense, they will also be providing the files that will be ripped, converted to something like RTF or PDF and torrented.

And what makes it stupid is that it could all be avoided now, when the whole e-book thing is still in its infancy. From the CNN article linked above:

The news comes as e-readers and e-books rapidly rise in popularity. Led by the Kindle, 1.7% of all books sold in the third quarter of 2009 were e-books, according to a Book Industry Study Group survey released this week. That’s up 42% since the beginning of 2009. The survey also found that 20% of e-book readers stopped buying print books altogether. Shatzkin expects that figure to double by next year.

Okay, so while ebooks have been a new buzz word and can flash impressive numbers like 42%, they still only make up 1.7% of book buying. Even if they jump by another 42%, they’ll only be around 2.4% of all book buying. Then, even if we take Shatzkin’s guess that 40% of ebook buyers will stop buying print books entirely, that’s still only 1.4% of the book buying public.

Maybe Harper Collins looks at these numbers and sees ebooks as something they can maybe stomp out of existence with a ridiculously high price point. Maybe that’s their goal. But if that is their goal, then they are destined for failure. Even if you’re not a fan of reading your bestseller off an LCD screen, it is fairly clear that it is becoming an eventual reality. This isn’t to say that regular print books will cease to exist, just that digital forms of entertainment are here to stay and will only grow. trying to counter this is only going to result in a violent negative reaction (piracy).

Harper Collins hits at part of the solution with its assertion that

enhanced e-books with video and other functions could be released simultaneously with hardcovers in the future “at a price more in line with the print edition

I don’t believe readers necessarily want to pay for video to go along with their books – unless it is in some way a vital part of the text – and they will still desire a simpler, cheaper “bare bones” version. My guess, though, is that the “video and other functions” will be like the massive amounts of shovelware dished out for the wii. Things that make the product look good on a shelf but are cumbersome and unenjoyable in practice. If they wish to offer “enhanced” texts for additional costs, fine, but I am betting the majority of readers would rather a plain text at a cheaper cost. And if this is not offered, they will find alternative ways of procuring them.


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