In the Wall Street Journal, Jeffrey A. Trachtenberg reports on publisher ambivalence toward “daily deal” book sale sites, such as BookBub or The Fussy Librarian. He talks to representatives from a number of traditional publishing houses, including our old friend Steven Zacharius from Kensington Publishing Corp. A number of these representatives express concern that, even though these promotions tend to be quite successful, they may be inculcating a generation of cheapskates who will only buy books when they’re on sale.
“We know we might be shooting ourselves in the foot,” says Mr. Zacharius. “But I can’t resist because it’s such a good way to stimulate sales.” Every promotion the company has run through BookBub has been profitable, he said, despite the steep discounts.
Stop. Hold it right there. Pardon the all-caps, but I just feel the need to yell.
NO, YOU ARE NOT SHOOTING YOURSELF IN THE FOOT. YOU DO NOT EVEN HAVE A FOOT ANYMORE. AMAZON HAS ALREADY BLOWN IT CLEAN OFF. GET A PROSTHETIC.
Whew. I feel a little better now—but there’s still just so much to unpack here, even in just that one little paragraph.
Zacharius clearly recognizes that low prices are “such a good way to stimulate sales.” Every such promotion has been profitable, he says it right there. And then he adds, “despite the deep discounts.” But what’s with this “despite”? Shouldn’t it be clear by now? It’s not “despite,” it’s because of!
The writing has been on the wall for months now that the return of publishers’ agency pricing strategy is decreasing their share of the e-book market, and effectively handing it over to self-publishers who sell e-books at the prices consumers are willing to pay. Every bit of new evidence that comes in reaffirms that fact, including this news now that when traditional publishers drop their prices, they sell more e-books. And they don’t lose money on them the way they would on loss leaders—the promotions are “profitable.”
“It’s an industrywide concern,” said Heather Fain, director of marketing strategy at the Hachette Book Group. It’s hard to know, she added, whether readers who are dedicated to reading bargain books will ever spend as enthusiastically to buy full-priced titles.
So? There’s an easy solution there. LOWER THE PRICES. Perhaps these publishers should take a cue from smaller publishers, who seem more enthusiastic about the idea. For example:
“Nobody needs to buy a book,” says Jane Friedman, CEO of Open Road, which promotes its titles via EarlyBirdBooks.com. “You have to make it appealing, and one of the best ways to do that is price.”
But these publishers just don’t seem to get it. Let’s not forget that Steven Zacharius wanted Amazon to segregate self-published books away from traditionally-published books, so as to reduce consumer confusion. It seems like consumers have already done a decent job of getting over that confusion—they’re buying self-published books in droves, while giving over-priced traditionally-published ones a miss. The evidence is right there staring him in the face that consumers keenly practice price discrimination, and he continues to worry that maybe he’s helping them form bad habits.
It turns out that this story also saw some discussion on The Passive Voice a few days ago (I somehow missed it until I thought to check just now) and once again, Zacharius showed up in the comments there to discuss it further. His further comments don’t suggest any greater insight into consumer behavior than his quotes from the article. For example:
Fortunately most people still are willing to pay the normal ebook price for authors they like or for a book that has good reviews. Most ebook sales are still from the bestsellers at normal prices. Look at the NYT bestseller lists and they’re almost always recognizable names of new releases. Even the Amazon lists are generally bestselling authors unless of course the book is at a severely discounted price. But then the total revenue is far lower than the traditionally priced ebook. Of course if it’s a self-published book the author is keeping 70% of the receipts if it’s over a given price.
Yet, this doesn’t take into account those Association of American Publishers and Bookscan figures from September showing (traditional) e-book sales declining considerably since agency pricing went into effect. If “most people” are still willing to pay those prices, how come industry sales are dropping overall? People haven’t just suddenly gotten sick of e-books—especially since indie sales seem to be ticking right along.
I suppose this will all end up one of two ways—either publishers are right, and they’ll continue to survive, or they’re wrong and they’ll either have to change or go out of business. I look forward to finding out which outcome turns out to be the right one.