Nico Vreeland has a great article in Chamber Four about this topic. He quotes author Douglas Preston as saying:
“The sense of entitlement of the American consumer is absolutely astonishing,” said Douglas Preston, whose novel “Impact” reached as high as No. 4 on The New York Times’s hardcover fiction best-seller list earlier this month. “It’s the Wal-Mart mentality, which in my view is very unhealthy for our country. It’s this notion of not wanting to pay the real price of something.”
And then he goes on to point out:
The problem with this isn’t that customers are “entitled” to think they should get ebooks cheaper. The problem with this is that no publisher has yet advanced any logical explanation as to why the ebook editions SHOULDN’T be cheaper than the hardcovers. The burden of proof is on the publishers, and they haven’t convinced anybody.
This is exactly what publishers don’t understand. Remember that famous letter the CEO of Macmillan sent out about the Amazon dispute? It was send to "authors, illustrators, and literary agents", but who is missing? The consumer! Not one word did John Sargent address to his ultimate customers. Does he not care about them? Probably not. He, like many publishers, still consider the middleman – the bookseller- as their customer. With that attitude how can they ever expect that their readers will give them any respect or credibility.
(TeleRead also covered the New York Times article from which Preston’s quote is sourced.)
Paul, I hope you left a comment at Vreeland’s site indicating he’s a little slow on the draw :). There have been several Teleread and An American Editor articles on publishers’ silence within the past few weeks. Hopefully Vreeland pointed to Teleread in his article.
You know the funny thing is, the agent model effectively removes the bookseller as their customer. I wonder if Macmillan realized that by forcing Amazon to raise prices, they are not only pissing off Amazon but very likely their new direct customers.
“It’s this notion of not wanting to pay the real price of something.”
I’m sorry what? That quote from Preston proves that he knows nothing about economics. The “real price” of something is what the buyer is willing to pay.
for example, when you list your house at $300,000 that is not the “real” price. The “real” price is what you sell it at.
You can price your books at $30 all day long thinking that is the “real” price. But, if no one buys it at that price you’ve actually proven that ISN’T the real price.
BTW: My personal threshold for an ebook is $10. Anything over that I will just wait. There are plenty of great ebooks priced under $10 that I will happily buy and read.
BOb
Before releasing the Kindle, Amazon seeded staff on numerous forums and email lists dedicated to ebooks and ebook readers. They “listened” and took notes. They heard that the people who have been reading ebooks for a decade will NOT pay full print book prices for them. Ever.
Not a single mainstream publisher, to my knowledge, ever bothered to do that. For most of that decade, they dismissed ebooks as not having any real economic future–and did so even after their sales percentages began growing in double digits.
Small wonder that, having slept through the revolution, they are now trying to reverse progress and force ebooks to fit into their antiquated business model–new wine in old bottles.
Last time a company took the approach of “The customer is our enemy:”
Enron.
““The sense of entitlement of the American consumer is absolutely astonishing,” said Douglas Preston,…”
Actually, the real sense of entitlement is being displayed by Preston (and other authors and publishers) who feel that their customers have an OBLIGATION to pay them whatever amount of money they ask for.
It is funny we keep hearing how entitled we are supposed to be acting yet publishers don’t even think we are entitled to well-formatted ebooks free of typos.
If publishers had said they were raising the price of ebooks to improve quality or pay the authors higher royalties I would have no problem with paying more for ebooks.
Instead every time I see a higher-priced ebook from one of the big six publishers I will remember the contempt those in the publishing world have for their customers.
Paul — Thanks for the link and congrats on the Napco sale. Keep up the good work with your new management.
Rich — Teleread and others have definitely covered that ground before. My post was more about my own indignation at this hack Preston calling his readers “entitled” for using basic common sense.
Bill — I agree. I really think Macmillan’s making a mistake. But Amazon made a bigger one with the way they handled it.
PilotBob — I know, right? Preston sounds like a spoiled little kid.
Elizabeth — That’s a good point. I do think Amazon has good intentions. It’s just their execution is so entirely hamfisted sometimes. Makes it very hard to like them.
Bruce, HeavyG, Sandir — Agreed.
Definitely an interesting perspective on the “real price”. I do agree with him that the publishers have done a lousy job communicating on this one, but I can’t help but think that is because they know they don’t have a good message. If they try to justify how an ebook shouldn’t be significantly cheaper it just opens the can of worms around the whole current publishing model with production runs, returns, etc. They then reveal how selling of ebooks at higher costs help offset screwed up production models on print books and could cause even greater ebook backlash. It will be interesting to read the Harvard Business Review case study on this in a few years!
I agree that many publishers haven’t communicated clearly on price (I think I have but I’m not exactly one of the conglomerates who rule the publishing world).
Returns really aren’t as big a problem in the world of hardbacks, though. Unlike mass market paper, where books are stripped and destroyed, hardbacks are sent back and remaindered (this is where those sales books on the Barnes and Noble racks come from). If the cost of a hardback is $1.50, even remaindered returns are break-even, so the full cost of the printing is pretty much the $1.50. So, an eBook earning equal profit to the hardback should come in a bit less than $1.50 less than that hardback (a bit less because the $1.50 doesn’t include shipping costs…let’s say, another $0.50 per book).
For small publishers like me, who use print on demand technology, costs are higher and returns are a huge issue (for those small publishers who accept returns). Which is why I charge so much less for eBooks than for paper.
Isn’t entitlement an interesting word, by the way. It seems to have become co-opted into political speech. Entitlement is what your opponents think people deserve. What you think they deserve is rights. In my opinion, customers are completely rational to look for lower prices. If Wal-Mart charges $10 for the same jeans you can buy somewhere else for $20, why shouldn’t you shop at Wal-Mart. Authors are also completely rational to hope for higher royalties. Who would hope for lower royalties, after all. Price is a compromise between what buyers are willing to pay and what sellers are willing to take. It just doesn’t seem to me to have a huge moral component (except in cases of national disaster, etc. where it’s tacky to charge a fortune for fresh water, for example).
Rob Preece
Publisher
Books have always been associated with their physical appearance. It was obvious that a hardcover was more expensive – it had, well, hard covers, a dust jacket and larger type. For the customer this was explanation enough, the book crowd knew that the real rationale for the price difference is another one (the fixed costs: editing, proofing, book design), but naturally nobody cared about spilling the beans.
Small wonder that the customer now demands lower prices for ebooks (no hard cover, no dust jacket … at least it has larger type) and the publishers aren’t able to justify their motivation for higher prices, even if it is the same as it always was.
That’s some catch, that Catch-22…