Tag Archives: publishing

Writing tip Wednesday: “To Indie or not to Indie publish”

Most Amazon bestselling authors aren’t making minimum wage

By Charlie Jane Anders

Yesterday we posted a chart from Hugh Howey’s new report on author earnings, showing indie and self-published authors pulling ahead of people published by the “big five” in terms of total unit sales. Now here’s another chart from an e-book publishing expert who’s calling some of Howey’s conclusions into question.


E-book sales. Source: Hugh Howey

E-book sales. Source: Hugh Howey

Writing in Digital Book World, Dana Beth Weinberg points out that there are a number of questions about Howey’s data, even beyond the potential flaws that you’d already noticed. For one thing, Howey isn’t representing all self-published and indie authors — just the top 1.5 percent, or the cream of the crop. There are also some questionable assumptions in Howey’s methodology, writes Weinberg, and some statistical problems.

But leaving that stuff aside, even if you accept Howey’s data and his conclusions, it’s not clear that most of his indie/self-published authors are doing better than people published by the big mainstream publishers, argues Weinberg. What is clear, though, is that the people who are doing best, on Amazon e-book sales, are those published by Amazon’s own publishing imprints.

The really depressing thing? Weinberg estimates that most of the authors in the survey, whether self-published or published by a New York publishing house, are not making minimum wage:

Sales figures:

A different look at e-book sales.

A different look at e-book sales.

Full article at: http://io9.com/most-amazon-bestselling-authors-arent-making-minimum-w-1522482723

Source material at:
The Report, by Hugh Howey, Feb. 12, 2014
Full article at: http://authorearnings.com/the-report/

The Principal of Digital Abundance — thoughts on author earnings, by Damien G. Walter, Feb. 12, 2014
Full article at: http://damiengwalter.com/2014/02/12/the-principle-of-digital-abundance-thoughts-on-author-earnings/

Note: This post suggested by Research Assistant Ashlie

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Can I Make More Money via Traditional or Self-Pub?

An interesting blog entry that poses questions for things to consider.

For example:

If their agent shops the book and gets a publishing offer from a reputable house, but the advance is lower than the author wants, can the author reject the offer, take back the book, and self-publish it?

Technically, the answer is usually “yes” unless the author/agent agreement stipulates otherwise. If I shop a project, you are within your rights to reject any offers and take the project back. But it’s important to realize that it puts agents in the position of spending hours and weeks and months on something for which they’ll never be compensated.

Find out more at the link below.

Can I Make More Money via Traditional or Self-Pub?.

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Redo: Glimpses

[Editor's note: The original "Glimpses" was syllable too long. So, here is the haiku again. This time trimmed by a syllable.]

At the water’s edge,
Echoes whisper my longing.
My heart holds your face.

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E-book publishing and price fixing

Source: http://www.nytimes.com/2012/04/18/business/economy/competition-needs-protection.html?_r=1&smid=fb-share&pagewanted=all

April 17, 2012

Competition Needs Protection

New York Times


To believe publishers and authors, the government just handed Amazon a monopoly over the book market: The price-fixing suit against Apple and the nation’s top publishers filed by the Justice Department last week will free Amazon to offer ruinous discounts in the booming new market of electronic books, drive brick-and-mortar bookstores out of existence and kill off publishers’ lucrative business of ink on paper.

Yet there is a different reading to this story. Publishing companies — like bookstores — fear they are on the losing end of a technological whirlwind of digital distribution that will make much of what they do obsolete. They would like to stop it. But though publishers may be happy to subvert competition to protect their business, this can entail a heavy cost for the rest of society.

The media industry’s efforts to limit competition date at least as far back as the 1920s and 1930s, when the emergence of radio threatened newspapers’ stranglehold of local markets.

At a meeting at the Biltmore Hotel in New York in December 1933, newspaper executives offered what was essentially a plan to divvy up the audience between radio entertainment and newspaper news. The newspapers would stop their campaign against radio and reinstate radio listings if the major radio networks would limit their news offerings to a couple of short bulletins a day from the newspapers’ wire services.

The Biltmore Agreement, as their pact was known, soon fell apart, as independent stations not part of the deal started buying information from new radio news services and offering real news. Despite that cartel’s failure, the anticompetitive impulse survives to this day.

The Internet is walloping media perhaps like no other technology before. And the media establishment again looks upon competition as a hindrance to its survival.

Flailing under the loss of readers and advertisers to online competition, newspaper executives approached regulators three years ago floating the idea of an antitrust waiver. They wanted to coordinate on a strategy to charge readers for their online news and take steps against the aggregator Web sites that were republishing much of their content. Though they gained the sympathy of crucial members of Congress, the government rightly shot down the idea.

The top record labels, meanwhile, are facing a class action antitrust suit that accuses them of colluding to keep the price of online music artificially high to protect their lucrative CD business.

The suit filed last week against Apple and five of the nation’s six main publishers has a similar plot. Amazon had been buying e-books wholesale and selling many best sellers at a heavily discounted $9.99, taking the loss to encourage sales of its Kindle e-reader. Fearful that this discounting could destroy the $25-a-book hardcover business, publishers took advantage of Apple’s entry into the market to change the terms. According to the lawsuit, they colluded with the computer colossus to establish an “agency model” under which publishers would set e-book prices in a range of $12.99 to $14.99, and give the distributor — be it Apple or Amazon — a 30 percent cut.

It’s natural to feel some sympathy for old media firms as technology juggernauts bear down on them. To many of us, book publishers and newspapers are more than just businesses. They are the keepers of the culture, the guarantors of our democracy. And they are small compared with Amazon, which controls 60 percent of the growing e-book market, as well as a big share of the market for books on paper. Absent any collusion, Apple’s entry into the e-book market would be the kind of competitive challenge we should welcome in the digital world.

But the charges aren’t trivial. The kind of collusion alleged by the Justice Department is called price-fixing. It has been illegal for a very long time, even if one is fighting a very large rival. According to the Consumer Federation of America, it would cost readers about $200 million this year alone. More important perhaps, this behavior could arrest the development of innovative platforms to sell digital goods on the Web.

Competition in the digital domain doesn’t look like carmakers’ slugging it out for market share. In digital markets, dominant firms are almost inevitable. There is no other social media firm with anywhere near Facebook’s 850 million members. Almost two-thirds of all Internet searches in the United States happen on Google.

The concentration is driven by the economics of the Web. The cost to Amazon of selling one more e-book is pretty near zero. This increasing return to scale makes big digital companies much more profitable than small ones. It is compounded by what economists call “network effects”: If many programmers design apps for iPads, they will become more popular, which will encourage more programmers to write apps for them.

Competition is nonetheless crucial to keeping innovation alive. Think of Google’s successful move into the smartphone business with Android, or its less successful stab at social media with Google Plus. A lot of innovation is also built on top of the dominant platforms. That is perhaps where competition most needs protection.

European and American regulators are looking into Google’s behavior not to check how it treats Microsoft’s Bing, but to determine whether it abuses its dominant search engine to increase secondary businesses — like, say, its shopping guide — while pushing innovative rivals down the rankings. The Justice Department is interested in how Apple sets terms for media companies because it wants to make sure they have a shot to innovate on the iPad and Apple’s other platforms.

Just as important as ensuring that platforms cannot abuse their dominance is to ensure that the companies that make the products that flow on these platforms — book publishers, say — do not use anticompetitive tactics to benefit one platform at the expense of others. This is the kind of competition that the Justice Department’s civil suit against Apple and the book publishers is meant to protect.

Admittedly, the Justice Department’s case may be bad news for the established book industry. Amazon and other online competitors have squeezed Borders out of business. It is only a matter of time before cheap e-books put an end to hardcover tomes selling for $25. And with Amazon pushing into publishing itself, some publishers could become victims as well.

But what really matters to society is what the case means for the production and consumption of books. That might not be so dreadful.

For sure, if brick-and-mortar bookstores disappear, browsing will die with them. But writers and publishers will have plenty of other ways — think Amazon, Facebook or Google — of letting readers know about their books. E-books, moreover, can be profitable. Mark Cooper of the Consumer Federation of America estimated that producing, distributing and selling an e-book costs about 25 percent of the cost of a physical tome; a $10 e-book still gives publishers about $4 to cover overhead and profit. And in an e-book world, publishers’ costs are sure to fall.

While Amazon remains dominant, its share of the e-book market has fallen to about 60 percent from 90 percent. Barnes and Noble, which has about a quarter of the market, would suffer if Amazon discounts sharply. But it could shed costs by getting rid of bookstores. And publishers can recover pricing power. Apple and two of the five publishers decided to fight the charges in court. But three settled. Though they must allow Amazon to resume discounting, they must do so for only two years.

And even if every existing publisher were driven out of business, reading would probably survive. Without the middlemen, publishers might even pay higher royalties to creators.

Music offers perhaps the best parallel of what could happen to the written word online. Record labels that originally welcomed Apple’s iTunes soon realized it was a killer in disguise, allowing consumers to unbundle $13 CDs and buy only their preferred singles for 99 cents.

But it wasn’t generally terrible for musicians. ITunes offered a shot to garage bands that could never have signed with a label. And fans didn’t fare too badly. Last year, consumers bought 1.3 billion singles — saving about $5 billion by not having to buy entire albums. This is hardly chump change. Would we be willing to give this up to save endangered record labels? While we ponder this, why not consider reviving Blockbuster, Circuit City and Tower Records?

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E-book battles: writers pawns and prize

[Editor's note: while not directly related to the e-book lawsuit, it is related as it pertains to Amazon, probably the biggest seller of books and e-books. As before, to find out more about the e-book lawsuit, click on e-book in the "Filed under" section at the bottom of this blog post. Thanks for stopping by.]

Source: http://www.nytimes.com/2012/04/16/business/media/amazons-e-book-pricing-a-constant-thorn-for-publishers.html?src=recg

April 15, 2012

Daring to Cut Off Amazon

New York Times


TULSA, Okla. — Plenty of people are upset at Amazon these days, but it took a small publishing company whose best-known volume is a toilet-training tome to give the mighty Internet store the boot.

The Educational Development Corporation, saying it was fed up with Amazon’s scorched-earth tactics, announced at the end of February that it would remove all its titles from the retailer’s virtual shelves. That eliminated at a stroke $1.5 million in annual sales, a move that could be a significant hit to the 46-year-old EDC’s bottom line.

“Amazon is squeezing everyone out of business,” said Randall White, EDC’s chief executive. “I don’t like that. They’re a predator. We’re better off without them.”

It is an unequal contest. EDC has 77 employees, no-frill offices on an industrial strip here and a stock-market valuation of $18 million — hardly a threat to Amazon, a Wall Street darling worth $86 billion. But Mr. White’s bold move to take his 1,800 children’s books away from the greatest retailing success of the Internet era is more evidence of the extraordinary tumult within the book world over one simple question: who gets to decide how much a book costs?

The Justice Department last week sued five major publishers and Apple on price-fixing charges, simultaneously settling with three of the houses. The publishers say they were not illegally colluding but simply taking advantage of a new device platform — Apple’s iPad — to sell their e-books in a different way, where they controlled the prices.

The publishers wanted to stop Amazon from using what one of them called “the wretched $9.99 price point,” according to court papers. Selling e-books so cheaply, they feared, would solidify Amazon’s robust grip on the business while simultaneously building a low-price mind-set among consumers that could prove ruinous to other bookstores and the publishers themselves.

EDC does not produce e-books, but saw exactly this happening with its physical inventory. Amazon was buying EDC’s books from a distributor and discounting them to the bone, just as it does with everything it sells. This might have been a boon for readers, but it was creating trouble with other retailers who carry the company’s titles, as well as with EDC’s network of independent sales agents, who market its books from their homes.

“They were becoming showrooms for Amazon,” Mr. White said. “We were shooting ourselves in the foot.”

Amazon is generally reluctant to explain its business practices and declined to comment for this article. But its executives say it is shaking up an antiquated business model by eliminating middlemen and passing the savings on to consumers. Publishers that try to cling to the past, they have said, will die.

The retailer’s growing list of critics, however, argue that Amazon has $48 billion in revenue but hardly any profit, proof that its approach is opportunistic and unsustainable. When traditional publishers, booksellers and wholesalers are destroyed, these opponents say, Amazon will be left with a monopoly that will be detrimental to the larger health of the culture.

In recent months, the dispute over Amazon’s strategy of selling books below cost has boiled over from several directions.

During the holiday season, Amazon encouraged customers to use physical stores as showrooms before ordering more cheaply online, a move that infuriated bookstores in particular. Publishers and distributors say that Amazon, never exactly shy in negotiating terms, has been more assertive in its quest for ever-better deals.

In February, Amazon demanded better margins from the Independent Publishers Group, a Chicago distributor of dozens of small imprints. IPG balked, so Amazon removed nearly 5,000 of the company’s e-books from its site.

“Amazon wants the price of books to be very, very low — lower than the publishing community can support,” said Curt Matthews, IPG’s chief executive. “Making a book is still a craft industry. Books need to be edited, to be publicized. Someone needs to say this is good and this is not. If there is not enough money to support that whole chain, the system will break down.”

Publishers have often been ambivalent about Amazon. On the one hand, it offers an extraordinarily efficient method of distributing their wares. Readers anywhere can easily order the most obscure volume and have it delivered the next day. With e-books, access is even easier, but publishers’ vulnerability is compounded; Amazon controls not just the method of distribution but the actual device the text is consumed on.

“Last year was the best in our 37 years, mainly due to the way Amazon was pushing the books,” said Bryce Milligan of Wings Press in San Antonio, an IPG client. “Then Amazon cut us off because they couldn’t get a better deal. Now our e-books sales are down 50 percent.”

If publishers and wholesalers feel threatened, writers are caught in the middle — both pawns and prize.

Ted McClelland, a writer in Chicago, had two IPG e-books dropped by Amazon. He just got a royalty statement on one of them, “Horseplayers: Life at the Track.” Half of his modest income on the book came from Kindle sales on Amazon.

“I don’t know whether Amazon is being greedy or IPG is being cheap, but I’m caught in the middle,” Mr. McClelland said. “What matters to me is getting my books back on Kindle.”

Here in Tulsa, EDC operates out of offices on the eastern outskirts in a less-than-glamorous district of warehouses and auto supply shops. Like IPG, it is primarily a distributor, selling picture books developed in England by Usborne Books to toy stores and bookshops in the United States. Its publishing line, Kane Miller, produces the popular “Everyone Poops” book and its sequels.

EDC’s so-called consultants — a direct sales force of about 7,000 women — sell to friends and acquaintances as well as their local schools. For a while the party plan was successful. Sales more than doubled from 2000 to 2004.

In recent years, though, the consultants have found it rough going. They would pass around a picture book like “The Noisy Body Book” or “Guess How Much I Miss You,” talking it up, and then the customer would order it online. Sales fell about 20 percent. Frustrated consultants began quitting.

What happened in February to Christy Reed, a sales consultant in Pleasanton, Tex., was becoming all too routine. Her school district decided to order 16 copies of a science encyclopedia and a science dictionary but then completed the deal on Amazon.

“I worked so hard to sell those books,” Mrs. Reed said. “I had to talk to so many different people. Then I lost the sale to a couple of clicks on the computer.”

She acknowledged that the district saved a few dollars but added: “I’m here, in the neighborhood. I went to school here. My kids went to school here. Yes, they got the books for less. But my earnings go back into our community. Amazon’s do not.”

After Mr. White, EDC’s chief, heard about that episode, his exasperation with Amazon peaked. Several times in the past, he had grappled with the retailer. He tried to get it to lower its discount on his books three years ago, but a tentative deal did not stick, he said. He was outraged that the company did not collect sales tax, which had the effect of making its books even cheaper.

Two months ago, he asked his biggest wholesaler, Baker & Taylor, to stop selling all EDC books to Amazon. When Baker & Taylor refused, Mr. White canceled its account. Baker & Taylor declined repeated requests to comment about EDC.

Of EDC’s $26 million in annual revenue, Baker & Taylor was responsible for about 6 percent, most of which was because of Amazon. Mr. White, a trim 70, said that when he made the decision to bail out, his blood pressure soared. But he’s also reveling in the excitement, just a little. He commissioned a drawing of EDC in the role of David taking on the giant Amazon. “I’m Type A,” he said. “I don’t mind a fight.”

Somewhat to Mr. White’s surprise, EDC is doing better without Amazon, at least for the moment. (Some of its books are still available on Amazon from third-party sellers.) Sales in March rose, in part because of new accounts like a toy store in Round Rock, Tex., that placed an initial order for 61 books. And colleagues in the business have been congratulating the publisher, or at least expressing their admiration for Mr. White’s guts.

“I tell them, ‘You never had the chance to make 7,000 women happy in one day,’ ” he said.

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E-book publishing lawsuit article / opinion

Source: http://www.nytimes.com/2012/04/16/business/media/amazon-low-prices-disguise-a-high-cost.html?_r=1

April 15, 2012

Book Publishing’s Real Nemesis


The Justice Department finally took aim at the monopolistic monolith that threatened to dominate the book industry. So imagine the shock when the bullet aimed at threats to competition went whizzing by Amazon — which not long ago had a 90 percent stranglehold on e-books — and instead, struck five of the six biggest publishers and Apple, a minor player in the realm of books.

That’s the modern equivalent of taking on Standard Oil but breaking up Ed’s Gas ’N’ Groceries on Route 19 instead.

Last week, the Justice Department sued in United States District Court in New York, charging that Apple, Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster had colluded to fix e-book prices. (Hachette, Simon & Schuster and HarperCollins have already agreed to settle.)

The suit has its roots in 2007, when Amazon released the Kindle and began selling some of the most sought-after books for $9.99 in order to bolster sales of its device. Not surprisingly, booksellers and publishers hated this price with the force of 10,000 suns because it made physical books sold for $25 or more seen outrageously overpriced.

Under the wholesale arrangement with Amazon, the publishers received half of the list price, which yielded better money, but gave them no control over the pricing of their product. With the introduction of the iPad, publishers got a crack at remaking their deal because Apple allowed them to set the price and then took a cut of 30 percent.

That so-called agency model developed with Apple allowed publishers, not just Amazon, to set the price and in a move that caught the interest of the Justice Department, they all came up with pretty much the same price. (Why the crumbling book business is worthy of so much attention from Justice while Wall Street skates is a broader question we’ll leave for another day.)

Let’s stipulate that there may have been some manner of price-fixing here, perhaps even arranged in “private rooms for dinner in upscale Manhattan restaurants,” as the complaint darkly charged. The Justice Department is entrusted with, among other things, protecting the interests of American consumers and, given a narrow focus on price, its move on the publishers make sense.

But pull back a few thousand feet and take a broader look at the interests of consumers From the very beginning and with increasingly regularity, Amazon has used its market power to bully and dictate. It leaned on the Independent Publishers Group in recent months for better terms and when those negotiations didn’t work out, Amazon simply removed the company’s almost 5,000 e-books from its virtual shelves. The Seattle Times just published a series with examples of how Amazon uses its scale not only to keep its prices low, but its competitors at bay.

As low-margin companies trapped in a declining business with fewer outlets, book publishers face an existential threat. “If we are fixing prices for our benefit, we don’t seem to be very good at it,” said one publishing executive mordantly. (He declined to be named criticizing the lawsuit because of his involvement in the settlement.)

The deal struck with Apple also allowed other players into the e-book business, including independent bookstores. Previously, Amazon’s $9.99 subprofit price was a virtually impenetrable barrier to entry for anyone who couldn’t afford to lose millions in order to gain market share. Remember that it was only after agency pricing went into effect that Barnes & Noble was able to gain an impressive 27 percent of the e-book market.

Now Amazon has the Justice Department as an ally to rebuild its monopoly and wipe out other players. If the decision to charge the publishers was good for competition, why had the stock price of Barnes & Noble dropped more than 10 percent since Wednesday? Borders is long gone, and the possible loss of Barnes & Noble would be bad for consumer choice, online or off.

There are some ironies here. Amazon views e-books as cheap software sold to animate device sales, in this case, the Kindle. And who does that remind you of? Ah yes, Apple, which shrank music to a 99-cent single business to propel the sale of iPods.

This time, Apple is on the side of the angels, mostly because the company doesn’t have the leverage of a dominant device. Peter Kafka at AllThingsD dug out a throwaway line in the middle of the complaint from the Justice Department that said, “Apple also contemplated illegally dividing the digital content world with Amazon, allowing each to ‘own the category’ of its choice — audio/video to Apple and e-books to Amazon.”

The counterargument to the publishers’ position runs like this: why should consumers be saddled with paying an extra few dollars just to keep competition alive? In the short term, the answer seems clear. But Richard Epstein, a professor at the New York University School of Law, pointed out, “it is not clear that lower prices are necessarily in the long-term interests of the public at large.”

He said that lower prices work both ways, spelling “low costs to consumers and low royalties to authors.” Anyone who has written a book, including me, can tell you that book publishing has always been a bit of a clubby business, with uniform practices in realms beyond pricing. Among many other standards: sell your book to any publisher you wish, but you will never get more than 15 percent of net royalties on the hardcover edition.

Robert F. Levine, a lawyer with an extensive practice in publishing, said there’s a practical reason for all that uniformity. The book business is both hermetic and dwindling.

“There is not a drop of new capital coming into this business,” he said. “The margins are low and there is almost no growth, so you end up with a rather small industry, with a handful of companies and a handful of players.” Scott Turow, a big-time author who is president of the Authors Guild, worries that the club is going to get a lot smaller. “It is breathtaking to stand back and look at this and believe that this is in the public interest,” he said. “The only rationale is e-book prices will go down, for how long? What happens when there is no one left to compete with them?”

I’d be lying if I said I didn’t get a little thrill when I found out on Amazon that I could get an e-book version of “Fifty Shades of Grey,” the No. 1 book on the New York Times best-seller list, for just $9.99. But after a week of watching the Justice Department and Amazon team up, I’ve learned that low prices come with a big cost. Maybe I’ll order it at my local bookstore instead.

carr@nytimes.com; Twitter: @carr2n

[Editor's note: you can find additional entries on this subject, by clicking on e-book listed below.]

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E-book pricing: lawsuit filed

Source: http://www.latimes.com/entertainment/news/la-et-apple-authors-20120413,0,6062761.story

Lawsuit against Apple: Writers wary of action by Dept. of Justice

Michael Connelly and Sherman Alexie are among authors who view the Justice Department’s suit against Apple and five publishers as acting against writers’ interests.

By Carolyn Kellogg, Los Angeles Times

April 13, 2012

When the Department of Justice and state officials announced their lawsuits against Apple and five major publishers Wednesday, it sent a ripple of anxiety through the talent at the industry’s heart.

“I’m in a bit of an awkward position because this has pitted my publisher against the retailer that far and away sells more of my books than any other,” says Michael Connelly, the bestselling mystery novelist. “I don’t want to bite the hand that feeds me, and both of these hands feed me.”

Connelly is published by Little, Brown, which is owned by Hachette, one of the publishers named in the suits that has since agreed to settle.

The scrutiny given to Apple’s alleged arrangement with the publishers — they are accused of colluding to raise the price of e-books, which they have denied — is largely perceived in publishing as shifting the balance of power in bookselling to Amazon. Publishers rely on Amazon as a major source of print book sales and have generally cooperated with its policies. When it launched the Kindle, Amazon deeply discounted e-book prices and offset the loss with profits from other parts of its business. Apple has been the first significant alternative to Amazon as an e-book retailer.

“I think the DOJ’s suit is misguided,” explains Andrew Wylie, the most powerful agent in publishing, who counts a number of Nobel Prize-winners among his 800 clients. “I think it is acting against the interests of culture and diversity in publishing. I think it is acting against the interests of authors.”

In part, that’s because the pricing of e-books directly affects the way authors can earn a living — and the publishing ecosystem that sustains them. “I know for a fact that my publishers and my editors publish books that they know are going to lose money but they think should be of the world,” says National Book Award-winning writer Sherman Alexie. “The John Grishams of the world support the experimental nature of publishing.” The DOJ’s suit, he says, “gave Amazon explicit permission to go for a total monopoly.”

Connelly observes that the DOJ suit seems to be unbalanced. “I believe in fair play. So I feel that if the government is going to step in and put controls on how publishers act to ensure a competitive marketplace, then I hope the government will be just as vigilant in guarding this amazing, creative and important industry from being monopolized by one entity,” he says. ” Amazon spreads my work far and wide. You can’t beat that. I’m very grateful. But I don’t want a world where there are no bookstores or other venues for discovering my work or the work of any other writers.”

For a writer just starting out, the suit served as a reminder that publishing is in flux. “I love writing and am going to continue writing, but having all my eggs in one basket is kind of scary,” says Elliott Holt, whose debut novel will be published by Penguin in 2013.


Copyright © 2012, Los Angeles Times

[Editor's note: while I read and enjoy the works of Michael Connelly and Sherman Alexie, I don't think the lawsuit is "misguided." I think colluding to fix prices is misguided and as history shows, only furthers to protect the profits of those on the inside (Those fixing the prices.) at the expensive of those on the outside (Those having to pay them). Apple should not be allowed to set prices and neither should Amazon, but in this case it appears that Apple with the aid of publishers was doing just that, which profited them at the expense of book buyers. To read earlier articles on this, click on one of the Category listings below: e-book, publishers, or publishing.]

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Noah’s Ark for books: another side of digital publishing divide

[Editor's note: yesterday I posted an article about the Encyclopedia Britannica going online only. Now, here is a New York Times article about a California man and family working to preserved physical copies of books, a sort of Noah's Ark for books. I guess there won't be future copies of the Encyclopedia Britannica in this collection.]

March 3, 2012

In a Flood Tide of Digital Data, an Ark Full of Books



RICHMOND, Calif. — In a wooden warehouse in this industrial suburb, the 20th century is being stored in case of digital disaster.

Forty-foot shipping containers stacked two by two are stuffed with the most enduring, as well as some of the most forgettable, books of the era. Every week, 20,000 new volumes arrive, many of them donations from libraries and universities thrilled to unload material that has no place in the Internet Age.

Destined for immortality one day last week were “American Indian Policy in the 20th Century,” “All New Crafts for Halloween,” “The Portable Faulkner,” “What to Do When Your Son or Daughter Divorces” and “Temptation’s Kiss,” a romance.

“We want to collect one copy of every book,” said Brewster Kahle, who has spent $3 million to buy and operate this repository situated just north of San Francisco. “You can never tell what is going to paint the portrait of a culture.”

As society embraces all forms of digital entertainment, this latter-day Noah is looking the other way. A Silicon Valley entrepreneur who made his fortune selling a data-mining company to Amazon.com in 1999, Mr. Kahle founded and runs the Internet Archive, a nonprofit organization devoted to preserving Web pages — 150 billion so far — and making texts more widely available.

But even though he started his archiving in the digital realm, he now wants to save physical texts, too.

“We must keep the past even as we’re inventing a new future,” he said. “If the Library of Alexandria had made a copy of every book and sent it to India or China, we’d have the other works of Aristotle, the other plays of Euripides. One copy in one institution is not good enough.”

Mr. Kahle had the idea for the physical archive while working on the Internet Archive, which has digitized two million books. With a deep dedication to traditional printing — one of his sons is named Caslon, after the 18th-century type designer — he abhorred the notion of throwing out a book once it had been scanned. The volume that yielded the digital copy was special.

And perhaps essential. What if, for example, digitization improves and we need to copy the books again?

“Microfilm and microfiche were once a utopian vision of access to all information,” Mr. Kahle noted, “but it turned out we were very glad we kept the books.”

An obvious model for the repository is the Svalbard Global Seed Vault, which is buried in the Norwegian permafrost and holds 740,000 seed samples as a safety net for biodiversity. But the repository is also an outgrowth of notions that Mr. Kahle, 51, has had his entire career.

“There used to be all these different models of what the Internet was going to be, and one of them was the great library that would offer universal access to all knowledge,” he said. “I’m still working on it.”

Mr. Kahle’s partners and suppliers in the effort, the Physical Archive of the Internet Archive, are very glad someone is saving the books — as long as it is not them.

The public library in Burlingame, 35 miles to the south, had a room full of bound periodicals stretching back decades. “Only two people a month used it,” said Patricia Harding, the city librarian. “We needed to repurpose the space.”

Three hundred linear feet of Scientific American, Time, Vogue and other periodicals went off to the repository. The room became a computer lab.

“A lot of libraries are doing pretty drastic weeding,” said Judith Russell, the University of Florida’s dean of libraries who is sending the archive duplicate scholarly volumes. “It’s very much more palatable to us and our faculty that books are being sent out to a useful purpose rather than just recycled.”

As the repository expands — from about 500,000 volumes today toward its goal of 10 million — so does its range. It has just started taking in films.

“Most films are as ephemeral as popcorn,” said Rick Prelinger, the Internet Archive’s movie expert. “But as time passes, the works we tried to junk often prove more interesting than the ones we chose to save.”

At Pennsylvania State University, librarians realized that most of their 16-millimeter films were never being checked out and that there was nowhere to store them properly. So the university sent 5,411 films here, including “Introducing the Mentally Retarded” (1964), “We Have an Addict in the House” (1973) and “Ovulation and Egg Transport in the Rat” (1951).

“Otherwise they probably would have ended up in a landfill,” said William Bishop, Penn State’s director of media and technology support services.

Not everyone appreciates Mr. Kahle’s vision. One of the first comments on the Internet Archive’s site after the project was announced in June came from a writer who said he did not want the archive to retain “any of my work in any form whatsoever.”

Even some librarians are unsure of the need for a repository beyond the Library of Congress.

“I think the probability of a massive loss of digital information, and thus the potential need to redigitize things, is lower than Brewster thinks,” said Michael Lesk, former chairman of the department of library and information science at Rutgers. But he conceded that “it’s not zero.”

If serious “1984”-style trouble does arrive, Mr. Lesk said, it might come as “all Internet information falls under the control of either governments or copyright owners.” But he made clear he thought that was unlikely.

Under a heated tent in the warehouse’s western corner the other day, Tracey Gutierres, a digital records specialist, worked on a new batch. If a volume has a bar code, she scans it to see if the title is already in the repository. If there is no bar code, she checks the International Standard Book Number on the copyright page. If the book is really old, she puts it aside for manual processing.

Before the books make it the 150 feet to the shipping containers for storage, some will have to travel 12,000 miles to China. The Chinese, who are keen to build a digital library, will scan the books for themselves and the archive and then send them back. The digital texts will be available for the visually impaired and other legal purposes.

As word about the repository has spread, families are making their own donations.

Carmelle Anaya had no idea what to do with the 1,200 books her father, Eric Larson, left when he died. Then she heard about the project. “He’d be thrilled to think they would be archived so maybe someone could check them out a hundred years from now,” said Ms. Anaya, who lives in California’s Central Valley.

Her daughter Ashley designed a special bookplate. Any readers across the centuries will know where the copies came from. “The books will live on,” Ms. Anaya said, “even if the people can’t.”

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A byte of a tome: encylopedia goes online only


CHICAGO—Hours after Encyclopaedia Britannica Inc. announced it will stop publishing print editions of its flagship encyclopedia for the first time in more than 200 years, someone among the editing minions of free online rival Wikipedia made an irony-free note of that fact.

“It was announced that after 244 years, the Encyclopaedia Britannica is going out of print, instead focusing on its online encyclopedia,” the entry read.

The book-form of Encyclopaedia Britannica has been in print since it was first published in Edinburgh, Scotland, in 1768. It will stop being available when the current stock runs out, the company said. The Chicago-based company will continue to offer digital versions.

Officials said the end of the printed, 32-volume set has been foreseen for some time.

“This has nothing to do with Wikipedia or Google,” Encyclopaedia Britannica Inc. President Jorge Cauz said. “This has to do with the fact that now Britannica sells its digital products to a large number of people.”

The top year for the printed encyclopedia was 1990, when 120,000 sets were sold, Cauz said. That number fell to 40,000 just six years later in 1996, he said. The company started exploring digital publishing in the 1970s. The first CD-ROM edition was published in 1989 and a version went online in 1994.

The final hardcover encyclopedia set is available for sale at Britannica’s website for $1,395.

“The sales of printed encyclopedias have been negligible for several years,” Cauz said. “We knew this was going to come.”

The company plans to mark the end of the print version by making the contents of its website available free for one week, starting Tuesday.

Online versions of the encyclopedia now serve more than 100 million people around the world and are available on mobile devices, the company said. The encyclopedia has become increasingly social as well, Cauz said, because users can send comments to editors.

“A printed encyclopedia is obsolete the minute that you print it,” Cauz said. “Whereas our online edition is updated continuously.”

Lynne Kobayashi of the Language, Literature & History section of the Hawaii State Library notes some people will always prefer using print sources, but that readers are becoming attuned to online searching because of a proliferation of electronic publishing.

“There are many advantages to online searching, chief among them the ability to search within the text,” Kobayashi said. “The major disadvantage is the need for a computer or devices with access to the Internet.”

Kobayashi said her decision to use traditional or online resources depends on the question she wants answered.

“Sometimes subject knowledge and familiarity with standard resources may get faster results than keying in a search and sifting through results,” she said. “If the search is broader, searching across several online sources may yield more options.”

Britannica has thousands of experts’ contributors from around the world, including Nobel laureates and world leaders such as former President Bill Clinton and Archbishop Desmond Tutu. It also has a staff of more than 100 editors.

“To me, the most important message is that the printed edition was not what made Britannica,” Cauz said. “The most important thing about Britannica is that Britannica is relevant and vibrant because it brings scholarly knowledge to an editorial process to as many knowledge seekers as possible.”

Kobayashi said as information professionals, librarians see an important part of their role as directing patrons to trustworthy information sources.

“While Wikipedia has become ubiquitous, the Britannica remains a consistently more reliable source,” she said.


Online: http://www.britannica.com

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The price creep of e-books

This is an interesting companion piece to the one on self-publishing that I posted earlier. If interested in writing, this is also a good blog to follow. Tom Dupree has many years experience as an editor, and it would be worth your time to tap into that knowledge.


E-Customers Creeped Out By Price Creep

By Tom Dupree

There’s a piece on page 1 of today’s Wall Street Journal about e-book sticker shock, another good job by the Journal’s book-beat reporter Jeff Trachtenberg. I’ve been railing about this issue ever since Apple persuaded the six major publishers to disallow any discounting by retailers on e-books. As Mr. Trachtenberg points out, this restriction doesn’t apply to print books, so you have the increasingly common phenomenon of e-editions equaling, and even surpassing, the discounted print edition at retailers like Amazon.com. In at least one instance (emphasis on “at least”), Ken Follett’s doorstop FALL OF GIANTS, the publisher’s e-book price is $18.99 – but the paperback edition can be bought new for $16.50.

Let’s re-emphasize what’s actually going on here. The major players in an industry which faces massive headwinds, book publishing, is deliberately overpricing its most promising and fastest-growing revenue stream, specifically to dampen e-demand and reduce “cannibalization” of “higher-margin” hardcover and trade paperback editions. Mr. Trachtenberg points out that under the “retail model,” by which Amazon was charging $9.99 for new bestsellers, it was the retailer who took the loss; the author and publisher still received roughly half of the full retail price. But under the current “agency model,” the publisher retains 70%, and the retailer gets the rest. No more “loss leaders,” and essentially no more $9.99 bestsellers.

But look closer at the Follett. Dutton’s suggested retail price for this 985-page tome in hardcover is $36. Under the “retail model,” it collected $18 per e-copy, just as it did for a hardcover, and Amazon could give it away if they liked. Of course, that’s no way to run a business: “How do we do it? Volume!” What Amazon was trying to do was to jump-start a nonexistent e-book market and worry about coaxing it into profitability later; they’ve always been forward-thinking in that way. But under the “agency model,” Dutton gets 70% of $18.99, the highest price I’ve encountered for a commercial trade e-book, which is $13.30 per e-copy, and all retailers receive the same $5.70 (I rounded both numbers to the next penny). $13.30 — and remember, this is the absolute Beluga of e-pricing — is $4.70 less than $18. But who’s counting?

My point exactly.

Now let’s consider Apple’s motives. It’s a wonderful company, but it’s no less ruthless just because its antagonizer-in-chief has passed away. When Apple was the “first mover” in digital music, it used the leverage of its huge installed iPod base to oppose the big record labels by dampening the retail price from $15-$16 for a whole CD to 99 cents for an individual song (boy, that price rings a bell. And it’s increased since then, too). But in e-books, Apple found itself, uncharacteristically, in Amazon’s wake (Steve Jobs had infamously sniffed at the Kindle’s launch: “People don’t read any more”). So now what it had to do was eliminate Amazon’s price advantage – and, amazingly, in a reversal of its effect on the music business, it succeeded in propping up the retail price of e-books! Justice is now looking into whether preventing discounting constitutes illegal collusion among the major publishers (as are European authorities), and I don’t know much about the law so can’t speculate, but it does sound fishy, and it protects retailers (guaranteed profit) at the expense of consumers (higher prices).

I have some friends in the book biz who’ve read my previous musings and have some pretty good arguments that nobody seems to be considering. For example, it’s an age-old fact that for big bestselling authors like Mr. Follett, or Stephen King or John Grisham or Danielle Steel or Nora Roberts, publishers pay way too much up front as an “advance,” otherwise known as a “guarantee against royalties.” First, it’s necessary because everybody else is waving huge paychecks around, and you have to be there to compete. Second, a major author can be a tentpole for the rest of your list: if you, Ms. Retailer, want the new Grisham, you’ll have to hear about all the other great stuff we have. Third, there’s the intangible prestige factor, as authors and agents want to be with the house that publishes XXX. But these millions represent a nonrefundable guarantee which has to “earn out” before a book realizes its true potential for perennial profit down the road. (I’ve heard that Mr. King has a deal which plays down the guarantee in favor of a larger participation on the back end, like major movie stars sometimes do.) A surprise hit like THE HELP is very profitable immediately, but big bestsellers from well-known authors always start out deep in the red, and I’d love to know what Kathryn Stockett’s agent has in mind for her next contract.

That means you have to scramble for every penny you can find during the hot new-release period with the ads and the DAILY SHOW spots, very much like movie studios do. My question is: why aren’t the big publishers doing so?

Mr. Trachtenberg quotes a publisher as saying people are realizing the advantages of e-books and are willing to pay a premium for them. I’ve heard that too from some consumers. But $18.99? (P.S.: Book prices never go anywhere but up.) He shares more ominous quotes from others. A reader says it’s hard to justify a $10-$15 e-book when you can pick up a used print copy for $2 or $3 on Amazon. If that was the Ken Follett, the author and publisher made no money on the used-copy resale, when they could have received $18 for a “retail-priced” e-book. Also, the ability to self-publish and shop online is hitting the major publishers from the low end. As an industry consultant says, some e-buyers may opt for “five-star-reviewed” self-published mysteries or romances which are going for $2.99 or $3.99. Plus, if it’s digital it’s stealable, and remember that millions of otherwise law-abiding kids believed downloading from Napster was justifiable because CD prices were too high.

I think it’s fair to say that most e-reading devices have been purchased since “agency pricing” went into effect about two years ago, so possibly it’s only the early adopters like me who recoil against $12.99 and $14.99 books, or e-editions which cost more than paperbacks. Most new e-reader owners may think that’s the going rate you pay for not having to lug the physical book around, being able to read it on damn near every mobile device there is, etc. Yet as a “veteran,” I’d still be willing to wait, even a whole year, so the publishers have time to sell every hardcover they possibly can, if they’d only then give me a fairly-priced e-edition so I could fairly pay the author and publisher instead of ignoring them.

As it is, I have a list of saved backlist books that I’ll never buy in print editions; I just want to read them once. Every month or so I check on them, and every so often a publisher will experiment with a temporary lower price (this is why the publishers will probably survive any accusation of price-fixing; each one is free to charge anything it likes). I will either get the price I want, or the publisher will lose a sale which I would guess is sorely needed. It’s as simple as that.

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