legacy publishers

Shocking WSJ Discovery: Higher Prices=Lower Volume!

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This piece by Barry Eisler originally appeared as a guest post on A Newbie’s Guide to Publishing on 8/4/15.

Barry Eisler here. Joe, thanks as always for the guest slot. I was going to mock this Wall Street Journal article somewhere, and there’s no better place than A Newbie’s Guide for that…

So okay, today the Wall Street Journal ran a piece headlined, “E-Book Sales Fall After New Amazon Contracts: Prices Rise, but Revenue Takes a Hit.” The article is behind a paywall, but you can access it by cutting and pasting the headline into your browser and clicking on the result of the search.

I just want to make sure I’m the first to congratulate the Wall Street Journal on its shocking discovery of a correlation between higher prices and lower demand. And, while I’m no economist, I’d like to humbly propose that the WSJ call its discovery something like, “The Demand Curve.” If this doesn’t win the newspaper a Pulitzer, I have one more suggestion: an even more radically new article on how a round object fastened to an axle can work as something called…a wheel.

Apologies for the snark, but where else but in publishing could a notion like “higher prices lead to lower revenues” even be controversial, let alone newsworthy? But the publishing industry is notoriously special, and Joe has been beating this drum for years. Five years ago, he wrote:

Naturally, people would rather pay less for something than more. And in a digital world, like we’re rapidly becoming, consumers have shown consistently in other forms of media that they place less value on downloads than on physical products.

When companies price digital content too high, consumers respond by pirating that content. That’s the ultimate in “devaluing.”

 

Read the full post on A Newbie’s Guide to Publishing.

 

Translating John Sargent

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This post by J.A. Konrath originally appeared on his A Newbie’s Guide to Publishing blog on 12/19/14. Note that it contains strong language.

Often times it seems as if those who work in the legacy publishing world are so out of touch with authors that a translator is needed to explain the true meaning of what has been said.

Such is the case with John Sargent, CEO of Macmillan, in his recent public letter.

Sargent in crazy bold italics, the translation in common-sense normal font.

Dear Authors, Illustrators, and Agents,
There has been a lot of change in the e-book publishing world of late, so I thought it a good idea to update you on what is going on at Macmillan.

Translation: It will be easier to accept the bad news if I warn you first.

The largest single change happens today, December 18th. Today a portion of our agreement with the Department of Justice (called a consent decree) expires, and we will no longer be required to allow retailers to discount e-books.

Translation: Remember when we illegally colluded with other publishers to price-fix? We did that because we were worried that low-priced ebooks would harm our paper distribution oligopoly.

It doesn’t matter that we have a much higher profit margin on ebooks. It doesn’t matter that since forcing the agency model on Amazon, our authors made less money. What matters is that we foresaw a day where ebook sales surpassed paper sales, and we knew that would put us out of business because savvy authors wouldn’t need our value-added publishing services anymore.

Happily, Amazon won’t be able to discount our ebooks anymore, so we can charge high prices and protect the interests of our business and of the cartel at the expense of your financial situation.

Unless you’re one of the huge bestsellers we publish. Those huge bestsellers sell a shit-ton of paper books. Under this model, they’ll continue to get richer.

 

Read the full post on A Newbie’s Guide to Publishing.