We might have Apple to thank for eBooks becoming expensive

[GermanSuplex]

Many of the big companies that distribute media have it in for Apple. Instead of lowering prices for digital downloads or trying to find novel ways to distribute content and still earn a healthy profit, they just come up with strict demands and twist the arms of sellers.

Look at the app store... the prices are much more competitive... great apps anywhere from 99 cents to about 10 dollars. There are some major publishers on the store as well, but I reckon they make their stuff more affordable to compete, not because they think the price is fair. If it was only major companies on the app store, they'd probably try to get the same price as a DS or PSP game, anywhere from 30 - 40 dollars. That's just my opinion though.

 

[Wordslinger29]

Apple will usher in a whole new era of ebook piracy with the iPad. Once the iPad is jailbroken the first thing to get cracked is ebook's, I'm not promoting it but just speaking the truth. Piracy has a big impact on the music industry and I can see it happening with the publishing industry.

If this happens, expect to see publishers leaving the iBook store and authors refusing to allow their work to be released in eBook form. Piracy hurts musicians, but at least they have additional sources of revenue, like touring, merchandise, and music licensing. Authors only have their novels. Some might get lucky and sell the movies rights, but that's the equivalent of hitting the lottery.

 

[lordhamster]

Apple will usher in a whole new era of ebook piracy with the iPad. Once the iPad is jailbroken the first thing to get cracked is ebook's, I'm not promoting it but just speaking the truth. Piracy has a big impact on the music industry and I can see it happening with the publishing industry.

No need to usher in a new Era. Its already here. Damn near every book you could possibly want is already out there in PDF and audiobook form if you know what Usenet Newsgroups to look in.

That being said, for the average employed person, their time will still be better spent just buying the books and music. With the music for example... at 99cents it just isn't worth the bother of piracy.

 

[MikhailT]

If this happens, expect to see publishers leaving the iBook store and authors refusing to allow their work to be released in eBook form. Piracy hurts musicians, but at least they have additional sources of revenue, like touring, merchandise, and music licensing. Authors only have their novels. Some might get lucky and sell the movies rights, but that's the equivalent of hitting the lottery.

Publishers aren't going to leave iBook store or any other stores. Book piracy has been here since the first book has been published. There's no way to avoid it. Publishers will harm the authors and themselves more by leaving the stores. It's better to have 6m sales than to have none. There's nothing publishers can do to protect their work. People can just buy the physical books and scan it up for the internet.

The only thing publishers love about the iBook is the large number of iTunes paying accounts plus the 70% revenue take for each sale.

 

[lordhamster]

Publishers aren't going to leave iBook store or any other stores. Book piracy has been here since the first book has been published. There's no way to avoid it. Publishers will harm the authors and themselves more by leaving the stores. It's better to have 6m sales than to have none. There's nothing publishers can do to protect their work. People can just buy the physical books and scan it up for the internet.

The only thing publishers love about the iBook is the large number of iTunes paying accounts plus the 70% revenue take for each sale.

Right on. Presumably even at a much lower price, publishers should be able to make more profit per sale, given that distribution and logistical costs would be much lower.

 

[Wordslinger29]

Publishers aren't going to leave iBook store or any other stores. Book piracy has been here since the first book has been published. There's no way to avoid it. Publishers will harm the authors and themselves more by leaving the stores. It's better to have 6m sales than to have none. There's nothing publishers can do to protect their work. People can just buy the physical books and scan it up for the internet.

The only thing publishers love about the iBook is the large number of iTunes paying accounts plus the 70% revenue take for each sale.

Publishers pulling out is extreme. I got carried away there. Book piracy may have been around since the first book was published, but I haven't seen any evidence that it's nearly as widespread as what happened to the music industry. If it comes to a point where piracy is hurting author's royalty checks, there's going to be problems. That's my main point. Authors have no other source of income outside of the advance and royalty checks (and many books never earn through the advance). Despite what some people think, getting a book published doesn't mean you're making a ton of money. There are published authors out there who have to work a 9-5 job to support their writing. Mid-list authors have to pump out a book or two (sometimes three) a year to make ends meet. If they don't earn the kind of sales the publisher expects, it could seriously jeopardize getting their next book published. Piracy might not hurt Stephen King or Dan Brown, but there's a lot of authors out there whose careers could be crippled by it.

 

[MikhailT]

Publishers pulling out is extreme. I got carried away there. Book piracy may have been around since the first book was published, but I haven't seen any evidence that it's nearly as widespread as what happened to the music industry. If it comes to a point where piracy is hurting author's royalty checks, there's going to be problems. That's my main point. Authors have no other source of income outside of the advance and royalty checks (and many books never earn through the advance). Despite what some people think, getting a book published doesn't mean you're making a ton of money. There are published authors out there who have to work a 9-5 job to support their writing. Mid-list authors have to pump out a book or two (sometimes three) a year to make ends meet. If they don't earn the kind of sales the publisher expects, it could seriously jeopardize getting their next book published. Piracy might not hurt Stephen King or Dan Brown, but there's a lot of authors out there whose careers could be crippled by it.

I totally know what you mean, but there's nothing that can be done about it. I don't foresee any technologies in the future that'll change this. Piracy isn't the problem, it's the declining readership among technological societies that's 24/7 working.

The reason it hasn't done as much damage to the book industry is because nobody read books as often as they listen to music. I can show you a country full of music listeners that has more than 100 songs but I can't show you a country that's full of book readers that has read more than ...20 books. Hell I met people who never read any books after school, not even newspaper. They just rely on the Internet and blogs and crap like that.

 

[marksman]

I am not sure why jailbreaking an iPad would contribute to ebook piracy.

It is not a real jail.

 

[MikhailT]

I am not sure why jailbreaking an iPad would contribute to ebook piracy.

It is not a real jail.

? My sarcasm detector doesn't work on the internet. So i'm going to assume you're not joking.

In order to get files off iPhone (in this case the epubs from iBook store), you need to be able to log into the file system. The only way in right now is via iTunes. Therefore it's a jail with only authorized door entry as iTunes. So jailbreak is required to get those files, crack the DRM protection and release the DRM-free copies on the Internet. But somebody should be able to get the epub files from the backups that iTunes use, as long as it is not encrypted.

 

[Wordslinger29]

I totally know what you mean, but there's nothing that can be done about it. I don't foresee any technologies in the future that'll change this. Piracy isn't the problem, it's the declining readership among technological societies that's 24/7 working.

The reason it hasn't done as much damage to the book industry is because nobody read books as often as they listen to music. I can show you a country full of music listeners that has more than 100 songs but I can't show you a country that's full of book readers that has read more than ...20 books. Hell I met people who never read any books after school, not even newspaper. They just rely on the Internet and blogs and crap like that.

True. I know people who have no problem saying they hate reading--some act as if they're proud of it. It's a shame.

 

[Night Spring]

In order to get files off iPhone (in this case the epubs from iBook store), you need to be able to log into the file system. The only way in right now is via iTunes. Therefore it's a jail with only authorized door entry as iTunes. So jailbreak is required to get those files, crack the DRM protection and release the DRM-free copies on the Internet. But somebody should be able to get the epub files from the backups that iTunes use, as long as it is not encrypted.

If iBooks work the same way as the rest of iTunes, wouldn't there be copies saved on your computer, the way copies of apps are saved on your computer? In that case, no need to jailbreak iPad to get at the books, you just need to take them off your computer and crack the DRM.

 

[MRU]

The best explanation of the whole story and one that actually reveals some startling truths about Amazon.

Last Friday, Amazon.com unilaterally pulled most or all of Macmillan's books (edit: including all paper editions, not just electronic) from their online store. (You can still find them via afilliates or second-hand stores, but Amazon themselves won't sell them to you. Note that this only affects me via my Merchant Princes books — published by Tor, a Macmillan subsidiary — in the US Amazon store. My Ace titles are safe ... for now.)
This whole mess is basically about duelling supply chain models.
Publishing is made out of pipes. Traditionally the supply chain ran: author -> publisher -> wholesaler -> bookstore -> consumer.
Then the internet came along, a communications medium the main effect of which is to disintermediate indirect relationships, for example by collapsing supply chains with lots of middle-men.
From the point of view of the public, to whom they sell, Amazon is a bookstore.
From the point of view of the publishers, from whom they buy, Amazon is a wholesaler.
From the point of view of Jeff Bezos' bank account, Amazon is the entire supply chain and should take that share of the cake that formerly went to both wholesalers and booksellers. They do this by buying wholesale and selling retail, taking up to a 70% discount from the publishers and selling for whatever they can get. Their stalking horse for this is the Kindle publishing platform; they're trying to in-source the publisher by asserting contractual terms that mean the publisher isn't merely selling them books wholesale, but is sublicencing the works to be republished via the Kindle publishing platform. Publishers sublicensing rights is SOP in the industry, but not normally handled this way -- and it allows Amazon to grab another chunk of the supply chain if they get away with it, turning the traditional publishers into vestigial editing/marketing appendages.
The agency model Apple proposed -- and that publishers like Macmillan enthusiastically endorse -- collapses the supply chain in a different direction, so it looks like: author -> publisher -> fixed-price distributor -> reader. In this model Amazon is shoved back into the box labelled 'fixed-price distributor' and get to take the retail cut only. Meanwhile: fewer supply chain links mean lower overheads and, ultimately, cheaper books without cutting into the authors or publishers profits.
Amazon are going to fight this one ruthlessly because if the publishers win, it destroys the profitability of their business and pushes prices down.
(Note that Amazon have been trying to grab a larger share of the cake by dipping into the publishers -- and the authors -- share of what meagre profits there are (book publishing is notoriously, uniquely unprofitable, within the media world), even though they've already got the wholesale and retail supply chains stitched up. Their buy wholesale/sell retail model screws publishers' ability to manage their cash flow and tends to induce price wars on the supply side, which is okay if we're talking widgets with a range of competing suppliers, but books are individually unique products and the industry already runs on alarmingly narrow margins: this isn't the music or movie biz.)
Now, as to pricing and DRM -- those issues are entirely irrelevant -- at least at this stage of affairs. They're different battles. For what it's worth, the ePub format Apple, Sony, Baen, and everybody except Amazon are going with doesn't mandate DRM (although it provides an optional vendor-specified DRM layer). The DRM push comes from the board level of the corporations who own both the book publishers and the music vendors, and individual editors and publishers know it's crap. This is a battle that'll be lost or won within the publishers.
Pricing ... we sell books by reverse auction, most expensive editions first, then cheaper editions, then mass market, until we get to the remainder shelves. What any sane publisher would like to do is to get away from the current crude fixed-price points -- a system they can't do anything about right now because it's locked in via the wholesale/retail distribution model -- and get round to flexible pricing on books: start selling high, then drop the price incrementally with much higher granularity than is currently possible. Such a system would allow them to get a lock on the price elasticity of demand, and thus work out the price point at which they can maximize book sales. A fixed-percentage agency model (distributor takes a flat 30 or 35%, whatever the price, while the price is set by the publisher) lets them do that.
It's interesting to note that unlike the music industry who had to be pushed, the big publishers seem to be willing to grab a passing lifeline.
Final note: to customers, Amazon would like to be a monopoly (i.e. the only store in town). To suppliers, Amazon would like to be a monopsony (i.e. the only customer in town). Their goal is to profit via arbitrage, and if they can achieve those twin goals they will own everyubody's nuts -- the authors, the customers, everyone. They are, in fact, exactly the kind of middle-man operation that the internet tends to squish, gooily. And if you think things would be different if I, Charlie Stross, went into self-publishing and sold my wares directly without any icky publisher to 'help' me ... do you really think I'd get better terms out of Amazon than a huge publishing conglomerate?
Whether this means Macmillan is any better placed to adapt to the post-internet order is an entirely separate issue which I can't begin to address here.
But Amazon, in declaring war on Macmillan in this underhand way, have screwed me, and I tend to take that personally, because they didn't need to do that.
[Edit]: Just before Apple announced the iPad and the agency deal for ebooks, Amazon pre-empted by announcing an option for publishing ebooks in which they would graciously reduce their cut from 70% to 30%, "same as Apple". From a distance this looks competitive, but the devil is in the small print; to get the 30% rate, you have to agree that Amazon is a publisher, license your rights to Amazon to publish through the Kindle platform, guarantee that you will not allow other ebook editions to sell for less than the Kindle price, and let Amazon set that price, with a ceiling of $9.99. In other words, Amazon choose how much to pay you, while using your books to undercut any possible rivals (including the paper editions you still sell). It shouldn't surprise anyone that the major publishers don't think very highly of this offer ...