Candice Hughes

Not long ago I posted a summary of comments on the cost of book production by Lee Child.

Here’s another source showing how little it actually costs to produce a physical paper-based book (just in terms of printing).

“Printing a 9-by-9-inch, 334-page hardcover book in China costs about 44 to 45 cents now, with another 3 cents for shipping, says Goodwin. The same book costs 65 to 68 cents to make in the U.S.” He goes on to explain that US printing obviates the need for an additional 30 days of shipping time- plus the extra 3 cents cost.

http://news.yahoo.com/s/ap/20100708/ap_on_bi_ge/as_china_cheap_no_more

Thus, the cheapest cost for China is 47 cents versus the most expensive cost for the US 68 cents. Will an extra 50 to 70 cents more or less  prevent anyone from buying a paper book (over say an e-book version)? Because that ‘s the real cost difference unless vendors artificially lower e-book prices by cutting pay for writers or publishers or sell at a loss to themselves. In fact, the difference is likely even less because there is still a cost for programming to develop and maintain software allowing e-books to be uploaded and viewed.

These numbers further demonstrate that most of the cost of a book is content development (ie: the writer sitting in the chair fingers to keyboard for months or years and the editor polishing the text up) plus some marketing/sales costs so that readers can find and obtain a copy of a new book and don’t have to hunt the Internet for obscure web sites to buy a poorly or non-promoted book. Thus, most costs do not change regardless of whether the book is delivered in electronic or print format.

E-books are a great option, but keep the price honest.

Spring has been here for several weeks now, with the usual crazy New England weather- shorts and tee-shirts one week then back to sweaters and coats the next.

Besides the changing but consistently wacky weather, the publishing industry continues as well, changing but expectedly so.  Publisher’s Weekly reported that e-books were up 177% for 2009 while sales of most other books were flat or slightly lower than the year before. All forms of entertainment have been moving digital for a number of years. Yet things rarely move entirely digital or, if they do, convert in their original form. I still listen to the radio periodically. I often listen to the radio online. It’s still the radio, just a different delivery system. I envision paper-based books sharing the world with digital books- reaching an even larger audience.

Spring is a great time for writing- full of energy and bursting with ideas! So now it’s back to a writer’s main job…writing.

The agency model for e-books is out of the gates and off and running as of yesterday. As many expected, there have been some bumps in the road. Some publishers are still working with Amazon. This is all to be expected given how quickly deals had to be put together.

My main concern is communication with customers. This morning I checked the Amazon Kindle blog and noticed a number of customers complaining about the price changes. Some felt that publishers were price-gouging, getting more because they could, etc. To quote one customer “I’m really tired of these publishers jerking me around. Ebooks are almost pure profit since they don’t have to pay anyone to print or ship…”

Very few customers posting recognized or understood that authors need to be paid fairly for their work. The focus was heavily on publishers and lawyers writing up contracts as well as the low costs of producing an e-book versus printing. The truth is that without authors sitting in a chair, fingers to keyboard for months or even years, pouring their heart and imagination out onto their hard drives, there would be no e-books (or any other form of books). The truth is that like other products (cars, jewelry, clothing) some products may have a higher intrinsic value than others.

I believe most people are willing to pay fairly for what they buy when they understand the value of what they’re buying. Few expect to buy a shiny new BMW car for the same price as a Kia.

Of course, why should readers realize or understand the monumental effort that goes into writing a book unless authors, publishers, agents and others in the community engage them in conversation? We are not explaining our side of the story. We’re letting Amazon and others put their side of the story out leaving readers feeling confused.

Yes, e-books are cheaper to produce. But they are part of the set of products an authors produces. In fact, an ever greater part. The pay (or salary, if you will) that an author receives in exchange for sitting at their computer for months and years is based on what all these products (e-books, hardcover, paperback, etc) earn. Artificially lowering the price of e-books to “one low price fits all” means that no matter how hard an author works, no matter how good they are in crafting a story, they’ll earn the same base amount.

Naturally, Amazon and other companies that make the hardware needed to read e-books want low priced content. They want to sell their hardware (e-book readers) for as much as they can. In order to do that, they need to offer customers a carrot. The carrot is low cost content. Their pitch to customers is, “yes, you’ll pay hundreds of dollars for this reader but after that you’ll hardly pay anything at all for using the device.” Fair valued-content brings up the total cost proposition of owning the e-reader. Some customers may then want to pay less for the reader.

E-readers and e-books need each other. Like any relationship, there are ups and downs as well as power-struggles. I believe the agency model is basically fair to both sides. Readers also win because they will keep getting fantastic stories to read in any format they like (print books or e-books).

The one issue I have with the Kindle is that it’s limited to reading black and white text primarily. I’ve been waiting for something to come along that will allow a top-notch reading experience but also provide a thrilling multi-media experience as well. The hints surrounding Apple’s secretive meeting with publishing industry giants has me intrigued. Will we finally see a device where authors can reach out to their audience with every tool at hand?

Imagine the possibilities….(no, don’t burst my bubble yet with reality like slow internet connections or dodgy Wi-Fi or faded colors- for now I’ll just dream…)

Bookmarked: The Girl Who Played with Fire by Stieg Larsson

E-books are expected to represent $150 million of this year’s book market, rising to $201 million next year (according to Albert Greco, professor at Fordham University as quoted by the Wall St. Journal). Two major publishers announced e-book delays (Hachette Book Group and Simon & Shuster). Only a couple years ago, e-books seemed like harmless dalliances. A way to look hip, to crest the techie wave. Now the wave is threatening a whole business model.

Fundamentally, e-books and their so far rock bottom prices represent a basic struggle between consumers (readers) who would like to pay as little as possible for a product (books) and producers (publishers and authors) who would like to earn a reasonable profit from their products. How far the model can stretch under these pressures is uncertain. Already consumers have access via the Internet to very low cost, even free, “books”. Frustrated authors post books on their web sites or give podcasts of them. Google has indexed libraries full of free books. But, no one is checking the quality of all this free written entertainment. That’s where the current model benefits consumers. Only an infinitesimally small number of books pass the extremely high hurdle to publication by a major publisher. To pay all the people who ensure this high quality entertainment, create a beautiful package and give consumers easy access to it, publishers need to earn a certain income with profit to keep shareholder’s happy so they can stay in business. If consumers do their part by keeping volume high, prices can be lowered. But low volume and low profit is an unsustainable business model. Are consumers willing to pick through mountains of chaff for gems in “free” Internet entertainment? Or are they willing to pay for quality?

In other words, how low can prices of e-books go before publishers (and authors) call it quits? The e-book medium offers so many enticing opportunities for enhanced content and other benefits that are worth paying for. If the focus can be moved from bargain basement to luxury entertainment, e-books may turn from Trojan horse to gift horse.

This weekend, my RWA (Romance Writers of America) chapter hosted Amy Pierpont from Grand Central Publishing. A number of us agreed this meeting was one of the best we’ve had because Amy has such a wealth of industry experience and is so passionate about books.

One key take-away from our discussion about the industry was that paranormals are still going strong with no end in sight. (Keep looking for those vampire books!) Expect paranormals to combine with other genres or subgenres. Recently I found a pirate vampire series for young adults that seems to be checked out of our library most of the time (a definite issue when my young adult is clamoring for book 2). I was particularly happy to hear that paranormals have a bright future since my second novel is a paranormal thriller with romantic elements (no, I didn’t entirely drop the medical slant, it’s just less prominent than in book 1). There aren’t any vampires in my novel but I believe I have some beings who are just as intriguing.

Another trend is the growth of e-books and e-readers. Publishers are looking to do more in this area because of the growth even though, at this time, the e-book area is only a small part of overall sales. From our informal sampling, there’s still a lot of room for growth since only one writer in the room currently has an e-reader. However, there was strong agreement that as readers, we book people are enamored of the touch, feel and smell of books- something an e-reader doesn’t offer.

The final trend I’ll mention is the growth of e-marketing tactics. Look for electronic announcements of all kinds from publishing companies promoting novels. Word of mouth is still the best way to attract readers and that is moving to the Internet as well with bloggers recommending novels and talking with their favorite authors.

While the publishing industry, like most other industry, hit a rough patch, there are a lot of exciting things going on!