OK, you wanted me to rant...

You wanted a rant? Here’s a rant. It should probably come with a health warning: stand well back and take precautions against explosion. This rant has been brewing for some time…

 I’ve kept well clear of all disputes and discussions about how much an eBook should cost, and how large a royalty the author should get, mainly because when the argument was at its peak my mind was occupied with more urgent matters like should I accept Severn House’s offer and retreat gently into retirement.

 But that’s over now; I did accept the offer, and though retirement doesn’t figure among my immediate plans, I no longer have a vested interest in how much anything in the book trade should cost. But like most people who buy books, I do have an opinion. So here it is.

 Long ago, years before I was overtaken by insanity and set up a publishing company, here in the UK we had an arrangement called the Net Book Agreement. It meant that books were sold for the cover price: no discounting, no three-for-the-price-of-two offers, no silly prices in the supermarkets. The only cut-price books on sale were remaindered stock, and they were usually confined to small chains of shops which specialised in buying up two- or three-year-old supplies of overstocks. I think something similar still exists to this day in the USA, except maybe the cut-price books are only months old rather than years, and they’re sold in most bookshops, not just specialist ones.

 Hand-in-hand with the Net Book Agreement came a kind of gentleman’s agreement between publishers and bookshops about a level of trade discount which meant everyone could make a living. (Another aspect of this was the sale-or-return system, which merits a whole rant of its own, and, dear readers, will get one. Promise.)

 Then the Net Book Agreement slowly slipped away. It was never formally abolished; it just… went. Chain bookshops began to run special offers; supermarkets added cheap books to their stock range; Amazon became a major player. The remainder shops went out of business because the conventional books were effectively in direct competition with them. Sale-or-return stayed. More on that at a later date.

 The result is that chain bookshops and supermarkets now demand crippling trade discounts and sell at prices which undercut small publishers’ production costs. Small independent bookshops can’t afford to compete and have to fight to survive. Here in the UK we lost one chain bookshop about a year ago and cracks are starting to show in the remaining one, so all is clearly not rosy there either. I suppose book buyers do benefit, and I confess I do buy heavily discounted books myself, but only bestsellers which are guaranteed to earn the author and publisher a decent return. I don’t see sales of books increasing, though; no one I know buys any more just because they’re cheaper. As far as I can see, the only real winners are Amazon and the supermarkets.

 And now the argument is happening all over again, with regard to eBooks. Until a few days ago I’d kept so far out of it that I didn’t even know what agency model pricing meant – but then I saw a news item which accused its proponents of going back to the ‘bad old days’ of the Net Book Agreement, and the fog began to lift. Publishers want to set the price themselves. For which please read, publishers want to make a living, just like anyone else.

 I can see a certain amount of logic behind the view that the print edition of a book takes care of the production costs, so an eBook edition costs much less to produce. It’s not entirely true, since eBooks incur costs that print editions don’t, but I can see the logic. What I haven’t seen is any clear evidence that eBook sales don’t actually replace print sales, but are additional to them. And with or without agency model pricing, the best available trade discount is still about 50% of cover price, and all costs have to be met out of the publisher’s half. (Have I ever done a breakdown of what it actually costs a small publisher to get a book from manuscript to bookshop shelf? Maybe next week, eh?) 

 This was going to be a rant about eBook pricing, and it seems to have opened out into one about book pricing in general. Which probably means I’m going to have to provide that breakdown, if only as a shield against some of the flak that’s going to head my way. So excuse me while I go and root out the information I’ll need. It’s going to take me till next week…

Comments

[Roy Innes]

Fascinating (in a scary sort of way). I've just launched my latest mystery, published by one of the small firms that you describe. The book is larger(5x8 vs 7x4), the print is bigger, but the listed price has been raised from $12 to $20! This for a PAPERBACK detective novel that will be read only once and passed on to a friend or taken to a used book store for credit. A coffee table book it will never be. If cost of real book publishing is rising at that rate, e-books will become more than "additional". They'll take over the market, at least in the crime novel genre.

[Carrie]

I'd LOVE to see a breakdown in costs next week! That would be incredibly illuminating.

[michael]

YEA!!! The other side!!!

BTW, you need to use more caps and exclamation points for a proper rant.

Question. If the agency model aka "net book agreement" is a must for publishers survival...
... why doesn't Random House agree (it is the Big Six minus One following the agency model)?
...why does it apply for e-books only, letting expensive to produce hardcovers sell for less than the e-book?
...why is not used for any other retail product from music, video games, DVDs, anything you buy at groceries stores, department stores, WalMart,etc?

Thank you for your insight from the side not heard from enough.

[Lynne Patrick]

In that case, Roy, there would be even less reason for eBooks to be cheaper than print, because they'd be bearing the entire cost of production!

[Lynne Patrick]

You may find it surprising too, Carrie.

[Lynne Patrick]

Sorry about the lack of suitable punctuation, Michael - must be my editor gene kicking in there.
You'd hear no complaint from me if cut-price goods in any market ceased to exist. My first thought whenever I see something priced stupidly low is who's getting ripped off here?

[Carrie]

It can't be anything but, as I have no idea what to expect.

[Robin Agnew]

Another great post, Lynn. Any chance you want to address the topic of returns? My sister, who is women's wear/gift retail, is completely jealous that I can return stock. Even though I am a bookseller, it seems like returns should be limited to author events. We usually carry only one copy at a time of a title, with some exceptions. This whole thread is completely educational.