Monday, December 29, 2008

The New York Times on used books

It's a no-win scenario for authors to talk about the impact the used-book trade has on their livelihood, so I won't. But The New York Times had an interesting article entitled "Bargain Hunting for Books, and Feeling Sheepish About It" recently.

All right, I'll make one comment. One of the standard arguments you hear is that lots and lots of people buy used books when trying an author out, and then if they like him or her, they start picking up their stuff new. In my experience, having done hundreds of signings, that's just not generally true. People often come to signings with stacks of my books to get autographed, but it's usually either all new copies, or all used copies. I've almost never seen a case of a reader switching from one to the other.

Yes, yes, yes, I'm sure there are individual examples of people switching from buying an author used to buying new, but, again, in my experience, it's not the norm, even among people who profess to loving the author's work.

And, just in case the point is lost: when you buy a used copy of an author's book, neither the author nor the publisher makes a cent. Yes, yes, somebody paid for the book originally, and that person did contribute to putting food on my table (and on my editor's table) ... but the person who bought the book used did not.

(And before someone chimes in and says, "Well, then, I guess you hate libraries, you Philistine!," no, I don't -- and in Canada (and many other countries, but, as with so many things, not the US) we authors get a nice cheque from the government each year to compensate us for our lost royalties on copies circulated through libraries; read up on the Public Lending Right if you want to know more.)

The Robert J. Sawyer Web Site


23 Comments:

At December 30, 2008 10:47 AM , Blogger Melody Friedenthal said...

I read that NY Times article when it was first published and, like the author, I admit to being swayed by the economic times. I buy new books, I buy used books and I borrow library books. The exact ratio of one to the other to the third has varied with how flush I am feeling at any given time, and the availability of what I seek at the specified venue.

 
At December 30, 2008 11:09 AM , Blogger RobertJSawyer said...

Neither authors nor publishers are immune to the economic times.

But since you recently bought a book directly from me, you're off the hook, Melody. :)

 
At December 30, 2008 2:04 PM , Blogger Unknown said...

I'm one of those folks where a used book acts as a gateway to a new author. I bought one of your books used a long time back and have since bought 2 or 3 (I have too many books to remember exactly) of your books brand new. And I will continue to buy your books new so long as they're easily available to me.

So yeah!

 
At December 30, 2008 7:16 PM , Blogger Ginny said...

The first book of your I bought was Hominids. I bought it new and enjoyed it so much I scoured new and used book stores for your other stories. Unfortunately, most new bookstores didn't carry all of your books (shame shame). I was able to find rest of the books at used bookstores. Of course, I enjoy your books so much, I buy new - but mainly because I am too impatient to wait for them to trickle down to the used book stores

 
At December 30, 2008 7:21 PM , Blogger RobertJSawyer said...

Welllllllllll, I'll politely point out that all of my novels except THE TERMINAL EXPERIMENT, STARPLEX, and ILLEGAL ALIEN are currently in print, and ANY new bookstore can special order them (and almost all of them will gladly do so), and all my in-print novels are available new from Amazon.com, BAMM.com, Borders.com, BN.com, Chapters.com, and so on.

 
At December 30, 2008 7:22 PM , Blogger RobertJSawyer said...

And, for that matter, most of my books are also available directly from me -- and autographed, to boot! ;)

 
At December 30, 2008 7:39 PM , Anonymous Anonymous said...

That was a very insightful article. Thanks for posting it.

Stephanie

 
At December 30, 2008 7:44 PM , Blogger Ginny said...

I hang my head in shame...

 
At December 30, 2008 7:56 PM , Blogger RobertJSawyer said...

It's not about shaming people, Ginny -- it's about raising consciousness. There's no shame in never having thought about something before ... :)

 
At December 31, 2008 3:37 AM , Anonymous Anonymous said...

I've always been surprised at how long in coming the technology-driven reckoning has been for the book publishing industry, but it appears the time is now nearing. And so the publishers will be forced to learn the same lesson to which the music industry spent most of the last decade being wilfully blind: no one is entitled to retain a business model, and the best way to succeed in the market is to sell products people actually want to buy at a price they are happy to pay. "We can't compete with free!" moaned the record company behemoths - but then Apple started a wacky concept called iTunes and promptly sold a billion dollars a year worth of music. Instead of making books expensive and then acting surprised when consumers decide to pay less, perhaps publishers should try to, I don't know, charge less in the first place.

 
At December 31, 2008 9:25 AM , Blogger John F said...

I want to fully understand your position, Rob. In your view, when is it acceptable to purchased a used book?

 
At December 31, 2008 9:57 AM , Blogger RobertJSawyer said...

Interesting comments, originalbobt. However, they seem perhaps to be predicated on a couple of odd assumptions. The first is that a billion dollars is a lot of revenue for the music industry; in fact, in 2005, physical-media music sales were a TWELVE billion dollar industry (and the average iPod contains just $40 worth of music that was purchased digitally) -- and that revenue stream, I'm sure you and I both agree, is drying up and ultimately will disappear.

The second is that books must have huge profit margins for publishers as is (since you imply that they could easily be sold for lower prices than they now are).

In fact, that's not the case; most books lose money or barely make a profit, and for most books the natural audience size is NOT elastic: charge half as much for most books and you will NOT sell double the number of copies; charge one tenth and you will not sell ten times as many.

Many publishers have tried experiments in this area, including my own Robert J. Sawyer Books imprint; we published great hardcovers at about half or two-thirds of the going rate for our first several books, and saw no bump in sales (and we lost money doing so); when we raised our pricing to match the industry norms, we saw no drop off in sales. The number of people who want to read a given book is pretty much fixed, and is not particularly price-dependent.

With the recent extensive discrediting of Chris Anderson's Long Tail hypothesis as specifically applied to the music industry, it's clear that low price plus ready availability does NOT magically make once-marginal entertainment products suddenly profitable.

As to the argument that no one is entitled to a business model, there's some truth in that, and I know it's become a rallying cry often invoked. On the other hand, no one is entitled to circumvent a business model just because they don't like it, either. One can't say, "I'll stop stealing cars when Detroit will sell me one for a price I want to pay!"

The true frontier aspect of the electronic frontier, it often seems, is the lawlessness: the ease with which it becomes possible to take things that in the past one had no choice but to pay for, and the (short-sighted) "cleverness" of defeating any attempt at generating revenue.

For instance, the notion that TV should be free -- that one should be able to strip out the ads with their PVR, or BitTorrent the content without paying for DVDs -- begs the question of where the million or so dollars it costs to make an hour-long TV show comes from, and why anyone should want to front that money.

In a lot of ways, it comes down to the same mindset that has made WalMart so successful: I don't care anything about the people who produce this stuff, or whether they make a decent living or are properly (or even humanely) rewarded for their efforts, and I don't care about the impact this new-fangled way of shopping is having on the livelihoods of people in my community, who used to make a decent living before WalMart moved into town; all that matters to me is that I get stuff as cheaply as I possibly can.

In other words, it's really not that surprising that the "E" prefix that often used to be attached to words related to online commerce has been replaced with an "I" instead.

 
At December 31, 2008 10:18 AM , Blogger RobertJSawyer said...

Hi, John F. I have only marginal problems with people buying used copies of books that are no longer in print, and I do so occasionally myself -- and try to suppress the thought that some stranger has likely sneezed all over the pages; books are the one used commodity we buy that we don't (and, indeed, CANT') clean before we re-use them ourselves ;).

If the book IS in print, then I don't approve of people buying it used, and won't do so myself.

However, even buying only out-of-print books can have a negative impact on the ability of people to make a living writing books (and, yes, I think having professional authors and artists IS an important thing for our society and culture, and not something we should blithely or lightly toss aside).

A friend of mine, who recently wrote the long-awaited Xth novel in his series, was told by his publisher that they COULDN'T reissue the older, now-out-of-print titles in said series because the used-book marketplace (which has grown enormously thanks to Amazon.com offering used copies along with new, the advent of online booksellers that specialize in used copies, and the presence of eBay) had destroyed the market for reprint backlist titles.

The point is that until recently, used books were a tiny part of the book industry; Amazon and others didn't really revolutionize the way new books are sold, but rather have revolutionized the used-book market, making it easy to find multiple copies of anything you might want without even leaving your home.

No one is entitled to a business model? Maybe so. But everyone really should think about the economic impact of the things they do; if 2008 taught us anything, it should be that.

 
At December 31, 2008 11:12 AM , Blogger Unknown said...

Whats the deal with remaindered books? I've picked up a few books at about %10 of cover price in Chapters, what if any cut do authors/publishers receive?

I'm surprised there isn't a tax like that imposed on blank recording media to cover the loss (not that I'm advocating more taxes;)

You say that price does not seem to be a factor, but it is the dominant factor for me. I read a lot, and in order to be able to afford my habit I avoid hard-cover and I buy mostly used.
Maybe if the softcover prices could be lowered (I'd like to see half the current) the demand for new would increase?

Thanks for the great books, and thought provoking blog

Cheers
Chris

 
At December 31, 2008 11:49 AM , Blogger RobertJSawyer said...

Hi, Chris. I discuss the question of remainders and what authors get here.

 
At January 01, 2009 1:26 PM , Anonymous Anonymous said...

Thanks for the considered response, Rob. A couple of further thoughts:

... a couple of odd assumptions. The first is that a billion dollars is a lot of revenue for the music industry; in fact, in 2005, physical-media music sales were a TWELVE billion dollar industry (and the average iPod contains just $40 worth of music that was purchased digitally) -- and that revenue stream, I'm sure you and I both agree, is drying up and ultimately will disappear.

Oh, I don't think the billion dollars of iTunes sales is a lot relative to prior sales, but it is a lot relative to the amount predicted by the "we can't compete with free" argument. Whether it's enough is also a separate issue - is it enough to sustain the massive conglomerates who need to meet quarterly sales targets in order to prop up their share value? Clearly not - but that model is and was a relatively recent development in the music business, and it is likely to not remain with us in a recognizable form much into the future. Which is, I submit, neither a good or bad thing - it's just how industries evolve (or don't, as the case may be).

The second is that books must have huge profit margins for publishers as is (since you imply that they could easily be sold for lower prices than they now are).

You won't catch me arguing that books carry massive profit margins - I'm sadly aware of how little money is made per book. I'm also not arguing that books could "easily be sold for lower prices" - but I am arguing that they are going to need to be sold for lower prices... and it is unlikely that the restructuring of the industry which is going to be required in order to recalibrate itself to match those lower revenues will be anything but "easy". I'd argue further that books in fact currently successfully are being sold for lower prices - but, as the NYT article attests, just not by the publishers, but by resellers.

In fact, that's not the case; most books lose money or barely make a profit

Right - so to me, neither a publisher nor an economist, the proper response would be either (a) publish fewer books or (b) lower the costs incurred in publishing books. The 8/10 model (where 8 products lose money and are carried by the success of the remaining 2) can't be said to have worked too well for the music industry - but they insist on following it.

and for most books the natural audience size is NOT elastic: charge half as much for most books and you will NOT sell double the number of copies; charge one tenth and you will not sell ten times as many.

Fair enough - but I think the issue is not the elasticity of the demand, but the existence of the demand at all. Here are some possible scenarios for the publishing industry, at least as based on the NYT article and our discussion: raise prices and extract more money from existing customer base (though presumably at some price point fewer people will want to pay the required amount); keep prices the same and sell progressively fewer books, since people evidently aren't willing to pay the current prices; or lower prices to the amount which people are willing to pay (and clearly they are willing to pay some amount, they just aren't willing to pay the price set by the publishers). The last option seems the most viable to me, but it will require massive and painful changes - but I'd submit those changes are going to occur whether done voluntarily or otherwise.

Many publishers have tried experiments in this area, including my own Robert J. Sawyer Books imprint; we published great hardcovers at about half or two-thirds of the going rate for our first several books, and saw no bump in sales (and we lost money doing so); when we raised our pricing to match the industry norms, we saw no drop off in sales.

Do you have any thoughts as to whether this phenomenon is peculiar to (pardon the phrase) genre fiction? I'm curious as to whether it would apply to fiction which is not marketed and sold to a "pre-packaged" group. Maybe I'm not articulating that the right way, but here's what I'm wondering: science fiction fandom is a relatively limited group of people - it shouldn't be, but that's sort of how it's ended up (viz. the segregating of books by genre in your average bookstore); let's assume the going price for a sci-fi fiction novel is $10; reduce the price to $5, and I'm not sure that the problem is being addressed in a constructive way: the same relatively limited number of people is going to be aware of this new lower-priced book, so your pool of potential purchasers hasn't expanded much - and as you say, they aren't particularly price sensitive (at least on the downward part of the price curve). What if, however, you were going to sell that $5 novel not on the shelves of the sci-fi section, but on the front shelves of the store where everyone will see it? I'm genuinely curious as to whether sales would be affected in that case.

With the recent extensive discrediting of Chris Anderson's Long Tail hypothesis as specifically applied to the music industry, it's clear that low price plus ready availability does NOT magically make once-marginal entertainment products suddenly profitable.

Right - so shouldn't the industry being exploring ways of making "once-marginal" products something other than marginal? Let's take a dumb, easy example - Tom Doherty Associates has its offices on 5th Avenue in NYC. Does it really need to maintain offices on one of the most expensive commercial avenues in the world? Really? When every other industry sees revenue declining, it cuts costs - publishers will need to do the same (and, obviously, are already doing so).

As to the argument that no one is entitled to a business model, there's some truth in that, and I know it's become a rallying cry often invoked. On the other hand, no one is entitled to circumvent a business model just because they don't like it, either. One can't say, "I'll stop stealing cars when Detroit will sell me one for a price I want to pay!"

I think you're eliding two different issues here: the re-sale of used books and the stealing of copyrighted materials. If you're arguing that re-selling a used book amounts to copyright infringement, I'd be interested in hearing the argument. But I don't think that's the issue. The analogies between the music and book publishing industries aren't exact: the music industry has been decimated by theft. The book publishing industry appears to be being decimated by the perfectly legal act of people paying what they want for the purchase of a product. Nobody argued that "I'll stop stealing cars when Detroit will sell me one for a price I want to pay!" - but they did say they wouldn't pay the price that Detroit was demanding for an inferior product... hence the steady loss of market share to non-Detroit automakers like Toyota.

The true frontier aspect of the electronic frontier, it often seems, is the lawlessness: the ease with which it becomes possible to take things that in the past one had no choice but to pay for, and the (short-sighted) "cleverness" of defeating any attempt at generating revenue.

Again, though, I'm not sure what's "lawless" about buying a used book from a willing seller. There's clearly a demand for the title in question, and the seller is willing to pay a certain price - which is different from the music industry issue of people stealing copyrighted material because they aren't willing to pay any price at all. What accounts for the difference is that music is a purely digital affair which can be endlessly duplicated and enjoyed - but books don't really work that (yet - though there appear to be some trends in that direction, I suppose). The "physicality" of the book is still important - a fact which publishers should be using to their advantage.

For instance, the notion that TV should be free -- that one should be able to strip out the ads with their PVR, or BitTorrent the content without paying for DVDs -- begs the question of where the million or so dollars it costs to make an hour-long TV show comes from, and why anyone should want to front that money.

I agree. But TV production and total viewing hasn't declined, so obviously the issue is being addressed somehow.

In a lot of ways, it comes down to the same mindset that has made WalMart so successful: I don't care anything about the people who produce this stuff, or whether they make a decent living or are properly (or even humanely) rewarded for their efforts, and I don't care about the impact this new-fangled way of shopping is having on the livelihoods of people in my community, who used to make a decent living before WalMart moved into town; all that matters to me is that I get stuff as cheaply as I possibly can.

I think it's disingenuous to try and turn this into a political argument. But the Detroit automakers example you raised earlier then becomes apposite: authors, book publishers and retailers can continue to argue that they have an entitlement to sell an over-priced underperforming product, and that anyone not willing to pay their demanded rate is not just a lousy customer but actually an enemy of the community - but that argument hasn't worked out terribly well for Detroit or many of the major music labels. But, hey, maybe third time will prove to be the charm.

 
At January 01, 2009 1:56 PM , Blogger RobertJSawyer said...

Very thoughtful comments, originalbobt. A couple of small responses:

First, the argument that "X is better than those who said we could never do squat" isn't all that powerful. Yes, X is better than nothing; no question. But, to put a billion-dollars-a-year in perspective, my Canadian publisher, Penguin Canada, is a $100-million-a-year company, and is just one of several publishers serving a tiny marketplace of 30 million people here. Doing just ten times that much in sales as, by far, the market leader serving the entire world, just isn't that much. Better than worst-case estimates, yes -- but that does not make it a success. :)

On whether publishers should publish fewer books -- should eschew the books that have limited appeal in favor of guaranteed bestsellers -- well, yes, that's what business schools would dictate. The two problems are, first, no one really knows how to predict breakout bestsellers (The Da Vinci Code and the first Harry Potter book being the most famous recent examples of books that performed way beyond expectations), and, second, do we really want that from our cultural industries? Do we really want the sole criterion of what gets published to be how many people we think will read it?

(Although, yes, it is what we're getting in a lot of ways, whether we want it or not; it would be unkind of me to name names, but a great many SF&F writers who used to be published regularly have been dropped in recent years by their publishers. The mid-list is indeed drying up.)

On whether Tor needs to be not just on Fifth Avenue, but actually in the Flatiron Building, of all places, that's a good question. Part of the answer is that you need to be located in New York because that's where the biggest pool of actually qualified publishing professionals to hire from is located. And part of the answer is that a lot of business is still done face-to-face between agents and editors, requiring them to be concentrated geographically.

Others have tried to build publishing empires in cheaper locales; few of the startups have succeeded, and before we say established firms need to relocate we really do need to understand why publishers are based in downtown New York (or Toronto or London, also famously expensive cities) in the first place.

Finally, I've never opined that stealing pirated electronic texts and buying used books are morally equivalent, but from the author's perspective they are economically equivalent: people enjoying our labors without helping to put food on our tables.

 
At January 01, 2009 6:01 PM , Blogger Kirstin said...

I believe we need to restructure the entire publishing industry business model, but it's so entrenched and so many people are invested in the current model that the industry might have to collapse before this effort is seriously pursued by anyone in the business.

With rising transportation and manufacturing/materials costs, which I think are #1 and #2 in the list of the publishing industry's liabilities, I think an eventual shift to e-books is inevitable.

What I would like to see is an e-book universe with some editorial direction and some gatekeepers. It may sound elitist, but I do have a certain preference for correct spelling and decent grammar.

What I would not like to see is a wild-west e-book universe in which there is no quality control and people forget or never learn the value of good writing and the enjoyment of reading a well-written book. I worry about new or reluctant readers giving up on books when they see mistakes or don't find themselves enjoying books.

A new business model might solve the problems of used books and of what some perceive as unreasonable cover prices for books--I'm one of those people, but I don't think either publishers or bookstores overcharge, I just think transport trucks and paper are becoming less feasable day by day. A new business model could solve the problems of transportation costs and manufacturing costs, too.

People will be reluctant to change, but people have always been reluctant to embrace change.

 
At January 01, 2009 10:31 PM , Blogger Unknown said...

The music industry has hardly been "decimated by theft" as one poster suggested but it is going through a very difficult (albeit necessary) transition as downloads continue to rise and take up the slack for slumping CD sales.

The numbers tell quite the opposite tale. As Rob pointed out, annual music sales in 2005 were worth 12 billion dollars. In 2008 that figure has risen to 18 billion dollars. That's a staggering 50% increase. And sales are set to rise to the 20 billion dollar range by 2011.

 
At January 02, 2009 6:44 AM , Anonymous Anonymous said...

Thanks, Rob - I appreciate you taking the time to get into this discussion. One last set of thoughts from me on this, and then I swear I'll shut up.

Because it's long been the neglected step-child of the entertainment world, I think other elements of the industry are missing a chance to learn some lessons that were painfully won by the comic book publishers. You'll recall that in the mid- to late-1990s the comic book industry, by most conceivable metrics, imploded. The number of titles being published collapsed, the number of retail outlets collapsed, the number of persons being employed in the industry collapsed, the number of copies being sold collapsed, etc. etc. There were a few different reasons for this, some of which were incredibly dumb and short-sighted moves on the part of the publishers themselves and others which were entirely out of their control (the upward spiraling of the cost of paper and the shift in leisure time to other media such as videogames being among the latter).

For a few years the industry was in a blind panic, desperately trying to figure out the answer to the question: "we used to be able to reliably sell 400,000 copies per month of a given title, now we can barely sell 100,000, how do we get those people back?" To which the proper response was: you can't. It's over. You'll likely never again be able to sell half a million copies per month on a regular basis - but you can sell 100,000 copies of a title per month - and there's a way to do so profitably. So, the industry was "rationalized" - new business models were attempted (such as gearing publishing towards the printing of collected trade paperbacks), titles were targeted to the audience, a pruning of talent occurred, etc. etc. Over the last few years the industry has rather nicely stabilized - sales are nowhere near what they were two or three decades ago (to say nothing of Golden Age sales), but that's okay. Excellent comics are being published, those working in the industry are happily and gainfully employed and their fans are relatively content (as happy, one supposes, as fans ever are). There aren't as many people gainfully employed as there once was and the industry as a whole isn't making nearly as much money as it once was, but there's a viable, even prosperous, industry to be had, and people are, well, having it.

The music industry appears to be in the middle of a similar situation: massive hit albums used to be able to sell around 10 million copies in the US - now the upper limit appears to be around 5 million or so. The industry has been running around asking itself "how do we get those missing 5 million copies sold again?" They can't. They won't. But selling 5 million copies of an album is nothing to sneeze at. The industry will be smaller than it once was. But there will still be an industry. It might not look like it once did, the executives might not be winging around on their LearJets anymore, but lots and lots of people will still make decent money from the writing, recording and selling of music. They are doing so right this minute. I sincerely hope that the book publishing industry is able to learn from the painful lessons that her sibling industries have had taught to them.

 
At January 02, 2009 2:30 PM , Blogger RobertJSawyer said...

The New York Times on the financial state of the music industry: see this this article.

 
At January 02, 2009 6:38 PM , Blogger Unknown said...

One issue I've never seen addressed by the music (or any other) industry is the high cost of entry associated with purchasing downloads. In the old days, if you had a stereo or a walkman, you could walk into any record store and purchase music in the format of your choice without incurring any additional costs, but to buy a song online, you need to invest a few hundred dollars in a computer and pay your monthly broadband internet fees before you make a single purchase.

Now granted, computers are a lot more than glorified electronic shopping baskets, but you need one to purchase music and to subsequently transfer it to your iPod or other digital player, or to burn it to an audio CD. Is the high cost of entry a deterrent to sales?

Another factor is the effect on spending of the increase in the number and cost of telecommunications and entertainment services (rather than products) available to consumers.

We are no longer living in a telecommunications landscape dominated by 12 cable channels and a landline telephone and disposable income that would have gone to things like books and CDs in now spent on to cell phone and mobile data plans, extended cable packages, high speed internet fees, satellite radio and gaming subscriptions, among other things.

On average, consumers may be spending less to purchase things like books, DVDs and CDs. But I wonder whether consumers are actually spending just as much (if not more) on entertainment as in previous years, but have simply shifted from purchasing the content itself to paying for the services that allow access to said content. T

 
At January 02, 2009 7:18 PM , Blogger RobertJSawyer said...

Hi, JS. Indeed. There's no doubt that Apple's by-fiat decrees about how music will be sold and priced have been great for moving iPods; there' a lot of question about whether it's been great for the content providers, though.

Likewise, with Amazon.com and how books are sold online, or Google and the digitizing of books: these things are just DONE by the companies that dominate the marketplace, and presented as fait accomplis, without even token attempts to consult with all the stakeholders -- and the actual creators (musicians, writers) are never asked and pretty much have no say.

 

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