Hard times ahead for publishers

The perception that selling ebooks by the agency model is unfair (consumers) and illegal (EU) is a big worry for publishing firms On Tuesday 1 March, several publishing offices in Europe were raided by inspectors from the European Commission. “They burst in like cowboys” said Francis Esménard, the president of French publisher Albin Michel, to journalists at 01net , even if “they were only going to find legal contracts”. Elsewhere, they seized smart phones and laptops from senior executives and no doubt ruined a good few lunches. No one likes to meet a Eurocrat at the best of times, but these ones may be beating the death knell of the publishing industry. The background to these raids is the agency model many big publishers have adopted to sell ebooks . Under this model, instead of selling the ebooks wholesale and allowing the retailer to set the price they charge the customers, the publisher itself sets the price of the ebooks and the retailer takes a commission. The potential problem with this arrangement is that it could, according to the EU commission statement explaining the raids, “violate EU anti-trust rules that prohibit cartels and other restrictive business practices”. The agency model is, in effect, a return to the net book agreement in electronic form. Publishers let that go in 1997 – and bitter experience has taught them to regret it . Losing the net book agreement did not lead to greater variety, customer choice, a better deal for producers or for shops (as those on the right claim unfettered competition should). It led to a three-way carve up of the trade between Waterstones, supermarkets and Amazon. Hundreds of viable publishers servicing thousands of shops were swapped for just over a dozen bloated giants with only a small number of effective outlet options. The stakes are even higher in the new ebook wars, at a time when even Waterstones branches are beginning disappear from our streets. The unspoken purpose of the agency model is to stop Amazon getting a monopoly and becoming pretty much the only effective ebook publisher around. Without the agency model, Amazon could easily discount everyone else out of contention. With it, publishers and other outlets stand a chance. But the law is a strange thing. When one company forces through a virtual monopoly, it is considered ‘competition’ and to be encouraged. When a group of companies try to get a good deal for everyone, it’s a cartel and to be destroyed. Hence the raids – and Esménard’s understandable conviction that “this operation is masterminded by Amazon”. At the moment, it seems that publishers are likely to lose the fight. It’s not only the law that’s against them, it’s the consumer. Publishers may see themselves fighting a noble fight against Amazon’s monopolistic evil, but consumers just see them notching up the prices. To give an example, just as all those raids were kicking off in Europe, a worldwide whinge was brewing up on a new site called Lost Book Sales . This is a place readers can go to complain if they’ve been unable to get hold of a digital edition of a book – or haven’t been able to buy it as cheaply as they’d like. Sample remark: “Too bad, so sad. You couldn’t get your shit together to let me GIVE YOU MY MONEY. Since you don’t want my money, I am going to pirate your work.” That’s 21st century morality writ large. Imagine a similar scenario involving being rude to a butcher and running off with a string of his sausages because you don’t like the prices he charges. Most of the rest of the site is similarly unpleasant; a further example of the impatient, right-here-right-now, screw-the-producer capitalism that’s so common on the internet. So far then, so yuck. But the editor of Lost Book Sales does make an important point: “The only reality we readers know is that we want to buy the book but can’t.” The customer may be unpleasant, but he or she is always right. It’s clear that publishers do need to up their game to accommodate the new demands. There’s also the fact that they’ve been pretty dreadful at digitising the backlists of their living authors, while those of dead authors are widely – and often freely – available. Publishers have to do something to win over people like those complaining on the Lost Book Sales, who, after all, represent pretty much everyone. The trouble is that Lost Book Sales ignores important realities in the book trade – such as the fact that digital editions still cost money to produce (and indeed that the physical costs of a printed book are only a small percentage of their price), that rights are hellishly complicated, and that authors fear losing out hugely if publishers start putting up their backlist digitally (since they would never go out of print and so never be able to escape their contracts). But the fact that customers have a distorted view of how much ebooks should cost is hardly the publishers’ fault. Especially since a new breed of “self-published” authors are starting to sell millions of the things at $0.99 or less on Amazon – which casts an interesting light on the recent declarations about ebooks outselling paper books. This perception that ebooks should cost next to nothing is a huge problem, especially if you’re a writer likely to sell anything under than 50,000 books a year, and hoping to have any kind of editorial support. Or if you’re a conventional publisher rather than Amazon. So when charging a reasonable price for ebooks is seen not only as unfair, but also illegal, it really starts to appear that publishers don’t have a hope. Publishing Ebooks European commission European Union Sam Jordison guardian.co.uk

Posted by on March 16, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.