This is the first in a little series of posts on why Amazon, Macmillan, and everyone else are all wrong about ebook pricing.

The myth of devaluation

If anyone ever tells you that low prices for ebooks are devaluing books, you can be sure of one thing – what you are about to hear is not a logical argument on ebook pricing.  Either this person is lying to you, or this person is making an emotional or psychological appeal to you to pay more.  You can not “devalue” an ebook by lowering the price.  You can undermine the leverage the seller has to charge a higher price, but you can’t make a potential buyer value the book less.  People like to confuse value and price.  They are related, to be sure, but are very different concepts.

Let’s look at an example.  Let’s say you and I have each written a book.  We have an imaginary consumer who likes your book twice as much as he likes mine.  If both books are priced at $10, he will certainly buy yours.  If I drop the price to $9, he’ll still buy yours because he likes you that much better.

But what if I drop the price to $1?  Have I devalued your book?  No, absolutely not.  He still values it twice as much as he values mine.  But my price is 10% of yours.  He’s probably going to buy my book, and he’ll do it because he’ll get half the enjoyment of your book at 10% of the price.  This is, for most people, a good deal.

Now, if we pretend that collusion and price fixing aren’t illegal (and let’s do that, just for the sake of argument), you could call me and we could agree to both charge $10.  This would work if we were the only two games in town.  But we aren’t.  We have to compete with not only all the other authors out there, but all the other things that people might possibly do with their free time.

And there will always be cheaper alternatives to your book (well, there’s maybe a case or two where that’s not exactly true, but we’ll get to that another day).  Movies, music, walks in the park, the internet, the list is endless.  Blaming me for “devaluing” your book is just silly.  You might as well blame the beach for all the nice sand there is to walk on, and the cool breeze coming in off the water.

So what can you do?  First of all, the only reason that what I’m doing matters to you is that I might be doing something you hadn’t thought of, and you can learn from me.  Beyond that, don’t worry about me.  Worry about making your book the best it can possibly be, and worry about how to get more people aware of it.  There are a million ways to do this, and none of them start with accusing your fellow authors and publishers of “devaluing” your work.

See part 2

It gives me great pleasure to introduce you all to Manfred Macx, a new kind of publishing company.  It’s not a new idea – bands big and small have been doing it for a while, and authors are just starting to try.  But as more and more of our media of all kinds is being distributed digitally, where making an extra copy (or a thousand) is nearly instantaneous and effectively free, we have to rethink the way we compensate creators of content.

At Manfred Macx, the author has a book, and the author has a goal, a target dollar amount that unlocks the electronic version of the book.  The author can sell almost anything;  Paper copies of the book, dinner with the author at a fancy restaurant, a character in the book named after you – whatever.  When the target goal is reached, everyone gets the ebook.

Beyond that, Manfred Macx is creating a community around authors and fans, fostering communication and connection in ways that weren’t possible before the internet changed our lives.

Watch this space for updates, or sign up for the mailing list.  We’re looking for authors right now, and expect the site to go live in November.

You probably think this blog is abandoned.  It is not, really, though it is on extended hiatus.

When it returns, which I hope will be early fall, 2009, it will be more than a blog.  It will address some of the ways in which the publishing industry is horribly broken.  I will explain what’s been keeping me busy since I last posted, and why it’s more important to me than keeping up with the blogging.

The  world’s  leading  provider  of  e‐reading  solutions,  Netherlands  based  iRex Technologies  (www.irextechnologies.com),  has  today  announced  that  it  has  reached  agreement  with  Adobe®  to license  the  Reader  Mobile  9  SDK  which  provides  support  for  the  PDF  and EPUB  file  formats  plus  support  for Adobe’s content protection technology which it will offer on its iRex DR1000 series.

It’s great that iRex is supporting EPUB.  The more support this format gets, the more likely it is we’ll have a standard format for ebooks across all platforms instead of all these competing formats.  Imagine if you needed a different web browser for different websites you visited (Beyond the terrible websites that only work in Internet Explorer).

And reflowable PDF support is fine – PDF isn’t an open standard, but it’s widespread enough that it doesn’t have the large drawbacks of some of the other formats.

Of course, no format support is complete without the inevitable DRM announcement.  It’s nice to call it “content protection”, but we all know it’s anti-consumer technology that doesn’t work.

An extra kudos to iRex for including this message on the email they sent me with the attached press release (a PDF) – “Please consider your environmental responsibility before printing this e-mail on paper.”  I not only considered my environmental responsibility, but also my convenience, and didn’t print a piece of paper for me to lose.

You can see the press release here.

Chris Andrews, the Executive Producer of Gutenberg.com, is particularly excited about bringing together people who read ebooks into a new network, where they can learn, discuss, and have some fun. “I think it’s important that we remember that reading is fun. It’s fun whether it’s in a printed book or an ebook. And people love to discuss books. Let’s not let the “computer syndrome” hit us, where we make everything complicated. Keep it simple, this is a book, everyone knows what a book is. It’s been around for over 500 years.”

A lovely sentiment, and it really gets to the heart of the problem with ebook readers.  It is not that people are sitting around wishing for a new device to allow them to buy their beloved books all over again.  People are thinking, “I live in a world where information is increasingly digital, and my books remain mostly unchanged in 500 years.”

If we focus on what is great about books, and what we can add to them now that internet connections are everywhere new things are possible,  the ebook readers will come.

The new Gutenberg.com is hoping to do that.  They have a social network built on Ning that they’d like you to be a part of.  They have a blog.  And if they’re lucky, they’ll ride the coattails of the Amazon announcement rather than get buried by it.

Press release:  Gutenberg.com Officially Opens – Invites Ebook Lovers and Neophytes Worldwide to Become Part of Growing Ebook Community.

Google is constantly updating its library of public domain books, currently 1.5 million strong, so you should expect an ever-increasing number of books available to read both on both PCs and on your phone.

While it’s great that Google is making more and more books available in electronic format, I hardly think Amazon is worried about error-filled scans of public domain books.

Article:  Google Makes iPhone the New eBook Reader: Watch Out Kindle – PC World.

There’s a long and interesting article at Ars Technica from a guy who’s been in the ebook business for a long time.  His point is, basically, that everyone has gotten it wrong for the last ten years, making the same mistakes, over and over.  And the big players today are still making those mistakes.

He lists many of them, and most will sound familiar – Ebooks are too expensive;  DRM hurts honest customers and doesn’t do a thing to stop piracy, which is a vastly overstated problem anyway;  No one has tried anything really and truly new with ebooks.

It’s all a little depressing.  I was hoping he’d get to some brilliant idea to save the book industry, but he never really does.  But he gets it – he sees the ridiculous state of the industry now, stubbornly clinging to the old way of doing things instead of embracing all the new things you just couldn’t do before.

The world is still looking for publishing business models that work and will continue to work when all books are ebooks.  Someone could make a lot of money . . .

If electronic publishing—and that includes the reality that it’s very easy to “pirate” electronic text—is a form of publishing that some authors and publishers have a hard time adapting to, then that’s just too damn bad for them. As my father liked to say whenever I’d whine about something as a boy, “things are tough all over.” If they can’t cut the mustard, then it’s just a fact that over time they will fade away.

A comment I left at Teleread prompted a contributor there to send me to an interesting article on the future of novels.  My first thought was, “that’s the biggest and most obnoxious tip jar I’ve ever seen on a website”.  That led me to think, “There’s no way the person who wrote this article has any concept of infinitely copyable digital content”.

But I was very wrong.  And the article comes from an author, someone who has experienced some of the changes in the world of publishing fiction, which puts him in a much more qualified position than many to speak about the industry.

He makes the point that some will be harmed by changes – the electronic revolution will mean that some won’t be able to make a living by writing any more.  That’s unfortunate – no one wants anyone to lose their livelihood.  Certainly when I say that you can’t charge for an ebook, I don’t mean that I think authors should work for nothing just so I don’t have to spend $9.99 at Amazon.

I do think that authors need to find new ways to make money, and it’s nice to see some authors agreeing with me.  People are thinking about new ways to publish fiction.  It’s not going to be the end of fiction, but it might be the beginning of the end of the way the publishing industry does business today.

Luckily, many authors will adapt, and many publishing companies will adapt, and people will still get to consume fiction.  But the way it gets paid for will probably be very different.  Not scary, but different.

The proper price for an ebook in relation to a printed book is an increasingly common debate.  It’s very difficult to put a price on something that you can give away as many times as you want without losing anything.

Publisher Walt Shiel offered these thoughts: “. . .We publish all our e-books with a coupon for a discount (equal to the e-book purchase price) applicable to the purchase price of the print edition.”

It’s nice to see publishers realizing that ebooks can be used as promotion for print editions.  But even this is not a sustainable business model.  The day will come when printed books are merely collectors items, something to keep behind glass.  What will ebooks be used to sell then?  Some authors might give away ebooks to promote speaking tours, seminars, or some other sort of access to the author.  Some could use them to promote limited print editions, such as signed copies.

And for some, this will be enough.  But there’s a limit to the number of collector editions anyone can sell, and many authors aren’t interested in public speaking or teaching.  It’s different for musicians, in the same boat in terms of distributing digital content, but much more likely to do live performances, and therefore able to give away content to promote concerts.

The search for an effective business model for ebooks and the next generation of readers will continue.  The music industry may be a good guide, but the solution may come from an entirely unexpected source.

Article:  Ongoing Reader Debate: Why Are E-Books So Expensive? – mediabistro.com: GalleyCat.

So how does it differ from the flock? Well, if you can’t find anything to carry around and read then the web service lets you make your own ebooks. A file converter service allows a user to convert text files, documents, RSS feeds and even web pages into eBook format.

The fact that we need a service to take text documents and create ebooks from them to read on the device of your choosing is a failure of the ebook reader market.  If you make a reader that can’t render a particular file format, it’s your responsibility to make sure you handle the conversion.

Article: Make Your Own eBooks With eBook Hood | MakeUseOf.com.