The American Booksellers Association doesn’t like Amazon.com, Target, and WalMart selling $25-$35 hardback bestsellers for nine bucks or less. In this letter, addressed to the Department of Justice, the ABA calls for a full-fledged anti-trust investigation of the practice.
Some excerpts from the letter, and some reflections, follow:
Publishers sell these books to retailers at 45%-50% off the suggested list price …[and Amazon, Target, and WalMart] are, in fact, taking orders for these books at prices far below cost.
This practice is nothing new. Clyde owned an independent video store for more than twenty-five years, and during that time, Target and WalMart constantly took losses on tapes and DVDs in order to offer them at prices local dealers couldn’t match.
Rather than write the Justice Department, Clyde competed in the only way he could: by offering a level of customer service that big-box stores couldn’t match (and employing better-trained, higher-quality staff.) He also worked hard to make Video Library a place customers would fall in love with … the kind of place locals would support because paying more for a video in our store was more satisfying than paying less for it at WalMart.
The ugly truth is this: if local booksellers cannot find ways to make their higher-priced offerings more appealing than the discounted items at Target — if they can’t offer customers a *reason* to spend more on the same books — then, ultimately, these little shops aren’t going to survive.
Because publishers print list prices indelibly on jacket covers, and because books are sold at a discount off that retail price, there is a ceiling on the amount of margin a book retailer can earn.
It’s true that books arrive from the publisher with a price stamped on the spine … but this, in the end, is only a “suggested retail price,” and bookstores can and do sell the books for more.
I know of one independent bookstore, for example, that offers customers with deep pockets the opportunity to pre-order autographed versions of new hardbacks for special delivery on the day of release. Books sold through this subscription-based service command premium prices because customers see autographed first editions as a potential investment, love knowing a copy of the book is reserved for them, and enjoy feeling like members of a book-loving “upper class.”
Subscribers to a service like this one aren’t going to be wooed away by steep discounts at Target.
Instead of protesting market trends and ignoring signs of the times, booksellers might be better served by asking, “What can we do to make shopping here better than shopping at WalMart?”
By selling each of these titles below the cost these retailers pay to the publishers, and at the same price as each other, and at the same price as all other titles in these pricing schemes, Amazon.com, Wal-Mart, and Target are devaluing the very concept of the book.
What’s next — asking the Justice Department to close libraries because the practice of lending books to people creates an expectation that books should be free?
The price of a book isn’t based on humanity’s innate, subconscious concept of what a book should sell for. Hardback books cost what they do because acquiring, editing, typesetting, proofing, printing, warehousing, promoting, and shipping them is a terribly inefficient (and, therefore, terribly expensive) process.
The harsh truth: a distribution channel now exists which is efficient enough to acquire, deliver, and supply books — and subsidize steep discounts through the sale of other merchandise. If this experiment proves successful — which remains to be seen, by the way — then the publishing industry had better do more than whine about it.
It’s also important to note that this episode was precipitated by below-cost pricing of digital editions of new hardcover books by Amazon.com, many of those titles retailing for $9.99, and released simultaneously with the much higher-priced print editions. We believe the loss-leader pricing of digital content also bears scrutiny.
This is where things really get bizarre. Essentially, the ABA is suggesting that the digital edition of a book should cost what the hardback edition of a book should cost — because they need people to keep associating the concept of a new book with the price of a hardback.
Nonsense. “Printing” digital books does not require ink, paper, or glue. No warehouse space is required to store them; no shipping costs are incurred in delivering them. As costs associated with producing, warehousing, and shipping books decline, it is not unreasonable to expect the price of the final product to fall in tandem.
One might also argue that digital books are a better investment of scarce publishing resources — since, presently, they cannot be returned for credit (eliminating losses due to charge-backs) and cannot be loaned out (eliminating revenue lost when cheapskates read borrowed copies for free).
(Quoting David Gernert, John Grisham’s well-paid agent): “If readers come to believe that the value of a new book is $10, publishing as we know it is over. If you can buy Stephen King’s new novel or John Grisham’s ‘Ford County’ for $10, why would you buy a brilliant first novel for $25?”
People interested a John Grisham novel *because* it costs just ten bucks are not, in my experience, the same people out scouring the slush pile for brilliant first works from unknown novelists.
But this is neither here nor there. If we want to find the criminals who are, in Mr. Gernert’s words “taking consumer’s attention away from emerging writers,” we need look no farther than the publishers themselves. Publishers created and are maintaining the cult of celebrity that drives the “blockbuster” mindset. Publishers elect to pour millions into promotions for high-profile books, while leaving the vast majority of first-time novelists to promote themselves.
It could be argued that this entire “crisis” has its roots in the industry practice of spotlighting blockbuster books as a means of keeping an antiquated, inefficient system afloat.
There is simply no way for ABA members to compete. The net result will be the closing of many independent bookstores, and a concentration of power in the book industry in very few hands.
Power in the book industry is *already* in very few hands. Except for small independent presses, monstrous corporate conglomerates own the big publishing houses. Except for the remaining independent bookstores, a handful of chains (Barnes and Noble, Borders, and, to a much more limited extent, Books-a-Million) dominate sales (and even define what kinds of books will be produced, and in what formats).
If avoiding the concentration of power in just a few hands is the goal … the ABA has waited far too long to start the fight.
If left unchecked, these predatory pricing policies will devastate not only the book industry, but our collective ability to maintain a society where the widest range of ideas are always made available to the public, and will allow the few remaining mega booksellers to raise prices to consumers unchecked.
The ABA would like to position the independent bookseller as the last line of defense for the free exchange of ideas in America.
In truth, we already have a very successful channel for the free, public exchange of ideas: the Internet. It is cheap. It is accessible. It is efficient. It is frictionless. It is stable. It requires little or no overhead to maintain.
It also makes many very fine, but inefficient and antiquated technologies and business models irrelevant.
It is not going away, and things are not going to go back to the way they were.
Rather than ask the government to protect a mismanaged, bloated, and inefficient industry, the ABA would do better to help its members embrace some uncomfortable truths:
– Times have changed. For years, the book industry has been about creating, selling, and moving thick, heavy objects from one place to another. Just as downloads have slowly rendered vinyl discs and CDs redundant for most consumers, the arrival of the functional digital book will transform book publishing from an industry into a niche market.
– Things aren’t going to get better for traditional publishers. Authors don’t really need publishers or agents any more; instead of giving up the lion’s share of profits to a corporation, writers can quickly, effortlessly, and profitably distribute their work directly to their readers.
– Things aren’t going to get better for independent booksellers. As good e-book readers become ubiquitous, there’s not going to be as much need for quaint little shops with book-lined shelves.
It’s fun to rail against “the big guys.” People can spend a lot of time and money investigating anti-trust practices and calling for protectionism.
None of this is going to stop the decline of an industry whose entire foundation has been erodedby the advancement of digital technology.
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