Tech Friday: Like Falling Dominoes

falling_dominos_smallJust days after Amazon conceded to MacMillian’s demands for an agency model for e-book pricing (ie, variable pricing), Robert Murdoch’s Harper Collins started rattling it’s saber that it wanted the same deal.  By the end of the week Hachette had joined Harper Collins.  So like dominoes, the major publishers are falling in line to continue their old publishing strategy of initial high price (hardback), price drop 1 (trade paperback) and price drop 2 (mass market paperback for digital books.  Since Amazon capitulated to MacMillian, they will have to do the same with the publishers.

This development does bring up some questions about the future of digital manga.  Since 2002, manga has been at the price point of $9.99.  That seemed to be the sweet spot that helped it to grow to the point we see it today.  There has been some variation on that, with publishers trying a lower price point of $7.99 for more popular books and a higher price point of $12.99 for titles with a more dedicated audience.  With the dip in the economy, there was a rise in several titles, but because these changes have been by only a few dollars, fans have beared it.  But what’s going to happen if/when we start seeing digital manga?

Publishers claim that Amazon’s price point of $9.99 “devalues” books because it puts the e-book at lower than a hardback.  I don’t see their point.  Am I “devaluing” a book if I choose to wait for the mass market paperback, which is often 5 times less than the hardback?  Hardly.  I’m making a choice to get a smaller and less expensive book.  Pricing an e-book at $9.99 doesn’t devalue it in anyway.  What it does is throw publishing’s old model out of whack, and just like the music and TV and Movie industries, they don’t like the boat to be rocked.  Music and Movies are still kicking and screaming even though they’ve probably seen more growth in the last 10 years than in the previous 20.

Will manga become subjected to the same kind of pricing when it becomes digital?  The public’s perception is going to be that digital manga be priced at probably half its print price, around 5.99-6.99.  All three of the publishers pushing for Amazon’s change  are also involved in manga.  MacMillian publishes distributes First Second and Seven Seas Entertainment.  Harper Collins publishes Tokyopop’s YA adaptations, and Hachette is the parent of Yen Press.  Will these publishers push for the same arrangement for our favorite titles as for their prose titles?  Will we start to see more variable pricing in our manga than we already do?  I hope not.  The pricing structure we see now, which is based on demographics seems to be working.  And there’s no reason to fix something that isn’t broken.  We don’t need to see any more publishers falling into this line that may do more harm than good in the end.  Hopefully manga publishers won’t be as short-sighted.

8 thoughts on “Tech Friday: Like Falling Dominoes”

  1. Great post, Lori! It doesn’t make much sense to me to raise prices of luxury goods when the economy still stinks. The effect for me personally is to dust off my library card and just save myself the money.

    1. Yeah, it doesn’t make much sense to me either, but we are dealing for large corporations where common sense isn’t allowed. I’ll just keep hoping my unfounded fears remain just that.

  2. They’re not at all unfounded. The fact is, these large publishers and media conglomerates are really no longer necessary in the modern world but they are fighting for a business model that was outmoded 20+ years ago. In an era when people can self-publish their own works, big name media companies are only a means to distribution and even that is changing. Most of these companies are afraid of losing their cushy jobs when people realize they are entirely irrelevant.

    They could work to ensure their continued survival by making themselves actually useful but they’re so used to being able to do anything they want to do and nobody having a choice in the matter that they freight train will have run them down long before they hear it coming.

  3. Brian, as a former book editor myself, I disagree about publishers. They serve very valuable quality control functions, both as gatekeepers and as editors. Yes, anyone can publish anything thanks to the Internet, and the result has not been a flood of genius—there’s a lot of crap, some mediocre work, and the very occasional flash of genius. As both a writer and an editor, I am well aware that every work can be improved by a second set of eyes. Editors, copy editors, designers, production people, all specialized in what they do, work together to make a book read well and look good. No one person has all those talents. I do agree that the business model is outmoded, but that has to do more with the marketing piece than production.

    And Lori, here’s my issue with e-books: Publishers can come up with all sorts of reasons why they charge what they do, but if people perceive an e-book as worth less than a paper book—and people do, for very valid reasons—then they won’t be willing to pay as much.

  4. When publishers say ebook pricing “devalues” books, they are referring to the lifetime profitability of the book, not necessarily the pricing of hardbacks versus e-books. You’re right in that they are used to the “old system,” which is to sell high at the beginning, then dynamically adjust the price as demand rises or falls. Anecdotes suggest ebooks have not become a “new” revenue stream for publishers, merely siphoning some hardcover readers away from hardcovers instead. Their profit margins on hardcovers are bigger than paperbacks and ebooks, ergo it’s in their interest to protect hardcover sales.

    Second, movies and music have *not* done better. They report higher revenue every year, but revenue =/= profit. Movies are selling less tickets at higher prices, and DVD sales are practically on the verge of collapse while Blu-ray has not picked up the slack. Music industry profits are down 50%. What all this has translated into is less risk being taken on original properties, and more budget funneled into “sure-fire blockbusters,” i.e. sequels for movies, shallow teen flavors of the week for music. Some may see that as a blessing, of course; the most interesting music are usually found online these days. Yet no individual has the resources and infrastructure to really compete with a commercial release, at least not yet.

    There are all kinds of conflicting interests pulling on traditional publishers. That shouldn’t be forgotten in any such discussion about virtual content. As to whether publishers are still needed in this day and age, that’s a separate quandary entirely. But until an individual can make as much money as JK Rowling self-publishing on the net, and online can pay all the salaries of all the professional writers in the world that exist, it might be too soon to consider. The old system is still here, because it still pays best.

  5. I think the truth, as Simon suggests, is somewhere in-between.

    A lot of people don’t realize just how the “pie” of a book cost is distributed–I do, because I used to work at a bookstore.

    A lot of people don’t appreciate the power of a good editor. I complain about this all the time, especially in journalism. (I’d also argue that some editors aren’t really allowed to edit, and that’s how we get book bloat.)

    On the other hand, I don’t think even those of us who understand the challenges of publishing are willing to pay over a certain price point for anything digital. I’m getting more digital-oriented, but at the end of the day, I like a physical object to read and will pay accordingly. The digital copy has to be less–at least for now.

  6. “MacMillian publishes First Second and Seven Seas Entertainment.”

    To clarify, Macmillian is Seven Seas’ distributor, not publisher. Seven Seas is still in charge of all of our own titles. Hence, we started releasing a number of our OEL titles last year as ebooks on the Kindle at a $3.50 price point.

    Licensed manga from Japan would likely have to cost more due to the extra licensing costs and approvals that would be required from the Japanese publishers, though. (That’s if the Japanese even allowed a book to have an ebook version.)

  7. Brigid, certainly there are some elements of the modern publishing structure which are useful, but there’s also a lot of dead wood sandwiched in between which has to be paid for, thus higher prices to cover unnecessary middle management, etc. Even with editors and the like, the mix of crap to quality remains about the same, lots of stuff that comes out of the major publishers is garbage, it’s just well manicured garbage. I’d be all in favor of much more lean, mean publishers without the dead wood and with an actual dedication to the best, most modern publishing and distribution models coming to the scene but I’m not holding my breath.

    Further, e-books *ARE* worth less than physical books for the very fact that they are not physical. Once you read it, what do you do with it? You can’t sell it. You can’t give it to a friend.. You can’t donate it to a library. You can either let it clog your hard drive or you can delete it. Of course nobody in their right mind is going to pay full price for something that doesn’t come with full benefits, nor should they.

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