Lipskar and Konrath on the Agency Model

A few days ago, Digital Book World published an open letter from literary agent Simon Lipskar to the Department of Justice. In the letter, Lipskar takes issue with the government’s reasoning and data in the anti-trust case against Apple and five of the Big Six publishing houses. Lipskar’s letter is lengthy and detailed. It’s definitely worth a read.

A couple days later, J. A. Konrath took on Lipskar’s reasoning and data in a blog entry. This piece, too, is worth a careful reading. It’s pretty convincing (admittedly, I’m one of those folks who finds Konrath convincing on just about everything).

What I want to take issue with is Konrath’s desire to prove the agency model is A Bad Thing. I’m not so sure that it is — at least not for him and for me and for other indie authors.

Konrath has illustrated clearly that authors sell fewer books and make less on each sale under the agency model. But that doesn’t mean that the agency model is bad “for authors.” It means it’s bad for authors whose work is being distributed under that model. For indie authors, the agency model — and anything else that keeps traditionally published books overpriced — may be A Good Thing. Maybe even A Very Good Thing.

Here’s my thinking:

Put on your fantasy hat, and imagine that things had gone very differently when Amazon first brought out the Kindle in 2007. Imagine that the big publishing had realized a game-changing event had occurred. Imagine that the head honchos at these companies had gotten together with their top executives and explained that things were going to change, and that there wasn’t a damn thing they could do to stop it. Imagine that they had set about reforming their businesses to prepare for the coming world — a world in which publishing would become predominantly digital within ten or fifteen years.

They would’ve started cutting their workforces through attrition and early retirements. They would’ve made all their authors’ backlists available, and they would’ve offered ebooks at prices far, far below those of paper books. Maybe they would’ve invented ereaders and POD systems of their own. That is, instead of being dragged kicking and screaming into the digital age, imagine that they chose race into it, competing with one another to see who could arrive first and best.

In such a world, would indie authors be seeing the success they are now? In a world where every novel that’s ever been traditionally published, including current best-sellers, was available on Amazon for between $.99 and $4.99?

I don’t think so. Some indie authors would be successful, sure, but I don’t think the explosion of indie success we’ve witnessed would’ve happened. I think the justifiably high cost of paper books and, more importantly, the consistent over-pricing of traditionally published ebooks have opened the door to the proliferation of financially successful indie authors.

Here’s why: there are a lot of people out there who love to read but don’t have much money. I’m one of them. Once I realized that there were tons of indie books out there that were just as good as traditionally published books but cost way less, my buying habits shifted. Big time. That kind of shift, writ large, explains why indie authors are doing so well.

Konrath’s blog entry quotes an anonymous letter from a publishing-industry insider who skewers Lipskar for implicitly asserting that books are “fungible.” Here’s one place where I’ll disagree with Konrath and his anonymous letter-writer: books are indeed fungible in certain situations.

The italicized qualifier is important. This is one of those issues where it’s easy to make someone sound stupid by putting extreme words in his mouth, an argumentative technique known as building a straw man. If you say, “books are fungible,” you sound like an idiot. Obviously, books differ from one another radically; there are many books out there I would love to read, and probably quite a few more I’d abandon after the first page. Such books are not interchangeable. Furthermore, I follow several fantasy authors and series quite avidly. When Jim Butcher brings out a new Dresden novel, nothing else will substitute. I must read that book immediately, and I would pay quite a bit for the privilege of doing so. A novel in one of the series I follow is not interchangeable with something else.

That said, if you give me a mass of 1,000 books I’ve never heard of before, by authors I’ve never heard of before, the books in that mass start out, in my mind, as fungible. Each one might turn out to be one of the best things I’ve ever read; each one might also turn out to suck. Are they fungible in a real sense? No, of course not. They’re all different from one another. But as an uninformed buyer, I don’t know about those differences, yet. I won’t know about them until I read the books.

So I take the 1,000 books and I start looking at their covers, titles, reviews, and descriptions. I begin downloading Kindle samples to see what I might like. Now I have more information to work with, and I’m able to weed out a lot of books that just don’t interest me. Let’s say I’m left with fifty books that I really want to read. I’ve gathered all the info I can about these books, and they all sound terrific.

Now, if I’m in Barnes & Noble, I can’t buy fifty books. Even at mass-market-paperback prices, I couldn’t afford it, not even spread out across a whole year. But let’s say I’m shopping on Amazon, and twenty of the fifty books are reasonably priced indies. I could buy three of the fifty that are traditionally published ebooks, pay my $35. Or I could buy one traditionally published book and ten indie books. I really enjoy reading, so I go with the latter option.

That’s the kind of situation in which books are fungible — you’re browsing, you have limited funds, and you’re looking for new things. You find a bunch of things that look promising, based on limited information. Then you have to decide which you’re going to buy. In such a situation, price is an enormous factor for many readers. Once you choose your books, buy them, and read them, they won’t be fungible in your mind any longer. In your mind, they’ll become the differentiated individuals they always, in fact, were. But before you read them, the situation was much more fluid.

That’s where the agency model — and the Big 6’s broader recalcitrance on pricing — may have helped the indie movement. When readers go shopping without a particular book or author in mind, there’s a window into which a new book or author can slip. If traditionally published books cost many times more than indies, there’s more chance the book that slips in will be an indie. This is what Lipskar is talking about when he asserts that “new publishers, self-publishers and retailer-owned publishers [are] providing consumers ebooks at lower prices than the agency publishers and taking significant market share from them in the process” (accessed 5/13/12).

Lipskar doesn’t seem to think the huge pricing advantage traditional publishers are handing to indies threatens his livelihood, along with that of everyone else involved in traditional publishing. If I were him, I’d be worried. What happens when “significant market share” becomes “majority market share”?

At any rate, I ask you this: why are we fighting the agency model? Sure it’s bad for the authors who are trapped in it, but that’s not us. Maybe someone can explain to me why I’m wrong. Until then, I’m thinking anything that pushes up the cost of traditionally published books and ebooks is A Good Thing for indies. Let the Big Six keep losing their market share. We know where those readers are going.

6 thoughts on “Lipskar and Konrath on the Agency Model

  1. Since receiving my Nook last year as a gift, I’ve discovered a whole bunch of new writers. Ones I’d never heard of before. The difference? The downloadable samples AND the prices. Some were backlisted titles, but that’s only lead to some of their current works as well.

  2. When prices of media are high, they’re a barrier to entry. Many are avoiding buying an ereader because the ebooks they most want are $14.99. If prices came down, more Kindles will be sold. That’s a bigger market, and more ebooks will be sold. When prices go down, people buy more. Low priced ebooks aren’t in competition with each other.

    Ex: Lee Child is $12.99. I won’t buy a Kindle because I want to spend $6.99 or less. Lee Child drops to $3.99. I buy a Kindle, buy Lee, and have cash left to buy Konrath.

    When agency pricing is gone, the pie will get bigger and we’ll all sell more copies.

    • Very good point, anonnamiss. Amazon must’ve been thinking along these lines when they started loss-leading ebooks at $9.99, and that practice was one of the reasons I bought my first Kindle (the other being that I couldn’t fit any more books in my house). I wonder, though, if the ball isn’t rolling fast enough that it doesn’t matter so much, now.

      It’s hard to know how many ereaders are out there, but it’s a lot — many millions — and tons of other people read on tablets or phones. And we’re not exactly a nation of readers. There may be enough ereading devices out there that we’ve moved past the stage where just getting people to try ereading was the challenge.

      Let’s say there are enough devices out there. Not as many as there could be, but enough. And many of these relatively early adopters are buying indies, perhaps in part because they’re cheaper (also because they’re as good). Word starts getting out about indie books. Every time a Fifty Shades of Grey phenomenon hits the mainstream media, that helps people realize that indie books are worth considering. In that environment — enough devices out there already, slow economic recovery, readers who’ve never tried an indie hearing about them and thinking “hmmm …” — indies may well be in competition with Child, and the fact that he’s $14.99 may well help us.

      Don’t get me wrong: I believe what you describe will happen. Eventually, Child will be $6.99 or less. Indies will lose their price advantage, but the pie will get bigger for everyone, and that’ll be a good thing all around. In the meantime, though, Child at $14.99 gives us an advantage, and that advantage creates a golden opportunity to continue breaking down the prejudice against indies. If we make the most of that advantage, by the time Child is cheap and every last person on earth has an ereader, people won’t be thinking in terms of “traditional” and “indie” any longer.

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