The “$9.99 Problem”

The New York Times is reporting that the U.S. Department of Justice will take Apple and two major publishers to court in an antitrust suit. Three other publishers initially named in the suit have agreed to settle out of court.

At issue is the “agency model” Apple negotiated for selling ebooks from major publishers. Before Apple’s new approach, ebooks were being sold according to the “wholesale model” publishers and brick-and-mortar bookstores have used for ages: publishers sold their books to bookstores for a set amount (half their retail cost, for instance), and bookstores resold them to customers for whatever price they wanted. The wholesale model allowed Amazon to sell ebooks to customers for $9.99, even though Amazon sometimes took a loss at that price. The agency model, in contrast, allows publishers to sell their books through online retailers, such as Apple, for whatever price the publisher wants. The retailer makes its money through a percentage commission on each sale.

Because the advent of the agency model brought an across-the-board increase in ebook prices, the Department of Justice is accusing Apple and the five publishing houses of price-fixing.

I have mixed feelings about this case. I’m all in favor of there being multiple ebook retailers, and Amazon really had a corner on the ebook market before the agency model took effect. Now Amazon’s share of the market has dropped from 90% to 60%, according to the Times. On the other hand, ebooks cost way too much, given the greatly reduced costs involved in producing and distributing them. There’s no reason we should have to pay $12.99 or $14.99 for an ebook. The price pressure Amazon was exerting would, over time, have forced publishers to become leaner, meaner companies capable of making money at a much lower ebook price point. Even $9.99 is way too much, if you ask me.

So You Want to Be a Writer . . .

. . . but how do you share your work with the public?

Traditionally, you send a proposal or manuscript to an agent, and if you look promising, she agrees to represent you. She submits your work to a publishing house. Once accepted — or rather, if accepted — your book appears in hard copy and is sold by retailers. Every six months, your publisher sends you a check reflecting your royalties on those sales, which will generally be between 10% and 15% for hardcovers and less than 10% for paperbacks.

Why do authors make so little per sale? Well, traditional publishing is expensive. You have to pay for big offices full of people, offices that are air-conditioned in the summer and heated in the winter. Those people need computers and desk chairs and health insurance and 401Ks. You need presses. You need a whole bunch of paper. You need shippers to cart those books all over the country — trucks and gasoline and drivers. You need advertising. And then there are the retailers, who also have buildings and employees and so forth. Lastly, your agent takes a cut. When you’re trying to support all that on $7.99 mass-market paperbacks, the author’s slice gets pretty slim.

Maybe there’s a better way. What if you cut out the publishing house, with all those desk chairs and 401Ks? What if you cut out the paper, and let the woodpeckers keep their forests? What if you cut out the shipping companies, with their great big trucks? What if you cut out the brick-and-mortar retailers? What then?

If you get a 6% royalty on a $7.99 paperback, you make $0.47 per book. If you sell your work as an ebook through Amazon, you can price it at $2.99 and make $2.09 on each sale. As the author, you make four times as much; readers’ costs are more than halved. Maybe readers can buy more books. Both authors and readers benefit, right?

So why do successful authors still overwhelmingly choose traditional routes to publication? With a few well known exceptions, authors seem unwilling to abandon the big-house paper book and its tiny royalty.

There’s more going on here, I think, than fear of change. In truth, traditional publishing offers some perks that are hard to replace:

  1. Quality control. Agents and publishers act as gate-keepers, sifting through masses of not-very-good-to-downright-awful manuscripts so that readers don’t have to. For indie books, this gate-keeping function matters in absentia: readers know that no gate-keeper is at work, so they tend to assume the worst (that indies are the books that couldn’t get past the gate-keepers because they’re not as good).
  2. Editing. Very few authors have a universal grasp of writing mechanics. Almost everyone has at least one blind spot and probably more than one, and everyone — everyone! — makes typos. Furthermore, as any writing teacher will tell you, editing your own writing is a lot harder than editing someone else’s. Publishers agree to edit your work so your blind spots won’t piss off your readers. Editing can also improve your manuscript in more global ways.
  3. Design. Readers expect aesthetically pleasing, professional book covers. Publishers employ graphic designers who can make them.
  4. Marketing. Your book could be the greatest thing since sliced bread, but if no one knows it’s out there, what’s the point? Publishers employ marketing experts; indie authors may not know anything about marketing.

All these points can be subjected to quibble. “The copy-editing on my book sucked!” one author might lament. “The cover they made was heinous!” another might complain. “Marketing?” another might sneer, “no way — my publisher spent all their marketing dollars on someone else.”

But however imperfectly individual publishers might provide these services, publishing houses remain the readiest way of accessing them. Many first-time authors have no idea how to find truly professional editing and design services. Sure you can hire someone who advertises herself as a copy-editor, but how do you know if she’s really good? And as for marketing . . .

Well, here’s one small place where I can help. It can be tough to get indie ebooks reviewed — there are a lot of them out there, and only a few sites and bloggers are willing to review them. Well, I won’t reject your book because it’s electronic — in fact, I won’t accept anything else. And I won’t reject your book because it’s self-published — in fact, I won’t review it if a traditional publisher is standing behind it.

So send me your indie ebooks. I won’t get to all of them. If this blog generates a lot of interest, I may not get to most of them. But I’ll get to some of them, and every little bit helps.