Books Don't Want to Be Free

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THE BOOKS ISSUE OCTOBER 8, 2013

Books Don't Want to Be Free How publishing escaped the cruel fate of other culture industries

You hardly have to wait in line at Barnes & Noble anymore. The cashiers stare into the middle distance, while on the sales floor, space for books steadily erodes. Instead: toys, magnifying glasses, doodads for the desk. Also: Nook devices, which are supposed to represent the future. Except the Nook division is actually doing worse than the stores themselves. Independent booksellers still have not recovered from the last decade’s brutality. And five major publishers just learned that, as part of their settlement of a price-fixing suit, they’ll have to refund about $3 for every electronic copy of a New York Times best-seller that they sold over a 25-month period. Reasons to fear for the fate of publishing are not difficult to find, and neither are the prophets of doom.

 

Step back and look at books in a wider context, though, and the picture changes. If you’re in the business of selling journalism, moving images, or music, you have seen your work stripped of value by the digital revolution. Translate anything into ones and zeroes, and it gets easier to steal and harder to sell at a sustainable price. Yet people remain willing to fork over a decent sum for books, whether in print or in electronic form. “I can buy songs for 99 cents, I can read most newspapers for free, I can rent a $100 million movie tonight for $2.99,” Russ Grandinetti, Amazon’s vice president of Kindle content, told me in January. “Paying $9.99 for a best-selling book—paying $10 for bits?—is in many respects a very strong accomplishment for the business.” At the individual level, everyone in the trade—whether executive, editor, agent, author, or bookseller—faces threats to his or her livelihood: self-publishing, mergers and “efficiencies,” and, yes, the suspicious motives of Amazon executives. But the book itself is hanging on and even thriving. More than any major cultural product, it has retained its essential worth.Of course, publishers think that $9.99 is still too low for popular e-books, an assessment that drove their ill-fated effort to work with Apple to take control of what they cost. (After racking up legal bills that “look like the unit sales numbers of Fifty Shades of Grey,as one of their CEOs put it, the houses settled anyway and incurred that $3 penalty and a raft of other punishments.) It may be that a higher price would be more equitable. But other media still have reason to look at the relative economic health of the book with envy. Putting together an album requires not just the talents of the musician, but expensive instruments and recording equipment, costly studio space, and a team of engineers and technicians. Each edition of a newspaper consumes enormous resources. Movies and television involve sinking millions into performers, crews, and effects. Yet audiences have come to believe they should get all that on the cheap, if not for free. Meanwhile, books—not as complex a production—have held up much better.

Part of the problem for journalism, music, and television is that they are vulnerable to disaggregation. Their products are made up of songs and articles and shows that have long been consumed in those individual units. Once the Internet made it possible to ignore the unwanted material, overall value slipped. Easy access to favorite singles opened those up to impulse buys—but also made purchasing the whole record feel almost indulgent, a splurge for audiophiles and diehard fans. Now the TV viewer wants “Breaking Bad” without bills from Comcast. The ability to score individual articles by the clicks and ad dollars they reap has exposed vital but embattled forms like international reporting and arts criticism to further pruning.

Hollywood has fallen victim not to disaggregation but to its opposite: Netflix and the like have bundled films into affordable smorgasbords, undermining the perceived value of each movie. (More recently, Pandora and Spotify have hit music from this second flank.) The dark side of digitization—piracy— is obviously another force at play. Sites like BitTorrent, following in Napster’s wake, have helped convince a generation that they shouldn’t have to pay for the goods.

 

In publishing, meanwhile, the deal with the customer has always been dead simple, and the advent of digital has not changed it: You pay the asking price, and we give you the whole thing. It would make little sense to break novels or biographies into pieces, and they’re not dependent on the advertising that has kept journalism and television artificially inexpensive and that deceives the consumer into thinking the content is inexpensive tomake. Two new services are vying to be the Netflix for e-books, but most publishers are wisely keeping their distance.

There’s more at work here, though. Even before the Internet, you could watch films at a discount, on VHS or DVD, so long as you accepted a downgrade in quality—no house-sized screen or transporting audio. Music fans, similarly, have traded the richness of vinyl to gain convenience. Some print stalwarts find e-readers a step down, but the fundamental experience of immersing yourself in a text is not bound up in any particular medium or venue. Reading never depended too much on sensual verisimilitude, only a mental leap from the words to the ideas they represent. The book is so low-tech, it’s hard for technology to degrade it.

The one place where books have been free is libraries, whose existence is instructive in another way: We’ve had libraries for centuries and fund them with public dollars because we view books not just as entertainments, but as repositories of culture and knowledge. Following the library’s lead, we hold on to our books and display them in our homes (in some cases even after we’ve switched to the Kindle). And while a certain amount of sharing—one reader passing a copy of a favorite title to a friend—has always been part of the trade, books’ perceived worth seems to protect them from outright online theft. “Book piracy is about to arrive on a massive scale,” a Telegraph headline announced in 2010—an evergreen prediction yet to pan out. A few publishers have experimented with selling e-books without the standard digital-rights management technology and have not seen bootlegged copies littering the Internet thereafter.

Other bottom-line figures underscore how well the shift to digital is working out for the book. According to the leading annual industry survey, net revenue in trade publishing has increased overall since 2008. While it’s true that the economy as a whole also improved during that period, that wasn’t enough to reverse the trajectory of other culture industries. What has really made a difference for publishers is that e-book revenue has skyrocketed—by more than 4,500 percent. Just as important, the boom has come at surprisingly little expense to higher- priced hardcovers and paperbacks, sales of which are only slightly down.

 

The profit picture appears more cheering still. Simon & Schuster reported in February that the company's improved fortunes in recent years were owed largely to “the growth in more profitable digital book sales as a percentage of total revenues.” A Power- Point slide presented by HarperCollins to investors this year indicated the same thing: “Historically, as e-books replaced print books, revenues declined slightly on a title-by-title basis. However, profitability increased significantly.” Publishers used to claim, at least to agents, that the low price of e-books ate up their savings on printing, shipping, etc. Not so, it seems.

It's not clear whether the situation changed, or if there was something strategic behind the publishers' cries of poverty. What does seem certain is that, despite their legal setbacks, the major houses have done their part to uphold the value of the book in readers' eyes. When those publishers came up with the pricing scheme that landed them in trouble, it wasn't a grab for short-term profit; the details are technical, but the upshot was that the companies actually collect less money for every e-book sold. What they gained in the bargain was the preemptive power to prevent Amazon from lowering prices to unsustainable levels. It was a long-term play to protect the worth of their product—so that, even if the whole business does eventually go digital, there will be enough value built in to  support the books of the future.

Evan Hughes is the author of Literary Brooklyn.

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posted in: books, publishing, amazon, piracy, netflix, barnes and nobles, culture

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