Sunday, March 11, 2012

Rushdie and "napsterism"

"Anyone who thinks that fair pricing that allows authors to make a living is a cabal or cartel system is deep in the grip of Napsterism." - tweet by Salman Rushdie

I think Rushdie is arguing for the Agency Model. Which is the model that lets publishers enforce a price for a book, which was pressured on Amazon by the big publishers, no longer allowing them to put bestsellers for sale for under ten bucks, but letting publisher set a higher price if they wish. This model is now under attack legally, because it was enforced by a "cartel". 

The flaw in Rushdie's thinking here is, I think, that "fair pricing" fails to take into view that sales drop with higher prices, so maximum profit is found somewhere in the middle. It’s great that an author wants 20 bucks for his book, but if that price cuts sales by 80% compared to ten bucks, it helps him very little. 

Where the "middle" is, is of course the Question. One can get survey software which plot a bell curve based on a survey one makes and takes. 

The second flaw is that arguing against enforcement of high prices is hardly "napsterism", by which I take it he means that a person wants to get everything for free no matter what. That's quite a leap from "over ten dollars is too much for a normal ebook" to "I want to get all ebooks for free".

I'm not arguing against people's rights to set their own prices, that is of course a given right. And indeed Amazon's strategy, to buy books at full price and sell them at a loss to gain market share, is debatable from competition viewpoints, and certainly from their competitors' viewpoints! But it's a complex issue. 


Bruce W. said...

The other problem he ignores is that e-books are cheaper to deliver to the customer: no printing, no massive warehouses, no shelf space, etc. etc. I don't mind splitting these reduced costs a bit with the producer, but it really makes me angry when the price for a e-book I download is the same for the identical book I pick up at my local bookstore.

Eolake Stobblehouse said...

Yes indeed, you are far from alone in this.

I've heard the argument that printing/dist is just a small part of the cost for publishers, but I think that if this is so (given how expensive these things are), then their costs are probably out of control, with a big empire left over from the paper book heyday, lots of staff in premium offices in Manhattan and so on.

ganesha games said...

Unless we are talking high-end art books (large format, printed on very good paper, etc) the economy of scales is such that printing is NOT such a determining factor in pricing a book.

When a big publisher pays 80c to print a paperback and maybe 40c for its various digital costs (formatting, shelf space on vendors' sites, various promotional expenses), the difference between the paper and the digital version can't be dramatic. Especially since the digital version still sells less than the paper version, and potentially causes more losses due to piracy (second-hand sales may cause losses in paper but not in potentially big numbers like piracy).

I don't have hard numbers, these are only guesses based on talks with people in the industry.

Eolake Stobblehouse said...

I imagine you're right.

So of course this means that the ebook revolution is a great advantage to the small and self-pulisher, and actually a disadvantage to the big publishing companies, since people expect to pay significantly less for ebooks.

Well, my heart doesn't bleed too much, it was a playing field which badly needed some leveling.

Eolake Stobblehouse said...

Somebody on Twitter suggested self-publishing to Rushdie. Not a bad idea. Normally authors get only a couple of dollars per book, which means if they can sell them themselves for a couple dollars and sell much more (due to lower price), they could make much more money.

Anonymous said...

The flaw in your thinking is that while it's obviously true that putting a hugely lower price on a book will sell more copies authors only get a small percentage. Not a problem for well established writers but a bit of one for the new guy.