Did You Know?

It comes as no surprise to those of us in the book business that the media have devoted so much time and attention to e-readers this holiday season. After all, it’s the gadget du jour. No matter where you look, the stories appear the same … touting the multiple features, low cost, and ease of buying e-books. Why ruin a story with a strong dose of reality when it will only feel like a bucket of ice water or sound like sour grapes?

The book industry has long advocated and even embraced new formats. When paperbacks were introduced, reading became more affordable. Audio books allowed content to be enjoyed while driving or cooking and made it so much easier for the sight-impaired. E-books may be the latest format, but their emergence has opened up issues of privacy, censorship, market share, and the true costs of all that goes into publishing a book, as well as the value of an author’s intellectual property.

History has shown that Americans cherish their privacy and are careful to protect it. Yet technology is already encroaching on this coveted right, now that data mining goes beyond planting ‘cookies’ on our computers. Search Amazon.com for a book on a specific topic and you will likely find e-mail advertisements in your in-box from other companies — even if you only searched for the book and didn’t buy it.

For the most part, indie booksellers take the position that a customer’s request for a particular book should not be judged. If it’s available, they will offer to get a copy for you, even if they don’t like the book, don’t respect its premise, or agree with the ideology. In the last couple of years, Amazon.com removed listings of books from Macmillan, Ten Speed Press, and Melville House when the publishers would not agree to its terms. (Publishers felt the discount being requested was unreasonably steep.) Just like that – zap – books were censored not for content, but for demands for a higher than average profit margin.

Then there’s a question about the accuracy and integrity of industry data on e-book sales. For example, Amazon.com suggests that one way to meet their minimum order requirement for free shipping is to add cheap e-books from the public domain to your order. Since these materials don’t pay royalties and cost less than new books by living authors, adding a cheap e-book to an order still counts as one more e-book sold. We know that sales of e-books have soared, and that only adds to the media intrigue. Few know that the number is artificially inflated.

When it comes to e-book pricing, it seems that we’re in a situation where the tail is wagging the dog. Amazon.com has successfully established the average retail price of an e-book at $9.99, but how long can they plan on losing money on each new e-book sold? Not many know that the average cost to Amazon.com – even with a generous discount – is several dollars more per e-book than the sale price. From the onset, Amazon chose this pricing strategy to establish market dominance; and once that happens, prices will go up. Remember all those deep discounts the big box bookstores once offered when they were establishing stores in new markets? They eventually disappeared.

In several European countries, the law is such that companies can only discount up to 5 percent, which allows more diversity in the business community. That’s why you can travel throughout Europe and see town squares filled with independent shops and cafes. In the United States, there’s no such regulation and no limit to discounting. Corporations are better able to sustain losses until they have reached market dominance. Rarely will you find an independent business owner able or even willing to conduct business in this manner.

Technology may have improved our lives in countless ways, but it can have a negative impact as well. Issues of privacy and censorship, sustainable local communities with healthy economies, the survival of small independent business, and the vibrancy of Main Street America … all are at stake due to some of the business practices being used right now by those who have other interests than books and are not primarily devoted to the world of ideas. When profits are derived from the collection and sales of consumer data and unreasonable pricing demands, rather than a commitment to the promotion of books and reading, consumers aren’t getting the full story. It’s a teaching moment the media is missing.

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