Back in the 90’s and early aughts when I was collecting comics, prices were in pretty rapid rise. The publishers always blamed the increased cost of paper. So when they were $1.25 when I started collecting and $2.25 when I stopped several years later, it was all about the paper. Comics cost upwards of $4 a piece now. Now, you can get an ecomic, and it will cost you… about $4. Dang the rising costs of paper.

Peter Osnios thinks the courts are about to hurt the book business:

To get a sense of where the pricing issue now stands beyond the legal battles, I embarked on this simple exercise: I went to every major on-line retailer and a selection of traditional booksellers to find out what they were charging for Krugman’s End This Depression Now. The title was published last April and reached as high as number 17 on the New York Times bestseller list for printed books. A starred review in Publishers Weekly concluded, “Krugman has consistently called for more liberal economic policies, but his wit and bipartisanship ensure that this book will appeal to a broad swath of readers from the Left to the Right, from the 99% to the 1%.” According to Norton, the book has sold 30,000 copies in print, with e-book sales of 25,000. The list price for the book is $24.95, and every bookstore I called is selling it at that price. You can also order it directly from the publisher’s website, but that comes with a shipping charge and sales tax where required.

Here is where the pricing becomes interesting. Amazon’s hardcover price is $14.71, with no shipping charge for customers who pay an annual fee of $79 for Amazon Prime and two-day delivery. The Kindle edition is $9.48. At BN.com the hardcover is $14.71, but the e-book price is $13.72 (BN.com has free shipping for orders over $25). Moreover, in the Barnes & Noble bookstore, the hardcover is $24.95. On Apple’s iBook, the price is $11.99. The Sony store charges $14.99, and on Kobo, which was recently named the e-book provider in the coming year for independent booksellers, the price was $15.49. Only Google Play matched Amazon at $9.48.

The end result of all of this, Osnios believes, is that cheap will rule the day and that those who are able to sell cheap, like Amazon, will be able to force the price down to the point that everyone but Amazon will be harmed, including the consumer. The consumer, Osnios explains, will be harmed by the publishers because “the result will be fewer books that matter — like [Krugman’s book] — whether in print or digital formats. ”

Well, I can safely predict that he is wrong on Krugman. So wrong, in fact, that it calls the rest of what he has to say into question. Books like Krugman’s will always do well because they’re safe. They might not give him as much of an advance, but I don’t think Krugman is going to forgo writing a book because his advance is $x rather than $2x. The danger, to the extent that there is one, lies in unsafe authors. Any sort of risk-taking.

This may be inevitable in any event. It may ultimately not actually matter insofar as the reader is concerned. With self-publishing becoming increasingly economical, the publishers can essentially force would-be authors to make a name for themselves before signing them anything with an advance. Maybe a tenured professor at George Mason University won’t write a book to be self-published that he otherwise would if he were to get an advance, but… vanity is a pretty powerful thing.

There is a possible concern that quality will drop and we’ll have to start getting used to typos and shoddier editing, but this is not end-of-the-world stuff to me. and honestly, the risk of such is not worth the upcharge the publishers are demanding. The lack of sympathy I feel for publishers who have been trying to keep ebook prices comparable to physical book prices is not insignificant here. It’s not just that Amazon is wanting to sell me the books for less. It’s that Amazon prices actually make sense to me in terms of what I am getting.

Arguments about the increasing costs of paper aren’t going to cut it anymore.


Category: Market

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4 Responses to The Rising Cost of Paper

  1. Abel Keogh says:

    I’d go off on why Osnios is full of crap but The Passive Voice did it for me. Read his thoughts here.

  2. trumwill says:

    Thanks for the link, Abel. Comic book retailers used to be under a contractual obligation not to sell comics for over the listed price. This was to prevent them from taking a much heralded issue of an ongoing series and slapping a $10 price-tag on it (there was a time window involved, though. They could put one aside for a couple months and then do so. Doing that risked that they would get it at cover price from some else, though).

    A question, though, is… isn’t there a free-market argument to be made by the publishers here? Which is to say, why can’t they make selling it at a certain price a requirement for being able to buy the book wholesale?

    I have some ideas, but I’d be interested in your perspective.

  3. Abel Keogh says:

    If a publisher wants to contractually obligate sellers to sell their books at a certain price I don’t have a problem with that if both parties agree to it. Of course most retailers would refuse to sign such an agreement as it would put them at a competitive disadvantage.

    The problem is that the traditional model of publishing is very inefficient. Most publishers sell their books to distributors who in turn sell them to Wal-Mart or B&N and take a cut of the profits. Publishers still don’t get how to sell directly to consumers. A book is only worth what someone will pay for it. The nice thing about Indie publishing is that you can learn pretty quick how much your book is really worth.

  4. trumwill says:

    My understanding is that that’s sort of how this unfolded. The publishers (en masse) wanted to attach that stipulation and were being sued on the basis of anti-trust violations.

    If I’m right, I think there are two market ways to look at it.

    On the one hand, collusion between suppliers is anti-market. There is a reason that the publishers had to back down.

    On the other hand, publishing has relatively low barriers to entry. If the major publishers all wanted price controls, there’d be nothing to stop Abel Keogh Books from underselling them and putting them at a disadvantage. So unlike some industries, anti-trust violations shouldn’t apply here.

    My view is more in-line with the first. That there may not be a high barrier to entry, but there is market inequity that gives certain publishers – if they collude – an exceptional advantage that is anti-consumer. I think of this as being closer to the “anti-market” position, though.

    (On the other hand, Amazon itself has become so big that if they refuse to sell a book, that in and of itself represents a threat. I don’t actually think they are there yet, but as we transition to proprietary ebooks, and Amazon is king of that particular hill, they might get there.)

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