Book Selling Analogies

I’ve been known to post a few analogies that don’t quite work. I may be trying to do the same this morning.

First though a public service announcement. I’ve added Richard Robinson’s blog to the blogroll – he had to prompt me and shouldn’t have. Sin of omission and one I’ve been guilty of before. If you think I should be adding you and haven’t, send me note to remind me.

I’d also like to thank Keith Graham for his offer of help with the hack-crap and his post from today.

Next – before we can analogize, we need to know what’s being talked about.

Amazon has pulled MacMillan titles from their direct sales. This is because MacMillan (publishing) wants Amazon to sell their e-books at prices ranging from 12.99 to 14.99, rather than the fixed 9.99 that Amazon wants to impose on all e-book sales.

Amazon is trying to drive e-book sales in support of their Kindle. They are under pressure to sell Kindles, pressure that has been increased by the intro of the IPad from Apple, which is working on a sales model closer to what MacMillan is looking for. (Apple is making noises about helping content providers like newspapers and magazines, not to mention books, get back onto a making a profit for their content model.)

There is lot’s and lot’s and lot’s of commentary about this. John Sargent of MacMillan has posted an open letter; The Nielsen-Hayden’s are weighing in over on Making Light; Scalzi from yesterday; BoingBoing this morning; Jim Butcher also this morning but I can’t find the link (sorry Jim). And lot’s more all over the place.

One interesting between the lines thing I saw in Jim Sargent’s letter is that it is obvious that some pressure is coming back at MacMillan from traditional book sellers; Jim alludes to this: In the ink-on-paper world we sell books to retailers far and wide on a business model that provides a level playing field, and allows all retailers the possibility of selling books profitably. Looking to the future and to a growing digital business, we need to establish the same sort of business model, one that encourages new devices and new stores. One that encourages healthy competition.

In other words, brick and mortar sellers are saying “How can we sell a hardback for $25 a copy when the exact same thing is available for $9.99 on Amazon?

Good question despite all of the assurances from various and sundry that E-book sales spur physical book sales & etc. May be true (some certainly swear by it) but the issue is not whether that is true or not, the issue is whether those who are spending the money to purchase and re-sell believe it. And obviously they do not at this point in time.

Amazon is also playing hardball, trying to maintain their market share and gain acceptance of their sales model before Apple gets anything going. (Who’s going to sell to Amazon for a fixed-loss when Apple sells for a “fair price”? No one – unless Amazon is right in their assumptions that there is a price beyond which E-books won’t sell.)

Quick aside: who in their right mind believes that every book is worth exactly the same as every other book? (Yes, I know that books can be sold for less than 9.99, but that’s kind of beside the point right now.) No two books, authors, subjects, etc., are the same. Does anyone really believe that say, a long lost newly released Heinlein novel has the same value as a first time novel from someone we’ve never heard of?

Anyway. Here’s my analogy.

Back around 1990 or so, paintball guns went electronic. This conferred both tangible and intangible benefits to the paintball market: a very light trigger pull (just a switch, no mechanical force exerted), let the guns be controlled by a chip so that you could fire three balls per trigger pull, for example.

Some though found major faults; guns could no longer be looked at to determine if they were firing above safe limits, for example; there was no way to determine how many balls per second were being shot (and we’re talking capabilities in excess of 30 balls per second – approaching the rate of fire of those electronic gatling guns you see in the Terminator flicks).

The industry loved this. Everyone loves pulling the trigger and the more balls a gun spits out per second, the more profit the paintball manufacturers were making.

Prices per ball lowered dramatically over the next couple of years, going from an average of 6 to 8 cents per ball to 2 to 4 cents per ball.

The paint manufacturers went into major market share wars, since everything became about volume of sales – volume, volume, volume.

Every gun manufacturer HAD to add electronic models to their lines or they were out of business.

No one was paying attention to the consequences: every player had to step up to the high-volume level of shooting if they wanted to remain competitive (or even stay on the field playing for any reasonable length of time.)

Sure, the amount of paint (and money) each individual player was spending increased – but we were losing players. By the droves. Competition paintball became cost-prohibitive. The big name teams and players that spurred younger player interest could no longer be funded. At the grass roots, it became impossible to entice new players into the game – the perception of the initial cost was just too much for the average person looking for some fun.

Some of us tried to put the brakes on. We pushed for competition ball (the marquee of the sport) to slow down and emphasize skill over volume. The economic rollercoaster of huge volumes of paintball sales just rolled right over us.

The industry is down 30+% these days, losing ground to other shooting sports, manufacturers (of electronic guns) are dropping like flies, distribution companies are feeding on each other and there is far more capacity (still) than there is demand for. Consolidation is the order of the day and

a lot of voices are now calling for a slower game, one that emphasizes skill over volume, fun over expensive, flashy gear & etc.

Amazon is the company pushing for volume here. MacMillan is the company trying to slow things down. It’s great to be able to afford more and more and more – until you find out that the folks selling it to you (in this case, book publishers) can no longer afford to stay in business. No paintballs, no shooting. (Actually, a lot of noise with no result, lol)

I know the parallels aren’t exact here, but the end result will be; publishers are going to get squeezed until they are forced to consolidate, less and less content will become available and all you readers will start with a short-term glut, but end up with a long-term that has very little to offer.

EDIT: 1:25 est
Lot’s more discussion coming in on this one:
Tobias Buckell
Charlie Stross (perhaps the best all-around explanation of the situation so far, and generally supportive of the paintball industry analogy I offered earlier, as well as a general endorsement of the fundamental concept that

A MONOPOLY OF ANY KIND IS NOT A GOOD THING

Suricatus
Jay Lake
Cheryl Morgan (includes the Amazon Fail logo)
And SF Signal has a nice roundup of the above and more

I’ll say this for sure: This thing will not be going away by Monday