What’s the proper price for books that don’t exist?

Just a couple of days after I posted a video of the director of the Ayn Rand Institute, that organization sends out this release:

Apple Should Be Free to Charge $15 for eBooks

WASHINGTON–Apple and five top book publishers have been threatened by federal antitrust authorities. According to the Wall Street Journal, they are to be sued for allegedly colluding to fix ebook prices.

According to Ayn Rand Center fellow Don Watkins, “Traditional books may come from trees but they don’t grow on trees–and ebooks and ebook readers such as the iPad definitely don’t grow on trees. These are amazing values created by publishers and by companies such as Apple. They have a right to offer their products for sale at whatever prices they choose. They cannot force us to buy them. If they could, why would they charge only $15? Why not $50? Why not $1,000?

“There is no mystically ordained ‘right’ price for ebooks–the right price is the one voluntarily agreed to between sellers and buyers. Sure, some buyers may complain about ebook prices–but they are also buying an incredible number of ebooks.

“What in the world justifies a bunch of bureaucrats who have created nothing interfering in these voluntary arrangements and declaring that they get to decide what considerations should go into pricing ebooks?”

Read more from Don Watkins at his blog.

I didn’t know what the Institute was on about until I saw this Wall Street Journal piece:

U.S. Warns Apple, Publishers

The Justice Department has warned Apple Inc. and five of the biggest U.S. publishers that it plans to sue them for allegedly colluding to raise the price of electronic books, according to people familiar with the matter.

Several of the parties have held talks to settle the antitrust case and head off a potentially damaging court battle, these people said. If successful, such a settlement could have wide-ranging repercussions for the industry, potentially leading to cheaper e-books for consumers. However, not every publisher is in settlement discussions.

The five publishers facing a potential suit areCBS Corp.’s Simon & Schuster Inc.;Lagardere SCA’s Hachette Book Group;Pearson PLC’s Penguin Group (USA); Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH; and HarperCollins Publishers Inc., a unit of News Corp. , which also owns The Wall Street Journal….

This is truly a fight in which I do not have a dog. I think. And it should please the Randians that my own attitude has to do with market forces. I can’t conceive of paying $15 for a book when, after the transaction, I don’t actually have a book.

So I can approach this dispassionately, and ask, to what extent is this a monopoly situation? After all, Apple has competitors — such as Amazon, which actually pioneered this business of selling “books” to people electronically. The WSJ story addresses that:

To build its early lead in e-books, Amazon Inc. sold many new best sellers at $9.99 to encourage consumers to buy its Kindle electronic readers. But publishers deeply disliked the strategy, fearing consumers would grow accustomed to inexpensive e-books and limit publishers’ ability to sell pricier titles.

Publishers also worried that retailers such as Barnes & Noble Inc. would be unable to compete with Amazon’s steep discounting, leaving just one big buyer able to dictate prices in the industry. In essence, they feared suffering the same fate as record companies at Apple’s hands, when the computer maker’s iTunes service became the dominant player by selling songs for 99 cents.

Now that sounds more like what I would think the market would bear, if the market were like me. $9.99 sounds closer to what I might conceivably be willing to pay in order to have access to the contents of a book without actually getting a book. But it still seems high.

Yes, I can see advantages to a e-book. You can store more of them in a smaller space. They don’t get musty, which for an allergic guy like me is nothing to sneeze at. And you can search them, to look up stuff you read, and want to quote or otherwise share. That last consideration isn’t that great for me because I have an almost eerie facility for quickly finding something I read in a book, remembering by context. But… once I’ve found it, there’s the problem that if I want to quote it, I have to type it — which is not only time-consuming, but creates the potential for introducing transcription errors. Far better to copy and paste. (At least, I think you can copy and paste from ebooks. Google Books doesn’t allow it. See how I got around that back here, by using screenshots of Google  Books.)

But I still want to possess the book. Maybe it’s just pure acquisitiveness, or maybe it’s a survivalist thing — I want something I can read even if someone explodes a thermonuclear device over my community, knocking out all electronics.

In any case, all of us are still sorting out what an ebook is worth to us. Let Apple set the price where it may, and try to compete with Amazon. Then we’ll see what shakes out.

14 thoughts on “What’s the proper price for books that don’t exist?

  1. bud

    I want something I can read even if someone explodes a thermonuclear device over my community, knocking out all electronics.

    Not sure that would be high on my list of things to worry about if a thermonuclear device exploded over Columbia.

  2. Brad

    Consider it division of labor. You worry about shielding some potable water from radiation, and I’ll take care of the books. Then when you’re bored to death and need something to read, I’ll trade you a book for some water…

  3. `Kathryn Fenner

    It’s the collusion that is the issue. Apple is always free to set prices wherever it wishes, but it cannot collude with others to fix prices. This isn’t a free market problem; it’s anti-trust.

  4. Steven Davis II

    In a time where SHTF, I doubt you’ll get much in trade for a book. Unless they need it for starting a fire.

  5. Burl Burlingame

    I’m about two weeks away from placing “Black Ocean” (hey did you finish it?) online in the iBook store and was thinking of charging $4.95, which is a fair price for something that has no production cost other than prep.

  6. Kathleen

    Once again Kathryn has hit the legal nail on the head, of course.

    Didn’t one of your previous posts contain a discussion of print/electronic book publishing/release pricing issues/solutions?

    At any rate my bunker is well stocked with printed material.

  7. Brad

    Wait a second, Burl — are you secretly “Rick Blaine”? If not, how come it’s you putting the book on the market?

    Yes, I finished it. I hadn’t written about it because I hadn’t decided what to say about it beyond what I had said already.

    I enjoyed it, and the story carried me along well until the end. But I can’t say it appealed to me as much as my favorite alternative history novels, such as Guns of the South and SS-GB.

    I’m not sure, but I think it’s because those other books dealt with a difference that I clearly understood from my knowledge of history. With SS-GB, I’m reading about the nightmare that everyone had worried about — that Hitler would have succeeded in mounting an invasion of England, and won the war before the Americans could get into it. (The difference? He didn’t violate his non-aggression pact with Stalin. Failing to make that fatal and insane error, he was able to concentrate overwhelming force in the West.)

    And of course, with Guns of the South, it’s about the guns. Or rather, the repeaters.

    In both cases, my knowledge of history clearly explains to me what’s at stake, and what people’s motives are. That makes it easier to get into.

    In Black Ocean, I’m still vague as to what happened to change the course of history, and what that means. Near as I can tell, the differences were that Pricess Kaiulani survived, and (I think) actually married the Japanese prince, thereby bringing Hawaii into the Japanese sphere of influence.

    But that is more hinted at than clearly stated. And I have trouble imagining what that means to the course of history.

    I THINK what it would mean, in reality, is that the U.S. would not have jumped into the war with both feet the way it did after Pearl Harbor.

    In Black Ocean, we have the Americans conducting the sneak attack on Hawaii — and even following through with boots on the ground.

    I have trouble understanding the isolationist U.S. motivation for doing that, and I don’t think the book helps me through that…

  8. Burl Burlingame

    Yes, I’m Rick Blaine. A marketing idea of my agent’s, who then died suddenly, but I don’t think that was the reason.

    The subtext of the book (as I planned it) was a meditation on the subject of loyalty under stress, both vertical and lateral.

    It’s sort of about the Japanese-American experience during WWII, flipped around, with a cast of real characters that you couldn’t invent if you tried.

    Also, for Pearl Harbor and Japanese-military history nerds, it’s full of “easter eggs” for the buffs.

    The last two empires, under the hegemony economic model, were the U.S. and Japan, and both nations were about 200 years too late.

    An emotional subtext for me was that it was written whilst my newspaper was in a battle for its life.

    And oh, the U.S. military did jump into Hawaii with boots on the ground — in the 1890s.

    I think you might be right about being more familiar with European history than Pacific history. To most people, if you say “Rommel,” they have a clue, but if you say, “Doihara” …

    The hat trick in writing a novel is not to make it into a lecture. Characters and story and dramatic immediacy come first.

    I tried to paint a picture of Hawaii in economic doldrums, a rather depressed place, while the U.S. and Japan maneuver behind the scenes. I also tried to give a feeling about the emerging role of media and governmental manipulation. In 1941 terms. Also, the parallel, albeit left-and-right brain tracks, of cops and reporters.

    Plus, as you know now, I dicked around with the reader’s expectations about what happened, when. Just a bit of pacing and plotting trickery.

    And even if I weren’t Rick Blaine (the Bogart character in “Casablanca”), I’m the typography designer as well. Even if you didn’t care much for the book, it had wonderful typography, right?

    (And all that swell typography goes bye-bye in the iBook edition.)

  9. Brad

    Well Burl, I’m just as impressed as hell. Good job. You’ve done what I’ve never been able to get it together enough to do.

    I get ideas for novels — other sorts of books as well. The idea starts with a character, or a situation, or a premise. And I really like the character or situation or premise, and I think about them a lot, adding all sorts of complexities. I come up with another character or two, and I think, “Wouldn’t THIS situation be interesting?”

    But then, when I try to figure out where it all goes, and how it ends, I don’t know, and I lose interest. Mainly because I don’t want to do all that work and find out that I’m straining to find an ending. I have a huge appreciation for good endings, and I really don’t like unsatisfying ones. (My definition of a “good ending” is pretty broad — it doesn’t have to be happy, although that helps. It just has to be well-crafted, and FIT, feel true.)

    So why don’t I just start writing, and see what happens? Well, the simple answer is that I’ve never had the time. I always worked really long hours in my newspaper career, coming home exhausted and not having the energy that my family deserved. If I had managed to find the time and energy to write a book while my kids were growing up, I hope I wouldn’t have; I hope I would have spent it on the kids.

    About the time my kids were leaving home, I started the blog on top of my work, so I never gained a minute. Then I was unemployed, and WAY too busy pursuing work to think about a book. And now I have both ADCO and a blog that, in fits and starts, I try to develop into a business, and I never have enough time to do both justice. (There is always, always a LOT more stuff I’d like to do with the blog, that I can’t find time for.)

    Still, if I could embark on writing a book with confidence that I knew where it was going, I might force the time to do it. But that doesn’t happen.

    And here’s why that’s a big obstacle for me — I see things all at once. I perceive things holistically. I don’t go step A, step B, step C. Every decent column I ever wrote in my career started with all of the elements, and ESPECIALLY the ultimate point, crowding into my head at once. And I would write it all out before I lost it. I always had trouble telling people what a column I had not yet written was about, except in general terms, because the explanation required every paragraph to be understandable. Most of my columns were about two or three or four ideas, and while I could tell intuitively how they were connected, I couldn’t put it into words until I sat down and worked out the words. But the key is that I knew where I was going with it. As for the writing process, I would dive into it, swim underwater the whole way, and come up on the other side with the last graf in my teeth.

    That works great for column-writing. It’s kind of hard to do that with a book. I can’t hold my breath that long.

    For me, I think the best way to write would be a variant of the way Kerouac did it — in one long, sustained burst. I don’t think my enthusiasm for an idea would last through trying to write a few grafs one night, then a few more the next. I’ve never been able to do anything that way. Remember how in school they wanted us to spend weeks on a research paper, doing note cards and rough drafts and all that nonsense? That was unthinkable for me — it was an all-nighter or nothing. Which is one of the big reasons why I became a newspaperman.

    So my hat is definitely off to you, Burl. I’m really impressed…

  10. `Kathryn Fenner

    @ Steven–yet again spouting off without checking your facts–I have recently sold several books for enough money to make it worth my while to go to the Post Office…lots of people still value hard copy…

  11. Burl Burlingame

    Yes, time matters. I would go into the office on early Sunday mornings when no one was there, and I’d get about six hours alone — and since I wasn’t home, nothing to distract me. Plus, music on headphones, which helps one get into the “zone.”

    Anthony Burgess used to check into a small hotel with room service and emerge two weeks later with a completed novel.

    The other thing I did was outline the plot obsessively, so I knew where I wanted to END UP at the end of each chapter, even if I wasn’t sure how to get there when I started typing, but that’s part of the fun. The thing I’m proudest of is the book’s pacing. (I thought of it from the get-go as a cheesy thriller page-turner with a serious subtext.)

    I also got a piece of brilliant advice from a friend who’s a literature professor. I was going to have the big “reveal” be the American attack on Pearl Harbor, and he said that sucked, because it would absolutely NOT be a surprise to anyone who picks up the book, so he said kiss it off in the forward/prologue/first chapter, and as you know, that’s exactly what I did. He said a plot twist / surprise can not just be an event, but the reader’s EXPECTATION of an event.

    My agent wanted it published under a pseudonym so that we could check out market reaction and reviews in a market where my standing in the community wouldn’t be an issue. It worked so well that my own newspaper’s reviewer gave it a thumbs-up without knowing I did it.

    I think I’ll use my real name in the iBook edition.

    The disappointing thing is that my agent died in the midst of all this, and could never get another agent to even consider it. I tried hard but fiction agents have been in full panic mode for the last decade. So my dream of penning the kind of paperback you buy at the airport is still in my house.

    It’s not a masterpiece, but we’ve all read worse things.


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