It’s the Market, Stupid

Evil Empires

How to begin? I have been bombarded with emails from the Northern California Independent Book Association (NCIBA), the American Booksellers Association (ABA) HERE , Publishers Weekly (HERE) and others regarding the agency model for e-book pricing and its preservation. The Department of Justice has reached some form of a settlement with three publishers regarding the pricing of e-books. I am always very leery and in fact downright adamantly against the government making any effort at controlling prices through pressure, agreements (what is the difference between that and price-fixing), and intimidation. Whether for the good or bad it all depends on a point of view, and they are all wrong points of view.

Amazon is blamed and it is the witch in this witch hunt. They are blamed for the demise of Borders and the precarious existence of Barnes and Noble, (yet these same retailers were the evil empires not too long ago, and remember Microsoft’s heavy hand in tech). Now these organizations defend these national chains and yearn for the days of yesteryear. Let’s get one thing straight from my high pedestal, the big houses do not care a fig about the consumer, they only care about their businesses and their profits – and I say bully for them. Like it or not they provide an important service to writers, agents and eventually the consumer. Yet at any stage the consumer can opt out, as they have been for years; I have been told that only about 1% of the reading public buys hardcover books. Book sales are down, YouTube videos are up, and Hulu is challenging CBS, the world is tilting. And now that more and more people are reading using various electronic devices, the marketplace is becoming more and more like the old west, and I for one don’t think a sheriff is needed. So quit complaining to ears in Washington.

The independent bookstore is scared to death by Amazon and they should be. I’m sure that the illuminating monks of 1450 wanted to have Gutenberg drawn and quartered – he was directly affecting their livelihoods. Now the same can be said of Amazon. Is their pricing a problem? Probably. Can they undercut the price of a book sold at a bookstore (though the margin is a lot less with shipping)? Yes. Should taxes be paid on the sale? Yes. And what about Costco, Target, Wal-Mart and other buyers in bulk – shouldn’t their prices be the same as the local independent bookstore? Yes – but they’re not. As I said, the marketplace is cowboy town.

Ebooks are the new chimera. Six or seven types, dozens of readers, at least five formats and counting, black and white, color, and priced from free to whatever. It’s the whatever that’s being challenged. I’m sure if some had their way, free ebooks would be banned. They are so unfair. What is really scaring agents and publishers is the lack or loss of control. For over one hundred years they held in thrall writers. Now writers are free to publish, market, make money, lose money, succeed and fail without Scribners, Wiley, Penguin, and Random House dictating how they shall live and breathe. It’s tough losing control. I can sell my books (see left and right columns) for whatever I want: free, $0.99, $2.99, $29.99, my costs are minimal, my margins are also minimal –Dan Brown gets more from the market than I do, but since I’m Gregory C. Randall, the market pays me what I can get (for now - I will get even). BTW – all my books are on sale until June 21.

All these shenanigans are just this – fear of change. The writing/bytes are on the wall. Ereaders, tablets, pads and phones ARE the future, paper books will still be bought, fine hardcovers will be made, and in fact I’m sure there are monks slaving under candles even today.

As my hero, the Austrian economist Ludwig von Mises said in Human Action (1949) GO HERE, “The market is supreme.” It is what it is, and does what is does, and pay what it pays – until it won’t. It is not emotional or caring, it is not fair or political (sorry DOJ), it is brutal and unforgiving, just ask Borders, the auto industry, Bill Clinton's last book, and Mervyns.

Mises stressed the importance of entrepreneurship because it is entrepreneurs who actually do monetary calculation. Today more than any time in history there are more independent publishers (entrepreneurs) printing and distributing books – thank you print-on-demand, Mark Coker and Smashwords, Amazon, and computers (no particular allegiance – I go both ways, Mac and PC). We Indies are testing the waters with our own money and as such changing the course of rivers, and contrary to what Mr. Oren Teicher, CEO of the ABA, says “Fewer ebooks eventually being produced by publishers? Almost a guarantee.” All I can say is phooey Mr. Teicher and get out of our way. You are not doing us any favors.

A closing remark: While Mr. Teicher’s letter was to booksellers and, in passing, to writers, I firmly believe that he doesn’t care a comma about us independent publishers and writers who use Amazon and Smashwords as our only doorway to the electronic marketplace, and whether they are fair or not, thank you. And to the poor independent bookstores in my neighborhood, “When are you going to return my emails?”

More later . . . . .