What’s a book really worth?
"Dear book industry, I'm so sorry to tell you this, but your books really aren't worth $25. Just like newspapers weren't really worth what people were paying for them and magazines, either. And CDs, and DVDs."
I caused a bit of a fuss last week when I blogged these words here, or in a mirror post on Paidcontent.org. This has been one of the most commented and tweeted posts I've ever offered and much of the feedback centered on this question: was it fair of me to drag the price of books down?
My answer: Current book prices are a lie
I'm cheating when I say this, of course, because I know full well that most people who buy hardbacks don't pay list price anyway. Even in an airport, you can get 20% off a hardback if you time it right, not to mention the 50% you can get off bestsellers at Barnesandnoble.com (sorry, the sale is over, but yesterday you could get Sue Grafton for $13.97, Ted Kennedy for $17.50, Mitch Albom for $11.99, and the list goes on).
So people pay discount prices, yet bristle when I suggest books should be cheaper. Let’s figure out why. To explain where book prices come from, I must first explain where they do not originate. Books are not priced based on:
- Time, effort, or passion the author put into it. This is the saddest news to deliver and the hardest one for authors (or would-be authors) to hear. But it's obvious when you consider it honestly. In fact, the masses of unpublished or self-published authors should rise up and protest anytime someone suggests that the author's hard work — or "blood, sweat, and tears," as one Twitter commenter put it — should bear on the price of the book that emerges from this personal crucible. Because there is no relationship between the quantity of effort one puts into a work and the quality of the output. Certainly Stephenie Meyer put a great deal of energy into her books, but not 100x more than her friend Shannon Hale, author of a Newbery Honor book and many other teen fantasy novels. Yet Meyer has reaped 100x the financial reward (at least). Not to mention the many of us whose teen fantasy novels languish in the Kindle store. If effort=reward, then something's been rotten Denmark (or Forks, Washington) for some time now.
- The cost of the author's advance. There is some truth to this one, but it’s temporary, and results in painfully circular logic: "We paid millions for this book, therefore, it's worth millions." Nope. You paid millions for the book, because analog-constrained business practices evolved over decades that led you to model future returns based on print distribution opportunities and retail prices. And those outrageous advances will continue to be paid out as long as publishers forget that their analog assumptions are quickly eroding in the marketplace. Yes, I am suggesting that advances will come down in the next decade. It happened in music, in movies, and it will happen in books.
- The exclusivity of the work. One commenter chastised me, suggesting that I would devalue a Jackson Pollack work to a handful of dollars because it was "only paint splashes on canvas and wood." Though not a Pollack fan, I wouldn't diminish the value of his original work because it is exclusive. Art is the most extreme example of a monopolistic good. There can only be one original, therefore the original has value that any copy does not. Books are copies. Copies are worth the value people assign to the content, plus the cost of the copy itself. Unless an author wants to hand print a book on homemade hemp paper, bind it with leather harvested from his or her own steer, and offer that book on auction to the highest bidder, a book is just a bundle of ideas plus the physical means required to replicate and distribute it.
- The personal value a reader places on it. Another argument offered by some was that books – when they change our lives – can give us value that we would pay hundreds for. This is a nice thought, but it's also impossible to achieve. There's a little thing in economics called transparency that prohibits any nonexclusive book from being sold at an extreme value. This is because you don't know whether the book will change your life until it already has. Though Life of Pi elevated me in ways most books cannot, I paid just $15 for it because I didn't know it would have that effect on me until after I read it. Like all books, its value was not transparent, meaning you cannot assign a value to a book without consuming it. And once consumed, there is no economic incentive to pay the author for the overabundance of value delivered. Other than to buy his or her next book (at a discounted price at Costco, most likely, because even then, there's no guarantee that the book will deliver that same value.)
Is all hope lost, then? No, the secret to recouping the value of a book is to make sure you multiply the experience of the book’s value as far and wide as possible. An unlikely model emerges here in the form of James Patterson who does this by generating (careful choice of words there) what seems like a book a week. And they're all available in digital format. He evidently understands that reading is an addiction that can be fed quite easily by opening the supply of the drug of choice.
If I were an author or publisher hoping to preserve the value of books — whether physical or digital — I would focus on the most convenient book experience possible; make it easy to find, easy to evaluate, easy to consume, and easy to share. The more easily these things can happen, the more people will consume. If we do this right, ten years from now, more people will read books than ten years ago. And they'll each read more titles than they did ten years ago. And though they'll pay less per book, it could actually generate more profit (slightly less revenue against markedly lower costs).
In the process, we'll see a shift in how authors are developed. Yes, authors who have proven themselves in the digital minor leagues, will get picked up by the majors at a handsome price and then they'll have the chance to milk things like exclusives: exclusive interactions with the authors, exclusive content available only to subscribing members, exclusive hardback editions that are printed in limited runs and hand numbered by the author. But the bulk of authors will not achieve this, and instead will find an audience of a few hundred or a few thousand readers they can appeal to and thereby share what caused them to invest so much time, effort, and passion. As an author myself, I’ll admit that while I’d love the former, I’ll at least take the latter – something I can only do in a digital world.