I
recently blogged about how the Netflix model will kill book publishing and
unfortunately, not enough readers agreed with me. I must have failed to somehow state what
should be obvious: such monthly discount programs are the cheese on a very
deadly mouse trap.
When
someone says go buy all of the dresses or cups of coffee or bottles of wine
that you want for the price equivalency of just one of those items, you’d
understand how the industries could survive, right? Answer: They couldn’t.
Books
are no different.
Even
Netflix is not a good analogy. It
recycles content for the most part. For
instance, Netflix doesn’t have anything new (except for one or two original
series). It shows a movie that already
was shown somewhere else. Further, that
movie got to make money by playing in theaters or being seen on commercial
TV. But when you bundle masses of books
and tell readers to go ahead and take all of them for a fraction of their cover
price, you create an impoverished industry.
So
do I think it’s wrong for competing forces to discount its product or
service? Absolutely not.
Many
businesses will offer deals, such as these:
All-you-can
eat breakfast buffets are still popular in Las Vegas. One may wonder why someone would take a loss
on a meal. Well, it’s simple. It’s called a loss leader. They hope their loss will lead you to
them. They hope you’ll end up staying at
the hotel housing the restaurant. Or
even better, that you’ll gamble there.
They hope the great lure of a free meal will secure word-of-mouth
advertising. In the end, they make a
nice profit.
Amazon
will sell e-books for peanuts because it just wants you to buy their
e-device/tablet AND to use that to shop for other, higher ticket items. It also wants to juice its stock price and
consumers have a liking towards a company that charges pennies for things others charge the market value for. Amazon wins.
When
restaurants and businesses use Groupon to get new customers, it pays a price for
it. Usually, the business sells a
full-price item to Groupon for 75% off and the consumer saves 50%. The business usually breaks even or maybe
takes a small loss-but it uses this to introduce its products, services or food
to new customers—or to win back old ones that had not visited in a while. The business wins in the long run.
So,
as you can see, many businesses benefit from their discounted pricing
arrangements. But in the world of book
publishing, words by the pound is an industry-destroyer.
Pandora
or Spotify or Netflix may or may not pay-off for the music and film industries,
but a monthly book-reading fee is a doomsday device for the book world.
Why?
·
Book
stores lose business and will then go out of business.
·
Printed
books get snubbed for the preferential e-pricing, this speeding up the extinction
of print.
·
Publishers
lose because their profits become capped—and then they dwindle.
·
Authors
lose because their royalties take a hit.
The
problem is that consumers feel like they win when a bunch of discounted
services fight each other and offer the most books at the lowest price. And, as readers, they do win—if you judge
victory purely by economics. They lose
when the quality of books suffer. They
lose when publishers go under or when authors start writing fewer books. They lose when they hurt the creative arts
industry that they love.
Some
may say that the book industry started this model many decades ago when it had
Book-of-the-Month Club. But the
comparison falls short.
The
club deal was temporary—you get a few books (not all you can eat) for a
limited time for a few pennies—but then the full-price kicks in and consumers
actually end up overpaying. The book
selection is very limited and often they are not brand new titles. Today, subscription services are looking to start the show.
Safari
Books Online has been successful for the past dozen years selling business and
technology books, a more specialized area, via subscription. It has a number of tiered plans starting at $28/month. They have a catalog of 32,000 books. They may be okay, but what do you do with
Oyster and its 100,000 trade books, where users have unlimited access for a
paltry $9.95/month—or the equivalent of two trips to Starbucks.
Scribd
tops that with a $9/month offering its tens of thousands of books—unlimited
access. The selection, for now, includes
Harper Collins' backlist plus indie house titles.
E-Reatah
offers 90,000 titles but thankfully limits use to two books per month,
depending on the plan. It has tiered
plans starting at $15/month. They still
threaten the written word economy, but offend me the least.
The
thing I hate more than these give-it-all-away plans is authors and publishers
literally giving books away. Too many
are giving away free downloads of entire
books, desperately hoping they will find new readers who will love a discovered
author so much that they will suddenly buy their books.
It
works, at times, exactly as they hoped.
But the bigger industry issue is that we are training consumers to look
for FREE books or to feed off these minimally-priced monthly plans. By doing so we have gotten consumers used to
paying little or nothing for a book. The
industry is suffering from deflation, and putting itself in line for a book depression.
The
library is the great economic equalizer.
If you’re poor or on a limited income, use the library to gain access to
books. I love the library. But the marketplace mustn’t turn itself into
a bazaar or a swapshop flea market.
What
it comes down to is this:
1.
The
monthly pricing plans take away from individual book sales and instead groups
books together—good and bad, old and new.
2.
It
takes away from publisher and author identities.
3.
It
reduces how we see books -- they will be commoditized.
4.
It
will limit price growth for single books.
5.
It
will be the final nail to B&N and many bookstores.
6.
It
will reduce the quality of books produced. It will lead to a decrease in the
number of titles published. It will cause publishers to shut down. It will
lead to fewer authors getting published.
7.
These
unlimited plans—coupled with free books—will not allow any time for those who
may want to buy a book not on the plan.
They simply lack mind capacity or time of day to read any more.
It’s
bad enough Amazon undercuts the entire industry but the real bomb would be to
allow the Netflixation of the book industry to soar.
Any
questions? Any doubts? I implore the major publishers to avoid
participating in their own demise. If
you truly love books and hold the written word n high regard, you will not
support a pricing plan that makes books irrelevant.
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Brian Feinblum’s
views, opinions, and ideas expressed in this blog are his alone and not that of
his employer, the nation’s largest book promoter. You can follow him on Twitter
@theprexpert and email him at brianfeinblum@gmail.com. He feels more important when discussed in the third-person. This
is copyrighted by BookMarketingBuzzBlog © 2013
