Tuesday, February 23, 2010

Part Two: A Little More About Digital Music, and Finally I Talk About E-Books

Just a couple of things about part one; I was wrong about the number of computers which can be set to one iTunes account. I said three, but in reality it's six. Also, I just want to talk about borrowing and lending music. I used to let my friends borrow my CDs all the time, and in turn I would borrow theirs. In that way, I got to listen to the music and make a tape of it for my own use and my friends got to do likewise. But most importantly, it wasn't just the music. I got to see the album cover, the liner notes. I love liner notes. I love the special thanks. I love the funny stories that are sometimes hidden. I love it when the band puts the lyrics in. I love the artwork that might be in there as well. And the album cover, which I mentioned in passing; I love album covers. Album covers can be an artist's conception of the album. The liner notes help the band color the music a little more. When I download an album, I miss the liner notes (I get a very small .jpg of the album cover, which is not the same). And while I can easily share the music (with DRM-free iTunes, I can make as many copies as I want), my friends don't get the liner notes or album cover either. Now, there are exceptions; two albums I bought on iTunes were iTunes exclusives, which came with a .pdf of the liner notes. But that's the exception to the rule.

Okay, now, on to the E-Book.

Much like digital music, digital books have advantages over physical books. Production costs are lower as you only need to create one file to sell multiple times. They take up much less space than a physical book. All the same things I mentioned before.

The only problem here, though, is that Amazon dominates the market and (until recently) has set the price. They became publishers and sellers, which meant that they got a double cut of profit because they held the digital rights. Now, this is very similar to what Apple did with iTunes pricing; the price was set at ninety-nine cents a song by Apple, not by the record companies (of course, with the record companies, they would have set the price much higher but would have lowered it in the ensuing litigation and PR nightmare when we went from $20 a CD to $13 because they admitted to price gouging...). The problem is for the publisher and author with the E-Book. There's a different sense consumers seem to have with digital books over digital music. The idea is that digital music is worth just as much (or almost as much) but that a digital book is worth a third as much as a real book.

A short tutorial on book releases: Before the advent of the E-Book, major releases were first sold in hardcover form, which are the most expensive to produce and thus the most expensive to purchase. The MSRP on these books is generally $30 or so, depending on the size of the book (both physical size and expected sales, in that smaller sized books are less and larger-expected sales books are more expensive). Big box stores like Wal-Mart and Target often offer these books with a 30% discount, which they can eat because they make money elsewhere (though that just reflects the regular price, not any promotional new-release sale which might knock another 3-7% off the price). Bookstores also offer discounts, though they are generally not as deep. Amazon falls under the big-box price model, often offering even deeper discounts than Wal-Mart is able to give consumers. When a major release goes to paper back, it often goes to what is called Trade Paperback. Trade Paperback books have a high-quality binding and generally hold up to multiple readings rather well. Discounts offered are of equal percentage to those offered on hardcovers. After a successful hardcover and trade run, books then go to the mass market paperback format, which is a cheap binding. Most of the Stephen King and Michael Crichton books you find in airport bookstores are the mass market paperback versions. These have a MSRP of ten bucks, but are generally offered anywhere from three to ten dollars. For a book that sells well, this transition from original hardcover release to mass market release can take about a year.

When Amazon set the price for books on the Kindle reader, they set the price for new releases at $9.99. So, here's what you've got; New Release CD comes to $14.99. Same album on iTunes costs $12.99. Net difference of two dollars, which is a fair difference, though considering most stores sell new release albums for as little as $9.99 the first week of its availability, so it's kind of a toss-up. New Release Book comes to $29.99. New Release E-Book comes to $9.99. That's a difference of $20. Again, most stores offer a discount the first week of availability, but not two-thirds off. That's a major chunk of change to account for. And publishers are furious.

Why are publishers furious? Well, publishers and authors are saying that this pricing model creates a diminished value in the eyes of the consumer. Instead of $30, a new book is only worth $10. Physical book sales are already dropping in favor of electronic book sales. Consumers are less willing to pay for a physical book when they can get the other one for much cheaper, and physical booksellers are asking publishing companies for a price break to compete with e-books. Publishers can't give them the break they are asking for without losing a lot of money.

So the problem isn't really the e-book, but the pricing. This has caused many publishers to pull their books from the e-book market.

The general consensus is that the pricing model that works for the music industry does not work for the publishing industry, because the original models were not interchangeable. A CD is a CD is a CD. Granted, there are differences between some releases; I bought the Limited Edition debut album from Franz Ferdinand, which came with two discs. It cost more than the original, single disc edition. But there is no real production difference between an album's first pressing and it's third pressing. But a book is not a book is not a book, as I explained earlier.

Strangely enough, the architect of the music industry's new model, Apple, seems to understand this problem the most. And now, the iPad.

What a ridiculous product the iPad is. Everyone remembers the movie Honey, I Shrunk the Kids and its less-successful and unfortunately titled sequel Honey, I Blew Up the Kid, right? Well, here's what Apple did; they contacted Rick Moranis to see if he still had at least one of the machines from one of those two movies (I never saw the third of the series, Honey, We Shrunk Ourselves so I don't know if he built a third machine or if he was just using the original first one). Turns out, he had the machine from the first movie, which made things a little difficult. See, he had to first find a baseball, or a glass Coke Bottle, or something, to disable the laser. Then he had to reverse the polarity, or something. Then Steve Jobs took a specially modified iPod Touch with AT&T 3G access but no telephone and placed it in front of Rick Moranis' ray. Moranis turned it on, and zap! the Ipad was born.

Basically, the iPad is kind of useless. There is no reason for anyone to buy one, if you ask me. It's not powerful enough to replace your computer. It's not portable enough to replace your iPod. It doesn't have a camera. It doesn't make phone calls or even voice-over-IP (VOIP) calls (like Skype and Vonage). In fact, all the functionality the iPad provides can be provided by a combination of a netbook (a small, feature-light laptop), a Google Android phone (which can become a 3G modem for your laptop at no further cost to your wireless plan) and some other e-book reader. The iPad's only advantage is that you get all this in one device. But, again, you have to pay $100 extra to get the iPad with 3G access, then pay AT&T a monthly fee beyond whatever you're already paying your wireless provider to use the 3G access, and then you've got no multi-task functionality, no flash support, and then you're dependent on the Apple iBookstore price structure.

Okay, that lat part is actually something I kind of like. As I said, Apple understands that you can't iTunes the publishing industry (yes, I just used iTunes as a verb). Unlike it did with music pricing, and unlike Amazon did with e-book pricing, Apple went to the publishers to set prices for e-books. And an amazing thing happened; Publishers cut Apple a deal, of sorts. See, the publishers are aware that having spent money on a reader, consumers won't want to spend $30 on a new e-book. They understand that the reader represents an investment which should have some sort of pay off, and they understand the payoff comes with the prices of the books. After all, it is true that a digital file should cost less than a physical book. But less than ten dollars? No. Not right away, anyway. So the iBook has a tiered price schedule, meaning new releases cost more and older books cost less. The tiered price will likely change in direct correlation to the hardcover/trade paperback/mass market publication of the particular book. The digital files will be cheaper, but publishers will still make enough money to pay the author.

Of course, since I formulated all of this in my mind, Amazon has relinquished pricing control and agreed to a similar pricing model, which is a testament to Apple's dominance and brand-loyal following. The Amazon Kindle is the dominant e-book reader, a position Amazon knows it will hold until the iPad is widely available, regardless of price. The more consumers who purchase their e-books for the iPad, the more lucrative it will be for the publisher to make their books available for the iPad. We've already seen publishers pull their books from Amazon. Their pricing model was going to be a problem.

So, unlike the digital music file, there are problems for producers of the media with the e-book. But Apple has taken steps to include the producers in the process, so that problem may be taken care of. For the consumer, the benefits are similar to that of digital music; storage takes up no physical space beyond the space of the reader you're using. And while prices aren't as cheap as they were for new releases, it is still cheaper than a physical book.

But that physical book. I love books. I mean, I love books. See?

And those are just the books on the one bookshelf (the new, amazingly awesome one with glass doors on the bottom three shelves, and which carries my favorite books on the top three and our prized books behind glass, like our signed Alan Alda books and my battered/beloved paperback copy of The Hitchhiker's Guide to the Galaxy and so forth). See, what I love about books far outweighs the inconvenience of having to store them. But I don't really see that as an inconvenience. There's a great film, Auntie Mame starring Rosalind Russell. In it, there's a great line; "Books are awfully decorative, don't you think?" And while that line is spoken by a character who you are meant to instantly dislike, and is an indication of just how vain and stupid that character is, there's a grain of truth to it. Books are decorative. I just happen to also read them. I will admit that the books behind the glass doors are arranged to be aesthetically pleasing, and not in alphabetical order (like the other bookshelf) or grouped by genre (like the top three shelves of the new bookcase). But I do read the books.

Something else I love about books is the fact that I have signed copies. See, in the fall of 2008, Lee K. Abbott read at Webster University. I got a chance to meet him and he signed a copy of his short story collection All Things, All at Once which I mentioned in my top books of the decade post. Lee K. Abbot could not have signed a digital copy of the book.

One day, when I was in high school, I climbed out my bedroom window onto the roof of my parents' sunporch. I was carrying a book, I can't remember which one but I have a sneaky suspicion that it was either Cather in the Rye or Douglas Adams' Starship Titanic by Terry Jones (wrap your head around that one!). I dropped the book to the deck below. I retrieved it and the book was not damaged. Try doing that with an e-reader.

Another problem with e-books; writing. When I give somebody a book, I like to write them a note in the book. And when I read a book that is mine, sometimes I like to make a note in the margin, just a thought about a character or an idea or plot point. It's a habit I picked up in college.

The last advantage of physical books is that physicality, the ability to let friends borrow or to borrow friends' books. It's that not having to transfer files from one device to another when I upgrade (there is no real physical correlation to this, except for moving books from one bookshelf to another or packing up and moving to a new living space). And once I buy a physical book, the publisher and the store can't pull it from my hands. This is something that has happened to Kindle owners, ironically with digital copies of George Orwell's 1984. Granted, owners were refunded and Amazon changed its policy, admitting that the deletion was stupid. But still...it has happened and could happen again.

So, many of the same advantages and disadvantages between digital music and digital books. But one thing I haven't touched on yet in this post is the independent author, without an agent or a publishing deal. You'll remember that with an independent musician, it is fairly easy to at least place your music in the iTunes and other digital music stores, much easier than it is to place a CD in a department store or record store. And while it is harder for a writer, it is still possible to place an e-book in the e-book store. Though, with Amazon, it is easier to sell a physical book than it is to sell a physical CD, because unlike iTunes, individuals can sell books (provided the book has a valid ISBN) on Amazon. Lightning Source, Inc is a good source for self-publishers to sell their books on Amazon, since they work with Amazon to print-to-order your book. Lulu offers a similar service with e-book publishing as well. Again, like an independent musician using iTunes, an author using these services can do the online equivalent of putting their book on the for sale shelf next to all the best-sellers. And in the case of Amazon, selling your book there means you are selling your book at the world's largest bookstore.

Well, there you have it. iTunes, iBooks, e-books, Kindles, iPads, iPods, Nooks, and rants. One last point I want to make; I like the portability of digital music. I like having 800 songs on an iPod in my pocket. The average length of a song is about three and a half minutes, or so. Sure, that's more music than I can listen to in a day, but it's nice to be able to have that many to choose from so I can skip something if I don't want to hear it. The Kindle, depending on which one you own, holds between 200 and 1500 books (200 is a low-ball estimate by a consumer, 1500 is a high-ball estimate by Amazon itself). Now, really, how many people (besides English majors) read more than one book at a time? And of those few who do read more than one book at a time, who reads 200 books at a time? It just seems excessive. Also, I'm sure that if you have been reading this post in one sitting, you are painfully aware that staring at text on a computer screen (because that's what these e-readers have, computer screens) is not easy on the eyes. So not only will you not be reading 200 books at once, but it will probably take you even longer to read those 200 books, and you'll need corrective eye surgery when you're done.

I've kind of decided that I'm an analog guy living in a digital world. I prefer movies shot on film over digital; I prefer manual film 35mm cameras to digital. I prefer Vinyl to CD and .mp3. If it were feasible, I'd prefer watching movies with a reel-to-reel film projector rather than a DVD, but again, not feasible (but I prefer DVD to streaming over the internet). I prefer a stick shift over an automatic transmission. I do prefer to type on a computer, but I admit to having a strong affinity for my Royal typewriter. When it comes to plugging in an electric guitar, I prefer tubes to solid state (and ten points to the first person who a. understands that reference and b. is not my father) and will always favor a wood fireplace over a gas fireplace. That having been said, perhaps I'm not all analog. I am a social media user (facebook, twitter, Google Wave and Buzz, and an early abandoner of myspace). I watch most of my television on Hulu (though I hate the lower quality) and I do use Netflix streaming. I don't know...I guess there are certain things that belong a certain way. There's a point at which convenience isn't reason enough to take something on, in my opinion.

Oh well.


Bridget said...

1. I have many decorative books...those that I have bought just for their wonderful titles... like Everything You Always Wanted To Know About Energy, But Were Too Weak To Ask and Mental Health In A Mad World.

2. Why were you climbing out the second floor window, with a book in hand, only to drop it and retrieve it?

3. Your mother reads more than one book at a time and she is not an English major.

4. I like "hard copy" books!

Anonymous said...
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notawritersfather said...

OK, I realize I don't get the ten points, so I won't go for them. I do appreciate the reference, however, and the inference that getting the referred esoterica makes me somehow, cool in the eyes of your readers.