A crosspost by Giuseppe Granieri, 40k‘s editorial director, about his intervention at IfBookThen 2012.
We have made a difficult decision, since we usually do not talk about ourselves (and we are not going to do that in a direct way). Nevertheless, there is a perspective in which 40k’s experience is of general interest and perhaps we have something to share at IfBookThen 2012.
In a near future (or relatively close), when paper books sales numbers will no longer justify publishers investments, digital-only publications will become a standard and will raise a number of concrete problems, often very different from those faced by working both with paper and digital editions. In a year and half – being only digital – we have experienced on some of these problems (from book promotion to pricing strategy). We will try to share ideas and experiences in order to make them a useful starting point for the discussion.
About prices, there is still a lot to understand. It is a sensitive issue, because it does not concern only the reader’s satisfaction, but also the author survival (who has to be paid) and the maintenance of the system that brings quality to the public (editing, proofreading, packaging, etc.). But above all, it must guarantee the sustainability of those publisher’s investments that are strategic to the reader.Translations, to list one of the most important.
On one hand our approach is very idiosyncratic (we work on short texts). On the other hand it is very open. We do not use DRM and we try to maintain a consistent price. But here’s the first challange: finding the price that satisfies everyone – without revenues from paper – is not a simple task. Publishers will have to safeguard readers interests, but also the ones of professionals who work to bring the book to the public (editorial team, author, translator).
Price according to readers. Some of our experiments show that the value chain of the book is contracting. Promotions like this one tell – with numbers – that 99 cents is an attractive price to the reader (with several hundred downloads in four days). Looking at the market – and to prices we can observe in these days – it seems that a novel has to come out with a price between 6.99 and 9.99.
Price to safeguard author and publisher. Low prices – considering the European anomaly of VAT on eBooks, at 21% in Italy – are sustainable only if part of the revenue comes from paper sales, too. If you sell only ebooks, the margin for authors and publishers to sustain the system becomes affordable only by postulating a larger number of copies sold. But the market is not expected to grow in such proportions as to justify the assumption that all titles will sell two or three times as many copies.
It will be an ever more competitive market, crowded by self-publishers – soon in Italy too – and with increasingly aggressive prices. The risk with these prices (for the reader) is, to make an example, that investments in translations are drastically reduced. Translating a novel costs thousands of euros and the number of copies to be sold to justify the investment – at these prices – becomes often a topic on which you need to think deeply and carefully. The first risk is that a lot of not-mainstream literature loses the chance to be published in markets other than the original language one.
Same thought about new titles: paying advances to authors will be increasingly harder if total revenues will no longer have the benefit of paper prices.
It is not new, if we think about it. We have seen this happening with journalism: online revenues (which depend completely on advertising and no more on subscriptions and copies purchase) led strong consequences on journalists compensation: they are often paid 5 euros per article or less (or nothing at all). The risk is that the value of the quality work which is at the basis of publishing will suffer the pressure downwards on prices.
The same is true for authors. We pay royalties from digital standards (25%), but we need to consider that lower prices reduce authors revenues. Of course, authors can choose self publishing and take 70% from direct sales. But can a system stand if based only on self publishing? In my opinion we still need publishers (for one thing, at least: self publishers do not translate on their own).
The trap of prices lower than 2.99. At the moment, considering the state of the market, we would be glad to release some of our titles with a price lower than 2.99, matching the natural price of 40k classic – which might be 1.99 or 1.49. But in order to find our books on all platforms, we need to apply the same price everywhere. And this would mean reducing Amazon royalties by the 50%, because in this price range the publisher takes 35% and not 70%. And, once again, we need to think of the author gain, the translation costs and the sustainability of the system.
The general scenario. In such a model, digital-only and with such pressures on prices, publishers will be led to reduce the prices noticeably in order to remain competitive.
Even historically publishing business is one of the strangest in the world (a one in which two titles in ten pay – with a bit of luck – the other eight at a loss). That could mean a risk to readers: books of lower quality, translations underpaid, and so forth.
The perception of value. This, I admit, is one of my fads. However, observing what is happening in the United States (to be on US market is an irreplaceable gym, to us) there is a direct relationship between price and perceived value. And that is another thing we will try to take in consideration. If you pay a book less than a coffee, how do you perceive the months of work needed by the author to write it?
Going back to the reader. I do not think that we will see a turnaround in the future. Prices will fall and strategies will become even more aggressive. This may not be necessarily good for the reader, as we said before. It will be a situation with positive aspects and some risks of adverse effects. Publishers, to ensure what we have today, once stored the revenues from the paper, will have to invent new ways to square the circle.
Richard Nash, time ago, said that it is no longer possible to make revenues by selling only contents. We will have to innovate, to experiment different approaches, to look ahead. A challenge that must be faced safeguarding everyone interests: from those who work and must be paid appropriately, to those who should be able to find the book they love at a fair price and packaged with the appropriate quality. It will not be easy to figure it out, but if we love reading, we have to try all together.
Translation by Camilla Querin
