That Silly Textbook Dollar
At orientation this year, the campus bookstore handed out these glossy, full-color brochures full of “information” extolling the value of, you guessed it, the campus bookstore. A particular graph on one of the pages caught my eye, however:
This graphic was part of a page that was futilely attempting to explain why textbooks are so atrociously expensive, and playing up the value added by the college bookstore.
I was left asking, “What value?” In fact, what stood out the most to me was the assertion that for every dollar I spend on a book, the author gets a little over a dime. What a terribly inefficient distribution mechanism! I was instantly reminded of Apple’s iPhone App Store where developers get to keep a whopping 70% of every dollar spent by the customer! That’s enormous! iPhone app writers must be making an absolute killing right now! ((They are. Compare and contrast: the app store rewards developers with 70% profit and the customers with low low prices, and it’s booming; meanwhile, the publishing industry punishes its authors with inexcusable 7-15% profit and hammers readers with double-digit prices, and everywhere they’re faltering and losing sales.))
Yet this graph reveals that it’s not so rosy for our poor textbook writer. First of all, those greedy publishers take 65¢ of each dollar for themselves! But that’s not the end; the book has to pass through the bookstore, which, like any good business, has to make a profit, and so they snatch 23 out of the remaining 35 cents. Add in a penny for freight costs, and the author is left with only a little over 11¢ to show for his efforts, you know, writing the damn book all on his own. Clearly the middlemen are squeezing writers out their ability to make a living without taking second jobs.
There has to be a better way. I mean, the college bookstore itself is taking twice what the author is left with and they’re literally adding no value, to say nothing of what the publishers get.
So I started to think about what it would be like if authors were able to distribute books like I can distribute software — that is to say, digitally.
Now, slight tangent. The subject of e-books always results in much gnashing of teeth from bilbiophiles to tech pundits. But these people are missing the ball; e-books aren’t not the future, they’re the present. I have bought several e-books in the past year along, for instance, and Amazon’s unfortunately-named Kindle
Anyway. First of all, since there would be no physical goods, there would be no actual manufacturing, and hence no costs associated with it. There go the freight costs and two thirds of the paper, printing and editorial costs: so far, 22.4¢ saved that could be pure profit for the author.
This is basically assuming a distribution chain whereby the author writes a book, sends the manuscript to a publisher who reads it, edits it, hypes and markets it, and then distributes it to the 3rd party retailers. But the thing is, there are still two steps between the creator and the consumer here. That seems like an awfully inefficient distribution mechanism for a fully digital product. Really, what does the retailer do? Well, they aggregate products for a market, I suppose. But these particular digital products aren’t dependent on walking to a store to buy them; why shouldn’t you be able to go over to harpercollins.com and pick up an e-textbook without having to go through yet another middleman?
There’s really no disadvantage to bypassing the middleman. By cutting out the college bookstore, that’s another 23¢ that somebody gets, either the author or the publishers. Let’s say the publishers get these 23 pennies because the author got the last 22 which we saved by eliminating paper and printing costs. So at the moment the author’s taking home 35¢ and the publishers are getting 65¢, of which 30¢ are profit.
To recap, thus far our hypothetical textbook writer is much better off financially than he was before since he’s taking home three times as much profit compared to today’s model. What writer wouldn’t like to see his royalty checks triple?
But really, what is the publisher actually doing under this arrangement? In the past they were responsible for printing the book and managing the inventory, but now that’s all obsolete, so the money they’re getting that’s not profit in hand goes toward paying for editorial, “general & administrative” and marketing costs. let’s assume that running and promoting the online store is distributed equally among these latter two.
If you think about it, all the publisher really does is editorial work and the maintenance of an online store. Now, most writers I know do their own editorial work or have peers extensively review the manuscript before submitting it to the publisher, so let’s say that especially proactive writers could bypass this chunk of the publisher’s duties for some more cash in hand. Now all that’s left is the online store, and after eliminating editorial costs, they’re taking about 50¢ to run it.
That seems a little high to me. You see, my fellow software engineers who sell their own indie software all run their own online stores. After the stores are set up, the only recurring costs are payment processing and the like, and these typically cost between two and eight percent. Between two and eight percent. And the publisher has the nerve to be taking 50% for this same service? The nerve!
But wait! Most writers are technically illiterate, you say! How can they be expected to run an online store!! Yes, this is true, but that’s why there are pre-made solutions that don’t require technical mumbo-jumbo. If they exist in the world of indie software, it’s no stretch to imagine that they would spring up for indie publishing. These pre-made solutions tend to run on the high side in terms of price, so maybe even 9 or 10% of each sale will be going to the payment processor and the online store maintainer in the case of the indie solutions. That’s a fuck of a lot better than keeping that much for yourself after all is said and done.
So what am I saying? I’m saying that writers need to be more entrepreneurial. They need to sell their products directly to consumers in order to bypass the cripplingly expensive middlemen who can and do ruin books, and they need to do more themselves than simply write; they need to learn to market, and sell their work as well, because the rewards of doing so will be about nine times as much profit per unit sold compared to not doing it.
They need to stop accepting the conventional wisdom of “I’ll write a book and then beg a publisher to take it, then I’ll hope that they do a good job marketing my book, then I’ll hope that it sells well, then I’ll hope that I didn’t get screwed on my contract, then I’ll hope that they send me a check every so often that’s enough for a couple of nice dinners out.”
Writers need to take their fate into their own hands and write on their own schedules, determine the target market for themselves, determine a fair price for their work themselves, and do all the promotion and marketing themselves, because only them will they truly be able to make a living. The publishing industry was created to squeeze the profit from writing into its own cup. Technology can help writers fight back, and they should be embracing it, not running from it.
Or maybe this is simply a very long way of saying that when I purchased a $100 computer science textbook this year, I was miffed that either the author wasn’t making nine times what he actually was, or that the textbook wasn’t a ninth the price.
Categorised as: Finances, Writing