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Sunday 16 December 2001

Book Prices

An article in the New York Times addresses the issue of book pricing. I buy a lot of books, so this is a subject close to my heart.

The gist of the story is that pricing in the publishing industry is almost random, and that the publishers can’t or won’t see what’s wrong. They just keep raising their prices in hopes of increasing their profits above their current paper-thin margins, and failing. Most of the problem is summed up in a single sentence from the article:

Stephen Rubin, publisher of the Doubleday Broadway group at the Random House division of Bertelsmann, said, “I am just convinced that there is no difference between $22 and $23. Let’s face it, price is not a factor if it is a book that you really want.”

Here are the problems with that reasoning:

  1. Notice that it requires three brand/company names to identify this guy. Possibly the publishers’ corporate structures — nearly all of them are at least as Byzantine as the Doubleday/Random House/Bertelsmann excrescence we see here. “Consolidation” in the publishing industry seems to have largely meant funneling all the money from a dozen different companies back to the same corporate parent.
  2. It’s not the difference between $22 and $23 that matters, but the difference between, say, $15 and $23.
  3. If the goal of your marketing is to sell your products only to consumers who “really want” them, as Mr Rubin suggests his is, you don’t deserve to have a job that in any way involves selling anything to anyone. Depending on how extremely he chooses to define “really” in “really want”, he could charge $5,000 for a copy of the latest John Grisham novel and still see it as a “success” when the John Grisham Museum and Sculpture Garden bought the only copy sold.

As I said, I buy a lot of books, far more than the average American. In the past few months in particular, though, there have been a good number of books — probably about 15 or 20 — that I have left on the shelf at the bookstore because I judged them not likely enough to deliver value for the money.

Other books, I’ve imported from Britain, where the pricing is more rational. (Amazingly enough, Amazon.co.uk’s shipping to the USA is usually faster and always cheaper than Amazon.com’s shipping, too.) Bestsellers and new releases have pretty much the same prices on both sites thanks to deeper discounts in the USA, but cover prices for the same book in American guise is usually about 20% more than the British version.

My prediction is that the publishing industry’s “solution” to this problem within the next few years will not be to adopt some realistic marketing and business practices (publishers pulp or remainder, on average, 30% of the books they print each year — imagine if any other industry did that), but rather to attempt to subject their customers and retailers to some kind of restrictive license agreement to reduce the secondary market and marginalize (no pun intended) the “gray market” in imported books. This would be not unlike what we have now with software, music, and movies — and remember, most publishers are ultimately divisions of companies that also produce music and movies.

In the last few years, large companies of all kinds have come to look everywhere but at themselves for the cause of their problems. I see no reason why the publishing industry should miss out on the trend.

Posted by tino at 00:06 16.12.01
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