First, let me give Auletta a lot of credit. This is actually one of the best discussions of e-books and publishing I've ever seen. My criticisms, then, will sound a little disproportionate, because a lot of agreeing on my part doesn't make for a decent blog posting; only the criticisms are worth mentioning at length. It's not fair, really, since Auletta makes many of the points I have in this blog.
So first a little agreeing. What I like about Auletta's piece is that he mentions a lot of the things that I've been harping on. These are things like the relatively low percentage of printing and distribution in a book's total cost; the absolutely essential nature of publishers, not only with editing and nurturing authors, but also advances. (My main criticism with that is that he didn't stress it enough.) Also, he noted that e-books are three to five percent of the book market; that's small, but it's actually higher than I had heard before. It may well be that the industry-wide number is higher because of the sort of rapid-consumption books, such as romances, that are popular on e-readers.
One of the most important points he makes is that the digital tycoons don't read books, don't believe books will survive, and have no clue how publishing works. His accounts of what Steve Jobs of Apple and Jeff Bezos of Amazon have said or believe is shocking, though completely credible. Jobs claims publishing is doomed, because only 60% of the public read a book last year (he actually said 40% didn't read a book, but I think it's more revealing to reverse the number). Bezos wants to destroy publishing, period. Neither of them understand anything about mid- and lower-list authors, and how they become top-of-the-list authors, thanks to publishers and independent bookstores.
This is important stuff, and deserves priority in my discussion. Now a little criticism. First, Auletta ducks the question of whether e-books really are going to take over the book world. The advance of e-books is limited not only by the utility of the traditional codex (in an interview on NPR's "Fresh Air," Auletta himself said he prefers to read hardcovers), but also by the expense of e-readers. Sure, someday e-readers may become cheap enough for all, but not yet. Not by a long shot. The not-95% of the market that e-books occupy is still a very small fraction of the total, even with their rapid growth.
Second, he could have disassembled the effort by Amazon, in particular, to cut out publishers. This sounds great (Hey authors! You get the profits that publishers used to get!), but it's not. Auletta did mention some of the value that publishers bring to books, including subsidizing unprofitable books, but he failed to make an obvious comparison. We've had self-published books for generations. With very, very, very few exceptions, we've never heard of them. Why? Because they stink. Publishers not only identify writers who can actually write, they screen out the junk that's not worth reading. Traditional bookstores know this; that's why they don't stock absolutely everything published by anyone. Add in the fact that publishers edit and design and market and generally improve books, and the fact that they provide advances that actually allow books that are worth something to be written, and you see that cutting out the publisher is a dumb idea all around.
So what is Amazon trying to do? To skim off the authors who already have name recognition. This, too, is an attempt to hurt publishers. As Auletta notes, a small percentage of successful authors subsidize the others, who are publishing worthy books that have small audiences, or who are early in their careers and are still trying to break out. If those profitable authors get skimmed off by Amazon, all the rest of us authors sink, and don't get published.
Again, don't get me wrong: I think a digital retailer is not only inevitable, it's good in many respects. Amazon is a force to be respected, and in some respects to be welcomed. As Auletta writes, it brings backlist books to the general public. But we have to recognize when it takes actions that hurt all authors.
There are two other points I wish to examine.
First, Auletta notes that 40% of books get returned. True; a huge number, no doubt. But he failed to note that this is not evenly spread across all books published. Some books sell out; others get almost their entire print runs returned. Let's examine this a little further: A publisher releases a first novel. The print run is small. The publisher targets independent bookstores, hoping to build an audience. The retailers take one or two copies each. In the end, this book is not successful. Many bookstores return all the copies they ordered. Next to it on the shelf is a bestseller, or a backlist book with a steady audience. These do not get returned. In other words, the returns figure that Auletta cites is actually another way in which successful books (and publishers) subsidize the up-and-coming authors, who need time to gain recognition and a healthy audience.
Publishing does have problems, some of which Auletta notes; but, as he also notes, it accepts a certain amount of inefficiency because it's necessary for the future of the business. What happens when all of today's well-known authors retire? You'd better have brought up a new generation of authors, which takes time and money, and a lot of returns along the way.
The other thing I'd like to examine is the comparison that one of Auletta's sources made. The comparison was that publishers were being like railroads, which made the mistake of thinking they were in the train business, not the transportation business. Huh? I actually know something about this. The problem with the railroad industry was that the structural forces of the industry impelled them toward cutting their prices below a profitable level. If a line had a roundabout route, and so was less attractive, it lost business. But since it was such a capital-intensive enterprise, it had to continue to pay a large amount to maintain track, rolling stock, and the like, even if it ran no trains. So it was in that railroad's interest to offer cut-rate prices to attract business, so it could get some kind of income, even if it was not enough to pay expenses. Then that would push stronger competitors to match the price cuts, and start to take losses as well. The result was constant downward pressure on prices.
That's the real comparison, and it's scary.