Wednesday, October 21, 2009

My Latest Industry Theory

Many of you have probably heard that Amazon and Wal Mart are involved in an all-out book pricewar right now, lowballing book prices to compete with one another, and driving indies out of their minds considering they can't afford to do the same.

Sadly, in this economy, what's anyone to do but go with the lowest price they can find. I pre-ordered King's Under the Dome, which is retailing at $35, one can only hope that some of the extra $10 goes to paying for the extra pages in this over 1,000 page tome, and just realized that the price has dropped since my order date from $19.95 to $9.

$9 freaking dollars. But I'm sure some of you are still reeling over the fact that the laydown price is $35.

This is not the first over $25 title released of late -- Harry Potter and the Deathly Hallows $34.99 (784 pages), The Lost Symbol $29.95 (528 pages) -- all HUGE bestsellers in the industry.

In some cases, the price seems to be increasing along with page number, but if you compare two similarly sized titles in similar genres -- the new Barbara Kingsolver is 528 pages and only costs $26.99, a whole $3 less than Dan Brown's latest and the same number of pages -- you see that the page number/cost ration is not necessarily a correct assessment.

Obviously a much more in-depth look would be required in order to make a valid theory, but based on what I've seen (and book prices that used to average $25.95 seem to now average about $26-27 based on the latest releases) it looks as though the industry is looking to the heavyweights to make up their sales numbers from the past year.

Now you should all know by now that I actually have no issue paying for a hardcover book, as long as I still have work to support that habit. And even if my own income slips, I cut other places (from deli meat to bologna) to make up the cost when I can. (I don't drink coffee so saving on the daily latte is not going to help me).

Which is not to say that there aren't options for book junkies out there. The library, for one, if you're budgeting and willing to wait the months it takes to get your grubby hands on a popular new release. Or, Amazon. Which is what I use. The Strand is also a good one for bargain prices and it's technically an indie store.

Sad but true, I'm a total hypocrite. The need for bargain prices and saving bucks is a two-fold issue. One is the fact that none of us can afford it right now. Our society is a retail one and we all want to buy, but with layoffs and the economy "crisis" we have to look for bargains or stop spending. And neither one is good for the economy or the rest of the folks who still have jobs or the possibility that more jobs will open up (not that we should all be working retail as adults anyway! but that's another issue altogether).

But the issue is an older one than that. We're cheap. We want what we want and we want a bargain price for it. Sales, coupons, haggling, these were all taking place before the craptastic economy became what it is now. Honestly, there comes a point where the price is as low as it can go with a profit still being possible. We've all heard how the big box stores claim not to have made any money off the HP releases because of the deep discounts they chose to offer. In fact, it was the other items that they were counting on folks buying while waiting for the midnight releases that they planned on making all of their money on.

And if you do the math, if you know the math, of a $25 retail price on a book, the bookstore only makes a certain percent. They may buy it at 50% cost and then retail it at full price, but the $12.50 is whittled down by shipping costs, by the cost of paying employees, and by every other overhead cost that the store has before they can count it as true profit.

But look at it from the other side. The publisher sells it at 50% cost and of their half they have to pay the author (if they've sold over their advance), they have to pay production costs, they have to pay the author's agent, they have to pay for marketing (and let's hope they've gone this route because marketing is how the word gets out about the book in the first place), and they have to pay for their own employees.

I guess my main issue is why the books are so expensive these days anyway. If the $25.95 book has been the mainstay of the hardcover market for the past 15 years or so, and that's about how long I've been buying hardcovers, then what has happened that all of the sudden they have to increase the costs so much?

Worldwide, production and shipping have increased, that's a given. Employment rates have gone down, but minimum wage has gone up so those two might balance out, I don't know. But again, it does look as though the Dan Browns, Stephen Kings, and JK Rowlings, the stars' if you will, books are increasing in price dramatically over the average.

All I know is this, most people don't read as quickly as I do. $25-$35 for a hardcover book, if compared to the volume of pages in the book itself (and if it's an average sized book on the higher end of the spectrum, that throws it off a bit, but I mean 250 pages at $25 and 1,000 pages at $35) at the average reading speed -- note, I can't find the actual statistics in real studies of how much the average American reads. It's low, like 50% have read less than 1 book a year. So if we're super generous and say that someone reads even 1 book a week, which is less than half of what I read, then that would mean that the reader is getting at least 7 days of entertainment out of their $25-$35. The average movie ticket is $10, for 90-120 minutes of film. So a hardcover book is still a good deal unless you devour like I do.

And us devourers are the ones who are making up for you slackers out there who read less than 1 book a year. Dan Brown's latest is at least 4 years overdue, so I'm guessing that means some of you 1-a-year folks haven't read anything since Da Vinci Code. Shame, shame!

Demand drives costs. I'm guessing that even though we seem to be seeing the opposite here, demand is increasing the cost and the bookstores (who can) are undermining it by discounting back to the average, that if there were more sales of books in general, that the cost of books would average out again thereby creating a marketplace where the indies can once again compete with the big box stores -- which is good for us readers all around. While this pricewar is terrible for indie stores, it is good for us consumers. We want them to want us to shop with them. The problem is that the average indie store falls off the grid with an issue like this and is eventually forced out of business. And the bigger problem is that right now, there's not much to be done about it because every industry is facing the same thing.


Christy Pinheiro, EA ABA said...

I have a theory about this too-- Amazon consistently prices it's books BELOW the $25 mark because that forces people to purchase an additional book in order to qualify for free shipping.

Also, they undercut the authors by selling returns at below list price. I verified this myself.

Diane said...

I took advantage of this as well and ordered: Under the Dome; Pirate Latitudes and The Lacuna...each was $9.00 (all come out in Nov).

Vickie said...

I don't do HB unless I see it for trade somewhere or someone gives it to me. They are crazy costly and I rarely need to read a book as soon as it is released. I like new releases, don't get me wrong, but I prefer TPB or MPB new releases.
I do indie as much as possible. I do B&N on as needed basis, but that's about it for the box stores. Wal-Mart, SuperTarget, etc rarely carry the books I want to read.