October 19th, 2010 by Mike Fulton
Posted in eBook Publishing

One of this year’s biggest new releases in the Fantasy genre is Towers of Midnight, the penultimate entry in the long-running Wheel Of Time series by Robert Jordan, due out in about two weeks. I first heard about this new release a month or so ago when I saw it listed on Amazon’s Kindle Books page. The Kindle version was shown as being available the same day as the release of the hardcover edition. Skip ahead to now, and it’s gone. It’s been pulled from Amazon’s site. I took a look over at Barnes & Noble’s site, and the Nook version has been pulled there too. The release date hasn’t just been pushed back… it now looks like there is no eBook edition coming at all.

Towers Of Midnight book is being published by Tor, which is a division of Macmillan. If you’ve been following this blog, you might start getting the idea that I’ve got some sort of thing for the Macmillan publishing company, because their name keeps coming up. Well, I don’t. At least, not on purpose. But the thing is, it seems like every single time I find out about some weird thing going on with a publisher and eBooks, it comes back to Macmillan.

Despite having originally announced the release date on their own website in addition to doing it through various retailers, I’ve yet to see any explanation from Tor about why the eBook version has been delayed or cancelled. Creating an eBook is not really that difficult, so it’s hard to imagine there could be any technical issue. In fact, the only reason that comes to mind for delaying an eBook version that’s already been announced as coming out the same day as the hardcover version is because Tor/Macmillan thinks that the sales of the eBook version will cut into the sales of the hardcover version.

Of course, they’re absolutely right about that. No question about it, sales of the eBook version would definitely cut into the sales of the hardcover version.

The REAL question is, since eBooks are more profitable than paper editions, why would Tor/Macmillan want to hold back the more profitable version in favor of the less profitable version?

The X factor is how many people will buy both versions, and how does that number change depending on which version is available first? But even here, it seems like there’s no good argument for holding back the eBook version. It may be true that some people who buy the eBook version will want a nice hardcover edition for their bookshelves, but I honestly can’t imagine that too many people who buy the hardcover edition and read it that way will be interested in getting an eBook version later. Once you’ve read the book, what’s the point? Sure, there are some people who will be interested in re-reading it over and over, and some of those will be willing to buy the eBook version for that purpose, but I’d have to think that they’re a pretty small percentage of the total.

I hate to repeat myself, but as long as Macmillan keeps repeating their goofiness it seems necessary. My guess is that Macmillan has taken the whole eBook side of the business and just kinda tacked it onto the side of how they normally do things — including their accounting practices. I would bet they’ve failed to correctly gauge how profitable eBooks really are because they’re factoring in various costs into the eBook profit equation that don’t really belong there.

The obvious example is the idea that they might factor in production costs of the paper edition and average them across other versions like eBooks. However, there’s less-obvious examples. Like marketing costs… a big percentage of marketing costs for a book like this are used for various point-of-sale displays that get setup in book stores. It’s hard to imagine these help sales of eBooks as much as they do sales of paper books, but if they’re averaging all the marketing costs across all editions, then it makes the paper version look MORE profitable and the eBook LESS.

The bad news is, it will probably take awhile for most publishers to figure out how to do these things correctly. Especially old-school publishers like Macmillan.

The good news is that writers are generally not stupid. As their existing publishing contracts expire, more and more of them will either start publishing eBooks directly or at least start insisting on publishers being more intelligent about it. Old-school publishers like Macmillan will either be forced to change how they do things, or they’ll fall behind newer publishers who aren’t stuck in the 19th century.

Addendum

I just got an email from Amazon telling me that my pre-order of the Kindle version of Towers of Midnight has been delayed by 11 months to October 1, 2011. No reason is provided… they just say “an unexpected delay has occurred in delivering the Kindle version of the book listed below“.

Frankly, it’s not all that unexpected to anybody who’s been following all the various crap that Macmillan has been pulling with regards to eBooks. Unfortunate. Ridiculous. But ultimately not really that unexpected, sadly.

We need to let Tor/Macmillan know that we’re not happy about this. Their website is http://us.macmillan.com. There are various email links there if you want to email them. You can also write them a real paper letter at:

Macmillan
175 Fifth Avenue
New York, NY 10010
(646) 307-5151

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September 13th, 2010 by Mike Fulton
Posted in eBook Publishing

The available evidence would seem to indicate that there are certain publishers who simply don’t understand where eBooks fit into the grand scheme of things. They don’t understand that traditional notions of pricing, marketing, and selling regular hardcover or paperback books simply do not apply without modification to eBooks.

Macmillan

One such publisher is Macmillan. They came to my attention recently when I discovered that they were the publisher of several classic Isaac Asimov science fiction novels which were selling at $10.99 and $11.99 for the eBook editions. Since Asimov died nearly 20 years ago, and since the novels in question have been available as mass-market paperbacks for at least that long, and in some cases much longer, I had a hard time understanding where these prices came from.

Macmillan was the main publisher at the center of the big blowup with Amazon earlier this year over eBook pricing. Amazon had been pricing eBook versions of new hardcover fiction releases at $9.99, and Macmillan wanted the price bumped up to $14 or $15. Up to this point, Amazon had pretty much a lock on the eBook market, but the new Barnes & Noble Nook and Apple’s iBooks had opened things up a bit so that publishers had other outlets. At the end of everything, Macmillan got the price increase they wanted.

Macmillan recently published new hardcover editions of several Asimov classics. These are priced at $24.99 and are typically selling for around $16-18. Not too different from a regular new release, except of course that these are reissues of books that are 50-60 years old. The price of the hardcover edition might not be unreasonable, but it simply doesn’t make sense to set the price of an eBook edition accordingly when the books have been out in mass-market paperback for decades.

I really don’t have a problem with somewhat higher prices for eBook editions of brand new releases, as long as it doesn’t break the 2nd Commandment of eBook Publishing: an eBook version should never be priced higher than any physical edition. However, Macmillan is not just doing this on new releases. They’re consistently pricing eBooks at significantly higher prices than the mass-market paperback edition that’s already been out for awhile.

Macmillan CEO John Sargent wrote a blog post defending their pricing setup where he discusses how their overhead contributes to the price they set. The blog has a long list of comments, none of which take his side of things.

From reading that post, it seems that one of the big problems is that Macmillan is using what I call “goofy” accounting practices where they’re confusing the costs of producing eBooks with the costs of producing physical editions. They are trying to wedge eBooks into their existing business model and setting prices basically like it’s just another paper edition.

The only way this is going to work in the long run is for publishers to get the accounting done right. If they don’t, they’ll be underestimating the overhead of their print editions while the market for such is shrinking. That’s going to come back and bite them in the behind at some point. No doubt they’ll eventually figure out how to fix things or they’ll go out of business. Personally, I’d rather they bought a clue somewhere and stuck around.

Their website is http://us.macmillan.com. There are various email links there if you want to email them. You can also write them a real paper letter at:

Macmillan
175 Fifth Avenue
New York, NY 10010
(646) 307-5151

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