eBooks are bad for authors?

I don’t know enough about book publishing and distribution to evaluate this properly, but it doesn’t seem right. Freakonomics reports that according to the US Authors’ Guild, authors will be worse off while publishers will be better off comparing ebooks to hard covers.

When I say “doesn’t seem right” I’m referring mostly to the fairness of it, but I’m also wondering how it can possibly be true.

Of course the analysis if by the Authors’ Guild, so they are naturally likely to be biased towards authors. Specifically, I don’t care how many examples they quote – I’d like to see the real data or at least a random sample of data.

They don’t talk about sales volumes, but although higher volumes might still make authors better off than the pure margin analysis shows, I expect it will have an even better impact for the publishers.

The comparison of ebooks against hardcovers is an interesting choice. I would imagine there are far more paperback books sold each year – a more thorough analysis would consider that as well.

I read another recent story about John Locke making a fortune by leveraging the low cost of ebooks and the price elasticity of books. By dropping the price of his books to 99c he is making more money than when he was selling them for ten times that.  I don’t see how that isn’t a boon to authors from ebooks.

Ultimately, it probably isn’t ebooks that are bad for authors as much as it is the pricing model of current ebooks (in this case basically Amazon but also Apple with their iBook Store).

As I said at the start – I don’t know enough about this. If anyone can shed some light, please comment away!

Published by David Kirk

The opinions expressed on this site are those of the author and other commenters and are not necessarily those of his employer or any other organisation. David Kirk runs Milliman’s actuarial consulting practice in Africa. He is an actuary and is the creator of New Business Margin on Revenue. He specialises in risk and capital management, regulatory change and insurance strategy . He also has extensive experience in embedded value reporting, insurance-related IFRS and share option valuation.

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1 Comment

  1. They are certainly a threat to their immortality, as files on hard drives and flash, replace row after row of hardcovers, in public and private libraries across the globe.

    Our digital mediums have lifetimes measured in years; paper and granite are still the only way we know to reliably store information for centuries…

    But it’s about more than just the practical matter of information storage and retrieval; memorials have to be real; you have to be able to see them unaided; touch them.

    Didn’t really answer your question, and now I am late for work:(

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