Yesterday, Amazon touched off something of a firestorm by emailing hordes of readers and KDP authors for help, requesting authors email Hachette CEO Michael Pietsch to explain why lower prices are better for readers and the publishing industry.
Today, Pietsch has been responding to everyone who’s emailed him. I find his response reasonable enough — for the most part, he claims, Hachette’s ebooks fall beneath Amazon’s preferred $9.99 cap — but there’s one part that stuck out to me.
“The invention of mass-market paperbacks was great for all because it was not intended to replace hardbacks but to create a new format available later, at a lower price.”
This is false.
Well, technically, it isn’t false — it’s true that mass market paperbacks weren’t invented to replace hardbacks. But they weren’t published in the modern fashion, with a publisher releasing them months after the more expensive hardback. Rather, paperback rights were purchased by competing publishers who were able to sell their paperbacks for 10% of the price of the original hardcovers.
In other words, they were invented to disrupt the hardcover industry.
In 1939, the average hardcover cost $2.50-3.00 — the modern equivalent of $40-50. The new paperbacks cost $0.25 — a little over $4.00. Presumably, the first paperbacks were reprints in order to ensure the audience for those titles was already in place and minimize the paperback house’s risk of printing a dud. However, paperbacks blew up the market so well that by 1950, publishing houses were publishing paperback originals. It was feared these paperback originals would “undermine the whole structure of publishing.”
And they might have.
For more than twenty years, paperback prices held steady. They even declined; in 1961, some paperbacks cost as little as $0.35, just $2.79 in modern dollars. Then a funny thing happened. Starting around 1966, costs climbed to an adjusted $4-5. By 1975, they hit $6-7. And by the mid-1980s, mass market paperbacks cost the equivalent of $7-9.50. They’ve hung around $7.99-9.99 ever since.
After 25 years of steady prices, what happened to cause paperback prices to triple over the next twenty years?
When I first did this research two years ago, I stumbled onto the fact that this timeline coincided precisely with the conglomeration of the publishing industry. Beginning around 1958 and accelerating in the ’60s, small and medium publishers were gobbled up by the majors, culminating in today’s environment of the Big 5 (formerly 6). I assumed that the decrease in competition allowed the major houses to increase prices.
However, I think that’s only part of the puzzle. I am now entering the realm of speculation, so take the following with grains of salt. But I believe two more factors are at play.
First, most of the independent paperback publishing houses were bought up by larger houses. In other words, not only was competition decreased, but in many cases, it was gone. Meanwhile, tenfold disparity between the price of hardcovers and the price of paperbacks may have felt like far too much. Undermining the value of literature, if you will.
Second — and this is pure intuition; more research is required here — I expect that major publishers quit selling off their paperback rights. Likely, they used their newly acquired paperback imprints to handle publication of that format. No longer did you have two different publishers competing on price for the exact same title. Rather, you had a single company whose interest, obviously, was that these two separate editions wouldn’t compete at all.
That, I expect, is when Pietsch’s model finally came into play: a company releases a new book in hardcover, selling to all those who prefer the format or can’t wait to read it. Sometime down the road, months or even a year later, a paperback format is released, picking up a second market of readers.
Whatever Hachette would like us to believe, this is a radical change in intent from the paperback’s original role.
As a result, rather than selling a hardcover for $50 and a paperback for $4, they’re selling the hardcovers for $25-36 — often discounted by Amazon to $15-20 — and the paperbacks for $8-10.
Meanwhile, ebooks are lodged messily in the middle. It’s 2014. You can’t delay the ebook release the way you can delay the paperback release. You’d lose out on all those readers who now primarily or solely read ebooks. But so long as it is less than the hardcover, it’s still a bargain. Sort of. $8-15 is less than $15-20, right? Just make sure to drop it to $6-10 when that $8-10 paperback is finally made available.
It’s no wonder traditional publishers and Amazon are at loggerheads. Like Penguin and Pocket Books in the 1930s, Amazon essentially invented a new format of book. One that, with no per-unit production costs and negligible returns, could be the cheapest format yet. A format capable of opening up a new market of readers.
Or, more accurately, of resurrecting it.