Luddites raise tired arguments over used e-books

13 Feb
Used bookstores didn't destroy publishing after all. Who'da thought?

Used bookstores didn’t destroy publishing after all. Who’da thought?

Amazon’s patent on “used” e-books has drawn considerable commentary over the past few days, and it should, given its potential to radically change how digital goods are sold online. It’s this actual point that makes one  particular commentary over on Vice seem especially foolish and out of touch.

A post titled “Used ebooks, the ridiculous idea that could also destroy the publishing industry” argues that Amazon’s entire end game is to cut authors and publishers out of their rightful slices of book sales. A used reseller of goods, after all, doesn’t have to give a penny to the original seller, which in this case is the publisher or author.

“On the grounds that publishers and authors don’t get a cut of physical used books, Amazon could easily seek to justify refusing to pay writers for secondhand transactions,” according to the article. “Used e-books are a paradoxical anachronism, a cannily capitalistic construct whose only aim is to squeeze authors and publishers.”

I’m getting tired of such thinking for two reasons. First, in the larger sense, there’s the inherent Ludditism in it. The inability for consumers to resell the digital products they buy has so far been a big strike against those digital goods when compared to their physical counterparts. How many times have we heard the argument of, “Why would I want to buy an e-book? Can I resell it? No.” Amazon’s technology looks to solve that problem.

While the various wings of the entertainment industry have publicly bemoaned the wide-scale piracy enabled by the internet, digital goods have also been good for them in the sense that they have made resale harder if not impossible.

Make no mistake: for some markets – notably video games – resale is a much bigger problem than piracy. The problem is that just when some of these content producers were figuring out how to use the existing system, Amazon has come along and thrown a wrench into the works with the potential of an entirely new system. Hey guys, welcome to technology – that’s how it works.

We’ve been hearing the same arguments since time immemorial. Used book stores were reviled by publishers once upon a time, while the movie industry tried to sue VCR makers out of business. In each case, the advances – whether they were technological or not – ultimately helped to make the industries even bigger. Business plans, believe it or not, had to change along the way.

“Used” e-books are not going to destroy publishers or authors any more than used book stores did. They will, however, force businesses to think differently and adjust their plans. Writers will always have a way to make money, and lots of it (unless we’re entirely replaced by robots), because there will always be a need for the next Twilight or Hunger Games mega-entertainment juggernaut. How will they do that in the future? Damned if I know.

But while we’re at it, we’re going to need to dispossess ourselves of the term “used” when it comes to e-books and other digital items. As many commenters including the folks at Vice have pointed out, a “used” e-book is just as good as a new one, since there’s no wear and tear on it. The connotation of a used good will therefore no longer be the same, so we’re going to need a new term for such products – perhaps something a little more exact and less pejorative, like simply “resold.”

Getting back to the argument at hand, the other thing I’m getting tired of is criticism of Amazon before it has actually done anything to deserve it.

In the standard business cycle of technology companies, an innovative idea comes along and disrupts an existing business. The implementer of that idea then builds a business around it, gets rich (sometimes via a new monopoly), then acts defensively and often anti-competitively to preserve said riches. Along the way, that inevitably means the company stops disrupting.

Given that, it’s perhaps understandable that many expect the other shoe to eventually drop with Amazon – which is why the company perhaps gets more than its due of criticism when it does goof, like with its blocking of user accounts or remote deleting of some e-books.

But as the “used” e-book patent indicates, the company still seems intent on disrupting. Amazon’s low or non-existent profits for much of its existence should also give it the benefit of the doubt. As the New York Times recently put it, “Amazon has had plenty of opportunities to raise its margins in the past, but has instead routinely chosen to reward customers with subsidized shipping and higher discounts.”

In a land where we’re all presumably innocent until proven guilty, we should perhaps rein in fears that Amazon is going to royally shaft everyone at least until there’s even a little bit of evidence that it might actually happen.


Posted by on February 13, 2013 in amazon, ebooks


3 responses to “Luddites raise tired arguments over used e-books

  1. Author & Reader

    February 13, 2013 at 11:29 am

    I’ve published one very large, highly technical ebook on Amazon. The book is sold with full lending rights and without copy protection. Nothing stops a buyer from sending copies to everyone in his company, to all his friends, and posting it on the net. But it’s for a niche market so I’m not expecting a lot of piracy. I had the choice of locking it up tight, so why did I publish it without restrictions? Because that’s the way I would like to buy an ebook.

    Maybe I’m an idiot, but I think most people are honest.

    I also sell the ebook on my web site in .mobi (Kindle) and .epub (iOS and many others) formats, both without restrictions.

    The used market doesn’t bother me at all since I’m currently selling my ebook as if it was a physical good. No, what bothers me about Amazon is their royalty structure. I fully understand that book publishers have been gouging authors for centuries, but that doesn’t make it right.

    Since Amazon’s storefront is all electronic, it costs them virtually nothing to have my ebook published through them. For doing all this “hard work”, they steal 65% of the gross. If I opt for the model where they only steal 30%, I can’t price the book at more than $9.99 but then they charge me for the delivery costs at a whopping 15¢/MB @ 25.9 MB = $3.89. That’s right, 39% of the cover price goes to delivery. The mob would love to get those margins. But wait, it gets better — they charge the delivery fee even if the buyer downloads over wi-fi. I am not kidding. Then they hold back another 30% of the net for U.S. taxes. I’m betting I’ll never see that money.

    On a $10 book at 70% royalty I take home $3. With the 35% royalty I have to charge $12.24 just to get the same $3 take home.

    Who did all the work again? Hmm…

    I also sell the book on my own web site using PayPal. PayPal charges $.30 + 2.9%, so I take home $9.40 on a $9.99 book. So please folks, buy direct from the author whenever possible.

    Amazon is anti-competitive and restricts me from selling at a lower price. They even have a link on every page to squeal on any author who tries to sell lower elsewhere.

    The music I buy has no restrictions but I’m not giving it away or reposting it. I buy small amounts of music from iTunes. It’s an easy experience. I buy through the musician’s web site whenever possible, even if it’s more of a hassle because as a content publisher myself, I understand they get to keep more of the money. I know other people who have never paid a dime for music.

    To me, it’s not the used book market that authors should be up in arms about. It’s the gouging that Amazon does. Amazon steals far more money from authors than piracy and reselling ever would because they skim off the top of every single book.

    • petenowak2000

      February 14, 2013 at 3:06 pm

      This seems to be a very exceptional case. Most books (text-based novel and non-fiction) come in at well under 1MB in size, in which case Amazon charges only 15 cents for delivery:

      So with taxes, delivery and Amazon’s cut deducted from a $9.99 e-book, you’d still get well over $6 (or 60%) in royalty. Compare that to a traditional publisher, which pays 12-15% royalty on printed books and 25% on e-books and… well, it’s no comparison at all.

      • Author & Reader

        February 14, 2013 at 3:31 pm

        I knew I shouldn’t have illustrated it so heavily, and for hi-res devices no less. Some images are 10’s of KB because they’re GIF & PNG, not JPG. JPG’s compression added too many artifacts.

        With over 650 images, I’m providing a lot of value to the reader.

        It still irks me to be dinged such a high delivery charge when it costs nowhere near that amount over cellular and essentially zero on wi-fi. If TekSavvy charged at that rate for the 300 GB data cap, my ISP bill would be $46 K a month. Even Rogers only charges $5/GB of cellular data on the $30/6 GB plan (0.5¢/MB).

        So Amazon charges me 30 times what Rogers charges and we all know how inexpensive Rogers is, right? NOW do you think Amazon is being fair?

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