Tuesday, May 12, 2009

"Pernicious" Pricing and Increasing E-book Piracy

It looks like book publishers are now suffering the fate of media markets who have gone before them into the digital frontier. Best selling e-books are cropping up on self-publishing books sites offering free titles to the masses.

"For a while now, determined readers have been able to sniff out errant digital copies of titles as varied as the “Harry Potter” series and best sellers by Stephen King and John Grisham. But some publishers say the problem has ballooned in recent months as an expanding appetite for e-books has spawned a bumper crop of pirated editions on Web sites like Scribd and Wattpad, and on file-sharing services like RapidShare and MediaFire." More: NYTimes

Authors seem divided on their opposition to such activity. Harlan Ellison threatens pirates with medieval measures saying those that stick their hand in his pocket will draw back a bloody stump while other authors like Cory Doctrow offers free digital downloads of their books on the same day they are released to traditional bookstores.

“I really feel like my problem isn’t piracy,” Doctorow said. “It’s obscurity.”

Richard Sarnoff, CEO of the company that owns megapublisher Random House, seems to think the escalating problem of piracy is the result of publishers not offering services consumers want at a price they are willing to pay.

“If iTunes started three years earlier, I’m not sure how big Napster and the subsequent piratical environments would have been, because people would have been in the habit of legitimately purchasing at pricing that wasn’t considered pernicious,” said Richard Sarnoff, a chairman of Bertelsmann, which owns Random House, the world’s largest publisher of consumer titles. - More: NYTimes

I have a lot of respect for Random House since I have been a customer of their online audio books division, Audible.com, almost since it's introduction. I think their monthly subscription program offers an excellent value for the money. But, I'm sorry, Mr. Sarnoff, but in my opinion the current pricing for Kindle editions of hard copy books offered on Amazon does border on the pernicious. So, it is not surprising the tide of online piracy for e-books is rising.

The publishing industry is saving huge amounts of money if they don't have to print, bind, warehouse and distribute hard copy books. According to some authors, publishers aren't even putting much effort into editing any more either. I see increasing evidence of this in the hard copy books I have been reading lately, finding them peppered with misspellings and poor sentence structure. So I find it incongruous that they demand almost as much for an e-book as a printed one.

Audio books require extensive investment in production, with the hiring of quality voice talent, rental or maintenance of a fully equipped recording studio, editing and mixing often including music and sound effects. E-books, though, in their current form, are little more than reformatted Word documents. If they don't include illustrations (which sadly, most fiction these days doesn't), most formatting can be totally automated using the digital file submitted by the author. Furthermore, consumers are asked to lay out higher and higher amounts for single-purpose viewing devices - much more than MP3 players that can play most audio books. The new large format Kindle costs more for a monochrome display device than a consumer pays for a well-endowed color-capable computer that can be used for a myriad of activities. No wonder e-reader manufacturers are nervous about Apple's announced plans for a color tablet.

I hope Random House will draw on its experience with Audible and develop a more reasonable pricing structure, hopefully accompanied by device subsidies if device manufacturers cannot (or will not) come down on retail prices.

Now if Amazon could talk some sense into the movie studios and get them to be more reasonable in their video-on-demand prices. I bought a Roku box to enable me to watch movies from my instant Netflix queue on my big screen TV and was excited when I got an e-mail announcing that the device would now support Amazon's video on demand service. But then I went up on Amazon and saw that they wanted almost as much to purchase a digital download - with no guarantee that the title would remain available indefinitely for download - than a hard copy DVD. Only a $2 difference? Give me a break! I am so anxious for video-on-demand to evolve into its full potential that I even went through the device authorization procedure but when it came down to it I just couldn't force myself to go through with the purchase, knowing if I waited a couple of months I could buy the regular DVD for just a little more than half the price.

Of course ultimately, what I would like to see is a slightly higher Netflix subscription that offers ALL of their titles digtitally available on demand. Surely it would be more profitable than having to maintain shipping centers and DVD inventories. Then if cable producers would offer their programming ala carte, we'd truly be in entertainment heaven!

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