Amazon CEO Jeff Bezos thinks books prices overall are too high and that this is part of the reason authors aren’t making as much money as they used to — but he’s only half correct when he says authors can make more money by charging less per book.
“Book prices in my view are too expensive. … $30 for a book is too much,” Bezos told Business Insider’s Henry Blodget on stage at an event in New York City today. He explained that the traditional logic for booksellers has been that books are only ever competing with similarly priced ($20 to $30) books for consumers’ hard-earned money, but what’s actually happening is that books are also competing with other kinds of digital media like games, TV episodes, and songs.
“If you realize that what [books] are really competing with is Candy Crush, then you’d start to say, ‘Gosh, maybe we should work on reducing friction on long-form reading,” Bezos said. “If you want to do more of something, make the friction less. If you want less of something, make the friction more. If there’s a particular snack food that you like a lot and it’s making you fat, put it on the top shelf where it’s harder to get to, and you’ll eat less of it.”
The “friction” he is referring to includes the high price of books, which if lowered would lead to more people buying them. In turn, those producing books would make more money — including authors. So, for example, you might buy one new hardcover per month at the average price of around $30, but if the average price were lowered to $10, you might end up buying four to five books over the same period, thus increasing the total amount spent.
“Making reading more affordable is not going to make authors less money. … It’s going to make authors more money,” he said.
But Bezos is only half correct. Regular book publishers probably could sell more books and make more money if they lowered prices. Alternately, authors could ditch their regular publisher in favor of Amazon’s publishing arm, which offers a greater cut on book sales and more control over pricing. But neither of these scenarios are likely to increase the total amount of money going to authors.
Why? Well first of all, regular book publishers do have a vested interest in helping authors make more money, but their first priority will always be to ensure their own profits remain healthy. If lowering book prices will increase the publisher’s profits, then it will do so, but not to the extent that it’ll lose money so authors can make more.
Secondly, authors could start publishing through Amazon’s publishing arm for the bigger cut on each book sold, but the total number of books sold will likely be lower. This is because books under Amazon Publishing sell only through Amazon’s online stores (not competitors), and won’t get the kind of marketing and promotion offered by regular book publishers. In other words, it’ll be a lot harder for authors to produce a bestseller. And that means regular publishers might actually offer a more lucrative deal.
Authors know this, and that’s why they weren’t so quick to side with Amazon during Amazon’s recently resolved fight with major book publisher Hachette, which had to do with the online retailer wanting a more generous set of terms that would allow it to sell Hachette book titles at a lower, more competitive rate while still turning a reasonable profit. It caused a fight between the two parties that led to Amazon removing Hachette book titles from its product recommendations, eliminating all discounts on those titles, and otherwise discouraging consumers from buying them. The compromise was to allow Hachette to set retail prices on all titles sold through the online retailer. Hachette obviously has a vested interest in helping the authors of its published books make more money, but I highly doubt this will be prioritized over ensuring its own profit margins remain high. That means authors probably won’t be cashing larger checks, sadly.
It is worth noting that Amazon is working to “reduce” friction in other ways when it comes to books and long-form reading, such as keeping prices low on its branded tablet and e-reader devices and attempting to sell books by the chapter (aka Kindle Singles). Those moves aren’t going to help full-time authors in the short-term, but it’s definitely a good start. And Amazon is certainly doing a heck of a lot more than the major book publishers.
With the rise of self-publishing services like Blurb and Amazon-owned CreateSpace, this lose-lose scenario for authors may begin to change, but it’ll be a while before they are making the kind of money they deserve from a bestselling title.