Sacre bleu! Amazon (s amzn) and Google’s (s goog) digital book efforts could force publishers to slash prices and put them out of business, says Arnaud Nourry, head of French book publisher Hachette. He is concerned that unilateral pricing by e-book resellers like Sony (s sne), Amazon and Barnes & Noble (s bks) could destroy publisher profits. “On the one hand, you have millions of books for free where there is no longer an author to pay and, on the other hand, there are very recent books, bestsellers at $9.99, which means that all the rest will have to be sold at between zero and $9.99,” Nourry was quoted as saying in today’s Financial Times.
This is only partially true, of course. Books have a long and very rich history that cannot be easily replaced by electronic versions. There are many bibliophiles (including myself) that have shelves full of books that won’t get tossed aside in favor of my Kindle — a gadget which, at the moment, has a malfunctioning screen. That’s a problem I don’t run into with a paperback. There’s nothing quite like going into a bookstore and browsing the shelves looking for your next great read, so the electronic revolution won’t affect books as much as it has music and movies. There’s something romantic about a physical book that just isn’t there with CDs and DVDs — perhaps because the printed book has been around for hundreds of years, and audio and video have gone through a quite a few format changes in their short existence. This also makes books unique in the content realm, in that they are quite difficult to pirate.
Regardless, Nourry has a point. He claims that retailers like Amazon are paying more than $9.99 for each e-book, thus selling them at a loss. He goes on: “That cannot last…Amazon is not in the business of losing money. So, one day, they are going to come to the publishers and say: By the way, we are cutting the price we pay. If that happens, after paying the authors, there will be nothing left for the publishers.” It’s not clear if that is true or not, but we do know that Amazon takes 70 percent of newspaper and blog subscriptions on the Kindle, with only 30 percent going to the content maker. Further, is it really a bad thing if the publisher is left out in the cold? Reading the rejection letters of hit authors makes one wonder what need there is for publishing houses at all, in the age of the Internet.
That’s what Mr. Nourry is so worried about. He is terrified that authors (and Amazon) will realize that they don’t really need his industry to get things done. Don’t worry, Arnaud. Yes, prices might go down and your cut may shrink — but perhaps you should be thankful that people will still be buying books in 10 years. That’s more than can be said for CDs and DVDs.