Why your e-book really isn't worth fifteen dollars
Recently, there was a dust-up between Amazon, an information technology colossus that happens to sell books, and Macmillan, one of the six conglomerates behind just about every book published in the United States. Amazon wanted to price all of its Kindle e-books at $9.99 or less; Macmillan, not wanting e-books to undercut its sales of paper books, wanted a deal where they set the retail price and guaranteed Amazon a fixed proportion of the take. As negotiations bogged down, Amazon, no doubt wanting to Send A Message, decided to remove all Macmillan books from its catalog—not just the e-books, but the paper editions as well. At which point authors and fans whose books had been delisted Sent Their Own Message, along the lines of, Amazon, You Suck. So Amazon caved, and now Macmillan is free to offer $14.99 e-books to the masses.
Some people may wonder: why on earth should anyone pay fifteen bucks for a stack of bits that cost nigh-unto-zero to reproduce? In response to this argument, Tobias Buckell walked his readers through what it costs to publish a book, pointing out that even before you consider the cost of paper and ink and shipping, the editors and artists and proofreaders have to get paid. According to Scott Westerfeld, the cost of printing a book is between three and ten percent of list price.
I’m not going to argue with Real Authors (especially authors whose books I like) about the economics of the publishing industry, but I beg to point out that in the free market, prices are set by supply and demand. As a representative of the “demand” side, I think something is seriously amiss here.
I can’t stand to read long documents on an LCD screen, so if I’m ever going to take the e-book plunge, either laptop screens need to improve significantly, or I’m going to get an E-Ink-based reader. The Amazon Kindle and the B&N Nook both retail for $259.00. According to the Consumer Expenditure Survey for 2008, that’s double what the average American spends on reading in a year. In exchange for that $259.00, I would have free access to a whole pile of out-of-copyright and freely licensed documents in e-book form, but since I’m not reading those works now, I don’t consider that access to be worth anything to me. What about all those e-books that I can buy?
I checked out Charles Stross’s titles on both Amazon and B&N. When a Stross title is available as a mass-market paperback, the paperback almost always lists for $7.99 (B&N currently is having a “everyone gets the member rate” sale, so they are actually offering them at $7.19) and the Kindle or Nook edition almost always costs $6.39. Buckell’s Crystal Rain and Ragamuffin are available for $7.99 in either mass-market paperback or Kindle form. The books in Westerfeld’s Uglies tetrology are either $8.99 or $9.99 in paperback, depending on the title; the discount on the e-book version ranges from $1.00 to $5.77 (the latter is for the Kindle version of Extras, the most recent book in the series; I assume that’s a promotional rate).
Let’s generously assume, based on the numbers in this survey, that the e-book versions of the titles I would want to buy will sell for, on average, a $2.00 discount off their paperback prices. At that rate, I’d have to buy 130 e-books before I recoup the cost of the reader itself. And who knows how many times e-book pricing and technology are going to change before I buy another 130 books?
Wait a minute. Did I say it cost $259.00 for an e-book reader? But of course, I want to be able to share my books with my wife, and sometimes we both might want to read different books at the same time. So our household would need to get two readers, the cost of which might be recovered after buying 259 books.
And on top of that, the value to me of an e-book is less than that of a paper book, because with the Digital Rights Management built into the technology, I can’t loan my e-book to a friend (unless I bought it from B&N and the title has “LendMe™” enabled as a special feature), sell it to a used book store, or donate it to a library.
Obviously there are a few people out there who find enough other value in e-books to make them worth the money. (Best-sellers seem to have very steeply discounted e-book editions, so if you’re the sort of person who likes to read a lot of best-sellers as soon as they come out, e-books may be a reasonable choice for you.) Hopefully their dollars will sustain the industry until it can come up with a business model that makes sense to the rest of us. And perhaps there are others who thought the cutting-edge technology they bought was a wise investment, and are now fuming about how their hopes have been dashed, their expectations frustrated. All of this has happened before, and it all will happen again.
In the meantime, paper books are serving me well, so I’ll keep buying them.
Health care reform: state of play
Every once in a while my wife asks me, “So what is in this health-care reform bill, anyway, and what good will it do us?” And I usually answer something like “a hummina hummina hummina”, because with all the negotiations and plans and bills and amendments and proposals that have been floated for the past nine months, it’s hard to keep track. Fortunately, Igor Volsky, of the Center for American Progress’s “Wonk Room” blog, has compiled a handy table showing the salient differences between the bill passed by the House, the bill passed by the Senate, and the compromise that the White House has proposed today.
The common points, briefly, are:
- Everybody except the very lowest-income families, or people whose premiums would be more than a certain percentage of their income, must buy insurance.
- Most employers will be pressured to provide insurance to their employees, but the exemption for small employers and the exact form of pressure varies among the bills.
- Lower-income households would get subsidies to help them pay their premiums.
- The subsidies are financed by some combination of an excise tax on high-premium insurance plans and a tax hike for higher-income families.
- If you like your current coverage, you can keep it, and will receive additional consumer protections.
- The “donut hole” in Medicare Part D will be gradually reduced or eliminated.
Thinking outside the beis medrash
I’ve seen a lot of angst in the Jewish blogosphere over the ever-rising cost of day school tuition; this article, linked by someone on my LJ-friends list, is the latest example of the genre. The problem has a tragic dimension, because of a little-known wrinkle in economics called the Baumol effect.
James Surowiecki explains:
When Mozart composed his String Quintet in G Minor (K. 516), in 1787, you needed five people to perform it—two violinists, two violists, and a cellist. Today, you still need five people, and, unless they play really fast, they take about as long to perform it as musicians did two centuries ago. So much for progress.
An economist would say that the productivity of classical musicians has not improved over time, and in this regard the musicians aren’t alone. In a number of industries, workers produce about as much per hour as they did a decade or two ago….
The rest of the American economy functions differently. In most businesses, workers are continually getting more productive and can produce a lot more per hour than they could ten or twenty years ago. In 1979, workers at G.M. needed forty-one hours to assemble a car. Today, they need just twenty-four…. Because companies are producing more for less, they can hold down costs, and when times are good they can raise wages without hiking prices. So, in the late nineties, as productivity rose, wages did, too, though inflation lay dormant.
Generally, productivity growth is a boon, but it creates problems for non-productive enterprises like classical music, education, and car repair: to keep luring talent, they have to increase wages, or else people eventually migrate to businesses that pay better. Instead of becoming nurses or mechanics, they become telecom engineers or machinists. That’s why teachers are getting paid a lot more than they were twenty years ago. (The average salary for an associate college professor has risen almost seventy per cent since the early eighties, and that’s if you adjust for inflation.) To pay those wages, schools and hospitals have to raise prices. The result is that in industries where productivity is flat costs and prices keep going up.
So if we want to keep Jewish education accessible, instead of letting it consume an ever-increasing proportion of each family’s income, we have to think about ways to make it more productive. How could our community achieve at least some of the goals of Jewish day school without hiring one full-time teacher for every fifteen to twenty-five children?
I’ll offer one idea: A team that knows something about Judaism and programming could set up a Jewish-themed online role-playing environment, where Jewish kids from all across the country, whether or not in day school, could meet like-minded folks, socialize, and take lessons in Jewish religion and culture in the form of quests for honor and treasure. We could call it “World of Frumkeit”.
A House divided against the other house
There’s a joke about a junior Democrat in the House of Representatives who, speaking to one of his elders, referred to the Republicans as “the enemy”. The old statesman corrected the youngster: “The Republicans are the opposition. The Senate is the enemy.”
Please call your Representative TODAY
Democrats in the House are now trying to decide what their next step should be with regard to health care reform. The main options under discussion seem to be:
- Hold their noses, pass the Senate’s bill, and move on to the next agenda item. (This would require liberal Democrats to hold their noses very, very tightly.)
- Pass the Senate’s bill and then pass a separate bill, through the budget-reconciliation process, that fixes the parts that the House finds most obnoxious. (This would require some assurance from Senate Democrats that they’d actually take action on the separate bill. Such assurance is not currently forthcoming.)
- Break health care reform into several smaller bills and pass those bills separately. (Each of those bills would then have to go to the Senate, which would have to pass a motion to introduce the bill, a motion to end debate on the bill, and a motion to end debate on putting the bill to a final vote; each of those motions could be filibustered and even if they got 60 votes for cloture, Senate rules allow 30 hours of debate on each motion. The people who are proposing this route either have a truly cunning plan or are on crack.)
- η Pass a bill that’s even weaker than what the House and Senate have passed in the hope that at least one Republican can be persuaded to vote for cloture on it. (AAARRGHH!)
The longer they dither about this, the worse the party looks and the greater the chance that everyone will just walk away from the issue and hope the Republicans don’t make mincemeat out of them in the fall. I would say that the need to take some action, on both political and policy grounds, is so blindingly obvious that a rational politician shouldn’t need encouragement, but—sigh—we’re dealing with Democrats here. I would say that politicans who are so committed to acting like losers don’t deserve to win elections, but even if they deserve that consequence, the country doesn’t.
So if you vote in the United States and your district is represented by a Democrat in the House, please call your Representative today and let him or her know where you stand. The House switchboard is (202) 224-3121.
Overdrawn at the phone bank
I spent today volunteering for the Coakley campaign, helping it try and snatch victory from the jaws of defeat (after the Democratic Party spent a month going “jaws of defeat? what jaws of defeat? we can’t possibly lose!”—but every other liberal blog in the country has that rant). I told the Organizing for America coordinator that I was interested in canvassing, but not in making phone calls, because enough of my friends, not to mention my wife, had been complaining about the incessant phone calls. (What with the mayoral election in November, the special-Senate-election primary in December, and the election itself today, it has been the season for everybody and his brother to leave us a message explaining how So-and-So is the greatest politician since Pericles and could you please remember to vote on Tuesday.)
And hanging out at the office (of a union local that was participating in the campaign), waiting for the van to come pick up us canvassers, I talked to some of the other volunteers and some of the office staff, and they too were kinda sick of all the phone calls. And this was one of the offices from which people were making phone calls on behalf of the candidate. Seeing the instructions for those folks, I could imagine what kind of technology they were using on the back end; it’s sort of cool. A good Asterisk hacker could probably build it in a month or so.
The procedure for participating in the vote-for-Coakley phone bank went something like this:
- Call a certain toll-free number and type in your ID number on the telephone keypad.
- Listen to a tutorial on how the system works.
- When you hear a beep, it means you are connected to a real live person and not an answering machine. Say “hello” and go right into your vote-for-Coakley script.
- When the call is finished, do not hang up. Instead, press the star key.
- Then type in a code indicating the kind of response you got. (I don’t remember the numbers, but it was something like 1 for “hang up”, 2 for “I already voted”, 3 for “I haven’t voted but I will”… you get the idea.)
- You will automatically be connected to the next voter; go back to step 3.
So if you were, say, a college student in California who wanted to do something for the Massachusetts Senate race (on either side—I assume the Republicans have a similar system), but you had no money to donate, you couldn’t fly out to Massachusetts, and indeed you only had the occasional half-hour between classes… no problem! The party could give you their phone bank’s toll-free number, give you an ID number, and you could do your part to grease the wheels of democracy. And with this technology, a small staff could manage to get useful work out of hundreds (thousands?) of untrained passionate volunteers all over the country. Isn’t that great?
Maybe not.
By making each voter telephone contact so cheap for the caller, even as the irritation level for the callee has stayed constant, the whole enterprise of phone-banking is starting to resemble spam. The only difference is that when you get spam in your mailbox advertising organic penile-enhancement products, you don’t really know who sent it, so you delete it (or send it to your spam filter’s tuning system) and get on with your life. If you get spammed over the phone in the name of some political candidate, you remember that candidate’s name, and not necessarily favorably.
In preparation for next fall’s Congressional elections, party committees would do themselves a big favor by deciding how many times they really needed to contact each voter by phone, setting themselves a limit, and publically pledging not to go over that limit. In some districts, this sort of discipline might force them to turn away volunteers—telling them “if all you can do for us is make phone calls, sorry, we already have enough people to reach everyone we need and we don’t want to overdo it”. It might be hard to turn down free labor, but this is a freebie that comes with a hidden cost.
An incisor-lickin’ good movie, with a message for our times
Recently, Rabbi Arthur Waskow, a leader in the Jewish Renewal movement, encouraged “fellow-seekers for peace and healing of the earth” to see Avatar, James Cameron’s film about native resistance to a resource-extraction conglomerate, and to connect that film with the upcoming Jewish holiday of Tu B’Shevat.
In the same vein, I encourage my environmentally conscious readers to go out and see Daybreakers, this year’s big-budget movie about vampires who combust rather than sparkle.
Daybreakers is set in a future where nearly every human being on earth has become a vampire, but now a blood shortage is putting their eternal lives at stake. Just like overfishing has ruined the stock of North Atlantic cod, ten years of growth in the vampire population has reduced the human population to a minute fraction of its former glory, and even with advanced technology sustaining humans in blood-farms, there is not enough left to slake the planet’s thirst. The main character, a hematologist for a sinister vampiric megacorporation, is trying to synthesize artificial blood that can mitigate the need for human stock, but as his experiments result in failure after failure, bloodlust-driven civil unrest becomes more and more of a threat.
One might ask: how on earth did these vampires let the situation get so far out of hand? Couldn’t they have, for example, ensured that a healthy breeding population of humans was kept alive in some kind of nature reserve? But of course, future generations will probably ask similar questions about our own environmental catastrophes, in which our own short-term hunger is blinding us to the long-term needs of our planet. The vampires of Daybreakers, thus, reflect our own selfish desires back to us, and the movie teaches us a valuable ecological lesson: manage your stocks of edible wildlife, or they will manage you.
PS: Speaking of blood-sucking: eleven dollars for a movie ticket?!
Weak tea
Hall’s Third Rule of Politics states: “Constituency always outweighs consistency.” Thus, activists who fly the banner of the “Tea Party” have been eager to condemn “socialist” government spending. But the tea-partiers in Michigan have found one government spending program they like: the auto-industry bailout.
Joan Fabiano, a tea-partier and former GM employee, justified her non-protest by saying: “Would you like to see yourself out of a job if your company’s leadership made the errors and you had NOTHING to do with it?”
Ma’am, we have this word for economies where company leaders, no matter how incompetent, end up choosing which employees keep their jobs. The word is “capitalism”.
Happy new decade
Almost ten years ago, some of my friends were discussing what we should call this decade: the Oughts? the Naughts? “The Zeroes”, my wife said. As it turned out, she was prescient.
Good-bye, Decade of Zeroes. Don’t let the door hit your Sylvester on the way out.
Comrade Vladimir Ilyich has left the building
Like most liberals, I’m disappointed by all the compromises that the Democrats had to make to get their 60th Senate vote1 for health care reform. But make no mistake: even without single-payer, public option, or Medicare buy-in, this law is A Very Good Thing. Kevin Drum summarizes what we are getting:
- Insurers have to take all comers. They can’t turn you down for a preexisting condition or cut you off after you get sick.
- Community rating. Within a few broad classes, everyone gets charged the same amount for insurance.
- Individual mandate. (Remember how we all argued that this was a progressive feature back when John Edwards and Hillary Clinton were championing it during the primaries?)
- A significant expansion of Medicaid.
- Subsidies for low and middle income workers that keeps premium costs under 10% of income.
- Limits on ER charges to low-income uninsured emergency patients.
- Caps on out-of-pocket expenses.
- A broad range of cost-containment measures.
- A dedicated revenue stream to support all this.
The chief objection to the bill, among left-wingers who would rather blow the whole thing up than pass it, is that by requiring everyone to buy insurance and not having any publically sponsored competition to keep prices down, the bill represents a massive giveaway to the for-profit insurance industry. On the one hand, they are absolutely right. On the other hand, letting corporate interests skim off social-welfare programs has been standard operating procedure in American politics for decades, even before Ronaldus Magnus. Food stamps are a wonderful benefit to agribusiness. Federally guaranteed loans for both housing and college education are basically free money for banks. Programs like SBIR funnel government research grants to private firms with the explicit expectation that those firms will turn the research into profitable commercial products.
This is all basically legalized graft, but it does give these programs stakeholders with more political clout than, say, minimum-wage workers. And I don’t see how progressives can push the political system far enough to the left that cutting deals with Big Business becomes unnecessary. To do that, a President Obama wouldn’t be influential enough; we’d need a President Lenin.
1 They passed up a golden opportunity during the Bush years. When Republicans were clamoring for an “up-or-down vote” to get Bush’s Supreme Court nominees in, the Democrats should have doubled down and said, “let’s eliminate the filibuster for everything”.
