Wednesday, March 31, 2010

In E-Book Era, You Can’t Even Judge a Cover

New York Times article "In E-Book Era, You Can’t Even Judge a Cover" (March 30th, 2010) describes how e-books are changing free advertising that book publishers received from third parties seeing a book being read. For example, one brings the distinctive Marx Engels Reader, edited by Robert Tucker onto the bus--others see it, remember it, and purchase it. This does not happens, the Times conjectures, with e-books. Corrections suggests that competition between booksellers makes the effect of this loss of advertising a wash, as book companies will pay readers (through lower prices) to read their books for the advertising.

Among other changes heralded by the e-book era, digital editions are bumping book covers off the subway, the coffee table and the beach. That is a loss for publishers and authors, who enjoy some free advertising for their books in printed form: if you notice the jackets on the books people are reading on a plane or in the park, you might decide to check out “The Girl With the Dragon Tattoo” or “The Help,” too.
On the one hand, publishers can no longer advertise on book covers. However, the advertising is by no means free. Let us say I am in competition with another bookseller. An extra person seeing my book cover nets me an expected $0.10, as it does him as well. Then upon this happening, I will be willing to charge $0.10 less for my book, to undercut him on prices, as he will be willing to undercut me. In essence, consumers are being paid to advertise because we compete for advertisers.

Therefore, this switch may have no impact on publisher's bottom lines--competitive book sellers had to pay the consumer the worth of their advertising to begin with. We might note that it may be a loss to consumers, until we recognize that a) the option is still open to be an advertiser and b) marginal cost of e-books is even lower than that of regular books, and they may choose the low-cost bundle to the high-cost-but-advertiser's-fees bundle.

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