Disagreeable logic on digital books

Evan Schnittman is the Vice President for Business Development at Oxford University Press. In that position, he probably knows a lot more about publishing and its economics than a volunteer leader for the Florida Writers Association (namely, me). Still, his recent blog post Why Ebooks Must Fail, contains some logic I don't understand.

According to Mr. Schnittman, e-books will mean the end of trade publications because of the following:

• Because of the need to sell the frontlist (the books in the front of the store) at the expense of the backlist (the books in the back of the store), publishers overship new releases because that's when they count revenue.


• They need to ship too many books and count revenue that isn't really there because competition forces them to overbid for the best authors.


• Trade publications are even worse because most retailers can get a full refund.


• To pay the refund publishers have to ship more books they won't sell.

Mr. Schnittman says e-books screw all this up because they eliminate the upfront revenue from the overshipping of the frontlist books, but cost at least as much to produce--if not more--than traditional books. That's right, he says that the need to enhance content for e-books will actually increase their production costs above physical books. But because the income to the publishers won't be front-loaded any more, the money to overbid for talent and add extras won't be manageable.

With all due respect for Mr. Schnittman, I say "Balderdash!" No one is forcing publishers to overpay or talent--and many writers will doubt they do anyway. More to the point, Mr. Schnittman essentially ignores the conclusion from his own description of the business practice, which he clearly proves is unsustainable.

As it currently stands, I'm no great fan of e-books. The readers are too expensive at this point and there's not enough differential in the price of e-books to provide a favorable return on investment. But the technology prices will come to earth. Laptops used to cost $2000 or more. MP3 players used to cost several hundred dollars. Their prices came down and so will the readers'.

And if e-books are the end of the existing publishing model, it's not because of the e-books, it's because the current model isn't sustainable.