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Tuesday, Nov 24, 2009
Thirty bucks for a new hardcover! How book prices got so out of hand, who's responsible and what it will take to make reading more affordable in the future.
Dec 3, 2002 | December is one of the biggest months for booksellers, and Brian Ritenbaugh, a supervisor at a B. Dalton Bookseller in Monroeville, Pa., is bracing for his customers. During his 10 years in the retail book business -- at B. Dalton and also at independent stores and selling college textbooks -- he's seen the same reaction time and again. "No matter what the prices are, they say it's too expensive," he says. "The first thing they ask about is price, and the reactions range from a grunt to an outright whine."
It's unlikely that Ritenbaugh will be hearing happier noises anytime soon: Book buyers now must shell out $20, $30 or even $40 or more for hardcovers that decades ago used to cost less than $10. And the sticker shock is causing many customers not to buy as many books.
"It's just too expensive," one Chicago book buyer said recently at a Barnes & Noble, putting down the new hardcover by a favorite author, Chuck Palahniuk, even though it was discounted 20 percent. "I used to buy more books and be willing to try new authors. But you don't know if the book's going to be good or not and it's too expensive to try something new or even an author I usually like."
Why do books cost so much? Consumers are often baffled at the price tag attached to what appears to be little more than a mass of paper, cardboard and ink. A whole host of factors, including the size of the book, the quality of paper, the quantity of books printed, whether it contains illustrations, what sort of deal the publisher can make with the printer and the cost of warehouse space, all affect the production costs of a book. But, roughly speaking, only about 20 percent of a publisher's budget for each book pays for paper, printing and binding, the trinity that determines the physical cost.
The rest of what you shell out for, say, the new Donna Tartt novel pays for the publisher's overhead (the cost of maintaining a staff of editors, proofreaders, book designers, publicists, sales representatives and so on), and for the cuts taken by distributors (who run warehouses that supply books to retailers) and booksellers. Promoting the book is another expense: printing up catalogs presenting each season's titles to booksellers and the media, purchasing ads, mailing out hundreds of review copies to critics and sending the author (if he or she is lucky) on a book tour. So are shipping fees and the storage costs on unsold copies.
Fluctuations in the cost of any of these elements can eat into a publisher's profits and force them to raise their prices. For example, the price of paper skyrocketed twice over the past few decades, in the late '70s and mid-'90s.
Many readers are surprised to learn that the author's cut is quite low -- as a general rule, it ranges from 10 to 15 percent, though very popular authors are able to negotiate a higher royalty and others must accept a lower one. Flashy news items about handsome advances (for hardcover or paperback rights) paid to such young authors as Jonathan Safran Foer or Dave Eggers create the false impression that writing books is a lucrative enterprise. (Advances are an upfront payment made "against royalties"; the advance is deducted from the author's royalty payments as copies of the book are sold, although many high-profile -- and even low-profile -- books fail to "earn out" their advances.) Except for a handful of bestselling writers, the overwhelming majority of authors make only $5,000 or $10,000, if that, on projects that took them years to complete. (Most must rely on other sources of income, such as teaching, journalism or a gainfully employed spouse to get by.)
Then there's that peculiar aspect of the book business known as the "returns policy." Books are sold to retailers in a process that resembles consignment. Bookstores pay for the bo oks they order, but they are able to return any unsold books for a full refund (though they usually have to pay shipping). This practice began during the Depression, when publishers wanted to keep selling books in bad economic times, and it continues today despite frequent calls for its abolition.
This means that if a publisher ships 100 copies of a book to a bookstore and only 50 sell, the remaining books are shipped back and the bookseller is given credit for them. (The returned books are sometimes destroyed, although increasingly they are sold to "remainders" dealers who in turn supply retailers with reduced-price sale books.) The estimated cost of these returns is also figured into the price of a book.
"When you're buying a book, you're not only paying for that book, but you're also paying for the book that will be returned and destroyed," explains Jason Epstein, former editorial director at Random House and the author of "Book Business: Publishing Past, Present, Future." "That means you're actually paying for a book-and-a-half, or a book-and-a-quarter."
