My loyal readers (both of you) know that I keep an eye on the publishing industry, and try to make sense of pronouncements and prognostications, especially as they regard e-books and the future for those of us outliers.  But here’s something that still mystifies me:  Who buys hardcover books?

The better-half and I are book junkies.  We have far more DTBs than anyone living in a cramped apartment ought to.  But very few of these are hardcovers.  A quick perusal of the stacks shows that the b-h has more hardcovers than I do.  Mine tend to be graphic works — Mondo Boxo, by Roz Chast for example, or movie books like Lulu in Hollywood, badly damaged by certain bored kittehs who used it as scratching post.

The b-h has more hardcovers than I do reflecting his varied interests — eco-systems, travel, botany, geology, etc.

Both of us have a smattering of fiction and biography in hardcover.  Generally, these are books that were purchased used, gifts or found in the laundry room.  It is exceedingly rare that either of us buys new hardcovers.  Generally, when we do it’s a question of impatience.  The last new hardcover I bought, I purchased shortly before I got my kindle.  It was The Girl Who Kicked the Hornets’ Nest, the last of Stieg Larsson’s Millennium Trilogy. I came late to the series.  I’d devoured the first two books, and the third one had just come out in hardcover. I broke down and bought it after finding out that I would be 504th on the New York Public Library waiting list.

Here’s the thing: hardcover books aren’t just expensive, they are big and bulky.  I’ve never seen them as “better” from a reader’s point of view.  I bring this up because there is a constant debate on the Kindle forums regarding the price of e-books.  Much has been said about the “agency pricing” model and how Amazon wanted to cap prices for ebooks at $9.99 but got outflanked by big publishing.  Many readers complain that e-book prices for new books often exceed the paperback prices, but that doesn’t matter much to me. As a consumer, and avid reader, I’m likely to buy the cheapest version of a book I can get. I prefer to get books from the library (since I’m likely to only read a book once) or to get them used or free from my laundry room and then “recycle” them by leaving in the laundry room when I’m done.  Usually, I can wait for a book from the library or to be discounted, but on the rare occasion when I don’t want to, getting the book on Kindle at a lower price than I’d pay for a new hardcover feels like a bargain to me.

I finally paid more than $9.99 for an e-book when I decided I “had to” read Stephen King’s 11/22/63.  The initial Kindle price was $26; apparently this was an “enhanced” version, which included some old CBS footage of the Kennedy assassination.  That was more than I was willing to pay, but once the price came down to $14.99, considerably lower than the hardcover, I grabbed it.  It’s now back up to $16.99.  My reasoning was simple:  I wanted to read it.  I wanted to read it THAT SECOND.  I wanted to read it at the lowest available price and without having to leave my house or wait for a delivery.

What I don’t get, however, is who, under normal circumstances buys hardcover fiction when less expensive e-books are available?

I took a quick look at the Publisher’s Weekly hardcover bestseller list.  The first 17 books listed were mostly mysteries, thrillers, or fantasies, Sue Grafton, Michael Connelly, even the very late Michael Crichton was represented.  General fiction as represented by Nicholas Sparks came in at number seven and Janet Evonovich at number 9.  It’s safe to say that none of the books represented would be considered literary fiction or serious fiction.  So is it all people who simply can’t wait to read the next one by _______?  Or do people prefer to read hardcovers because they think they are more “classy”?  What happens to these books once they are read?  Are they resold? Given away?  Placed proudly on bookshelves for years to come?

I’m imagining that’s it’s an older demographic, but then I wonder who precisely.  Kindle early adapters skewed old, and the main selling point for the “traditional” non-backlit e-readers was that they read like print, not a computer screen, which appeals to people who grew up reading print. Given that the price of e-reading devices has come down and that e-book prices remain below hardcover prices, it would seem likely that more traditional hardcover buyers will switch to ebooks.  I’d like to know why they haven’t made the switch already.  I don’t know what the market researchers have uncovered but my guesses would be (1) they don’t like “e” anything and would prefer to just read their books (2) they like the feeling of “ownership” they get from print books, and on some basic level you don’t “own” your e-books no matter what Toni Morrison says, (3) while they might consider price, they also take into account “sharability”.  They always pass the book along and then discuss it with at least one other person, and so far e-books with DRM don’t provide a good system for doing that.

So here are my prognostications on book formats and pricing:

DRM will continue to have a negative impact on e-book sales since it’s still much easier to share your DTBs, and even circulate them within your family or non-virtual social network.  While having all your books in a “cloud” somewhere may be great insurance in case your devices are stolen or destroyed, there’s something off-putting about a company like Amazon controlling your cloud. It’s not irrational for consumers to be concerned, not just about sharing, but that someday Amazon (or a competitor) will simply scoop up your “books” or impose a new rule: “Henceforth, you will pay to us the sum of $100 a month for “storage” or we will hold captive and eventually destroy your entire library.”

Possibly Amazon’s hedge against this is that we are moving toward what AOL founder Steve Case, referred to as a “sharing economy.” While entrepreneurs like Case, believe that younger consumers are more interested in “use and experience” then ownership, the model that has made Zip Car profitable, might not work for books.  Books have almost always been shared, passed along between friends, stored on shelves where guests were welcome to them.  They are available for free at libraries.  Like movies, most be people don’t mind sharing, and  we may only experience the same book once.  Yet unlike movies, people want to “own” their books, and “ownership” seems to add value even though the same book will probably only be “experienced” once by the same consumer, and most books won’t be resold.  It’s not that people don’t want to “share” the experience of reading a book; it’s simply that they want to do so without the interference of a big company, or with a big company getting a cut every time they share.

It wouldn’t be against Amazon’s self-interest as a publicly “consumer-oriented” company to create a different system.  They could probably even figure out a way to make money from it.  How’s this: Instead of a virtual lending system that is amazingly complex and restricted, why not a DRM that sells you a license that still can’t be copied, but can be removed from the “cloud” and lent a limited number of times before it self-destructs?

Right now Amazon “storage” is free because this sells more books.  People can buy ebooks and read them with the kindle app whether they own a Kindle or not.  That would still be the case.  The difference would be that people could remove books from this “virtual” library without having to have Mother’s permission to do so.

If you could, in fact, actually “buy” your download, then Amazon could, without raising too big a ruckus, actually charge a storage fee. They might offer different pricing schemes for this — book recovery (in case of device loss or damage) for any ebook purchased through Amazon and not purposely removed from the cloud by the consumer, could remain free, but the ability to read books on multiple devices could have a fee that could rise with the number of devices.

Like the current used book market it wouldn’t be so great for publishers or authors, but consumers would love it.  Let’s say you limited a book to five moves before it self-destructed. That would be pretty similar to what happens when you loan someone a book and they loan it to someone who loans it to someone. While that might lead to some online swapping systems that would cut into profits, it could also work out for sellers and publishers.  The “books” themselves would be more valuable (and Amazon could charge more) because they could be loaned or resold, and there’d be no danger of Amazon coming to reclaim them. Amazon could as it does now, get a cut on resales or become a direct seller.

Just as there are now different formats for print books with different pricing — hardcover, trade paperback, mass market paperback, there could be different e-formats as well — a “first run” that comes at a higher price with bonus features (as was tried it with 11/22/63), a lower-priced version that comes out later without the bonus, and a third run, equivalent to “mass market” that’s considerably cheaper but maybe with a more limited number of loans or no free storage.

Granted, the Internet makes a lot of things easy, and it might be very easy to set up a “used e-book” website and offer people money to sell e-books that still had loans (just as it’s almost as easy now to became an online used book seller). But how much would that actually cut into sales given that “used” e-books would have fewer if any “loans” available and couldn’t be stored free or used on multiple devices?  Amazon currently makes a large profit selling used print books, and could continue the trade with e-books.  Publishers and authors could demand something they don’t currently have with print — resale rights and restrictions.

In short, it could be done in a way where almost everyone wins, except of course brick and mortar bookstores.  I have also ideas about that, but I’ll save them for another post.