You cut to the heart of the matter: at every step, all I seem to be hearing is how the publishing industry (meaning the larger corporate houses) is having a hard time making the new reality fit the old practices. If any publishing house is using book-publishing methodologies to ready titles for e-book readers (particularly at this early stage, when the machines are rudimentary), they ought to be fired en mass.

As to the seductions of bidding wars, this is the same cyclical gambling binge that hits Hollywood again and again. Everyone is afraid to lose the next big hit, so they pay a premium for the chance to scratch off the filmy silver layer and see if they can match the names of an author three times. That each ticket may costs millions is nothing compared to finding a Dan Brown.

There is more art than science in these things, and that requires sensibility. The products are not widgets which can be tested for function and durability, the markets are not based on needs.

I also agree that there should be a mutual benefit between writer and publisher. That’s exactly how it’s supposed to work. Too often, however, the publisher is the writer — from packaged books written for hire, to books bought and then bludgeoned into some other form by a marketing department looking to fill a hole. I don’t begrudge the publishers any of this, but it creates a corrosive effect. (Some of the angriest rants from people in the publishing industry seem to be expressions of self-loathing.) I simply say it’s not what I want to do.

When *you* start down the road to release a book in electronic, portable form, you begin with the assumption that you must preserve the “integrity of the page” and “integrity of print branding”. If you can’t exactly duplicate the frames and shading employed in sidebars, or get the tiny graphic of the geek with his finger in the air to display in the exact location and size as they appear in the print book, you don’t want to release an electronic version at all. Even when working with a minimally-formatted book like a novel, you strive to preserve original fonts, typesetting and layout details in the ebook version. You set up task forces, invest in development of new devices, software and technologies, and generally make things much harder and more expensive than they need to be.

You appear to be completely oblivious to the fact that one of the major draws of the ebook is the flexibility users have in controlling how the text is displayed. Most e-reading software and devices allow the user to change the font, font size, line spacing, orientation of the page, and sometimes even the font and page colors. All your efforts to preserve the “integrity of the page” are wasted.

Nevertheless, you pass the expense of these efforts on to the ebook buyer, and as a result your customers think you’re ripping them off on ebooks. You repeatedly defend your pricing on the grounds that your overhead in producing an ebook is comparable to producing a print book, but you leave out the part where you could provide a simplified version of the ebook at a much lower cost—a cost consumers would find much more reasonable and appealing. You ignore the customer’s priorities (portability, convenience and cost savings) in favor of your own, self-imposed priorities.
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Also, I can’t feel too bad for publishers who whine about being forced into “usurious” auctions. Nobody’s forcing them to participate, and when the numbers get into the high sixes and low sevens they know very well how hard it will be for the resulting book to earn out, never mind earn a healthy profit. When the majority of bidding war books fail to live up to their promise, all it means is that the winner of the bidding war made a very bad business decision.

Gives me an irresistible urge to scream “Stop the Madness.”

I see a lose end sticking out of this knot that may help to unravel it.

Each stakeholder, most typically the content creator vs. publisher, seem intent upon blaming each other for this problem.

If you want someone to blame, blame the hazards of being a public company. To make money, Wall Street wants the share price to go up. Share price goes up when there is potential for earnings growth. So management decisions are based on predicting the odds of growing earnings. Typically the most reliable odds are what worked in the past. There are two ways to analyze what worked in the past. One is to look at the tactics, the other is to look at strategy.

An example of a tactic that worked in the past is – when I lowered the price 10% sales increased 30%.

An example of a strategy that worked in the past is – when I introduced a new product that reduced time spent on housework and freed up time to spend on more enjoyable activities, sales and profit margins both increased 30%.

When one chooses to repeat the discount tactic, it works for a while, but becomes progressively less successful and margins erode.

When one chooses to repeat the strategy, there are many hurdles to overcome – it is hard to inspire internal staff who believe what they do can not be surpassed and recognize opportunities for new products, the time it takes to invent new products, marketing in a highly competitive environment – but when successful, e.g., Procter & Gamble’s Swiffer, the returns are sustainable and have a halo effect on the rest of the company.

It is much more typical for a public company to repeat the tactics than the strategies that have brought past success.

Book, News, and Entertainment companies suffer the same challenges. The solution is not to throw the “babies out with the bathwater.” The solution is for leaders to engage and internal staff to respond to the challenge of recognizing what is good about their current products and how the interactive media could add value over and above those products. P&G did it by engaging the consumer to participate.

What do books do for their consumers? For me, a book offers an experience totally different than a movie. It stimulates my senses in the process of telling of the story. The movie fills in a lot of blanks that the book doesn’t. In fact, I am reluctant to see a movie version of a book I loved because I am afraid it won’t be up to the way I imagined it. But when I do like a movie version, it creates an appetite for me to want to re-experience the process of reading the book again.

That’s just an example of how tapping into consumers can offer insight into an opportunity to add incremental revenue and profits from another media, like movies, to the book business. I understand that the publisher doesn’t necessarily have the rights, but I would suggest to the writers that there may be mutual benefit to working with a publisher who maximizes the incremental value of your story across all media.

You’re quite right that the industry’s leadership is failing in every way, and this despite the fact that they have both a blueprint from the music industry and a product which is less likely to be pirated simply because it is that much harder to digest. (A three-minute MP3 can play in the background of your life. It’s much harder to read something.)

In the short term I think it’s every person for themselves, and I think third-party players (particularly small publishers and independent bookstores) may be hardest hit.

As to what Ross has to say, I think he has something important to say, but instead of speaking the truth he lashed out at others. I cannot imagine how much pain there is in the publishing industry, and how much loss is being felt. Even if much of the damage is self-inflicted, as Ross clearly believes, that probably only makes it that much worse.

I do feel for the man.

He said: the enduring significance of books and their ability to educate, inform and entertain.

Then he said: to fill inventory pipelines.

He’s the kind of guy who’d spit on Van Gogh on the one hand yet brag to his friends about owning a Van Gogh painting.

He has nothing to say.

It has been said before – the digital/Internet genie is out of the bottle. There’s no putting it back. But, there is an opportunity to get to know the genie. Find out how to work optimally with the genie for everyone’s benefit. Hope the bigwigs with the power and money and ability to drive change quickly on a massive level can take time out from their name-calling and criticizing others, and instead make some positive change happen.