The Rising Cost of Paper

Back in the 90’s and early aughts when I was collecting comics, prices were in pretty rapid rise. The publishers always blamed the increased cost of paper. So when they were $1.25 when I started collecting and $2.25 when I stopped several years later, it was all about the paper. Comics cost upwards of $4 a piece now. Now, you can get an ecomic, and it will cost you… about $4. Dang the rising costs of paper.

Peter Osnios thinks the courts are about to hurt the book business:

To get a sense of where the pricing issue now stands beyond the legal battles, I embarked on this simple exercise: I went to every major on-line retailer and a selection of traditional booksellers to find out what they were charging for Krugman’s End This Depression Now. The title was published last April and reached as high as number 17 on the New York Times bestseller list for printed books. A starred review in Publishers Weekly concluded, “Krugman has consistently called for more liberal economic policies, but his wit and bipartisanship ensure that this book will appeal to a broad swath of readers from the Left to the Right, from the 99% to the 1%.” According to Norton, the book has sold 30,000 copies in print, with e-book sales of 25,000. The list price for the book is $24.95, and every bookstore I called is selling it at that price. You can also order it directly from the publisher’s website, but that comes with a shipping charge and sales tax where required.

Here is where the pricing becomes interesting. Amazon’s hardcover price is $14.71, with no shipping charge for customers who pay an annual fee of $79 for Amazon Prime and two-day delivery. The Kindle edition is $9.48. At the hardcover is $14.71, but the e-book price is $13.72 ( has free shipping for orders over $25). Moreover, in the Barnes & Noble bookstore, the hardcover is $24.95. On Apple’s iBook, the price is $11.99. The Sony store charges $14.99, and on Kobo, which was recently named the e-book provider in the coming year for independent booksellers, the price was $15.49. Only Google Play matched Amazon at $9.48.

The end result of all of this, Osnios believes, is that cheap will rule the day and that those who are able to sell cheap, like Amazon, will be able to force the price down to the point that everyone but Amazon will be harmed, including the consumer. The consumer, Osnios explains, will be harmed by the publishers because “the result will be fewer books that matter — like [Krugman’s book] — whether in print or digital formats. ”

Well, I can safely predict that he is wrong on Krugman. So wrong, in fact, that it calls the rest of what he has to say into question. Books like Krugman’s will always do well because they’re safe. They might not give him as much of an advance, but I don’t think Krugman is going to forgo writing a book because his advance is $x rather than $2x. The danger, to the extent that there is one, lies in unsafe authors. Any sort of risk-taking.

This may be inevitable in any event. It may ultimately not actually matter insofar as the reader is concerned. With self-publishing becoming increasingly economical, the publishers can essentially force would-be authors to make a name for themselves before signing them anything with an advance. Maybe a tenured professor at George Mason University won’t write a book to be self-published that he otherwise would if he were to get an advance, but… vanity is a pretty powerful thing.

There is a possible concern that quality will drop and we’ll have to start getting used to typos and shoddier editing, but this is not end-of-the-world stuff to me. and honestly, the risk of such is not worth the upcharge the publishers are demanding. The lack of sympathy I feel for publishers who have been trying to keep ebook prices comparable to physical book prices is not insignificant here. It’s not just that Amazon is wanting to sell me the books for less. It’s that Amazon prices actually make sense to me in terms of what I am getting.

Arguments about the increasing costs of paper aren’t going to cut it anymore.

Will Truman

Will Truman is the Editor-in-Chief of Ordinary Times. He is also on Twitter.


  1. Dude! Publishers used to force authors to make a name for themselves before publishing. Write in magazines was the whole idea. Get good at writing, then write books if you want.

    • Okay, but I think self-publishing ratchets that up considerably. Not only “hone your craft” but “write a book, self-publish it, market it yourself, and then when it’s successful we will then help you with your next book.” That sort of thing. Beyond “make a name for yourself in the writing world” and towards “make a name for yourself with the general public.”

      • Let’s say that hypothetically, I’m dissatisfied with practicing law and want to become an author. Hypothetically.

        Right now, the path Will describes is the one I’d have to take. I’d need to not only write a book — a daunting enough task, as those who have undertaken it can attest — but then self-publish and self-promote to the point that I can present myself as a low-risk venture to a literary agent, who is looking for clients to as a low-risk ventures to one of the dwindling number of publishing houses.

        Risk is inversely proportional to the number of people who have actually bought my book. Since right now the potential reachable audience with a publisher’s backing is still an order of magnitude more than what I can do self-publishing, this is still a game that must be played.

        One endgame is that eventually, my self-promotion reaches a point that I can simply dispense with a publisher altogether. I negotiate a deal directly with the online vendors or sell my book directly, in purely digital form, with only tens of paper copies of my book in existence.

        Part of getting there is to write something, without support, that is good enough to capture a mass audience. In a world where pornography bastardized from Twilight fanfic becomes not only a best-seller but a cultural phenomenon, this must not be an impossible hurdle. Or so I keep telling myself.

        But part of it is exploiting marketing paths to reach a wide enough audience, and part of it is understanding the math behind the online distribution deals as compared to what sorts of stakes the big boys play for. Not for nothing do most Kindle editions of first-run bestsellers go for between ten and twenty dollars — and it is not for nothing that the most important factor governing where within that spectrum a particular product falls is the fame of its author.

        • This is all quite right.

          If Osnios is correct about pricing and the effect it’s going to have on profit margins and such, the publishers will become increasingly conservative as time goes by. Which means that Author Burt Likko would have to become even bigger in order to warrant their attention. At the same time, the bigger ABL becomes, the less he needs the publishers to begin with.

          I don’t really know how that resolves itself.

          I imagine there will be some sort of sweet spot where they determine what ABL did on his own represents a sufficient lack of risk to pick him up and market him, but ABL still isn’t well-known enough that he needs the publishers to take him to the next level. There’s no telling how big that sweet spot is. Above that point, where the authors could really go their own way if they so chose, you might still have some authors who will simply be glad to be rid of the administrative and marketing aspects of it.

          Tom Clancy and James Patterson – two particularly entrepreneurial writers – both utilize major publishers as far as I know. Will the next of their kind? Once they already have the apparatus independent of the major publishers? I’m not sure they will.

      • Though it must be said that ‘vanity publishers’ (don’t know what they’re real name in the biz is) are almost entirely scams. (though the people that submit works for publication to them are almost entirely bad writers).

        • I don’t think the former is true anymore. The advent of viability of Print-On-Demand has lead to a lot more competition, lower prices, and profits being made on optional frills (edit your book, graphic design a cover, etc.). Amazon and the ebook is also providing some pressure, since you can bypass publishing entirely.

          I think the latter is true only in terms of numbers and the fact that most bloggers are pretty bad writers. My price-point for ebooks is $5, and I utilize Amazon Prime borrowing, meaning that I end up with a fair amount of stuff that is self-produced. I’m sure a lot of it is bad, but Amazon manages to recommend stuff that isn’t.

          I think these two things are related. As self-publishing (or epublishing) has become less of a rip-off, more intelligent and educated people are giving it a go. Whereas before they wouldn’t because they’d try to get it published and just bury it if there were no bites.

    • Now people get book deals from their blogs and tumblr pages.

      • Yeah, though I do wonder how long that will last. Right now, they might sign the author of the Stuff Texans Like like to a book deal. In the future, will they tell the author that STL needs to prove himself as bookworthy first? Or will the author of STL be more likely to make more money by self-publishing? I’m not sure.

        I am just sure that Paul Krugman will always have the ear of major publishers.

        • I agree it does seem to be a trend/bubble that is likely to burst soon especially because it only produces coffee-table type books but not literature or longer non-fiction.

  2. There is a possible concern that quality will drop and we’ll have to start getting used to typos and shoddier editing…

    Dude, have you read much fiction lately? We’re already getting used to typos and shoddier editing.

  3. A few points:

    The issue about the pricing needs more explication. If the hardcover of Krugman’s book is selling at bookstores for $24 and somewhat less at Amazon, what does the publisher charge the bookseller or Amazon for a copy? How much does Amazon pay the publisher for the rights to release a Kindle edition? And does Krugman get the same amount royalty per copy, no matter which platform is used? Of course, Krugman or Tom Clancy can make better deals with the publisher than the first time author.

    Everything depends on risk. The idea that in a super-low-cost environment publishers will not release “significant” books reminds me of the complaints about the book superstores (B&N, Walden, etc.) that they would drive the small, snobbish booksellers out of business, then sell nothing but Tom Clancy and Harlequin Romances. Well, it didn’t happen, and even Krugman and Chomsky stayed on the shelves. If anything, the current system is better for important books, as the risk of getting stuck with 10,000 copies of unsellable economic theorization has been sharply reduced. the publishers still have the editorial and promotional costs, but the physical costs have dropped away. Of course, is they price their products too low to recover costs, whose fault is that?

  4. Krugman moves 30,000 physical books and 25,000 e-books. Is this a hit? If Krugman could go directly through the e-commerce vendors and not sell physical copies at all, would he have made more money?

    • Here is what strikes me about those numbers:

      1. This is probably considered to be a bestseller.

      2. They are really small. There are 300 plus million people in the United States, it is a bit sad that only 55,000 thousand or so will buy a book by Krugman (not for ideological reasons, I’d be sad for any respectable writer of both fiction and non-fiction.)

      Do Americans really read this little? Or are there just huge gaps between The Shades of Gray, Twilights, Song of Fire and Ices of the world and the serious stuff?

      • Do Americans really read this little?

        Mostly yes. In recent polls, one in five Americans had read zero books in the past year. Although to be honest, some number of those copies of Krugman’s book will go into public libraries and be read more widely. My county library has seven paper copies, all either checked out or on hold (currently a total of 17 holds). The larger regional network to which they belong has a total of 37 paper copies, most checked out, on hold, or restricted to in-library use. Of the available copies in the regional network, most are in university libraries.

        For what it’s worth, the elapsed time for me to (1) update my bit torrent client, (2) find an appropriate link, and (3) download a file containing unencrypted copies of the EPUB, MOBI, and PDF versions of the e-book was less than five minutes.

  5. E-book price competition as enabled by this settlement isn’t going to cut publishers’ profit margins. Competition from self-publishing might, and might even render publishing houses obsolete, but the connection between that and this antitrust settlement is tangential at best. An Amazon monopoly might, but then an Amazon monopoly could also cut profit margins on paper books (and I think there are a few reasons why an Amazon monopoly is less likely than some people think).

    OK, it will cut margins compared to no competition on pricing ala the Apple agency price scheme. Monopolistic collusion does tend to raise margins for those involved. But it won’t cut margins compared to, say, selling paper books. Because, in fact, e-books will be sold under basically the same rules as paper books, best as I can tell.

    What this settlement forbids is agency pricing: setting a retail price (or a minimum price) by contract, and then publisher and retailer taking an agreed upon percentage. This was a new idea; paper books aren’t sold that way, and neither were e-book until the agreement between Apple and the publishers. Previously, books, whether electronic or print, were sold on the whole-sale model: the publisher and the retailer agree on a whole-sale price, the retailer sells the book for however much they want, pays the publisher the wholesale price for each book sold, and pockets the difference (or eats the loss, as Amazon apparently did occasionally with discounted books). When Amazon discounts a book, the publishers’ profit margins are not reduced; their margin is the same regardless of what price Amazon sells it for. If Amazon chooses to sell it for less, Amazon’s profit margin is the one which is reduced (presumably, they make up for it in increased e-reader sales, volume, etc).

    “What about an Amazon monopoly?” you might ask, “Amazon offers low prices to drive other retailers out of business and build market share for their Kindle, then uses that market power to lower publishers margins.” I have a few responses to that.

    First, to suppose that Amazon’s discounts are predatory pricing because they sell e-books for less than paper book prices is silly. E-books cost less to stock, handle, and distribute than paper books. As a bare minimum, Amazon offers free 2-day shipping to Prime members (as well as free slow shipping on any large order); that’s an expense they don’t have to pay for e-books. There’s no call to whine that Amazon competes on price (and sells more e-readers) by passing the savings on to the customer just because everyone else is trying to keep up the same-price racket.

    Second, and related, while it’s true that Amazon is a big player in the e-book market, they’re also a big player in the paper book market. And Osnos finds sells the paper book for the same price as Amazon (a quick Google Shopping search discovers that and are also in that price range), though brick and mortar stores are more, probably in part because of overhead and in part because it’s harder for a brick and mortar customer to comparison shop. Maybe Amazon has already driven margins down on those, too (they’ve certainly made life difficult for brick and mortar retailers). But if they have, they haven’t become a monopoly: there are a number of competitors, and it seems the primary effect, if anything, is to provide customers with lower prices.

    These first two points boil down to “publishers make less money because customers pay less for books” not actually being a valid objection. And if fewer books are written because customers aren’t willing to pay for them, that’s the market at work.

    There’s another issue, though, which is the implication that Amazon seeks to drive market share to the Kindle by offering low-priced ebooks, even occasionally selling books at a loss. There appears to be some concern that by getting customers to buy their (relatively expensive) hardware, they’ll be driving future sales to their store, possibly at the expense of customers. This concern is somewhat valid. But it’s important to note that Amazon is not the only place where you can buy e-books for the Kindle. It’s true that the Kindle uses a .mobi format, rather than the standard .epub, but as a technical matter it’s trivial to convert between them (speaking from experience). Smashwords makes e-books they sell available in both formats, as does Baen books (Baen seems to be just about the only publisher making the transition to the e-book era gracefully). If Barnes and Noble wants to encourage people to buy Nooks by not making e-books they sell available on Kindle, that’s their choice, and the consequences are on them.

    OK, that’s a bit of a slog.
    This settlement returns e-book sales to the same system used for paper books.

    Amazon discounting is not predatory pricing, and publishers and other retailers insistence at putting e-books and print books at the same price point is silly.

    If you’re worried about people buying Kindles and becoming captive customers for Amazon, other people can sell e-books for Kindle, too.

    • This is a great comment, Fnord.

      These first two points boil down to “publishers make less money because customers pay less for books” not actually being a valid objection. And if fewer books are written because customers aren’t willing to pay for them, that’s the market at work.

      I agree that the market would be at work here. Whether it’s a valid objection, though, depends on how we’re framing it. I mean, the market drove my favored smartphone OS into virtual extinction. So I can’t complain. That doesn’t mean that I think the market is better off for it. Or at least, my consumer position within it is weakened.

      Osnos is appealing to the same sensibilities, I think. Or trying to. Basically saying “the market will cease to deliver the products you want.” Which is going to be a valid concern for some. I think the hard part of making that case is the “… and so you need to keep paying $10 or more for ebooks…” at which point, I think even the people he is making his pitch to (those who would miss the books that might have trouble getting published in the future) would consider a bad tradeoff.

  6. My prediction is that the variety, writing quality, intellectual quality and delivery service of fiction and non fiction will all improve and the price will approach zero. Authors will find different ways to monetize their efforts, readers will find different ways to discover and choose based upon quality, and middlemen that can be eliminated or automated will be.

    • Maybe. I’m getting a bit skeptical of “they’ll simply monetize some other way” though. This is usually in response to piracy, but if book prices approach zero, I think it’s going to be a problem. Not that there will be a dearth of authors, but I’m not sure the extent to which I see improvement in quality. Even if I’m not seeing what Osnos is.

      • Yeah, that’s the thing about predictions, especially about the future… I could very well be wrong.

        It just seems that once we cut out the overhead, improve the technology, increase the transparency and speed of the delivery system, and allow authors and editors and marketers to collaborate and offer their products in 200 languages to 7 billion people with rising disposable incomes, that the going rate for absolutely awesome work will be about the same as the going rate to listen to a great song or watch a good show. The whole game changes.

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