Deep Discounting: Another Perspective
Apparently the big box stores are competing with each other to see who can sell books for the least amount of money. Agent Nathan Bransford has a good summary of the situation here. Go read it and then come back.
I have to say, I disagree with Mr. Bransford, particularly when he opines "But surely this isn't temporary."
Really?
Just how cheaply do you think the publishers can produce the books? Publishing doesn't make big margins. It's not a profit-mongering game. The industry generally makes enough to keep itself afloat, and that's about it.
Think about it. What are Amazon and Walmart et al. really doing in this round of shenanigans? The are taking a loss. Working from conventional prices, their loss is about $4 per unit. It strikes me that if cheaper prices will move more units, this is a strategy on par with chopping up your own raft for firewood while adrift in the ocean. The more successful you are at it, the faster you sink yourself.
Presumably the deep discounters are hoping to use these loss-leaders to drive other, profitable, sales. This is a response to the generally sluggish retail market. Why they're choosing books and not, say, video games is an interesting question. My perception lately has been that the book industry is suddenly mainstream news, and books are suddenly "cool"; but I may simply be seeing that because I'm in the industry.
But anyway. I fail to see how any publishers are going to succumb to pressure to bring their prices down, or give booksellers any bigger of a discount. If the Big Five hold firm, they win. How long can the big box stores keep giving away books for a loss, particularly when they're giving away the bestsellers? (Seriously, guys, give away something that you don't expect to sell a million copies of. Take your profits on the sure money.)
It's simple math. As long as the Big Five hold on, the whole scheme will collapse in a couple of months. And given the already narrow margins in publishing, I don't see how the Big Five have any choice but to hold on.