In ebook battle, Amazon is right about Orwell – and a few other things

Aaron Pressman Yahoo Finance
It's George Orwell's world and you're just living in it.
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It's George Orwell's world and you're just living in it.

As the big book publishers, led by Hachette, battle with Amazon (AMZN) over ebook pricing and related issues, the publishing industry and media are twisting a legendary author's words to make an erroneous point.

In March 1936, George Orwell decided to review 10 books offered via a new-fangled, low-priced process – the Penguin paperback. The books were just fine and a good value to the reader, Orwell conceded, but the pricing was an unmitigated disaster for the publishing industry. And he went on to explain, at length:

"It is, of course, a great mistake to imagine that cheap books are good for the book trade. Actually, it is just the other way about. If you have, for instance, five shillings to spend and the normal price of a book is half-a-crown, you are quite likely to spend your whole five shillings on two books. But if books are six-pence each, you are not going to buy ten of them, because you don’t want as many as ten; your saturation-point will have been reached long before that. Probably you will buy three sixpenny books and spend the rest of your five shillings on seats at the 'movies.' Hence, the cheaper books become, the less money is spent on books. This is an advantage from the reader’s point of view and doesn’t hurt the trade as a whole, but for the publisher, the compositor, the author and the bookseller it is a disaster."

Orwell was both dead set against paperbacks and dead wrong about the impact. Paperbacks expanded the overall market for books by attracting many buyers who didn’t purchase high-priced hardcovers. Surely they cannibalized some spending on higher-priced volumes, but the net effect was positive. Orwell’s in good company -- the copyright media almost consistently oppose new technologies and formats instead of seeing an opportunity to adapt and profit.

Amazon recently cited part of the opening sentence of the 1936 essay in a Web post attacking publishers for wanting higher ebook prices: "The famous author George Orwell came out publicly and said about the new paperback format, if 'publishers had any sense, they would combine against them and suppress them.' Yes, George Orwell was suggesting collusion."

Hachette Book Group CEO Michael Pietsch responded to the Amazon missive with his own letter. Pietsch defended higher ebook prices and blamed Amazon for "seeking a lot more profit and even more market share, at the expense of authors, bricks and mortar bookstores, and ourselves."

A wrong read of Orwell's words

But here’s where the craziness began. A New York Times reporter added in the first half of the Orwell sentence quoted by Amazon: “The Penguin Books are splendid value for sixpence, so splendid that if the other publishers…” and claimed Amazon had mistaken Orwell’s intent. “When Orwell wrote that line, he was celebrating paperbacks published by Penguin, not urging suppression or collusion,” reporter David Streitfield claimed.

But check the 154-word passage I’ve cited above – which followed the disputed sentence – and try to determine whether Orwell was favoring those cheap paperbacks. Not at all. He went on in the essay to predict the downfall of libraries and fewer novelists penning books. But now, the mistaken meme that Orwell really loved cheap paperbacks has spread far and wide.

Adding to the irony, the very same New York Times reporter cited Orwell’s words last year – to make Amazon’s point: "No less an authority than George Orwell thought paperbacks were of so much better value than hardbacks that they spelled the ruination of publishing and bookselling. 'The cheaper books become,' he wrote, 'the less money is spent on books.' Orwell was wrong, but the same arguments are being made against Amazon and e-books today."

And in a final twist to the pretzel logic, last year “Orwell was wrong,” but this year Orwell “went on to undermine Amazon’s argument for cheap e-books.”

Not sure what’s changed in a year, other than Amazon upping the pressure on Hachette by ending pre-orders for some upcoming books and stocking fewer already-issued books, thus delaying customer orders. These are common tactics in the media business -- Barnes & Noble (BKS) understocked books from CBS's (CBS) Simon & Schuster unit last year. And Amazon has stopped pre-orders for some Disney (DIS) movies recently, after doing the same to Warner Brothers in June.

There are certainly many differences between the paperback dispute of the previous century and the ebook battles of the current one. And there are other reasons to favor Amazon's ebook pricing.

But the most important point still holds. Readers do far more with their time than just read, and spend far more of their money on diversions other than books. Cheaper ebook prices, particularly at the psychologically attractive point of $9.99, have proven one way to attract far more of the attention – and dollars – than the higher-priced alternative.

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