Penny dreadful

The book business is often accused of sleepwalking into situations it later regrets: Amazon; the end of the Net Book Agreement; the ultimately uneconomic growth of the big-box retailers over the past two decades. Is the 20p e-book another example of this?

The promotion was started by Sony last summer, and went largely unnoticed until Amazon began to price-match. Then it was seen as something of a flash in the pan, affecting a small number of titles from a small number of medium-sized publishers. Even now, some mischaracterise it as an Amazon push, while others downplay its impact. One problem has been trying to ascertain the size of the 20p footprint. But the more numbers we see concerning the e-book market, the bigger the problem appears to be. My working estimate is that the 20p promotion might now account for 15% of all e-books sold—roughly as big as the self-publishing market (the consequences of which remain much discussed).

There are upsides, of course. Who wouldn’t want a Man Booker winner such as Life of Pi to be more widely read? Or for publishers such as Canongate, Quercus and Faber to profit from the follies of market share-hungry retailers, willing each other towards mutual self-destruction?

But this is a faux promotion underwritten by false economics, with a deadly sting in its tail. It is not a campaign around a specific author or group of books, or a selection of publishers; it is not underwritten by a marketing push, or aimed at a specific audience. Worryingly, we do not even know if these books are being read.

We do know that it is having little impact on Sony’s business, while costing Amazon millions. Educating punters that Man Booker Prize-winning novels can cost just 20p is money badly spent. Sony’s cash could be better deployed developing devices readers want to use; Amazon’s on paying more tax.

But actually what worries me more is our collective response to this. Perhaps we have become too inured by past price promotions to truly care anymore; perhaps we think we have to dance to the regulator’s tune that price really is the only measure of whether a market is working; perhaps the numbers are just so intoxicating that sobering up is hard to do. If that is so, we’d better start looking more seriously at the new economics of this marketplace, because 20p has already become the new £1.