iPad Helping Book Publishers Gain More Control Over eBook Pricing

[MacRumors]

Last weekend, book publisher Macmillan won out over Amazon in a battle over eBook pricing, switching to an "agency model" in which book prices are set by the publisher with retailers receiving a percentage (30% in Amazon's case) of the sales price. The move effectively eliminated Amazon's standard $9.99 eBook price for new releases, with Macmillan targeting a range of $12.99-$14.99 for new releases.

Macmillan's negotiations with Amazon were spurred by its deal with Apple for the iPad involving a similar arrangement. While Amazon at the time claimed that it felt that other publishers would not follow in Macmillan's footsteps, other book publishers do in fact appear to be falling into line.

During an earnings conference call this week, News Corp. CEO Rupert Murdoch acknowledged that his HarperCollins book publishing unit has been unhappy with Amazon's control over eBook pricing and noted that HarperCollins and Amazon were about to begin discussions about moving to a similar model allowing for more flexible pricing.

And just yesterday, Media Bistro reported that Hachette CEO David Young has announced a similar plan for his company, marking the third of the five book publishing partners announced by Apple for the iPad to extend the agency model beyond the Apple deal. Young writes:

"There are many advantages to the agency model, for our authors, retailers, consumers, and publishers. It allows Hachette to make pricing decisions that are rational and reflect the value of our authors' works. In the long run this will enable Hachette to continue to invest in and nurture authors' careers--from major blockbusters to new voices. Without this investment in our authors, the diversity of books available to consumers will contract, as will the diversity of retailers, and our literary culture will suffer."

The increased prices will reportedly actually result in lower income for book publishers, serving instead to prevent Amazon from selling eBooks at a loss in order to draw in Kindle customers. In the view of publishers, the move will help maintain consistent eBook pricing and improve the long-term viability of the industry, while also allowing publishers the flexibility and control over their releases to offer eBook releases on the same day as hardcover releases.

Article Link: iPad Helping Book Publishers Gain More Control Over eBook Pricing

 

[Sky Blue]

Thanks, Apple. I love paying more for things.

 

[dwd3885]

nice spin. "iPad Helping Book Publishers Gain More Control Over eBook Pricing".

That's a laughable angle. I don't think even the most diehard Apple fanboy would want book publishers to have more 'control' by charging more. THANKS APPLE!

 

[ProwlingTiger]

Anyone else feel this is ironic? For the longest times, Apple had only allowed one price for songs on the iTunes Store. Then they allowed some different pricing options.

Now, Amazon is being forced to offer variable pricing options.

nice spin. "iPad Helping Book Publishers Gain More Control Over eBook Pricing".

That's a laughable angle. I don't think even the most diehard Apple fanboy would want book publishers to have more 'control' by charging more. THANKS APPLE!

Diehard fanboys woud be buying from Apple anyways, therefore a.) they would already be paying these new eBook prices and b.) they are accustomed to paying premiums.

 

[aeryck]

Book publishers are comparable to music publishers in my opinion, but I know little of the facts surrounding what money actually finds it way to the author. With a physical book, there are definite costs for creating the physical object that the publisher bears, but with a digital book there isn't. Does the author get a higher percentage with a digital book?

Are we going to see a RIAA like wolfhounds going after open source books? Is google going to monopolize out of copywrite books?

There's a storm coming...thats what we thank apple for, change.

 

[DTphonehome]

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 3_1_2 like Mac OS X; en-us) AppleWebKit/528.18 (KHTML, like Gecko) Version/4.0 Mobile/7D11 Safari/528.16)

So, in order to wrest control from amazon, apple allows publishers to charge more. Thanks, apple, way to fight for the consumer.

 

[theneweyes]

Okay, while most people will be unhappy with the increased pricing I'm happy with the news. What this means is more money for authors (and believe me there are very few authors who can make a living writing). In these early stages of the "iPad" industry it's important to set a precedent for how things are going to be done. Even with pricing at 14.99, it is still cheaper than a hard cover release from a bookstore. You might be able to get a comparable hardcover price from Amazon, but Amazon has a very efficient business model which is putting bookstores around the country out of business.

 

[rjstanford]

The publishers having more influence would have happened as soon as major eBook publication started opening up anyway; the fact that Apple is pushing them over the edge is more of a coincidence than anything else.

The sad thing is that this kind of vertical price control was, until recently, illegal. Don't you just love de-regulation? The publisher was historically free to set whatever price they wanted to the wholesaler or direct retailer, who was then free to set whatever price they wanted to the end user.

Now, sadly, that's no longer the case, and retailers can be forced to charge a certain price for the privilege to sell products. That was always true to some extent, naturally, but it used to be far less enforceable (and in reality, far less common than it is now). It was almost unheard of for products that could be readily obtained from a wide variety of merchants (unlike, for example, a POS Bose radio that only a few "certified retailers" would carry).

Welcome to the future.

 

[Goona]

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 3_1_2 like Mac OS X; en-us) AppleWebKit/528.18 (KHTML, like Gecko) Version/4.0 Mobile/7D11 Safari/528.16)

So, in order to wrest control from amazon, apple allows publishers to charge more. Thanks, apple, way to fight for the consumer.

And why should every ebook be 9.99 When you go to the book store is the price the same for every book? With CD's and music singles, it makes more sense since most albums and singles cost about the same. Why should a 300 dollar book cost the same as a 10 dollar book?

 

[VenusianSky]

Just like music. Do you know you can purchase some CD's brand new at a major retailer for less than what it costs on iTunes? I've been checking Amazon lately as well for digital downloads. They tend to charge less for whole albums than iTunes.

 

[theneweyes]

The publishers having more influence would have happened as soon as major eBook publication started opening up anyway; the fact that Apple is pushing them over the edge is more of a coincidence than anything else.

The sad thing is that this kind of vertical price control was, until recently, illegal. Don't you just love de-regulation? The publisher was historically free to set whatever price they wanted to the wholesaler or direct retailer, who was then free to set whatever price they wanted to the end user.

Now, sadly, that's no longer the case, and retailers can be forced to charge a certain price for the privilege to sell products. That was always true to some extent, naturally, but it used to be far less enforceable (and in reality, far less common than it is now). It was almost unheard of for products that could be readily obtained from a wide variety of merchants (unlike, for example, a POS Bose radio that only a few "certified retailers" would carry).

Welcome to the future.

I don't get what you're saying. In this case the publisher IS setting the price. Sounds like you're arguing against but your argument is for.

 

[SiPat]

I wish people would gen-up before posting "apple-fanboi this, apple fanboi that" type of comments.

Amazon is far from the consumer's friend it is made out to be, and Apple isn't really pushing up prices. In the long-term, Apple's involvement will actually reduce prices of ebooks.

The best explanation of Amazon's pricing policies I've read is here:

http://www.antipope.org/charlie/blog-static/2010/01/amazon-macmillan-an-outsiders.html

 

[BornAgainMac]

I wish my technical books were that cheap. But $15 bucks is expensive for "Story Books".

 

[avigalante]

Wait, wait - I get to pay more for an eBook? Sign me up!

/sarcasm

 

[wackymacky]

Given that this is the same model as the App store uses I presume the books will cost approximately the same on the iBooks store?

I wonder if the prices will vary in different countries or just be a simple currency conversion, otherwise they may cost more that a real paper book!

 

[-=XX=-Nephilim]

This is such a typical corporate bull-****!

Only person who should mark this news with positive is Rupert Murdoch & co.

meh...

 

[RichardI]

Ever play monopoly? Price fixing?

I think my BS sensor just went off - beeping louder and louder ..... and in the crystal ball I see a reflection - it's a little hazy - getting clearer - clearer - OMG it's Microsoft! How did that get in there?
Shame on you Mr. Young, shame!

 

[enberg]

Well now. Unless Apple somehow finds a way to eliminate bittorrent, this silly spin won't really be true, will it?

 

[theneweyes]

Well now. Unless Apple somehow finds a way to eliminate bittorrent, this silly spin won't really be true, will it?

Unless you jailbreak your iPad potentially you won't be able to download pirated books, just like apps for the iPhone. Unless you can open them as PDF files but I'm sure Apple is already scheming against piracy.

 

[gnasher729]

Book publishers are comparable to music publishers in my opinion, but I know little of the facts surrounding what money actually finds it way to the author. With a physical book, there are deffinate costs for creating the physical object that the publisher bares, but with a digital book there isn't. Does the author get a higher percentage with a digital book?

Are we going to see a RIAA like wolfhound going after open source books? Is google going to monopolize out of copywrite books?

There's a storm coming...thats what we thank apple for, change.

Speaking for all the non-native English speakers: Could you explain what a "deffinate" cost would be? Why would the publishers go naked, I don't get that. And I know the words "copywriter" and "copywriting", but the combination "out of copywrite" just doesn't make any sense. I guess "bare" and "copywrite" don't mean what you think they mean.

 

[brent0saurus]

Call me simple but I don't understand this part

"The increased prices will reportedly actually result in lower income for book publishers, serving instead to prevent Amazon from selling eBooks at a loss in order to draw in Kindle customers."

Why do increased prices result in lower income for publishers? And why does this prevent Amazon from selling at a loss?

I just know I'm going to feel really stupid when I get my answer....

 

[wackymacky]

The publishers having more influence would have happened as soon as major eBook publication started opening up anyway; the fact that Apple is pushing them over the edge is more of a coincidence than anything else.

The sad thing is that this kind of vertical price control was, until recently, illegal. Don't you just love de-regulation? The publisher was historically free to set whatever price they wanted to the wholesaler or direct retailer, who was then free to set whatever price they wanted to the end user.

Now, sadly, that's no longer the case, and retailers can be forced to charge a certain price for the privilege to sell products. That was always true to some extent, naturally, but it used to be far less enforceable (and in reality, far less common than it is now). It was almost unheard of for products that could be readily obtained from a wide variety of merchants (unlike, for example, a POS Bose radio that only a few "certified retailers" would carry).

Welcome to the future.

How's this different from what places like Wal-Mart and supermakets have been to manufactuers and producers for years: If you want use to stock your product this is the price point.

 

[theneweyes]

Speaking for all the non-native English speakers: Could you explain what a "deffinate" cost would be? Why would the publishers go naked, I don't get that. And I know the words "copywriter" and "copywriting", but the combination "out of copywrite" just doesn't make any sense. I guess "bare" and "copywrite" don't mean what you think they mean.

A bit off topic: The average writer makes $5,000 a year.

 

[gloss]

Guess who's not going to be buying as many eBooks anymore?

I don't care how you rationalize it, a 50% increase over an existing mental price point is not going to go over well.

 

[jerome65]

Evil Publishers!!!!!

serving instead to prevent Amazon from selling eBooks at a loss in order to draw in Kindle customers.

Imagine that, the publishers actually want to make money off the product they are producing instead of it being a "value added" product sold at a loss to help sell Amazon's Kindle. Retailers like Amazon and Wallmart constantly pushing for lower and lower prices for the products that they sell is one of the things that has been driving manufacturing out of the U.S. Not the only thing, the manufacturers are trying to maximize their profits as well, but with the added pressure from large box retailers is not helping.

Wether you like the price increase or not the product should be sold at a price that will allow the publishers to make a profit and pay the authors and people who make the books a living wage. They know better what those costs are than the retailers. Adding a few bucks more to the price will not break the bank for the consumer.