iPad Helping Book Publishers Gain More Control Over eBook Pricing

[chukronos]

I find the responses in this thread interesting. I wonder if the ebook business is going to continue to grow at this new price point. Personally, I purchase physical books. Most new best sellers are only about $20 at Barnes & Noble and Borders (usually 30% off when brand new). Plus, Half Price Books bookstore will purchase them when I am done.

What I find interesting is this: When the record industry wanted to do the same thing the book publishers are now doing, Apple fought it. Apple was taking a loss on the itunes store. But, this was okay because they were making a profit by selling iPods. Apple was the good guy, the record industry was the bad guy. When Wal-mart, Sony, Zune music stores worked with the record industry on tiered pricing, they were portrayed as the bad guys for trying to screw the consumer. Everyone was hoping for their failure.

Fast forward to today and the eBook publishing industry. Amazon is selling ebooks at a loss to propel the sales of their kindle. No different than what Apple was doing with itunes and the iPod. Yet, Amazon is considered the bad guys? Apple does the exact same thing with publishers that Wal-mart, Sony, and the Zune music stores did with the record industry and they are considered the good guys? I am surprised more people aren't upset. but, then again, too many people do not read anymore.

 

[virduk]

All this is going to do is increase ebook piracy.

And I certainly am not happy about the changes, just as I do with real books I'd like to shop around for better prices amongst retailers. Of course given 90% of my reading is done via libraries ebook prices won't affect me much.

 

[milk242]

I find the responses in this thread interesting. I wonder if the ebook business is going to continue to grow at this new price point. Personally, I purchase physical books. Most new best sellers are only about $20 at Barnes & Noble and Borders (usually 30% off when brand new). Plus, Half Price Books bookstore will purchase them when I am done.

What I find interesting is this: When the record industry wanted to do the same thing the book publishers are now doing, Apple fought it. Apple was taking a loss on the itunes store. But, this was okay because they were making a profit by selling iPods. Apple was the good guy, the record industry was the bad guy. When Wal-mart, Sony, Zune music stores worked with the record industry on tiered pricing, they were portrayed as the bad guys for trying to screw the consumer. Everyone was hoping for their failure.

Fast forward to today and the eBook publishing industry. Amazon is selling ebooks at a loss to propel the sales of their kindle. No different than what Apple was doing with itunes and the iPod. Yet, Amazon is considered the bad guys? Apple does the exact same thing with publishers that Wal-mart, Sony, and the Zune music stores did with the record industry and they are considered the good guys? I am surprised more people aren't upset. but, then again, too many people do not read anymore.

It's called being an apple fanboy or justifying their will be purchases for the ipad or thinking apple can do no wrong.

 

[Eric S.]

Fast forward to today and the eBook publishing industry. Amazon is selling ebooks at a loss to propel the sales of their kindle. No different than what Apple was doing with itunes and the iPod. Yet, Amazon is considered the bad guys? Apple does the exact same thing with publishers that Wal-mart, Sony, and the Zune music stores did with the record industry and they are considered the good guys? I am surprised more people aren't upset. but, then again, too many people do not read anymore.

According to Steve Jobs, "nobody reads anymore."

Oh, right ... that was before Apple made an ebook reader device.

 

[cmaier]

According to Steve Jobs, "nobody reads anymore."

Oh, right ... that was before Apple made an ebook reader device.

No, it's not an ebook reader device. It's a device that, among many other things, also handles ebooks. Just because no one reads anymore doesn't mean Stevie doesn't want his share of the pie created by those few who do

 

[TMay]

I find the responses in this thread interesting. I wonder if the ebook business is going to continue to grow at this new price point. Personally, I purchase physical books. Most new best sellers are only about $20 at Barnes & Noble and Borders (usually 30% off when brand new). Plus, Half Price Books bookstore will purchase them when I am done.

What I find interesting is this: When the record industry wanted to do the same thing the book publishers are now doing, Apple fought it. Apple was taking a loss on the itunes store. But, this was okay because they were making a profit by selling iPods. Apple was the good guy, the record industry was the bad guy. When Wal-mart, Sony, Zune music stores worked with the record industry on tiered pricing, they were portrayed as the bad guys for trying to screw the consumer. Everyone was hoping for their failure.

Fast forward to today and the eBook publishing industry. Amazon is selling ebooks at a loss to propel the sales of their kindle. No different than what Apple was doing with itunes and the iPod. Yet, Amazon is considered the bad guys? Apple does the exact same thing with publishers that Wal-mart, Sony, and the Zune music stores did with the record industry and they are considered the good guys? I am surprised more people aren't upset. but, then again, too many people do not read anymore.

Firstly, the new price point is a maximum; it is variable pricing and goes down from there. So say there is a new J.K. Rowling book out. The publisher is going to charge the $14.99 price point until sales drop off, then pickup some sales at $12.99, and so on until the price ultimately reaches some minimum, probably $4.99. Apple's format is ePub so the publisher can opt out of DRM; not possible with Amazon (at least until they capitulate again).

Secondly, Amazon was originally pricing at $9.99 (making $6.66 per transaction doesn't look like a loss to me) but was only leaving $3.33 on the table for the publisher and the author. For them is was a lose/lose proposition, and many Authors questioned the viability of ebooks. Apple comes along and offers the publisher a better structure, basically a 30% fee (they get $4.50 of $14.99 out of a new best seller release) and the publisher keeps $10.50, which is three times what they were getting with Amazon. Publishers may even consider a more equitable split with the Authors.

From my perspective, consumers pay more if they can't wait (the market response) but given time, pricing decreases to the same minimum as Amazon was offering. Maybe people won't purchase at the new release price, and publishers will be forced to drop pricing quickly in response to the market.

 

[cmaier]

Firstly, the new price point is a maximum; it is variable pricing and goes down from there. So say there is a new J.K. Rowling book out. The publisher is going to charge the $14.99 price point until sales drop off, then pickup some sales at $12.99, and so on until the price ultimately reaches some minimum, probably $4.99. Apple's format is ePub so the publisher can opt out of DRM; not possible with Amazon (at least until they capitulate again).

Secondly, Amazon was originally pricing at $9.99 (making $6.66 per transaction doesn't look like a loss to me) but was only leaving $3.33 on the table for the publisher and the author. For them is was a lose/lose proposition, and many Authors questioned the viability of ebooks. Apple comes along and offers the publisher a better structure, basically a 30% fee (they get $4.50 of $14.99 out of a new best seller release) and the publisher keeps $10.50, which is three times what they were getting with Amazon. Publishers may even consider a more equitable split with the Authors.

From my perspective, consumers pay more if they can't wait (the market response) but given time, pricing decreases to the same minimum as Amazon was offering. Maybe people won't purchase at the new release price, and publishers will be forced to drop pricing quickly in response to the market.

Amazon announced a week or two ago that you could opt out of DRM.

 

[TMay]

Amazon announced a week or two ago that you could opt out of DRM.

I missed that, but you are correct.

Happened very quietly Jan 15, basically unannounced:

http://www.niemanlab.org/2010/01/amazon-quietly-lets-publishers-remove-drm-from-kindle-ebooks/

"It’s hard to ignore that Amazon is making these changes shortly before Apple is expected to unveil its long-anticipated tablet computer on Jan. 27, which could be the most potent challenge to the Kindle ebook ecosystem yet. Amazon also announced yesterday it would radically improve the revenue share it offers Kindle publishers, handing over 70 percent of the list price — a level that matches what Apple offers software publishers in its App Store."

 

[cmaier]

I missed that, but you are correct.

Happened very quietly Jan 15, basically unannounced:

http://www.niemanlab.org/2010/01/amazon-quietly-lets-publishers-remove-drm-from-kindle-ebooks/

"It’s hard to ignore that Amazon is making these changes shortly before Apple is expected to unveil its long-anticipated tablet computer on Jan. 27, which could be the most potent challenge to the Kindle ebook ecosystem yet. Amazon also announced yesterday it would radically improve the revenue share it offers Kindle publishers, handing over 70 percent of the list price — a level that matches what Apple offers software publishers in its App Store."

I believe your analysis of Amazon's previous pricing is wrong as well. From what I've read, amazon was paying more than $9.99 for the books, and keeping only 70% of the $9.99 price they sold it at. So the publisher was getting its $12.99 (or whatever) plus 30% of the sales price. The publishers actually make less per sale under the new model.

 

[kernkraft]

According to Steve Jobs, "nobody reads anymore."

Steve, my dear, you should immediately get out of that digital ghetto of yours. People still DO read. Maybe people around you do not. I still do.

 

[Kristenn]

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!

So you don't want authors who work hard to write the book to get fair profits?


Wow. Just wow.

 

[spf250]

iPad is crap. the way these sites are trying to spin its effect is stupid as well. you're going to strain your eyes reading off of these things. a lot of cult-ish idolization going on over this thing

 

[spf250]

I think their margins are big enough when they're selling a 5mb data file for 12 - 15 dollars. Fair is disputable. I guess we should raise the price on everything so everyone is evenly compensated in your little world

 

[ajhill]

They just don't get it.

Most of the Book Sellers do not get it. eBooks don't compete against physical books. They are competing against the free model. I.E. bit torrent, usenet, etc. If the book price is low enough, Book sellers will sell many more units than they will at a higher price. They know this, it's the frisbee model. With the market moving to eBooks, costs drop dramatically and consumers SHOULD eventually see lower prices. If publishers don't have the costs of printing a book they will adopt the price model that makes the most money, period. And that will be a model with a low price that sells a lot of books. The textbook model just doesn't work for the bestseller list.

Prices don't need to be held down artificially low by Amazon, simply to justify the absurdly high price of a Kindle. Esp given the low price of the entry level iPad.

Those of us old enough to remember when movies were first made available to the home market will remember VHS tapes of movies selling for $75 and $100. When digital (and analogue) discs (i.e. Laserdiscs) first became available they were often $40-$70 for premium movies. Everyday titles were $19.99. And the quality was better than VHS, but not really that great (esp the color RED on video, Yikes!).

DVDs pushed the purchase price for movies down even more.

Now as BluRay competes with the FREE model the prices have dropped even more. You are hard pressed to find a BluRay disc over $30. And that $30 is about 1/5 of the value of the $80 that we spent on Laserdiscs in the 1980s when you consider inflation.

And eventually online download of movies (the movie version of an eBook) will lower the cost of a movie even more than BluRay.

Yes, movies and books are still probably overpriced today. But they are much more affordable than they were a few short years ago, pre Internet. And the people who put hard work into creating these products do need to be compensated. So quit your bellyaching. I mean $14.95 (2010 dollars) for a 1080P, Dolby Digital 7.1 channel pristine movie that you can watch hundreds of times with no degradation? That's a great value, that will get even better when it goes down to $10 for an eMovie (download). Now if we could only get better writing into our movies, and fewer explosions.

Prices will continue to come down. Even as inflation eats away at the value of every thing that you own. Remember what a million dollar home looked like in 1980 vs a million dollar home today?

Just as the music companies eventually found the right price point for their music, so to will book Publishers.

Given the domination of the FREE marketplace (i.e. stolen music) that price is likely to continue to come down. I can remember having to purchase albums and CDs just to get a handful of truly good songs. (Dark side of the Moon, aside).

In ten or twenty years this will all be moot anyway. By then there will be no such thing as a Music Company, or Publisher. Artists and Authors will simply announce their latest works on their social network and their fans will go to the artist's site and download them for a pittance. The artists will then keep nearly ALL the revenues.

That's my $0.02

 

[Kristenn]

I think their margins are big enough when they're selling a 5mb data file for 12 - 15 dollars. Fair is disputable. I guess we should raise the price on everything so everyone is evenly compensated in your little world

Yep, that's my little world all right. I'm sure the authors of books don't care one bit.

Also, to the poster above me. I love your theory!

 

[TMay]

Most of the Book Sellers do not get it. eBooks don't compete against physical books. They are competing against the free model. I.E. bit torrent, usenet, etc. If the book price is low enough, Book sellers will sell many more units than they will at a higher price. They know this, it's the frisbee model. With the market moving to eBooks, costs drop dramatically and consumers SHOULD eventually see lower prices. If publishers don't have the costs of printing a book they will adopt the price model that makes the most money, period. And that will be a model with a low price that sells a lot of books. The textbook model just doesn't work for the bestseller list.

Prices don't need to be held down artificially low by Amazon, simply to justify the absurdly high price of a Kindle. Esp given the low price of the entry level iPad.

Those of us old enough to remember when movies were first made available to the home market will remember VHS tapes of movies selling for $75 and $100. When digital (and analogue) discs (i.e. Laserdiscs) first became available they were often $40-$70 for premium movies. Everyday titles were $19.99. And the quality was better than VHS, but not really that great (esp the color RED on video, Yikes!).

DVDs pushed the purchase price for movies down even more.

Now as BluRay competes with the FREE model the prices have dropped even more. You are hard pressed to find a BluRay disc over $30. And that $30 is about 1/5 of the value of the $80 that we spent on Laserdiscs in the 1980s when you consider inflation.

And eventually online download of movies (the movie version of an eBook) will lower the cost of a movie even more than BluRay.

Yes, movies and books are still probably overpriced today. But they are much more affordable than they were a few short years ago, pre Internet. And the people who put hard work into creating these products do need to be compensated. So quit your bellyaching. I mean $14.95 (2010 dollars) for a 1080P, Dolby Digital 7.1 channel pristine movie that you can watch hundreds of times with no degradation? That's a great value, that will get even better when it goes down to $10 for an eMovie (download). Now if we could only get better writing into our movies, and fewer explosions.

Prices will continue to come down. Even as inflation eats away at the value of every thing that you own. Remember what a million dollar home looked like in 1980 vs a million dollar home today?

Just as the music companies eventually found the right price point for their music, so to will book Publishers.

Given the domination of the FREE marketplace (i.e. stolen music) that price is likely to continue to come down. I can remember having to purchase albums and CDs just to get a handful of truly good songs. (Dark side of the Moon, aside).

In ten or twenty years this will all be moot anyway. By then there will be no such thing as a Music Company, or Publisher. Artists and Authors will simply announce their latest works on their social network and their fans will go to the artist's site and download them for a pittance. The artists will then keep nearly ALL the revenues.

That's my $0.02

The reality is that for most titles, ebook sales are meager and generally a small fraction of dead tree sales. This is coming from the authors who have commented on the Amazon/MacMillan dustup. The Agent model that publishers want will give them more return on fewer sales, and the variable pricing will maximize profits. Some of that will be passed on to the Authors (MacMillan is offering to renegotiate the Authors cut).

Either way, most authors will never make very much money ebooks.

 

[friedmud]

Either way, most authors will never make very much money ebooks.

I think this is incredibly short sighted... And sounds just like things that were said when iTMS debued, and we se how that's gone!

I'm not saying that the iBookstore is going to be the thing that changes the game (although it might). But, I do believe that eBooks are going to grow in popularity and eventually eclipse dead tree books. Maybe that's hard for some of us to see right now because we've lived our whole lives without an eBook reader that's good enough to change everyhing... But it will happen.


Personally that device is already here: the iPad. It's good enough for me that I plan on never buying another dead tree book (and yes I am an avid reader). But I do see that it might not be good enough for everyone else.

As an ebook reader the main thing it gives me is portability. I regularly read 1000+ page books... And these are unwieldy to travel with ( especially work travel where I have a laptop and tons of other stuff to carry). Having a super slim and light iPad that can take the place of both the laptop and book is going to be awesome!

 

[Lara F]

As long as you have the proper device to play it on, I don't see why it would be a problem. It's no different than owning a Betamax tape collection -- only useful if you have a Betamax player.

Isn't that the whole point? Who has a Betamax player today? I love having an e-book collection I can take with me at all times, but it sucks knowing they're not future-proof in any way.

And I'm not talking 20 or even 10 years btw. I can give an example right now of "outdated" DRM and that's Mobipocket. They were the biggest e-book supplier (along with eReader.com) prior to Amazon and the Kindle. Early adopters circa 2002-2006 would have bought a lot of titles for their Palm PDA's/smartphones and Windows Mobile devices. I didn't fortunately, but I did purchase a few that weren't on eReader. And guess what, I can't read those DRM'd books on my iPhone since Mobipocket never released an app. And indeed appears to have ceased all development after being bought by Amazon, so you can forget about Android, Web OS outside the Classics emulator, probably new Windows Mobile or BlackBerry phones too. When my Palm TX finally dies, that'll be it. And it's only been 3 years.

 

[Eric S.]

In ten or twenty years this will all be moot anyway. By then there will be no such thing as a Music Company, or Publisher. Artists and Authors will simply announce their latest works on their social network and their fans will go to the artist's site and download them for a pittance. The artists will then keep nearly ALL the revenues.

I don't think democracy will trump capitalism quite that easily. Production and promotion will still be done by large companies, even if the means of distribution change.

 

[erushurerx]

According to Steve Jobs, "nobody reads anymore."

Oh, right ... that was before Apple made an ebook reader device.

Exactly!! While I really do love Steve's products, he really put his foot in his mouth on that one.

The Kindle is a great device. I absolutely love mine. With the number of books available on the Kindle, if some publishers decide to increase their price, hopefully that will mean that others will keep their prices at the current level in an effort to sell more books. Plenty of authors currently offer a book for free on the Kindle just to get their works read. Authors that are willing to do that find their other works selling more than they would otherwise. I've enjoyed books from several authors that I would have otherwise not read through this marketing method in the Amazon Kindle Store.

I think it is quite possible that those publishers that are spearheading the movement to increase prices might find that they are shooting themselves (and their authors) in the foot. Most people who purchase e-book readers are avid readers in general and are quite happy to read a wide variety of books. Let's face it, if they have an option to choose between free books, $9.99 books, and $14.99 books, I think it is safe to say that the higher priced books will be selected the least.

 

[rlhamil]

Before Apple entered into the negotiations, Amazon was making 70 percent off of the & 9.99 price of an ebook. Amazon made $6.66, and the Publisher made $3.33.

Then Apple entered into discussions and said that they will sell ebooks in the iTunes store for 30%. Apple will also support variable pricing.

Amazon comes back and matches the 30%. MacMillan then states that they will move to Apple if Amazon doesn't match the variable pricing. Amazon shuts off all MacMillan stores. After much whining by Amazon, Amazon agrees to variable pricing.

MacMillan now is stating that they will renegotiate with the authors guild implying better return for the authors.

From now on, Publishers will track the market making pricing adjustments to maximize profits. For popular Authors and sequels, it may take a long time for consumers to see price decreases, but eventually, pricing will hit the same lows as Amazon previously had.

Looking at this from Amazon's view, they took a big hit.

From the Publishers view, they get better return and more pricing granularity.

From the consumers view, pricing will be higher initially, but ultimately pricing will be as low as the previous pricing.

From the Authors point of view, it will probably be a significant improvement in return.

My point of view is that Authors making more return will probably increase the variety and numbers of ebooks available.

That is good for Apple and everybody else.

From my point of view, I don't want any one retailer (Amazon _or_ Apple,
for example - and for full disclosure, I buy from both and own stock in
neither) controlling prices.

What I _do_ want, not right away, but when eBooks and eMusic
are almost fully accepted as replacing traditional media, is for the
traditional publishers to go bankrupt and _die_. For movies, most
production (give or take stuff like _The Blair Witch Project_) is beyond
the means of most individuals. That's not true for some music, and
it's not true for books at all; along with the talent to write something
that people will want to read, all it takes is a cheap computer and
OpenOffice to do a perfectly reasonable job of producing an eBook.
(Even software to convert to various eBook formats, complete with
some sort of copy protection, needn't cost much.)

In place of the traditional publishers, how about agents that could
directly market to retailers? Even better, let's axe the retailers too,
since even at 30% rather than 50% or whatever, they have the largest
share of the markup.

If a dozen well-known and computer-savvy authors got together, they
could set up a cooperative electronic storefront. Its cut would be enough
to keep it running, and no more; it would be similar to a
farmer's co-op or a credit union. The authors would get all the rest,
and out of their share would pay for their own proofreading, editing,
and publicity services. New faces would have to charge very little
(and perhaps depend on friends to do the proofreading, and on their
low prices to substitute for publicity) until they gained some
recognition (if they ever did), but they wouldn't have to be concerned
with how they fit any particular publisher's lineup.

I'm all for authors getting more. But once physical media are eliminated,
all other stages in the process should also be eliminated, or be employed
by the authors. In any other role, they're parasites and unnecessary
gatekeepers.

The legitimate role of capitalism is not to fatten the useless, but to
provide for _efficient_ exchange of goods and services. Electronic
media _should_ be disruptive to obsolete physical media distribution
practices.

(That scenario does not _necessarily_ apply to technical books and
textbooks, although it might; some of the wikimedia sites are getting
close to being useful replacements for commercial equivalents. Even
research papers aren't always pay-for-access anymore - think of arXiv.org.)

 

[gwangung]

From my point of view, I don't want any one retailer (Amazon _or_ Apple,
for example - and for full disclosure, I buy from both and own stock in
neither) controlling prices.

What I _do_ want, not right away, but when eBooks and eMusic
are almost fully accepted as replacing traditional media, is for the
traditional publishers to go bankrupt and _die_. For movies, most
production (give or take stuff like _The Blair Witch Project_) is beyond
the means of most individuals. That's not true for some music, and
it's not true for books at all; along with the talent to write something
that people will want to read, all it takes is a cheap computer and
OpenOffice to do a perfectly reasonable job of producing an eBook.
(Even software to convert to various eBook formats, complete with
some sort of copy protection, needn't cost much.)

In place of the traditional publishers, how about agents that could
directly market to retailers? )

They call those publishers.

I think you'll be very very surprised to note that it's harder than it looks to market and promote. And when you're in business for yourself, whether as an artist or as a consultant, you spend more time trying to hustle up business or promoting yourself than you do actually doing the work you want to do.

Now, maybe the traditional publishers may go by the wayside, but somebody performing their functions will arise, because most writers a) don't want to deal with that stuff and b) are quite bad at that stuff (because they're WRITERS).

Again, see http://whatever.scalzi.com/2010/02/...ime-soon-a-deeply-slanted-play-in-three-acts/ (and this is from a writer who got started as a self-publisher).

EDIT: BTW, I'm a writer/producer of a theatre troup. By far, the largest part of my time is in promoting and marketing the group. Electronic media helps, but it's no substitute for traditional, face to face salesmanship.

 

[TMay]

I think this is incredibly short sighted... And sounds just like things that were said when iTMS debued, and we se how that's gone!

I'm not saying that the iBookstore is going to be the thing that changes the game (although it might). But, I do believe that eBooks are going to grow in popularity and eventually eclipse dead tree books. Maybe that's hard for some of us to see right now because we've lived our whole lives without an eBook reader that's good enough to change everyhing... But it will happen.


Personally that device is already here: the iPad. It's good enough for me that I plan on never buying another dead tree book (and yes I am an avid reader). But I do see that it might not be good enough for everyone else.

As an ebook reader the main thing it gives me is portability. I regularly read 1000+ page books... And these are unwieldy to travel with ( especially work travel where I have a laptop and tons of other stuff to carry). Having a super slim and light iPad that can take the place of both the laptop and book is going to be awesome!

I should have elaborated a bit. Most authors don't make any significant money with dead tree books either. It's the nature of writing. You have to be found, and then you have to build an audience, which might take many titles and quite a bit of time. Will this be easier with the ebook model? I can't say, but I would agree with those that see a future of a more streamlined model of publishing.

If Apple did nothing else, they leveled the playing field for publishers, and even ebook readers other than the Kindle, and basically endorsed the ePub standard. If the Agent model gives the publishers good results and the authors a fairer share, then maybe we will see DRM being eliminated fairly quickly by publishers.

 

[RebootD]

Lies

A huge cost comes from the publishing, printing and shipping of books to stores. All of that overhead disappears yet they expect us to pay the same price for a digital version?

What's next pay-by-the-chapter? Only like chapters 4, 7 and 10? Pay $.99 per chapter!

 

[cmaier]

A huge cost comes from the publishing, printing and shipping of books to stores. All of that overhead disappears yet they expect us to pay the same price for a digital version?

What's next pay-by-the-chapter? Only like chapters 4, 7 and 10? Pay $.99 per chapter!

why should price have anything to do with cost?