no, i have no desire to read your other posts. i am only responding to your original insults directed toward my post. we should agree to disagree over this discussion and drop it. your wish is granted. move along.
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Not All Major Publishers Reportedly On Board With Agency Model for eBook Pricing
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You could make Clerks, Reservoir Dogs, or Primer without a studio, though, and any of those would be far, far more impressive than Avatar.
Well, as much as I respect your economics background, you might want to recall that the Agency model chosen by MacMillan gives the publisher variable pricing power with Apple ( and now Amazon) getting 30%; a $10.50/$4.50 split assuming a retail price of $14.99. The reason that MacMillan wants this over the Wholesale model is that they get to vary pricing optimized to demand or to create demand, and have the opportunity to maximize profit over the life cycle of the book sales. I'm sure that you are familiar with the following.
http://en.wikipedia.org/wiki/Demand_(economics)
But let's assume that Amazon was losing $5.00 per ebook in order to establish what they had hoped would be the standard for ebooks, the Kindle. At some point, and tiring of the losses, Amazon would have forced the publisher to take a smaller cut, ensuring profitability for Amazon's ebook store. By being proactive, the publishers forced Amazon to acquiesce, ironically returning a profit to Amazon, and at the same time giving the publishers pricing power. Sure, Amazon's business model got torpedoed, but it was a risky strategy from the get go.
The only negative for the consumer is that the price may be higher for new releases of popular authors, and may stay high for a current bestseller, giving the consumer the option to purchase at the higher price, or to wait until the price drops to meet his expectations. This is pretty much how the market should operate.
A savvy consumer might find that there are plenty of good values in ebooks from authors who have recently dropped off best sellers list, and pick those up in the $4.99 range, saving $10.00 each. This is pretty much the same as shopping for books in the bargain bins. YMMV
You could make Clerks, Reservoir Dogs, or Primer without a studio, though, and any of those would be far, far more impressive than Avatar.
Kudos. Glad I'm not the only one thinking this way
Well, that's the popular theory...but let me throw another one out there. Amazon is trying to drum up a market for ebooks, which is still extremely small.
Ofcourse losing money on each sale was not a permanent solution. I have no doubt if Amazon could increase ebook readership 1000% over the next 10 years, that the would dictate a lower cost from the publishers so they could actually turn a profit on each sale.
Lets not forget, each additional sale of an ebook is pure margin, i.e. there's no additional cost to the publisher for each additional ebook sold. There's also no inventory costs associated with ebooks. So if they're currently getting $15/ebook for 2.5M in sales, they'd actually be better off if that were only getting 7.5/ebook for 25M in sales ($37.5M vs $187.5M), just to throw some number up. The authors obviously would be beneficiaries too of this model. Oh yea...and who'd be taking all the risk? Amazon, that is who...there the ones upfronting the cost of growth. Yes, they're recouping some of it on the Kindle right now, but they're still losing money on every ebook sale in an effort to penetrate the market.
Economically, in theory it's in everyone's best interests if the Amazon's model works. Except for one thing....greed and lack of foresight. If you're going to create a new market, you need at least one of two things. Either an amazing and revolutionary product, or be offering a significantly lower cost alternative to something that already exists.
Now I love my ebooks, probably have bought 100 or so in the last 18 months. But they aren't amazing and revolutionary. It's the savings, and the fact when I make a $300 investment in an ereader, I buy it for the convenience and the fact that over time I expect to recoup my investment. If all of a sudden, ebooks and hardcover book costs converge...what's the attraction. Why sink hundred into a reader so you can buy a digital version? Yea, I'd probably still buy the ebook version since I've already got the sunk cost of the Kindle already....but I doubt I'd buy a Kindle today without the promise of significantly cheaper digital alternatives to the physical copies I can already order on amazon, have shipped in 2 days free to my door, that I can put on a book case as decoration, easily lend out to another family member or friend, or sell if I choose. And that's the issue...the publishers move (some publishers) will stifle growth, at everyone's expense, including the author's, publishers, reselllers, and consumers. Why? Control. Pure and simple, the likely long term model of this would involve an evolution of the way books are distributed, and the publisher's role in the process. And damn you all, damn the author's, damn everyone... they are making decisions now to spite themselves without any long-term thinking.
Ofcourse, one of the happy alternatives of this could be the market correcting this anyway. If some publishers have the foresight (which from this original linked article appears is the case), then perhaps people will still buy their ebooks, but the share of those publishers increases at the expense of the Macmillian's out there...and that would make me smile.
They can prices books whatever they want, actually.
What people miss is that publishers - such as what medical book publishers are doing right now - can just create a Book App and sell their book through the iTunes App store for WHATEVER PRICE THEY WANT!
For example, current medical books in the iTunes App Store sell for up to $300!
Apple actually allows any publisher to sell their book through iTunes WITH DRM at any price they want! Even free!
People completely miss this point.
What people miss is that publishers - such as what medical book publishers are doing right now - can just create a Book App and sell their book through the iTunes App store for WHATEVER PRICE THEY WANT!
For example, current medical books in the iTunes App Store sell for up to $300!
Apple actually allows any publisher to sell their book through iTunes WITH DRM at any price they want! Even free!
People completely miss this point.
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This TBIResearch article seems to contradict what authors are saying about the agency model. Authors, or at least the ones here, seem to be for it:
http://nielsenhayden.com/makinglight/archives/012162.html
John Scalzi seems to be for it, too, though he seemed to be more pissed at Amazon for taking the books off, rather than price. Regardless, he seems to be for the agency model pricing, as it sounds like he gets a larger royalty that way. I assume he, all of people, would know the difference of what he gets paid between the two models.
Now granted the TBIResearch article says publishers make less money with the agency model, and they themselves seem to draw the conclusion that means less money for authors. If anything, I'd wager the author gets a bigger cut under the agency model, which would mean a smaller cut for the publishers, and that would be the only reason a publisher might not want to go the agency model route. But that's for the publishers and authors to fight about.
http://nielsenhayden.com/makinglight/archives/012162.html
John Scalzi seems to be for it, too, though he seemed to be more pissed at Amazon for taking the books off, rather than price. Regardless, he seems to be for the agency model pricing, as it sounds like he gets a larger royalty that way. I assume he, all of people, would know the difference of what he gets paid between the two models.
Now granted the TBIResearch article says publishers make less money with the agency model, and they themselves seem to draw the conclusion that means less money for authors. If anything, I'd wager the author gets a bigger cut under the agency model, which would mean a smaller cut for the publishers, and that would be the only reason a publisher might not want to go the agency model route. But that's for the publishers and authors to fight about.
Yes but as we have seen with apps, marketing is a huge factor in success. With things like medical apps, there's a built in market. but when you are talking about general books, it's a lot harder.
This is where deals like Amazon and itunes come into play. they have built huge systems to encourage additional sales with 'customers also bought' and 'itunes genius'.
the thing with all of this is that the publishers didn't like Amazon having the power to set prices etc. they can't do it with 'real' books, why should they get to with ebooks. They got that power because they were the only choice. And they knew it. Now Apple has entered the game and publishers can say no and refuse to resign contracts and leave Amazon. And Amazon doesn't want that. So any publishers that want a change in terms will get it. Because the last thing Amazon wants is for them to completely jump ship and take all their books elsewhere. BN.com is nipping at Amazon's heels and being the only online story to get Harry Potter, Twilight or whatever the next big book turns out to be would push them way ahead. and even if a publisher lets Amazon keep the paper, if the ipad goes as big as it could and everyone starts going ebook, just losing that would hurt.
in many ways it's the same fears that the tv networks and studios have about downloads v optical disk/broadcast viewing.
brave new world on the horizon and the old regiment is scared ********.