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Since I would say most books are not comparison shopped this is only going to hurt Random House for those cases people are just trying to find something to read and might go the cheaper route.

99% of the books I have bought in my life have been recommendations or authors I liked or some other means of wanting a specific book. Sure I have bought books browsing through a bookstore, but I never compared the price of two different books to decide which one to buy.

People are not going to go, well this book I want to read is 11.99 but this book I don't care that much about is 9.99 so I will buy it.

It won't hurt Random House unless they make a deal with the iBookstore and enter into exclusivity or a price "freeze."

People won't buy one book OVER another based on price. They will, however buy from one etailer vs another because of Price.

Your scenario - why buy the book on iBookstore for 11.99 when you can get it for 9.99 on Amazon AND read it on the iPad?

The iBookstore is "at stake" - not the device. How viable and thriving can the iBookstore be if they don't have enough content and/or the prices are higher. Not very.
 
Of course the ebook market is still expanding, but I think Apple missed an opportunity by not getting the iPad out before Christmas. Kindle2 was the most popular gift purchase on Amazon this past season.

I have to admit being a bit jealous. I'm reading "Too Big To Fail" right now, and it definitely weighs more than an e-reader!
Ultimately, I don't think Apple's delay will affect the long-term sales of the iPad.

Concerning Kindle2's impressive ranking for holiday gift purchases, I will point out that there is *one* point of distribution for this device: Amazon.com. You can't buy it anywhere else. If I recall correctly, the rest of the devices in the top ten were Apple iPods.

Kindle is a pure-play device: it's just an e-reader (and a very nice one, based on the three times I've seen the device in the wild -- I live in the SF Bay Area and currently don't commute on the train).

The iPad promises to be much more. How many apps are in the App Store? Almost 200,000? Even if you think that only one of a thousand is worth downloading, that's still 200 good apps.

That's where iPad's advantage lies: it's not just an e-book reader. If the market wants it to be something else, the iPad will become that device and most likely, it will be a lot of different things to various people at various times. An e-book reader doesn't have flexibility.
 
The iBookstore is "at stake" - not the device. How viable and thriving can the iBookstore be if they don't have enough content and/or the prices are higher. Not very.
Random House is the last of the five major publishing houses that hasn't signed with Apple. They are the sole major holdout; the others are onboard.

Is Random House standing on the pier, watching the iBookstore ship sail away with their four competitors waving goodbye? Probably not. Quarter by quarter, Apple's iBookstore will increase sales figures until they surpass Kindle (I'm guessing in 12-18 months). Random House will belatedly sign with Apple after sitting on the sidelines and watching money roll into their competitors, finally admitting that they will go where their customers are going.

Remember, Levi Strauss refused to sell jeans at Wal-Mart and that decision almost killed the company. If the consumers want to shop at the iTunes Store or the iBookstore, you really want to be there.

And remember, the iBookstore isn't the sole driver of iPad sales. The device has a plethora of alternate functionality that the general consumer will probably find appealing. The iBookstore does not have to be a blockbuster operation from Day One.

These media industry execs are greedy and short-sighted. After years of a 99-cent single pricing cap, the major record labels fought with Apple for variable single pricing. They got it and promptly watched their overall sales plummet. At least one major record executive sheepishly admitted that it didn't work out.
 
The reason that they don't want to set the prices is because right now they have a book, they sell it to Amazon for say $20 after that its out of their hands, if Amazon decides to sell it for $8 and start a price war it doesn't affect the publisher one bit. On the other hand if the publishers are setting the price and a price war starts (ala 99cent apps) then they are selling the title for $8 and now they have lost $12 per book (I have no idea what the real prices are I just used that as an example). By selling it indirectly they have no risk and a reliable profit stream, by selling directly they have to engage in price competition which they are more than happy to let amazon do instead

In the real world, Amazon has to eventually make a profit and raise their sales price to something over the $20 they paid for it. So the publisher can keep that $20 in their head as their wholesale price and then tell Apple some higher price. Anything they sell at the higher price is extra profit over what they would have gotten wholesale. They can move the price up and down to match what Amazon is doing at or above that $20 and not hurt their wholesale price (which I assume is what is used to calculate the author's royalties).

If it weren't for Apple wanting a clause that states no other ebook seller can undercut them, the publisher would even be happy if Amazon sells at a loss. Don't try to match the price on the Apple site and just accept that most of the sales at the flat rate of $20 will be coming from Amazon.
 
Random House is the last of the five major publishing houses that hasn't signed with Apple. They are the sole major holdout; the others are onboard.

Is Random House standing on the pier, watching the iBookstore ship sail away with their four competitors waving goodbye? Probably not. Quarter by quarter, Apple's iBookstore will increase sales figures until they surpass Kindle (I'm guessing in 12-18 months). Random House will belatedly sign with Apple after sitting on the sidelines and watching money roll into their competitors, finally admitting that they will go where their customers are going.

Remember, Levi Strauss refused to sell jeans at Wal-Mart and that decision almost killed the company. If the consumers want to shop at the iTunes Store or the iBookstore, you really want to be there.

And remember, the iBookstore isn't the sole driver of iPad sales. The device has a plethora of alternate functionality that the general consumer will probably find appealing. The iBookstore does not have to be a blockbuster operation from Day One.

These media industry execs are greedy and short-sighted. After years of a 99-cent single pricing cap, the major record labels fought with Apple for variable single pricing. They got it and promptly watched their overall sales plummet. At least one major record executive sheepishly admitted that it didn't work out.

Sorry but your logic and sentence "charting" is full of holes.

"Apple's iBookstore will increase sales figures until they surpass Kindle " The Kindle is a device. The iBookstore is a content provider. Are you comparing the Amazon eBookstore to iBookstore?

"andom House will belatedly sign with Apple after sitting on the sidelines and watching money roll into their competitors, "

huh? If Dan Brown's book is published by Random House - it's not available via any other publisher. That means wherever it's available, it will sell. Meaning if NO eBooks exist for it - people will buy hard copies. If it's ONLY on Amazon, people will buy it via Amazon. If it's available via 3 ways, people will be divided where to get it simply by convenience and/or price.

Random House won't be LOSING any revenue. They have an exclusive item. Your jeans metaphor just doesn't work on many levels.

"The iBookstore does not have to be a blockbuster operation from Day One."
No - it doesn't. But to "train" people to buy there, it should have enough to get the ball rolling. I'm not suggesting it doesn't.

"And remember, the iBookstore isn't the sole driver of iPad sales." - I never said it was. And that's not really the discussion. The discussion isn't iPad's success or even its success as an eReader. The discussion it the viability of the iBookstore.
 
Is Random House standing on the pier, watching the iBookstore ship sail away with their four competitors waving goodbye? Probably not. Quarter by quarter, Apple's iBookstore will increase sales figures until they surpass Kindle (I'm guessing in 12-18 months).

Which could be a bad outcome for those other four if Random House is right about a race to the bottom war. In the Amazon model up to now the publishers got full price on the books. Amazon skimmed profits off of other stuff to offer the discounts on the books sold. If the average revenue goes down but the units sold (in all formats ) remains constant then revenue and profits will go down.




These media industry execs are greedy and short-sighted. After years of a 99-cent single pricing cap, the major record labels fought with Apple for variable single pricing. They got it and promptly watched their overall sales plummet. At least one major record executive sheepishly admitted that it didn't work out.

This only further supports Random Houses argument. That publishers aren't particularly good at retail pricing. There is a pricing curve that record stores typically followed. Top 50 on sale, most of the rest of the new stuff "full price" , older stuff that folks are collecting at lower prices.

The stupid model that the record folks are following at iTunes store is that all of the Top 50-100 stuff is at the highest prices. That may not be all their fault. Gotta wonder if Apple is actually sharing the retail data on sales on a daily/weekly basis with them. That's the huge disconnect. Apple's retail data "what is selling, where, and how fast" isn't really passed onto the publishers very quickly. What hooks does Apple provide to adjust pricing.

But not surprising that a publishing house doesn't have a huge data warehouse analytics to properly adjust pricing to demand and market conditions.


With the everything $.99 model Apple wasn't even trying to do what WalMart does. Everything at WalMart isn't one price and takes items on/off sale. Apple was driving the store primarily to just hit breakeven. Didn't really care if made no money (or a very slight loss ). [ Not that they haven't made some money just on volume, the economies of scale are so huge and the percentage of stuff sold (as opposed to free) is large it would be hard not to make some money. ]
 
Greed? Perhaps.

Survival - without a doubt. Publishing is NOT extremely profitable except for a select few authors/books. For every Harry Potter or Da Vinci Code there are thousands of books that never make a profit or barely squeak by. And usually those big "gravy trains" are paying the expenses of the smaller books/sales.

And with the internet - exposure to more media has diluted sales even further. Not just for books - but attention spans in general.

So greed? Like I said - perhaps. But I don't begrudge publishing houses from having to pay their bills. And unless you're in the industry or a contract lawyer for a publishing company, how can you assess what costs are involved when it comes time to paying for everyone and everything involved in bringing a book to market.
 
Why concerned?

Scenario: Best Seller X

Publisher sells to Amazon for fixed price - say $13. Amazon sells for $9.99
Publisher via iBookstore sells for $13. They are already more expensive. If they drop down to 9.99, they only get appx $7 (they lose 30 percent to apple).

So to remain competitive with other etailers, the PUBLISHER loses money on Apple's structure if they want to remain competitive.

But the publisher has no reason to lower the price. Say 100,000 people are going to buy the book. In this scenario, Amazon sells it for $9.99, and Apple sells it for $13.00, so 90,000 people buy at Amazon, and 10,000 people buy at Apple. The publisher gets 70% of $13 = $9.10 times 90,000 from Amazon, and 70% of $13 times 10,000 from Apple. Amazon has $0.89 gross margin per book and has to pay all their cost out of that $0.89, while Apple has $3.90 gross margin per book.

So why would the publisher reduce the price on Apple's bookstore? They are not going to sell more books. Maybe 110,000 instead of 100,000, but not much more. When Amazon reduces the price, that is Amazon putting money into the consumers' pocket. The publisher is not affected by this. They get the same money, no matter how much or how little profit Amazon makes from every book.
 
How many pounds of magazines/books are in 16gb? 32? 64? :eek:
How many books or magazines can you read during that one train ride back home from work? What good is it to have a thousand books with you? Can it really change your reading habits?

With iPod, it was different. I would not carry many CDs so that I could listen a bunch of one hit wonders in a row, one from each CD. Books or magazines are different. One can easily occupy you for half an hour, so I doubt the amount of reading will change much in the long run. The same people who were already reading regularly will keep on reading in whatever format. The convenience factor may give it a nudge, but I doubt it will make much of a difference.
 
This may sound strange. I wonder if epublishing could reduce the number of available books.

1. The physical cost of publishing books is trivial. The real cost is all the stuff that gets the book ready for print. (editing, type setting, illustrations, cover art, sending the author to strange places to sign books...)

2. most books are published as filler books. They are intended to take up space on store shelves. If they sell a copy, cool. It is not expected.

3. Electronic bookstores don't need filler. Why spend the money for something that has a very low probability of success if you don't need to?
 
How many books or magazines can you read during that one train ride back home from work? What good is it to have a thousand books with you? Can it really change your reading habits?

Not more than one or two. Now that I think about it, zero, I work from home. I do like the idea of taking my library with me when I go on vacation or when I have the unfortunate possibility of dead time while standing in line, getting a haircut or waiting for a movie to start. (Yes, I do turn my books off during the previews.)

Have you ever been waiting in line at the Apple store to purchase more iStuff, when you run into someone reading an ultra cool book? I like the ability to purchase the book on the spot before I am distracted by some rude person wanting to know what ultra cool book I am reading.

Will this change my reading habits? I already read everything I can get my hands on. This will just make it easier to find more stuff. It will not give me more free time.
 
But the publisher has no reason to lower the price. Say 100,000 people are going to buy the book. In this scenario, Amazon sells it for $9.99, and Apple sells it for $13.00, so 90,000 people buy at Amazon, and 10,000 people buy at Apple. The publisher gets 70% of $13 = $9.10 times 90,000 from Amazon, and 70% of $13 times 10,000 from Apple. Amazon has $0.89 gross margin per book and has to pay all their cost out of that $0.89, while Apple has $3.90 gross margin per book.

So why would the publisher reduce the price on Apple's bookstore? They are not going to sell more books. Maybe 110,000 instead of 100,000, but not much more. When Amazon reduces the price, that is Amazon putting money into the consumers' pocket. The publisher is not affected by this. They get the same money, no matter how much or how little profit Amazon makes from every book.

Because Apple, I believe, and someone has yet to correct me if I'm wrong, is making publishers sign an agreement that their books will not GO for less elsewhere. Which means publishers have to either NOT sell through Amazon at all, or get Amazon to raise the price to $13. And Amazon doesn't want to do that because right now - 9.99 seems to be the "tipping" point for sales.
 
...the iPad isn't even marketed as an ereader, it's just one functionality that it does fairly poorly comparatively.
I didn't know you got your hands on an iPad already. I'd assume you did to make such a comment...
 
Because Apple, I believe, and someone has yet to correct me if I'm wrong, is making publishers sign an agreement that their books will not GO for less elsewhere.

No. There are two costs. One is the wholesale cost at which Amazon or Apple buys the book. The other is the cost at which the book is sold to the customer. The publisher will mark the book at a suggested price, but the seller is not bound by that price.

Often what has been done in the book selling business till now is that the selling may use profits from other parts of business to reduce the cost of the book. So sell to the book bestsellers 'at cost' or below cost in hopes that folks will buy something else while looking through the store. Grocery markets do similar things with sale items.

Apple's tactic is reportedly twofold.

One, they are demanding the lowest price available.
Two, they want the model to change to where the publishing houses set a hard price at where the book is to be sold. Apple ( or any other retailer according to Apple's reported demands) acts as an agency and takes a fixes piece of the action ( again Apple has to get a minimal "best offer" percentage of those offered. ).


Which means publishers have to either NOT sell through Amazon at all, or get Amazon to raise the price to $13. And Amazon doesn't want to do that because right now - 9.99 seems to be the "tipping" point for sales.

Amazon wants to stimulate the market. It isn't like they really want to sell at $9.99 since it is below costs for some books. ( They have to find money from someplace else to offset the loss).

Conceptually Amazon could just institute a "NY Times bestseller book buyers club " program and just hand folks $3.00 gift cards every time they bought a best seller. ( knocking the checkout price back down to $10.00 ).

What Amazon doesn't like is that it takes the pricing out of their control. They have spent gobs of money and time on creating systems which allow them to figure out how to set prices to make money. The agency model puts pricing in the hands of folks who really don't have the data to do pricing.
 
How many books or magazines can you read during that one train ride back home from work? What good is it to have a thousand books with you? Can it really change your reading habits?

With iPod, it was different. I would not carry many CDs so that I could listen a bunch of one hit wonders in a row, one from each CD. Books or magazines are different. One can easily occupy you for half an hour, so I doubt the amount of reading will change much in the long run. The same people who were already reading regularly will keep on reading in whatever format. The convenience factor may give it a nudge, but I doubt it will make much of a difference.

This is fairly perceptive and, I think, correct. There are *many* differences between digital books and digital music, and so comparisons between them should be looked at skeptically.

First of all, music tends to be something that you listen to repeatedly; books (novels, anyway) tend mostly be read first. I read *a lot*, but have probably only reread 2% or so of the novels that I have read. Most books I read once and then move on. So the fact that I can carry hundreds or thousands of books on the the iPad (or any e-reader) is not as useful to me as the fact that I can carry thousands of songs on my iPod.

There is some convenience in carrying 6-8 unread books with me, of course, but that's not the same as being able to carry all of my music with me at one time.

Second, one of the great advantages of mp3 players is that you can transfer all of your existing songs to the mp3 player, for free. There's no functionality like this for an eReader.

Third, buying digital music through iTunes was generally cheaper than buying a CD - and clearly cheaper if you consider that many people would buy an entire CD because they only wanted one song. E-Books do seem to be somewhat cheaper than hardbacks, but are not any cheaper than paperbacks, which is what most people buy.

Fourth, (at least for 99% of the population), an iPod played back music just as well as any other portable music player. E-book readers do not have the resolution of even the cheapest paperback - and of course you don't have to worry about reading a paperback at the beach or by the pool, nor do you need to worry that someone might steal your paperback, generally.

And of course there's no digital equivalent of libraries.

So I don't think that the iPad is going to change publishing much - e-books will remain a niche item, which only a small percentage of the population will embrace.

The big exception to all of this, however, concerns textbooks. *If* textbooks were as usable on the iPad as they are on paper (a big if), there would be tremendous advantages to an iPad or other e-reader.
 
Who cares about the damn publishers. They take too much $$ from the writers anyway. Hopefully this will somehow enable more writers to be able to publish their work without the extremely expensive method of going through a publisher.
 
Right, because a new device is going to suddenly make people read more. :rolleyes:

That's a major reason I'm buying the iPad. Easier & more convenient access to books wherever I am = greater likelihood for me to read more.

I mean, I was already considering a Kindle DX, but the iPad happened to be announced around the same time, and it's just a better deal all around.
 
Yeah, I'm not sure I understand what the issue is.

Apple: "Hey Random House, instead of letting the stores set the prices, YOU can set whatever prices you want, and we'll just take a small cut."

Random House: "But that will lead to price wars and reduce our profit!"

.... huh? :confused:

Agreed. The train is leaving the station Random House. . .
 
That's a major reason I'm buying the iPad. Easier & more convenient access to books wherever I am = greater likelihood for me to read more.

I mean, I was already considering a Kindle DX, but the iPad happened to be announced around the same time, and it's just a better deal all around.

Not for everyone. In my opinion, there's too much overlap between a Macbook and the iPad. iPhoto, iTunes, email, web surfing, WiFi are all available on my Macbook. For now the iBookstore sounds like it will be unique to the iPad. So if the killer feature, in the context of this thread, is the e-reader, then we have to decide if the Kindle with lifetime international pre-paid bookstore access is a better deal than a $500+ iPad. Yes, the iPad does other things but are they worth hundreds of dollars more when you already have them on your lapop?

In my opinion having to pay extra to duplicate features I already have on another machine just to get an e-reader is not a better deal.
 
Not for everyone. In my opinion, there's too much overlap between a Macbook and the iPad. iPhoto, iTunes, email, web surfing, WiFi are all available on my Macbook. For now the iBookstore sounds like it will be unique to the iPad. So if the killer feature, in the context of this thread, is the e-reader, then we have to decide if the Kindle with lifetime international pre-paid bookstore access is a better deal than a $500+ iPad. Yes, the iPad does other things but are they worth hundreds of dollars more when you already have them on your lapop?

In my opinion having to pay extra to duplicate features I already have on another machine just to get an e-reader is not a better deal.

One nice thing is that I'm not much of a laptop person - I have always preferred desktops. When I'm out and around town, the iPhone does pretty much everything I could want. The iPad is for use at home.

Maybe if I get to the point where I truly need desktop-class apps wherever I am, I'll pick up a MBP...
 
Wow!

Don't know what to say - they love Amazon. They let amazon sell their books for 9.99 or less, hopefully making some profit in the way. But suddenly setting a 9.99 to 12.99 price with Apple is making them nervous, because who knows what might happen – they might even end up making more profit. How can that be good?

Therefore Random House not only wants to let amazon sell their books for iron clad pricing, but even gave away $60+ value of kindle books, as they, 'on the house' ;).
 
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