9 ms·

E-Book Sales Fall After New Amazon Contracts

72 points by msh 11y ago

swehner 11y ago
Just write shorter books.
- fencepost 11y ago
  That's perhaps excessively terse, but there's probably quite a bit of that going on. EBooks remove the physical hints that differentiate between the latest doorstop from George R. R. Martin or Neal Stephenson and something that's 5 words over the novella/novel dividing line.
toyg 11y ago
Surprise: higher prices do not mean higher profits, especially if most of your business relies on impulse buying and disposable income, and your goods are fundamentally intangible. You didn't need to be a genius to see that coming. The more I see ebooks I'm vaguely interested in selling for £15 or more, the less I'm going to buy them.
- Azkar 11y ago
  It really baffles me that a company will still treat customers like this. Amazon has become bigger than wal-mart because they focus on the customer, maybe other companies will catch on and follow suit. Customers are not stupid, they understand that e-books are a lot cheaper to produce/distribute than a physical book, and they should be priced accordingly. I wonder how long we're going to see these inflated e-book prices before the publishers drop the prices to what they previously were. If this sales trend continues they'd be dumb to not drop the prices of e-books.
  - ghaff 11y ago
    "Customers are not stupid, they understand that e-books are a lot cheaper to produce/distribute than a physical book, and they should be priced accordingly." If customers "understand" this, they mostly understand incorrectly. While it may make intuitive sense that printing and distributing a book should make up a lot of its cost, that's not actually true. I haven't looked at the details for a few years but this is something I wrote a while back on the topic: http://www.cnet.com/news/why-e-books-arent-cheaper/ http://www.cnet.com/news/why-e-books-arent-cheaper/ (To summarize that post, printing plus the take of wholesalers who handle distribution is only about $5 for a hardcover.)
    - toyg 11y ago
      It's still a $5 difference. If you look at most recent books, there won't be that difference between prices. In some cases, the ebook is even more expensive. That's just greed. Prices are not linked to costs but to what the market will bear; in an electronic media market where prices will always be anchored to zero at one end (thanks to piracy and intangible goods), what the market will bear is inevitably less than what it used to be. Customers understand this more intuitively than media producers who grew up in very different times.
    - Booktrope 11y ago
      When a publisher sells an ebook, they receive wholesales not retail price. Wholesale prices in the book businss range from about 35% of list (if you use a full-service distributor) to about 5o% of list (if the publisher sells directly to the retailer). You present an example where the list price is about $28, which means the publisher will get at best $14. But your calculations are based on the supposition that the publisher would get the full list price. Here's another huge cost you don't include for the publisher with print books -- they are returnable and often get returned. If a publisher gets 25% of the books sold returned, effectively the publisher is getting only about $10 for a list price of $28 / wholesale $14. (Return rates can be higher or lower, but there are always returns.) Using the cost figures you use on your referenced example, the publisher loses money on the print book. And, you omit other costs incurred by traditional print book publishing, including shipping, warehousing books and fulfilling orders. With ebooks there are no returns (a huge factor in the analysis), no printing, no shipping, no warehousing. Wholesale prices are a higher percentage of the list price. We publish ebooks and get about 65% of list from Amazon, Apple and Barnes and Noble (it's a bit higher or lower depending on which vendor) So it's obvous that our costs are lower for ebooks and the share of revenue we get is higher. In other words, list price of ebooks indeed should be far less than print, and ours are.
  - toyg 11y ago
    Particularly because it's the future of the whole market. It's the same sort of stupidity currently gripping certain BBC managers: they have to make cuts, so they'll cut their digital services first. You want to survive, so you kill your future? It's just madness.
  - adventured 11y ago
    Amazon isn't bigger than Walmart. Walmart is five times larger. Amazon's last four quarters of sales: $95.71 billion Walmart's last four quarters: $485.3 billion Amazon's total profit over 20 years: ~$0 Walmart last four quarters of profit: $16 billion Facebook, too, has a greater market cap than Walmart, based on trading at 90 times earnings, versus Walmart's 13 PE.
- tsotha 11y ago
  You'd think if anybody knew how to wring the absolute maximum revenue from customers it would be Amazon. If the publishers end up getting squashed by the book version of Popcorn Time they'll have only themselves to blame.
danharaj 11y ago
> Publishers said the current pricing model involves some sacrifice but they felt it was worth it to keep Amazon in check. > Before 2010, book publishers operated with a “wholesale” model for e-books in which they sold titles to retailers, which could discount as they saw fit. Amazon was willing to buy a title for $14.99 and sell it for $9.99, taking a loss to grab market share and encourage adoption of its Kindle e-reader. > Publishers worried that such discounting kept Apple Inc. and Google Inc. from emerging as competitors, as those companies might not want to lose money on e-books. Seems reasonable to me.
- jbeales 11y ago
  Keeping Amazon from becoming dominant is the only reason for jacking ebook prices that makes sense. > [Amazon] accounted for 64% of the U.S. e-book market, by units sold That's actually lower than I thought, but higher than publishers should be comfortable with.
  - cstross 11y ago
    Back at the point in time when Apple and the big six were talking about agency model pricing -- which the DoJ brought the price-fixing case over -- Amazon's penetration was around 90%. (I'm of the opinion that the DoJ case is therefore evidence that US anti-trust law is broken; Amazon were clearly operating a predatory monopoly, but the DoJ went after the much easier target because price fixing is easier to prove.) Speaking as an author published by the major houses (Penguin Random House and Macmillan in the USA; Macmillan and Hachette in the UK) I'm not seeing my books hitting the ebook bestseller charts much -- but I'm not seeing my sales decline relative to where they were a few years ago, either. What seems to be happening is that the bestseller charts are being dogpiled by self-published titles on deep discount -- 99 cents to $2.99 seems to be typical. And the old joke "sell it at a loss, we'll make it up on volume" seems apposite at this point.
    - Turing_Machine 11y ago
      "Amazon were clearly operating a predatory monopoly" Nonsense. You could maybe argue that they were a monopsony, but even that is a stretch. "What seems to be happening is that the bestseller charts are being dogpiled by self-published titles on deep discount -- 99 cents to $2.99 seems to be typical." Someone selling a product for less than your antiquated publisher sells it for is not "predatory". Those authors are almost certainly making more per copy than you are. The consumers are paying less. The authors are making more. What is the problem with this?
revelation 11y ago
Who knew, if you raise prices, through collusion or explicitly, you might just take in less money. But part of it is probably just the same that is happening with music and TV. There are now very diverse sources to fuel media consumption, you are not bound to a specific "curated" collection. Hence the success of US series in Europe, where most of the time you can't even see them legally.
jbeales 11y ago
When an ebook costs over 90% of the price of a hardcover, am I going to buy the ebook, which I can't lend, resell, or give away, or the ebook, which can only be read by me? The answer is simple, I'm going to buy whatever the cheapest physical book is. In Canada, with a Kobo, buying from Chapters/Indigo, the trade paperback is often cheaper than the ebook. This is my situation, and it means that the only time I buy an ebook is if I'm extremely motivated to read a book right now and I can't get it digitally from the library. If I had a situation where I was travelling and extremely space-constrained I might pay the premium for an ebook, but that hasn't happened to me yet. All that doesn't mean I don't read ebooks, but that I don't buy them. The ebooks I read come from the library, (I'm a member of two libraries with great ebook selections), or are classics from Project Gutenberg or similar.
- chanux 11y ago
  To add to the downsides you have mentioned, we practically don't really own them. I mean, almost.
  - jbeales 11y ago
    Yeah, "renting for life" doesn't bode well for passing a first edition ebook on to your children ;)
  - a3n 11y ago
    I don't buy as many physical books as I used to; mostly fiction, and mostly used. I buy a fair number of ebooks, mostly technical, and mostly from O'Reilly. I love that they're DRM-free; in my case I take the PDF version, but they have other formats. Pakt has a very low-intrusiveness form of "DRM." They print your name on every page of the pdf that you buy, but it's otherwise unrestricted. I don't think Pakt or O'Reilly is going to come after you for sharing an ebook with a family member, and I've given a few copies of O'Reilly books to colleagues, to evangelize both O'Reilly and the tech in question.
    - baghira 11y ago
      Similarly Springer ebooks have your name as a watermark at the bottom of the page, but no "real" DRM. It's a pretty reasonable compromise.
subliminalzen 11y ago
I recently subscribed to Kindle Unlimited and it has definitely saved me money. And with the selection getting better and better, I envision this "Spotify for ebooks" business model as the new normal. I own a Kobo too and hope Chapters / Indigo offers the same service.
DrNuke 11y ago
I'm pretty sure I read somewhere it depends on content: niche-domain knowledge and test-preparing e-books sell ok at $10-$15 even if pirated more than often; self-empowering fluff and cuisine titles sell nicely below $10; mainstream novels, essays and general prose sell below $5. If I'm able to trace down the report, will add a link for your reference.
efuquen 11y ago
I always check kindle prices, and if they are close to physical price of the book I will more often then not simply not buy. Overall I still prefer to buy hardcover versions of books I really really want, but if I'm on the fence and see a kindle book that has at least a decent markdown I will more easily make that purchase then give away precious bookshelf space to a book I'm not sure is a must have. I've forgone quite a few purchases I would have been likely to make for that very reason.
mg74 11y ago
These publishers are absolute idiots. Ebooks for 12 to 16 dollars just to support their outdated business model of the hardcover to paperback cycle. I have a whishlist of over 1000 books on Amazon. I can just go through that list and wait with the newer ebook titles until they drop down in prices. This will be my "customer buying pattern" from now on. Winners: 2 to 3 year old books and Amazon. Loosers: New books and the publishers.
blinkingled 11y ago
This was about the publishers being able to set their own prices wasn't it? Maybe they tested out if people were willing to pay more. If they find out they don't they can always go back to the discounts. Trouble was before Amazon had that power. Seems fair that publishers should be able to set their own price. Personally I don't buy an ebook if it isn't in single digit price. Anything more and I might as well buy the hard copy if I need it badly, otherwise I am better off not buying it at all.
Hyperborian 11y ago
> “If you have a good book, price isn’t an issue.” Because if it's that good, it will show up on the various pirating sites quickly. There is a new ceiling on media prices, books included, and these companies are just going to keep loosing money until they adjust their pricing to the new reality.
- rhino369 11y ago
  But is that really true. Piracy is so easy only an extremely deep discount will sway me. Pirates are only a certain percent of the population. The optimal revenue generation probably occurs when you just ignore pirates. If they dash prices 75% and double the number of sales, they still lose revenue. You'd need to quadroople sales to just break even.
- naner 11y ago
  Not exactly true, I'd wager most kindle owners don't bother with piracy. I did finally setup OverDrive with my local library, however.
kozukumi 11y ago
A Kindle was my first e-reader but I have since switched to a Kobo. If I cannot find a book to buy in DRM-free ePub I don't bother with it now. Music is DRM-free these days, no reason for books to still come with horrible restrictions.
cletus 11y ago
I believe consumers as a whole have an innate sense of fairness and it's this that drives a lot of piracy. Australia has had historically high amounts of TV piracy because Australia tends to get treated poorly. One of the country's largest ISPs admitted over half of traffic was BitTorrent [1]. I live in the US now. I don't have cable TV but I do pay for Netflix and HBO Now and will probably pay for the ad-free Hulu Plus now that it exists (I'd never pay for an ad-supported streaming service) and, what the hell, probably Showtime too. In part because I watch them but I don't really need all of them. I really want to put my money where my mouth is here and support such services. I often now see novels on Amazon where the paperback is $8 for a book that's been out for years. The ebook is... $10. Now in the case of print media like the NY Times and the WSJ, I get why they prefer the physical copy: it comes down to advertising. Advertisers will still pay more for print ads and certain advertisers will only buy print ads so they have to print physical copies a bunch of people won't read. It's why, just now in going to this page, you see the WSJ advertising print + online access and why print + online is usually cheaper than just online. But I don't get this at all with ebooks. Paper books need to be typeset and printed, supplies for that bought and the physical products need to be boxed and shipped to various distributors and so on. The distributor, printer and retailer all need to take cuts. The ebook is essentially direct to market with zero distribution costs. Now ebooks offer a lot of advantages to the consumer: immediate access, searchability, more portable. But they also come with negatives: you can't as a general rule resell or even give away an ebook so it can only generally be read by the buyer and their immediate family. Publishers should be loving this because publishers hate the preowned book market. It's why textbooks are often changed from year to year: just to devalue used previous editions and force students to buy new books. Yet publishers are acting in a way that strongly suggests they just want to kill the ebook market. Could that be it? They just know how to print and sell paper books and want to keep on doing it? Could it be fear of piracy and the inability to adapt to this new business model? My own sense of fairness kicks in here: when I see a $10 ebook for an $8 paper book I just don't buy either. I'm reminded here of the cable TV industry. Cable TV is dying. It's why cable companies will essentially give you free Internet if you subscribe to TV services (and charge you $50-80/month if you don't). This artificially props up the number of TV subscribers, which is important because the price of content is driven by the number of consumers. The more consumers a provider has, the lower the pre-consumer cost of channels. This is also why Comcast was so desperate to merge with TWC and has since merged with Dish: to reduce content costs and increase their negotiating power with content providers. But all of this is just seeking higher land in a flood: eventually you run out of land anyway so you're just delaying the inevitable. We see the same thing in the music, TV and movie industries where direct-to-market versions are often more expensive than, say, buying a CD or DVD and having it shipped to your house. Perhaps this really is the long game of setting price expectations. Piracy seems to be the response of the market to "unfair" pricing and licensing practices and it does seem to eventually force change. The problem is that once you've taught a whole market to be pirates, only some of them will switch back to more legitimate channels. It still astounds me that you can be forced to watch FBI disclaimers and the like on movies you legitimately buy and have incompatibilities that won't allow you to watch HD content (HDCP versions and the like) yet what has none of those problems is pirated content. It's a wholly better user experience. I really wish these old world industries would just accept we live in a digital world and get over their anachronistic business models. [1]: http://www.itnews.com.au/news/day-13-iinet-ceo-says-bittorrent-dominates-traffic-159742 http://www.itnews.com.au/news/day-13-iinet-ceo-says-bittorre...
Booktrope 11y ago
The posted article has some huge errors. It actually says, "Amazon was willing to buy a title for $14.99 and sell it for $9.99, taking a loss to grab market share and encourage adoption of its Kindle e-reader." That is complete poppycock. No retailer pays list price for books; they pay wholesale price, which in the book business is usually about 50% for print books; sometimes higher for ebooks. (It depends on the publisher/retailer deal) During the time when the lawsuit was pending, the standard wholesale price for big publishers was more like 50%. So when Amazon buys a book that lists for $14.99 they paid $7.50. Marginal cost of selling an ebook is not very large. If Amazon bought a product for $7.50 and sold it for $9.99, they marked up the product about 33%. This is not "selling at a loss" Big publishers did not object to Amazon selling for below list because it would impact Apple. They objected because they thought selling books at a discount would cause consumers to expect a lower price and they would no longer be able to sell higher-priced books. This is just what's happening right now. Amazon prices books very effectively and even more signficantly, Amazon has opened the marketplace for book sales to self=published authors and to independent publishers who are trying new models. For example I'm CEO of Booktrope which has a new model that produces ebooks that can be sold in the range of $2.99 to $9.99. (We pay a higher percentage royalty of authors in view of the lower prices.) Amazon primarily but also Apple and Nook have opened up huge markets to us and our books are available broadly to readers. It means that big publishers will face competition from us, publishers like us, and self-published authors, and it's not going away. The only way for the big publishers to avoid that would be to somehow block out competition including self-published authors and smaller, more efficient publishers who can produce ebooks at a lower price point. It's not going to happen so big publishers are at a crossroads and we should expect them to adjust or they will face continuing decline in sales.
- x0x0 11y ago
  I think the book publishers were also scared amazon might replicate the ipod/itunes playbook, ie they might wake up one day and amazon kindles might be 90% of the ebook market at which point amazon has way more leverage over them than they would like. So I think for the publishers this is a way of leveling the playing field and trying to create competition in the book reader market.

72 points by msh 11y ago

swehner 11y ago

Just write shorter books.

fencepost 11y ago
That's perhaps excessively terse, but there's probably quite a bit of that going on. EBooks remove the physical hints that differentiate between the latest doorstop from George R. R. Martin or Neal Stephenson and something that's 5 words over the novella/novel dividing line.

toyg 11y ago

Surprise: higher prices do not mean higher profits, especially if most of your business relies on impulse buying and disposable income, and your goods are fundamentally intangible. You didn't need to be a genius to see that coming. The more I see ebooks I'm vaguely interested in selling for £15 or more, the less I'm going to buy them.

Azkar 11y ago
It really baffles me that a company will still treat customers like this. Amazon has become bigger than wal-mart because they focus on the customer, maybe other companies will catch on and follow suit. Customers are not stupid, they understand that e-books are a lot cheaper to produce/distribute than a physical book, and they should be priced accordingly. I wonder how long we're going to see these inflated e-book prices before the publishers drop the prices to what they previously were. If this sales trend continues they'd be dumb to not drop the prices of e-books.
- ghaff 11y ago
  "Customers are not stupid, they understand that e-books are a lot cheaper to produce/distribute than a physical book, and they should be priced accordingly." If customers "understand" this, they mostly understand incorrectly. While it may make intuitive sense that printing and distributing a book should make up a lot of its cost, that's not actually true. I haven't looked at the details for a few years but this is something I wrote a while back on the topic: http://www.cnet.com/news/why-e-books-arent-cheaper/ http://www.cnet.com/news/why-e-books-arent-cheaper/ (To summarize that post, printing plus the take of wholesalers who handle distribution is only about $5 for a hardcover.)
  - toyg 11y ago
    It's still a $5 difference. If you look at most recent books, there won't be that difference between prices. In some cases, the ebook is even more expensive. That's just greed. Prices are not linked to costs but to what the market will bear; in an electronic media market where prices will always be anchored to zero at one end (thanks to piracy and intangible goods), what the market will bear is inevitably less than what it used to be. Customers understand this more intuitively than media producers who grew up in very different times.
  - Booktrope 11y ago
    When a publisher sells an ebook, they receive wholesales not retail price. Wholesale prices in the book businss range from about 35% of list (if you use a full-service distributor) to about 5o% of list (if the publisher sells directly to the retailer). You present an example where the list price is about $28, which means the publisher will get at best $14. But your calculations are based on the supposition that the publisher would get the full list price. Here's another huge cost you don't include for the publisher with print books -- they are returnable and often get returned. If a publisher gets 25% of the books sold returned, effectively the publisher is getting only about $10 for a list price of $28 / wholesale $14. (Return rates can be higher or lower, but there are always returns.) Using the cost figures you use on your referenced example, the publisher loses money on the print book. And, you omit other costs incurred by traditional print book publishing, including shipping, warehousing books and fulfilling orders. With ebooks there are no returns (a huge factor in the analysis), no printing, no shipping, no warehousing. Wholesale prices are a higher percentage of the list price. We publish ebooks and get about 65% of list from Amazon, Apple and Barnes and Noble (it's a bit higher or lower depending on which vendor) So it's obvous that our costs are lower for ebooks and the share of revenue we get is higher. In other words, list price of ebooks indeed should be far less than print, and ours are.
- toyg 11y ago
  Particularly because it's the future of the whole market. It's the same sort of stupidity currently gripping certain BBC managers: they have to make cuts, so they'll cut their digital services first. You want to survive, so you kill your future? It's just madness.
- adventured 11y ago
  Amazon isn't bigger than Walmart. Walmart is five times larger. Amazon's last four quarters of sales: $95.71 billion Walmart's last four quarters: $485.3 billion Amazon's total profit over 20 years: ~$0 Walmart last four quarters of profit: $16 billion Facebook, too, has a greater market cap than Walmart, based on trading at 90 times earnings, versus Walmart's 13 PE.
tsotha 11y ago
You'd think if anybody knew how to wring the absolute maximum revenue from customers it would be Amazon. If the publishers end up getting squashed by the book version of Popcorn Time they'll have only themselves to blame.

danharaj 11y ago

> Publishers said the current pricing model involves some sacrifice but they felt it was worth it to keep Amazon in check. > Before 2010, book publishers operated with a “wholesale” model for e-books in which they sold titles to retailers, which could discount as they saw fit. Amazon was willing to buy a title for $14.99 and sell it for $9.99, taking a loss to grab market share and encourage adoption of its Kindle e-reader. > Publishers worried that such discounting kept Apple Inc. and Google Inc. from emerging as competitors, as those companies might not want to lose money on e-books. Seems reasonable to me.

jbeales 11y ago
Keeping Amazon from becoming dominant is the only reason for jacking ebook prices that makes sense. > [Amazon] accounted for 64% of the U.S. e-book market, by units sold That's actually lower than I thought, but higher than publishers should be comfortable with.
- cstross 11y ago
  Back at the point in time when Apple and the big six were talking about agency model pricing -- which the DoJ brought the price-fixing case over -- Amazon's penetration was around 90%. (I'm of the opinion that the DoJ case is therefore evidence that US anti-trust law is broken; Amazon were clearly operating a predatory monopoly, but the DoJ went after the much easier target because price fixing is easier to prove.) Speaking as an author published by the major houses (Penguin Random House and Macmillan in the USA; Macmillan and Hachette in the UK) I'm not seeing my books hitting the ebook bestseller charts much -- but I'm not seeing my sales decline relative to where they were a few years ago, either. What seems to be happening is that the bestseller charts are being dogpiled by self-published titles on deep discount -- 99 cents to $2.99 seems to be typical. And the old joke "sell it at a loss, we'll make it up on volume" seems apposite at this point.
  - Turing_Machine 11y ago
    "Amazon were clearly operating a predatory monopoly" Nonsense. You could maybe argue that they were a monopsony, but even that is a stretch. "What seems to be happening is that the bestseller charts are being dogpiled by self-published titles on deep discount -- 99 cents to $2.99 seems to be typical." Someone selling a product for less than your antiquated publisher sells it for is not "predatory". Those authors are almost certainly making more per copy than you are. The consumers are paying less. The authors are making more. What is the problem with this?

revelation 11y ago

Who knew, if you raise prices, through collusion or explicitly, you might just take in less money. But part of it is probably just the same that is happening with music and TV. There are now very diverse sources to fuel media consumption, you are not bound to a specific "curated" collection. Hence the success of US series in Europe, where most of the time you can't even see them legally.

jbeales 11y ago

When an ebook costs over 90% of the price of a hardcover, am I going to buy the ebook, which I can't lend, resell, or give away, or the ebook, which can only be read by me? The answer is simple, I'm going to buy whatever the cheapest physical book is. In Canada, with a Kobo, buying from Chapters/Indigo, the trade paperback is often cheaper than the ebook. This is my situation, and it means that the only time I buy an ebook is if I'm extremely motivated to read a book right now and I can't get it digitally from the library. If I had a situation where I was travelling and extremely space-constrained I might pay the premium for an ebook, but that hasn't happened to me yet. All that doesn't mean I don't read ebooks, but that I don't buy them. The ebooks I read come from the library, (I'm a member of two libraries with great ebook selections), or are classics from Project Gutenberg or similar.

chanux 11y ago
To add to the downsides you have mentioned, we practically don't really own them. I mean, almost.
- jbeales 11y ago
  Yeah, "renting for life" doesn't bode well for passing a first edition ebook on to your children ;)
- a3n 11y ago
  I don't buy as many physical books as I used to; mostly fiction, and mostly used. I buy a fair number of ebooks, mostly technical, and mostly from O'Reilly. I love that they're DRM-free; in my case I take the PDF version, but they have other formats. Pakt has a very low-intrusiveness form of "DRM." They print your name on every page of the pdf that you buy, but it's otherwise unrestricted. I don't think Pakt or O'Reilly is going to come after you for sharing an ebook with a family member, and I've given a few copies of O'Reilly books to colleagues, to evangelize both O'Reilly and the tech in question.
  - baghira 11y ago
    Similarly Springer ebooks have your name as a watermark at the bottom of the page, but no "real" DRM. It's a pretty reasonable compromise.

subliminalzen 11y ago

I recently subscribed to Kindle Unlimited and it has definitely saved me money. And with the selection getting better and better, I envision this "Spotify for ebooks" business model as the new normal. I own a Kobo too and hope Chapters / Indigo offers the same service.

DrNuke 11y ago

I'm pretty sure I read somewhere it depends on content: niche-domain knowledge and test-preparing e-books sell ok at $10-$15 even if pirated more than often; self-empowering fluff and cuisine titles sell nicely below $10; mainstream novels, essays and general prose sell below $5. If I'm able to trace down the report, will add a link for your reference.

efuquen 11y ago

I always check kindle prices, and if they are close to physical price of the book I will more often then not simply not buy. Overall I still prefer to buy hardcover versions of books I really really want, but if I'm on the fence and see a kindle book that has at least a decent markdown I will more easily make that purchase then give away precious bookshelf space to a book I'm not sure is a must have. I've forgone quite a few purchases I would have been likely to make for that very reason.

mg74 11y ago

These publishers are absolute idiots. Ebooks for 12 to 16 dollars just to support their outdated business model of the hardcover to paperback cycle. I have a whishlist of over 1000 books on Amazon. I can just go through that list and wait with the newer ebook titles until they drop down in prices. This will be my "customer buying pattern" from now on. Winners: 2 to 3 year old books and Amazon. Loosers: New books and the publishers.

blinkingled 11y ago

This was about the publishers being able to set their own prices wasn't it? Maybe they tested out if people were willing to pay more. If they find out they don't they can always go back to the discounts. Trouble was before Amazon had that power. Seems fair that publishers should be able to set their own price. Personally I don't buy an ebook if it isn't in single digit price. Anything more and I might as well buy the hard copy if I need it badly, otherwise I am better off not buying it at all.

Hyperborian 11y ago

> “If you have a good book, price isn’t an issue.” Because if it's that good, it will show up on the various pirating sites quickly. There is a new ceiling on media prices, books included, and these companies are just going to keep loosing money until they adjust their pricing to the new reality.

rhino369 11y ago
But is that really true. Piracy is so easy only an extremely deep discount will sway me. Pirates are only a certain percent of the population. The optimal revenue generation probably occurs when you just ignore pirates. If they dash prices 75% and double the number of sales, they still lose revenue. You'd need to quadroople sales to just break even.
naner 11y ago
Not exactly true, I'd wager most kindle owners don't bother with piracy. I did finally setup OverDrive with my local library, however.

kozukumi 11y ago

A Kindle was my first e-reader but I have since switched to a Kobo. If I cannot find a book to buy in DRM-free ePub I don't bother with it now. Music is DRM-free these days, no reason for books to still come with horrible restrictions.

cletus 11y ago

I believe consumers as a whole have an innate sense of fairness and it's this that drives a lot of piracy. Australia has had historically high amounts of TV piracy because Australia tends to get treated poorly. One of the country's largest ISPs admitted over half of traffic was BitTorrent [1]. I live in the US now. I don't have cable TV but I do pay for Netflix and HBO Now and will probably pay for the ad-free Hulu Plus now that it exists (I'd never pay for an ad-supported streaming service) and, what the hell, probably Showtime too. In part because I watch them but I don't really need all of them. I really want to put my money where my mouth is here and support such services. I often now see novels on Amazon where the paperback is $8 for a book that's been out for years. The ebook is... $10. Now in the case of print media like the NY Times and the WSJ, I get why they prefer the physical copy: it comes down to advertising. Advertisers will still pay more for print ads and certain advertisers will only buy print ads so they have to print physical copies a bunch of people won't read. It's why, just now in going to this page, you see the WSJ advertising print + online access and why print + online is usually cheaper than just online. But I don't get this at all with ebooks. Paper books need to be typeset and printed, supplies for that bought and the physical products need to be boxed and shipped to various distributors and so on. The distributor, printer and retailer all need to take cuts. The ebook is essentially direct to market with zero distribution costs. Now ebooks offer a lot of advantages to the consumer: immediate access, searchability, more portable. But they also come with negatives: you can't as a general rule resell or even give away an ebook so it can only generally be read by the buyer and their immediate family. Publishers should be loving this because publishers hate the preowned book market. It's why textbooks are often changed from year to year: just to devalue used previous editions and force students to buy new books. Yet publishers are acting in a way that strongly suggests they just want to kill the ebook market. Could that be it? They just know how to print and sell paper books and want to keep on doing it? Could it be fear of piracy and the inability to adapt to this new business model? My own sense of fairness kicks in here: when I see a $10 ebook for an $8 paper book I just don't buy either. I'm reminded here of the cable TV industry. Cable TV is dying. It's why cable companies will essentially give you free Internet if you subscribe to TV services (and charge you $50-80/month if you don't). This artificially props up the number of TV subscribers, which is important because the price of content is driven by the number of consumers. The more consumers a provider has, the lower the pre-consumer cost of channels. This is also why Comcast was so desperate to merge with TWC and has since merged with Dish: to reduce content costs and increase their negotiating power with content providers. But all of this is just seeking higher land in a flood: eventually you run out of land anyway so you're just delaying the inevitable. We see the same thing in the music, TV and movie industries where direct-to-market versions are often more expensive than, say, buying a CD or DVD and having it shipped to your house. Perhaps this really is the long game of setting price expectations. Piracy seems to be the response of the market to "unfair" pricing and licensing practices and it does seem to eventually force change. The problem is that once you've taught a whole market to be pirates, only some of them will switch back to more legitimate channels. It still astounds me that you can be forced to watch FBI disclaimers and the like on movies you legitimately buy and have incompatibilities that won't allow you to watch HD content (HDCP versions and the like) yet what has none of those problems is pirated content. It's a wholly better user experience. I really wish these old world industries would just accept we live in a digital world and get over their anachronistic business models. [1]: http://www.itnews.com.au/news/day-13-iinet-ceo-says-bittorrent-dominates-traffic-159742 http://www.itnews.com.au/news/day-13-iinet-ceo-says-bittorre...

Booktrope 11y ago

The posted article has some huge errors. It actually says, "Amazon was willing to buy a title for $14.99 and sell it for $9.99, taking a loss to grab market share and encourage adoption of its Kindle e-reader." That is complete poppycock. No retailer pays list price for books; they pay wholesale price, which in the book business is usually about 50% for print books; sometimes higher for ebooks. (It depends on the publisher/retailer deal) During the time when the lawsuit was pending, the standard wholesale price for big publishers was more like 50%. So when Amazon buys a book that lists for $14.99 they paid $7.50. Marginal cost of selling an ebook is not very large. If Amazon bought a product for $7.50 and sold it for $9.99, they marked up the product about 33%. This is not "selling at a loss" Big publishers did not object to Amazon selling for below list because it would impact Apple. They objected because they thought selling books at a discount would cause consumers to expect a lower price and they would no longer be able to sell higher-priced books. This is just what's happening right now. Amazon prices books very effectively and even more signficantly, Amazon has opened the marketplace for book sales to self=published authors and to independent publishers who are trying new models. For example I'm CEO of Booktrope which has a new model that produces ebooks that can be sold in the range of $2.99 to $9.99. (We pay a higher percentage royalty of authors in view of the lower prices.) Amazon primarily but also Apple and Nook have opened up huge markets to us and our books are available broadly to readers. It means that big publishers will face competition from us, publishers like us, and self-published authors, and it's not going away. The only way for the big publishers to avoid that would be to somehow block out competition including self-published authors and smaller, more efficient publishers who can produce ebooks at a lower price point. It's not going to happen so big publishers are at a crossroads and we should expect them to adjust or they will face continuing decline in sales.

x0x0 11y ago
I think the book publishers were also scared amazon might replicate the ipod/itunes playbook, ie they might wake up one day and amazon kindles might be 90% of the ebook market at which point amazon has way more leverage over them than they would like. So I think for the publishers this is a way of leveling the playing field and trying to create competition in the book reader market.