[Publishing]
[publishing] Reader feedback, more thoughts on ebook pricing & marketing
This post mostly rises up from an active comments thread here trimmed and edited by me, with special thanks to commentors Kelly, Ashavan Doyan, and CharlesP, as well as everyone else hanging in there.
Kelly said (in part): I think you may be missing the biggest price point issue for consumers — the price of the mass market paperback. Publishers need to give readers a reason to pay more for an e-book
There may be a perfectly good argument to be made about not using dynamic pricing, but simply “lower prices” isn’t enough, unless a revised model can ensure publishers sufficient profit for books to earn out. Otherwise we get what’s already been happening — fewer titles, more low-performing authors dropped, increasing focus on bestsellers without the midlist to back them up. Where do future bestsellers come from? Often as not, the midlist, which serves as a ‘farm team’ for the book line.
If you want to pay paperback pricing for ebooks, waiting for paperback availability isn’t unreasonable. The market’s worked that way since before I was born. Amazon has skewed consumer perceptions with the $9.99 promise, but that’s my underlying point. $9.99 makes it much harder for publishers to sell hardbacks against ebooks priced there, which undercuts their margins, which is slowly strangling the supply side of the book industry.
Ashavan Doyan said (in part): I want the authors to make money. But I also want reasonable consumer prices as a reader of books. For instance… The Great Hunt (book 2 of the wheel of time, published by Tor) – paperback $7.99. Ebook – $9.99 WHY??? This book was published what? 15-20 years ago?
And yes, the agency model may be anti-competitive, but if you look at Amazon’s model from a publisher’s perspective, it is far more anti-competitive. Check out the discussion of this on Making Light for a far more intelligent analysis than I can offer. My opinion is once Amazon’s lock is broken, the models will continue to shift under market pressure, and the competitiveness issue will come into play.
CharlesP said (in part): I’m curious as to what your take is on how it seems we’re going from one fixed price structure (Amazon setting new/best sellers at $9.99) to another (the publishers setting the price for all retailers). We’ve gone from no market competition in pricing (because Amazon owns so much of the market) to no market competition in pricing (because the publishers are setting the price no matter where the consumer goes).
I’m not convinced that the agency model an improvement in and of itself, but it’s definitely a step in the right direction. Right now we have a single player (Amazon) at 75+% marketshare setting terms for the entire ebook industry. Under the new model we have six players (the big six publishers) setting terms to at least two outlets (Amazon and Apple iBooks). That produces a lot more opportunity for flexibility and innovation in models when no single player is holding all the reins. Amazon has no trouble remaining in lockstep with itself as a single-source chokepoint, but you won’t see consistent solidarity from the big six over time as they have different ideas or entertain different proposals.
Likewise Apple, which, for example, has changed business models within iTunes several times. So I see this move as not a final fix, or even necessarily much of an interim improvement, but as a breaking of a logjam which will now allow multiple players and market factors to participate in setting price points and retail terms, instead of leaving everything in Amazon’s hands. By definition that is more competitive.
CharlesP: I have trouble understanding what the publishers are hoping to accomplish by making sure everybody is paying them the same amount, which happens to be less per book than they were currently getting from Amazon. The only semi-plausible explanation I’ve thought of is that they’re hoping to (or at least OK with) hurting eBook penetration to protect hardcover sales.
“Hurting ebook penetration” isn’t the issue. It’s preserving the business model, which enables profitability and continued operations. Whether that business model should be preserved is a different and legitimate issue, but it’s how they work today. What they’re after is maintaining the value perception of initial high-demand releases, which the $9.99 price point is threatening to destroy, especially with the ongoing growth of ebook market share. Publishers don’t “hate ebooks”, they’re desperate to understand them, but they’re even more desperate not to lose money on ebooks.
CharlesP: The future with an enforced “everybody selling at our selected price” future
I do recommend following the give and take on the original post, but these strike me as some of the high points worth emphasizing. There’s also some pretty interesting stuff in comments on the LiveJournal mirror, including a long exchange with
I’m terribly pleased to have such an thoughtful, patient set of commentors on my blog. Thank you all.
Posted: 3:13 pm Mon February 08 2010 |
Where am I?
You are reading the blog of Jay Lake, speculative fiction writer and author of hundreds of short stories, many novels, and winner of the John W. Campbell Award.
Learn more here.
Comments
Leave a Reply
« [publishing] Amazon vs Macmillan, the $9.99 price point, and market forces | [publishing] Books as licenses – print and ebooks both »
uberVU - social comments
February 8th, 2010 at 3:17 pmSocial comments and analytics for this post…
This post was mentioned on Twitter by jay_lake: New blog post: [publishing] Reader feedback, more thoughts on ebook pricing & marketing http://bit.ly/clsPjV...
Kai Jones
February 8th, 2010 at 4:29 pmBut Amazon’s new release hardbacks are not that much more than their previous ebook price–I routinely get them for $12 to $14, which is only a couple of bucks more than the ebook. Your argument doesn’t make sense at the financial level. Nobody who might buy an ebook from Amazon is going to pay $28 for the hardcover–Amazon doesn’t charge that much for it!
Now, if Amazon’s ebooks are skimming hardback sales from brick-and-mortar stores that don’t discount new releases…well, I’d like to see some proof. Anybody who bothered looking at Amazon for the ebook would see that the hardback is discounted and buy it from Amazon.
Nor will I entertain an argument that people who want the book right! now! are deciding between paying the full MSRP of $28 at Borders or downloading the ebook from Amazon at $10. Amazon lets you preorder books and on the day of publication, gives you the cheapest price they’ve offered it at during the time between your purchase and their shipping it. I often get books from Amazon before they’re out in local stores, and I’m sure of getting my copy, not having to wait because something sold out.
The *only* monetary argument I can understand is for travelers–and at least that makes some sense with regard to ereaders. I’ve bought books at full price while at an airport, because I ran out of reading material. If I had an ereader, I probably would have bought an ebook instead–and that means if the book in question were a new release, then the difference in price between a hardback and an ebook would matter. Just how much of book buying falls into this circumstance?
Jay
February 8th, 2010 at 4:33 pmI believe that only about 4% of print books sold move through Amazon (though I don’t have data to back that up). The travel buying question can’t account for much more than that.
[publishing] Reader feedback, more thoughts on ebook pricing … « Internet Cafe Solution
February 8th, 2010 at 5:21 pm[...] Read more from the original source: [publishing] Reader feedback, more thoughts on ebook pricing … [...]
CharlesP
February 9th, 2010 at 7:04 amOh hey, I’m a high point (or two)!
This is somewhat a re-statement/rehashing of my follow ups to your follow up in the other thread.
The whole Net Book Agreement thing in the UK was news to me, and in a world where the publishers have always set the price (and not at the consumer friendly 50% off cover price of best sellers at most US retailers) I can see the publisher’s concern more. But in the US, where this “battle” has played out, I think the consumer is going to see a $9.99 eBook on a $250+ device and compare that with a $10-18 Hardback and only maybe purchase the reader and the books… and guys like me who try to wait for paperback editions so they can buy more books aren’t going to jump at that price point just yet (for me it’s $99 device and $5 eBooks which will make it so I could convince my wife it’s not a waste of money). But, those people who have purchased the device are going to buy more and more books than they otherwise would because it will help them perceive their purchase of their Kindle/Nook/etc as a “good buy”.
I think your logjam breaking point is a good one, but I think this was a messy logjam breakage that would have been better broken in a couple months when iPad w. $14.99 books vs Kindle w/ $9.99 books was being decided in the consumer market. As it is we won’t see which price point on books wins as much as we’ll see which type of device wins. If the only price I can get the new ebook from X author at is $14.99 and that’s the book I want, I’m going to be deciding between the best discounted HB price vs the eBook price and not choosing between publisher X’s books at $14.99 vs publisher Y’s books at $12.99.
I also expect to see Amazon trying to do some “Rebate” thing to get books down to their desired price (buy these $14.99 books and get a $5 credit toward another Kindle purchase), or bundling books together with music credits, or something to differentiate themselves from Apple.
CharlesP
February 9th, 2010 at 7:19 amBased on: http://www.fonerbooks.com/booksale.htm (which looks like figures I’ve seen elsewhere) I think it’s more like Amazon accounts for about $4B of the $20B in books that aren’t sold through places like WalMart & Supermarkets (who sell about $10B in books, but such a limited stock as to not be lumped in with the industry as a whole)… and not counting the $5B a year in textbooks. That would make it more like 20% of the “book store” books sold (about as many as B&N)… though their numbers are harder to track as they lump in books/DVD/CDs into one $6B figure.
Jay
February 9th, 2010 at 7:23 amThe numbers I’ve seen thrown around as ‘conventional wisdom’ (as opposed to hard data, which you are citing) is 4% of print fiction is sold through Amazon, which makes them the single largest print outlet in the world per store (counting them as one store), and about 75% of ebooks are sold through Amazon.
CharlesP
February 9th, 2010 at 7:27 amThose figures are going to be universal to all books, and I know Amazon ships a ton of technical non-fiction books. What I don’t know is how much of any of those markets are library purchases (or how the library books get counted in that).
Ronda
February 11th, 2010 at 3:06 pmI am a new kindle owner (as of Christmas) and just getting used to the pricing and now noticing the pricing war. I recently bought a new release book at $9.99 precisely because it was under $10. If the book had even cost $11 i would have waited. The $10 line encourages impulse buying ,the higher prices do not. The KINDLE encourages impulse buying, at the right price. Otherwise I wait for the ‘dynamic pricing’ drops anyway. I think you will find this true of most cost conscious buyers.