New John Sargent blog post on e-book pricing

[Robotech_Master]

Surprised not to have seen any discussion of this yet.

New blog post here: http://blog.macmillanspeaks.com/answ...-the-comments/

My TeleRead coverage here: http://www.teleread.org/2010/03/12/j...gency-pricing/

Sargent responds to comments and questions from his previous post, and explains Macmillan's take on e-book pricing a little better.

[kennyc]

Thanks for the link.

[Connallmac]

Here's my response:

You will never see another dime of my money. Your anti-consumer, anti-competitive pricing model will insure that I give my money to other publishers. I have always enjoyed dealing with Baen, and they will enjoy an uptick in sales from readers like me. People who don’t appreciate being treated like thieves with useless and restrictive DRM schemes and pricing policies that have have no connection to the actual market. I find the attitude of big businesses like yours laughable. If the government wanted to control what you charged for a book you would howl that it was too restrictive, but when you take a monopolistic approach to markets it just good business.

[FizzyWater]

Jeez. In the past, they at least pretended the price of the physical book had some relationship to the price of the supplies used to create the book. Hardbacks cost most to create and are priced accordingly. Trade paperbacks have higher quality pages, but a soft cover, so cost less than hardbacks, but more than mass market paperbacks. MMPH are made cheaply and are priced as such.

Why he thinks eBooks should be priced at a "weighted average" between the three makes no sense...beyond sheer corporate greed. The "weighting" might just be in the percentage going to the CEO's bonuses.

[leebase]

Movies don't cost any less to be shown at the $1 theater, or during the matinee hour. There's a premium you pay to watch a "first run" movie at the theaters. During that window of time, they do not sell the dvd, they do not show the movies in your hotel and they don't play them on HBO or on network TV.

Movies go through windowing from greater to lesser cost. Books have done the same thing. They don't release the paperback at the same time as the hard back. The difference in the price of a paperback and a hardback has never been about the cost of producing the hard back.

People that thought otherwise -- didn't think very well.

Lee

[kennyc]

Originally Posted by leebase

...

People that thought otherwise -- didn't think very well.

Lee

and consumers are now waking up are realizing that the only reason for some of the outrageous prices in the ebook and health care industries (to name just two) are simply due to corporate greed.

There is one theory/speculation that the next war will not be between nations, or religions but between people and corporations.

[FizzyWater]

Originally Posted by leebase

People that thought otherwise -- didn't think very well.

Opinions, great. Insults, not so great.

We really do try to be civilized on these forums. We don't always manage it. And we definitely don't all agree. But I'd appreciate it if you would word your responses with more care.

[charleski]

Originally Posted by FizzyWater

In the past, they at least pretended the price of the physical book had some relationship to the price of the supplies used to create the book.

No, they never 'pretended' that, you inferred it, and, I must say, inferred it incorrectly. This fixation on physical properties seems common, but it's wrong.

Hardbacks can be ridiculously cheap to print on a large run, and I've certainly come across hardbacks that were less durable than a well-made paperback.

The fact is that, in the majority of cases, when you buy a hardback you're paying for the privilege of not waiting for the discount paperback. That's always been the case. This is market segmentation at work - some are willing to pay more to get a product fast or to receive other perceived benefits, others prefer to wait and forgo those benefits in order to save money. If you want to maximise profit you'll have a strategy that caters to both sectors.

As I say in my comment to the blog post, there's no reason that market segmentation can't be maintained for ebook offerings.

[Elfwreck]

"Retailers will promote and market books, but we will control the price for the book."

And, um, they expect retailers to promote and market them just as enthusiastically as they do for books they receive 50% of? They expect their books to somehow be included in site-wide promotions, when retailers can't alter the price?

He's obviously never sold goods on consignment before.

"And many of our decisions on list prices were driven more by our Amazon relationship than by our relationship with consumers."

Obviously. So... he believes that Amazon, not consumers, will decide what sells and what doesn't, so it's more important to establish a solid business arrangement with Amazon than to work for happy consumers.

Shall we open a betting pool for year-and-quarter when indie ebooks outsell mainstream publishers' ebook sales?

[Bremen Cole]

Originally Posted by Connallmac

Here's my response:

You will never see another dime of my money. Your anti-consumer, anti-competitive pricing model will insure that I give my money to other publishers. I have always enjoyed dealing with Baen, and they will enjoy an uptick in sales from readers like me. People who don’t appreciate being treated like thieves with useless and restrictive DRM schemes and pricing policies that have have no connection to the actual market. I find the attitude of big businesses like yours laughable. If the government wanted to control what you charged for a book you would howl that it was too restrictive, but when you take a monopolistic approach to markets it just good business.

+1 Lot's of great points in there................

[bgalbrecht]

I've always understood that the publishers (except for Baen, perhaps), want to pay for most of their fixed costs for books upfront with an more expensive hardcover edition, and then release lower cost editions later for the budget-minded people willing to wait. That's how the book business has always worked in the past. That's why I don't have a problem with them either viewing the ebook as a budget edition, and delaying the release, or pricing the ebook comparable to the hardcover initially, and repricing the book to the budget edition when the budget edition comes out. My problem with MacMillan and the other big publishers has been in the haphazard way they treat ebooks. I think they're making a big mistake with the agent model, because I don't think they'll budge on the ebook price when there's heavy discounting on the hardcover edition, and John Sargent's already made it clear that there will be no guarantee of price parity between the MMPB and the ebook. Maybe there will be, or maybe they'll just price the ebooks at $9.99, because that's all John Sargent has promised in his blogs.

[GeoffC]

The pricing of an ebook reflects the value to the customer ! but only when that customer is able to source the ebook through all the hoops put in place by geographical restriction.
I never thought I would say that DRM is a 'lesser evil'.