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05-31-2012, 01:47 AM | #1 | |
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Amazon/B&N/Kobo can once again discount ebooks from the 3 Publishers starting June 10
The 3 major publishers that settled are: Simon & Schuster, Hachette and HarperCollins
http://paidcontent.org/2012/04/16/wh...r-readers-now/ No changes until June at the earliest Quote:
+ 60-day comment period = June 10, 2012 (at the earliest) when the settlement is approved. The big question is that will Random House switch back from agency model to wholesale. Random house will make more money from wholesale. In addition, Random House will be at a disadvantage if best sellers from Simon & Schuster, Hachette and HarperCollins are discounted to $9.99 while Random House best sellers continue at $12.99 or $14.99. If you're Random House CEO, what would you do? In addition, the publishers that didn't settle (Penguin, Macmillan) will also be at the same disadvantage. Less money on agency pricing and higher prices on best sellers ebooks. --------------------something to ponder----------------- Big 6 = 60% of the ebook market the other 2000 publishers + self-publishers = 40% of the ebook market if Random House switch back to wholesale, it will be a lost cause for Penguin and Macmillian to fight on. By themselves, Penguin and Macmillian make up about 17-18% of the market. The other 82% will all be on wholesale. If Random House sticks with agency pricing, it will be about 30% under agency pricing and 70% wholesale. Random House is the biggest publisher in term of market share. Last edited by Top100EbooksRank; 05-31-2012 at 02:13 AM. |
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05-31-2012, 01:59 AM | #2 | |
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Numerous reports that Publishers make less money on agency pricing compare to wholesale.
Macmillian CEO even admit this: http://blog.authorsguild.org/2012/04...ceo-macmillan/ Quote:
For example, wholesale, a $25 recommended retail price meant Amazon paid $12.50 for the ebook. Under agency, that same book is priced at $12.99. The publishers get 70% or $9.093 Wholesale: $12.50 to the publishers Agency: $9.093 to the publishers These publishers must have felt that making less money on ebook is a worthy tradeoff in protecting their print business. |
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05-31-2012, 06:55 AM | #3 | |
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I thought people paid agency pricing because it was the only way to get their favorite authors. What's so magical about wholesale pricing from a Big 6 publisher vs wholesale pricing from a smaller publisher when your favorite authors aren't available on any of them? I don't see this as an issue. |
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05-31-2012, 08:33 AM | #4 | |
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A best seller from Random House priced at $9.99 (wholesale - retailer discount) will sell more than THE SAME bestseller from Random House that is priced at $12.99 or $14.99 (agency). Advantage #2: Wholesale a book with a RRP at $25 will result in $12.50 for the publishers. Agency pricing a book with the price of $12.99 will result in $9.093 for the publishers. That's why Random House might be tempted to switch back to wholesale. The downside: it will speed up the adoption of ebook, which is bad for Random House since it wants to protect its print hard cover business. The one who will be disadvantage are those who are on agency (Penguin, Macmillan). If all 6 are on agency, then it's a level playing field. But if 3 or 4 are on wholesale and 2 or 3 on agency, it tilts the balance toward those who are on wholesale. The whole point of collusion was to get at least 4-5 Big Publishers to switch to agency. If only 1 did, it would be at a huge disadvantage. Last edited by Top100EbooksRank; 05-31-2012 at 08:36 AM. |
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05-31-2012, 08:38 AM | #5 |
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http://www.teleread.com/chris-meadow...e-fixing-suit/
There’s some fascinating stuff here. For example, from pages 30-31 of the ruling, the judge explains why collusion is so probable. It’s a classic “prisoner’s dilemma” scenario: if each individual publisher hadn’t known it could count on most of its competitors to move to agency pricing as well, it would have made little sense for it to do so alone: ------"The costs of such a unilateral switch to the agency model would be substantial. The publisher would be selling its eBooks at a higher price than its competitors and would therefore be losing market share. This loss in market share would in all likelihood have been large. Random House gained significant market share from the Publisher Defendants during the months between their adoption of the agency model and Random House’s capitulation. The eBook sales by Random House increased 250 percent in 2010 as it continued to sell them at $9.99. At the same time that an individual publisher would be losing market share, it would be taking in less revenue per sale because of Apple’s 30 percent commission. In addition, the publisher would probably lack the leverage to force Amazon to accept the agency model. Potentially, then, this publisher would be barred from selling its eBooks to Amazon."------------- Basically, if 2 Publishers are pricing books at $12.99 and $14.99 (agency) and the other 4 Publishers's books are priced at $9.99 (wholesale), guess which publishers will gain market share and which will lose marketshare. That's why the publishers who are on agency will be at a disadvantage. When the settlement takes place on June 10, it will be Penguin, Macmillan, and Random House*: agency pricing Simon & Schuster, Hachette and HarperCollins: wholesale pricing *Random House can switch to wholesale if it wants (not part of DOJ lawsuit or settlement). Last edited by Top100EbooksRank; 05-31-2012 at 08:51 AM. |
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05-31-2012, 09:17 AM | #6 | |
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05-31-2012, 09:41 AM | #7 |
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I have over 400 books on my wish list, most because the price was higher than I wanted, from a variety of publishers. I'll buy the ones whose price drops first. If there was only one book I wanted and no other to read, yeah I'd just have to suck up the price and buy it, but I have a book a day habit so I'm not so picky about which I read next.
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05-31-2012, 09:43 AM | #8 |
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05-31-2012, 09:51 AM | #9 | |
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Random House on why it switched to agency:
Quote:
Bottom line: RH switched to help out retailers who couldn't make it on lower margins (read: everyone but Amazon). Will RH stay with agency ? My guess is most likely, because RH is looking to establish its own sales channel, jointly with other publishers-Anobii and Bookish. You'll hear more about those two ventures shortly, IMO. |
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05-31-2012, 01:26 PM | #10 |
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05-31-2012, 04:51 PM | #11 |
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Let me know when Haruki Murakami ebooks are cheaper.
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06-01-2012, 07:50 AM | #12 | ||
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1) similar to the other publishers, they want to slow down the adoption of ebook in order to protect their print business DESPITE gaining marketshare 2) Barnes and Noble decide "not to feature Random House in any future advertising" as punishment for not switching to agency pricing. http://dearauthor.com/features/indus...mes-important/ Quote:
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06-01-2012, 07:59 AM | #13 |
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basically, wholesale will favor the settling Publishers Simon & Schuster, Hachette and HarperCollins.
Amazon will price their bestsellers at $9.99. I expect Nook, KOBO to compete and lower their prices too. Simon & Schuster bestsellers: $9.99 (Amazon pays $12.50) Hachette bestsellers : $9.99 (Amazon pays $12.50) HarperCollins bestsellers: $9.99 (Amazon pays $12.50) Penguin bestsellers: $12.99 (70% agency cut = $9.093) Macmillan bestsellers: $12.99 (70% agency cut = $9.093) Random House bestsellers: $12.99 (70% agency cut = $9.093) Higher prices will result in less books purchased (relatively). OUCH #1 Agency will also mean $9.093 revenue per book instead of $12.50. OUCH #2 The $1 million question: What will Random House do? Last edited by Top100EbooksRank; 06-01-2012 at 08:01 AM. |
06-01-2012, 09:49 AM | #14 | |
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There is no doubt that the Settling Publishers gain an advantage vis-a-vis RH-while the settlement lasts. However, the long term effects of giving Amazon a monopsonistic hold on the market are right where they have always been . Steve Jobs was right: eventually, Amazon is going to say: Give us your books at 70% of $9.90 =$6.93 or we'll take our business elsewhere." And $6.93 is a lot less than $9.93.
Now consumer advocates tend to ignore the possibility of this happening because they don't understand (or want to understand) the problem this poses for publishers, but publishers would be incompetent not to want to guard against such a scenario. They guard against such a scenario by : 1. Encouraging as broad and diverse a group of retailers as possible ( that's the intent of agency pricing). 2. Establishing their own sales channels . In the UK, RH is investing in Anobii LINK Anobii isn't off the ground yet,but its CEO is on record as promoting direct marketing to consumers from the publisher.Anobii sets out their vision HERE: Quote:
Last edited by stonetools; 06-01-2012 at 10:07 AM. |
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06-01-2012, 10:01 AM | #15 |
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Actually... there's quite a bit of historical (albeit anecdotal) evidence to support the idea that short-sightedness (especially as it pertains to ebooks) may actually be one of their (and all of BPHs') superpowers.
Last edited by DiapDealer; 06-01-2012 at 10:14 AM. |
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