E-books worth 5% of Hachette's business

[DMcCunney]

Commentary in The Bookseller. from Hachette CEO Tim Hely-Hutchinson:

http://www.thebookseller.com/news/13...utchinson.html
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Dennis

[abookreader]

That seems like a very low number to me. I've seen other Publishers report 10 to 12% and growing. Then again, Hatchette seems to set very high eBook prices in my experience.

[JSWolf]

If Hachette wasn't one of the Agency morons, then they would have eBooks be more then 5%.

[vaughnmr]

Originally Posted by JSWolf

If Hachette wasn't one of the Agency morons, then they would have eBooks be more then 5%.

Yep, they lost all my business last April.

[Fbone]

Hachette does allow Overdrive library borrowing. That may account for much of their ebook sales.

[Greg Anos]

And 9% of their US business...

It's still doubling year-over-year.

[bgalbrecht]

I like to repeat this, in hopes some people at the Agency 5 get a clue. They need to price their ebooks at least 10% less than mass market paperback prices (assuming one has been release), because B&N discounts all MMPB by 10% at their website (or in-store with the B&N rewards program), but the ebook price set by the publisher is the MMPB MSRP.

Furthermore, when they get to the point where they're considering dropping the print book from the backlist, they ought to be dropping the ebook price to about half the MMPB list price, because they're now competing with used book stores. Of course, they'll never do that because they believe that cheaper older ebooks (I'd guess I can't use the term in-print!) will cannibalize sales of new books, because we'd all rather buy cheap books than new ones (right?). In reality, what they would be doing is producing more competition with used book stores, with whatever money would have gone to the used bookstore going to the ebook retailer, them and the author.

I think that the only Hatchette ebooks I've bought since April one were with my soon-to-be-used-up 40% off Sony gift cards, and indirectly, library books. There just aren't that many new books that are compelling for me to buy at new paperback prices, when I have thousands of to-be-read ebooks that I either bought at used book prices before April, got free, or bought at Fictionwise at 50%-60% off in the last month (like Rex Stout's ebooks for about $2.50 each).

[Ken Irving]

Originally Posted by abookreader

That seems like a very low number to me. I've seen other Publishers report 10 to 12% and growing. Then again, Hatchette seems to set very high eBook prices in my experience.

That 5% seems to represent total sales of everything. There is a 9% figure quoted that seems to represent the the ebook share of book sales alone, and the CEO is quoted as saying that ebook sales have been tripling each year - 1% in 2008 to 9% this year. That seems to fit right in with the 10% to 12%.

[Andrew H.]

Originally Posted by bgalbrecht

I like to repeat this, in hopes some people at the Agency 5 get a clue. They need to price their ebooks at least 10% less than mass market paperback prices (assuming one has been release), because B&N discounts all MMPB by 10% at their website (or in-store with the B&N rewards program), but the ebook price set by the publisher is the MMPB MSRP.

This will never happen while their sales are tripling year-over-year, though.

We may not see much movement on price until the market tightens, if at all.

[leebase]

Originally Posted by bgalbrecht

I think that the only Hatchette ebooks I've bought since April one were with my soon-to-be-used-up 40% off Sony gift cards, and indirectly, library books. There just aren't that many new books that are compelling for me to buy at new paperback prices, when I have thousands of to-be-read ebooks that I either bought at used book prices before April, got free, or bought at Fictionwise at 50%-60% off in the last month (like Rex Stout's ebooks for about $2.50 each).

Do you honestly believe these large book publishers don't understand the realities you talk about? That there is competition for the book dollar from libraries, used books -- not to mention Tv, Movies, Facebook and the like.

Maybe they just don't think selling to YOU at YOUR desired price level is a business WORTH being in. They aren't willing to work for the price you are willing to pay. You have options that mean "the publishers don't matter to me".

Well, guess what. The publishers have options that mean "you don't matter to them". There are other customers willing to pay the prices the publishers are asking for. They have an army of bean counters who's job it is to constantly monitor that price point for which they get the greatest return.

The Agency 5 wrested control away from Amazon -- but they are STILL bound by what the market will bear. Given your description of your pricing points -- you never really mattered much in their calculations before and don't now.

Lee

[EricLandes]

Originally Posted by leebase

Do you honestly believe these large book publishers don't understand the realities you talk about? That there is competition for the book dollar from libraries, used books -- not to mention Tv, Movies, Facebook and the like.

Actually, no, I don't think they understand the realities, and here's the primary reason why:

eBooks are an incredible growth market right now. So, an Agency publisher sees fantastic growth and thinks the Agency model is working.

But, given how fast the _entire_ market is growing, how do they know that instead of 200% growth, they might have seen 280% without Agency? They don't, and can't. They've completely missed the opportunity, because these growth rates cannot be sustained for long.

Now, remember the original deal with Apple was for a year. We don't know what's going to happen come April (again.)

I'm fully expecting one of the Agency 5 publishers to switch back to the wholesale model right when the growth rate peaks and say "See! Agency works!"

And they still won't get it. They only way they can really be sure right now is to compare themselves to Random House, but their egos are so big they all think they do things differently and each of their businesses are unique.

[tech_au]

Hachette, The evil instigators of geo-restrictions world-wide and now the only publisher in Oz to set Agency pricing. How many Hachette titles have I bought since this madness started and ebook were available to Australians locally. None. There are plenty of other titles from non-Hachette publishers.
Though Random House is pretty much the only major publisher in the UK and US that is non-agency at the moment.

[leebase]

Originally Posted by EricLandes

Actually, no, I don't think they understand the realities, and here's the primary reason why:

Any numbers to back up your opinion? Of course, unless you are inside the inner circle at Amazon or one of the publishers, you don't have any hard numbers....neither do I.

What I do know is that the publishers do have their real sales numbers. They have the numbers from sales during Amazon's "subsidize ebooks to own the market" scheme, and they have the sales numbers after they took control of pricing.

They also have an extreme economic incentive to maximize profits. They have a track record that at least has allowed them to stay in business and grow to being one of the top 6 publishers in the world.

So....I'm still betting on the publishers. They successfully established a much higher price for hard back books than they are asking for ebooks. I see little evidence that the folks on this forum (including me) happen to be a LOT better about running a book business.

I think that the market that can afford $139 to $500 for ereading devices can handle the difference between $10 and $13 or $15 for the price of an new release, popular ebook.

If the market truly just will not pay the price....I am comfortable in my belief that the publishers will lower the price. I trust the publishers to be self interested.

Lee

[abookreader]

According to Publishers Weekly the growth in eBooks right now is attributable heavily to lower priced eBooks.

Summarizing, hardback and MMP sales are down. Trade is holding steady, and eBooks are growing heavily in units sold, but revenue per heavy volume buyers is actually down leading to analysis of "eBook buyers are avoiding buying higher priced Agency Pricing books"

Just as e-book purchases are altering the habits of shoppers by format, their growth appears to be lowering the total dollar volume buyers are spending on books. Dollars per buyer fell from $34.81 in last year's third quarter to $31.65 in this year's third period. Sales per buyer in fiction, a particularly strong segment for e-books, fell noticeably, dropping to $17.12 from $19.62 in the year, while nonfiction spending had a more modest decline, falling from $19.56 to $19.00. Children's spending per buyer dropped from $18.06 to $16.62. The declines are due to dips in both prices paid per book and, to a lesser extent, unit purchases.

Full article here:
http://www.publishersweekly.com/pw/b...l-holiday.html

[leebase]

Originally Posted by abookreader

Summarizing, hardback and MMP sales are down. Trade is holding steady, and eBooks are growing heavily in units sold, but revenue per heavy volume buyers is actually down leading to analysis of "eBook buyers are avoiding buying higher priced Agency Pricing books"

eBooks, even at $12.99 to $14.99 are already cheaper than hard back books. Someone switching from buying hardbacks to ebooks, even at the Agency 5 pricing, reading the same amount, would see a decline in per user sales volume (price * units).

There's nothing in that article that says "after pricing on Agency 5 books rose, sales of those books plummeted, while sales of books at $5 increased". We don't know what we don't know, and the numbers have not been provided to tell us if the decrease in per user ebook buying is simply the result of ebooks being cheaper than hard backs.

Lee