Why is it okay for Jobs, but not for Bezos?

[Sydney's Mom]

The problem is the publishers saw this as spilling over beyond ebooks. They are protecting their cash cow, the hardback sale, by making sure ebooks do not get too popular, at a price which is lower than the cash cow. If they can make sure ebooks sell at the same price as the cash cow, then they are indifferent to what you buy. One of Amazon's biggest selling points for the kindle was best sellers at $9.99 (unless they aren't). I understand not wanting Amazon to control the ebook market - how has that worked out for music and Apple? Why is it okay for Jobs but not for Bezos? Or is it that they saw what happened to music, and its cash cow the album sale, and they don't want the same thing to happen to the hardback?

This will definately slow the adoption of ebooks. I don't know if they have taken a large enough hold that they will survive. For myself, if I can't get the books in ebook format from the library (MacMillan doesn't sell to libraries), and my choice is between a $5.89 paperback and a $6.99 ebook, I am going to have to think long and hard about pushing the buy button. Not because the $1.10 is a lot of money, but because it bothers me to have to pay more when I know the unit cost is less. That is why I first came to MR - I wanted to complete my Sookie Stakehouse collection, and Amazon had some of the back issues at a price greater than the corresponding paperback. I was able to buy the ebook elsewhere at a price I considered fair, and convert it for my kindle.

I can see why Amazon caved. The windowing threat is huge. Look how mad we all got about Game Change.

Do you think this is a death knell for ebooks, except among the small group of hard core converts on MR?

[bwaldron]

Originally Posted by Sydney's Mom

Do you think this is a death knell for ebooks, except among the small group of hard core converts on MR?

No, although I agree with you that Macmillan and other old-line publishers are trying to preserve their existing business model by pricing ebooks (and locking them down) such that they won't cut into physical book sales too much. They appear to view ebooks as a threat, rather than a tremendous opportunity.

They will hold on for awhile, but they will fail -- kicking and screaming the whole way. There will be enough smart publishers, editors and (most importantly) authors to ensure that they do fail.

[Shaggy]

Originally Posted by Sydney's Mom

The problem is the publishers saw this as spilling over beyond ebooks. They are protecting their cash cow, the hardback sale, by making sure ebooks do not get too popular, at a price which is lower than the cash cow. If they can make sure ebooks sell at the same price as the cash cow, then they are indifferent to what you buy.

That should be "profit" not "price". But why let common sense become part of the eBook business model?

[Ankh]

Originally Posted by bwaldron

They will hold on for awhile, but they will fail -- kicking and screaming the whole way. There will be enough smart publishers, editors and (most importantly) authors to ensure that they do fail.

With all due respect, I don't think that publishers, editors and authors are that important.

It is us, consumers, customers, who define the driving force. Is there a genuine need for ebooks? Put bluntly, was the reason for Kindle popularity $10 price tag for bestsellers?

For general population and non-MR types? I honestly don't know.

[Kali Yuga]

Originally Posted by Sydney's Mom

The problem is the publishers saw this as spilling over beyond ebooks....

That's because the issue IS going beyond ebooks. Ebooks are still a miniscule part of their business (less than 5%), but are cannibalizing hardcover sales and threatening the value of their product.

Originally Posted by Sydney's Mom

I understand not wanting Amazon to control the ebook market - how has that worked out for music and Apple? Why is it okay for Jobs but not for Bezos? Or is it that they saw what happened to music, and its cash cow the album sale, and they don't want the same thing to happen to the hardback?

1) For the publishers, Apple gave them exactly what they wanted: more control over pricing.
2) With music, Apple started with a highly restrictive pricing scheme. But over the last year or so, they have given the labels more control over pricing.
3) It's not exclusively about "slowing down" ebook sales. It's about making sure their product still has value when ebooks become a bigger part of the market. It's also about making sure they can discount a book that's been out for a few months and still make some revenues off of it.

Originally Posted by Sydney's Mom

This will definately slow the adoption of ebooks.

I doubt it. In fact, giving the publishers what they want might actually encourage them to put out more titles in ebook format in a timely fashion, since they won't have to be quite so paranoid about losing high-margin sales and eroding the value of their product.

Originally Posted by Sydney's Mom

I don't know if they have taken a large enough hold that they will survive.

Ebooks will do just fine.

$15 is just the price for new ebooks; it's pretty clear that publishers will use dynamic pricing, e.g. drop the price of the ebook after the title has been out for 6 months or so. That's how hardcovers work -- I assure you, it doesn't cost 2x or 3x as much to print a hardcover as it does a paperback. They just happen to use a physical form to set up a tiered pricing structure. You charge more for high-demand titles, and when demand falls, you reduce the price in order to encourage more sales. It's just basic economics -- albeit without the artifice currently utilized by the book industry.

Even at $15 for a new ebook, they're cheaper, more convenient, more portable, and "greener" than paper. The market is not going to collapse in a fiery ball because they charge $5 more for a brand-new title for a few months.

[mcl]

Originally Posted by Kali Yuga

$15 is just the price for new ebooks; it's pretty clear that publishers will use dynamic pricing, e.g. drop the price of the ebook after the title has been out for 6 months or so. That's how hardcovers work -- I assure you, it doesn't cost 2x or 3x as much to print a hardcover as it does a paperback. They just happen to use a physical form to set up a tiered pricing structure. You charge more for high-demand titles, and when demand falls, you reduce the price in order to encourage more sales. It's just basic economics -- albeit without the artifice currently utilized by the book industry.

Even at $15 for a new ebook, they're cheaper, more convenient, more portable, and "greener" than paper. The market is not going to collapse in a fiery ball because they charge $5 more for a brand-new title for a few months.

No, that's not clear at all. They have mentioned that they MAY reduce the price, at some unspecified future date. You are assuming it will be after a certain time period, or day-and-date with the TPB or MMPB, or what have you.

Almost everyone who supports this pricing model argues that the price will come down relatively quickly. And absolutely no one espousing that has any concrete evidence supporting those claims. While all existing evidence (i.e., Macmillan's existing ebook list prices for titles that have been out for years) suggests that the price will remain high for a very, very long time.

[smerrall]

Originally Posted by Kali Yuga

3) It's not exclusively about "slowing down" ebook sales. It's about making sure their product still has value when ebooks become a bigger part of the market.

We've seen over the past few years a real battle with blockbuster titles where Amazon, Walmart et al take huge loss leaders with hardcover books at $9.99. Publishers and authors hate it and claim it devalues their product. Just look at the rant from Stephen King recently for an example of that.

I suspect that the publishers realise they have lost the war and have accepted that their flagship products have been devalued in the public's eyes. They believe taking control of eBook prices by forcing an agency model across all titles, all retailers and all publishers will give them what they want in this emerging market.

If we're not careful the days of competition among (e)book retailers may be drawing to a close.

[dmaul1114]

I don't mind paying a bit more than a paper back for a e-book. The main reason I got an e-reader was to not have to hassle with buying books I'll only read once (or hassling with the library, though lots of fiction isn't carried in libraries anyway).

I just won't pay more than $10 for a book I'll read once--e-book or physical book. Academic books related to work are a different story, but I tend to buy them with grants, or request instructor evaluation copies etc. most of the time.

[SensualPoet]

For me, e-books are a substitute for paperbacks, not hard covers. Hard covers are for gifts, for presentation values ... Sarah Palin's Going Rogue is a great example. I have no interest in owning a hard cover -- I am mildly interested in the content. I would never buy it at $25; I might buy it at $10 in the initial period to "be in the loop"; six months on, good luck getting me to pay $5. For the publisher, however, where production, distribution, and returns costs are almost $zero, why not embrace the e-book segment since it's likely complementary and more profitable, than the existing channels?

I, for one, do not believe "hard covers will die" due to selling .awz files. People will continue to want to purchase physical books -- let them. And let's have e-books as complementary revenue streams that add value to the business eco-system which supports readers, authors, publishers and distributors.

[Sydney's Mom]

Originally Posted by Kali Yuga

That's because the issue IS going beyond ebooks. Ebooks are still a miniscule part of their business (less than 5%), but are cannibalizing hardcover sales and threatening the value of their product.

Are ebooks really cannibalizing hardback sales? Unless all the one-star reviews on Amazon for Game Change are lying, no one bought or intends to by a pbook. They aren't even buying the ebook when it comes out. I bought SKing's ebook, despite the delay. But I downloaded the book from the dark net first. There is no way I am going to buy another hardcover book - even if they are cheaper and more available than ebooks.

[bwaldron]

Originally Posted by Sydney's Mom

Are ebooks really cannibalizing hardback sales?

Certainly not in my case.

[Kali Yuga]

Originally Posted by mcl

No, that's not clear at all. They have mentioned that they MAY reduce the price, at some unspecified future date. You are assuming it will be after a certain time period, or day-and-date with the TPB or MMPB, or what have you.

Dynamic pricing is how the book industry -- and most media industries, in fact -- work. The threat to delay Amazon's access was clearly linked to a desire to maintain a higher priced for a temporary period; if they wanted $15 permanently, they would have threatened to cut off Amazon altogether. John Sargent has even explicitly stated that's what they will do. The "concrete evidence" is in the existing pricing structures: high-priced hardcovers (for authors whom they expect to sell well), followed by trade and/or mass-market paper at a lower cover price. So, I'm not seeing the "zomg $15 forever" position as particularly credible.

Originally Posted by Sydney's Mom

Are ebooks really cannibalizing hardback sales?

Absolutely.

At this point, Amazon claims that when a book is available in both hardcover and ebook format, 6 out of 10 sales of that title will be the ebook version -- and that doesn't include the free books. I don't think you can justifiably say that every Kindle sale is a lost hardcover sale; but it would be absurd to suggest that none of those were lost hardcover sales.

It's possible that book buyers are just spending the money they save on other books. But it's also possible they are buying something else (DVD's, music etc) or not spending the money. Given the price difference though, there is little reason to doubt that some people are purchasing the ebook version instead of the hardcover.

As to the one-star reviews: Aside from the fact that even 100-150 irate Kindle users are statistically insignificant, and that the hardcover pretty much sold out, it's clear that quite a few of those were by people who had no interest in buying the book in the first place, and were just upset that the ebook was delayed. So, I'm not really seeing that as a reliable indicator of anything other than buyer discontent (and petty discontent, imo, given that the delay was about a month) over the delay of the ebook.

[jgaiser]

Originally Posted by bwaldron

Certainly not in my case.

I will *sorta* agree with this. I still hit our local independent bookstore, Powells for new books regularly. But, not for Best Sellers. I spend lots for books that will probably never be in ebook format in my lifetime.

[bgalbrecht]

While I prefer the Webscriptions model, I can understand the publishers wanting to keep the "dynamic pricing" model of Hardback, trade paperback, mass market paperback, where the cheap MMPB comes out about a year after the HB edition. In general, I have enough to read that I'm willing to wait for the MMPB (or equivalent priced ebook) to come out (or borrow it from the library).

My biggest concern is that ebook dynamic pricing doesn't have the book return feedback that paper books do. With paper books, if the publisher gets a lot of returns, he's crediting the bookstores, and (at least for HBs) ends up with stock to warehouse. With ebooks, there are no returns, so unless the publisher is attentive, there's no incentive to drop the price of an older backlist book. Sure, Macmillan claims that they'll drop ebooks to $5.99, but they're not doing it now. For example, a popular author like Sue Grafton has a number of backlist MMPB books with a retail price of $7.99, but the ebooks are sold at $14 and up. Over at Fictionwise, BOB, etc. there are plenty of ebooks that didn't drop in price to match the MMPB (especially books by MacMillan and its subsidiaries). Say what you want about Amazon and its motives (it's all about Amazon's profit), but I think they've been one of the few forces to push the publishers to match the MMPB price with ebooks, and the agency pricing model is going to take that away.

[mcl]

Originally Posted by Kali Yuga

Dynamic pricing is how the book industry -- and most media industries, in fact -- work. The threat to delay Amazon's access was clearly linked to a desire to maintain a higher priced for a temporary period; if they wanted $15 permanently, they would have threatened to cut off Amazon altogether. John Sargent has even explicitly stated that's what they will do. The "concrete evidence" is in the existing pricing structures: high-priced hardcovers (for authors whom they expect to sell well), followed by trade and/or mass-market paper at a lower cover price. So, I'm not seeing the "zomg $15 forever" position as particularly credible.

Really?

Go to the Macmillan website. Or the B&N website. Look up older Macmillan titles. MUCH older titles. Titles that have been out in MMPB for YEARS.

Now, look at the MSRP for that ebook. That's the price Macmillan thinks that ebook should be sold for.

Notice anything? Like, for example, how the typical years-in-MMPB title from Macmillian still has an ebook MSRP of $15-30, perhaps?


yeah. THERE'S your concrete evidence for my position.

You can point at the deadtree dynamic pricing model all you want, but every scintilla of evidence of Macmillan's current pricing structure for their own ebooks screams that they have no intention of imposing it on ebooks.

And you'll forgive me if I don't take a single, vague hand-wave in a Macmillan press release as thorough refutation of that belief.