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Old 03-13-2010, 01:16 AM   #16
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Originally Posted by leebase View Post
I was in sympathy with the publishers over Amazon's "sell every NYT Bestseller for a loss" policy. It's one thing for a Wal-Mart or a Costco to buy a million Harry Potter books and sell them as a loss leader. It's another thing to have Amazon set the "value" of all books to $9.99.

I'm glad that Amazon caved because had they not, then ebooks would not be released until later -- like paperbacks. I like reading ebooks over hardbacks and like to have the OPTION to "buy now and pay more" or "wait and pay less".
I don't know that Amazon set the "value" of all ebooks to $9.99, as much as they set the "value" of all ebooks to be at or below the price of the lowest cost print edition. After all, they, and all of the other big book retailers were already discounting the NYT bestseller list hardcovers to prices between $8 and $15, and they've mainly been ensuring that the ebook price is less than the paper editions, even if they've been taking a loss on it because the publishers don't bother adjusting the price of their ebooks, ever.

I've got hundreds of books on my to be read list and even more on my to be reread list, so there are very few authors for which I would every consider paying hardcover price for their ebook for the privilege of reading their book sooner. On the other hand, if MacMillan is committing to releasing EVERY title as an ebook, that's a good thing, because they're certainly not doing it now.

I've never been into the Amazon boycott movement because I buy very few ebooks from them, but I intend to tag every MacMillan ebook that I look at that is priced above MMPB (when one is available) after the agent model goes into effect. I don't know if I'll give them all 1 star ratings as well, except for Doug Preston (just because I think he's a whiner).

I understand that John Sargent is trying to do what's best for his company in the short run and maybe even in the long run, but I believe that MacMillan could have been just as successful with the existing wholesale model if they had been willing to release all ebooks at the same time as the hardcovers, with a price comparable to the hardcover, and lowered the ebook price to match the subsequent lower price paperback editions. Amazon would have continued to subsidize the same loss-leader best-sellers that they're doing in print, and ebook buyers would be conditioned to wait for the paper edition to come out if they are cost conscious. As it stands now, if the ebook isn't released with the hardcover, we don't know if it ever will be, and we don't know if they'll ever drop the price when it's priced like a hardcover. Either way, I've always felt that the publishers don't really get ebooks, and just want them to go away, even though a sizable chuck of their steady readership has switched to ebooks.

In this last blog from Mr. Sargent, he's already made it clear that he's unwilling to guarantee parity between low cost print editions and ebook edition, and has hinted that the cost of the ebook might rise if the print editions go out of print (gouge the long tail, I guess). I fear that the ebook will end up becoming the new mid-list paperback, but at trade paperback prices.
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Old 03-13-2010, 01:26 AM   #17
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I don't think buying habits will alter nearly as much as presumed -- mostly because many people mistakenly think prices will be permanently set at $15 per ebook. They're going to use dynamic pricing, so ebook prices will fall over time. I suspect people will grudgingly figure this out, awhile after the agency model kicks in.

So, what will happen soon is what has been happening for a long time: Those who are willing to pay a premium will get the book faster, and those who want to pay less will wait until the price drops. Just like what happens with hardcovers and paperbacks -- and as what should happen, when supply is flat and prices can show the direct impact of demand.


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It will be very interesting to watch -- and to see how this "agency model" gets past the "price fixing" laws.
No, it'll be boring, because it isn't price fixing. The publishers are not colluding in secret to coordinate prices, they aren't allocating market segments to different publishers, discounts will be offered on, for example, NY Times best sellers by at least one publisher (Macmillan) but not necessarily by others, etc.

Also, unlike price fixing setups, this arrangement is very public and has received a fair amount of press. I'm reasonably confident that a) publishers and retailers already had their lawyers vet this model, and b) if it was illegal, the DoJ might have actually noticed or commented by now.

It's not much different than retailers setting the price for digital song downloads at $1 per. It's just a big shift from how prices were often set for books in the past.
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Old 03-13-2010, 01:29 AM   #18
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Is this whole thing going to much affect the Fantasy genre? I haven't heard any of the main fantasy publisher's names thrown around, but then, I'm not that familiar with the publishing industry.
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Old 03-13-2010, 01:35 AM   #19
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Nope, because can't buy them either way.
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Old 03-13-2010, 01:47 AM   #20
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Quote:
Originally Posted by bgalbrecht View Post
....I intend to tag every MacMillan ebook that I look at that is priced above MMPB (when one is available) after the agent model goes into effect. I don't know if I'll give them all 1 star ratings as well, except for Doug Preston (just because I think he's a whiner).
Don't you have better things to do with your time, like... flossing?


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Originally Posted by bgalbrecht
I believe that MacMillan could have been just as successful with the existing wholesale model if they had been willing to release all ebooks at the same time as the hardcovers, with a price comparable to the hardcover, and lowered the ebook price to match the subsequent lower price paperback editions....
Sure, if "success" means "throwing your profit margins under a bus."

Had they continued with this model, eventually the retailers would have forced the publishers to drop their wholesale prices, eroded the value of their products, and shifted even more power to the retailers.


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Originally Posted by bgalbrecht
As it stands now, if the ebook isn't released with the hardcover, we don't know if it ever will be, and we don't know if they'll ever drop the price when it's priced like a hardcover.
It seems pretty clear that, at least where Macmillan is concerned, they do plan to release the ebook concurrent with the hardcover, they will alter the price to reflect demand, and expect most books to hit the $10 price point within a year of release. Past (and even present) actions are simply not viable guides to future behavior, as there is about to be a huge industry shift.


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I've always felt that the publishers don't really get ebooks, and just want them to go away, even though a sizable chuck of their steady readership has switched to ebooks.
Since ebooks constitute less than 5% of sales, I don't see that as a "sizable" portion yet. Even a year ago, the general public barely knew about, let alone cared about, ebooks. There's far more hype than reality at this point.

The fact that most publishers are willingly climbing on board -- and taking advantage of the huge leverage they gained with Apple's deal -- indicates that these folks are a tad more savvy than MR readers presume. They're way ahead of the music industry, relative to the public interest in ebooks. Many posters assume that a multi-billion dollar industry can alter its business models, its contracts with authors, its adherence to international laws, and convert millions of books at zero cost overnight -- and if the business can't do all that, they are "dinosaurs" and "luddites." And, of course, a few people just hate publishers and want them to die immediately, and are happy to slag them with any negative characterization they can think of, as though their eradication will magically make everything right in the literary realm.
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Old 03-13-2010, 01:56 AM   #21
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Is this whole thing going to much affect the Fantasy genre? I haven't heard any of the main fantasy publisher's names thrown around, but then, I'm not that familiar with the publishing industry.
Just about all of the major SF/Fantasy imprints are going to the agent model, with the exception of Ballantine/Del Rey, which are part of Random House. My guess is that if the rest of the publishers are committed to dynamic pricing, and price ebooks higher when the paper editions are more expensive, and drop the price when they release budget print editions, Random House will set their MSRP/wholesale prices accordingly.

One area of concern for me is that if the hardcover/ebook rights are split from the mass market paperback rights, as is the case for some Stephen King bestsellers sold by Random House in hardcover and Simon & Schuster in mass market, the ebook may will get priced indefinitely to match the publisher's print edition, even though there's a much cheaper paper edition from another publisher.
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Old 03-13-2010, 02:06 AM   #22
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Don't you have better things to do with your time, like... flossing?
I was going to claim that I multi-task, but it is hard to type and floss at the same time. I've never actually tried to tag anything at Amazon. I'm certainly not going to go looking for MacMillan books just to tag them, nor will I tag something if it takes an additional minute or two. I don't know, if an ebook is tagged overpriced by a couple hundred people, does it convince casual buyers to buy some other book? Probably not when the buyer is looking specifically for this author or book.

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Sure, if "success" means "throwing your profit margins under a bus."

Had they continued with this model, eventually the retailers would have forced the publishers to drop their wholesale prices, eroded the value of their products, and shifted even more power to the retailers.
I don't think Amazon was discounting all ebooks to $9.99, just the best sellers for which they are discounting the hardcovers. But they are arguing that ebooks ought to be priced as budget books, when budget editions have been released, and I think this latest blog post says that MacMillan doesn't agree. Sargent clearly refuses that proposition, and is only willing to make the concession that a budget ebook price is no more than $10, and maybe less.

Last edited by bgalbrecht; 03-13-2010 at 02:18 AM.
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Old 03-13-2010, 07:44 AM   #23
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I was going to claim that I multi-task, but it is hard to type and floss at the same time.
I'd be very impressed if you could, though


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Originally Posted by bgalbrecht
I don't think Amazon was discounting all ebooks to $9.99, just the best sellers for which they are discounting the hardcovers. But they are arguing that ebooks ought to be priced as budget books, when budget editions have been released, and I think this latest blog post says that MacMillan doesn't agree. Sargent clearly refuses that proposition, and is only willing to make the concession that a budget ebook price is no more than $10, and maybe less.
Well, Amazon's stated goal was to establish $10 as the "standard" price point. Some ebooks (new and older) were priced higher, but it wasn't limited just to best-sellers. They (or other retailers) never explicitly said their goal was to force a reduction in wholesale prices, but it does seem apparent that was their strategy.

Sargent's recent blog post indicates they don't plan to peg ebook prices to paperback costs, they'll base it on demand. The instance he mentions is a book that is available for awhile in mass market and trade paper, and the publisher drops the MM copy; the ebook price may go up to match the trade edition. He is basically operating off the principle that the different paper editions are just window dressing on demand-based pricing. HC-to-paperback is just a far less efficient mechanism than what you can accomplish with an electronic good, whose price can be updated at any time.

I might add that eventually there may well be benefits to disconnecting those prices. Let's say a typical paper book is in HC for 8 months, and it takes a month or two to ramp up the paperback production, distribution and marketing -- mostly to place a thin veneer over the mechanisms of demand. With the ebook edition, it will start out with a lower official price, then it may drift down as demand falls, to the point where the ebook may fit your price in 6 months instead of 10 or 12.

Besides, in a few years, basing ebook prices off of paper will make as little sense as basing a DVD price off of a movie ticket or VCR price; or basing a digital download price off of a CD or vinyl record price; or a PS3 game off of a physical copy of Parcheesi....
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Old 03-13-2010, 10:10 AM   #24
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Yes, I won't be buying books from the publishers that move to the "agency model". I'll be buying from customer friendly publishers and authors. There are too many good books and too little time to read them all. I don't have to worry about it.

I'm sure that the big publishers have already written me (and people like me) into the category of "acceptable loses" so we can all be happy.

The "agency model" is price fixing and against free market principals. It was allowed for a valid business model but what Macmillan is using it for has nothing to do with an "agency model". Amazon, Apple, B&N and Kobo are not "agents", they are running websites and performing simple electronic sales transactions. It's a loophole to allow them to price fix and try to drive up prices. In my opinion the consumer protection laws should be updated to define what an agent is, so these loopholes can be closed.

One additional side effect is that I've switch 180 degrees on "piracy". I'm still not going to file share myself but I'm no longer going to criticize people who do. Go nuts! I understand.
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Old 03-13-2010, 10:28 AM   #25
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No, I suspect my buying habits will be pretty much the same.
I'll decide it's time to purchase a book and go to a website. I'll look around ... looks good, looks good, looks good but holy heck do they really think I'm going to spend $15!!!

Guess which two books I'll buy?

I really don't ever "wait" for a book in that I'm an impulse buyer. If you don't convince me to buy your book in about the first 20 seconds then you'll probably not sell me your book. If a book falls into the Holy Heck category I'm not going to place it on a list and price watch it. I just forget about it. I also hardly ever anticipate a New Release. There are a few authors that I consistently enjoy but generally I find books and authors to be highly interchangeable in that there are literally thousands of them out that who all have the capability of entertaining me for a couple of hours.

So really - if you want to sell me a book you are going to have 1. Make me aware of it's existence and 2. Make it available at the price I'm willing to pay.

I don't see that changing.
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Old 03-13-2010, 10:48 AM   #26
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It will be very interesting to watch -- and to see how this "agency model" gets past the "price fixing" laws. I seriously doubt the agency rules will prevent "customer loyalty" programs like micro pay. If anything, more sites will be resorting to such schemes as a way to lower price without "lowering the price".
Agency models aren't considered price fixing; they're a different relationship between manufacturer and storefront. The store doesn't have to buy the materials up front.

In the case of ebooks, the original model was kinda broken, because AFAIK Amazon wasn't "buying" a stack of ebooks and then trying to sell them at a profit; Amazon didn't buy the ebook from Macmillan until the customer said "send me an ebook!" At which point, 1 sale goes to Macmillan; Amazon takes their cut (or a loss), and the customer receives 1 ebook.

The agency system is a better economic model for what's going on here. Amazon isn't risking anything by hosting the books, which is one of the reasons retail sales take such a high cut--the 50% rate assumes a lot of nonsales which are subsidized by the successes. If there's no money tied up in costs, there's no reason the middleman should get that high a percentage of the sale.

However, the fixed-pricing model is likely to bite publishers badly. They won't have the ability to gauge customer interest by lowering the price a bit and seeing if sales skyrocket; they won't have the ability to participate in site-wide promotions. The retail model allows the ones who deal directly with customers the flexibility to find out what they want; doing so with commission sales is a lot harder.

And publishers *still* don't think they're competing with amateurs or free ebooks. Macmillan thinks it's competing with Random House, thinks Amazon is competing with the B&N bookstore--not Smashwords, and certainly not Feedbooks.

(In response to the original post: No, it won't affect my habits in the slightest; I don't buy DRM'd ebooks.)
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Old 03-13-2010, 11:30 AM   #27
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There have been some series that were so engrossing that I have bought the hardback for $25. But (and here is where the publishers lose) for the most part, I simply pass it by, and hope that I'll remember to look for it at a later date. All that money spent on advertizing. Wasted.

For an ebook price to be somewhat equal to the hardback price at first release doesn't bother me. Again, all that money spent on advertising. Wasted.

If you're concerned about the prices going too high do what I do naturally - get a year or two worth of reading now. I also buy from smaller companies with new, but VERY GOOD, writers.

Higher prices can't hurt me, I'm not a slave to the newest hot seller from Blankety Blank.

The MacMillans of the world can just bleed themselves dry discovering that we are willing pay a fair price for their books, but not hardcover book prices for a hand full of electrons.

I want my favorite writers to make a good living and I do understand that the need of a publisher is very real.

But the ink, paper, printing presses, book binders, warehouses, truckers, warehouses (at the retailers end), store front, and store employees will no longer be a cost to the end product.

I do miss the scriptoriums though.

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Old 03-13-2010, 11:32 AM   #28
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So... Apple convinces the world we all need higher prices on ebooks, and then inserts a little clause that gives them alone the right to "discount" bestsellers as they see fit. Nope, I don't buy into it, they lost me as a customer.
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Old 03-13-2010, 11:32 AM   #29
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I won't be purchasing any MacMillan books simply because they won't allow the ebooks in libraries.

The Agency Model is just another way to say price fixing. I have a huge backlog of ebooks and don't have the need to purchase any of the grossly overpriced, DRM laden offerings from the publishers. It is my hope that more readers will say no to price fixing and not purchase ebooks.
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Old 03-13-2010, 11:42 AM   #30
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HorridRedDog once ate a cherry pie in a record 7 seconds.HorridRedDog once ate a cherry pie in a record 7 seconds.HorridRedDog once ate a cherry pie in a record 7 seconds.HorridRedDog once ate a cherry pie in a record 7 seconds.HorridRedDog once ate a cherry pie in a record 7 seconds.HorridRedDog once ate a cherry pie in a record 7 seconds.HorridRedDog once ate a cherry pie in a record 7 seconds.HorridRedDog once ate a cherry pie in a record 7 seconds.HorridRedDog once ate a cherry pie in a record 7 seconds.HorridRedDog once ate a cherry pie in a record 7 seconds.HorridRedDog once ate a cherry pie in a record 7 seconds.
 
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Join Date: Nov 2009
Device: PRS-600 EB-1150
Quote:
Originally Posted by TallMomof2 View Post
I won't be purchasing any MacMillan books simply because they won't allow the ebooks in libraries.

The Agency Model is just another way to say price fixing. I have a huge backlog of ebooks and don't have the need to purchase any of the grossly overpriced, DRM laden offerings from the publishers. It is my hope that more readers will say no to price fixing and not purchase ebooks.
I won't be purchasing any MacMillan books simply because they won't allow the ebooks in libraries.

More than enough reason to skip them. But instead of boycotting them just think of them with revulsion. As in "I do not need to look at the used toilet paper".

Price fixing is price fixing, whether or not it is in the open.
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