People have been ragging on Amazon for years, trying to get them to release some of their data. Well, they just have.
Quote:
It's also important to understand that e-books are highly price-elastic. This means that when the price goes up, customers buy much less. We've quantified the price elasticity of e-books from repeated measurements across many titles. For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000.
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Lots of sputtering to follow, I suppose. Especially over this:
Quote:
We believe 35% should go to the author, 35% to the publisher and 30% to Amazon. Is 30% reasonable? Yes. In fact, the 30% share of total revenue is what Hachette forced us to take in 2010 when they illegally colluded with their competitors to raise e-book prices. We had no problem with the 30% -- we did have a big problem with the price increases.
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Pretty consistent of them:
- Indie titles - 30% Amazon, 70% for the author-publisher
- Tradpub - 30% Amazon, 70% for the author & publisher, split 50-50
Basically, Amazon is telling Hachette that if they want no-discount agency, then can have it...at $9.99 but not at $14.99.
The gloves are off; pass the pringles...