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#16 | |
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These particular cases came about because Amazon discounted the hardcover to a point below the one they were required to charge for the ebook. I doubt it will happen elsewhere, and I'd be a bit surprised if it happened again at Amazon. (The fact that it happened at all sounds like an "Oops!" moment to me.) ______ Dennis Last edited by DMcCunney; 10-06-2010 at 10:23 PM. |
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#17 | ||
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Publishing has been suffering since long before ebooks were a gleam in anyone's eye. There have simply been too many books chasing too few readers. Everybody knew it, but nobody wanted to be the first to address it. Back in the days before ebooks, there was a reason for that: addressing it meant publishing less books. In the genre I'm most conversant with - SF - you could have cases where an editor would say "I'm scheduled to release four books in month X, but I only have three thus far. What's the least bad manuscript in the slush pile to fill out the schedule?" Publishing only three titles in month X wasn't an option, because the assumption was they'd lose the retail shelf space occupied by the fourth title, and not get it back. Those too many books were not merely competing for too few readers, they were competing for limited space on retailer's shelves. Some years back, before ebooks, I saw specs that there were 50,000 titles published in the US each year, and the average bookstore had space to shelve and display 5,000 - 8,000. Books that didn't fly off the shelves did not get reordered, and were returned to make room for new releases. Returns provided another source of problems, because publishing had historically used a 100% returns policy. Unsold books could be returned for full credit, so the retailer bore no risk if they guessed wrong on what might sell. Hardcover books were simply returned. Paperbacks weren't. The covers were stripped off and returned, but the bodies of the books became trash (and all to often wound up being sold without covers for a fraction of the normal price.) To make things more interesting, the distribution system was convoluted enough that it could be six months to a year before the publisher knew whether a book had sold. So there would be periodic wrenching spasms as a publisher trimmed it's lines and published less books, and others followed suit. Authors found themselves without contracts, and people involved in producing the books found themselves without jobs. Consolidation has been at work, as publishers bought smaller houses, and retailing has contracted as well, as major chains like Barnes and Noble drove smaller booksellers out of business, because they couldn't compete with B&N's pricing. And B&N and fellows were under pressure from warehouse stores like CostCo and Sam's Club, who had even greater economies of scale and pricing power. Amazon became the 800 lb gorilla in book retailing, putting pressure on everyone. And the consolidation put another form or pressure on publishing, as publishers were acquired by media conglomerates who saw supposed advantages in having all forms of media under one roof. The conglomerates had revenue and profitability targets publishers couldn't meet, and the efforts to do so provided additional issues for the industry. The Agency Pricing model had a simple goal: protect the hardcover best seller. Those are the industry crown jewels. They generate the highest revenue and carry the highest margins. For most publishers, best sellers make the difference between whether they make money or show a loss for the year. Amazon was selling Kindle editions at their default $9.99 price at the same time that they were selling the hardcover. Many readers just wanted to read the book now, had the capability of reading the electronic version, and didn't care about the paper volume, so they bought the cheaper ebook. The publishers were seeing declining revenue. The Agency Pricing model effectively says "If you want to sell the ebook at the same time as the hardcover, you have to charge a higher price and remit a greater percentage to us, to make up for what we are losing by not getting a hardcover sale. If you want to sell the ebook cheaper, you must wait for several months to give the hardcover time to sell before competing with it." Mass market paperbacks don't get released until a year after the hardcover for a reason, and the same reason applies to ebooks. Ebooks have simply added a whole new level of uncertainty to the equation. The dust has yet to settle, as everyone in the industry gropes for a successful strategy including ebooks that will let them remain in business. ______ Dennis Last edited by DMcCunney; 10-06-2010 at 10:24 PM. |
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#18 |
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You are assuming the publishers got LESS from Amazon for the Kindle version of the books than they did the HB version. If that is the case then I can see your point, but I don't believe this is so. I could be wrong. Amazon pays contracted price per Kindle version sold, no matter how much Amazon sells to the public for.
Yes, the publishers ARE being greedy, when they could lower the price a little and sell MORE books. Then, once the pbooks come out lower the electronic price even more. But they don't want to do that. They want to whine and moan that making electronic versions is SO much work, and they can't make any money on them. If the publishing industry was in trouble before then maybe they need to look at their practices, and maybe see electgronic publishing as a savior. Remember, insanity is doing what you have always done and expecting to get different results. Publishing is trying to get different results by using the same tactics, when the market has clearly changed. |
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#19 | |||||
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The standard discount to a retailer like Amazon from a publisher is probably around 60%. A hardcover with a $30 list price will cost Amazon $12. Like other retailers, they can choose to accept less margin on the book to boost sales. Some brick and mortar retailers might treat a really popular title as a "loss leader", and sell it for less than they paid for it, with the goal of attracting customers to the store and selling them other things once they got there. You might not be willing to believe Amazon gives the publisher less on a Kindle edition than on a corresponding hardcover. I'm not willing to believe they they are making no money or taking a loss on Kindle sales. If the publishers were getting as much from the Kindle sale as the hardcover sale, I don't think they would have felt the need to impose the Agency Pricing model. Quote:
Remember, books compete for the reader's discretionary time. There are any number of other things the reader could be doing instead of reading a book. Why read a book when you can watch TV? While I certainly won't complain if I can get books cheaper, the limit here isn't the money required to buy them - it's the time available to read them once I have. I tell people one advantage to ebooks is that you don't have to call the paramedics if my unread stack topples over on me. Quote:
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The fundamental question from our point of view is probably "Can publishers survive selling ebooks at the sort of prices a lot of folks here would like to see?" From what I can tell, the answer is "No. They can't." Ultimately, you get what you're willing to pay for. If you aren't willing to pay what it costs to produce something, and make some money for the producers, it won't be made. ______ Dennis |
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#20 |
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You are assuming that people who would buy the ebook would have bought the hardcover version if the ebook was not available, which is not necessarily a true assumption. An ebook sale does not necessarily represent a lost hardback sale.
You are also assuming that the publishers can be trusted to actually lower the ebook price later, which again, is not necessarily true... |
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#21 | |||
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Pricing is always "what the market will bear", and the publishers are in the process of finding out what that is. Quote:
And perhaps it would, but the publisher will still want to get a price premuim from those who don't want to wait. Quote:
______ Dennis |
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#22 |
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Dennis, do you have anything to backup that Amazon pays less per Kindle book than it does hbacks?
As for competing for time? Yes, but also for dollars. I don't buy hardbacks. The exception was the Harry Potter books. I also don't pay the outrageous prices the agencies now want for ebooks. Yes, the ones I want are less than the hbacks, but I found a few that are out in paperback, and the prices is between the two. Surely they have made their money from the hback sales? Or at least the hback time? Why have the electronic version be MORE than the pback? What is their cost? Most people I know that read are willing to pay pback prices for electronic versions, or a little more if no out in pback yet, but not a huge amount. Thirteen dollars is a standard price I have seen, and we won't pay it. But again, if I wait will the price of the ebook come down? Or will the price stay the same, even as the hback price comes down? I think if they really want to the publishers can make this work, but that is the point. They. Don't. Want. To. I feel they forced agency pricing on ebooks because they are afraid of the medium, not because they were getting less per book from Amazon. If I contract for you to sell wigglies for me I can set the price I charge you, and suggest a MSRP that I tell everyone, but I do not have the right to tell you that you cannot sell wigglies for LESS than you paid me. That is your business, I get $X/wigglie either way. |
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#23 | ||||||
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Amazon's standard price for a Kindle edition is $9.99. The list price for a current hardcover will be around $25 - $30. The standard discount to a retailer like Amazon is something around 60%. So Amazon probably pays the publisher between $10 and $12 for each hardcover. You are asking me to believe Amazon either sells the Kindle edition of a new hardcover at cost or takes a loss on each sale when it sells at $9.99. Sorry, I don't believe that. Why on earth should it? A brick and mortar retailer might have an incentive to do that on selected titles to get people into the store, where they might buy other things as well. (That happened with the Harry Potter titles.) Amazon has no brick and mortar store to want to entice people into, and no incentive to play the "loss leader" game. You can assume Amazon makes money on Kindle sales, and pays the publisher less than what they charge you. Quote:
(Yes, there's some extreme wishful thinking among publishers about how much they can charge.) I do buy hardcovers, but hardcover, paperback, or ebook, the same issue arises: I have to find time to read it. Lower prices aren't likely to make me buy more books I don't have time to read than I already do. Meanwhile, as mentioned, most of the costs of a book are incurred before it reaches the point of actual publication, whether it's a paper edition or an ebook. The cost of printing, binding, warehousing and distribution of a printed book is about 20% of the total book budget. And the ebook version doesn't get to tag along free with the assumption the production costs are covered by the paper edition. The accounting doesn't work that way. The ebook will be expected to make a contribution to covering the costs. (What happens if the ebook is the only edition?) Quote:
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What will you do if they can't survive selling ebooks at the price you would prefer? Quote:
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The fundamental question is "How much does Amazon remit to the publisher for each Kindle edition sold at the same time as the hardcover is issued?" You appear to believe they pay the publisher the same amount for each sale whether it's a hardcover book or a Kindle edition. I don't. I assume the electronic edition is covered by a different contract with a different price schedule, and that the publishers did not anticipate that Amazon would sell Kindle editions competing with the hardcovers at substantially lower prices. When Amazon did so and they lost revenue, they countered with Agency Pricing. ______ Dennis |
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#24 | |
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What publishers need to balance is whether it is worth it to them to sell it to me at a paperback price, or not to sell to me at all, because those are the two choices. Paying hardback price is not a choice for me. I simply won't do it, never did in the print days and certainly won't do it for something loaded with DRM that restricts my rights and uses. |
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#25 | |||
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If everyone thought like you, there wouldn't be hardcover bestsellers, most of which are bought by people not willing to wait a year for the PB to be released. Quote:
_______ Dennis |
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#26 | |
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Quite apart from the expense, a hardback is simply a less convenient version of the book. I'm not going to pay more for an inferior (to me) product. |
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#27 | |
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Once someone has bought a Kindle, the only type of DRM they can use directly (without stripping) is Amazon DRM. The device has an automatic way to buy from the Amazon store. Whispernet is designed to deliver books from Amazon. They are selling a platform, not just either a device or ebooks. Look at the situation in the UK, Amazon have just arrived and are simply buying marketshare by offering books much cheaper than the established ePub stores. Every Kindle sold is a customer taken away from those stores forever. Steven Fry's new autobiography is £20 list/£9 Amazon for the hardback, £19.57 list/£6.30 Amazon for the Kindle version. At Waterstones it is £11 for the hardback, £14 for the ePub. Tony Blair's new autobiography is £25 list/£12.50 Amazon for the hardback, £25 list/£7 for the Kindle version. At Waterstones it is £14 for the hardback, £15 for the ePub. The Girl with the Dragon Tattoo is £4 paperback, £2.68 Kindle at Amazon. At Waterstones it is £4 for the paperback, £5.50 for the ePub. Eat Pray Love is £3.27 paperback, £3.11 Kindle at Amazon. At Waterstones it is £4.50 for the paperback, £8.85 for the ePub. The Kindle editions are not just cheaper than the ePub, they are half the price, significantly more than the discount for the physical books. And in each case, Waterstones is charging more for the eBook than the physical one, and Amazon is charging less. Edit: To show that I wasn't cherry-picking results from Amazon, I went to the Waterstones ePub main page and checked the bestseller/recommends/favourites/new and bestselling sections, 22 books in all. Every single one is cheaper at Amazon, and in general significantly so, not just a couple of pence. Last edited by murraypaul; 10-07-2010 at 04:55 AM. |
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#28 | |
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For some books I am perfectly fine to wait (price or format change) but for others I want to pay extra for immediate access. So the current trend in ebook-pricing makes perfect sense to me. |
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#29 |
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It is not just a matter of costs being less or slightly less for ebooks versus printed books-- there is also the matter that these ebooks are DRM'ed in such a way that does not allow easily sharing them with friends or re-selling them-- something with which you have absolute freedom with a printed book
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#30 |
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I don't buy that publishers DIDN'T know Amazon would sell electronic books at the same time as hardbacks. You mean to tell me that not one person, not one lawyer at any point of the process, from any of the agencies, said "Hey, we haven't given them different release dates for these two editions. Do you think they might sell them at the same time?" only to turn around and say "Nah, they wouldn't do that, even though Dennis thinks we are getting less per Kindle edition. Let's just stick our head in the sand and hope for the best".
If no one figured out that they had given Amazon the go ahead to sell both editions at the same time then jobs need to be on the line. But I think they knew. |
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