Stars fall in Amazon protest about ebook prices

[Piper_]

Originally Posted by Kali Yuga

I'm actually on the fence about agency pricing. However, the reality is that the ONLY reason, IMO, that anyone objects to it is because some people are insanely sensitive to certain forms of pricing. If agency pricing resulted in a flat $10-per-title price, and retailer pricing resulted in $15 for a new ebook, I wonder how these conversations would go. Hmmm....

But in general I support the ability of a company to survive and actually turn a reasonable profit. I also recognize that book publishers are saints compared to the music and movie industries, which are notorious for abusing their financial obligations to many artists. As such I do not resent book publishers (of ANY size) for having the "temerity" to try and run a business.

Originally Posted by Kali Yuga

A publisher most likely receives $10 in revenues for a $25 hardcover, and $3 in revenues from a $10 ebook.

In order to generate identical revenues, in that circumstance they need to sell 3.3 times as many copies.

The "paper" costs for the publisher are only around 15% of the book's cost. So to make the same profits, they need to sell 2.85 times more books.

It takes more than just a low price to double or triple your sales -- all of your sales, by the way. You also need to market aggressively, which in turn (surprise!) negatively impacts your margins. There are no free lunches.
...
Plus, if the only way to get Joe Target to buy dozens of books is to slash margins to the bone, why bother?

Sorry to remind you that this is a business, and it's driven by margins. Publishing is not charity work.



Perhaps. But what are you basing this on? Market research, perhaps? Analysis of sales?

Amazon isn't a charity, nor do I think they're insane. Yet they agree the Agency 5 are overpricing ebooks.

I'm not an MBA, but I think observing the results of various models tells us a lot.

Amazon's non-agency, customer-centric model has given them huge success and done more to propel ebooks than any other company.

Apple and the Agency 5 encouraged the Agency model.

How have their book businesses been going?

My understanding is that the iBook store has not been a great success at all, and the big book Publishers have been hurting for years, requiring them to cut back on staff, editors, etc.

So to me, being against the Agency model is not a matter of not supporting "the ability of a company to survive and actually turn a reasonable profit." Like others here, I'm a free market capitalist.

Instead, it's a matter of recognizing business models that spur growth to the benefit of all vs. those that are arrogant, short-sighted and stubbornly non-progressive.

[Piper_]

Originally Posted by brecklundin

Still that acting in concert is like a huge red flag and just looks too juicy for some prosecutor to not want a crack at this one...time will tell I suppose.

I agree. Again, I'm no authority at all on matters of business law, but my understanding is that there were a lot of phone calls and some travel done at the time that strongly suggest that the big 5 publishers were communicating somehow and thereby agreed to stand together against Amazon to forcing them Agency model.

That coordination between companies is where they are legally the most vulnerable.

What I would hope, though, is that they get new blood who convinces them to dump it voluntarily. At least that might save us some tax dollars.

[Dulin's Books]

Originally Posted by Worldwalker

Referring to a shill as a shill is no more "name-calling" than referring to a publisher as a publisher.

yes it is, you clearly used it in a derogatory manner intended to belittle your opposition and therefor his argument. its inflammatory and unnecessary.

[Dulin's Books]

Originally Posted by Fbone

Borders is doing so now.

http://www.borders.com/online/store/BGIView_giftcards

See folks there's your ebook discount. Creative retailers will be able to find ways to discount for their customers if the want to. If you want to protest the higher prices at other book sellers than go shop at Borders and stop sending your money to the ones who keep strictly to the Agency pricing.

[Ankh]

Originally Posted by Kali Yuga

It takes more than just a low price to double or triple your sales -- all of your sales, by the way. You also need to market aggressively, which in turn (surprise!) negatively impacts your margins. There are no free lunches.

Originally Posted by Kali Yuga

Plus, if the only way to get Joe Target to buy dozens of books is to slash margins to the bone, why bother?

Sorry to remind you that this is a business, and it's driven by margins. Publishing is not charity work.

I can not provide a precise model, it all depends on the book... But one of the best marketing strategies in publishing comes essentially for free: the word of mouth. So, the more people read the book, the more likely it is that book will be talked about and recommended, the more copies will be sold in the end.

That effect surely exist... to quantify it is anything but easy.

[Grimm]

Originally Posted by brecklundin

Also, btw, camera makers such as Hoya/Pentax (Hoya has now owned Pentax for about 4-years now) require this same sort of agreement which has all but stifled competition between the retailers resulting in huge price jumps. We are talking around 30%-40% as a rule but in several instances it was as much as 50%-60% within the past 2-years.

Simple solution if you shoot with DSLRs. Shoot with a Canon instead of Pentax (avoid the Dark Side that is Nikon). Canon leads Pentax in the DSLR market for a reason.

[LakeLoon]

Originally Posted by Dulin's Books

See folks there's your ebook discount. Creative retailers will be able to find ways to discount for their customers if the want to. If you want to protest the higher prices at other book sellers than go shop at Borders and stop sending your money to the ones who keep strictly to the Agency pricing.

Wow, that's kind of . . . um . . . a stretch.

First of all, gift cards are basically a scam. They often go unredeemed, in part or in whole, resulting in gobs of cash for the issuer. They also tend to encourage people to make purchases they wouldn't have otherwise in order to use the "full value" of the card. A gift of a "free" $10 gift card in exchange for giving someone else a $50 gift card ain't such a great deal for many. Some will come out ahead, but on the whole Borders wins.

Second, this purported "discount" isn't specifically targeted at ebooks--it applies to anything. How much is Borders padding their prices in able to afford giving a free $10 gift certificate? I spot-checked pricing (for DTBs) on recent bestsellers between Borders and Amazon, and the Amazon price was usually a few bucks less. Not pennies, bucks.

Unfortunately, the reality of a Borders "gift card" is that you are making your recipient pay overinflated prices at Borders, and getting a $10 bribe for doing so, which can only be used for similarly inflated items.

Yes, there's a way to game the system--if you plan to buy a lot of ebooks anyway, and you keep the gift card for yourself, and the ebook prices are about competitive with Amazon, you come out ahead. Borders is counting on most people not doing that.

Get your deals where you can, but don't think you're doing anyone a favor by supporting Borders. Amazon has done far more to keep pricing down in the book world. They're not doing as good a job right now on ebooks in a direct sense, and I hope they do better. However, even keeping the price of DTBs down will have an indirect effect on ebook pricing--witness the fury of folks who refuse to pay more for an ebook than its DTB counterpart.

[brecklundin]

Originally Posted by Grimm

Simple solution if you shoot with DSLRs. Shoot with a Canon instead of Pentax (avoid the Dark Side that is Nikon). Canon leads Pentax in the DSLR market for a reason.

I am going briefly since this topic has been done to death for the most part by now...so

I shot Canon for years, loved it but sold it all to move over to Pentax and am not unhappy with the gear. Still Canon too had their price increase, as you likely well know, glass everywhere increased due the the Yen vs. the USD. It's just HoyaTax increased more percentage wise because they were at such unreal low prices. Prices were so low I can kick myself for not buying a couple other lenses I wanted at the switch. Now with the K-5 I have a body that is close enough to a 7D for my needs, save for tethering but that should come in a firmware update soon enough. I can work around tethering using my "old" K20D which is also sealed BTW...I leave near the ocean so a sealed bodies and lenses matter a lot to me. And actually so far the K-5 is giving results on par with the 5D Mk II, new tweaked Sony sensor...but I also would have been happy to grab a 7D it's just the glass. My POTN buddies still let me hang out with them though...

Oddly because I bought into the Pentax system just under the wire when their prices really went nuts, now I could actually sell my Pentax glass for a tidy profit but don't need or want to...save for a couple additional bits of glass I am well set for a good long time. And I have my heart set on a Pentax 1.7x TC that will AF with old manual lenses, how cool is that? But I also have LBA for a DA-F 100mm WR (sealed) Macro that is very reasonable at about $600.

And nothing in the Canon line-up offers up what my full set of FA Limiteds (the Three Amigos - 31mm, 43mm, 77mm each with a full load of that special magic pixie dust inside) of course I got the silver set just to be a bit retro, DA 35mm Limited macro, yeah a 1:1 35mm macro, and a couple sealed DA* lenses...so my glass does not suck. Still I did look at moving back to Canon when the K-5 came out with a US price tag of $1600. That's 7D territory...but I have all my glass setup nicely. But to do the switch I would need to spend such a huge added amount on glass, about additional $5k-$7k, it just was not attractive plus my new K-5 has DxO sensor result with a DR of over 14EV@ISO80 or 100 compared to the 7D with it's 11.7EV DR @ ISO100 and insanely clean high ISO shots with no NR until you get over 3200. But I am just not a high ISO sorta guy I like ambient light shooting for the mood.

I have no complaints about the gear it's the business practices of Hoya that I find objectionable...I did end up with a nice deal on the K-5 thanks to some connections that got the price down a couple hundred where I feel it should be as it's MSRP, but to be candid it's almost worth the

For me it's my only hobby I can still do to any degree and my original roots in photography were Pentax though I learned with a Rollei Twin Lense.

Remember real men shoot Pentax because we were born with our own Canons.

PS: feel free to PM me about camera talk...or we could start a thread in the Lounge because I know there are a number of photographers here...it might be fun to chat w/o the bickering on the photo boards, though I have two very friendly boards run by friends where there is no "my brand is better than your brand" stuff (face it, even the worst of today's DSLR's are still pretty darn good) it's all fun & friendly no matter what level your photography is. I always love to yak about it because I am always learning. Wish I could get out more though these days I am pretty much limited to studio shooting and macro. Maybe next year I'll be able to spend more time hiking and taking walks again.

OK....mods forgive me, I was lured into going this far OT...it's not my fault!! hehehehe...

[brecklundin]

Originally Posted by LakeLoon

@brecklundin: glad you find the issue interesting. There plenty of nuances here, some of which are probably interesting only to a limited audience. The main thing I would say is that the Supreme Court's Leegin decision did not suddenly make a broad category of conduct "legal"--it really was about the ease or difficulty of proving an antitrust violation. The court basically said that vertical price agreements are not "by definition" bad for competition; defendants can try to show that their arrangement was not harmful. This result was widely expected and applauded by many economists. The legislative proposals responding to this decision are not necessarily grounded in sound economic theory.

Moreover, the Supreme Court decision has no immediate relevance to the "agency" issue I mentioned. The "agency" defense would have been just as valid (or invalid) prior to the decision.

Ok, thanks for clearing up the real intent of that ruling. It sounds as if there is still discretion for the lower courts to rule some practices as in violation of the laws. And, btw, were those the same economists that helped drive our economy where it is today?

That's interesting about the cameras. 30-50% price jumps sound like a real concern. I have to wonder what was really going on there. Normally you would look to competition from other brands (rather than other retailers) to prevent increases like that. Now if the manufacturers were agreeing on price hikes, that's totally illegal. However, due to a phenomenon called "conscious parallelism" / "economic interdependence," it is very possible to see large parallel price increases in a small market that aren't the result of a conspiracy . . .

There were a couple things happening in the whole industry on lense prices, Pentax was just the last to increase their prices. But when they did boy did they increase. Part of the increase was the exchange rates as the Yen grew stronger vs. the USD. Though that could only account for around 10%-12% at the time. The rest was a result of Hoya changing the way Pentax functioned. They pretty much withdrew from the B&M stores completely. And, in reality, a shake-up really was needed as their management practices were, well, not very good considering they had an excellent product line-up, some of the best in class lenses, but struggled to hold a 4% market share. Anyway, Hoya voided or let expire all of their agreements with retail outlets. Then offered new agreements impossible for all but the largest online retailers to live up to. But then there is their MAP agreement. I am not sure if they have moved to an Agency model for the Pentax brand because Hoya is very tight lipped about business matters, heck they are tight lipped about new products, haha!!

So for me the burr in my saddle is the MAP agreement and the obviousness that there is something beyond the MAP pricing, perhaps the same sort of Agency model as we are seeing with ebooks, because prices between the big online retailers is typically pennies and never any sales. I guess I am just annoyed by this sort of way of doing business as a corporation will never act in the interests of customers and really don't seem to worry about alienating customers anymore. Anyway, both Hoya and Pentax are just odd companies. Pentax was quirky in a fun way, but Hoya is, as far as I am concerned, EVIL incarnate. Had I been aware of the Hoya purchase of the whole of Pentax Corporation, including the camera division, I would not have gone back the them. But once I had bought in I learned of the deal and it was too late. Still the did make my lense collection worth far more than I paid and are actually growing their market share with really nice entry and mid-level DSLR's.

Originally Posted by Piper_

I agree. Again, I'm no authority at all on matters of business law, but my understanding is that there were a lot of phone calls and some travel done at the time that strongly suggest that the big 5 publishers were communicating somehow and thereby agreed to stand together against Amazon to forcing them Agency model.

That coordination between companies is where they are legally the most vulnerable.

What I would hope, though, is that they get new blood who convinces them to dump it voluntarily. At least that might save us some tax dollars.

Interesting info that I hadn't run across before, thanks...it sure fuels the fires that there was indeed some, at best, marginal conduct going on at the time. And don't neglect Apple's role in the mess as well. But at least Apple was playing fair by trying to get the best deal possible for Apple vs. their competition. Not saying I like it but the stings were certainly there to be pulled and it seems obvious Jobs and his avarice took advantage and played the publishers by pandering to their weakness in wanting higher prices.

No matter what it's a tough sell all the way around. Especially when we take into account no book should ever go out of "print" as an ebook. Well, unless there is a distributions rights snafu as agreements with authors or their estates or owner of the copyright. Anyway, by never going out of print revenue will trickle in for decades after a book was popular.

[jhempel24]

Thanks for the heads up on the Borders stuff. I'm going to borders tomorrow to buy the new King book and Towers of Midnight, so I might as well get me some extra books/ebooks.

[JimKal]

Originally Posted by Fabe

Ultimately we are paying for the value of the content, not the cost of the packaging. There is no reason what-so-ever electronic books should cost less or more than a hard or paperback edition. It comes down to what the market will bear.

As I understand it, an author is only paid a relatively small fraction of the book's price. If I am correct in that understanding, there should be a significant difference in the price of an ebook and a printer version. For any publisher, there are certain costs that must be shared. A publisher has to make a profit to stay in business. The work of an editor must be compensated (they do add significant value). The real differences come down to the differences between e-costs and paper costs, transportation, the cost of unsold books,and probably many other things I of which I am unaware.

[Worldwalker]

It would be interesting if we paid for the content and packaging separately. That is, you pay $X for the story, and $Y or $Z for your choice of packaging: for instance, if you want it printed up as a nice hardback with real leather covers and a slipcase, you'll buy the deluxe package, while if you just want a read-once pulp paperback you'll buy cheap printing, and there's no extra packaging charge for the ebook; you just download that. Maybe even something like Baen does with their advance reader copies -- if you want an unproofed galley of the thing six months before the final product comes out, you can buy that too. That way, the authors would get royalties on the content, and everyone involved in the packaging (I can see a publisher farming out some work, like special hand-bound editions for the hardcore collector, for instance) would get paid for the packaging, but not the content. Everyone gets paid for what they do, not what someone else does.

Why do I think the publishers would hate this?

p.s. to Dulin: So people are required to be complimentary to those representing the cabal publishers' position, then? I've seen no requirement that those people remain civil to those representing the consumers. Good work if you can get it, I guess.

[Piper_]

Something always niggles in the back of my mind when I hear on one hand that what we are paying for is the content, but on the other hand, even if you pay for the content, it's wrong to make or get a copy of that content to read it in a different "container" without paying for it again...

Am I crazy, or is there a sort of contradiction there?

[Worldwalker]

You're not crazy; it's entirely contradictory. Which way it works varies depending on what you're trying to do and what the companies are trying to sell you at the moment. And it always works in their favor, exactly the opposite of a consumer's best interests.

[Dulin's Books]

Originally Posted by Worldwalker

I've seen no requirement that those people remain civil to those representing the consumers. Good work if you can get it, I guess.

it's right here https://www.mobileread.com/forums/faq...ing_guidelines