You don't matter - and you never did

[abookreader]

The Agency 5 pricing didn't slow down ebook sales in the slightest.

Nope.

http://www.the-digital-reader.com/20...omment-page-1/

By the way, Amazon has hinted at a huge shift in eBook consumer buying habits post agency pricing and Kobo Books did too. I doubt that all the boycotts had much to do with it, consumers naturally set their own price points and refuse to buy products they feel are too highly priced. And then prices fall. Its just the nature of the game.

[leebase]

Originally Posted by abookreader

Everything about this market is new. Amazon already reports selling more ebooks than paperbooks. Authors are self publishing their old bestsellers that were out of print - for a third of the price of the new bestseller. You think that doesn't matter?

Why would it? Was there ever a time in our lifetime when there weren't alternatives to buying new release hard backs? I know I had plenty of reading opportunities without needing ebooks when I was a kid -- and too poor to buy hard backs.

Economics isn't new. The people willing to pay the most, set the market, not the folks who say "that's too much". A publisher could set the price at $1000 for an ebook, and all of us would say "phoey on you-ey". But if lots of folks bought it at that price, then THEY would set the price, not us.

The Agency 5 moved their ebook prices to $12.99 and $14.99. And what happened to sales? They have kept going up. The people buying these books have already confirmed that $9.99 was not the top price the market would bear for new popular books.

Originally Posted by abookreader

The old model of publishing is on its last legs. Businesses who refuse to change as their market changes die.

Publishing is for sure changing. So far, though, there is no indication that $12.99 to $14.99 has been an impediment to mass market sales. There are a plethora of free ebooks available -- in addition to all the free and cheap book alternatives we've always had. And STILL, people are paying those higher prices for popular books.

When people STOP paying those prices, the publishers will respond with lower prices. It has nothing to do with the cost of production. It has nothing to do with what the non-hard back book buying public think.

Lee

[GA Russell]

Lee, in post #53 you quote Maggie, but incorrectly attribute the statement to me.

[abookreader]

Why would it? Was there ever a time in our lifetime when there weren't alternatives to buying new release hard backs? I know I had plenty of reading opportunities without needing ebooks when I was a kid -- and too poor to buy hard backs.

Yes and no. There have always been alternatives, but they may not have been alternatives that the buyer found just as desirable as the new higher priced hardback book.

That isn't the case now.

Now the hardback market competes not only with aged releases, it also competes with the internet, video games, small publishing houses who price well below Agency prices, netflix, ... and on and on and on. It is competition for the same buyers on steroids.

Economics isn't new. The people willing to pay the most, set the market, not the folks who say "that's too much". A publisher could set the price at $1000 for an ebook, and all of us would say "phoey on you-ey". But if lots of folks bought it at that price, then THEY would set the price, not us.

No. In a true market economy the people paying the most do not set the price and the people demanding the cheapest do not set the price. What sets the price is profit maximization .... and it isn't even that simple. Some businesses attempt to maximize profit over long terms (years) and some care only about the current quarter.

So far, though, there is no indication that $12.99 to $14.99 has been an impediment to mass market sales.

I'm not sure exactly what you are saying here but yes -- agency pricing did flatten eBook sales growth at those price points and more than one publisher has predicted that eBooks will likely demolish the MMP market, sooner rather than later.

[Ankh]

The basic premise of the rant is that it is possible to divide people into a couple sharply defined categories: "bargain hunters", "library readers", "hardcover buyers", to name a few. That sounds strange, most of my friends don't fit into that division, they wore each of mentioned hats throughout their lives, sometimes switching them on daily basis.

What I am certain of, is that market for books in general (paperbacks, hardcovers, trade paperbacks, ebooks) is shrinking, that book is loosing the war for young generation eyeballs.

It is up to them to pick and chose who they want to sell to.

[SensualPoet]

Originally Posted by leebase

Until sales actually go down -- the publishers are not going to lower the prices of their ebooks.

Ola! The future is here already. The most recent APA stats showed a decline in hard cover sales and a drastic uptick in ebooks (year over year as guidance). Industry historians are almost certain to cite Amazon for setting a floor, not a ceiling, on "frontlist" ebook titles at $9.99.

[SlowRain]

Originally Posted by leebase

The people who pay are the only ones who ever matter. Just like as a photographer it doesn't matter to me if someone thinks $50 is too much for a professional print as such people simply don't value my art enough to pay for it. I spend my time caring about the folks who do care for and are willing to pay for art.

Originally Posted by ardeegee

Otherwise known as "suckers."

ardeegee, you beat me to it.

One given in life is that those who know are usually at the mercy of those who don't. Another given is that the non-pretentious are the victims of the pretentious.

The American publishing industry is horribly managed, similar to the American auto industry. They don't know what people want, so they produce almost anything, hoping that the one or two hits will offset the multitude of misses. It's very costly and inefficient. We know this, yet we are at the mercy of those who think it actually costs that much to produce a given book. We know that a hardcover doesn't cost much more than a paperback, yet we are at the mercy of those who think they really are that much more expensive. Pay the author and bookstore a fair price: no one is going to challenge that, but it's up to the publisher to manage its own finances in a responsible manner. Don't make the readers pay for the publisher's incompetence and inefficiencies. If a publisher can't do this, perhaps it's time for a change of management.

Most individuals like to be viewed as intelligent, cultured, and sophisticated. And what better way to show you appreciate something than to throw a lot of money at it, right? Right? Money exists to pay the bills, not as a measure of your sophistication. This is the benchmark to determine pretentiousness and gullibility. Two people can read the same book. One person can put it down and say, "That was a good book. I'd pay $20 for that--it was that good." The other one can put it down and say, "That was a good book. I'd pay a fair price so that the author, publisher (if there is one), and seller can make a profit on it and keep on producing more." One of these two would, no doubt, look at the other and accuse him or her of lacking appreciation for the art--or, worse, of being cheap. Yet, they both enjoyed it and understood it equally. It's just that one is more pretentious and needs to flaunt the money aspect to prove it. That person is also more gullible as they obviously lack any understanding of the mismanaged publishing industry.

This can be applied to almost any industry or art where there is the perception of sophistication. Beware of people who are trying to push sophistication and appreciation as the reason to raise prices, as they are pretentious. Most good-quality things don't really cost as much as the producers would have the public believe, it's usually ego that drives their marketing campaign. If you think the publishing industry is bad for this, take a look at the pretentiousness in the specialty coffee industry--or the wine industry, for that matter. A coffee can cost a very reasonable price for the farmer to produce, but there are some roasters who want to market it as some sort of profound drinking experience, worthy of $10/cup. People who dare mention the relative cheapness of the production cost are ridiculed as being cheap, unappreciative, pedestrian, and having an unsophisticated palate. Only the truly "appreciative" understand and are willing to throw a lot of money at it, right? Right?

This is one of the most disgusting and disappointing aspects of human nature.

[leebase]

Originally Posted by GA Russell

Lee, in post #53 you quote Maggie, but incorrectly attribute the statement to me.

My bad, sorry. Copy-pastus-interuptus.

Lee

[leebase]

Originally Posted by SensualPoet

Ola! The future is here already. The most recent APA stats showed a decline in hard cover sales and a drastic uptick in ebooks

Paper book sales have been declining for some time. I was speaking of ebook sales which kept on rising even after the price hikes on ebooks.

Lee

[leebase]

Originally Posted by abookreader

No. In a true market economy the people paying the most do not set the price and the people demanding the cheapest do not set the price. What sets the price is profit maximization .... and it isn't even that simple. Some businesses attempt to maximize profit over long terms (years) and some care only about the current quarter.

It's never set by those who don't value the product. I obviously didn't mean the one guy willing to buy a book for $1000 sets the price. But given that millions of books sell for more than $20 lets us know that the mass market price for new works is -- $20 or more.

And it's "willing to pay" that sets the price -- not "how much it costs to make". If we move this debate to "what are people willing to pay" from "what does it cost to create an ebook" -- I will consider it a victory.

Folks who think the successful mass market price for new release hard backs is just too outrageous to even be considered -- do not matter to the publishers. Didn't matter before, don't matter now.

Lee

[leebase]

Originally Posted by SlowRain

A coffee can cost a very reasonable price for the farmer to produce, but there are some roasters who want to market it as some sort of profound drinking experience, worthy of $10/cup.

You got it. The guy who wants to, and CAN, sell a $10 cup of coffee couldn't care less that there are 100 million folks who don't want to pay that much for coffee. Drink your folgers in the smug knowledge that you aren't a pretentious effete $10/cup coffee drinker.

But what we have in this scenario, are folks who are demanding to have the $10/cup for $1. Why won't those produces sell THAT product for the price they demand?

Why? Cuz they have a few million folks willing to pay that $10/cup price. Those are the customers that matter to them.

Everyone else can drink Folgers.

Lee

[SlowRain]

No mention of Folgers was made. Good coffee doesn't cost anywhere near $10/cup for those who know about coffee pricing. It doesn't cost the farmer anywhere near that to grow a crop, harvest the beans, and have the beans processed. Bulk shipping isn't that much, either. Roasting isn't that costly, either. It's just that the industry wants customers to think it all costs that much. They usually make Folgers/Taster's Choice/Maxwell House quips to show how unsophisticated people's palates are. I wasn't referring to Folgers at all. There are plenty of places out there selling good coffee at decent prices. And there are plenty of pretentious places out there trying to convince people to pay a lot more for something that, in effect, doesn't cost much more to produce.

Now, leave Folgers et al out of the equation. They don't enter into it at all. We're talking good-quality, freshly roasted coffee here. It's about the presentation and pretentiousness of two things that are almost identical--one just has an elitist spin to raise the price.

The ironic thing is that most farmers and most writers are pretty down-to-earth people. They usually want to make a decent living and do what they love, unlike many professions I can think of. It's the importers, roasters and coffee shops that want to turn coffee into something pretentious. Likewise, it's the agents and publishers that want to create a similar effect in the publishing industry. Why is that, do you think? Because they, not the farmer or the writer, benefit directly from the snobbery associated with the sophistication of high pricing. They benefit financially from calling it "art" and ridiculing those who don't want to pay exorbitant prices. If they can create a sense of sophistication, it's easier to manipulate the readers.

Like I said, disgusting human nature. And it works on the gullible.

[leebase]

Originally Posted by SlowRain

No mention of Folgers was made. Good coffee doesn't cost anywhere near $10/cup for those who know about coffee pricing.

It doesn't matter. Pricing is tied to what the market will pay -- NOT -- what something costs to make.

Books are not an exact analog to coffee. No one who wants to read a Stephen King novel will switch to a romance novel just because it's cheaper.

Folks will swear they won't pay more than xyz for a book until their favorite author puts out a book in their favorite series.

Again, speaking only of that set of people that will pay $20 and more for a book in the first place. The rest of the folks -- just don't matter. That's me in the "don't matter" pile, btw. The few hard back books I've ever been motivated to buy don't really matter. I'm a paper back book kinda guy.

How about water? How on earth does a bottle of water cost as much as a bottle of soda? But people BUY the stuff. Frankly, soda itself is absurdly expensive relative to the cost of the ingredients. They guy at the 7-Eleven could care less what _I_ think the cost of a bottle of water should be when he sells water all day long to people willing to pay the price he puts on it.

And I do buy the occasional bottle of water myself. I may not think it SHOULD cost what it does, but I'm thirsty and would rather have water than a soda.

Lee

[SlowRain]

Originally Posted by leebase

It doesn't matter. Pricing is tied to what the market will pay -- NOT -- what something costs to make.

I'd say pricing is more tied to what the marketing agencies can convince the gullible to pay for it. If there are enough gullible, the price stays high. If not, or if there is competition for the exact same product (ie. public-domain authors), the price will come down. So long as they can play the "art" and sophistication cards, the gullible will be more easily enticed. Or, if they can lie about costs or keep people in the dark about them, even better.

[Worldwalker]

Originally Posted by leebase

The people willing to pay the most, set the market, not the folks who say "that's too much".

Wrong.

Let's take, as a hypothetical example, some ebook which is sold for $1,000. Exactly one person is willing to buy it for that price. So does that one person set the price?

In that same market, there are 500 people who are willing to pay $10 for the book. If the publisher sold it for $1,000, he'd make $1000; if he sold it for $10, he'd make $5,000. Are you saying that he should sell it for $1,000 because that person is willing to pay the most?

It's not the person who pays the most that matters. It's the market segment that, collectively, nets the most profit that matters. That's the number of buyers times the profit per book. And that rarely involves only the people who are willing to pay the most. That one guy may pay 100x what the other 499 would for our hypothetical ebook, but there's only one of him. He, in fact, is the one who doesn't matter.

The only thing that matters is the total profit a publisher can make on a book. That's what the publishers are forgetting. They're looking at the problem in detail terms: how can we keep ebooks from cutting into the sales of our hardcovers? They're looking at the segments individually. They're studying the trees, as it were, and ignoring the forest. And it's the forest that matters: the total income a publisher can derive from that book. Some of them have figured that out. They sell me (and a lot of other people) ebooks. The cabal hasn't figured that out yet, or maybe they have, but they think they can push a rope anyway. They're making a short-term trade, using short-term thinking, and it's going to bite them in the end.