Interesting article on book pricing and why it might rise

[Barcey]

Originally Posted by leebase

The publishers were responding to a rogue client, Amazon, who was selling the entire best seller's list at a loss in order to dominate the market. It was not in the publisher's best interest for this to continue.

They gave Amazon a choice. Either allow the publishers pricing power -- or -- Amazon would not be able to sell ebooks until LATER -- exactly the way paper back editions are handled. You wanna sell our books at paper back prices? Fine, then we'll only allow you to sell them during the paper back time window.

Why did Amazon choose to give up pricing power? Because Amazon knew that people, the new hard back book people (the one's who matter), would happily buy ebooks at $12.99 - $14.99 which is several dollars cheaper than the hard back books. If Amazon wasn't selling those books, then Apple and B&N would putting Amazon at a competitive disadvantage.

And we can see that for the most part, ebooks have indeed tracked paper versions. New ebooks start higher, ebooks where there is a paper back already out, are priced lower. Yes, there are exceptions, but they are exceptions.

The reality is that ebooks are cheaper than paper books and that the "paper back price" comes to ebooks if you just WAIT -- like paper back book buyers always have.

Those who want paper back prices on new release books -- just don't matter. Really. Never have.

Lee

Amazon was not the only one that was selling best sellers for $9.99. The other sites were as well. I didn't see Amazon lower the price below $9.99 to respond.

Kobo had a presentation where they showed sales volumes at different price point and it clearly showed that the most volume was moving at the $10 price point.

This wasn't about Amazon trying to dominate the market by selling below cost. It was about Amazon demonstrating what the price point had to be and they were willing to take a temporary loss to show the publishers their price had to drop.

[tompe]

Originally Posted by Barcey

This wasn't about Amazon trying to dominate the market by selling below cost. It was about Amazon demonstrating what the price point had to be and they were willing to take a temporary loss to show the publishers their price had to drop.

Had to be? Who decide that?

Yes, as you say they tried to use their size to extort the publishers to lower the price regardless of the consequences for the readers and writers. Luckily enough some publishers are fighting back.

[Sil_liS]

Originally Posted by tompe

Yes, as you say they tried to use their size to extort the publishers to lower the price regardless of the consequences for the readers and writers. Luckily enough some publishers are fighting back.

What consequences? And the point was that more books were sold at a lower price. The publishers keep saying that there is no proof that if the ebooks have a lower price more people would buy them, and that was proven. How is this extortion?

From here:
Definition of EXTORTION
1
: the act or practice of extorting especially money or other property; especially : the offense committed by an official engaging in such practice
2
: something extorted; especially : a gross overcharge

[Sil_liS]

Originally Posted by Barcey

Exactly, they've introduced a new product (ebook version). You previously would have bought a paper edition but now you have an alternate edition and you're not buying paper any more.

That is not what ficbot said. He said that he wouldn't have bought the paper version anyway.

[tompe]

Originally Posted by Sil_liS

What consequences? And the point was that more books were sold at a lower price. The publishers keep saying that there is no proof that if the ebooks have a lower price more people would buy them, and that was proven. How is this extortion?

The loss of the income from the best selling hardcovers will lead to less possibility of finding new and extremely good authors. A big thing if you as a reader prefer very good books and do not want to read OK or mediocre books.

[Sil_liS]

Originally Posted by tompe

The loss of the income from the best selling hardcovers will lead to less possibility of finding new and extremely good authors. A big thing if you as a reader prefer very good books and do not want to read OK or mediocre books.

This is the same kind of argument that can exist between hardcovers and paperbacks. The sales aren't lost, they are just exchanged for a different version of the same product First we had only hardcovers, then we had hardcovers and paperbacks, and now we have ebooks as well.

And it actually increases the chances of finding good writers. We could evolve into a system where the author posts the first chapter and the book only gets published if a certain number of people like what they read.

Aren't you getting tired of all the vampire fiction out there, which is the result of the publishers deciding that this is what the readers want to buy?

[Blue Tyson]

Originally Posted by tompe

The loss of the income from the best selling hardcovers will lead to less possibility of finding new and extremely good authors. A big thing if you as a reader prefer very good books and do not want to read OK or mediocre books.

You mean they will stop publishing stuff by great writers like Paris Hilton and Sarah Palin?

[tompe]

Originally Posted by Blue Tyson

You mean they will stop publishing stuff by great writers like Paris Hilton and Sarah Palin?

No, since these are bestsellers they are need to get resources to find new good books.

[tompe]

Originally Posted by Sil_liS

This is the same kind of argument that can exist between hardcovers and paperbacks. The sales aren't lost, they are just exchanged for a different version of the same product First we had only hardcovers, then we had hardcovers and paperbacks, and now we have ebooks as well.

That is perfectly OK if the ebook is not sold at the same time as the hardcover. I thought you said that the ebook was a replacement for hardback but maybe I misunderstood.

[ficbot]

Originally Posted by Barcey

Exactly, they've introduced a new product (ebook version). You previously would have bought a paper edition but now you have an alternate edition and you're not buying paper any more.

NO. You are not reading what I said. I am saying I did NOT buy the paper version. In the old days, I would wait for the paperback or get from the library or used book store. I have never bought hardback fiction in my life. I would NOT previously have bought the paper version, will not buy it now, and the only way they will get a sale out of me is to sell me an ebook. It's not a question of not buying the paper 'anymore.' It's a question of now buying something when previously I would have bought NOTHING AT ALL. That is NOT cannibalization.

[Pookeysgirl]

Originally Posted by Blue Tyson

You mean they will stop publishing stuff by great writers like Paris Hilton and Sarah Palin?

[Sil_liS]

Originally Posted by tompe

That is perfectly OK if the ebook is not sold at the same time as the hardcover. I thought you said that the ebook was a replacement for hardback but maybe I misunderstood.

I don't really care about the "at the same time" part of the equation. I buy the book because it looks interesting, not because it is the newest on the market. I haven't bought hardcovers in a while because I don't see hardcovers of books in English in the Netherlands.

The main reason that I think that ebooks are a good idea is because I want to read books that I already have in a different language. This is where the part about the price comes into play. If I buy the same book again, I don't really want to buy it at hardcover prices.

[DMcCunney]

Originally Posted by GlennD

There's a lot of talk about the initial costs of getting a pbook printed and distributed. I think that's missing one of the strongest benefits of ebooks for publishers. With a paper book, when there is a second printing the publisher saves some costs because the editing and typesetting is already complete. But, every new printing has costs for the printing itself and distribution. There are risks involved in deciding how many to print - underprint and you may miss your window of opportunity to sell a hot product, overprint and you have large remainder piles that cost more money to deal with. If you sell out a print run, there are always more costs to get more copies to market. Part of what you're paying for with a pbook is the costs of bearing those risks - the bestsellers help pay for the books that don't sell.

This would be of greater benefit to the publisher if more books had second printings. Most don't. The initial press run is all they see. Yes, there are risks in gauging the size of the press run. But the biggest one, offhand, is returns. The largest part of the cost in printing is setup and makeready - the steps of making the plates from which the job will be printed, mounting the plates on the press, doing test prints to insure proper registration and ink coverage. Once those steps are done, the incremental cost of printing additional copies of whatever it is is small. For additional printings, plates are already made, so that step goes away and only mount and test print are required.

With ebooks, you have to recoup the initial costs of editing/typesetting etc. Once you've met those costs, every additional copy sold is pure gravy. You're going to have copies ready no matter how many you sell. If an author becomes a hot commodity with his third book, you already have ecopies of his previous work available in your ebookstore - no rushing an older book back into print. A brick and mortar bookstore doesn't keep copies of older books because it's expensive to do so. With ebooks an author's entire back catalog are there for no additional costs or risk, for as long as the author and publisher have agreed to keep them there.

A brick and mortar store doesn't keep copies of older books because it probably doesn't have the shelf space to stock them. Having back catalog conveniently available is a major plus for ebooks.

Publishers and authors should be jumping all over ebooks - there's a ton of benefit to keeping large back catalogs in (e)print.

The publishers are certainly aware of ebooks. Their challenge is to integrate producing them into their work flow, create the distribution channels to sell them, and let the audience know they exist. The biggest challenge, from their viewpoint, will be making money on them.

Authors are jumping all over them too, witness the Backlist Ebook thread elsewhere on MR.
______
Dennis

[hgwlackey]

Originally Posted by tompe

No, since these are bestsellers they are need to get resources to find new good books.

Just because bestsellers are, right now, how (some) publishers finance finding (sometimes) good books, it doesn't mean it's the way it always has been and/or the way it always has to be. Things change. Business--maybe not the companies currently at the top of the pile right now, but some companies somewhere--will adapt.

If everyone in the world stopped buying hardcovers tomorrow, the publishing industry would be in a scramble, but once everything shook out, we'd get good books still, if for no other reason than the fact that people exist who care enough about good books to find a way to get them out there.

[DMcCunney]

Originally Posted by Sil_liS

What makes you think that Amazon was selling at a loss? Amazon is already established in functioning online. They are optimized for this. If they get the books 50% off from the publisher and sell them 30% off, they have 20% of the price to cover expenses and make a profit. Plus, the more ebooks they sell, the more kindles they sell.

Selling more Kindles is a minor benefit. What Amazon wants is to sell you ebooks. It's why I was unsurprised when the Kindle app for various platforms arrived. The Kindle was priming the ebook pump.

eBooks are a natural fit for Amazon. As you say, they are optimized for online sales. They are the world's largest catalog retailer. They already have a highly developed infrastructure to display items and take orders. Adding the ability to provide fulfillment via an immediate download was a simple extension of existing capabilities. eBooks don't require warehousing, and distribution is a download from an Amazon server.

Amazon uses a proprietary DRM scheme based on a modified version of MobiPocket DRM. The intent isn't so much preventing piracy as locking you in to Amazon as your vendor. If you want to read a published commercial title protected by DRM with your Kindle or Kindle app, you have to buy it from Amazon. You can side load Mobi format books not protected by DRM and read them, but in general, if you're buying the book, Amazon wants a cut of the sale.

They have pricing and selection sufficient that most Kindle owners don't see vendor lock-in as onerous.

And why would the publishers have a problem with that? If they really didn't want to work with Amazon anymore, they could just stop using Amazon as a retailer.

Oh, really? Amazon is probably the single largest book retailer in the world. A significant part of any publisher's revenue will come from sales through Amazon. You don't simply decide to stop working with them. Depending upon who you are, you may not survive without them.

There was a brief period during the flap that led to the Agency Model when books from publishers who adopted the Agency Model refused to sell books through Amazon - Amazon had raised the stakes by further discounting popular titles to $7.99 from their default $9.99. That didn't last long. There were too many reasons for both sides to reach an agreement and continue doing business.
______
Dennis