Interesting article on book pricing and why it might rise

[DMcCunney]

Originally Posted by hgwlackey

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.

For major trade houses, bestsellers may well make the difference between showing a profit and having a loss on the year. There are smaller specialty imprints that are unlikely to have best sellers, but chances are they have a much more narrowly defined focus and higher prices on titles they publish.

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.

Getting good books out there isn't the problem. Reaching the audience for any particular title to let them know it exists and might be something they would like to buy and read is the challenge for anyone trying to do it. It doesn't matter how good the book is if nobody buys it, and if you're a publisher trying to stay in business and make a living issuing good books, if nobody buys it, you might be out of business.
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Dennis

[DMcCunney]

Originally Posted by ficbot

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.

What has hardback vs paperback to do with the question?

As it happens, I do buy hardcover fiction. So do a lot of other folks, which is why the New York Times has a Fiction as well as a Non-fiction hardcover best seller list.

But my original suggestion was the ebooks would cannibalize mass market PB editions. This simply meant that an increasing number of folks would buy the ebook instead of the PB, to the point where it was no longer economic to produce the MMPB edition, as no one would buy it.

You're one of the folks that buys the ebook instead. The fact that you will flatly refuse to buy a print edition, and will do without if the book isn't available as an ebook is irrelevant to the question. From where I sit, ebooks have cannibalized the MMPB editions in your case, as you no longer buy paperbacks.
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Dennis

[DMcCunney]

Originally Posted by Sonist

Certainly not all mergers or acquisitions are successful, regardless of what the bankers tell you. This is a problem for the acquirers, and they are trying to make it a problem for the consumer.

Oh, absolutely. Those combinations are starting to unravel, witness TimeWarner selling Warner Books to Hachette, who relaunched it as Grand Central Publishing. TW discovered that the synergies were less easy to achieve than they might have thought (and had previously found that out the hard way when they were AOL TimeWarner, and tried to integrate online and print publishing assets.)

The acquirers are trying to survive. Publishing has been consolidating for decades, and acquisition of book publishers by multi-media conglomerates seeing synergies in having all forms of content under one umbrella is only the latest phase.

That's what I've been trying to tell you. There is a price point at which there will be a happy price medium between sales and profit.

I agree. But I suspect I think that "happy medium" is higher than you do. You're thinking in terms of the price you would like to pay. I'm thinking of the price the publisher might have to charge to do it at all, and suspecting that price may be higher than your preferred target. Then what?

Push the price higher than that medium and sales and profits drop, and piracy increases.

And the question is what that medium is.

Methinks ebooks are not worth as much as hard covers (and not even as much as mass market paperbacks), because of DRM and the current poor quality of presentation. And I think there are a lot like me out there.

There are, and I largely agree.

Not necessarily true for all. I personally buy hard covers because I much prefer reading a well-laid out book, which I can keep forever on my bookshelf. Again, I am not the only one -- just look at all the classics being re-released in hard cover.

I do the same, and have been gradually replacing MMPB editions with hardcovers to have durable reading copies.

The bottom line is, the technology has changed, and so the business model must change.

It doesn't matter how much publishers whine, they have to either adapt or perish.

I don't think publishing is dead, but some of today's large players will be. A few will adapt, and there will be a consolidation of the small epublishers in a few years.

The large players won't go down that easily. When you are units of multi-billion dollar corporations, you don't simply cease to exist. You may well transform.

And yes, I expect consolidation among ePublishers, too.

That's how business has always worked, and I don't see it changing because you or a few publishers don't like it.

It's not a question of what I like.

The fundamental underlying question in this discussion is "What should the price of an ebook be?", with the general opinion being "low" - certainly lower than the price of a hardcover, and preferably lower than the price of a mass market paperback.

My question is different: "What does the price of an ebook have to be, to let a publisher do it and make money on it?"

The answer to that question will vary depending upon the publisher and the book, but for reasons I've tried to discuss, I suspect it might be higher than a lot of folks will like.
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Dennis

[DMcCunney]

Originally Posted by Fbone

I agree with this. The publishing industry is already fragmenting into hundreds (literally) of indie and self-publishing entities. How can this be healthy for the industry? Unless most are hobbies and short-term interests.

Some are hobbies and short-term interests. Others, I fear, are born of wishful thinking, and reality will make its presence known soon enough.

There's an extensive discussion elsewhere on self-publishing. I have a simple take on it. If you just want to write and have your book(s) out there for people to read, and your satisfaction is in having the finished product with full control over the process, self-publishing is an appropriate route to follow. If you want to make any real money writing, it isn't.

Most folks self-publishing are making beer money if that. The few likely to do better have already developed an audience that will buy their work through being traditionally published and achieving success.
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Dennis

[DMcCunney]

Originally Posted by Polyglot27

Now, if an ebook version of a book is discounted after a certain period of time has elapsed after the first edition, the publisher would not be losing money but would have the advantage of retaining control of the title. The reader would not have to buy second hand copies where the publisher does not get anything, but buy the electronic version since there will be no mailing costs and the download is instantaneous. The advantage to users is that a book will never have to go out of print or out of stock.
All this is maybe just more wishful thinking.

No, it isn't, and something like what you suggest is likely to occur.

Right now, a book may see a hardcover edition first, then, after a year, a mass market PB. The delay is to keep the cheaper PB edition from competing with the HC. If reading the book now, and/or having the durable larger format is sufficiently important to you, you buy the hardcover. If price is more important, and you're willing to wait, you buy the PB.

Ebooks add a possibility to the mix: instead of buying the PB, you buy eBook edition. The question is what price you pay.

You will not see eBook editions offered simultaneously with the hardcover at MMPB prices, for reasons that ought to be obvious. If a publisher releases an eBook edition at the same time as the hardcover, you can assume it will carry a higher price than an MMPB edition. You are paying a premium for early access, because you do want to read the book now, and since you probably buying the eBook instead of the hardcover, the publisher will want to charge a price that will yield a comparable amount of revenue and profit.

If the eBook is issued to coincide with the MMPB edition, a price comparable to the MMPB is likely. One thing I think may occur is that existing eBook editions released simultaneously with the hardcover will be repriced when the paperback is issued.

There are a fair number of complaints when that isn't the case, and some publishers have a wishful thinking idea of how much they'll be able to charge for eBooks competing with MMPBs. Ultimately, I think they'll be forced to rethink their notions.

One thing I do not think will happen is eBooks issued by any major trade publisher at prices significantly less than the corresponding MMPB. I don't believe they can do that, as they simply can't price below cost and expect to stay in business.
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Dennis

[DMcCunney]

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.

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.

We might, though I doubt it.

One interesting experiment along those lines is Carina Press, an eBook only imprint of Harlequin, the romance behemoth. Carina is "shared risk". To keep costs low, they don't offer advances, but give a higher than usual royalty. Most of the work of editing and production is done by freelance contractors, reducing overhead. And the carrot is that successful Carina releases might be picked up by Harlequin for print editions.

A friend who has been an executive editor at a trade house and is currently a freelance writer was doing editing for them for a while. She recently resigned, after discovering she didn't miss editing as much as she thought she did. Actually, she does miss it, but what she really misses is the process of working to make a good manuscript better. She wasn't seeing good manuscripts at Carina. Because they didn't pay advances, what came over the transom was stuff established writers couldn't place elsewhere, and all the stuff from newer writers that populates any publisher's slush pile. She did see two titles that got snapped up for print editions, but not by Harlequin. (IIRC, one went to Pocket Books, and the other to Berkeley.)

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?

Publishers are herd animals.

The enormous success of Steven King largely created the Horror genre, and publishers realized there was a market for that sort of fiction and rushed to create imprints focused on it. It was classic boom and bust, with some of those imprints no longer around, and many horror writers no longer selling. If you aren't Steven King, Dean R. Koontz, Clive Barker or the like, good luck in finding an audience.

Stephanie Meyer's enormous success with Twilight has done something similar for Vampire fiction. Publishers see that success, and hope to tap into it.

They decide it's what readers want to buy because readers are buying it and it's hitting the best seller lists. Is it any surprise other publishers should try to get a piece of the action?

I'm not tired of it because it's not something I read in the first place, and don't care how much is published. The question is when the audience for it will tire of it.
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Dennis

[DMcCunney]

Originally Posted by Barcey

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.

Amazon did briefly lower the price of some current titles to $7.99, as part of their tussle with the Agency Model folks.

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.

Because that was what people were accustomed to from Amazon.

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.

Amazon conditioned the market to a defacto $9.99 price point via their Kindle editions. They didn't demonstrate what it had to be - they generated an expectation among the readers that that was what it should be.

That was a major issue for the publishers, and the Agency Model is in large part an attempt by publishers to reestablish control over pricing. I'd call the jury still out on whether it is working. Amazon trumpets the higher sales of books that carry their default $9.99 price tag, but that's not conclusive. What we don't know is whether enough people are buying eBooks from Amazon at the Agency Model pricing to meet the publisher's revenue and profit targets. If they are, the Agency Model won't go way. The publishers are betting that people want the books badly enough to pay the higher price. Many will. The question is how many.
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Dennis

[Barcey]

I'm sorry but I don't believe that Amazon conditioned the market. I believe they set a price that their market research showed the market would accept. The consumer reaction just reinforces it.

[Barcey]

Originally Posted by ficbot

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.

No, I understood what you were saying. The "cannibalization" is a simple marketing categorisation though and has nothing to do with your personal decision. Before ebooks you had a choice of hard cover, trade, or paper back. Now there is a new category called ebooks that is going to take sales from all of those categories.

I agree with you that it doesn't matter. It's going to steal sales from all paper editions and if priced correctly generate more sales. I was personally spending my same book budget on ebooks as paper editions so I was buying more then I was reading (and didn't care). The publishers were making a higher profit off of me and would have continued to. Instead they pissed me off and I stopped purchasing completely. Not everyone is going to react that way but the general trend will be to purchase less.

What matters is trying to understand your customer, listen to them and give them what they want so they'll continue to purchase. Trying to play puppet master with your customers doesn't work.

[Lemurion]

I think the problem is that many people want two things for ebooks:

They want the same release date as hardcover.

They want the same pricing as paperback.

I think the majority of publishers are more than willing to provide these things: Just not simultaneously, and that's the problem.

[DMcCunney]

Originally Posted by Barcey

I'm sorry but I don't believe that Amazon conditioned the market. I believe they set a price that their market research showed the market would accept. The consumer reaction just reinforces it.

Same difference. While there was probably market research, $9.99 is one of those "magic numbers". We think in terms of tens, and $9.99 is just below the point where it becomes $10. It's no surprise Amazon chose that price.

But meanwhile, Amazon set the example. Because they set the price at $9.99, other ebook retailers are between the rock and the hard place. Since Amazon carries pretty much everything, why should a buyer go elsewhere, when they can get it cheaper at Amazon? Of course, they need a Kindle or Kindle app to purchase and read them, and they are locked in to Amazon as the vendor by Amazon's DRM. That's the point of Amazon's exercise: become the default ebook vendor, with everybody buying ebooks from them.

If Amazon had chosen, say, $11.99 as the default price, that's what people would think of as the default price and expect to see.

The issue it presents for publishers is the expectation that ebooks issued at the same time as the hardcover should carry that price. The Agency Model was a direct response to the issue.
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Dennis

[DMcCunney]

Originally Posted by Lemurion

I think the problem is that many people want two things for ebooks:

They want the same release date as hardcover.

They want the same pricing as paperback.

I think the majority of publishers are more than willing to provide these things: Just not simultaneously, and that's the problem.

Exactly.

If you want the ebook at the hardcover release date, expect to pay a premium. If you want the ebook at the PB price, expect to wait for it, just like you would wait for the PB, and for the same reasons.
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Dennis

[Harmon]

Originally Posted by Snibborg

I am afraid we are in the situation now that the record industry was in in 1999 and it seems the book publishers are destined to make the same mistakes.

By hiking the price of ebooks more people will start downloading. One famous Torrent site already has a top 100 downloaded ebooks list. Add into that a small software package that converts ebooks to whatever format you want and you are just waiting for it to happen.

I can hear the wailing and gnashing of teeth already. You ain't seen nothing yet.

As Amazon demonstrates, once a customer has figured out how to easily acquire an acceptable product from a site, he or she tends to go back to that site to get more of that product.

It seems to me that the publishers and sellers think that they are engaged in establishing captive markets for their respective EBRs and ebooks. But maybe what they are doing is teaching a significant number of their customers to learn how to acquire ebooks from someone else, at which point it will be difficult to lure them back.

It makes me wonder if Amazon might not, at some point in the next couple of years, do what Apple did, and drop DRM from some of their ebooks. Their pricing is generally the lowest anyway, and they have the best ebook purchase & delivery system. It just might suck up a lot of their competition's customers...

[DMcCunney]

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?

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

It's only extortion if you're forced to pay it. In this case, you aren't. Don't like the price? Don't buy. Whether having the book is important enough to you to pay the higher price is your decision.
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Dennis

[Fbone]

Originally Posted by DMcCunney

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.

Dennis

Before the Kindle did many people really buy their books online from Amazon? Was it because of the selection? The prices? The convenience?

For me personally I never have. I could usually find them cheaper locally or borrow from library.