Smashwords Moves to Agency Model

[lilac_jive]

Originally Posted by DMSmillie

Thanks for confirming that.

No problem. Had to know for sure

[DMcCunney]

Originally Posted by FizzyWater

If Acme Corp sells a widget for $10 to BigReseller, suggesting a resale price of $20, but BigReseller sells it for $18, Acme still makes its $10. BigReseller is taking a risk, hoping that by losing $2 in an individual widget price, they'll still make more money overall, because more people will by the widgets from BigReseller at $18 than $20.

But BigReseller doesn't have the right to turn around to Acme Corp and say, "hey, I offered a coupon, so I'm only paying you $8 for your widget".

The problem you can encounter is when VeryBigRetailer attempts to dictate terms to Acme Corp.: "Give us the discount we want, or we don't stock your product!"

Depending upon who Acme Corp. is, they may be over a barrel, as they may not be able to survive without VeryBigRetailer's sales, but they also may not be able to survive offering the discount VeryBigRetailer wants. VeryBigRetailer just wants to increase it's market share, and may not care what happens to Acme Corp.
______
Dennis

[Fbone]

From Mark:
Quote:
Jessica, coupons represent a private transaction between you and your reader, and as such, they don't impact your list price or your price at retailers.
[end quote]
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So then Kobo can still offer coupon codes for Smashwords originated material?

[lilac_jive]

Originally Posted by Fbone

From Mark:
Quote:
Jessica, coupons represent a private transaction between you and your reader, and as such, they don't impact your list price or your price at retailers.
[end quote]
-----------------------------------

So then Kobo can still offer coupon codes for Smashwords originated material?

I don't think so, this is only for the book-specific coupons for smashwords books provided by the authors.

[HarryT]

Pretty much all bookstores disallow the use of any form of discount (such as points or loyalty cards) for any book which is subject to agency pricing.

[Fbone]

Originally Posted by lilac_jive

I don't think so, this is only for the book-specific coupons for smashwords books provided by the authors.

Ok, thanks.

I guess it's easy to double check. If a MR member has a Smashwords book on Kobo, (s)he can test Kobo's new 30% off code "dec3us30" for us.

[andrewburt]

Central to the whole question of whether one place charges too much for ebooks is what is a fair price. I've been conducting a survey asking that basic question, with various sub choices (and statistical analysis), over at:

http://critique.org/surv

The results so far have been interesting, and I invite everyone to drop by to take the survey and review the results.

[andrewburt]

Originally Posted by Andrew H.

There is *no way* that Amazon could afford to negotiate separate contracts with thousands of indie authors, many of whom will sell less than 100 books, total. I don't get to negotiate the price I'm paying for books with Amazon, either. If I don't like their price, I'll look elsewhere.

There's an interesting analysis of the problems with the Kindle contract ( http://www.sfwa.org/2009/07/amazon-k...and-annotation ), though they're less about pricing. (Especially since they've now allowed the self-published author to set their own price and get a reasonable 70% of it.)

While Amazon today has, say, 80% of the ebook market, customers will flock to any site in droves that offers a much better experience (e.g. same titles and lower price). Amazon can be a bully, but they ultimately aren't immune to competition. And with ebooks so easy to work with, competition is much easier. (Remember how fast Google displaced Alta Vista, which at the time seemed the unassailable best search engine.) We're just seeing the very earliest days of the ebook market. Lot can change in a short period of time. All of which will probably be better for the reader, on the whole.

[andrewburt]

Originally Posted by Andrew H.

In three years, the US e-book market has gone from way less than 1% of books sold to about 9% of books sold.

And 9% is just the beginning. If you want an idea where it could go -- and I stress this is just "could" -- I did some curve fitting of the AAP's ebook sales datapoints to the standard S-curve that many product adoption rates follow. The data fit the curve very tightly, and where it showed it going was, frankly, pretty astonishing. While I've been saying for ten years that digital books would replace paper somewhere in the 2015-2025 time frame, to see an S-curve showing it happening in the very near future kind of blows my mind.

The analysis, graphs, etc. are at: http://critique.org/blog/?l=20101110212040

[Andrew H.]

Originally Posted by andrewburt

And 9% is just the beginning. If you want an idea where it could go -- and I stress this is just "could" -- I did some curve fitting of the AAP's ebook sales datapoints to the standard S-curve that many product adoption rates follow.

I'm pretty sure that won't happen. Trees don't grow to the sky, and there are still too many barriers to e-book adoption, most notably that you have to buy an expensive device, there is no standard e-book format, and e-books suffer many disadvantages as compared to paper books. Even today, CDs outsell mp3s by a 2-1 margin.

[BearMountainBooks]

Originally Posted by abookreader

I'd appreciate it if somebody could tell me why this would be a thing for authors to cheer over?

I've always been under the impression that Authors were ecstatic when they'd wake up one morning and find out that Amazon had discounted their book.

It's not really. There's something to be said for not being surprised by a price decrease and being able to set the price one wants. The trouble, of course is that when the rules changed with the big guys...the contracts got less friendly for us authors. Amazon used to have sales--and the "difference" in list price came out of Amazon's pocket. With the newer contracts (anything priced $2.99 to $9.99) if Amazon matches a price...it comes out of the author pocket.

Now, I am not complaining because I knew the rules when I signed. Amazon gives me a bigger commission, thus, with that higher commission, any "sale" or "pricematch" comes from my pocket.

Thing thing of it is other retailers knew about the contract too. So they could cut the price--sometimes rather dramatically...and it actually hurt the author more than anyone because all of a sudden, Amazon cut the price (and like it or not, that is where the bulk of the sales came from) and that "sale" came directly from the author cut.

I don't like the agency model, but I understand why smashwords had to play. It was nearly impossible to offer a book to all the vendors and have it sold equally (the vendors would slash the price and then it would either be matched or we'd get complaints...we'd have to constantly be making adjustments.)

I had my way of managing the issue and other authors had their way and it was noodling along.

About the only good news is that when authors set the price, the price is generally low. We can also offer coupons or short term sales. But believe me, it isn't ideal. Neither was the other way because it caused all kinds of turmoil and headaches for the author trying to do the right thing and offer a fair price to everyone!

[andrewburt]

Originally Posted by Andrew H.

I'm pretty sure that won't happen. Trees don't grow to the sky, and there are still too many barriers to e-book adoption, most notably that you have to buy an expensive device, there is no standard e-book format, and e-books suffer many disadvantages as compared to paper books. Even today, CDs outsell mp3s by a 2-1 margin.

It will be interesting to see. There are a lot of tablet computers selling now, and the reading experience on an iPad is amazing. As for inexpensive, I picked up an android-based Pandigital Novel ereader for $80 last month. That's about the price of three hardbacks. (A few minutes work and it was a fully functional android slate.) Many people read on devices they got for other purposes. (I've been reading on my blackberry for ages now.)

epub and mobi are settling out as pretty standard formats, though I wouldn't be surprised if there's only one dominant format in five years (perhaps neither of the above, who knows).

The disadvantages of digital over paper are getting less all the time. I still want a reader device with sheets of (digital) paper I can flip and riffle. While that might seem a distant dream, then I read about a digital paper product that could be brought to market in "3-5 years." As an author, I like to be able to sign books. So I figured out a fairly simple wait to sign ebooks. Some people have said they like having a shelf full of book covers to look at, but one could easily imagine a screen hung on the wall displaying those too, if that's what's important to you. The uniqueness properties of paper books are getting fewer, and they may not ultimately matter to people as much as the pros of digital books outweigh their cons.

As for CDs vs. MP3s, I think the more apt comparison is LP vs. CD/MP3. Also, CD vs. MP3 numbers are frought with precision issues as to what exactly is being measured. Another example would be VHS being overtaken by DVD sales (which took a mere three years).

It will sure be interesting to see. I'll be pretty surprised, actually, if paper book reading is very common by, say, 2025. (To be conservative.)

[BearMountainBooks]

Originally Posted by hgwlackey

If coupons codes can still be used on the books, not just on Smashwords but Kobo, too, where I do most of the emptying of my wallet, I'm good with this. That's the biggest complaint I have about the agency five, the restriction against coupons.

I don't know if the standard Kobo coupons work. I *think* they are supposed to because a coupon is not a discount on the list price (a mark-down.) I see others had this question too and I'm as interested as anyone in the answer.

I know Smashwords coupons work because those are not "sales" and they don't change the list price.

Some of this is bound to sort itself out at some point. Meanwhile--I can tell you that as an author, it hasn't been a lot of fun with vendors something lowering the price of books by a lot and then sometimes there was matching and sometimes not...and we had emails and changes in revenue streams and complaints...

[BearMountainBooks]

Originally Posted by rhadin

A lot of Smashwords titles were priced under the $2.99 floor that Amazon imposes for the 70% author cut. I expect that we will see a sharp increase in pricing to that $2.99 floor. And when it comes about, we can all send Amazon thank yous for taking the first step to raise ebook prices as it exercises its increasing market power.

I'm not really seeing this. In fact, a lot of authors are lowering their price to 99 cents again because the low price can really rocket sales. Some of those sales may only last through the Christmas selling season, but I have noticed a rather larger number of authors who tried $2.99 deciding they could actually sel more at 99 cents and make almost the same amount of money.

The key, I think, is that one single model doesn't work for everyone. With so many people with different goals, I think the pricing structure will continue to be varied.

[BearMountainBooks]

Originally Posted by Fbone

Ok, thanks.

I guess it's easy to double check. If a MR member has a Smashwords book on Kobo, (s)he can test Kobo's new 30% off code "dec3us30" for us.

When Under Witch Moon goes live at Kobo, I can try testing that coupon. But I don't know when that will be. It's been "shipped" but hasn't appeared yet. Hopefully soon.