Random House adopts agency pricing March 1st

[kennyc]

Originally Posted by Logseman

Curious... so the revenue stream of popular (aka well-bought) titles is seemingly correlative to the degree to which it is pirated.

So the more pirating, the more sales! Yea!!!!

[JSWolf]

Originally Posted by CleverClothe

Given the price hikes by RH today, you are proved wrong. The publishers themselves acknowledged that the Agency pricing will often mean a smaller cut for the publisher.

If the publishers are saying that the agency model will give them a smaller cut, then why are they doing it? It's not good for the consumers, it's not good for the authors, it's not good for the eBook stores that sell the agency eBooks and the publishers are admitting it's not good for them. So who actually is the agency model good for? To me is sounds like it is not good for anyone.

What we need is for authors to say NO to the agency model when it comes time to sign the contract and make sure that is in the contract. Imagine what would happen is say Stephen King went to another publisher because the one he is with won't give in on NO agency model. Say Dan Brown has another book and wants nothing to do with the agency model. The authors who are well established have the power to do what's right for their readers. I just hope they will.

[JSWolf]

Originally Posted by faithbw

If there was agency pricing of pbooks then maybe that would help the few independent and chain bookstores left.

Are you trying to kill off reading?

[ApK]

Originally Posted by kennyc

So the more pirating, the more sales! Yea!!!!

Hehe. That is the battle cry of many self-deluding copyright violators.
All the statistics types in chorus please: Correlation doesn't mean causation!

[JSWolf]

Originally Posted by Kali Yuga

I'm saying that while it is true that some ebooks are more expensive, others are at the same price as before.

The statement "agency pricing = more expensive" indicates that there is an across-the-board price increase, which is simply not the case.

Thus it is partly true that agency priced books are more expensive. I am not saying that the statement is "false," or "wildly outrageous," or that "no prices changed," or "all prices went down," or "Random House gives out free puppies with every download." I'm saying that the perception exaggerates the impact of the price increases, and is thus moderately inaccurate.

I think you missed the boat and are now standing on the dock watching the boat sail away.

Prices went up big time. Prices even went up on eBooks where prices went down. Let's use Fictionwise as they used to be pre-agency. We got sales, we got discounts, we got credit towards other eBooks. We had the buywise club. Basically, we had a good thing going. We had a way to take prices and lower them and then find them acceptable and buy. It's not about the price listed for an eBook, it's the price we actually pay. On average, we payed less then we do now under the agency disaster. We got a fair deal overall. Now we've just lost CybeRead and Fictionwise is a ghost of what it was.

Face it, prices have gone up way way more then they've gone down. And when you look at the cost of eBooks as a whole, they've gone up. I don't think many if any are buying your "prices have gone down" routine. It doesn't fly in the face of reality.

[JSWolf]

Originally Posted by kennyc

So the more pirating, the more sales! Yea!!!!

That was the case when Napster first came out. Sales of CDs rose 6%. So what did the RIAA do? They got Napster shut down when what Napster was doing was helping the RIAA.

Now picture this.. you go digging around the darknet and find an eBook of an author or series you've wanted to try. So you download it and read it and enjoy it. Now you go back looking for more but more isn't there. So you go buy.

Take the eBook scenario and let's do it with the new agency model. So you go to the library and borrow the pBook and don't buy cause eBook prices are too high.

[Kali Yuga]

Originally Posted by Logseman

Curious... so the revenue stream of popular (aka well-bought) titles is seemingly correlative to the degree to which it is pirated.

Heh.... Well, this is yet another example of why "correlation does not prove causation."

Basically, the more popular it is, the more people will want it, the more it happens to get pirated. The effects on revenues, well, let's just say that is fodder for many a debate.

[ApK]

Originally Posted by Kali Yuga

Heh.... Well, this is yet another example of why "correlation does not prove causation."

Your timing is off. I asked for a chorus.

[Marseille]

Originally Posted by JSWolf

If the publishers are saying that the agency model will give them a smaller cut, then why are they doing it?

Aside from the fact that they were afraid of Amazon becoming too big and having too much negotiating power, the move gives publishers increasing amounts of control relative to consumers as well, and with that control, they can control their investment risk using long established tools and forecasting mechanisms. Windows for releases aren't good for business either (hardcover to paperback, Theater to DVD to streaming to tv), but they probably do have benefits with regards to predictability and risk control and they are definitely comfortable territory for content producers. Inertia is a powerful thing.

Before agency pricing we had a great market system in ebooks whereby there was strong voice for producers in publishers and a strong voice for consumers in retailers -- they wrangled and ultimately the resulting market had a sense of perspective and worked effectively. Agency cut off the consumer voice, and now everyone will suffer (at least until the particular retailer that stabbed consumers in the back is capable of turning around and stabbing publishers in the back too), but only as compared to what WOULD HAVE been if agency didn't happen. This lets anyone basically ignore the lost revenue -- it isn't as if there's a major non-agency cabal of publishers demonstrating the old model results in better profits. The move also slows down the digital revolution that content producers of every kind are afraid of and protects the familiar analog forms that they are comfortable with and understand better.

[Joykins]

Originally Posted by kennyc

So the more pirating, the more sales! Yea!!!!

I read a preliminary study on this and the general conclusion was that pirating raised the sales of midlist authors but cut into sales of bestselling authors, which makes sense because I'd think any surge in sales would be due to exposure to readers who hadn't tried the authors before, and bestselling authors already have that. In that case, piracy could be viewed as a playing a similar role to library loans.

FTR I have never intentionally downloaded anything illegally. I do haunt the freebies list though

As for Agency pricing--I mostly buy backlist and midlist and romance and I don't usually find the pricing too high for the traffic to bear under Agency, as these are relatively cheap and Hqn isn't Agency--but I support the right of a retailer to discount, which Agency prevents. I can't even use a farking coupon. And there are, I admit, some books I would willingly pay $5-6 for but wouldn't pay $14.99 for. I put those on my "get from library" list.

[Kali Yuga]

Originally Posted by JSWolf

I think you missed the boat and are now standing on the dock watching the boat sail away.

Oh? So, I'm just imagining how ebook sales are continuing to rise, that Amazon is selling more ebooks than hardcovers and more ebooks than paper books, and that $10 is still a fairly common price point? Yes, clearly I'm left out in the cold.

I might add, my habits haven't changed that much. In fact, most of the ebooks I wound up purchasing that were over $10 were not agency priced. I don't suppose you have an explanation for that situation?

Originally Posted by JSWolf

Prices went up big time.

Yes, some prices did go up. However, the publishers seem to have done what they said they would. New ebooks are $12-$14, with a small price cut for NYT Best Sellers; when the paperback comes out, the prices fall from $6-$10. There are no more delays in ebook availability. Ebook market share is rather unclear, but it does appear that there is robust, if not fierce, competition between at least four major retailers in the US (Amazon, Apple, B&N, Kobo, Sony).

Yeah, sounds like a total nightmare to me.

Originally Posted by JSWolf

Let's use Fictionwise as they used to be pre-agency. We got sales, we got discounts, we got credit towards other eBooks. We had the buywise club. Basically, we had a good thing going....

Yes, but did you have a sustainable thing?

Fictionwise was private and did not, as far as I can tell, release financial information, and they sold out to B&N for $15 million. The "heavy discounting" tactic didn't help Borders, and it effects on Fictionwise's bottom line is unknown. Was it ruined by agency pricing, or by B&N's neglect, which may well have been intentional? They supposedly sold around 7.5 million ebooks between 2000 and late 2009 -- whilst Apple brags about 100 million ebook downloads in about a year.

It's rather common when a transition like this is under way for screaming deals to appear -- and then flame out. Those of us who lived through the dot com madness saw it, ranging from huge flameouts (Kozmo's free delivery) to businesses that only survived by toning down their huge deals (e.g. eMusic going from a $10/month unlimited downloads to 40 downloads per month).

Your guess on whether Fictionwise could have survived on its earlier terms are as good as mine, though I suspect your answer is "yes" and mine is "no."

Originally Posted by JSWolf

Face it, prices have gone up way way more then they've gone down. And when you look at the cost of eBooks as a whole, they've gone up. I don't think many if any are buying your "prices have gone down" routine. It doesn't fly in the face of reality.

And just so we're clear on this, you are basing this on what exactly? Sales data? Total ebook revenues? A detailed industry analysis of price-per-unit? A full comparison of pricing for all the ebook retailers, pre- and post-agency pricing?

No, you're basically just saying "I paid less at Fictionwise." And while that statement is correct, it is also riddled with problems, and simply is not the whole story.

[wyndslash]

@kali: reading all of your comments so far, i must admit that it is giving me another perspective on this whole agency pricing thing, and i am glad for a new outlook i am indeed hoping that prices would eventually go down after a while. (i can definitely see the logic that they would be priced more heavily when they first come out and just gradually be discounted after a while).

[Kali Yuga]

Originally Posted by David Marseilles

Windows for releases aren't good for business either (hardcover to paperback, Theater to DVD to streaming to tv), but they probably do have benefits with regards to predictability and risk control and they are definitely comfortable territory for content producers.

I gotta say, it looked to me like windowing kind of sucked for almost everyone.

Readers had to wait months to get the ebook versions. Publishers, retailers and authors were overwhelmingly eviscerated by the readers for the practice. It was understandable given Amazon lowballing the ebook prices and the need to protect hardcover margins, but immediate release is definitely a better option.

Originally Posted by David Marseilles

Before agency pricing we had a great market system....

We did?!? Seems to me like lots of MR readers would've eviscerated you for saying as much in late 2009.

To be more specific, there was a great deal of concern over Amazon's attempts to -- wait for it -- control the market and reveal its anti-competitive streak. People were actually lauding Sony -- Sony!!! -- as a potential savior of the freedom of the ebook market. (You know you're really up a creek when you're hoping that Sony will protect your digital rights....)

Publishers were also terrified that their margins were going to go down the tubes, with authors on one hand ramping up to demand higher royalties while retailers (especially Amazon) was likely to demand lower wholesale prices.

Non-agency does have some advantages -- more discounts, retailers can compete on price -- but it's not like people regarded 2009 as a golden era for ebooks.

Originally Posted by David Marseilles

The move also slows down the digital revolution that content producers of every kind are afraid of and protects the familiar analog forms that they are comfortable with and understand better.

Did it?

Agency pricing wiped out the windowing issue, beat down Amazon's attempts to establish a permanent lock on the ebook market, let publishers relax about their margins, gives retailers slightly better margins, and still manages to sell a lot of books at the $10 price point. Meanwhile, ebook sales may have doubled during 2010.

I will say the ebook market would have developed without agency pricing, and it may be impossible to truly evaluate its effects on the market. But I don't really see it as slowing things down -- despite JSWolf's plaintive cries for the lost majesty of cheap Fictionwise titles.

[CleverClothe]

Originally Posted by JSWolf

If the publishers are saying that the agency model will give them a smaller cut, then why are they doing it? It's not good for the consumers, it's not good for the authors, it's not good for the eBook stores that sell the agency eBooks and the publishers are admitting it's not good for them. So who actually is the agency model good for? To me is sounds like it is not good for anyone.

As said before...

• Control
• Saving paper sales
• Weaken Amazon's control of the market (they hoped)

[Kali Yuga]

Originally Posted by wyndslash

i am indeed hoping that prices would eventually go down after a while. (i can definitely see the logic that they would be priced more heavily when they first come out and just gradually be discounted after a while).

Thanks!

I suspect everyone else posting in this thread died a little inside when they read your post, though.