Apple + Agency Pubs Colluded on Price?

[elcreative]

Originally Posted by Elfwreck

Like Konrath?

The arguments for cheap *ebooks* are drastically different from the arguments for cheap paper books.

Paper books cost to print, cost to deliver, cost to track inventory. They take up space while you've got them and take postage to send them away. The price *can't* ever drop to garage-sale levels; no matter how much publishers yell that production costs are really all about advances, editing, and overhead, the fact is, they cost considerably more than three-for-a-dollar to print, especially anything bigger than 150-page mmpbs.

Ebooks, however, *don't* cost to print. Don't cost to deliver. Inventory is simple and also cheap. At three-for-a-dollar, that's at least 25 cents profit. (Not that you can sell ebooks that cheap at any store, because *they* have overhead costs and don't want to deal with five-cent-per-sale incomes.)

The best method for pbooks is: price as high as the market will bear, because the fewer units you have to make, the lower your expenses. If you can make your annual income selling one book for $50,000, go for it. Every book created is an *expense;* it costs materials, accounting time, and physical resources from several people not included in the money-chain. The costs of making the book have to be balanced against the benefits that it brings.

The best method for ebooks is: price as low as you can to balance the maximum number of sales with profit-per-sale. If John Locke's sales would've been cut in half with his books at $2.99 each, he still would've been better off that way. (If, however, he'd've only had 1/5 the sales he got at a dollar, he made the better choice.)

Every ebook created is *not* an expense. There's *no* reason not to have a million of them... if you can find a million customers.

We don't know what the "sweet spot" is for ebooks, not by genre or subcategory, not by individual book. But it's damn well not $12.99, as shown by the incredible surge in sales when the price drops, and the number of $3-a-book authors who are paying their rent from Kindle sales.

Yes, it's a tiny number. Making a living from arts & crafts has *always* been precarious. The real question: Are *more* bestselling $12.99-a-book authors making a living at their craft, than $3-a-book indie authors?

Nice selective quoting as is usual around here... ignore everything relating to comments concerning a substantial number of authors and actually making a living... ah well... call it "arts & crafts", that makes it all right...

And if you aren't getting money for it then it is an "expense" as you're cannibalising your own possible sales... every book you give away is a definite sale not made...

[speakingtohe]

Well the sweet spot is probably under $5 including tax. Like Starbucks, get change from a five.
Who would have thought that people would line up to get a cup of mediocre tea or coffee for $4.50 served in a paper cup.

Helen

[JD Gumby]

Originally Posted by speakingtohe

Well the sweet spot is probably under $5 including tax. Like Starbucks, get change from a five.
Who would have thought that people would line up to get a cup of mediocre tea or coffee for $4.50 served in a paper cup.

"Mediocre"? You're giving Starbucks too much credit for quality.

[Elfwreck]

Originally Posted by Fbone

Authors hoping to support themselves by writing full-time live day-to-day in perpetual fear.

Regarding who makes a living: Are there more best-selling Agency authors in the Kindle million club or indie authors?

Are the Agency million-club authors making more money than indie authors who've sold 250,000 ebooks? Are there more quit-the-day-job authors among Agency authors or indie authors?

Pointing at the top .5% of any field is disingenuous. The issue for authors isn't, "could I be the next Konrath/Hocking/Locke;" it's "ten years from now, would I have made more money sorting this out on my own, or signing some of my rights away for business & editorial assistance?" There's not going to be any one right answer--but the Agency publishers are showing themselves less concerned with the welfare of their authors than supporting their choice of business model, regardless of whether that's better for authors or the public.

Mark Corker of Smashwords has said there are less than 50 authors (out of 14,000) that make more than $50,000/yr.

I'm surprised it's that many. Smashwords has been around a bit more than three years, and already there are several dozen authors making a (potentially) full-time income from its sales? Yay! And I know there are more at Amazon. (Konrath's making a fine living, and his Smashwords sales are pretty much nothing.)

[Elfwreck]

Originally Posted by elcreative

Nice selective quoting as is usual around here... ignore everything relating to comments concerning a substantial number of authors and actually making a living... ah well... call it "arts & crafts", that makes it all right...

Would it sound better if I said "making a living from one's art, or one's craft?"

I'm not talking about kitschy home decorations. People whose career of choice is creative work have always had a struggle to get paid for it.

And if you aren't getting money for it then it is an "expense" as you're cannibalising your own possible sales... every book you give away is a definite sale not made...

No, every book given away is *not* necessarily a lost sale. No more than every book bought at a yard sale is a lost sale. If the person *wasn't going to buy,* or wasn't going to buy at a higher price, then giving them a free book is a benefit--they might buy your next one, or recommend it to friends.

None of us got to love reading by paying full-price for new books. Almost none of us discovered our favorite authors by paying full-price for one of their books, new.

The idea that every reader is, or should be, a full-price buyer, is a new and ridiculous one. It's like assuming everyone would buy a new car if you banned carpooling and giving rides to friends.

I don't know how it plays out for everyone. I know that:
1) My book budget (ebook budget; I don't read print) is larger this year than it has been in my entire life, and
2) I don't buy fiction that costs more than $6, or has DRM.

Authors who bring their price down to $5 have a chance at getting my dollars; authors who sell at $14, don't. I don't care how many layers of overhead there are between the author and the sale; I don't buy books to support publishing houses--I buy to support *authors*, and if publishing houses would like a bit of that money, they need to fit into my buying limitations.

(Which, agreed, are far from universal. Shrug. I am not invested in convincing anyone that the Agency model is doomed--I have access to enough excellent reading material to last the rest of my life, whether the Agency publishers triple their output or fold tomorrow. If, however, the Agency publishers would like my *children's* ebook dollars in a few years, they'd better figure out how to convince me they're worth looking at.)

[rhadin]

Originally Posted by Elfwreck

One issue that needs consideration is how many $3 books were sold to someone who would've bought a $10 bestseller but decided that, at $14, they'd rather buy one or more indie books at the lower price.

I used to buy 4-6 and sometimes more books every month that were published by the Agency 6 -- until agency pricing. In the past 6 months I have bought exactly 0 of their books. I am now buying indie books via Smashwords at significantly lower price points.

[elcreative]

Elfwreck - You buy books to support authors??? I buy books to read them...

[anamardoll]

Originally Posted by Elfwreck

No, every book given away is *not* necessarily a lost sale. No more than every book bought at a yard sale is a lost sale. If the person *wasn't going to buy,* or wasn't going to buy at a higher price, then giving them a free book is a benefit--they might buy your next one, or recommend it to friends.

None of us got to love reading by paying full-price for new books. Almost none of us discovered our favorite authors by paying full-price for one of their books, new.

The idea that every reader is, or should be, a full-price buyer, is a new and ridiculous one. It's like assuming everyone would buy a new car if you banned carpooling and giving rides to friends.

This.

I had no idea that all the Freebies in the Deals forum represent books that I would have otherwise paid full price for if only the author hadn't given the book away.

I got my Mom a freebie two months ago and she just reported back that she loves that new author. Now I'm looking at her next book in the series, wondering if I want to pre-order it for Mom's Christmas present.

I don't understand how ANYONE can argue in good faith that a freebie is a lost sale. Seriously? EVERY free book in your Calibre library is a book you would otherwise have bought at full price if only the author hadn't been sucker enough to offer a freebie for a week? Really??

[anamardoll]

Originally Posted by Fbone

Authors hoping to support themselves by writing full-time live day-to-day in perpetual fear.

What? I mean, seriously, what?

I'm pretty sure that not ALL authors hoping to support themselves by writing full time live in constant fear. This doesn't pass the exaggeration sniff test.

Heck, *I'm* hoping that very thing, but I'm not fearful about it. It's a nice hopey dream to send me to sleep at night.

Anyway. Authors who "hope" to support themselves by writing full-time aren't going to get anywhere fast. Authors who want to support themselves full time aggressively follow at least two major rules:

1. Publish a large body of work so that an addition of ONE fan means TEN sales.

2. Expand your fan base with good editing, slick covers, responsiveness to complaints/contacts, and with as many freebies-deals-promotions as you can bear in the early expansion days.

If someone wants to be a successful indie author and they're pricing their books at $10 a pop, well, they should "live in fear", because that's not going to fly.

[MrsJoseph]

There are some excellent points here.

Re: $0.99 books: There are self-published .99 books. I don't keep track of them but I submit the most recent one I've purchased & read: Unlocked by Courtney Milan.

From Amazon

#394 Paid in Kindle Store (See Top 100 Paid in Kindle Store)

#2 in Books > Romance > Anthologies
#13 in Books > Romance > Historical
#17 in Kindle Store > Kindle eBooks > Fiction > Genre Fiction > Romance > Historical Romance

Re: Being an ideal reader - it seems that a lot of the disagreements here are based on who is an ideal reader either for the publisher or the author. There was a great blog post on this subject at Dear Author:

Given the seeming hatred toward ebooks and library lending and so on and so forth, the profile of an ideal reader for the Big Six appears to be something like this:

1. Buys print (to prevent piracy)
2. Buys new
3. Does not use libraries, used book stores (UBS), or torrent sites
4. Has sufficient disposable income for entertainment, such as movies, books, music, etc. that does not compete with grocery money
5. Loves to read

Guess what? I’ve been the Big Six’s ideal reader for the last six years. I meet all their requirements.

So the publishers and the few authors who hate libraries, UBS and ebooks (because of piracy) should love the fact that I’m doing exactly what they want, right? After all, I’m a REAL paying reader (one of the ones that REALLY count), not one of those “cheapos” who lend or buy used, thereby depriving them of the income they’re entitled to.

But is this really the ideal situation for them?

My total entertainment budget hasn’t decreased in the last six years. As a matter of fact, it has gone up. But I spend far less on books than I ever did when I had easy access to good libraries and UBS.

When it comes to titles published by the Big Six, I almost always buy mass market paperbacks (MMPBs). They are currently priced at $6.99 – 7.99 on average. I have an “auto-buy” list and a “good-enough-to-buy” list. Authors on those two lists always get bought, no matter what, because I’m fortunate enough to have sufficient funds for it. All new-to-me authors are bought using whatever funds are left over. So I have to think very carefully before spending any of my “new-to-me author” budget. Since I buy everything new, if I want to try 10 new-to-me authors, I need to spend somewhere between $70-80. Unfortunately I really can’t spend that much on unknowns. So I usually pick about 2-3 authors from the list every month. (Sometimes none if all my auto-buy and good-enough-to-buy authors have books coming out back-to-back or something and deplete my budget.)

[SNIP]

Furthermore, new-to-me authors, no matter how great the buzz is, get one shot with me. If they’re very lucky, two.

[SNIP]

This is somewhat true of my auto-buys and good-enough-to-buys. If they disappoint me twice back-to-back, I demote them to my “buy-only-if-everyone-says-it’s-the-best-thing-evah” list. Or worse, to my “no-longer-buy” list. I can’t think of a single author who got demoted and then was later promoted again in the last six years. If I had access to a library or UBS, I might have given them more opportunities to win me over. But I’m not risking my money on an iffy prospect again. I’ve given them sixteen dollars’ worth of chance.

Some may think, “What a cheapo! It’s only $16!”

To put things in perspective, for $16 I can get any of the following:

8 TV episodes from iTunes (at $1.99/each)
5 TV episodes from iTunes plus some change left over (at $2.99/each)
16 mp3 files from my favorite singers / bands
3-7 movie rentals
my favorite pizza, which I can split with my husband, plus ice cream
a visit with my primary care physician
my favorite pasta plus dessert
2 physical therapy sessions (plus some change left over)
3-5 ebooks from publishers and indie authors who do not engage in agency pricing

(An interesting side observation: I’ve noticed that I watch far more TV shows and movies than I did before I was forced into buying print and new all the time.)

Do I think I’m missing out? Yup. I know I’m not discovering many fabulous writers out there. But unless and until I make millions like the CEOs of the Big Six, I’m not changing my buying habits. After all, I am doing exactly what they want me to do: Buy print, buy new, 100% of the time.

P.S. In case anybody’s wondering, I do buy e-books if they’re DRM-free and not agency-priced. This post is directed at the publishers who are doing everything they can to force readers into buying new print books all the time. Like the old Chinese proverb says: be careful what you wish for…because you might actually get it.

[stonetools]

JA Konrath did an experiment last year in which he temporarily lowered the price of his books from $2.99 to $0.99 to see if he would make up in greater volume what he lost in the lowered price. He found that he made less money pricing his book at 0.99. than he did when he priced it at $2.99.

LINK

The belief that you ALWAYS make up in greater volume what you lose in price when you price a book lower is a popular myth round these parts. Reality says different.

You may disagree with the way publishers price ebooks (heck, I disagree- many times). But they are actually looking at data, not cherry picked anecdotes and hopeful suppositions. My hope is that they will get better and more flexible over time at pricing. Ofcourse theyre is no way they will ever plese everyone. But they can do better.

[Elfwreck]

Originally Posted by elcreative

Elfwreck - You buy books to support authors??? I buy books to read them...

I could read nothing but free content for the rest of my life, and never run out of interesting, informative, meaningful texts to read. I mean, digitally; obviously, living with access to both UC Berkeley and the SF public library, and several of the Bay Area's diverse personal collections, I would never have to pay for paper books and could still surround myself with incredible reading content.

I spend money occasionally because I want to support the future of literature and creative writing. I sometimes choose to read books that aren't available for free because I want more authors writing books, or because I want to show appreciation for *that* author's work.

I don't need to buy any more books. Ever. Between promotional freebies, discount coupons at Smashwords, huge-and-growing fanfiction archives, online libraries & teaching sites, literature collections like the one here at MR and Gutenberg and Archive.org, and thousands of well-written fascinating news-relevant blogs, purchasing reading content is optional.

I still have ~1.5 gb of gaming books I bought during the Help Haiti charity drive that I haven't looked at.

With an effectively infinite (i.e. "more than my lifetime could encompass") selection of reading material, I can afford to make buying choices based on ideology, not just to get access. I don't *need* access to any particular book, any particular author. When I buy, it's partially in thanks to the literary tradition that let me grow up reading three-for-a-dollar books from yard sales. I can't pay those authors back; I *can* do something towards making writing a viable job.

But I've no interest in making "writing for an Agency publisher in collusion with other publishers to keep book prices high" a viable job.

[MrsJoseph]

Originally Posted by Elfwreck

I could read nothing but free content for the rest of my life, and never run out of interesting, informative, meaningful texts to read. I mean, digitally; obviously, living with access to both UC Berkeley and the SF public library, and several of the Bay Area's diverse personal collections, I would never have to pay for paper books and could still surround myself with incredible reading content.

[snip]

With an effectively infinite (i.e. "more than my lifetime could encompass") selection of reading material, I can afford to make buying choices based on ideology, not just to get access. I don't *need* access to any particular book, any particular author. When I buy, it's partially in thanks to the literary tradition that let me grow up reading three-for-a-dollar books from yard sales. I can't pay those authors back; I *can* do something towards making writing a viable job.

I have to admit that I'm in a similar situation as you. I have no real need to buy books other than just "want" or "support." I've actually cataloged over 150 books (dtbs & digital) that I've purchased (in the last year) and not read yet. These are just the ones cataloged. I have no real clue how many others that I have that I haven't cataloged. It's a very large number, however. And it doesn't include access to the Philly Free Library, the Singapore Library, and my local libraries.

Add that to the fact that I have tons of other entertainment options, publishers need to realize that they need a better pricing strategy.

Dear Author had a great blog series about this very sensitive subject:

When readers speak about price, they are talking about the amount that they are willing and able to pay at the particular time that they are expressing the opinion about price. Willingness includes the measurement of time.

Let’s assume that the reader is willing and able to pay for 10 books a month with a budget of $50. This means at current mass market print prices, a reader can afford to purchase 5 new books at 7.99 with a little over $7 left over. In order to meet her budget & book quantity requirement (as most reader’s resources are finite), this means she will only be able to buy 3 new books and 7 at the price of 3.99, either used or with a coupon. (Willingness + ability). Here’s the value scale that I’ve come up with:

Full value = one new book.
Half value = used book, book with coupon.
Slighty greater than zero value = paperback swap, library, borrow from a friend.
Zero value = no purchase.

Scenario 1. We don’t know the author. Zero value.

Scenario 2. We’ve heard of the author. Slightly greater than zero.

Scenario 3. We’ve heard of the author because someone recommended the book to us. Between slightly greater than zero and half value.

Scenario 4. We’ve heard of the author because someone we trust recommended the book to us. Between half value and full value. (depending on the source, whether the book is outside reading comfort zone, whether it has trigger tropes, etc).

Scenario 5. We’ve read the author before and did not like the book. The value of the author’s next book is zero value or slightly greater than zero.

Scenario 6. We’ve read the author before and she has been hit or miss for us. The value of the author’s next book is slightly greater than zero to half value.

Scenario 7. We’ve read the author before and her last book has worked for us. The value of next book is full value.

Scenario 8. We’ve read the author and she consistently delivers what we are looking for in a read. The value of next book is not only full value but can take the place of other purchases for that month (i.e., a hardcover purchase which is equal to the value of three full priced mass market books).

Also see: http://dearauthor.com/features/lette...ital-part-two/

[murraypaul]

Originally Posted by stonetools

JA Konrath did an experiment last year in which he temporarily lowered the price of his books from $2.99 to $0.99 to see if he would make up in greater volume what he lost in the lowered price. He found that he made less money pricing his book at 0.99. than he did when he priced it at $2.99.

He is comparing 15 days at 0.99 to slightly over 2 days at 2.99.

a) Lowering the price, and selling many more copies, pushed the book up the sales lists, putting it in front of more eyes. That will slowly decay as sales drop at the higher price. What level of sales did he see over the 15 day period before putting the book on sale? Or for a month after?

Looking at an earlier blog post, he said:

Eighteen days ago, I dropped the price of my ebook, The List, from $2.99 to 99 cents on Amazon. I was selling 40 copies a day prior to that.

Currently, The List is #37 in the Top 100 Bestsellers on the Kindle. It's selling 620 copies a day on Amazon.

40 copies at day at $2.99 is ~$120 a day

And in the post you link to:

From March 1 to March 16 at 3pm, my ebook The List, priced at 99 cents and fluctuating in rank between #13 and #23, earned $5647. It averaged $375 a day. It peaked at $525 a day.

During the last 57 hours, The List, priced at $2.99 and currently ranked at #39, has earned $4092. It is averaging $1723 a day.

What does this mean?

Hell if I know. There's probably a formula in it somewhere. But I'm 100% sure I'll make a lot more money in 28 days at $2.99 than I did for the 28 days it was 99 cents. However, I wouldn't be making the current figures if I hadn't priced it at 99 cents.

He has made more money overall by lowering the price for a short period. He lowered the price to get more visibility, and kept some of the increased traffic after raising it again. He is making significantly more per day from that book than before lowering the price.

b) Did he see an increase in sales of his other books, as people liked the first one? That is (IMO) the main benefit of offering a book a low price or free, to entice new readers.

[elcreative]

MrsJoseph, Elfwreck etc... I guess we just totally disagree about just about everything... why would I want to download TV series from iTunes or movies... I'm watching less and less TV at the moment and I have access to a large number of channels by satellite, same thing for movies but having so much available just shows up the poor quality and lack of thought in so much broadcast and movie material at the moment... I'm actually watching far more factual material these days...

As far as relating it to books, well I'm simply reading more again... and I'm not a millionaire either but my criteria for buying a book have always been amazingly simple, "Does that book seem like I might enjoy it?" Answer yes then buy it, answer no then don't... short of cash then don't look... if you want to bring your "ideology" into then fine but don't expect everyone else to follow especially...

Don't put your interpretation on what other people say, especially when looked at through your ideological glasses... I didn't say that every book should be a purchased one, I said that a free book is a lost sale... it is... it may lead to other sales in the future or it may not but at the instant that a book is acquired for free then it isn't being purchased... simple English... sale = exchange of value (usually money) for item being sold, no exchange then no sale...