Kobo exec advocates higher prices for AU, NZ

[howyoudoin]

Originally Posted by meeera

Australia isn't a richer market, it's just a traditionally price-gouged market. Australians are waking up to this and geo-shopping as a result.

Actually Australia's GDP per capita is 1.27 times that of the USA. The rationale exists to price ebooks at 1.27 times the price.

[howyoudoin]

There's also the question of the legality of geo-hopping.

Piracy is bad because it deprives the rights-holder of the income due to them.

Geo-hopping does that too in most cases. Just because one pays the rights-holder in a different country doesn't mean that they aren't depriving the rights-holder in their country from their income. From the point of view of the local rights-holder, the geo-hopper is equivalent to a pirate.

[darryl]

Originally Posted by howyoudoin

There's also the question of the legality of geo-hopping.

Piracy is bad because it deprives the rights-holder of the income due to them.

Geo-hopping does that too in most cases. Just because one pays the rights-holder in a different country doesn't mean that they aren't depriving the rights-holder in their country from their income. From the point of view of the local rights-holder, the geo-hopper is equivalent to a pirate.

Rubbish. The rights-holder is paid. The local middleman, who usually contributes nothing in any event, is simply by-passed because I exercise my legitimate choice to purchase elsewhere. Of course, if the local middleman were to offer a competitive price ......?

[howyoudoin]

Originally Posted by darryl

Rubbish. The rights-holder is paid. The local middleman, who usually contributes nothing in any event, is simply by-passed because I exercise my legitimate choice to purchase elsewhere. Of course, if the local middleman were to offer a competitive price ......?

I do see the merit in that argument, but isn't the last sentence you make there a typical one made by pirates? When our arguments get close to theirs, we need to question if we're doing something entirely different, or even right. We can't be absolute in our proclamations. As much as I hate middlemen too, they have rights too borne of their transactions with the original rights holders, if someone's rights are being infringed upon that doesn't make it a victim-less transaction.

[fjtorres]

Originally Posted by darryl

Rubbish. The rights-holder is paid. The local middleman, who usually contributes nothing in any event, is simply by-passed because I exercise my legitimate choice to purchase elsewhere. Of course, if the local middleman were to offer a competitive price ......?

Right.
Because the subject is Indie publishers, not tradpubs.
With few exceptions, Indies sell globally, not regionally, which is why price discrimination would be a bigger issue for them. It would be the same publisher charging more to one customer than another for the exact same product.

[MGlitch]

Originally Posted by howyoudoin

I do see the merit in that argument, but isn't the last sentence you make there a typical one made by pirates? When our arguments get close to theirs, we need to question if we're doing something entirely different, or even right. We can't be absolute in our proclamations. As much as I hate middlemen too, they have rights too borne of their transactions with the original rights holders, if someone's rights are being infringed upon that doesn't make it a victim-less transaction.

What of the buyers right to a fair market. If the middleman is literally contributing nothing other than the sale of someones product why should a buyer be forced to purchase from them just because of their geographical location?

Wouldn't the middleman, in your proposal, be little different than an extortionist? Demanding greater prices for the same product that's available elsewhere, but which those who they sell to can not buy?

I'm all for middlemen being able to sustain themselves, but unless they are adding something either quantitative, or qualitative to the product, why should a buyer be forced to buy from them.

[darryl]

@howyoudoin. The last sentence of my post was an observation, not an argument. Even if this were not the case, I see neither logic nor merit in the tainted by similarity argument.

I don't hate middlemen. In many cases they form a very valuable role. What we have with digital rights is a situation where the internet has rendered the role of the local middleman superfluous, but rights-holders still cling to this model. The result is that local consumers are the victims, not the middlemen who buy knowingly and unfortunately still do surprisingly well from the many who don't exercise their rights to buy elsewhere.

@fjtorres. Whist I agree with you about Indies, I think the same applies to tradpubs, at least in relation to ebooks.

[SteveEisenberg]

Originally Posted by GeoffR

My advice to publishers would be to set a single global price, just allowing for different tax rates and a small buffer for currency shifts.

My advice would be to experimentally determine what prices generate the most net revenue in each market for each book type, and go with that. And my next piece of advice is to plow back the profits to purchase more book proposals for the kind of non-fiction I like

[GeoffR]

If you look at Amazon's list price requirements there are some incentives there to encourage publishers to price differently in some countries too.

For example, Amazon puts more pressure on publishers to set prices low in the US than it does in the UK by setting the price cap for the 70% royalty option lower in the US ($9.99, or about £6.99) than in UK (£9.99).

So will Amazon get the same level of criticism over geographical discrimination, or is it only bad when Kobo does it?

[GERGE]

I looked at my Kobo prices a bit and tried to figure out how they calculate. No such luck.

I checked random books from the bestsellers and new releases, they usually use 2/3 of the going conversation rate (sometimes even 1/3) for me but some books are priced with the current rate and some is priced higher than the current rate (we have never seen USD that high). The weird thing is, different books of the same publisher uses the both methods of price conversations.

I could discern no pattern.

[AnemicOak]

Originally Posted by GeoffR

For example, Amazon puts more pressure on publishers to set prices low in the US than it does in the UK by setting the price cap for the 70% royalty option lower in the US ($9.99, or about £6.99) than in UK (£9.99).

With VAT that £6.99 would be around £8.39 though right? The £9.99 would include VAT if I'm not mistaken while the $9.99 does not include sales tax. Not exactly parity of course, but not as big of a gap in max price as it at first seems? I don't know how much, if at all currency conversion rates, local fees or any kinds of taxes besides VAT might come into play to help eat up the last £1.61 of the difference.

[GeoffR]

Originally Posted by AnemicOak

With VAT that £6.99 would be around £8.39 though right? The £9.99 would include VAT if I'm not mistaken while the $9.99 does not include sales tax. Not exactly parity of course, but not as big of a gap in max price as it at first seems? I don't know how much, if at all currency conversion rates, local fees or any kinds of taxes besides VAT might come into play to help eat up the last £1.61 of the difference.

Yes you are right. So £9.99 inc. 20% VAT is about £8.33 excl. VAT.

But £8.33 is still more than £6.99 so the same point applies: Amazon has a lower price cap in the US than in the UK, favouring US customers over UK customers.

Edit: Here is Kobo's version of the price rules, they don't seem to have a price cap for the 70% royalty, but the price minimum could also give an incentive to price differently in different countries.

[darryl]

@GeoffR. My criticism of the practice is the same whoever does it. Your point is a good one unless Amazon (or Kobo) has a reasonable justification for it. So far I don't see it in either case. Kobo does seem to go a little further if they have in fact automated the process into exchange rate calculations, though I don't know if Amazon is also doing this. I certainly hope not.

[GeoffR]

Comparing Amazon's and Kobo's pricing rules that publishers must follow to get the top 70% royalty rate shows some interesting differences when it comes to prices in Australia and New Zealand:

Amazon's minimum price for 70% royalty is $3.99 in Australia and approx. $4.29* in New Zealand.

Kobo's minimum price for 70% royalty is $2.99 in Australia and $2.99 in New Zealand.

So while Kobo is advising publishers to increase prices in Australia and New Zealand, it seems Amazon is going much further and setting a higher minimim price that publishers must charge if they want the top royalty rate.

* converted from Australian dollars, since Amazon doesn't price in New Zealand dollars.

[GERGE]

"Your eBook must also be priced at least twenty percent (20%) lower than the price of the print edition of the book, if one is available" says Kobo. That is no so bad.