Why is it okay for Jobs, but not for Bezos?

[DawnFalcon]

Interesting note: In the Google Books Settlement case, one of the aspects the American DOJ has singled out as an issue is the ability of publishers to set not only prices but utterly control other issues (such as quality control) in the proposed settlement, and the anti-competitive effect on the market - and this is in a situation where Google *can* negotiate prices for *some* books, which is absent from the "agency model".

"fixing price related terms in wholesale agreements is per se illegal".

[GA Russell]

Originally Posted by kilron

...why would someone pay $300 to save money on books? publishers most likely fully believe that the number of people that buy eBook readers with the expressed plan of saving money on books has got to be miniscule. that's just not the prime motivation of buyers.

Originally Posted by guyanonymous

I bought my reader at $125 US (plus shipping)...that worked for me. I justified it by the free books I'd get via P.G.

I have no idea how many people are like me. I'm sure that many early adopters just want to own the latest toy. But I figured that my eBook reader would pay for itself with 8 public domain books which I intended to read anyway.

Your $300 figure might be high, but I can imagine that many purchasers of 5" screen models figured that their device would pay for itself in a year or two's time.

In the fall there was a thread about a survey that said that most Americans would wait to buy until eBook readers cost $50. I have to think that those were people who don't read very much. Typical Americans! And I suspect that they were thinking to themselves how low the price would have to be before the device paid for itself, given the amount of reading they do.

[Guns4Hire]

Originally Posted by DawnFalcon

Interesting note: In the Google Books Settlement case, one of the aspects the American DOJ has singled out as an issue is the ability of publishers to set not only prices but utterly control other issues (such as quality control) in the proposed settlement, and the anti-competitive effect on the market - and this is in a situation where Google *can* negotiate prices for *some* books, which is absent from the "agency model".

"fixing price related terms in wholesale agreements is per se illegal".

Yeah thats very very interesting. Wonder how many lawyers ole Bezo has going over that document.

[kilron]

Originally Posted by GA Russell

I have no idea how many people are like me. I'm sure that many early adopters just want to own the latest toy. But I figured that my eBook reader would pay for itself with 8 public domain books which I intended to read anyway.

Your $300 figure might be high, but I can imagine that many purchasers of 5" screen models figured that their device would pay for itself in a year or two's time.

In the fall there was a thread about a survey that said that most Americans would wait to buy until eBook readers cost $50. I have to think that those were people who don't read very much. Typical Americans! And I suspect that they were thinking to themselves how low the price would have to be before the device paid for itself, given the amount of reading they do.

see, i think you're going about it with a completely different logic than the typical consumer. i don't think the typical consumer is looking at eBook readers as something that will save them money. i believe its more about convenience. here's a device that is as big as one book, but i can store hundreds (thousands?) of books on there and take them all with me anywhere i go. its portable, its convenient, and i can buy a book at home and have it instantly instead of having to go to the store or waiting for it to arrive in the mail.

THAT has got to be the primary motivation behind the typical consumer. to a lesser extent, some of them who may be more "green" minded, may also see it as something to save a few trees. but while some here may justify it as a cost savings at some point, i truly honestly don't think that a typical consumer sees it like that. most have no idea what the cost difference is between an eBook and a physical book.

which gets me back to my original point in that the cost of entry is still too high and for that price it offers too little. my $300 price figure was trying to be about an average considering the most popular eBook readers out there are probably the kindle, the nook and one of the bigger sony's, but that's a total guess on my part.

i'm a major gadget hound, and i would have a hard time paying over $150 for a dedicated eBook reader. but that's just personal preference of course.

but you see, those "typical americans" who won't pay over $50 for an eBook reader, how many of them probably own smartphones or laptops or an iPod/MP3 player of some sort. probably a lot!! THOSE people are the market that Amazon and others so desperately want. THAT'S how you really make some money, but tapping into the "typical american". if you want to dominate, you have to think big. i honestly think that's exactly what apple is trying to do and the publishers are betting on apple being right.

[guyanonymous]

But without a bookshelf full of books, how can people know how smart I am? :P

I think that the "typical" consumer has many issues and concerns. I do agree that with the exception of those who really do figure out and get the long term savings, the pricing needs to move into the under $100 impulse category (or wherever each person sets that price level).

When I've talked to people about my reader (I read it in restaurants, on the beach, at the lake, against a wall when I'm waiting etc, and often get asked if it's "One of those ebook things?") I here comments ranging from "too expensive", "ebooks must be cheaper then", "I could get rid of all my shelves", "it's easy to read on", "it's hard to read on", "can you do email on it", "I can do that on my PDA", and so on.

The typical consumer is pretty varied

p.s., I'm in Canada, and as a typical Canadian, I just want more books on hockey and snow (NOT).

[weatherwax]

Originally Posted by basschick

ebook sales aren't cannibalizing hardback sales from me, nor from anyone i know. ...

seems like publishers keep beating the same drum, but i'd be interested in seeing any proof that selling less hardcovers is based on people owning ebook readers rather than simply people reading less or being able to afford less. besides, if ebook readers encourage people to read more, publishers could make a little less per book but sell a great deal more. obviously this business model didn't hurt walmart...

Before I got an ebook reader I bought several books a month, now I haven't bought any since last year.
I would pay the price of a paperback for some ebooks but the books I'm interested in are not available as ebook in German or quite expensive. So in my case it's even worse for the publishers: no sales at all

[GA Russell]

kilron, no doubt there are people as you describe. I think our disagreement is just over which group of people is more typical - the cost conscious or the convenience folks.

To my surprise I have noticed that even here, where there are many convenience folks, the price of a new model generates the greatest interest. That is to say, there is a lot more interest in a model priced, say, $30 less than a similar model. For example, I believe that the success of the Astak Pocket Pro was due entirely to their getting the price down to $199.

Also, we have had this past week these endless threads about refusing to pay more than $10 for an eBook. So people here are definitely cost conscious, and I would think that the enthusiasts would be less cost conscious than the general public.

But it's not something we can prove, so I'll respect your right to disagree.

[guyanonymous]

When pbooks cracked $10.00 I stopped buying them new and went to the used market almost completely. Now my visits to bookstores are generally to see what's new out there, catch any new releases I've failed to notice online, and add them to my list for "down the road, when they're cheap enough".

[kilron]

we can certainly agree to disagree on what are the key factors for a mass public acceptance of dedicated eBook readers. you're right that it is mostly speculation at this point and neither of us can definitively prove it either way.

even though the markets are different, i think about the emergence of the iPod in the MP3 player market. when the original iPod came out, it was mac only, and rather expensive when compared to other MP3 players out there. it certainly wasn't the first MP3 player out there (nor the 2nd or the 3rd). but what apple brought to the table was a simple and easy to use MP3 player that now came with some revolutionary software for creating and integrating all of your music on your computer. the "magic bean", if you will, of the iPod rise to dominance wasn't the hardware, it was the software. it was the iTunes software and its very simple integration and customization. i keep thinking that this is the key in emerging markets: how easy is it for any old jack or jill to just pick up and use? iPods certainly weren't cheaper than other competing players and they didn't really save you money vs. CD players. it was all about convenience, portability and easy-to-use interfaces and software.

that's my take at least.

[theducks]

Fiction Hardbacks: Never = No lost sales here.
Trade Paper Fiction: 1 or 2 per year = You are not making much money off of me
Mass Market Fiction: Used to be 5 or 6 per month, before the price broke the $5 mark, now it is 1 or 2 = Losing sales

In the last 2 decades, many of my local book stores have closed and or their stocked selection became limited. Future Fantasy, Tower Books, Crown, Little Professor.... RIP
Now I have the Biggies, only B and N and Borders. I left off Costco, Walmart and Target as the do not offer selection, only High volume title choices.

e-book: Back to 5 or 6 titles (Webscriptions) ,(and I have stopped spending money on more shelving or Storage crates)
Public Library: Is my source for reading books that are only available in HB = Gee, 1 sale per dozen readings or more.

To me, Publishing is making a book presentable to the reader.
Do that jobwell, whether it be for paper or e-books .

Price and Availability still rule my purchases.

[Kolenka]

Originally Posted by bgalbrecht

My biggest concern is that ebook dynamic pricing doesn't have the book return feedback that paper books do. With paper books, if the publisher gets a lot of returns, he's crediting the bookstores, and (at least for HBs) ends up with stock to warehouse. With ebooks, there are no returns, so unless the publisher is attentive, there's no incentive to drop the price of an older backlist book.

We can look at the shareware software industry as an example of why there is still an incentive to lower the price on backlisted titles (publishers who fail to do this are giving up revenue).

Shareware authors will usually have a price for their software, and unlike books, it will go up over time as more feature-packed versions get released, inflation takes its toll and so on. However, you see an interesting series of peaks of software sales:

- When the first version of the software is released, you get a spike in sales, as people try out and buy your product.
- When you run short-term price-drop, you will get spikes in your sales as people who tried it and didn't want to buy for full price get tempted into buying at the lower price.
- New versions also tend to cause a sales spike due to publicity, and added value tempting more people to buy.

Books have a similar series of spikes, that align with the book releases. Most of the sales of a book happen when the various editions get released. Too long after that, you lose interest from buyers (posts in this thread tend to echo this). If the person doesn't pick up the hardcover, then they might pick it up once they see the trade paperback, or perhaps the mass market edition. In the book industry, you also get a cheaper product at each step, with smaller margins, but usually higher volumes.

The concept of selling a product at X% margin, and then dropping the price to smaller margins at higher volumes isn't unique to books. After you've got your first surge of sales at 15$ for your "same time as Hardcover" eBook, you won't see a surge of sales like that again unless you drop the price. They will produce more sales by price dropping the eBook every few months until it 'bottoms out' at same price and you let it sit there. It also makes sense from a profit maximization standpoint to charge above-average pricing at first release to get those who really want the product to buy, and then drop the price to get the next group to buy, and so on.

It gets tricky when as a lot people mention, eBook pricing isn't in a vacuum, as it basically competes with the printed book as well. So if they price drop, for it to be effective, they have to price drop along the same schedule as the printed books.

It will be interesting to see if this model works (it has worked for other markets for decades) when applied to eBooks. I'm willing to let them give it a shot, but if their pricing isn't palatable to customers because they fail to price drop it, the bottom out point is in a weird place, etc... then that's that, it doesn't work here (not with the current buyers in the market, anyhow).

EDIT: And in any case, I was never a big hardcover guy. Not until recently anyways. I have hardcovers for my collection for durability, and stuff I just read for fun but don't really collect are more eBooks and less paperbacks these days.

[zacheryjensen]

Originally Posted by Sydney's Mom

The problem is the publishers saw this as spilling over beyond ebooks. They are protecting their cash cow, the hardback sale, by making sure ebooks do not get too popular, at a price which is lower than the cash cow. If they can make sure ebooks sell at the same price as the cash cow, then they are indifferent to what you buy. One of Amazon's biggest selling points for the kindle was best sellers at $9.99 (unless they aren't). I understand not wanting Amazon to control the ebook market - how has that worked out for music and Apple? Why is it okay for Jobs but not for Bezos? Or is it that they saw what happened to music, and its cash cow the album sale, and they don't want the same thing to happen to the hardback?

This will definately slow the adoption of ebooks. I don't know if they have taken a large enough hold that they will survive. For myself, if I can't get the books in ebook format from the library (MacMillan doesn't sell to libraries), and my choice is between a $5.89 paperback and a $6.99 ebook, I am going to have to think long and hard about pushing the buy button. Not because the $1.10 is a lot of money, but because it bothers me to have to pay more when I know the unit cost is less. That is why I first came to MR - I wanted to complete my Sookie Stakehouse collection, and Amazon had some of the back issues at a price greater than the corresponding paperback. I was able to buy the ebook elsewhere at a price I considered fair, and convert it for my kindle.

I can see why Amazon caved. The windowing threat is huge. Look how mad we all got about Game Change.

Do you think this is a death knell for ebooks, except among the small group of hard core converts on MR?

Don't you worry about eBooks there lass. If you would bother to review history for a moment you would see that every market Apple has entered, besides the PDA (Newton) market, (though PDAs did take off, just not during the Newton's run) has exploded shortly thereafter. You may not realize this but every modern laptop is based around Apple's groundbreaking PowerBook design. The MP3 player market barely subsisted on awful 32mb flash players that cost hundreds of dollars until apple slapped everyone in the face with the iPod. The iPhone comes out and 3 years later nearly every cell phone being made is a smartphone, and the market trend has completely inverted with consumers overwhelmingly claiming they have or plan to get a smartphone (iPhone or not).

Oh yeah, and never mind the personal computer...

So frankly, though Amazon has been doing... well they won't actually tell the truth about how they've been doing, but, at least people have heard of Kindles. So they must be doing okay... Apple will blow this thing wide open. It's in their best interest to do so. They push apps on the app store for the iPhone because they get 30%, they'll push eBooks for the same reason now.

Regardless of how you feel about Apple, and their product designs, ads, etc. they are undeniably successful, particularly in the popular media segment. So really, don't sweat it for the eBook. It's obviously the future, King Jobs has decreed it

[guyanonymous]

My 20GB MP3 player, by iRiver, still has better sound quality than Apple's MP3 players - and came out long before.

My first laptop - surprisingly - came out before Apple's PowerBook's, trackpad and all.

Smartphones existed prior to the iPhone.

And I had PC's (dos based) prior to Mac's existence.

They have affected design - but don't make the assumption that they led the market in creation. They do tend to refine the designs of others rather well, however.

[guyanonymous]

Wait...Apple did invent something with their products...the necessity of accessories to provide features everyone else includes!

A new type of mac video->VGA connector for every laptop they release.
Leaving out a <$5 part so that you have to spend $20+ to get FM radio on your mp3 player.
A $30 cord to get USB on your iPad.

More than anything else they've done - they've created an entire secondary line of accessories for their products that take up way to much wall-space at stores!

Oh - and they also killed hardware choice (though this provides greater stability for an OS that only has to deal with 15 hardware configs instead of 20000) and refined vendor lock-in better than any computer company before them!

[drgnbear]

said in the voice of Joan Crawford from Mommy Dearest:

NO MORE PAPER BOOKS!!! EVAR!!!!!!!!!!