Penguin Upsets Kindle Owners

[Logseman]

Originally Posted by tompe

It would have been very bad for the readers since the sale of best sellers is making it possible to publish non-best sellers.

Or non-best sellers would publish through other channels, which would imply probably less money to spend for the consumer. The non-best seller which doesn't sell for 10 dollars would sell better for 3 or 4.

[Worldwalker]

Originally Posted by tompe

It would have been very bad for the readers since the sale of best sellers is making it possible to publish non-best sellers.

So what keeps Baen Books in business? They sell ebooks at $5-$6 apiece, without benefit of NYT bestsellers. They sell a lot of them.

We could use some input from someone with publishing industry experience here: Do bestsellers subsidize the midlist? Does the midlust subsidize bestsellers? Do they live separate economic lives? How does it work, economically?

Also, what's usual in publishing contracts regarding keeping the book in print? If the publisher decides to stop selling a book, is there a provision for the rights to revert back to the author? Is that different for ebooks?

But in any event, that's irrelevant to this discussion. If Amazon was buying books (e- or p-) for $15 each from the publisher and selling them for $10 each as a loss leader, it's no different from the publisher's point of view than if they were buying those same books for that same $15 and selling them for $30 each. The publisher gets $15 either way. Except, of course, that they'd probably get a lot more $15's in the former case, since they'd be selling more $10 books than $30 books.

[leebase]

Selling books below cost is not a real market price. Amazon was threatening the pricing of the hardback books where publishers make most of their money. Of course the customer doesn't care if they get such a price break. Not in the shirt term anyway....just lie people were perfectly happy to buy cheap Japanese steel when they dumped it on the US market in order to run US steel companies out of business.

I am quite happy to buy a kindle book at less than the cost Amazon paid for it myself. I just understand why the publishers put a stop to it as it became clear that Amazon's business practice was threatening their main revenue source...the hard back book.

Yes, hard back booked are discounted. They are not discounted anything like Amazon's $10 price for every book on the NYT Best Seller's list all the time.

The market price is the price at which both the producer and the consumer are happy. Consumers were happy at $10 and would be even more happy at $1. However tie publisher has a higher number in mind. In time, there will be a new equillebrium found.

Lee

[Worldwalker]

The "invisible hand" of the market that would push it to that equilibrium cannot function in the absence of competition -- for instance, in the case of a cartel.

[Iphinome]

Originally Posted by leebase

Selling books below cost is not a real market price. Amazon was threatening the pricing of the hardback books where publishers make most of their money. Of course the customer doesn't care if they get such a price break. Not in the shirt term anyway....just lie people were perfectly happy to buy cheap Japanese steel when they dumped it on the US market in order to run US steel companies out of business.

I am quite happy to buy a kindle book at less than the cost Amazon paid for it myself. I just understand why the publishers put a stop to it as it became clear that Amazon's business practice was threatening their main revenue source...the hard back book.

Yes, hard back booked are discounted. They are not discounted anything like Amazon's $10 price for every book on the NYT Best Seller's list all the time.

The market price is the price at which both the producer and the consumer are happy. Consumers were happy at $10 and would be even more happy at $1. However tie publisher has a higher number in mind. In time, there will be a new equillebrium found.

Lee

Except there's more than one market, the wholesale and the retail. The retail price is not something the publishers have any right to control unless they want to stop wholesaling. That market has failed because the publishers have decided to favor one buyer over another. I don't understand why its legal to say I'm going to charge you triple because I like your competitor better. In theory the price is supposed to be the price for anyone who comes to you to buy.

The second market is the retail one, that's where amazon had an advantage, except nothing but profit margin or taking a loss prevented anyone form competing. The publishers before this were being paid either way so what right did they have to step is and deny the ability for a retailer to discount? This is the huge failing capitalism has compared to a free market. Capitalism controls the resources and denies anyone else the ability to compete, the market is cornered and controlled. While in a free or reasonably free market you buy as much as you need at the prices offered and don't have to worry about being punished for buying from someone else when they offer a better price.

In a free market if you need 100k widgets and one person has 15k to sell for $1 and another person has 500k for $2 you can buy the 15k $1 widgets and get the rest for $2. In a capitalist system if you buy those 15k widgets you may find those other 85k you need suddenly cost $5 for you and $2 for anyone else or perhaps for you they aren't available at any price. And *poof* widget monopoly.

Penguin has a monopoly and they are abusing it. I'd love to see the justice department look into this.

[Avarwen]

Originally Posted by crazed792

I don't like the idea of saying that you can't change above $9.99 for a best seller, but agree with some points. In my opinion MSRP should be at or below print books, and the publisher should be able to charge whatever the "market" dictates to the reseller (charging each reseller the same price, as volume doesn't or shouldn't matter with an electronic commodity*), but they shouldn't be able to control the resellers price to the consumer. So if the reseller wants to take a loss, let it.

I do think that setting up a group of 5 or however many publishers to price fix shouldn't be lawful. By allowing that, it makes it possible for the "market" to really be a "market" which is dictating price via any kind of competition.

* making allowances for variance in if the publisher has to pay any kind of fees due to DRM/format, but I'd assume not.

I use to work in the books section of a store that sold books, music and movies. Bestseller books when they first came out were always on sale so I figured they could use the same model for e-books maybe flexing on the price a little though. I'm not worried by this though sooner or later e-books will become the norm they have to. It's like how the music industry tried to shut down MP3's and ended up losing in the end.

It's going to be the same with e-books so many things have gone digital it was only matter of time before books followed suit though I didn't think it'd be this soon. With the ipad and all the android readers coming out this year publishers better take note. If the android devices catch on like the ipad e-books may become even more popular among the tech savvy crowd and regular people. If that's the case publishers are in for a rude awakening.

[DJHARKAVY]

Originally Posted by Avarwen

There needs to be some sort of universal model. Like non-reference and non text ebooks can't be sold for over $15.99. Also all best sellers should be $9.99 for a few weeks then go up after that time is over. Also ebooks should not be more than their physical counterpart. If the ebook market continues to grow at a quick pace at some point publishers will be forced to lower prices or die off. Digital is the future and if you aren't willing to except that then you should go the way of the dinosaurs.

Not going to happen so long as people are paying the requested prices for books.

[Solicitous]

Originally Posted by leebase

Amazon is no innocent in this. There's a big difference between Walmart buying 2 million copies of Harry Potter and selling them as loss leaders -- and selling EVERY NYT best selling book as a loss leader -- all the time.

But Amazon did have a practical monopoly on ebook distribution. The arrival of the iPad changed that. However, change was coming regardless.

Amazon had a choice. Either allow the agency model pricing -- or settle for having the ebooks delayed like paper books. With Apple going with the agency model, it was not possible for Amazon to accept the delay.

That said -- I am baffled by Penguin's pricing. I've never worried about agency pricing as the market will speak and pricing will come in line. I think Penguin's about to learn that lesson.

Lee

Is it not part of the Apple iBookstore policy that any ebooks being sold there cannot have it priced lower at another ebookstore? If so one publisher could set a price for the Apple store $4 lower than Amazon and with the agency model there is nothing Amazon can do to compete, nor could Amazon sell a book for $1 cheaper than Apple for 'promotional purposes' say, or special offers for customers.

[AnemicOak]

Originally Posted by Solicitous

Is it not part of the Apple iBookstore policy that any ebooks being sold there cannot have it priced lower at another ebookstore? If so one publisher could set a price for the Apple store $4 lower than Amazon and with the agency model there is nothing Amazon can do to compete, nor could Amazon sell a book for $1 cheaper than Apple for 'promotional purposes' say, or special offers for customers.

From what I understand yes that's part of Apple's deal. Apparently the lower price in iBooks but nowhere else has already happened on a few titles.

[kjk]

Originally Posted by Solicitous

Is it not part of the Apple iBookstore policy that any ebooks being sold there cannot have it priced lower at another ebookstore? If so one publisher could set a price for the Apple store $4 lower than Amazon and with the agency model there is nothing Amazon can do to compete, nor could Amazon sell a book for $1 cheaper than Apple for 'promotional purposes' say, or special offers for customers.

What about Penguin:
The Help, by Kathryn Stockett: Amazon $9.99, iBooks $12.99
Killing Floor by Lee Child: Amazon $6.99, iBooks $8.99

And Disney Hyperion:
The Red Pyramid by Rick Riordan: Amazon $9.89, iBooks $10.99
The Last Olympian by Rick Riordan: Amazon $8.98, iBooks $10.99
The Titan's Curse by Rick Riordan: Amazon $4.40, iBooks $5.99

And Matterhorn Press:
Matterhorn by Karl Marlantes: Amazon $9.99, iBooks $11.99

(just browsing Amazon's top seller list-a much bigger selection than iBooks, for sure)

[GeoffC]

The missing point in the argument is that the book, whether it be a paper or electronic version, is priced at the price the customer will pay. If sufficient customers are prepared to pay a higher price, then it appears the vender will be reluctant to lower that, at least in the early stages. Amazon and Apple may have "convinced" "brainwashed" (whatever) some of their customers that there is a limited number of outlets for the books the customer wishes to read, part of this will surely be the book format. These customers feeling that to be true will be less likely to 'search' elsewhere - at least initially; and not until they are otherwise educated.
I wonder how many iPad buyers bought the device for reading ?
Of these how many will be savvy with the business of ebooks ?

In the UK we only hear of iPad, Kindle and Sony - each of these has a 'store', media coverage has been somewhat limited and hints strongly at books available from each of the stores (only). When Kindle was first advertised in the US, media here did not highlight the US - centricity of the device.

There are only 68k members in MR (guest ratios perhaps 5-10* that) - how many iPads/Kindles etc have been sold ....

[tompe]

Originally Posted by Logseman

Or non-best sellers would publish through other channels, which would imply probably less money to spend for the consumer. The non-best seller which doesn't sell for 10 dollars would sell better for 3 or 4.

And then we probably loose the gate keeper functionality.

[Logseman]

Originally Posted by tompe

And then we probably lose the gate keeper functionality.

What do you mean?

[tompe]

Originally Posted by Worldwalker

So what keeps Baen Books in business? They sell ebooks at $5-$6 apiece, without benefit of NYT bestsellers. They sell a lot of them.

They have a niche audience.

We could use some input from someone with publishing industry experience here: Do bestsellers subsidize the midlist? Does the midlust subsidize bestsellers? Do they live separate economic lives? How does it work, economically?

Comment from the publishing industry:

http://nielsenhayden.com/makinglight...48.html#396969

A fixed $10 price point would certainly be good for Amazon's ebook business, but it would take a shark-sized bite out of the market for hot new bestsellers, which is trade book publishing's single most profitable area.

That revenue source is what keeps a lot of publishing companies afloat. It provides the liquidity that enables them to buy and publish smaller and less commercially secure titles: odd books, books by unknown writers, books with limited but enthusiastic audiences, et cetera.

My honest estimate is that the result would be fewer and less diverse titles overall, published less well than they are now.

[tompe]

Originally Posted by Logseman

What do you mean?

http://en.wikipedia.org/wiki/Gatekeeping_(communication)