Amazon's $9.99 eBook Attacked as "Predatory Pricing"

[ThomasMc]

What a load of horse manure. They don't have to print or ship anything, their only costs are a buck or two for royalties, and maybe a dollar for overhead. They are making $7 profit on a basically automated system. If the paperback is $8, the ebook should be more like $5.

[jgaiser]

Originally Posted by delphidb96

We'll see... My current K2(US) runs Sprint, but the replacement unit for my second broken K2 is on its way.

Interesting.. My replacement Kindle is *supposed* to arrive today via FedEx. Didn't think about it possibly being an international..

[calvin-c]

Originally Posted by ThomasMc

What a load of horse manure. They don't have to print or ship anything, their only costs are a buck or two for royalties, and maybe a dollar for overhead. They are making $7 profit on a basically automated system. If the paperback is $8, the ebook should be more like $5.

Uh-huh. And what's their overhead? Obviously you don't think preparing the book for publication is overhead. From your breakdown, Amazon must be acquiring their books directly from the author as you don't allocate any expense for paying the publisher-but all other reports are that they're acquiring their books from the publisher, so maybe you're right & they don't have very much overhead-but they're also paying *way* more than 'a buck or two'.

[DawnFalcon]

Originally Posted by calvin-c

they're also paying *way* more than 'a buck or two'.

And the end-user should care about this why? All higher prices do is drive the darknet. Publishers need to sort their pricing models out. There's precisely the same issue with console games and fixed platform-holder charges.

[samstod]

Part of the issue here is the business model for the publishing industry. Something like 80% of books don't make any profit, or at least not enough to cover the advance to the author. The industry makes some money on these, but the lion's share on the other 20%, and a good amount of that from a few top names selling millions of hardcover books (JK, James Patterson, Stephen King, Tom Clancy, etc). While the publishers would still make money on a 9.99 Harry Potter book, it wouldn't make enough to pay for all of it's other costs. That means either charging more for the Harry Potters of the world, or taking fewer risks on new authors, and IMHO, damaging the industry as a whole.

[calvin-c]

Originally Posted by DawnFalcon

And the end-user should care about this why? All higher prices do is drive the darknet. Publishers need to sort their pricing models out. There's precisely the same issue with console games and fixed platform-holder charges.

IMO it depends on the end-user. If all you care about is the present, then I don't think this discussion has anything of interest to you. Personally, I worry about the future. Not the long-term future (I have no idea what publishing will be like in 50 years) but not the short-term future either (I don't expect either Amazon or major publishers to go out of business in the next year or two), but in the future 10-20 years ahead.

That's when I see problems if we decide that publishers aren't entitled to a profit. As somebody said, the current business model has the 'big names' basically subsidizing new authors. If we change that, it'll lower the prices for books by the big names and eliminate the new authors, except for those who self-publish.

Is self-publishing a viable model for all authors? Not IMO. There's too much involved in publishing. I've seen *many* people who are good at what they do, when working for others, fail when working for themselves. Do they become worse at what they do? No, the reason they fail is because running a business takes a wide variety of skills-which they didn't have.

I expect the same is true of authors. They may be good at writing, but how good are they at promoting/advertising? Can they truly proofread their work adequately? I write documentation & the 'best practice' for that is to pass it around-let others proofread your work because they'll catch mistakes that you miss. You're too close to your own work-people see what they expect to see and the author, of course, knows what the sentence is supposed to say.

That's only a couple of examples of the value a publisher adds to an author's work. (It's probably true that not all publishers add significant value-but there's sleaze in every industry.) IMO a publisher does add value, so I think they deserve to earn a profit. The major questions are 1) how much profit is justified and 2) how much profit are they earning?

Until they open their books (assuming they ever do) we'll probably differ in our guesses on the latter. The part that ticks me off is when people look at what the author receives & assume that's the *total* cost of a book, to the distributor. It doesn't take more than a couple of minutes thought to realize how false that is-but that appears to be more than some people are willing to spend.

[DawnFalcon]

Originally Posted by calvin-c

That's when I see problems if we decide that publishers aren't entitled to a profit.

Yea, thing is the market's changing.

For one, the darknet means that misbehaving slits your own throat when it comes to profit in a way which just didn't happen a few decades ago.
For two, there are new ways to find authors which don't rely on boom or bust major author funding. Baen's Universe didn't publish new authors for fun, after all. (Well it was fun as well, but you take my meaning!)

Heck, John Ringo was found because he was part of the community around David Weber. The 1932verse's Grantville Gazette, and associated novels, grew out of a community.

More, bluntly, I am yet to be convinced that the majority of "publisher" functions couldn't be done work-for-hire, as they effective are in, say, much of the pen and paper RPG industry.


samstod - But why are sales like that? Oh yea, one factor: SHELF SPACE! This does not apply to ebooks... (screen space, yes, but there are ways to show things in ways which are considerably superior to a shelf...)

[sabredog]

Prpbably mentioned before me, but perhaps these high and mighty publishing corporations and their new (obscene) geographical restriction policy need to look at how Baen does business and does business successfully.

With No DRM, No restrictions and $6 per book with the buyer allowed to download as many formats as they decide to.

Amazon predatory pricing? Nope, just a load of cods.

[calvin-c]

Originally Posted by DawnFalcon

Yea, thing is the market's changing.

For one, the darknet means that misbehaving slits your own throat when it comes to profit in a way which just didn't happen a few decades ago.
For two, there are new ways to find authors which don't rely on boom or bust major author funding. Baen's Universe didn't publish new authors for fun, after all. (Well it was fun as well, but you take my meaning!)

Heck, John Ringo was found because he was part of the community around David Weber. The 1932verse's Grantville Gazette, and associated novels, grew out of a community.

More, bluntly, I am yet to be convinced that the majority of "publisher" functions couldn't be done work-for-hire, as they effective are in, say, much of the pen and paper RPG industry.


samstod - But why are sales like that? Oh yea, one factor: SHELF SPACE! This does not apply to ebooks... (screen space, yes, but there are ways to show things in ways which are considerably superior to a shelf...)

Certainly they *can* be done work-for-hire, the question is how many new authors can afford to hire them done? And, if they aren't done, how many new authors will *ever* sell enough books that they can afford to hire them?

Sure, some will mortgage their homes (assuming they own one in the first place) to come up with the money-and many more won't. Banks certainly won't lend money to new authors, but publishers will. So maybe this change you're predicting will change publishers from companies who help authors finish, promote, print, & sell their books into companies that give money to authors so they do those things themselves? Not likely, IMO-most authors simply aren't good at those jobs. So they'll either hire publishers to do them, if they can afford them, or they'll 'hire' the publishers for an ownership stake in their book-as they do, in effect, now.

It's possible that the market itself is changing. You mention what I call the 'universe' concept, in sci-fi. That does appear to have been successful-but it doesn't attract me. Too difficult to tell whether or not I'll like a story. Although some 'universes' have multiple storylines that intertwine (such as the Honorverse, branching into the Wages of Sin & Saganami series) but most end up with a main series plus a bunch of short stories of *very* mixed quality. That's why I've read many of the 1632 books, but not any of the Grantville Gazette collections.

And I refuse to read Star Wars or Star Trek. I'm sure there are a few gems among those-but it would cost me way too much in both time & money to find them among all the schlock. So, sadly, the 'universe' concept of finding new authors just doesn't work for me. Maybe I'm wrong-maybe it's the way the industry is going, but I do hope it won't arrive until after I've stopped reading (about the time I stop breathing).

I'm not sure Baen is a good example of publishing in general, although I can't prove it either way. My impression, however, is that sci-fi readers (all Baen's customers, AFAIK) are more supportive of their authors & 'their' publishers than readers in general are (probably because the 'general' publishers tend to ignore sci-fi).

They are, of course, an excellent example of how ebook publishing should be done-and probably will be done, eventually. They're ahead because sci-fi readers, again-IMO, tend to also be early adopters of new technology.

So, for the above reasons, I pretty much exclude Baen when I talk about publishers, in general. And that might be a mistake on my part-if the publishers (including Baen) would open their books we'd really have a better idea of how justified their claims are, as well as whether or not Baen's success is due to a different business model or simply to a different market. But they won't, so all I can do is guess-and my guess (FWIW) is that Baen's success is due to their market. But I could be wrong.

[DawnFalcon]

Baen's Universe was a webzine with a mix of short stories and serials by both new and established authors. It's not lost money, but it's not long term viable either because of the specifics of how it was launched, its likely Baen will launch another webzine within a few years.

I'd point out that the indie pen and paper RPG industry is very much work-for-hire, and many of the "companies" are one-man shops. And yet look at DriveThruRPG, which carries a wide variety of brands. One of the criteria involves a community.

Only one thing to me is really clear - the landgrab by publishers to ebook editions of older-contract books needs to be slapped down, and hard.

[sabredog]

I recently purchased the latest Travis S Taylor SF book from Baen. I could have purchased an ARC copy but as the release date was only a few days off I waited until recently to buy. Total cost US$6. Choice of any format or all and NO geographic restrictions.

My last purchase was the third book in the Helfort's War series, a non Baen published book (Random House), written by an Australian Author. Nope, without some IP masking trickery, I could not purchase this book as an ebook anywhere. Eventually I paid my US$7.50 and got the ebook. I could have waited and got it DRM free via a sharing site though, eventually.

It is truly astounding that the publishing giants have not learned something from the frenetic flailings of the music/movie industry. Surely that example of an antiquated failing marketing/sales strategy as something to avoid would have been obvious

[fugazied]

Originally Posted by ThomasMc

What a load of horse manure. They don't have to print or ship anything, their only costs are a buck or two for royalties, and maybe a dollar for overhead. They are making $7 profit on a basically automated system. If the paperback is $8, the ebook should be more like $5.

The publishers demand more than a couple of bucks. Also Amazon does have a decent chunk of overhead (apart from the actual distribution hardware).

But still, $9.99 isn't predatory, it should be the norm for these ephemeral products with 'lower' overheads.

[rhadin]

Originally Posted by DawnFalcon

More, bluntly, I am yet to be convinced that the majority of "publisher" functions couldn't be done work-for-hire. . .)

Every function that a publisher performs for an author can be done work-for-hire. But who will foot the bill? How many authors can afford $5,000+ for editorial work, $20,000+ for marketing, $2,000+ for cover artwork, $3,000+ for typesetting, etc., out of pocket? Publishers pay these costs.

And I can hear your scream now that the prices I gave are ridiculous -- way too high. But I know for a fact that they are not. In fact, I know that editorial costs, for example, can run much higher than $5,000. I recently finished editing a book where the editing costs exceeded $50,000.

I will grant that the costs fluctuate and generally are less for fiction than nonfiction, but it still costs many thousands of dollars to put out a book. Yes, some authors do it all themselves or do it on the cheap, and that gets reflected in their sales and their reputations; some are capable of doing it all and doing it all very well themselves; most are not.

Work-for-hire works well when you have the deep pockets to pay for the services; publishers pay for these services. Will authors gamble their own money on such services without knowing that the final product will at least recoup those expenses in the near term?

[rhadin]

Originally Posted by calvin-c

I'm not sure Baen is a good example of publishing in general, although I can't prove it either way. My impression, however, is that sci-fi readers (all Baen's customers, AFAIK) are more supportive of their authors & 'their' publishers than readers in general are (probably because the 'general' publishers tend to ignore sci-fi).

You are correct. scifi readers tend to be more supportive of authors they like. They often will buy both the e and p versions, as well as the ARC versions of a book. They often will click the donation button. Outside of certain niches, the Baen model will not work.

[calvin-c]

Originally Posted by DawnFalcon

Only one thing to me is really clear - the landgrab by publishers to ebook editions of older-contract books needs to be slapped down, and hard.

That I can agree with 100%!