eBook sales are down 17%

[pwalker8]

Originally Posted by ZodWallop

I meant to address this earlier, but I was at work.

Indie E-Book Retailer Books On Board Halts E-book Sales - Livolsi has been critical of how the switch to the agency pricing model was implemented from the beginning and voiced complaints that it was organized strictly to benefit the big retail players and “devastated,” independent e-book sellers.

Indie ebooktailers and the Agency Model: Where Are They Now? - It’s ironic that the publishers who were going to level the playing field amongst retailers pretty much now only have their titles available on B&N and Amazon.

RIP Fictionwise? - Looks like Fictionwise is becoming more obsolete by the day. During the spring they discontinued their membership program in the face of the agency pricing changes.

I did say many, not all. Small indie booksellers, both paper and ebook come and go. Of the two that are specifically mentioned, one was bought out in 2009, the other went out of business in 2013. Agency pricing didn't actually hit the streets until late 2010. It was revoked in 2012. It didn't come back until the Amazon/Hatchette deal in 2014.

I suspect that closer inspection would show that agency was more a convenient excuse than a real reason. Most small bookstores have a very narrow margin of profit. The number one reason small businesses go under is under capitalization, i.e. they simply don't have enough cash on hand to weather a downturn. Fictionwise was purchased by B&N back in 2009 and eventually shutdown by B&N. It's pretty likely that B&N planned to fold the Fictionwise customer base into the B&N store from the beginning.

[ZodWallop]

Originally Posted by pwalker8

I did say many, not all. Small indie booksellers, both paper and ebook come and go. Of the two that are specifically mentioned, one was bought out in 2009, the other went out of business in 2013. Agency pricing didn't actually hit the streets until late 2010. It was revoked in 2012. It didn't come back until the Amazon/Hatchette deal in 2014.

I suspect that closer inspection would show that agency was more a convenient excuse than a real reason. Most small bookstores have a very narrow margin of profit. The number one reason small businesses go under is under capitalization, i.e. they simply don't have enough cash on hand to weather a downturn. Fictionwise was purchased by B&N back in 2009 and eventually shutdown by B&N. It's pretty likely that B&N planned to fold the Fictionwise customer base into the B&N store from the beginning.

I guess I'll just have to trust that you know their business better than the owners did

[pwalker8]

Originally Posted by darryl

Many things, though I suspect you will not agree. I will discuss just some of what I see as the major ones here. Certainly ebook pricing. I believe that they are deliberately seeking to slow ebook adoption in order to preserve their print book market for as long as possible. This may not be an irrational tactic from their point of view, and it does seem to be working to some extent. But it is a short term tactic and a dangerous one for them. It is detrimental to their authors, who bear the brunt of this tactic. They are losing market share and have stood idly by and watched the development of a huge and growing market in which they play no role. At the same time, they delude themselves that their product is so superior that it is in essence a market of its own, and not in competition with the cheaper Indie market. On the supply side, their response to much better deals for authors in the Indie market has not, as one would expect, been to themselves offer better deals for authors. It has been to offer even worse terms, slash advances, cut many authors and engage in a rights grab. Their source of best selling authors in the future must surely be from the Indie ranks, and to attract such authors they will have to offer very good terms indeed and accept only limited rights. I will be interested to observe what their strategy is as their mega selling authors cease to write new books. Perhaps they do have an intelligent strategy to transition to the new state of affairs, and this is just a rational strategy to maximise their profits in the meantime. But I can't personally perceive such a strategy. All I can see so far is denial and short-sightedness and lost opportunities.

Finally, to return to your music industry analogy once more, imagine Amazon had not come along when it did. Certainly as better reading devices came along there would likely have been increasing piracy. Perhaps a Napster equivalent would have arisen, or simply a trade through the various file sharing systems. Publishers would possibly have offered ebooks in some form, no doubt at ridiculous prices, much as the record labels did with music files at different times. When Apple came along with IBooks it would have dominated distribution of ebooks, much as it did music. Or imagine the music industry with a timely Amazon. Apple may never have bothered with ITunes because it would have had to compete on price with an established player with deep pockets. But the one thing that could have happened in both Industries but did not is the established players embracing the new format and offering and controlling it themselves. Because they made the choice to take the safe road and not jeopardise their existing business model, which of course others then did anyway.

Hum, let me pull up two recent best sellers
Walter Isaacson's Leonardo da Vinci (published Oct 17th, 2017)
Ron Chernow's Grant (published Oct 10th, 2017)

The paper price for the da Vinci book is $21, the Kindle price, $17
The paper price for the Grant book is $24, the Kindle price, $20

In both cases, the kindle price is basically at the discount price for the hardback. So I don't see a price discrimination against the ebook version, unless you are simply arguing that ebook prices should be much cheaper.

Choosing price points for anything is more of an art than a science, but we do see a nice experiment in pricing going on.

I just bought book 5 of J.A. Sutherland's Alexis Carew series. Kindle price, either $5 or free if you have kindleunlimited. The paperback price is $18. Sutherland is an indie author and the paper version is via Amazon's Publishing Platform. I would predict that he's not going to sell many paper copies.

With iTunes, you have a tiered pricing model. You can buy individual songs at $1.29, or the whole album at a much lower price than all the songs totaled. The album price costs about what the cd cost at Amazon. So, it seems to me that the big Publishers already are following the current music industry's lead in pricing. Digital media cost is fairly close to physical media cost. Movies are priced the same way, it cost the same for a digital copy of the movie as it does for a Blu-Ray copy.

Now perhaps you are arguing that the published missed the boat by not selling the ebook versions directly. Some either do have or once had their own ebook stores. Baen has it's own monthly ebook bundle and has since 1999, which if we actually had sales figures, might give some interesting information. I do suspect that the fact that Baen ebooks are now available on Amazon probably is an indication though. I would suggest that most customers would rather shop somewhere than has all the books available, rather than go from publisher to publisher.

[pwalker8]

Originally Posted by ZodWallop

I guess I'll just have to trust that you know their business better than the owners did

You doubt that B&N bought Fictionwise in 2009?

As far as Diesel ebook store goes, they went into business right after the Amazon ebook store opened. Why do you think that they would have a different experience than your standard indie paper book store would have, i.e. difficulty competing with Amazon? They couldn't compete on price, so they tried a coupon scheme. That didn't change the fact that their target audience, people who had the technical expertise to get the books onto their reading device, was actually a pretty small group of people on the whole.

So, yea, as a long time ebook consumer, I think I have a pretty good idea of why Diesel went belly up. I sure know why I never bought from them even though I was part of that small group of ebook consumers that was their potential customer base.

[Cinisajoy]

Originally Posted by ZodWallop

I guess I'll just have to trust that you know their business better than the owners did

I don't think he knows more. Though he is right about the capital.

Here is the thing: anytime a company blames one specific thing for them closing, there is usually way more going on.
Example: a higher end clothing store goes out of business because Walmart came in and they can't get a very specific pair of jeans at the same cost as Walmart.
Why do I see several things wrong with that reasoning?

[DiapDealer]

Originally Posted by pwalker8

So, yea, as a long time ebook consumer, I think I have a pretty good idea of why Diesel went belly up. I sure know why I never bought from them even though I was part of that small group of ebook consumers that was their potential customer base.

Purely anecdotal. You didn't buy from them, so there's no way they had a large (and/or loyal) enough customer base to compete.

[ZodWallop]

Originally Posted by pwalker8

You doubt that B&N bought Fictionwise in 2009?

No. But I do doubt that that is what caused their closure, given the information and articles that were written at the time.

Fictionwise still operated as they had regardless of B&N's ownership. You can argue about it all you want. But it's not too difficult to find articles and even threads right here from the time saying that the switch to agency pricing is what doomed them.

"Specifically, Fictionwise says:

Until June 2010 Fictionwise had a Micropay System that allowed deposits by members and supported micropay rebate promotions on some ebooks. Rebates and deposits for this system have been discontinued due to eBook industry changes and other factors."

As far as Diesel ebook store goes, they went into business right after the Amazon ebook store opened. Why do you think that they would have a different experience than your standard indie paper book store would have, i.e. difficulty competing with Amazon? They couldn't compete on price, so they tried a coupon scheme. That didn't change the fact that their target audience, people who had the technical expertise to get the books onto their reading device, was actually a pretty small group of people on the whole.

Diesel eBooks Files Federal Antitrust Lawsuit against Apple and Publishers Over E-book Pricing - I guess Diesel threw money around on a lawsuit because they couldn't face the embarrassment of complaining about Amazon.

[ZodWallop]

Originally Posted by Cinisajoy

I don't think he knows more. Though he is right about the capital.

Here is the thing: anytime a company blames one specific thing for them closing, there is usually way more going on.
Example: a higher end clothing store goes out of business because Walmart came in and they can't get a very specific pair of jeans at the same cost as Walmart.
Why do I see several things wrong with that reasoning?

Knowing what I know about high end clothing and Walmart, I can tell you they don't sell the same specific pairs of jeans

[pwalker8]

Originally Posted by ZodWallop

Knowing what I know about high end clothing and Walmart, I can tell you they don't sell the same specific pairs of jeans

True, but if Walmart can convince consumers that blue jeans are blue jeans and this pair of Levi's is exactly the same as that pair of Jordache (to use an example from earlier years because these days, I have no clue what the big fashion jeans are) then they have marked a specific price point in the consumer's mind.

This is what the argument about ebooks and price point is all about. Is a J.A. Sutherland price point the same as a David Weber price point? Amazon would argue books is books. The publishers would argue that consumers buy based on the author and some books are worth more than other books. That matches their experience with the big selling authors carrying the book market.

[pwalker8]

Originally Posted by ZodWallop

No. But I do doubt that that is what caused their closure, given the information and articles that were written at the time.

Fictionwise still operated as they had regardless of B&N's ownership. You can argue about it all you want. But it's not too difficult to find articles and even threads right here from the time saying that the switch to agency pricing is what doomed them.

"Specifically, Fictionwise says:

Until June 2010 Fictionwise had a Micropay System that allowed deposits by members and supported micropay rebate promotions on some ebooks. Rebates and deposits for this system have been discontinued due to eBook industry changes and other factors."



Diesel eBooks Files Federal Antitrust Lawsuit against Apple and Publishers Over E-book Pricing - I guess Diesel threw money around on a lawsuit because they couldn't face the embarrassment of complaining about Amazon.

Diesel and BooksOnBoard filed because the publishers and Apple have deep pockets. The suit didn't go well for Diesel or booksOnBoard. The courts found that the publishers caused no injury to either company. If they couldn't get Cote to agree with them, they must have had a real weak case.

[ZodWallop]

Originally Posted by pwalker8

This is what the argument about ebooks and price point is all about. Is a J.A. Sutherland price point the same as a David Weber price point? Amazon would argue books is books. The publishers would argue that consumers buy based on the author and some books are worth more than other books. That matches their experience with the big selling authors carrying the book market.

I don't personally have an issue with price point of ebooks*. Publishers large and small should feel free to price their books at what they think they can get. I can vote with my wallet. I don't mind only buying BPH titles from Amazon/B&N/Google.

I was defending the point that agency pricing did hurt the independent ebookstores that sprouted up and thrived by being creative in the early days of ebook popularity.

An irony, since the BPH's argued that agency was intended to level the playing field and 'free' us (free them, more likely) from the oncoming monopoly of Amazon.

When I bought my Nook ST, one of B&N's selling points was that with the expandable storage you could buy books from them or elsewhere and still have room for them on your device.

There was a chance for ebooks to be similar to MP3s, where the store and the device wouldn't have to be married together. Agency blew it and shackled the big publishers even more to Amazon.

*One argument about the price point of books though. It already does exist in the world of paper books. Within a dollar or two variance (usually less than that) a Dean Koontz book will sell for the same price as a Stephen King book (I changed authors because I'm only vaguely aware of David Weber and am unfamiliar with J.A. Sutherland). Why should e-books work differently?

[DiapDealer]

Originally Posted by pwalker8

Diesel and BooksOnBoard filed because the publishers and Apple have deep pockets. The suit didn't go well for Diesel or booksOnBoard. The courts found that the publishers caused no injury to either company. If they couldn't get Cote to agree with them, they must have had a real weak case.

Having a legal case against Apple and the publishers, and agency pricing being a huge factor in their collapse are two very, very different things. They don't need to go hand-in-hand. In short: having a weak legal case against Apple and the publishers says very little about whether or not agency pricing contributed to Diesel's and BooksOnBoard's demise.

As far as Fictionwise goes, there is no question in my mind that agency-pricing ended their Micropay program. Nor that Fictionwise's Micropay program was their primary tool for competing against bigger ebook retailers including Amazon. That B&N bought Fictionwise prior to agency pricing's original incarnation is neither here nor there in this regard. Fictionwise and Micropay survived long enough for agency pricing to kill them both.

[ottdmk]

It's funny how things evolve. Agency is cited by Kobo as a major reason they're still in business.

[pwalker8]

Originally Posted by DiapDealer

Having a legal case against Apple and the publishers, and agency pricing being a huge factor in their collapse are two very, very different things. They don't need to go hand-in-hand. In short: having a weak legal case against Apple and the publishers says very little about whether or not agency pricing contributed to Diesel's and BooksOnBoard's demise.

As far as Fictionwise goes, there is no question in my mind that agency-pricing ended their Micropay program. Nor that Fictionwise's Micropay program was their primary tool for competing against bigger ebook retailers including Amazon. That B&N bought Fictionwise prior to agency pricing's original incarnation is neither here nor there in this regard. Fictionwise and Micropay survived long enough for agency pricing to kill them both.

It was ruled that they could show no injury. If agency pricing was a huge factor in their collapse, then they should have been able to show injury. Being able to show injury is pretty straight forward. All you need is before and after sales figures. Apparently, those figures didn't show such a cause/effect.

That B&N bought Fictionwise before agency pricing is everything. Why exactly do you think B&N bought Fictionwise? The only wonder is why they waited so long to roll Fictionwise into their store.

[DiapDealer]

Sorry, but I'm simply going to have to rule your opinion on the subject as amateur and unreliable as my own.