Is Agency Pricing Coming to UK?

[Kirtai]

Originally Posted by HarryT

Printing is a very, very minor component of the cost of a book (for a paperback novel, at least); the overwhelming majority of the costs of book production apply to an eBook just as they do to a paper book.

True, but printing and storage costs are marginal costs which never go away, unlike the up front production costs which can be paid off.

[Barcey]

Originally Posted by HarryT

A publisher, however, will know with a reasonable degree of accuracy how many copies of a book it is likely to sell. Prices have to set to recover all the "up front" costs for the book - editing, publicity, and so on and so forth - and to make a reasonable profit on top of that. Printing is a very, very minor component of the cost of a book (for a paperback novel, at least); the overwhelming majority of the costs of book production apply to an eBook just as they do to a paper book.

Paper book distribution has a lot more cost then printing. It's very inefficient. Printing costs are just a piece of the picture. Shipping, warehousing, inventory, brick and mortar retail stores, deciding how many to ship where, lost sales because you didn't have inventory, returns, wages and benefits for all the people associated with the above....

Yes there are one time costs associated with producing an electronic book but paper is not a small piece of the overall cost. This isn't about "educating the public" it's about trying to deceive the public. People understand the costs and expect the price to be much cheaper then what they pay for a physical book, not the fictional price that the publishers stamp on the cover.

[Fbone]

Originally Posted by fjtorres

Some governments feel the need to regulate the pricing of "essential" products. It is not universal even in those states.

"Dumping" is the sale of products below manufacturing costs across national boundaries. It is only deemed illegal if it harms local producers.

Otherwise, selling below cost happens all the time and is called "clearance", "fire" sales, or just plain "doorbusters". Check the thread on Sony reader pricing at Target for a perfect example.

A better example of what Amazon does can be found in supermarket weekly fliers: they are loaded with loss-leader sale items intended to draw in traffic and customers that will then buy other, regular-priced, items. It is called "basket pricing" because, while the supermarket may lose money on the sale of the discounted items, they make it back on the rest of the purchases in the shopping basket. Perfectly legal and standard practice in volume-based retailing.

Clearance and discontinued items are exempted along with "going out of business" sales. Although, the state monitors abuses in the latter.

And the loss leaders in the stores are not necessarily below cost. The markup along the chain is incredible. Do you really think it cost GM $4.00 to produce a box of cheerios? Compare the brand name costs with generic. I worked in retail while in college and no loss leaders we sold were below cost except for the store brand free item coupon.

Trick is we really dont know what the costs are for most things and it isnt important. The industry is self-policing. Abuses are quickly reported to the authorities. Notice how fast Amazon's competitors and publishers reacted to Amazon's ebook price structure which was reportedly below cost.

[AnemicOak]

Originally Posted by SensualPoet

An example I love to cite: Steig Larsson's The Girl with the Dragon Tattoo is $13.50 from Penguin Canada and that's the price at the till at my local Chapters/Indigo. This is a flimsy mass market edition, not a handsome, better bound trade edition. Yet Penguin Canada will sell me the same novel at $7.99 from kobobooks and $7.65 from Amazon -- Penguin Canada editions each. (The hard cover is $32.)

Penguin is one of the "agency five" and both Kobo and Amazon "did the deal". I am simply not seeing the impact except possibly in a handful of just released titles which the publishers believe they can sell at $12.99 and higher. They're wrong: I am simply redeploying my funds to something cheaper in the meantime and will buy those titles later when they are more reasonable and assuming I am still interested.

Question. Is Penguin Canada an agency 5 publisher? (Penguin US is, but Penguin UK is not). Are the ebook copies available to you for sure from Penguin? Penguin Ca lists the price of the ebook as $13.50

The US publisher is Random House and not an Agency publisher and the prices you mention sound in line with the US pricing.


Pretty much any Agency priced book in the US is either the same as the list price of the paper edition or $1 less (occasionally $2 less) and sometimes up to $5 more than the print copy (example Naamah's Kiss by Jacqueline Carey). This applies to books that have a mass market version out.

[BVLarson]

One item in defense of the publishers/authors concerning Amazon's annoying policies: They will lower their price to match any competitor automatically (with a min of about $1). This can catch the owner of the book in a trap. Let's say you sell on Kobo, and sell about 1% of your books there, and also on Amazon, where you get about 80% of your sales (realistic numbers). If Kobo decides to get a wild idea and slash your price, Amazon will match with no input from you. Since the price of the book cost them nothing up front, they think dropping the price costs them nothing. But it does cost you, and quite a bit, as the rights holder. If they were a traditional seller and had paid $4 to buy and store your paper copy, they would never slash the price way down. But with ebooks, they have no limits, no price threshold. They can happily dump your book and it's out of your control.
-BVL

[SensualPoet]

But, BVLarson, has your scenario ever happened? Just because something is possible, doesn't mean it will happen or will be repeated. President Obama could order a nuclear strike on Moscow in the morning, but it's highly unlikely.

[SensualPoet]

Originally Posted by AnemicOak

Question. Is Penguin Canada an agency 5 publisher? (Penguin US is, but Penguin UK is not). Are the ebook copies available to you for sure from Penguin?

So, yes, we are talking Penguin Canada throughout my example. But you have a point that, perhaps, something goofy is going on with different rights for different regions. I have used this author/series because it is so well known.

What about Elizabeth Gilbert's Eat, Pray, Love?

Amazon e-book - $8.76 Penguin
Kobo e-book - $10.49 Penguin
Sony Reader Store - $12.99 Penguin to Canadians (another reason we don't shop there)
Chapters/Indigo - $18.50 Trade paperback Penguin
Chapters/Indigo - $35.00 hard cover Viking

E-books are significantly cheaper than bricks and mortar titles -- and this is truly, madly, deeply truly true for backlist works -- and therefore e-book savings pay for the cost of the e-reader after 15 or so purchases and savings fly right into your pocket thereafter.

[charleski]

Originally Posted by HarryT

the previous book pricing cartel - the "Net Book Agreement" - was ruled to be illegal in the 1990s, so I'd be surprised to see full-blown "agency" pricing in the UK as exists in the US. The publishers know that it would be pretty certain to be judged an anti-competitive practice and prohibited.

Actually the NBA had effectively collapsed before it was ruled illegal in 1997. Hachette's CEO has gone on record stating that the demise of the NBA was good for British publishing, so it's strange to see them leading the charge towards agency pricing.

The problem with simply lowering prices to increase sales is that book purchases are partially inelastic. Consumers only have a certain amount of free time in which they can read books, and if they're rational they aren't going to buy books that they won't get round to reading. There's certainly room for growth by encouraging more people to read and encouraging people to buy rather than borrow from a library, but that growth will be limited.

[murraypaul]

Originally Posted by charleski

if they're rational they aren't going to buy books that they won't get round to reading.

I think that makes a lot of irrational people around here

[murraypaul]

Originally Posted by SensualPoet

What about Elizabeth Gilbert's Eat, Pray, Love?

Amazon e-book - $8.76 Penguin
Kobo e-book - $10.49 Penguin
Sony Reader Store - $12.99 Penguin to Canadians (another reason we don't shop there)
Chapters/Indigo - $18.50 Trade paperback Penguin
Chapters/Indigo - $35.00 hard cover Viking

Amazon UK eBook: £2.29 ($3.58 US)
Amazon UK pBook: £3.27 ($5.11 US)

[geertm]

The UK agency pricing battle has begun:

http://www.thebookseller.com/news/12...epository.html

Lets hope the bookstores will not cave in to the publishers this time!

[Duiker]

Originally Posted by HarryT

Unfortunately you really can't look at it that way. An eBook sale will generally be instead of a paper book sale, not as well as, so the eBook has to share the same costs that the paper book would have. You can't regard eBook sales as cost-free.

I'm not so sure. I would say about half of the books I've bought for my e-reader I wouldn't have bought the print versions of. The impulse buy is pretty powerful. The ebook pricing argument is getting very stale. The publishers that will succeed are the ones who know how and are willing to change with technology and not try to swim against the current.

[murraypaul]

Originally Posted by HarryT

Unfortunately you really can't look at it that way. An eBook sale will generally be instead of a paper book sale, not as well as, so the eBook has to share the same costs that the paper book would have. You can't regard eBook sales as cost-free.

I disagree with this too. With the current low prices Amazon are offering they are getting a lot of impulse buying from me, which wouldn't have been sales otherwise.

[EowynCarter]

Wonderful, no there are some book i can't have access to anymore....

Scary, as some shops in the US still haven't managed to get some books back...

Amazon ? No way !
I'll sooner go back to pbook, or go to the darknet, that's all this idiot publishers deserve !

Lets hope the bookstores will not cave in to the publishers this time!

I'll rather have expensive books, than no book at all !

/me is depressed....

[geertm]

Originally Posted by EowynCarter

I'll rather have expensive books, than no book at all !
/me is depressed....

I'll rather have no books at all, than expensive books.
If there is no competition this is always bad for the consumer.
Just buy books from smaller publishers and lesser know authors.
There are already some 40 books on my B&N wishlist from agency publishers that I would have bought for pre-agency prices. And still there are more than enought books for me to read. There more than enough great books out there by none-agency publishers.

If publishers control prices in both the US and UK they control the 2 major (english language) e-book markets, and they can raise prices as high as they like, without any real competition.