Agency pricing

[wallcraft]

Originally Posted by OtterBooks

I was under the impression that agency ebook sales have been increasing rather dramatically.

Everyone's ebook sales have been increasing dramatically, which is why it is going to be difficult for the Agency publishers to understand how badly they are doing relative to other sources of ebooks.

I consider myself relatively insensitive to price, but yesterday I decided not to buy a promising book by a first time (in fiction) author because it was $14.99 as an Agency ebook. The problem with set prices is that they are not based in commercial market realities. If Amazon (for example) was able to forgo some of its 30% fee to lower prices they would lower some more than others - based on actual sales figures. In principle the publishers could do this too (i.e. lower the price if sales are slow and increase it if sales are good), but they don't have the necessary real-time information or the infrastructure to do this.

[leebase]

Originally Posted by CleverClothe

They do if they want any of the Agency 5 books, thanks to a little monopoly ensuring law called Copyright.

Right and there is nothing new about that. Just like hard back books always cost way "too much" before there ever were ebooks. Nothing new here. Nifnits too much, you don't buy the book.

Lee

[Andrew H.]

Originally Posted by CleverClothe

That was a great joke, well done. Wait, you were serious? You think that price fixing is no different than setting prices?

*sigh*

Reading for comprehension will help you write posts that make sense.

That is exactly the point I was trying to make when I responded to hamster's comment about price fixing. I.e., he objected to my use of the term "illegal price fixing," and I explained that if it wasn't illegal, it was just setting prices.

Price fixing is completely the opposite of a free market. You have businesses working together to actively stop competition. A quick Google search turned up 234 "price fixing" stories in the last WEEK. And 137,000 in the archives.

You may have picked up on this being my point if you had read the conversation. Presumably all of those price fixing stories are about illegal price fixing?

This may be a personal question, but, do you watch Fox News?

No, I don't.

Were you going to tell me about a great Fox News story on price fixing you enjoyed?

[HamsterRage]

Originally Posted by Andrew H.

That is exactly the point I was trying to make when I responded to hamster's comment about price fixing. I.e., he objected to my use of the term "illegal price fixing," and I explained that if it wasn't illegal, it was just setting prices.

Wrong again Honey!

Legal v. illegal is a matter of law, and I'll assume about proving something in court. The big five worked together to use their shared monopoly to force Amazon to conform to a pricing system that neither they nor the consumer wanted. I'm fairly certain that the average man-in-the-street would view that as "price fixing", not "price setting". I do, but I've got to assume that it's somehow not illegal, since nobody's been charged with anything.

I chose my words very carefully in my previous posts, Andrew. If you want to re-write my posts and argue with yourself then more power to you. But keep me out of it.

[CleverClothe]

Originally Posted by leebase

Right and there is nothing new about that. Just like hard back books always cost way "too much" before there ever were ebooks. Nothing new here. Nifnits too much, you don't buy the book.

Lee

Before agency pricing, there was competition on pricing. Now there isn't. So yes, there is something new.

[CleverClothe]

Originally Posted by Andrew H.

*sigh*

Reading for comprehension will help you write posts that make sense.

That is exactly the point I was trying to make when I responded to hamster's comment about price fixing. I.e., he objected to my use of the term "illegal price fixing," and I explained that if it wasn't illegal, it was just setting prices.

You may have picked up on this being my point if you had read the conversation. Presumably all of those price fixing stories are about illegal price fixing?

My point still stands. You were contending that the price fixing of the Agency 5 was legal, whatever HamsterRage's own points are.

I will say to both of you, price fixing is illegal (though not always investigated). Having the same price as a competitor is not necessarily illegal.

[leebase]

Originally Posted by CleverClothe

Before agency pricing, there was competition on pricing. Now there isn't. So yes, there is something new.

Clearly there is -- even Amazon says so by saying that folks have shifted from buying "Agency 5" books to other lower cost books.

There is VAST competition for books.

Lee

[CleverClothe]

Originally Posted by leebase

Clearly there is -- even Amazon says so by saying that folks have shifted from buying "Agency 5" books to other lower cost books.

There is VAST competition for books.

Lee

Amazon said that customers are shifting away from the non-competitive pricing of the Agency 5 to the competitive pricing of the other publishers. Do try to keep up with the conversation.

[leebase]

Originally Posted by CleverClothe

Amazon said that customers are shifting away from the non-competitive pricing of the Agency 5 to the competitive pricing of the other publishers. Do try to keep up with the conversation.

Someone's a brick shy of a load, but not me. This "fact" SUPPORTS the reality of competition and how the agency pricing model has NOT resulted in an unfair market. Penguin is now in control of it's ebook pricing but has NO POWER to force people to pay those prices. As such, customers have migrated away from the higher priced books.

Thing is, this has ALWAYS been true. Lots of folks would never buy a new release hard back because of the price. Lots of folks waited for the paper back or used the library or bought the hard backs from the "cheap bin".

For a time we had Amazon subsidizing new release ebooks at the paper back price, which was obviously attractive for customers but not to the publishers.

So now that the publishers have set the new release back to their "new hard back prices" (yes, a few dollars cheaper) -- some of that market is going to revert back to waiting or choosing alternatives.

Lee

[CleverClothe]

Originally Posted by leebase

Someone's a brick shy of a load, but not me. This "fact" SUPPORTS the reality of competition and how the agency pricing model has NOT resulted in an unfair market. Penguin is now in control of it's ebook pricing but has NO POWER to force people to pay those prices. As such, customers have migrated away from the higher priced books.

Thing is, this has ALWAYS been true. Lots of folks would never buy a new release hard back because of the price. Lots of folks waited for the paper back or used the library or bought the hard backs from the "cheap bin".

For a time we had Amazon subsidizing new release ebooks at the paper back price, which was obviously attractive for customers but not to the publishers.

So now that the publishers have set the new release back to their "new hard back prices" (yes, a few dollars cheaper) -- some of that market is going to revert back to waiting or choosing alternatives.

Lee

Wait, you think that $14.99 at Amazon and $14.99 at Apple and $14.99 at Kobo is price competition? And you are saying I'm a brick shy?

Even the publisher's have admitted this. I've seen some reality distortion field effects, but this is new to me.

[leebase]

Originally Posted by CleverClothe

Wait, you think that $14.99 at Amazon and $14.99 at Apple and $14.99 at Kobo is price competition? And you are saying I'm a brick shy?

Even the publisher's have admitted this. I've seen some reality distortion field effects, but this is new to me.

Yes, there is competition. A book is not only competing with itself, but with OTHER books. How can folks crow about ebook sales shifting away from the Agency 5 publishers towards lower priced ebooks and at the SAME time say that Agency pricing is uncompetitive?

If you raise prices you are supposed to expect lower sales. Why should a publisher put out an ebook for $9.99 when it's still wishing to sell it's $25 hard backs? Lunacy. We expect there to be competition in the MARKET, but no one is supposed to have to compete with THEIR OWN PRODUCT (unless they want to).

You don't want to pay $14.99 for the ebook, then pay $18.99 for the hard back (on sale). What? You don't want to pay the new hard back price either? Then wait a year for the paper back to come out like you always used to do.

Lee

[Keryl Raist]

Originally Posted by JSWolf

But, do your books show up at any other shop other then Amazon? I know you can submit to Smashwords, but I am not always happy with the results from the meatgrinder there. So is there any place you can submit your books to other then Amazon or Smashwords where you can hand craft the eBooks to make sure they do come out nicely formatted for those of us that do not have Kindles?

I've got my book on Amazon, Smashwords, and Barnes and Noble. I'm in the process of getting it up on DriveThruFantasy.com. Rumor has it if you've got a mac getting set up with the Apple store isn't massively complicated (but I don't have a mac, so using Smashwords was fine by me.) You can also get a paper copy on Amazon. And if you want a PDF, I'll sell one to you directly.

So, yeah, I can sell in numerous venues.

If I had the savy and the time, I could set my website up to sell .mobi, epub, and pdf, but that's a bit beyond what I'm looking to do right now. It's easier to let the big boys handle the distribution end of things.

[Keryl Raist]

Originally Posted by leebase

Yes, there is competition. A book is not only competing with itself, but with OTHER books. How can folks crow about ebook sales shifting away from the Agency 5 publishers towards lower priced ebooks and at the SAME time say that Agency pricing is uncompetitive?

If you raise prices you are supposed to expect lower sales. Why should a publisher put out an ebook for $9.99 when it's still wishing to sell it's $25 hard backs? Lunacy. We expect there to be competition in the MARKET, but no one is supposed to have to compete with THEIR OWN PRODUCT (unless they want to).

You don't want to pay $14.99 for the ebook, then pay $18.99 for the hard back (on sale). What? You don't want to pay the new hard back price either? Then wait a year for the paper back to come out like you always used to do.

Lee

I think this is what agency pricing, when it's that high, is supposed to do, push you toward buying physical books.

I think the publishers are idiots for using this technique, but all the same, they're doing it. They know low ebook prices cannibalize the sales of their physical books. They want to sell physical books because making and selling physical books is their business. They're currently fighting against the reality that their real business is producing content, not producing the way that content gets to people. When they realize this, and start jettisoning their physical production stuff, they'll probably go guns blazing into low priced ebooks.

[leebase]

Originally Posted by Keryl Raist

I think this is what agency pricing, when it's that high, is supposed to do, push you toward buying physical books.

Here's another explanation. Publishers know they can make the most money the first year when a book is released. They put out their highest priced product, the hard back book, and put out no cheaper way to get that content because the demand is highest and enough people will pay the higher price.

Publishers are equally happy to sell a high priced ebook as they are a high priced hard back. I don't think they really care if it's an ebook or a paper book. What they care about is getting the most revenue they can during the highest demand window for their product.

Customers, of course, want the content for the cheapest price. If a MUCH cheaper version of the product is available, they'll choose it. Who wouldn't?

So the pricing will remain high during that "high demand" time window whether it's hard back books or ebooks. Folks who don't want to pay the high price will WAIT for the cheaper version to come out. That's the paper back, or the reduced ebook price. The publishers again don't really care which you buy.

Lee

[carld]

I've bought exactly one agency priced book, and that was through gritted teeth. I'll never be a regular buyer.

Agency pricing is ONLY being saved by the fact that ebook sales are growing like gangbusters (160% last month). Once the market matures I expect agency pricing to die an excruciating death, and hopefully take the price fix five with it.