BooksOnBoard reports major changes in ebook pricing

[BooksForABuck]

Remember, it's just these publishers who have adopted the agency model. Many of us continue to operate under a standard distribution model, allowing the distributor to offer discounts from our standard list prices.

As for whether publishers care about authors, authors are our suppliers. As such, we need them to continue to produce or we'd be out of business. Obviously publishers "care" more about some authors than others (if J.K. Rowling decided to publish with BooksForABuck.com, I'd care a lot, hint-hint, JK.) But obviously publishers are in business to make profits. Which isn't necessarily a bad thing. What is a bad thing is if they make pricing decisions that don't make sense for themselves or the industry.

I personally believe in affordable eBook pricing and in allowing distributors flexibility in offering discounts. Then again, I don't have a hardback fanbase I need to mollify.

Rob Preece
Publisher, www.BooksForABuck.com

[KJohnson]

First, we very much appreciate and value the professional discussion of the posters here. It's also important to point out that we and other eBook retailers offer and will continue to offer hundreds of thousands of titles NOT affected by these 5 REP (Required eBook Price) publishers and agency pricing. More than 75% of our titles will still be available, many discounted and most with Rewards dollars for each purchase.

With specific regard to the agency pricing, we had the choice of surprising our customers with the news after it happened, giving them no advanced notice of availability problems as the 5 publishers changed their systems and sorted out contracts with our wholesalers, plus surprising them (when the books become available again) with increased prices on their typical purchases. Instead, we chose to make our customers aware of all of this as soon as we understood it so that they could research, be prepared and make decisions for themselves. Our customers are savvy readers and savvy shoppers who are often very careful money managers. They communicate with us frequently via social media and our support email.

The publishers action is a response to Amazon's $9.99 pricing. Even though most of these titles lost significant money for eBook retailers, this pricing was adopted by others as a competitive response, including BooksOnBoard on a limited basis. For example, we offered Dan Brown's Lost Symbol at $9.98 at its release and continue to offer titles such as John Grisham's full catalog of recently released eBooks imprints at $9.98. (Dan Brown and John Grisham are Random House authors and will not be affected by the REP pricing issues.) Going forward, the 5 REP publishers will move force their $9.99 titles up to $12.99 or more, adding sales tax and removing other discounts and Rewards or Rebates. This reduces choice for consumers as the ability for any of us to discount is being taken away. And, yes, some of the pricing on high-priced, highly promoted big name releases on our site might drop to $12.99 or maybe $14.99 as dictated by the publishers. These, however, represent less than 1% of our entire catalog of eBooks for sale and less than 3% of all titles sold. On this limited selection, our customers will come out ahead in some cases and in some cases they will not. No matter what, the price will be the same everywhere. Our biggest concern is the REP publishers portion of the other 97% of eBooks sold, where a price increase is almost certain on all titles. This is the heart of where our customers shop.


Most of our customers typically buy eBooks that cost less than $7. Often, these are backlist and series titles, long ago set at paperback prices well below $9.99, and many are new release paperback-equivalent titles priced between $5.99 and $7.99. Adding sales tax to these prices and locking them in at a fixed retail price, which we normally discount, and dis-allowing rewards dollars - a large element of customer savings – will, in fact, add up to much more expensive eBooks for most of our customers for REP titles. Our customers are not the typical Kindle customer with high six figure household incomes, although a small portion do have Kindles, Sony Readers, Cybooks, Astaks, BeBooks, and more. They are people that typically are not making six figures, and cannot normally afford to buy a dedicated eBook reader. Most still do their eBook reading on PCs and laptops. They are typical of most readers who normally waited for the paperback to come out at the bookstore, rather than allow themselves the luxury of paying the hardcover price. A measurable increase in price after locking the new Required Ebook Price (REP), adding sales tax, and eliminating rewards dollars will typically be a significant increase (20% to 35%) in price for these good customers of both BooksOnBoard and the publishers. We are happy to report, nonetheless, that Harlequin, Random House, McGraw Hill, Samhain, and hundreds of our other publishers will NOT be going with the REP model for the foreseeable future.

We will continue to keep our customers informed, even if some interpret it as scare tactics. At the moment, we expect the 5 REP publishers eBooks not to be available after midnight tonight, April 1 We hope to see these eBooks back within a few weeks once the publishers get their infrastructure together. In the meanwhile, our top publishers Random House, Harlequin and Samhain as well as hundreds of others will continue to have hundreds of thousands of titles with Rewards Dollars on our site. Plenty of backlist and plenty of new titles from the publishers whose titles, premised on sales, matter most to our customers.

Please email if we can answer any questions, support@booksonboard.com

Kurt Johnson
BooksOnBoard

[Crowl]

Originally Posted by stustaff

No your missing the point.
If the publisher wants to tell the retailer " I will only sell my books to you if you sign this contract to say that you will sell them for $x and never sell them for less"

then that is fine the publisher SHOULD be allowed to do that!
If the shops then decide they dont want to agree to such a deal then they buy books from someone else.

eventually if all shops refuse to buy books the publisher will change their mind.

but there doesnrt need to be inteference/involvement from goverment etc

I'm not missing the point at all, this situation now where the publishers are dictating a price that the books have to be sold at is no different from the net book agreement that used to operate in the uk and was found to be illegal in the late 90s.

The publishers should have every right when it comes to deciding how much they personally want to get for a book, but once they have got their money from the bookstores then they should have no further say in the matter since thier dealing is with the bookstore and not the eventual consumer.

[pilotbob]

Kurt,

Thanks for your post. It is very informative. However I question this statement:

Originally Posted by KJohnson

Our customers are not the typical Kindle customer with high six figure household incomes, although a small portion do have Kindles, Sony Readers, Cybooks, Astaks, BeBooks, and more.

Can you tell me where you get your demographics on Kindle and other ebook reader device owners? I would surmise that the typical Kindle customer does NOT have a 6-figure income. (I read 6 figure income to be $100,000.00 per year or more.)

Also, as a Kindle owner you are correct, I buy my books at the Kindle store... well for two reasons. 1) because I don't need to do any liberating or conversion and 2) they usually have the best price.

Thanks,
BOb

[ficbot]

I am not a six-figure income household and I have a Kindle. I pritoritize reading and spend some of my discretionary money there as opposed to on eating out or something else. I think you are making a very inaccurate generalization.

I wonder if some titles will actually come down in price. I have a few titles wishlisted elsewhere for $19 or more (which I will not pay, hence they are wish-listed and not purchases) and I am curiious if they might go down to $14.99 after the change.

[KJohnson]

Bob,

The >$100k number was presented at an industry conference fall of 2009, I believe exact stat was $116k and the data originated from Bowker. I cannot confirm that it is included in their "2008 U.S. Book Consumer Demographics and Buying Behaviors Annual Report". There are always exceptions to the rule, but this is the data we were presented.

We ourselves also conduct frequent survey research of eReader device users from our own registered customer mailing list and though our social network sites.

Kurt

[phenomshel]

Originally Posted by KJohnson

First, we very much appreciate and value the professional discussion of the posters here. It's also important to point out that we and other eBook retailers offer and will continue to offer hundreds of thousands of titles NOT affected by these 5 REP (Required eBook Price) publishers and agency pricing. More than 75% of our titles will still be available, many discounted and most with Rewards dollars for each purchase.

With specific regard to the agency pricing, we had the choice of surprising our customers with the news after it happened, giving them no advanced notice of availability problems as the 5 publishers changed their systems and sorted out contracts with our wholesalers, plus surprising them (when the books become available again) with increased prices on their typical purchases. Instead, we chose to make our customers aware of all of this as soon as we understood it so that they could research, be prepared and make decisions for themselves. Our customers are savvy readers and savvy shoppers who are often very careful money managers. They communicate with us frequently via social media and our support email.

The publishers action is a response to Amazon's $9.99 pricing. Even though most of these titles lost significant money for eBook retailers, this pricing was adopted by others as a competitive response, including BooksOnBoard on a limited basis. For example, we offered Dan Brown's Lost Symbol at $9.98 at its release and continue to offer titles such as John Grisham's full catalog of recently released eBooks imprints at $9.98. (Dan Brown and John Grisham are Random House authors and will not be affected by the REP pricing issues.) Going forward, the 5 REP publishers will move force their $9.99 titles up to $12.99 or more, adding sales tax and removing other discounts and Rewards or Rebates. This reduces choice for consumers as the ability for any of us to discount is being taken away. And, yes, some of the pricing on high-priced, highly promoted big name releases on our site might drop to $12.99 or maybe $14.99 as dictated by the publishers. These, however, represent less than 1% of our entire catalog of eBooks for sale and less than 3% of all titles sold. On this limited selection, our customers will come out ahead in some cases and in some cases they will not. No matter what, the price will be the same everywhere. Our biggest concern is the REP publishers portion of the other 97% of eBooks sold, where a price increase is almost certain on all titles. This is the heart of where our customers shop.


Most of our customers typically buy eBooks that cost less than $7. Often, these are backlist and series titles, long ago set at paperback prices well below $9.99, and many are new release paperback-equivalent titles priced between $5.99 and $7.99. Adding sales tax to these prices and locking them in at a fixed retail price, which we normally discount, and dis-allowing rewards dollars - a large element of customer savings – will, in fact, add up to much more expensive eBooks for most of our customers for REP titles. Our customers are not the typical Kindle customer with high six figure household incomes, although a small portion do have Kindles, Sony Readers, Cybooks, Astaks, BeBooks, and more. They are people that typically are not making six figures, and cannot normally afford to buy a dedicated eBook reader. Most still do their eBook reading on PCs and laptops. They are typical of most readers who normally waited for the paperback to come out at the bookstore, rather than allow themselves the luxury of paying the hardcover price. A measurable increase in price after locking the new Required Ebook Price (REP), adding sales tax, and eliminating rewards dollars will typically be a significant increase (20% to 35%) in price for these good customers of both BooksOnBoard and the publishers. We are happy to report, nonetheless, that Harlequin, Random House, McGraw Hill, Samhain, and hundreds of our other publishers will NOT be going with the REP model for the foreseeable future.

We will continue to keep our customers informed, even if some interpret it as scare tactics. At the moment, we expect the 5 REP publishers eBooks not to be available after midnight tonight, April 1 We hope to see these eBooks back within a few weeks once the publishers get their infrastructure together. In the meanwhile, our top publishers Random House, Harlequin and Samhain as well as hundreds of others will continue to have hundreds of thousands of titles with Rewards Dollars on our site. Plenty of backlist and plenty of new titles from the publishers whose titles, premised on sales, matter most to our customers.

Please email if we can answer any questions, support@booksonboard.com

Kurt Johnson
BooksOnBoard

Thank you, Kurt. I have sent an email to the above address.

[JSWolf]

Originally Posted by phenomshel

Thank you, Kurt. I have sent an email to the above address.

What is it you have asked?

[dmikov]

Originally Posted by stustaff

Why should the publisher not be allowed to sell their books however and to whoever they want?
If they choose that people who want to sell their books must do so at certain prices then thats up to them! no book store has to buy from them.

instead of legislation how about letting the market actually do its thing! Books especially the sort being discussed here(eg not educational) are not a neccesity like power or food so let the publisher price ridiculusly people wont buy and prices will drop!

That's just ..hmm what pc statement will fit.. intellectually challenged statement I saw in awhile.
You can choose how to sell your stuff however you want, but it is illegal to sell to me and not sell to you - called discrimination. Granted they call it distribution agreements, but still - it's legal, but not ethical.
Plus it boggles my mind how after selling them already, I can see them on Amazon - so they had agreement, they can change the price of the book?
The whole entertainment industry with it's entitlement chip, seems to be existing in some parallel universe.

[phenomshel]

Originally Posted by JSWolf

What is it you have asked?

I didn't ask anything, Jon. I expressed regret that this situation is causing delays in delivery of ebooks from the participating publishers, and made some suggestions for the Wishlist feature on the website, and additional information for Series listings.

There are a lot of new books that I am interested in being released on April 6th. Most of them have now disappeared from retailer's sites and there are no preorder options now, either. It isn't just Books on Board, I found one title at Mobipocket for full hardcover price, and that was all.

It would have been nice, since the publishers conceived of this notion, if they had put the mechanisms in place regarding the feeds to retailers for them to be implemented without delays. Since they in their infinite wisdom did not choose to do this (yes, that was sarcasm), readers who choose to read in electronic forms are paying the price with delays and frustration.
I still say there's bound to be a discrimination suit in this somewhere... (that was sarcasm too, Jon, before you jump on me...)

[Fat Abe]

Originally Posted by KJohnson

Bob,

The >$100k number was presented at an industry conference fall of 2009, I believe exact stat was $116k and the data originated from Bowker. I cannot confirm that it is included in their "2008 U.S. Book Consumer Demographics and Buying Behaviors Annual Report".

Kurt

Sounds about right for the time frame of the report. With the introduction of later Kindle models, the median household income has probably fallen. A good thing, not a bad thing. Initial buyers of the iPad probably have too much discretionary income too.

[leebase]

I've never been a customer of BooksOnBoard. Frankly, I didn't know about you. I've been buying from Amazon, Fictionwise and Webscriptions. I just wanted to say "well done" in informing your customers about the pricing changes ahead of time. I didn't find out from Fictionwise until after they ended their Buywise program and removed so many titles from being able to be purchased. Even after writing them and getting form letter responses -- I STILL have no idea what is ahead for we Fictionwise customers.

Looks like I'll be checking out BooksOnBoard more.

Lee

[batgirl]

So much to be grumpy about but I'll take a wait and see attitude. After all, we don't have to wait too long.

Most likely, if the books are more than I want to pay, I'll just check them out of my library for free. In fact, I had stopped buying books (because of both space and money) years ago and it is only when I got my PB 360 that I started purchasing books again. I've discovered that this is my preferred method of reading. But if the cost is too much, then I'll start toting around library pBooks again.

But how are they going to calculate sales tax? Based on credit card addresses?

[pilotbob]

Originally Posted by pilotbob

Still 9.99 in the Kindle store. Isn't today the day the agency model pricing starts. Hachette is one of the 5 going to agency pricing right?

I'll have to recheck the price tomorrow.

BOb

Yes, the price is now $13.00 as is the Hard Cover... yet the MMP is 9.99. I just don't understand what justifies the ebook being more than the pbook.

Insane.

BOb

[pdurrant]

Originally Posted by pilotbob

Yes, the price is now $13.00 as is the Hard Cover... yet the MMP is 9.99. I just don't understand what justifies the ebook being more than the pbook.

In the case of I, Alex Cross, the justification is that the paperback at $9.99 isn't out until 1st October 2010, while the ebook is available now.

Note also that in (say) Australia, the Kindle edition is $11.99, while in the UK it's $14.09 ($11.99+VAT). But it doesn't seem to be currently available in the US at all.