Apple + Agency Pubs Colluded on Price?

[anamardoll]

Thank you, MurrayPaul, for providing that context. I get very shirty when people cherry pick data out of context, and I appreciate other posters providing clean-up.

Mrs. Joseph, I love the Dear Author blog and those are both very good posts. Thanks for digging them up!

[anamardoll]

Originally Posted by elcreative

I said that a free book is a lost sale... it is... it may lead to other sales in the future or it may not but at the instant that a book is acquired for free then it isn't being purchased... simple English... sale = exchange of value (usually money) for item being sold, no exchange then no sale...

No. That is not what "lost sale" means. "Lost sale" does not mean "Ana isn't buying something", because if that were true, BILLIONS of "lost sales" would be going on constantly around Ana -- I'm not buying any shaving cream at the moment? Lost sale! I'm not buying a hot pocket right now? Lost sale! Ana got a promotional copy of Oreo Cakesters in the mail to review? LOST SALE!!

"Lost sale" means "Ana isn't buying this thing but she otherwise would have". That is why a freebie ISN'T necessarily a lost sale. In order for a sale to be "lost", it had to be possible/probable in the first place.

There are two options for freebies:

1. Consumer A would have bought Konrath's book at $2.99 but notices that it's free this week and snaps it up. THAT is a "lost sale".

2. Consumer B would never have bought Konrath's book at $2.99 but notices that it's free this week and snaps it up. That is NOT a "lost sale" because the "sale" was never, ever possible.

Then there's the related:

3. Customer C would have bought The Help at $6 but not at $10 so goes off to buy something else instead. That is another version of a "lost sale" on the part of the snubbed book, but it's a gain for whoever did get the money.

"Money didn't exchange hands" is not a lost sale. "Money didn't exchange hands but it would have if things had been slightly different" is a lost sale.

[Elfwreck]

Originally Posted by elcreative

As far as relating it to books, well I'm simply reading more again... and I'm not a millionaire either but my criteria for buying a book have always been amazingly simple, "Does that book seem like I might enjoy it?" Answer yes then buy it, answer no then don't... short of cash then don't look...

Are you really saying you don't consider whether a book is three dollars or thirty before you buy it? Or that when you look for a new book to read, you snap up the first one you "might enjoy" without considering if there's another you might enjoy more?

Since I have access to more ebooks than I can read in my lifetime, I have to be selective about which ones I read, and since I have a budget, more selective about which ones I buy. If I had fewer millions of books to choose from, I might reconsider my criteria.

I can: pay $13 for a new ebook from Amazon (if I dealt with DRM),
Pay $6 for something from Baen, and start read my ebook while eating lasagne at the diner for lunch.
Pay $0 for a collection of fanfic or an rss feed of blog posts, and go out to a movie on the weekend.

So far, the benefits of Option 1 have never seemed to outweigh the other two.

Is it a "lost sale" every time I read fanfic instead of buying an ebook?

I didn't say that every book should be a purchased one, I said that a free book is a lost sale... it is... it may lead to other sales in the future or it may not but at the instant that a book is acquired for free then it isn't being purchased... simple English... sale = exchange of value (usually money) for item being sold, no exchange then no sale...

A free book is "no sale;" that's not the same as a lost sale. To "lose" something, you had to have it, or at least the possibility of it, in the first place.

A free book is no more a lost book sale than a carpool is a lost car sale. Just because someone will accept something for free, doesn't mean they would've bought it if it wasn't free. The sale isn't "lost" if it never would've happened in the first place.

The choice often is not:
- Free book; author doesn't get paid.
- Paid book; author gets a royalty.

More often, it's:
- Free book; author gets some attention.
- No book; author gets ignored.

[elcreative]

anamardoll... neat bit of selective quoting...
The full para you chopped said, "Don't put your interpretation on what other people say, especially when looked at through your ideological glasses... I didn't say that every book should be a purchased one, I said that a free book is a lost sale... it is... it may lead to other sales in the future or it may not but at the instant that a book is acquired for free then it isn't being purchased... simple English... sale = exchange of value (usually money) for item being sold, no exchange then no sale..."
I'm not talking about you and your acquisitions or otherwise your POV... I'm talking about the author's POV...

1: author has book, author gives book to you; you have book, author has nothing in return.
2: author doesn't give you book, you don't have book, author has nothing in return as nothing happened.
3: author sells you book, you give him money, author has money, you have book.

I'm not dealing with future results of freebies etc which is why lost sales is probably the wrong term but is a commonly used simplification... I'm talking about a simple thing... free = nothing for author right now, sale = something for author now...

[MrsJoseph]

Originally Posted by elcreative

MrsJoseph, Elfwreck etc... I guess we just totally disagree about just about everything... why would I want to download TV series from iTunes or movies... I'm watching less and less TV at the moment and I have access to a large number of channels by satellite, same thing for movies but having so much available just shows up the poor quality and lack of thought in so much broadcast and movie material at the moment... I'm actually watching far more factual material these days...

As far as relating it to books, well I'm simply reading more again... and I'm not a millionaire either but my criteria for buying a book have always been amazingly simple, "Does that book seem like I might enjoy it?" Answer yes then buy it, answer no then don't... short of cash then don't look... if you want to bring your "ideology" into then fine but don't expect everyone else to follow especially...

Don't put your interpretation on what other people say, especially when looked at through your ideological glasses... I didn't say that every book should be a purchased one, I said that a free book is a lost sale... it is... it may lead to other sales in the future or it may not but at the instant that a book is acquired for free then it isn't being purchased... simple English... sale = exchange of value (usually money) for item being sold, no exchange then no sale...

You don't have to agree with my opinion, that doesn't bother me at all.

The Dear Author blogs are VERY well researched - so it might not fit you but it does fit a majority of readers.

And a free book - one given away - is NEVER a lost sale. Never. Because if you hadn't given it to me I would not have purchased it. Period. So how is that a lost sale? Hoping someone else might buy it? But if you gave me the book and I liked it, then I buy the next book. Great example is Thea Harrison. She was breaking into the field and gave away a ton of books. I happened to get one and loved it. So I bought the next one, one for my mom AND I'll buy the next one released, too. Lost sale? The lost sale would have been me NOT getting that book because I'd never heard of her.

The "idea" of lost sale depends on your definition. YOU seem to see any exchange without money is a lost sale. Obv most authors and publishers see a lot of returns on free books...which is why they continue to do it.

Why not check out the LostbookSales website and see some real lost sales?

Every day an author and a publisher lose out on a sale of book. This is a site for readers to tell the world about the lost sale whether it is because of price, territorial restrictions or general availability. There are a whole host of reasons a particular book is not distributed all over the world. Sometimes agents advise their authors to sell only domestic rights which usually means US or UK get the goods. Sometimes publishers aren’t exploiting those rights.

But hey, YMMV.

[MrsJoseph]

Originally Posted by anamardoll

Thank you, MurrayPaul, for providing that context. I get very shirty when people cherry pick data out of context, and I appreciate other posters providing clean-up.

Mrs. Joseph, I love the Dear Author blog and those are both very good posts. Thanks for digging them up!

You're welcome! I love Dear Author, too. Great stuff, all the time.

[anamardoll]

Originally Posted by elcreative

anamardoll... neat bit of selective quoting...
The full para you chopped said, "Don't put your interpretation on what other people say, especially when looked at through your ideological glasses... I didn't say that every book should be a purchased one, I said that a free book is a lost sale... it is... it may lead to other sales in the future or it may not but at the instant that a book is acquired for free then it isn't being purchased... simple English... sale = exchange of value (usually money) for item being sold, no exchange then no sale..."
I'm not talking about you and your acquisitions or otherwise your POV... I'm talking about the author's POV...

1: author has book, author gives book to you; you have book, author has nothing in return.
2: author doesn't give you book, you don't have book, author has nothing in return as nothing happened.
3: author sells you book, you give him money, author has money, you have book.

I'm not dealing with future results of freebies etc which is why lost sales is probably the wrong term but is a commonly used simplification... I'm talking about a simple thing... free = nothing for author right now, sale = something for author now...

You are mixing up the terms no sale and lost sale. "Lost sale" means something very specific in the eBook community and it doesn't mean how you're using it. If you want to call that an ideological spin, have at it, but you don't get to simultaneously claim that:

1. The definition I gave of Lost Sale is my ideology.
2. The definition you gave of Lost Sale is the truth. I.e., your "I called it a Lost Sale because it is a lost sale" line.

Either "lost sale" has a definition or it's an ideology. If it's an ideology, you need to (in the future) say, "I called it a Lost Sale because that's how I define it." This will have the effect of signaling to your readers that you mean the term a certain (and different) way from other people's use of the term and will additionally mean that everyone else in the thread won't jump in to correct your non-standard use of the term.

[elcreative]

At various times in my career I come from a solid retail background and giving a freebie out means that it is an item that won't sell to anyone who has the freebie... simple accepted meaning in retail... if the eBook community wants to give it a new meaning then so be it but, if the meaning of the english language is changing in a specific group, you can hardly blame those using a term that has always previously been crystal clear...

[stonetools]

He has made more money overall by lowering the price for a short period. He lowered the price to get more visibility, and kept some of the increased traffic after raising it again. He is making significantly more per day from that book than before lowering the price.

Well , yeah. The point,is, as our good friend anamardoll missed completely, is that temporarily lowering price of the book as a promotion, worked to boost sales and therefore income once he brought the price up back up to 2.99 .
However, lowering price to 0.99 did not result in the kind of increased volume that made it a better deal for him to permanently lower the price to 0.99. He was clear about THAT.
To be honest, it's not really news that having a sale can increase traffic, buzz, etc. Merchants have doing that, probably since the dawn of markets.
THe whole point of agency pricing was that is an attempt by publishers and other booksellers to stop Amazon from making a play for monopolization of the ebook market by discounting the price of ebook bestsellers below cost.

Now many Mobilereaders thought that Amazon was in fact correctly pricing those ebooks because well, let's face it, consumers like cheap. Thus megabytes of bandwidth was expended on explaining how Amazon's prices were"right" because "the Internet changed everything" ,"ebooks could be distributed for free" , " if you cut prices you ALWAYS made it up in volume, "etc, etc.
Since then, its become clear that :

1.Amazon WAS in fact, heavily discounting bestellers below market price.
2. Fears that agency pricing would choke off the growth of the nascent ebook market were unfounded. The Ebook market has expanded dramatically DESPITE higher prices for bestsellers

OTOH,

1. Publishers have been clumsy about pricing ebooks, because (a) they are not as close to the consumer (b) they understandably want to defend the major source of their profit-HC bestsellers. They ARE learning , though. THe last big sales by Amazon and BN included some agency priced books. We can expect more of that.
2. Indie publishers and authors have taken advantage of publisher leadfootedness about prices to gain some mindshare and sales by through offering books at lower prices, either through promo sales for 0.99 or by permanently lowering the price of their ebooks to 0.99. Of couse, not every author that offers a book for 0.99 is making money. You still have to be good. But at a few are, and that's encouraging. It ain't the beginning of a a new world, though.

[Fbone]

Originally Posted by anamardoll

What? I mean, seriously, what?

I'm pretty sure that not ALL authors hoping to support themselves by writing full time live in constant fear. This doesn't pass the exaggeration sniff test.

Anyway. Authors who "hope" to support themselves by writing full-time aren't going to get anywhere fast. Authors who want to support themselves full time aggressively follow at least two major rules:

1. Publish a large body of work so that an addition of ONE fan means TEN sales.

2. Expand your fan base with good editing, slick covers, responsiveness to complaints/contacts, and with as many freebies-deals-promotions as you can bear in the early expansion days.

If someone wants to be a successful indie author and they're pricing their books at $10 a pop, well, they should "live in fear", because that's not going to fly.

If writing is your only means of support, you would worry that your book wouldn't sell enough to pay the rent. I'm talking people who quit their jobs to write full-time. You wouldn't be in this group since you (and spouse?) have other gainful employment. One "successful" book doesn't guarantee there will be others. In this modern age even more so. People are fickle.

[anamardoll]

Originally Posted by Fbone

If writing is your only means of support, you would worry that your book wouldn't sell enough to pay the rent. I'm talking people who quit their jobs to write full-time. You wouldn't be in this group since you (and spouse?) have other gainful employment. One "successful" book doesn't guarantee there will be others. In this modern age even more so. People are fickle.

I don't understand why anyone would quit their job to devote themselves full time to a job that doesn't seem likely (based on their past experiences) to support them.

Every full-time author I know didn't quit until after they demonstrated that they could live on their books sales. (Plural. I don't know anyone who quit after one book unless they had a significant safety net in place.) And even then, they built a nest egg and had a back-up plan or three before taking the plunge.

I would imagine, though, that what you are saying is correct: People who live without safety nets (willingly or unwillingly) do live fearfully. It's sad and one reason why we need better safety nets in our society. My point was merely that that isn't all (or even most) full-time authors.

[murraypaul]

Originally Posted by stonetools

Well , yeah. The point,is, as our good friend anamardoll missed completely, is that temporarily lowering price of the book as a promotion, worked to boost sales and therefore income once he brought the price up back up to 2.99 .
However, lowering price to 0.99 did not result in the kind of increased volume that made it a better deal for him to permanently lower the price to 0.99. He was clear about THAT.

I don't think he was.
http://jakonrath.blogspot.com/2011/0...nt-update.html

As of 2/15/2011 7:30pm, The List had sold 592 copies sold on Kindle this month. That had earned me about $1200.

That is ~$80 a day.

http://jakonrath.blogspot.com/2011/0...xperiment.html

From March 1 to March 16 at 3pm, my ebook The List, priced at 99 cents and fluctuating in rank between #13 and #23, earned $5647. It averaged $375 a day. It peaked at $525 a day.

http://jakonrath.blogspot.com/2011/0...update_15.html

On February 15 at 7:30pm, I dropped the price of my ebook The List from $2.99 to 99 cents.

It has now been that price for a month. So I'm raising the price back up to $2.99. The price change should take effect sometime tonight.

The List peaked as high as #15 on the Kindle bestseller list. It is currently at #23, and selling more than 1500 copies a day. In the 28 days it was 99 cents, it sold about 20,300 copies. It took 9 days to reach the Kindle Top 100, and has been there 20 days. Each copy sold has earned me 35 cents.

The total I earned during the 99 cent experiment was roughly $7100.

That is ~$235 per day.

He made considerably more money selling at 99c than he had made selling at $2.99 the month before. And that is even though he only gets 35% of the cover price at 99c rather than 70% at $2.99. Also interesting to note that he was making more money in the last 15 days at 99c than the first 15, so it wasn't simply an immediate burst of sales, but the effect of getting into the top sales lists.

[anamardoll]

Originally Posted by stonetools

Well , yeah. The point,is, as our good friend anamardoll missed completely, is that temporarily lowering price of the book as a promotion, worked to boost sales and therefore income once he brought the price up back up to 2.99 .
However, lowering price to 0.99 did not result in the kind of increased volume that made it a better deal for him to permanently lower the price to 0.99. He was clear about THAT.

Feel free to point out where in this thread I said that permanently pricing an eBook at 99 cents was the best strategy for making money. Oh wait, I didn't. I was talking about freebies-deals-promotions, which would indicate that I thought experimenting with price fluctuations is a good thing. After all, it's not a "promotion" if it's permanent.

But please feel free to continue to argue with things I didn't say.

[stonetools]

He made considerably more money selling at 99c than he had made selling at $2.99 the month before. And that is even though he only gets 35% of the cover price at 99c rather than 70% at $2.99. Also interesting to note that he was making more money in the last 15 days at 99c than the first 15, so it wasn't simply an immediate burst of sales, but the effect of getting into the top sales lists.

"The List" is now selling at $2.99. That's pretty much proof positive that Konrath believes that he can make more money selling it at a permanent price of $2.99 than at $0.99. He is the publisher and therefore has complete control over the price.

Feel free to point out where in this thread I said that permanently pricing an eBook at 99 cents was the best strategy for making money. Oh wait, I didn't. I was talking about freebies-deals-promotions, which would indicate that I thought experimenting with price fluctuations is a good thing. After all, it's not a "promotion" if it's permanent.

Well, if you are saying that offering sales and freebies are a good way of promoting books, well... OK. Can't dispute that, then.

I would point out also that you seemed to be claiming that agency pricing prevented sales and discounts. It doesn't. It just means that the publisher has to agree to the deal , instead of the retailer just deciding to offer it independent of the publisher.Just thought I'd clear that up.

[anamardoll]

Originally Posted by stonetools

I would point out also that you seemed to be claiming that agency pricing prevented sales and discounts. It doesn't. It just means that the publisher has to agree to the deal , instead of the retailer just deciding to offer it independent of the publisher.Just thought I'd clear that up.

I said that coupons don't work with agency priced books. That is always true, to the best of my understanding, regardless of how the agency book happens to be priced that week.

I suppose an agency could issue a coupon for their books, but I don't know of a case where this has ever happened.