Library E-Book Lending Poses Rising Problem for Publishing Industry

[darryl]

Originally Posted by pwalker8

It came out a year after the initial trial that Amazon lawyers wrote the initial DOJ brief.

You bring out this tired old chestnut again! Amazon lawyers did not write the initial DOJ brief. Amazon made a complaint which was apparently comprehensive and may have formed the basis for the DOJ's action. There is nothing wrong with this whatsoever. It is the DOJ's decision to take action, and the Court's decision as to whether that action is made out.

We only occasionally agree, but I do sometimes enjoy and even profit from your perspectives. However, you often take a somewhat esoteric view of various aspects of your legal system and its workings, which I will not always bother to seek to correct. I enjoy participating in these forums, but my time is limited and my posts usually too long-winded.

Originally Posted by pwalker8

The fact that Amazon was perfectly fine with agency pricing once they got Apple out of the way and Cote's order expired, which is why we now have agency pricing, seems to be ignored.

No. Not ignored. Amazon simply hoisted the conspirators by their own petards. They fought against a system where they enjoyed the benefit of the increased sales at the more reasonable price point whilst still making the margin associated with their own inflated price point! Amazon was never going to subsidise this forever, and by that stage had no reason to do so. No publisher came to them after the order expired asking for a wholesale type contract. They all wanted agency, and Amazon obliged. It was a beautiful thing to watch. High tradpub e-book prices bleeding sales to Indies and Amazon imprints. Discounted Hardbacks at prices around the same as e-books. Fantastic!

Traditional publishers finally seem to be approaching the realisation that they will have to discount to compete with Indies, but now of course must themselves bear the costs of such discounting, no doubt passing on as much of these costs as they can to their poor abused authors. It is quite interesting to watch them learn the pricing game. They are already good at extracting top dollar from new releases, but are now experimenting to find the optimum way to pick up also the demand at lower prices. At their own cost!

[DuckieTigger]

Originally Posted by leebase

The cost of a book has NEVER been about the cost of manufacturing and distributing books. Amazon Indie authors, or Amazon Imprint authors are cheaper because they can’t command higher prices.

They can't or they won't? For indies at Amazon a price over $10 makes very little sense in most cases due to the lower percent royalty. Same if you go too low (below $2.99?). The highest possible price does not guarantee the biggest profit, even if the royalties were the same at each price point. Same with going low. The sweet spot is somewhere in between.

[DuckieTigger]

Originally Posted by darryl

No publisher came to them after the order expired asking for a wholesale type contract. They all wanted agency, and Amazon obliged. It was a beautiful thing to watch.

Couldn't have said it better myself.

[darryl]

Originally Posted by leebase

The cost of a book has NEVER been about the cost of manufacturing and distributing books. Amazon Indie authors, or Amazon Imprint authors are cheaper because they can’t command higher prices.

And there has ALWAYS been competition for books. There are all the other books you could buy. There are library books. used books. More importantly, there is every other form of entertainment vying for people’s attention and dollars.

I would not say the price of a book has never been about the costs of manufacturing and distributing. Such costs become very relevant in a highly competitive market where margins are low in that they set a floor for the price. Few want to sell at a loss for long. If your competitor is more efficient and is able to sell at a lower price, you face the choice of matching them, distinguishing yourself from them in some way or getting out of the market. Some Amazon authors indeed could not command higher prices. Some could. But just because you can does not mean you should. Stephen King could price his next book at $100 per copy, and would probably sell a few books at that price. But he would make nowhere near as much money. It is about finding the optimum pricing strategy. Amazon's limitation of its top royalty rate to books priced within a range makes it obvious that Amazon considers books priced outside that range unlikely to be priced optimally. Tradpub pricing imperatives differ, particularly as they sell different versions of their books, including hard covers and various types of paperbacks as well as e-books and lately even audiobooks. It would be irrational if they priced without regard to the effect of the pricing of one type of book on the sales of the others. Their task is to maximise sales over all categories, leading to windowing and similar practices.

Totally agree with your second paragraph.

[Gardenman]

Originally Posted by rcentros

I understand. But the book only needs to be "ePublished" one time. And the additional costs for paper books you mentioned are not insignificant. And you need to add salaries for those who print and warehouse, and the cost of paper (also not insignificant). The bottom line, eBooks are much, much cheaper to produce than "real" books and they should cost less (and and did cost less, and would continue costing less) in a non-colluding world.

Also add into that the cost of buying back the books that are not sold

[binaryhermit]

I'm gonna take a page from a certain politician's rhetoric and send it at the big publishers:

If you don't like it, you can leave.

[rcentros]

Originally Posted by binaryhermit

I'm gonna take a page from a certain politician's rhetoric and send it at the big publishers:

If you don't like it, you can leave.

I think quite a few of us have done that. Which is why some publishers are lowering eBook prices and delaying sales to libraries, hoping to get us back into the fold. Alas, poor publishers, the horse is already out of the barn. Too late to close the doors now. Greed got you.

[pwalker8]

Originally Posted by DuckieTigger

Couldn't have said it better myself.

Hum, so Amazon fights a major legal battle against the publishers, and even tried to strong arm one publisher by removing the buy button from their books with the resulting awful publicity. But when Amazon finally caved and gave the publishers what they had wanted all along, the ability to set the prices, you spin it as Amazon beating the publishers. What an interesting and ahistorical view.

I really don't see how one can view agency pricing by the publishers as anything other than a defeat for Amazon and a win for the publishers. The publishers have exactly what they wanted, the ability to control the price. First run, NY Times best sellers is where publishers make their money. As long as they can charge premium prices for such books, they are making money. Selling backlist books for $3 is gravy for them and was never what the battle was about.

[DuckieTigger]

Originally Posted by pwalker8

Hum, so Amazon fights a major legal battle against the publishers, and even tried to strong arm one publisher by removing the buy button from their books with the resulting awful publicity. But when Amazon finally caved and gave the publishers what they had wanted all along, the ability to set the prices, you spin it as Amazon beating the publishers. What an interesting and ahistorical view.

I really don't see how one can view agency pricing by the publishers as anything other than a defeat for Amazon and a win for the publishers. The publishers have exactly what they wanted, the ability to control the price. First run, NY Times best sellers is where publishers make their money. As long as they can charge premium prices for such books, they are making money. Selling backlist books for $3 is gravy for them and was never what the battle was about.

Aweful publicity for Amazon? If I remember it right it was Hachette that got the bad publicity for being unwilling to negotiate in time before the contract actually expired. Amazon did them a favor by still selling their books. They only removed preorder buttons, not buy buttons.

To each their own.

ETA: Forgot to add my thoughts to the second part. How is agency a win for Amazon? There is no more competition. As Jobs said in 2010: "prices will be the same." The other positive is that Amazon can focus on selling more of their own books (indies and imprints alike). If you want to compete with Amazon now, not only do you need better service, you also need a bigger selection. A new store that only sells big publisher books has to have a very convincing buying experience to make people buy from there instead of Amazon.

[leebase]

Amazon and the publishers both won. Amazon had already established the kindle as the 800lb gorilla in ebooks. By the time this all shook out....Amazon had no NEED to subsidize the Kindle by selling NYT's best sellers at a loss.

The publishers won because nobody can use their product as a loss leader to sell other things. Sure they had to pay fines....but nothing like the devastation to their revenue that setting the permanent price of new books to $9.99 from $25-$30 (then with sales...$18-$20).

The consumer has won as ebooks are AWESOME....such a big improvement over paper books and worth MORE than the paper reading experience. Those consumers who can't afford $14.99 for a new ebook are in the same position as they were when they couldn't afford a $25 hardback. No harm, no foul.

Apple lost. But the iPad went on to be a huge success anyway. It's the best way to read ebooks if you have the money.....and you aren't among the tiny fraction of the population who really can't read a screen.

[Dazrin]

Originally Posted by leebase

Apple lost. But the iPad went on to be a huge success anyway. It's the best way to read ebooks if you have the money.....and you aren't among the tiny fraction of the population who really can't read a screen.

The first part of this is true. The iPad is a huge success.

Everything after that is subjective. I much prefer my e-ink device to reading on an iPad/tablet and it is not just about reading from a screen or the money. There are many other factors that contribute. Weight, size, contrast in daylight, etc.

[leebase]

Originally Posted by Dazrin

The first part of this is true. The iPad is a huge success.

Everything after that is subjective. I much prefer my e-ink device to reading on an iPad/tablet and it is not just about reading from a screen or the money. There are many other factors that contribute. Weight, size, contrast in daylight, etc.

It is not subjective that FAR AND AWAY most people have no problems reading on their phones or tablets. There are relatively few percentage-wise that report that they just can't read comfortably on a tablet.

Horses for courses. I have no debate with someone who says "I prefer".

[JSWolf]

Originally Posted by darryl

No. Not ignored. Amazon simply hoisted the conspirators by their own petards. They fought against a system where they enjoyed the benefit of the increased sales at the more reasonable price point whilst still making the margin associated with their own inflated price point! Amazon was never going to subsidise this forever, and by that stage had no reason to do so. No publisher came to them after the order expired asking for a wholesale type contract. They all wanted agency, and Amazon obliged. It was a beautiful thing to watch. High tradpub e-book prices bleeding sales to Indies and Amazon imprints. Discounted Hardbacks at prices around the same as e-books. Fantastic!

It was not a beautiful thing to watch Amazon cave in to agency. In fact, it was a very ugly thing to watch. Amazon was the reason Apple went for agency and now Amazon caves.

Agency wasn't about the publishers making more money. It was about taking down Amazon to protect flagging pBook sales. Now that Amazon has caved, the publishers are free to make customers pay more. Agency is one of the main reasons why Overdrive is used a lot and why there are long lines. I think because of agency, it's why a lot of people tried Overdrive.

[JSWolf]

Originally Posted by darryl

I would not say the price of a book has never been about the costs of manufacturing and distributing. Such costs become very relevant in a highly competitive market where margins are low in that they set a floor for the price. Few want to sell at a loss for long. If your competitor is more efficient and is able to sell at a lower price, you face the choice of matching them, distinguishing yourself from them in some way or getting out of the market. Some Amazon authors indeed could not command higher prices. Some could. But just because you can does not mean you should. Stephen King could price his next book at $100 per copy, and would probably sell a few books at that price. But he would make nowhere near as much money. It is about finding the optimum pricing strategy. Amazon's limitation of its top royalty rate to books priced within a range makes it obvious that Amazon considers books priced outside that range unlikely to be priced optimally. Tradpub pricing imperatives differ, particularly as they sell different versions of their books, including hard covers and various types of paperbacks as well as e-books and lately even audiobooks. It would be irrational if they priced without regard to the effect of the pricing of one type of book on the sales of the others. Their task is to maximise sales over all categories, leading to windowing and similar practices.

Totally agree with your second paragraph.

Before agency, there were some eBook stores competing very well with Amazon. Fictionwise and BooksOnBoard were two of them. They had business models that competed very well. I know a lot of (then) MR users shopped at Fictionwise and BooksOnBoard. I was one of them.

eBook sales are dropping because of the high prices. Back before agency, eBook sales where doing well and rising. You have to find a sweet spot between price and profit. Agency is not doing that. Agency is going higher then the sweet spot.

[JSWolf]

Originally Posted by leebase

Apple lost. But the iPad went on to be a huge success anyway. It's the best way to read ebooks if you have the money.....and you aren't among the tiny fraction of the population who really can't read a screen.

The thing I like is how people say they cannot read on an LCD screen such as an iPAD. Yet, they read on LCD computer screens and watch LCD TVs. There are people here saying that cannot read on LCD and while doing so, are reading on a LCD screen.