Posts Tagged ‘ebook pricing’
Update on MacMillan and Amazon
I am sure most are aware, but since I did do a ranty blog post about why I am Team Amazon the other day, I thought I would go ahead and update on the situation. After pulling all versions of books published MacMillan on Friday, Amazon.com issued a statement Sunday, January 31st:
Dear Customers:
Macmillan, one of the “big six” publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.
We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, we will have to capitulate and accept Macmillan’s terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books. Amazon customers will at that point decide for themselves whether they believe it’s reasonable to pay $14.99 for a bestselling e-book. We don’t believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced e-books as an alternative.
Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!
Thank you for being a customer.
Basically, they have no choice but to try to work something out with MacMillan. Amazon would prefer to keep the current model of buying ebooks which matches their model for all other books. They buy a book at approx. 50% of the cost and then set their selling price. As an example, a new released hard cover may have a list price of $29, chances are amazon would buy that ebook for $15 and then turn around and sell it for $9.99. They do this to encourage people to buy Kindles and because it gives them a large share of the ebook market. MacMillan is forcing a switch to an agency model where Amazon simply becomes a distributor who gets what amounts to a commission. MacMillan sets the selling price and Amazon keeps 30% of it. The irony is that Amazon makes more money in the agency model since they are not taking a loss on bestsellers, the publishers will lose money in the short term. For some reason, publishers are convinced that this model will be better for them in the long run….I guess we will have to wait and see.
As of this blog post, MacMillan books were not yet reinstated to Amazon.com store. There were some sightings of books earlier today, including MacMillan ebooks priced as high at $16.49, but they seem to have been taken down again.
So what can you do now? Unfortunately not much except vote with your money. If you agree that 14.99 or higher is too much for an ebook, don’t buy it! Wait for it to come down in price or find it at the library or borrow a friends “dead tree” version.
For now, this new pricing just applies to MacMillan yet there seems to be some talk that are leading people to think other publishers could be following suit:
Fight Night: Amazon vs. MacMillan vs. Apple ?
No Saturday Sound Off today…. too much news to post about! Before I get to the explosion of ebook drama all over twitter today, I had saved up a few reaction posts to the Apple IPad I wanted to share. First – the IPad? Really? *sigh* I am an apple fangirl, but even I can’t swallow that name and say it with a smile.
Links of Interest:
Kindle vs iPad is an easy decision because these are very different devices built for two distinct sets of customers.
So is the iPad a Kindle killer? No. And it probably won’t make a dent in Kindle sales. The people who are going to buy an iPad are most likely not the people who would buy a Kindle.
It’s far more likely, in fact, that the millions of iPad buyers over the coming months will include very large numbers of people who will use their iPads to buy books from the Kindle Store. The bottom line is that by the end of this year there will be over 5 million Kindles and, I suspect, just as many iPads, and those numbers together will mean over 10 million people for whom the Kindle Store provides the best selection and best pricing for their ebook purchases.
“If you like your kids, get them an iPad so they can play games,” said Russ Wilcox, the head of E Ink Corp., which created the digital paper technology used by the Kindle and many other e-ink-based readers. “If you love them, get them an e-reader so they can actually read.”
Now that we have the initial Apple IPad reactions out of the way, let’s get to the ebook drama that exploded on the web last night and continued over to this morning. A condensed timeline of events:
So what does this all mean? For the time being if you own a Kindle, you can not purchase books published by any author under the MacMillan name. Additionally, you can not buy new copies of these books from amazon.com unless you are willing to go through secondary sellers.
Many seem to be jumping to attack Amazon.com for being a bully or throwing a tantrum, yet I want to point out, it seemed obvious from Steve Jobs’ comments that book publishers were getting ready to do exactly the same thing. Withhold books in an effort to get what they wanted, higher e-book pricing. Amazon simply beat them to the punch, instead seemingly taking the consumer’s side on this one and saying NO. That is not to say that Amazon is doing this for the good of you and me, lets be realistic…. they are all about profits as much as publishers are. They are just more in the know with how to make profits from Kindle users….. we buy more books when they are priced lower and easily accessible. Pulling the sales of print books in addition to kindle books may seem like an unrelated move, but we must remember that Amazon sales volume is their negotiating tactic in this.
Being a Kindle lover, I find myself siding more with Amazon on this. This issue ties in with my previous post about publishers making users wait for Kindle releases. Once again I find myself thinking, major book publishers simply do not understand their various customer bases. I will not pay 14.99 for a new release, even if the print is hardcover, to read on my Kindle. Not when they still come loaded with overreaching user agreements and the horrible atrocity known as DRM. If you give me an ebook that I can own, transfer to any device I want, resell, and be able to lend in some way…. then I will happily pay “dead tree book” pricing for that ebook. Until then, 14.99 or more for an ebook is overinflated and unjustifiable.
Have I spent that much on e-books in the past? Absolutely… for authors I love and don’t want to wait for. But those are rare instances and if all e-books were that price you would loose a great many sales from me. Especially when I can head over to Fictionwise.com and MBaM and get great authors like Moira Rogers, Keith Melton, and Josh Lanyon for far less than that… and without DRM. Lower priced e-books give readers the chance to try out new authors without worrying about spending too much, without risk! Publisher’s need to figure this out and run with it. I can not even begin to understand why they don’t have someone in their marketing department who does not see e-books as the death of the publishing! Author Carolyn Jewel nailed it on the head with this:
Publishers need to hire someone who actually understands technology. Someone who grew up with it or enthusiastically threw themselves into it when the world changed. And it did, people, it did. And then they need to actually LISTEN to that person. Any C-Level employee who didn’t personally take a look at Twitter when the buzz started is automatically disqualified from this position.
The sad part about this entire situation is that the readers and authors are the ones stuck in the middle and ultimately taking the most harm. Just as we readers aren’t able to buy books at a reasonable price from Amazon during this time, authors are going to lose a what I imagine is a large chunk of royalties from Amazon sales. Let’s all cross our fingers that Amazon and MacMillan find some way of working this out quickly.
Update
While I was writing this post, there was an update to this article about the situation.
Motoko Rich, my colleague, spoke with a person who had a direct conversation with a person at Macmillan familiar with the conversations with Amazon. Macmillan offered Amazon the opportunity to buy Kindle editions on the same “agency” model as it will sell e-books to Apple for the iPad. Under this model, the publisher sets the consumer book price and takes 70 percent of each sale, leaving 30 percent to the retailer. Macmillan said Amazon could continue to buy e-books under its current wholesale model, paying the publisher 50 percent of the hardcover list price while pricing the e-book at any level Amazon chooses, but that Macmillan would delay those e-book editions by seven months after hardcover release. Amazon’s removal of Macmillan titles on Friday appears to be a direct reaction to that.
There now appears to be confirmation of this here.
Wow. *shakes head* I’m Team Amazon.
Book Publishers…someone needs to give them a clue.
As I sit here with a stuffy nose and a box of tissues in my hand, I stumbled across this article in the Wall Street Journal online about ebook publishing dates. It seems that two of the large publishing houses, who obviously have marketing geniuses working for them, have decided to push back publishing dates on new releases in ebook form. So anyone with an ebook reader will have to wait 3-4 months after the original publishing date to purchase it.
I read this and wanted to bang my head against my Kindle screen. Seriously? A quote from the smart guy in charge of one of the houses:
“We’re doing this to preserve our industry,” Mr. Young said. “I can’t sit back and watch years of building authors sold off at bargain-basement prices. It’s about the future of the business.”
uh huh. Just because this doofus brought up bargain basement prices I would like to bring up Stephen King’s Under the Dome. This is one book that the publishers are holding off the ebook for until December 24. However, Amazon and Walmart were selling preorders of the hardback version of this book for $9.99. Even now at Amazon the hardcover version is only $14.99. I can’t help but point out that if they were selling the ebook version of this book at $9.99 or $14.99 right now they would be making off with quite a bit more profit and a lot less bad press. (Side note: I do realize that the sellers may be taking a hit in this scenario, but shhhh my point isn’t as effective if you think about that!)
Anyway, my point is that it is obvious some publishers just don’t understand ebook readers. I bought a Kindle for many reasons, but a few of them are:
1. Space. I simply do not have space for a bookshelf of books. I live in a tiny 1200 square foot house with 2 adults and 2 very loud children. Space is a valuable commodity and no matter how much I love urban fantasy, I just don’t have room for bookshelves filled with paperbacks I still need to find time to read. Over the last year I have read more than 240 books…. that would need to be a seriously large bookcase. Because of this, even if you prolong the ebook release to boost hardcover sales…. I will not be one of those buying a hardcover. I imagine this is true of many ebook readers. Why would you spend $25 on a hardcover if you could wait 3 months and get it on your kindle for $10? All you are doing is pissing me off and doing a good job of convincing me NOT to purchase your ebook versions either.
2. Convenience. I love my Kindle because on release day I can have my brand new book to read within seconds. No amount of date pushing is going to change my love of convenience. I am not going to pack my 2 wild things up and head to the bookstore to get something on new release day. Again, all you are doing is annoying me that you care so little for my time.
3. Price. Being able to buy ebooks at a lower cost was a minor factor, but still one I considered. Even with that said, I am happy to shell out anywhere from $5 to $15 for an ebook. I don’t think that is unreasonable. I prefer to spend under $10, but if it is something I love I will put out a bit more. I wish someone out there could explain to me how the publishers are losing out so much by charging $10 on an ebook that has no shipping/distributing costs when they are willing to sell it to me for $7.99 in paperback? Surely paperback would be the lower profit margin when you compare the two? I venture to guess that most people buying ebooks are also paperback buyers, not hardback buyers.
I am curious to see how this works for these two companies. I forecast that that they will not see an increase in hardback sales, but instead will see a decrease in ebook sales as people boycott them for being idiots or look to illegal ways of finding these books or just getting them from the library. You would think that the Harry Potter books being the most pirated book in history could offer a lesson of sorts, but eh….
Additionally I think they will lose ebook sales simply because not all ebook readers are obsessed with release dates and make elaborate spreadsheets ~looking around at my fellow book bloggers~. With a hard publicity push for the hardback release dates, people notice, they make impulse buys when they hear about titles through word of mouth or blogs (especially at amazon.com). With ebook sales starting months later I think it gives time for people to forget about a title/author that looked interesting or move onto other books that are available. Unless a reader is really connected to an author or series, how many will remember to pick up that book later on? With ebooks its so very easy to give in to that impulse and hit the buy now button. Amazon seems to get it, a quote from their spokesperson:
Authors get the most publicity at launch and need to strike while the iron is hot. If readers can’t get their preferred format at that moment, they may buy a different book or just not buy a book at all.
In the end, I think I am just tired of publishing houses looking at ebooks as the “big bad”. Several reports have shown ebook readers to actually purchase more books than other book readers. Someone needs to take their thumbs out of their bums and use this momentum to figure out how to make it a win/win for all parties involved. Now, I think I need some chocolate after all of this ranting. I am curious for all my ebook readers out there… do you buy hardback version as well?
A Game of Thrones (A Song of Ice and Fire, #1) by George R.R. Martin
Image designed by Ailish Dawn
Visit Book Blogs