Why the price of your e-book matters
The recent news that the DOJ has brought a lawsuit against major publishers over e-book pricing with tales of secret meetings and greedy publishers has pushed the industry into the headlines. Even Brian Williams covered it.
For people who don’t work in publishing or who can’t quite wrap their head around agency pricing, here’s a quick primer:
—Days of yore: books had a suggested retail price: $12.00; $24.99, etc… “Suggested” = bookstores, acting as retailers, were free to price the book however they wanted. Thus, the corner bookstore might offer 10% off bestsellers, a discount for members etc… They were re-selling a book they had already purchased wholesale from the publisher, so they could price it at whatever level would ensure them sales and profit.
—Enter e-books: Amazon began pricing new e-books as low as $2.99 or $7.99. Their main goal was to sell Kindles, not books, so the price of an e-book was negligible to them. This was a drastic loss of revenue for publishers and authors and allowed Amazon to control 90% of the market. (This isn’t just a case of greedy publishers: many authors heavily depend on sales of their book, especially if their advance is low.)
—An alternative strategy: As the iPad was launched, agency pricing was introduced. This turned anyone who sold e-books from a retailer into an agent: they were selling the book as an agent of the publisher, meaning the publisher set the price and split the sale 70/30 with the agent. The agency model standardized the price of an e-book across the board so that a reader was offered the same price on an e-book no matter where they bought it.
—The benefits of the agency model: some prices rose, and others fell, but it gave consumers more choices. In addition, the publisher of Smashwords has used hard data to conclude that e-book prices have decreased with agency pricing as competition has increased although some argue that major publishers are still over-pricing their titles.
—The DOJ lawsuit: Disrupts the current system and forces publishers who have agreed to a settlement to reconceive agency pricing. Yes, this means immediate lower e-book prices for the consumer, but you have to question a decision that is opposed by the American Booksellers Association, the Authors Guild and which allows Amazon to regain the upper hand. Macmillan and Penguin vow to fight the lawsuit and each provide a cogent reason why the lawsuit is bad.
No one involved is against Amazon, or low prices per se (“Yay, $2.99 ebooks!”), the question is whether a system can be maintained that allows for a competitive market but one that doesn’t cannibalize the industry it supports.
I made the mistake of saying publicly that I don’t understand this whole agency-pricing-publishers-colluding brouhaha, and I got skool’d.
Find more details here at Publishers Lunch.
- paige-ofmylife reblogged this from annadevries
- axelpickle reblogged this from annadevries
- meowgosaurus reblogged this from discoverynews
- for-erica reblogged this from discoverynews
- tinman-romancer reblogged this from discoverynews
- windedllamarider likes this
- bitingthebook likes this
- selenehime likes this
- themourningwhale likes this
- hennypennyandthesky reblogged this from annadevries and added:
- seltzerlizard likes this
- waffles-with-sprinkles likes this
- idiot1700 likes this
- agvw likes this
- insertwithere reblogged this from annadevries
- vinxx555 likes this
- mandyconcurs reblogged this from discoverynews
- retrogradewaters likes this
- fyrdrakken reblogged this from sailaweigh
- merverb likes this
- watchyourself likes this
- kblr likes this
- strandedstmarkscitylights reblogged this from annadevries
- strandedstmarkscitylights likes this
- morningdaydreammemories reblogged this from meetapossum
- depthlessperception reblogged this from annadevries
- occasionaltimetravellers likes this
- relmo reblogged this from annadevries
- don-julian likes this
- twenty-oneandcounting reblogged this from wordpainting
- wordpainting reblogged this from annadevries
- rpr-beirut likes this
- reveriejaguar likes this
- exit200 reblogged this from discoverynews
- exit200 likes this
- fxgn likes this
- yeahcoolyeahcoolyeahcoolyeah reblogged this from discoverynews
- yeahcoolyeahcoolyeahcoolyeah likes this
- thefoxwood reblogged this from nocureforcuriosity
- camusinpumas reblogged this from annadevries
- mrocio likes this
- book-cooties reblogged this from annadevries and added:
- book-cooties likes this
- inbedwithbooks likes this
- aaa2zee likes this
- realkidsgoodbooks reblogged this from nocureforcuriosity
- thedoracle likes this
- thatchickliz likes this