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Dear Jane: Why Aren’t Penguin Books in the Kindle Store

Dear Jane:

I can’t find the most recent Ilona Andrews, Lisa Valdez in Kindle format! Why not?

Carolyn (and many others)

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Dear Carolyn:

The Short Answer. You should be finding the books by Ilona Andrews, Lisa Valdez, and others in the Kindle store. If you don’t immediately see a Kindle link when doing a regular search, go to Books and select “Kindle Books” and run your search there.

Kindle Books

The Long Answer.   In April 2010, five of the major publishers: Simon & Schuster (Pocket), Penguin (Berkley/NAL/Ace), HarperCollins (Avon), Hachette (Warner, Orbit), Macmillan (St. Martin’s Press, Tor) decided that they would move from the traditional form of selling to something called Agency Model.

Under the traditional form of selling, the publisher sold the digital book to the retailer (or store) like Amazon or Barnes and Noble and then retailer/store would set the price for the readers. Amazon began discounting all the hardcovers at $9.99 and that made publishers’ upset and scared. The publishers were upset because Amazon seems to control a lot of the ebook market. The publishers were scared because they felt that people’s valuation of books were declining. A lot of readers began to demand all books be less than $9.99.

When Apple announced that it was going to get into the digital bookselling market, it introduced a pricing scheme wherein the publisher sets the price and the retailer/store gets a commission much like a real estate agent gets a commission when selling a house. Publishers decided that they would require every retailer out there to comply with this new model of pricing which they called “Agency Pricing”. This meant that every retailer/store out there would have to sign new contracts with publishers.

Some retailers/stores were able to come to agreements with publishers right away but Amazon and Penguin could not. From April 1 until approximately May 26, Penguin books were not in Kindle format. On May 26, an announcement appeared in an online newsletter called Publishers Marketplace that Penguin and Amazon had reached an agreement and the Kindle versions of books like Magic Bleeds and Patience showed up in the Kindle store.

Some retailers/stores like Fictionwise rely on a third party to feed the books to you. Fictionwise and Books on Board and several other online bookstores rely on Ingram. As of yet, there haven’t been any announcements that Ingram has been able to come to terms with the Publishers.   New agreements are announced quite often.   For example, Books on Board started carrying Penguin books after a month or so hiatus.

Lack of agreements is why the iBookstore doesn’t carry any Harlequin, Random House (One Dance with a Duke by Tessa Dare, His at Night by Sherry Thomas), Kensington titles because those three, among many other publishers, have not gone to the Agency Model and that is the only way that Apple will currently sell publishers’ titles.

The Agency Model has only been implemented in the U.S. If you wonder what a digital book will be priced at, you need to look at the hardcover price. Apple has set the pricing guidelines as follows and this is the price that each retailer that has an agreement with the publisher will use:

Full right to price without Apple restrictions exists for:

Books that do not have a print equivalent.

Hardcover list prices that exceed $40 in print

Mass market or trade paperbacks list prices that exceed $20

For Mass Markets or Trade Paperbacks

For any book with a print equivalent list priced at $22 or less, the cap is $9.99

This is for the first year only.   After the first year, price can be anything UNLESS APPLE DEEMS IT UNREALISTIC

For Hardcovers

Anything under $22.00 is capped at $9.99
$22.01-$24.00, the maximum ebook price is $10.99;
$24.01-$25.00 is $11.99;
$25.01-$27.50 is $12.99;
$27.51-$30.00 is $14.99;
$30.01-$35.00 is $16.99;
$35.01-$40.00 is $19.99.

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Dear Jane:

With Agency Pricing, I thought we got rid of comparison shopping. Why are the prices different at Amazon and Barnes and Noble versus Sony, Deisel eBooks, Kobo Books and others? Did Amazon and BN sign some special deal that they can give discounts? Is it because they have special readers?

Patty

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Dear Patty:

The Short Answer.   Because some digital book sellers include the sales tax in the price and others collect it at the end of the transaction.   If you live in a state that doesn’t collect sales tax on books, shop at a site that adds the sales tax at the end of the transaction like the Kindle or nook stores.

The Long Answer.   With the Agency Model, the publisher is supposed to be the seller and therefore, sellers of products must collect sales tax.   The rule on sales tax is that wherever there is a significant business presence (also known as a “nexus”), the seller must collect a state sales tax.   For example, if your town does not have a Barnes and Noble and you order books online from that store, BN is not required to collect sales tax from you because BN does not have a significant business presence.

Apparently some publishers feel like they have significant business presence in many, many states.   Some retailers like Kobo and Sony add the tax into the price of the book which is why it looks like a book at Sony or Kobo is priced 5-9% higher than at a site like Amazon.   But the end result is the same, you have to pay tax according to your state tax requirements no matter where you shop.   Of course, you may live in one of those states that don’t require sales tax and then it probably behooves you to shop at those places that collect tax at the end of a transaction.   According to the Kindle site, the following publishers are collecting tax from the following states:

  • Hachette Digital, Inc.: AL, AZ, CO, CT, DC, HI, ID, IN, KY, LA, ME, MS, NC, NE, NJ, NM, SD, TN, TX, UT, VT, WA, WI and WY*
  • Harper Collins Publishers, LLC: All states other than AK, AL, AZ, DE, HI, MT, NH, NV, OK, OR, SD, VT and WY*
  • Penguin Group (USA) Inc: All States*
  • Simon & Schuster Digital Sales, Inc.: All states other than AK, DE, MT, NH, and OR*
  • Macmillan: AZ, CO, CT, DC, HI, IN, KY, ME, MS, NC, NE, NJ, NM, SD, TN, TX, UT, VT, WA, WI and WY*
  • * Kindle books sold by various publishers are subject to sales tax based on the publisher’s state tax reporting obligations and the taxability of digital books in those states. As a result, sales tax for Kindle books sold by the publisher may differ from the sales tax to which you’ve been accustomed for Kindle books.

Dear Jane is a weekly column where you ask the questions about digital books and I answer them.   Any question is welcome.   Send it to jane at dearauthor.com. Happy Reading!

Jane Litte is the founder of Dear Author, a lawyer, and a lover of pencil skirts. She spends her downtime reading romances and writing about them. Her TBR pile is much larger than the one shown in the picture and not as pretty. You can reach Jane by email at jane @ dearauthor dot com

22 Comments

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  2. Cathy KJ
    May 30, 2010 @ 06:21:19

    Thanks for explaining that we should search for penguin books via the kindle store. I was getting really annoyed that the kindle option for Hell Fire wasn’t coming up, but I just searched differently, and there it was! Glad that at least one part of this ego measuring contest has come to an end.

  3. Angela James
    May 30, 2010 @ 07:59:18

    Under short answer one, to clarify in case people were wondering why: sometimes the Kindle and print versions aren’t tied together for a myriad of reasons so only a search within Kindle store is an accurate search for a digital copy on Amazon.

    And I’m SO glad Penguin is back in the Kindle store because the Ace imprint publishes some of my favorite authors. I’m an unabashed Anne Sowards fangirl.

  4. VictoriaP
    May 30, 2010 @ 10:33:51

    One other note: The new Penguin releases may not show at the top of the list once you run a search even within the Kindle store. Be sure to scroll down; both Lover Mine and Magic Bleeds were about halfway down the page yesterday, unlike a normal search where an exact title match is usually first on the list.

  5. Mitzi H.
    May 30, 2010 @ 11:38:53

    This may be a stupid question….But Isn’t this price fixing? I remember….way back when….When Timex set the price for their watches and wouldn’t let a store sell them for less. I believe (if my memory serves me correctly) that they were sued and forced to market their watches with a SRP “suggested retail price”.

    And just a side note: I always thought that commissions were negotiable…Even Real Estate commissions must be negotiable by law.

  6. Castiron
    May 30, 2010 @ 11:44:05

    For example, if your town does not have a Barnes and Noble and you order books online from that store, BN is not required to collect sales tax from you

    Town, or state? My impression based on past catalog orders is that it’s state-based.

  7. Eva_baby
    May 30, 2010 @ 11:54:24

    To further aggravate things a bit… If you search for ‘Magic Bleeds’ in the Kindle store you will find the book. If you search under Ilona Andrews you will not find the book. “Magic Bleeds” in the Kindle store is connected with author IIona Andrews (note the second ‘i’ where the ‘L’ should be). Hopefully they’ll fix that typo soon.

  8. Sheila L.
    May 30, 2010 @ 14:12:31

    I’m not sure why Harper Collins, Penguin, and Simon & Schuster are charging California sales tax on ebooks.

    According to the California State Board of Equalization, digital downloads are not taxble:

    Products electronically transmitted to customers
    Your sale of electronic data products such as software, data, and digital images is generally not taxable when you transmit the data to your customer over the Internet or by modem. However, if as part of the sale you provide your customer with a printed copy of the electronically transferred information or a backup data copy on a physical storage medium such as a CD-ROM, your entire sale is usually taxable.

    source: http://www.boe.ca.gov/pdf/pub109.pdf

    That’s why iTunes purchases aren’t taxed here. However, there have been two failed attempts create a tax on digital downloads.

  9. Kelly S. Bishop
    May 30, 2010 @ 17:49:36

    Have you read Teddypig’s blog today??

    http://www.teddypig.com/2010/05/how-publishers-promote-piracy-a-ripoff-in-point/

    He pointed out that The Fountainhead in Kindle format is listed at $27.99. The Penguin CEOs are out of their minds.

  10. Boudicae
    May 30, 2010 @ 20:04:54

    Don’t know what’s going on in Canada. I can buy Lisa Kleypas’ backlist but not her new book. Same for Julia Quinn, Meredith Duran, Suzanne Enoch… the list goes on. Boy, am I not happy.

  11. Jane
    May 30, 2010 @ 21:01:49

    @Castiron Sorry, it is State.

  12. Jane
    May 30, 2010 @ 21:03:34

    @Mitzi H. It’s called retail price maintenance which was made legal in 2007 although given that pricing is set by Apple, it could be price fixing but Apple doesn’t have a monopoly on book sales. At best, it might be tacit collusion which is where companies adopt what other companies are doing when they see the competitors act in the market place but that isn’t illegal. Unfortunately.

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  16. Ridley
    May 31, 2010 @ 08:25:29

    Price fixing or not, it’s bullshit.

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  18. Suze
    May 31, 2010 @ 13:32:07

    Boudicae, I’m so with you. I have a few authors whose new releases I GOTTAHAVE as soon as possible. Two of them are Patricia Briggs and Ilona Andrews.

    So this happened with Silver Borne and now just this weekend with Magic Bleeds.

    I can buy the hardcopy book in a store, if I get there on the right day, or I can order a hardcopy book from chapters.indigo.ca. I can buy the audio book from Books on Board. I cannot buy an e-book, even through Sony, because of geographic restrictions.

    This makes absolutely no sense to me. If publishers are bundling e-rights along with paper and audio rights (even illegally for backlisted books), why the bleep can I not get an ebook version of a book that I can buy in paper or audio? Why on earth would Canada be able to get the paper book, but not the ebook?

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  20. Boudicae
    May 31, 2010 @ 15:38:30

    @Suze:

    Wish I knew. I refuse to go back to paperback (I read 3-4 books a week and I was just running out of room to keep them). These authors have simply lost sales. I’ll try the library for the authors I really like (haven’t had a library card in years but am getting one tomorrow). As for the rest… I’m moving on to new authors I hadn’t bothered to read before.

  21. Carolyn
    Jun 01, 2010 @ 12:11:12

    For the first time I had to pay a sales tax, on a Penguin book downloaded from Kindle. It wasn’t even a new release. I live in Alabama; I didn’t realize Penguin had such a large presence here. :-(

    Makes me a little hesitant now; how do you know if sales tax will be applied? It’s a one click deal.

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