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My eBook Resolution: Just Saying No to the Ebook Tax

Five dollar bill stack

Back in December of 2008, I wrote about the ebook tax or the surcharge that Macmillan and other publishers were placing on ebooks by charging more for the digital version of the print book. At the time I said this:

The more that I look at ebook pricing and the way that NY runs their ebook business, the more convinced I am of three things.

  • They don't actually want to encourage the sales of ebooks
  • They don't know what ebook readers want
  • They think that we are a group of readers that they can screw around with

Times obviously haven’t changed, and my suppositions back in 2008 were correct.   Publishers are working hard to sustain physical retail markets at the expense of ebook growth, that they don’t know what ebook readers want, and they think that ebook readers are a group that do not need to be cultivated.    (Read this article entitled “Why eBooks Must Fail” along with this comment by Teresa Nielsen Hayden for why ebooks are viewed with disfavor by legacy publishers).

In all the press statements made by Hachette and Macmillan, neither seem   interested in talking to the reader despite the fact that under the agency model, the reader is their direct customer.   The agency model is how publishers perceive that they will be able to control their content by disallowing discounting by retailers and driving up the price of ebooks to such a point that it is more attractive to buy the hardcover. Thus the ebook tax.

Truly, would you rather buy a $14.99 book in ebook format that you cannot share or sell; that is in a proprietary format which has limited use or buy the $16.99 physical version from Costco or Wal-mart or even Amazon?

If publishers would decouple ebooks from print books in pricing and truly meet the market, the move to agency model might not be so disconcerting for readers.   When ebook pricing is set by companies who have no experience in pricing but want to discourage ebook purchases, an ebook reader can’t help be view those publishers with a great deal of mistrust.

Dynamic pricing (which some people read as lower prices post hardcover) is really the new form of price discrimination.   Airlines utilize price discrimination the best by charging each person a different ticket for a seat on the same flight.   Dynamic pricing, however, depends on having a lot of knowledge about the consumer which the publishers are completely lacking.

Publishers will likely price higher for popular authors and less high for new authors and midlist authors.   I anticipate that pricing will not depend on whether titles are backlist but will be dependent on the author with the expectation that the backlist titles of very popular authors are worth more than midlist new releases.    Of course, with dynamic pricing, authors are totally dependent on what the publisher deems their digital books are worth.   The playing field will be quite disparate. (I was thinking if I was an author I would want to negotiate a per unit royalty rather than have it be dependent on the crazy pricing experiments of publishers).

So what’s a reader to do with the publishers and their pricing plans?   This is my plan.

I plan to not pay higher the physical prices and I refuse to pay over $9.99 for the digital equivalent of a hardcover.   While the costs of production (editing, cover art, etc)* are no different for print books and digital books, with print books, readers have rights such as resale and the ability to share and trade; thus they value the books less.

When new fiction books that are released are in excess of the comparable print price or higher than the $10.00, I will not buy new. I will get the book either from the used market, use my library (my library has an express service where you can pay $1.00 to read a new popular release without waiting your turn), participate in Paperbackswap or other like services. I will not buy new.

What I will do, if I really want to help the author, is buy a digital copy of the backlist titles, if reasonable, or a print mass market and gift this book to a friend.   In this way, I will be sending the author a royalty and seeding the love of that author with another reader.   What I won’t be doing is giving the publishers the satisfaction of moving me away from buying digital.

Do you expect ebook prices to increase?   What do you anticipate dynamic pricing will mean for publishers and readers?   Do you plan to make any changes in your buying plans?   Will you keep a log like liz m?

*I’d argue that ebooks have lower costs because manufacturing is less and there is no physical warehousing, warehouse tax, returns from resellers, and no secondary market.

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

160 Comments

  1. library addict
    Feb 07, 2010 @ 04:19:55

    Since I don't yet own an ereading devise (and have no desire to read on my cell phone), I will probably buy the same amount in digital that I do now – which is about 30% of the books I buy. Mostly I buy from eHarlequin (hopefully they have no plans to change to this dynamic or agency model) and at Fictionwise.

    If Fictionwise is also forced to go by these publisher set prices with no discounts (which is my understanding of this pricing model) than I guess I won't be buying as many books from them. I have a lot of Micropay stored up, but if I'm going to spend $15 or more for a book it had better be a hardcover copy (and I admit I do collect the In Death series, NR, JAK, and a few other authors in hardcover, but not nearly as many as I did 5 or 10 years ago).

    So it looks like I will be borrowing even more print books from my library (because they don’t do ebooks).

    Any word yet on if Penguin (Jove/Berkley/Putnam), Random House, and Simon & Schuster plan to join in this foolhardy attempt to limit readers’ choices?

    And here I thought the DRM mess and universal formatting was the big issue with ebooks. Silly me :P

  2. S
    Feb 07, 2010 @ 04:27:50

    May I join you in this resolution? I too refuse to pay more for an ebook than I would for a physical book. Unless it’s a favourite author who I autobuy I rarely spend more than $10 for a book anyway and rely heavily on my local library & second hand bookstores to keep me entertained.

    I’d also agree that the production cost of an ebook is significantly less than that of a physical book and scoff at the statements that say otherwise. How can a digital book cost the same as a print book when there is no paper, no ink, no binding, no shipping, etc involved? They would have equal costs when it comes to author royalties, editing, marketing, etc but once it goes to print that’s where the equality in price ends. And it’s infuriating that publishers want to charge more for a product that costs them less.

  3. KJ
    Feb 07, 2010 @ 04:55:40

    Unfortunately, I do expect New Release ebooks across the board to increase. Some more then others, but I think with Apple putting there hat in the ring and giving Publishers more options the increase is inevitable. Hopefully they will wise up sooner rather then later though. Because I will not purchase an ebook over $10 and will not pay more for a MMP ebook then it’s dead tree counter part.
    I’m with you Jane. I’ll be using PBS and the library more often now. Although I prefer ebooks and my ereader, I will not be stronghold into paying more money for a less expensive item. No matter the convenience.

  4. Rebyj
    Feb 07, 2010 @ 05:17:35

    The online reading community may not be a big percentage of actual consumers of books, So i have my doubts that a resolution such as this will actually affect numbers of print or ebooks sold. However, I do know that the Dear Author community Jane , the other J’s etc as well as the blog commenters do have a way of getting their voices heard.
    I respect this resolution and the issues it takes with book publishers and I can say I too will not pay more than $9.99 for an ebook. I use the Kindle, Stanza and Kobo apps for the iPod touch .

  5. Bronte
    Feb 07, 2010 @ 06:24:30

    Amen.
    Publisher has a right to charge what they want – I have a right to choose not to buy. What the publisher seems not to realise is that these actions are promoting, not detering piracy, and punishing the reader that does obey the law. I will be buying used copies that I will then resell/exchange as I do not have the room to store books.

  6. Kat
    Feb 07, 2010 @ 06:26:56

    One nitpick about ebooks not having a secondary market. This is true, but wouldn’t filesharing be the equivalent?

    Anyway, my more general point is that US$15 for a new release is about what we pay for mass market in Australia (assuming current exchange rate = AU$17). So if we could just get ebooks at the same time for the same price as the US, that would work for me. Hardbacks are around AU$30-$55 so the $17 is looking decent.

    My feeling is that there’s definitely a market for higher priced ebooks, and it would be silly if publishers didn’t experiment with pricing levels to find out what their optimal price point is.

    And I get that if you’ve been buying ebooks for <$10 then a move to increase prices would suck.

  7. Nadia Lee
    Feb 07, 2010 @ 06:37:54

    @S:

    How can a digital book cost the same as a print book when there is no paper, no ink, no binding, no shipping, etc involved?

    IIRC, the cost of ebook production isn’t from paper, ink, binding, etc. but rather technical req, such as DRM, formatting each title for multiple formats and devices — so far we don’t have one standard format, unlike music files (mp3) — and so on. Nobody wants to read a book that has lots of gibberish characters, and from what I understand, you need to format and double-check to make sure it’s done right. (I don’t know who said it, but somebody commented several months ago that the conversion process is not automatic.)

  8. RachelT
    Feb 07, 2010 @ 07:49:06

    I am another reader who will be following a policy similar to Jane’s, although the pool of books will be further decreased by geographical restrictions as I live in the UK. I will also look even more to the small epublishers (eg Samhain, Loose Id, etc), and other places such as Lulu/author websites where authors sell their books, and support them. It will be interesting to see if those publishers experience an increase in custom as I assume they will be maintaining their current approach to pricing?
    Rachel

  9. DS
    Feb 07, 2010 @ 08:20:05

    @library addict: I think Harlequin’s marketing has shown they know who their customers are.

    My friend and I who share the Amazon account refused to pay over $9.99 (or 20% less than the cost of the lowest priced new physical copy) for an ebook from the moment we received our Kindles and I’m gong to continue to refuse to do so. I do intend to keep an eye out for reasonably priced titles from backlists and epresses as well as current releases.

  10. Anne Douglas
    Feb 07, 2010 @ 08:29:01

    A question – because I’m not entirely sure how library book buying/pricing works – won’t this also make it much more difficult for libraries to buy in e also? So I can see that eBooks available via library systems will go down also, or at least there will be less copies available so you will be down to say 1 ebook available in your area vs the library system having bought say 3-4 e copies. Waits will be long :(

  11. Fred
    Feb 07, 2010 @ 08:51:36

    I really don’t understand how trade publishers can say that ebooks have the same production cost as physical books. I work in the production department for an educational publishing company, and our ebooks cost 50% less than print across the board. And I also know exactly how much those ebooks cost to produce; believe me, at a 50% mark-down, there is still profit to be made.

    Maybe it’s a difference in cost, because textbooks regularly cost over $100? I don’t know. But I just can’t wrap my mind around this concept that ebooks SHOULD and DO cost as much as print. Mind-boggling.

    I’d love any insight if anyone has some.

  12. Bonnie
    Feb 07, 2010 @ 08:55:56

    I’m with Fred. I absolutely don’t understand this.

    And, nope, I will not be paying more than 9.99 for an ebook. Can’t do it.

  13. Peggy P
    Feb 07, 2010 @ 09:07:50

    I’m with you Jane but this has really been my practice all along. I rarely buy a $9.99 book for my Kindle – it has to be something really special. There are so many books that are priced below $7 and then so many sales, etc. I mean I cleaned up last week at ARe and there’s a decent sale at Fictionwise now. I’ve got so many options for my book buying dollars, why would I pay such a price? I’m picky but not that picky about what I read, I just move along to the next reasonably priced ebook!

  14. DS
    Feb 07, 2010 @ 09:09:52

    @Anne Douglas: Macmillan, the main problem now, does not offer their ebooks to libraries. Also our local library only offers audiobooks for download, not ebooks.

  15. Christine M.
    Feb 07, 2010 @ 09:18:07

    @Nadia Lee:

    Nobody wants to read a book that has lots of gibberish characters, and from what I understand, you need to format and double-check to make sure it's done right.

    True, but they need to get this right in the first place for me to consider this part of their expenses and accept to pay extra for this “service”. There’s little QC being done. Why should I pay for something that isn’t done properly? I’m not saying every book is badly formatted, but there’s enough of them around to make me notice this issue and refuse to pay a supplement.

  16. Fred
    Feb 07, 2010 @ 09:26:14

    @Nadia Lee

    And if the trade publishers are using XML in their initial typesetting and composition, it really shouldn’t be an issue. You may have some discrepancies, but nothing to the point of illegible gibberish.

  17. Deb
    Feb 07, 2010 @ 09:33:32

    I'm not in the hardcover demographic. I never have been. I simply can't afford to be. I'm a voracious reader, if I purchased hardcovers, my book buying would diminish considerably. I have done what readers in my income bracket have done for years. I waited for the mass market paperback release. This hasn't changed since I went to digital reading. I have well over 200 ebooks, which I started purchasing since April of last year. Of that total, 2 were hard cover releases.

    What is going to hurt, is curbing the purchasing and reading of my mass market ppbs at the higher price point. I have no doubt most titles in the romance genre will be sold at a higher price point, as the romance genre outsells other genres. But as I had done for years, I will curb my enthusiasm for these titles and move to authors and publishers such as Harlequin and Samhain. I have been doing that anyway as windowing has been in practice for a while know. I have found new authors and have been purchasing their backlists as well as buying backlists of my favorite mid list authors.

    It all comes down to economics. Like the authors, I have to feed, clothe and house myself. I can't take on the responsibility of “supporting” someone else while sacrificing my needs and responsibilities. I invested in 2 ebook readers to increase choice in format, I will not be going back to print published books. I have not, nor will not turn to pirated material either.

  18. buriedbybooks
    Feb 07, 2010 @ 09:37:35

    I’m not really an ebook reader. Mainly because of the lack of secondary market rights. But I don’t see this as a form of price discrimination.

    Publishers already price bestselling authors higher than midlist authors. It’s why Nora Roberts books are $8 in mass market while debut authors are $6. Or, with romance, why some authors get a hardcover edition to begin with.

    As for discriminating against a particular format, I’m not really seeing that either. It depends on how the publishers use the dynamic pricing. If they start with higher pricing upon release then gradually reduce the ebook price as demand fades, then they are following the same pricing structure they do in print.

    In print, those who “must read the book the week it comes out” fork over their dollars for a hardcover. Whether or not that book will remain in their permanent collection. Those whose demand for the book is outweighed by the price wait for paperback. Which can be longer than a year. Or they go to the library and that author loses the sale entirely.

    I see nothing discriminatory about doing the same with ebook prices. Starting out with a high demand price and lowering it as the “print” version transitions to paperback.

    I agree that the value of an ebook is severely damaged by the DRM and DMCA issues. I also agree with previous posts that the lack of a common format harms the future of ebooks.

    Maybe it’s because I mainly buy print, but I see the similarities rather than the differences here.

  19. DS
    Feb 07, 2010 @ 09:51:18

    @buriedbybooks: In my case, It’s not the windowing it’s the ebook price. I object to $7.99 paperbacks and $14.99 ebooks. I’m also not going to pay over $9.99 for ebooks out in hardcover only because that covers any loss in ability to resell, donate or give the book to someone else.

  20. Tinabelle
    Feb 07, 2010 @ 09:53:21

    I am definitely with Jane on this one. I cannot be convinced that ebooks must cost the same as print versions for all of the reasons stated. The strategy to withhold ebook releases or to price them higher than paper copies to force HC sales is majorly flawed and won’t work on me. I used to collect the HC’s of a few of my favorites like DG, NR, JAK, AQ but stopped a couple of years back due to cost and space issues. The large majority of books that I buy are never released in hardcover anyway so I am not the target for this pricing move.

    My strategy:
    - I will NEVER pay more for a digital copy than a paper copy.
    - If a paper copy can be found at a discounted price, I expect the same discount in the e-version.
    - I may rarely pay the same price if it is a MUST have but this will be the exception.
    - I will use the library more often and especially for unknown or new authors.
    - I will wait for paperback releases or for prices to drop over time.

    Over the years it has gotten easier for me to be patient and wait for prices to drop or paperback releases. I used to be one of those people that had to have the book right away but that is no longer true. There are so many books out there that I want to read that I just move on. Now, if the entire industry adopts this model, that is another story altogether!

  21. Lynne Connolly
    Feb 07, 2010 @ 09:54:40

    Being in the UK, I sometimes don’t have the choice when the paper book isn’t available.
    But I don’t buy hardbacks, either, as a rule. I have one of my many shelves dedicated to hardbacks (fiction ones) and there are about 6 that I paid for. The other 3 were freebies or used. The ones I paid for were 3 I couldn’t wait for, and 2 I bought because I knew the author and one I knew I’d read and re-read so it was worth it (that’s Linda Howard’s “Mr. Perfect,” btw.
    I have hundreds of paperbacks, and probably the same in ebooks by now.
    So the answer’s no. I’d look for another book in the same genre by a different author that is cheaper, or I’d wait for the book I want to come down in price. Or, since I review, I’d see if the sites I review for had an ARC.
    I’ve written ebooks for a while now and not one of mine sells for over $8, base price. My EC novels sell for more, but only on third party sites. You can get them cheaper on the publisher site. That I don’t mind, the choice is there. And my publisher and I both make a reasonable amount on the sale.
    If the author was getting a significantly higher amount, ie half or more of the proceeds, then I might consider it, but I suspect that’s only because I write and I feel an empathy to other writers.
    There is plenty of profit in the sub $8 ebook, especially if there’s no third party distributor involved and don’t let anybody tell you any different.

  22. Terry Odell
    Feb 07, 2010 @ 09:57:22

    Aside from my Mystery Guild hardcovers, I don’t buy anything but paper and e-books. And I don’t want to pay more for an e-book than I would for a mass-market paperback. One of my e-publishers recently added the Kindle format instead of insisting sales only happen via their own website. The publisher’s “suggested” retail for Kindle was twice their own digital price. I, for one, was glad that Amazon cut that back to $9.99. It’s still too expensive, IMHO, but at least the books are available, and anyone who wants them for less can buy from the publisher’s site.

    I have an eBookwise, so the format issues are a major hurdle.

  23. LVLM
    Feb 07, 2010 @ 10:03:42

    What bothers me here is even the price point of $9.99. NO, just NO. Even for a new release. My personal price point is $7. Maybe $8 if I’m buying from a specialty publisher whose books I have to anyway pay trade PB prices for in hardcopy.

    I pretty much read ebooks exclusively. I still buy paper copies of books that I have to pay $9.99 (ebook version) for when I can get it for $5.50 at Walmart or discounted somewhere with coupons. Or books that come in e formats that my reader can’t read. But those books just sit on my shelf with me reading those on my eReader first. So I think hard before buying PB.

    Also, I happen to live in an area with a great library system and can download more mainstream books for free.

    And I’m rather lucky in that I could give a crap about reading a new release as soon as it comes out. I’ve always waited for the mmp version anyway, so paying HC prices was never an issue for me.

    At the moment, my actual dollars go to small epubs like Samhain, Loose-Id and or I buy from ARe or Fictionwise when there are sales.

    I just will never believe that it costs pubs more to put out ebooks so I can’t justify paying even $9.99.

  24. Nadia Lee
    Feb 07, 2010 @ 10:17:08

    @Fred: The problem is not that it costs more to produce ebooks, but that cheap ebooks cannibalize print books.

    P.S. I have no idea how traditional NY publishers do typesetting…so I can’t comment on XML, etc.

  25. Jessica G.
    Feb 07, 2010 @ 10:37:42

    I’ve already decided to do the same thing. I’m thinking about starting a thread on the mobileread forum as a place for people to post books they have passed on due to the new pricing model.

    There are only two books coming out this year I’m willing to pay $15 for the ebook (when Sony releases, usually they are just under $15 for a few days). Changes by Jim Butcher and Silver Borne by Patricia Briggs. I feel kind of dirty saying that, but I really really want those books.

  26. Susan Helene Gottfried
    Feb 07, 2010 @ 10:39:30

    You know, I take a lot of flak for my decision to self-publish my books, despite the circumstances that led me to that decision.

    Yet as I’ve watched this unfold, I’m more and more glad and even relieved I made the choices I made. I have a feeling that when all this shakes out, I’ll be okay. Maybe even (God and my readers willing) ahead of the game a bit.

  27. Deb
    Feb 07, 2010 @ 10:40:31

    @Nadia: I have to respectfully disagree. What has cannibalized publishing are other activities. Internet usage probably accounts for the majority of it. People aren’t reading (and thus buying) as much as they used to. The publishing industry has been in a downward spiral much longer than the Kindle.

    Harlequin is successful, even now during our great recession. They have been publishing all books in print and digital since 2007.

  28. san_remo_ave
    Feb 07, 2010 @ 11:04:56

    I expect to see ebook pricing for equivalent hardback to increase at release time (above $9.99); I don’t expect the paperback versions to increase.

    In all cases, I expect the ebook version to be LESS than the physical book version available. The moment they try to charge MORE for the ebook than physical is when I’ll get upset, but I only see that in a few rare instances so far.

    I probably won’t change my buying habits. Before I adopted ebooks as my reading standard, I didn’t buy hardbacks due to size and expense. I waited until the paperback version was released which, YES, meant waiting up to a year until I could read a popular author. I’ll likely just end up waiting for the ‘dynamic price’ to work its way to paperback equivalent before I’ll buy the book. Lord knows my TBR pile is big enough that I’ll have plenty to read until then…

  29. roslynholcomb
    Feb 07, 2010 @ 11:16:34

    @san_remo_ave: This is pretty much my position as well. I only buy e-books from LI and Samhain, and I’ve never bought hardbacks anyway. I’ve never had a problem waiting for the paperback version and I don’t see this as any different: Pay premium to get it hot off the presses, or wait a while to get the cheaper version. No biggee. I would imagine that there’s a price scale in there for everyone. Nowadays I have so little reading time anyway that I typically even wait until they hit PBS.

  30. Shaheen
    Feb 07, 2010 @ 11:29:00

    I don’t have an e-reader, but I do read ebooks on my laptop. Talk about not spending over $10.00 for a book – I’m not going to spend over $200 for a device that makes me read over-priced books. (I’m not a miser – really – I just hoard my money so I can buy more paperbacks!) The only books I pay more than $8.00 for are LUNA trade paperbacks, and that is only because there seems to be no guarantee that they will come out in paperback.

    Having said that, the only question I have against Jane’s position is whether this isn’t, in some nefarious way, falling straight into their hands? We’ve already established that Macmillan doesn’t like ebooks – if we all stop buying ebooks, that seems that it will be a vindication of their position on the lines of “See – nobody buys ebooks anyway!”

  31. MariaESchneider
    Feb 07, 2010 @ 11:47:12

    (I tried to quote a section of your very good article, but have not figured out the HTML code just yet…)

    Publishers will likely price higher for popular authors and less high for new authors and midlist authors. I anticipate that pricing will not depend on whether titles are backlist but will be dependent on the author with the expectation that the backlist titles of very popular authors are worth more than midlist new releases. Of course, with dynamic pricing, authors are totally dependent on what the publisher deems their digital books are worth. The playing field will be quite disparate. (I was thinking if I was an author I would want to negotiate a per unit royalty rather than have it be dependent on the crazy pricing experiments of publishers).

    Or if you are an author with a backlist not controlled by a big publisher, you look at this mess and decide it would be much easier to just upload the books yourself (or hire a company to do it, one that doesn’t take a royalty, but charges a flat fee.)

    It amazes me to no end that there is a customer with money in hand and the entire industry (with few exceptions–Baen being one) refuses to make the sale. Not only that, they are managing to alienate their best and most frequent customers, make it harder to obtain books (it takes longer to receive a hardback or requires going to the store.) and have done nothing but display disdain for the reader.

    It’s one thing to insist on higher prices. It’s quite another to treat your customer as though they don’t matter a whit.

  32. Nadia Lee
    Feb 07, 2010 @ 11:49:06

    @Deb: Please re-read my comment. I did NOT say ebooks cannibalize publishing industry, which BTW can’t happen since they’re a very legitimate part of publishing industry. I said cheap ebooks cannibalize print books. Of course, I don’t know how true that is, but that’s the most frequent argument against cheap ebooks I’ve read on various blogs and articles.

  33. Ridley
    Feb 07, 2010 @ 11:55:03

    I wonder what publishers are thinking. I mean, my reader was about $300. I didn’t drop that cash so I could continue to buy paper books, I bought it to read ebooks on it.

    Before my ereader, I bought my books from library sales, UBS or Amazon’s 4 for 3 sale. Even sticking to a $4-6 limit on ebooks now, they are making a lot more off me than they were during paper’s reign.

    From what I’ve read here and elsewhere, my experience is the common one. Did publishers not do any market research? Why do they think ebook buyers are all latent new hardcover buyers?

    I do buy the odd new paper book – ones not available in ebook or if the ebook was orgasmic five star joy that I want to loan to friends – but 99% of the time I buy my new books in ebook and I won’t pay more than $10. I’m buying something I can’t display in a bookcase, share with friends or sell to a UBS. Why on earth would I pay full paper price for that?

  34. MariaESchneider
    Feb 07, 2010 @ 12:13:03

    @Shaheen: The thing is, if there is demand, someone will fill it. Indie authors (I know not everyone will read them, but that won’t stop them from being there and it won’t stop some buyers) backlist authors, authors that maybe don’t want to sell the ebook rights because the deal isn’t good enough. Those authors could actually put out their own ebook only products–and if there is money to be made, you can be sure that some authors will take that path.

    Which is why I do not understand the publishers. Yes, they sell a unique product, but there is demand. Someone will fill that demand. And if readers are reading something else because they can get a reasonable product at a reasonable price…those readers won’t be reading big publisher books as often.

  35. MariaESchneider
    Feb 07, 2010 @ 12:15:40

    @Nadia Lee: Or–cheap ebooks actually create a market where there wasn’t one. I know several readers from the forums still buy a cheap pb–usually from a used site–but they will spend that same amount on an ebook. I don’t think cheap ebooks cause much of a problem; the buyers that buy in the 3 to 6 dollar range are often buying used anyway. SO if they spend that same 3 to 6 on an ebook, the publisher might make some money because it’s a “new” purchase.

  36. brooksse
    Feb 07, 2010 @ 12:30:29

    @Deb: And IMO one of the reason’s Harlequin has been so successful is because they are very savvy wrt ebooks and understanding their customers: the list price for ebooks is less than the paperback list price, ebooks are discounted an additional 10% or more on their website, they offer coupons to buy ebooks, their backlist ebook titles are priced at or near the original list price, most ebooks are available on their website a month before they’re released to bookstores (i.e, March 2010 titles are available now).

    I’m already “just saying no” – I’ve never paid more for a digital version than the lowest print price and very rarely pay more than $8.00 for an ebook. In the past, if an ebook was selling for over $10, I’d check to see if I could find an ebookstore where it was discounted below $10, or I’d buy one of the author’s backlist titles (which might have been for the same publisher), or I wouldn’t buy at all. From now on, I’ll take that $10 or $15 and spend it at eHarlequin or an epub where I can get 3 or 4 titles for about the same price. And Harlequin and epubs still sells backlist titles of some of the same authors anyway. That way I’m supporting the author and rewarding the publishers who appreciate ebook readers.

  37. brooksse
    Feb 07, 2010 @ 12:55:26

    @Shaheen:

    Having said that, the only question I have against Jane's position is whether this isn't, in some nefarious way, falling straight into their hands?

    I think it would only fall into their hands if you buy a lower priced print version of the book. If you don’t buy the print version or the ebook, it’s a lost sale instead of a sale in another format. And if you buy a lower priced backlist title, it would let them know people buy ebooks but won’t pay above a certain price.

  38. Bill Smith
    Feb 07, 2010 @ 13:01:09

    If ebooks cost as much to produce as print books, you are so doing it wrong. There’s just no reason.

    Remember, it is not the entire publishing industry that is trying to take advantage of its customers–it’s merely the mainstream publishers.

    There are a host of small presses and independent authors (including myself) who will cheerfully sell you their books at a very fair price and often without any form of odious DRM.

    Bill Smith
    http://www.BillSmithBooks.com
    billsmithbooks.blogspot.com

  39. Amy
    Feb 07, 2010 @ 13:04:56

    I have decided to follow a similar course as Jane. As I stated in another comment, I am sorry that some authors will be negatively impacted as a result of my decision (not that one measly sale to me makes a real difference in the scheme of things), but I cannot support the type of pricing that some publishers want to force upon me regardless of what their retailers think or what ebook readers like me want.

    Over the course of a typical year I buy roughly 12-15 new romance books a month to be read on my Sony reader, so I am not as voracious of a reader as some of you. I don’t want freebies and I don’t want to prevent publishers and authors from making a fair profit. (The dumb thing about all this is the publishers pushing the new agency model are openly acknowledging the fact that they will end up making less on ebooks. This is ALL done to support the price of print books at ebook readers’ expense.) I just want the ebooks to represent a fair price given its lower perceived value to me. (Remove DRMs so they can be read on any future device I may want to buy and allow me to freely give/sell my ebooks — then I’ll gladly pay the same as their print copy counterparts.)

    I will not even buy the print copies from those same publishers because doing so would mean giving into their deliberate manipulation at the expense of my ebook reading preference. Let the market speak. If I’m in the minority on this, well, I guess I’ll be back to buying more used print books and using the library for the books of some of my favorite authors who are with those publishers. (Honestly, I haven’t borrowed a romance novel from the library in YEARS. But making me spend even more money than I’m willing will definitely drive me back.)

    Also, in the future, when folks post recommendations/reviews, it would be appreciated if the poster could also note the publisher name and the listed retail price. I plan to explore more “new to me authors” who are published by those publishers that are not trying to push higher ebook prices. They deserve the additional sales (if the books are also good of course.)

  40. MariaESchneider
    Feb 07, 2010 @ 13:20:44

    @Terry Odell: Terry, what format does eBookwise use, if I may ask? (And where do you usually get books for it?)

    Thanks,
    Maria

  41. kirsten saell
    Feb 07, 2010 @ 13:28:05

    @Nadia Lee: IIRC, the cost of ebook production isn't from paper, ink, binding, etc. but rather technical req, such as DRM, formatting each title for multiple formats and devices -’ so far we don't have one standard format, unlike music files (mp3) -’ and so on.

    Those are still fixed, finite costs (like editing and cover art), not per-unit, ongoing ones (like ppb and shipping). Which means the more digital copies of a book are sold, the smaller a percentage of the cover price will be eaten up by those costs. At a certain point a sweet spot of sales is reached where those costs will represent virtually 0% per unit and the whole shebang is gravy, so hindering sales of ebooks is shortsighted to say the least. I’m not sure if DRM is an ongoing cost (do publishers pay a per-unit royalty to the DRM producers?), but if it is, that’s just one more reason to do away with it, IMO.

    @Ridley: Before my ereader, I bought my books from library sales, UBS or Amazon's 4 for 3 sale. Even sticking to a $4-6 limit on ebooks now, they are making a lot more off me than they were during paper's reign.

    Before mine, my annual book-buying budget was about $15 or $20–I restricted myself to books my mom brought when she visited, or books borrowed from friends–because the only books available where I live are of the rack at the grocery store variety. Amazon’s shipping on physical books to my admittedly isolated town is often more than the cover price of the book I’ve purchased, if you’ll believe. Since I got my Sony, I spend about 1000% more on books, because the books I want are actually available to me.

    That said, I have never bought a book that was more expensive in e than in print, have purchased exactly one book for $12 (nonfiction), and zero for $9.99. My sweet spot for ebooks is between $4 and $6–exactly what my publisher charges for novel-length stuff, surprise surprise–and I have to really think about it if they want $8. This isn’t going to change.

    I think this model is going to be a good opportunity for some publishers to gain readers–if they want to, and if they employ their dynamic pricing effectively–pubs like Samhain have shown me that it is possible for publishers to understand the needs and habits of readers and capitalize on them. Those who don’t and won’t, are going to be left in the dust, I’m afraid, and I won’t have any sympathy for them.

    There was a lot of complaining recently that publishers don’t understand their readers because their readers are not their customers. Well, now that’s going to change, and when it does, some will figure it out and some won’t. And a small, self-serving part of me is glad that some won’t, because the more $15 ebooks there are, the more attractive my publisher’s books will be to readers. The shift could well be toward higher ebook prices across the board, but to prevent that all consumers have to do is refuse to buy them. When Macmillan is busy hemorhaging cash while Samhain, LI, Baen, HQN and others are rolling around naked on piles of $20 bills, maybe they’ll get the message.

    I’m not holding my breath, but it could happen.

  42. gwen hayes
    Feb 07, 2010 @ 13:33:27

    Before ebooks, the only time I purchased hardcover was when I was in a book of the month club–Literary Guild etc.

    Then times got leaner and I would buy my paperbacks at the used book store that gave credit for used books too.

    There are no royalties in that for the publisher or the author. NOW, I buy only ebooks. I still spend about the same amount of money because I am very savvy with my Micropay rebates–but all my purchases benefit the publisher and author.

    Will I pay hardcover prices? Hardly ever–except when the Micropay rebate at Fictionwise is 100 percent. Then it all averages out for me.

    I would just really love it all the pubs would make their books available in all the formats. That would really make me happy.

  43. Amy
    Feb 07, 2010 @ 13:39:27

    @kirsten saell: Since I got my Sony, I spend about 1000% more on books, because the books I want are actually available to me.

    Before I bought my Sony I bought roughly 4 or 5 new print books a month. I, too, have spent more $$$ over the past 18 months on more book purchases and purchased more copies due to the ease and convenience of buying ebooks. I guess one person will be happy if my ebook and print book purchases were to decrease as a result of the new pricing schemes: DH. :)

  44. Moriah Jovan
    Feb 07, 2010 @ 13:45:02

    @MariaESchneider:

    IMP. It’s proprietary and hard to find. BUT if you get the eBookWise Librarian software, you can convert RTF, DOC, and HTML.

    If I can’t find any of those, I get the LIT format (ESPECIALLY if the title is DRMd) and crack it, then convert the HTML to IMP.

    It’s an acrobatic act, but well worth it, especially since the reader’s only $90 right now AND ergonomically divine. IMO, it’s the perfect starter ebook reader.

    (I wish I were getting sales checks from how much I pimp this little thing.)

    Re: cost of creating ebooks.

    I wish we could get away from thinking about the cost of ebook versus print book of the same title. Other than keeping track of costs SPECIFIC TO the format, the costs should be amortized over the TITLE, not the format (i.e., hardcover, trade paperback, mass market, audiobook, ebook). There is NO REASON to talk about how much an ebook doesn’t cost that a print book does when the fixed costs are 80% of the cost of a TITLE.

    No matter what formats you provide for ONE TITLE, only a small percentage of the costs are specific to each format provided.

    Re $9.99. I’m sitting with whoever said $9.99 ebook was too much. As an indie who provides 7 DRM-free formats for epic novels for $6, I refuse to pay more for an ebook than I’d pay for a MMPB. Period.

    In fact, I have thresholds per word count and I’ve stopped buying from e-presses who don’t provide a word count. I’ve been burned too many times with ~$4.50 for an 18k “novella” (most likely BAD), when that’s more than a category-length romance. Labeling something a “short story” or a “novella” or “category” is no longer sufficient information for me.

  45. roslynholcomb
    Feb 07, 2010 @ 13:52:34

    @kirsten saell:

    When Macmillan is busy hemorhaging cash while Samhain, LI, Baen, HQN and others are rolling around naked on piles of $20 bills, maybe they'll get the message.

    Or they’ll do what corporations have always done when they see that a smaller company is beating them. They’ll either buy the e-pubs, hire away their principals or artificially lower their prices until they push them out of business. I don’t know who MacMillan’s corporate parent is, but some of these companies have extremely deep pockets. This is much what happened in the early 80s. Those of us who read romances in the 70s remember when there were a heckuva lot more publishers. A lot of those were absorbed by bigger houses. My guess is that will happen again.

  46. Jean
    Feb 07, 2010 @ 13:56:38

    I refuse to pay more money for a digital version than I would for the lowest available paper book. Black Jack by Lora Leigh a new March (paperback) release by MacMillan is priced at $14.27 for the Kindle version while the paperback is $7.99.

    I will refuse to purchase not only the ebook, I also won’t purchase ANY new copy in paper either from any publisher who prices like this. If I really want the book I’ll wait to get a copy used. I don’t want any of my money going to the publishers who price their ebooks so outrageously.

  47. Maili
    Feb 07, 2010 @ 14:20:55

    @Nadia Lee:

    The problem is not that it costs more to produce ebooks, but that cheap ebooks cannibalize print books.

    On what basis? I’m sorry for being dense, but I don’t understand the logic of your comment there. Three reasons:

    a) there is some evidence that browsers among ebook readers are more likely to buy low-priced ebooks than trying free ebooks or buying high-priced ebooks.

    b) the majority of ebook readers no longer buy print books. Excluding them means lost sales, but it still doesn’t affect print book sales itself because these ebook readers wouldn’t buy print books in the first place.

    c) if it’s true that ebooks are cannibalising print books, what about audio books (tape and digital)? Aren’t these ‘cannibalising’ print books as well? Most audio books (digital particularly) these days are priced between $2.99 and $25.99**. Quite a few friends buy these for their mp3 players (iPod, iTouch, Zen and Zune, mostly). They don’t buy print books any more. So, are audio books cannibalising print books?

    IMO, the only real cannibals here are other forms of entertainment (cinema/DVD, video gaming, hobbies, the internet, live entertainment, etc.) and short-sighted book publishers themselves.

    Edit: ** I should clarify that these are low prices, comparing with the prices of physical audio books.

  48. shellBell
    Feb 07, 2010 @ 14:23:49

    I started saying no early last year. The big publishers are already pushing me more and more to the library instead of allowing me to purchase eBooks. The simple fact of geographical restrictions has already reduced the number of books available for purchase. If I’m really interested in buying the eBook version I will hunt around my usual sites. I prefer to buy from Fictionwise but the majority of the eBooks that I am interested in purchasing recently have geographical restrictions, so I do try to shop around. If the price is too high or the geographical restrictions are in place everywhere then I will borrow the book from the library. I won’t purchase eBooks that are over $9.99.

    I have spent more on eBooks in the last 3 years than I ever had on print books. I would love to be able to purchase the backlists of my favourite authors in eBook format, but for that to happen the books must actually be available in eBook. I hate that the publishers will release some backlist books in eBook format but not all. Especially annoying when the books are in a series and some are missing. I would love all of Julie Garwood’s historicals, Judith McNaught’s historicals and Johanna Linsey’s backlist to be available in eBook but the publishers obviously aren’t interested in producing them.

    I refuse to pay more money for a digital version than I would for the lowest available paper book. Black Jack by Lora Leigh a new March (paperback) release by MacMillan is priced at $14.27 for the Kindle version while the paperback is $7.99.
    Diesel eBooks has Black Jack listed at a discounted price of $22.78 – definitely not purchasing at that price!

  49. MaryK
    Feb 07, 2010 @ 14:34:31

    It won’t change my buying habits because I’m not their customer anyway. I only buy ebooks from small presses, and I buy maybe 3 hardbacks a year.

  50. Ivy
    Feb 07, 2010 @ 14:50:52

    I agree w/ Jane. I refuse to pay that much and imo, they’re cutting off their nose to spite their face. I can count on less than 1 hand the authors I want in hb & even then I pay a discounted price or buy used. I can’t remember the last time I paid asking price for a book. I’ll buy used or on sale. I resent the publishers’ manipulation. Readers aren’t their customers though, it’s the retailer who sells their books. Maybe if they paid attention to the readers, the ones who actually buy their product things would improve…Guess that’s asking too much. I prefer the smaller publishers. They have their act together.

  51. MariaESchneider
    Feb 07, 2010 @ 14:51:29

    @Moriah Jovan: Thanks!

  52. LVLM
    Feb 07, 2010 @ 14:59:38

    @Amy:

    @kirsten saell: Since I got my Sony, I spend about 1000% more on books, because the books I want are actually available to me.

    Before I bought my Sony I bought roughly 4 or 5 new print books a month. I, too, have spent more $$$ over the past 18 months on more book purchases and purchased more copies due to the ease and convenience of buying ebooks. I guess one person will be happy if my ebook and print book purchases were to decrease as a result of the new pricing schemes: DH. :)

    I’m with you guys. Before I got my eBookwise, I spent hardly anything on new books. Most books I’d get from the library or UBSs or Library sales. So authors weren’t getting much out of me. Even popular authors who had new releases, I could get their books fairly quickly after releases because so many would buy them and there’d be a stockpile at the UBS.

    Since I got my eReader, I spend roughly $35 a month on books. And the authors make money off of that.

    If popular authors were in ebook at a decent price and DRM free, I’d be all over that.

  53. Esri Rose
    Feb 07, 2010 @ 15:01:32

    Publishers cling to paper publishing
    because they don’t offer much else.

    When the vast majority of authors do their own promotion and may even pay for outside editing, what’s the one thing publishers offer the average author? Distribution to and shelf space in brick & mortar stores. Of course legacy publishers are going to fight digital publishing – because when readers can find reviews/samples of an ebook and pay a reasonable price, and authors have things like cover control and a greater return on their promotional investment, then print publishers will be superfluous. For now, they’re still making money with their current business model, which is to put the vast amount of their budget into a few titles that fit a well-worn formula. But it’s not going to last forever. Readership will continue to decline, because a business model that focuses on a few units at high prices rather than more units at a lower price results in less variety. Bored readers buy fewer books. Ebooks require less upfront investment, and far from clinging to their paltry advances, most writers I know would happily trade them for a higher percentage of each book sold, along with truly valuable services like promotion and the perception that publishers offer higher-quality books. I know a lot of people badmouth Amazon.com, but their search engines, reader reviews, excerpts and ability to self-publish may be the last great hope for books. Once they combine that with cherry-picking and promoting the books that rise to the top, legacy publishers will find their readership limited to people who can’t afford an e-reader.

    Unfortunately, cutting down on ebook purchases will do exactly what print publishers want – cripple the ebook market. And buying only used books will cause print publishers to narrow their focus even further, taking even fewer risks on new authors and unusual book ideas. Jane’s suggestion is good: Established print authors are releasing their backlists in digital form on Amazon and pricing them at well under $10 per title (some as low as $3.50!). If you can find a self-published author you like at a good digital price, even better. When those sales go up, publishers will get the message that there’s money to be made in ebooks – by pricing lower but selling more.

  54. LVLM
    Feb 07, 2010 @ 15:11:38

    @MariaESchneider:

    Off topic but to add to Moriah Jovan’s info-

    eBookwise is part of Fictionwise, so many books on Fictionwise are in the format eBookwise reads. Also, there is a bookstore that eBookwise runs with many of Fictionswise’s titles that are purely in ebookwise’s format.

    Other than that- the librarian software is only $15. You can convert HTML and TXT to read on eBookwise with it. Moreover, since non DRM PDF can be changed to TXT, you can buy non DRM PDF versions of books.

    I have an eBookwise and most epubs offer their books in at least one, if not all, of those versions. It’s a good starter eReader–

    Jane– sorry for going off topic.

  55. MariaESchneider
    Feb 07, 2010 @ 15:24:23

    @LVLM: Thanks! Good info to have!

  56. Moriah Jovan
    Feb 07, 2010 @ 15:27:22

    @LVLM:

    Thank you. I forget about that because I very rarely buy anything from Fictionwise and/or eBookWise bookstore. I find the interface just too impossible for me to deal with.

  57. Penny
    Feb 07, 2010 @ 16:04:56

    Due to vision problems it is no longer comfortable for me to read print books.
    If it is not available at a reasonable price for me to read on my Sony, forget it.
    I am sure there are others like me for whom print is no longer an option. Ebooks have allowed me to continue to read voraciously without headaches. I buy a lot of books per month 15-30 and spend my money with publishers who want my business. I have had to jive up reading some of my favorite authors.

  58. becca
    Feb 07, 2010 @ 17:48:07

    There are 3 authors I buy in hardback: Lois Bujold, Terry Pratchett, and Nora Roberts (what can I say? I’m an In Death junkie). Some of those I also buy in audio. If they were available at a reasonable price, and if I had an ereader, I’d probably get them in e-format as well. e-format and audio don’t cannibalize my print buying, they augment it.

    One major thing: this whole kerfluffle is definitely keeping me out of the ebook market. I’m not going to drop a couple hundred bucks on a reader and then have to spend time I could spend reading cracking DRMs and making the files usable and archivable. I’d rather be reading.

  59. meopta
    Feb 07, 2010 @ 18:48:57

    @ Penny – that’s my situation as well, with my vision changes post chemo it’s far easier to read on the Sony that on paper. I just decided to give up some auto-buy authors as well. I’m not sure I’ll buy the e-books when (if) the prices come down to the MM pricing. I may blacklist those titles altogether. (Insert only hurting the author etc here, but my responsibility to a fair market overrides my responsibility to a particular author, I will read a different author in their place.)

    @ whoever was going to make a master thread on books passed by for windowing or overpricing – link it if you do, I’d certainly like to read it.

    -Liz M

  60. Jane
    Feb 07, 2010 @ 21:01:00

    So I am thinking that in the book link section, I should note if the ebook is in excess of the print price. Would that be helpful?

  61. Jane
    Feb 07, 2010 @ 21:08:14

    Where are all the peeps who are saying that the ebook prices of mass markets will be cheaper than the paperback version? I was shopping over at Fictionwise tonight and all the late Joan Wolf novels (post 2000) are priced at $9.99 while her best works (the Signets) are under $5.00. Yeah, dynamic pricing is really going to work well.

    Joan Wolf’s later works were published by Hachette, one of those pubs moving to dynamic pricing under the agency model.

  62. Nadia Lee
    Feb 07, 2010 @ 21:17:50

    @Maili: I have no idea how true that is b/c I’m just quoting what I’ve read. :-)

    TBH I can sorta see the logic of how cheap ebooks cannibalize print books, and right now print pubs may be trying to stop more people from going e because it’s only a very small % of the overall market (about 5%, unless it’s changed recently).

  63. Nadia Lee
    Feb 07, 2010 @ 21:21:03

    @Jane: Yes. Please do. There are some books I want to get now, hence I may try to get the e-version, but I’m not going to bother if it’s going to cost more than getting a print copy.

  64. Miki S
    Feb 07, 2010 @ 23:53:30

    @Tinabelle: What she said.

    Except I will not buy physical copies if that’s the only option. I will borrow it from the library if I just have to read the book.

  65. Miki S
    Feb 07, 2010 @ 23:54:47

    @Jane: Hmmm. Will you “price check” the various sites, or only list that for one site?

  66. kirsten saell
    Feb 07, 2010 @ 23:59:50

    @roslynholcomb:

    Or they'll do what corporations have always done when they see that a smaller company is beating them. They'll either buy the e-pubs, hire away their principals or artificially lower their prices until they push them out of business.

    At least those corporations will be eating their own losses if they artificially lower their prices, instead of having the retailer do it for them.

    Amazon was tilting the playing field so that Macmillan’s ebooks could compete on the same field as, say, Loose Id’s–but Macmillan was making a shit-ton more money on every ebook it sold than LI was, and selling more ebooks than they would have because of Amazon’s subsidy, too.

    LI was doubly penalized, having Amazon subsidize another publisher’s overpriced ebooks while at the same time paying Amazon a higher discount than the big boys have to. A $9.99 Macmillan ebook could earn Macmillan way in excess of $10, while a $9.99 LI book would earn LI $3.50 or $4. How the fuck is that fair, or allowing market forces to decide?

    Macmillan was profiting from both directions at once by earning premium wholesale on ebooks that then sold more copies than they would have because they were offered to consumers at mid-range prices.

    If a car dealer decided BMWs were too expensive and swallowed huge losses in order to mark them down to Hyundai prices, who the hell would still buy a Hyundai?

    Value is not a function of price. It’s a function of price versus quality. A Hyundai at a Hyundai price is decent value. A BMW at a BMW price is also decent value–even if the car itself is no better in quality and the difference is only in the perceived value of the brand.

    Artificially lowering the price of BMWs so they sell at the same price as Hyundais would be grossly unfair–especially if BMW got to rake in the dough as if people were still paying BMW prices for their cars.

  67. Morning Report | avidbookreader
    Feb 08, 2010 @ 00:01:40

    [...] sure to check out this arti­cle, My Ebook Res­o­lu­tion: Say­ing No to the Ebook Tax at Dear Author, writ­ten by Jane. I agree with her res­o­lu­tions and plan to con­tinue doing [...]

  68. Tweets that mention My eBook Resolution: Just Saying No to the Ebook Tax | Dear Author: Romance Novel Reviews, Industry News, and Commentary -- Topsy.com
    Feb 08, 2010 @ 00:07:33

    [...] This post was mentioned on Twitter by Barry Eisler, mfmakichen, Erotic Romance, Brad Vertrees, Keishon and others. Keishon said: RT @dearauthor: New post: My eBook Resolution: Just Saying No to the Ebook Tax http://bit.ly/a4Nuii [...]

  69. Evangeline
    Feb 08, 2010 @ 00:13:38

    @roslynholcomb:

    Or they'll do what corporations have always done when they see that a smaller company is beating them. They'll either buy the e-pubs, hire away their principals or artificially lower their prices until they push them out of business. I don't know who MacMillan's corporate parent is, but some of these companies have extremely deep pockets. This is much what happened in the early 80s. Those of us who read romances in the 70s remember when there were a heckuva lot more publishers. A lot of those were absorbed by bigger houses. My guess is that will happen again

    I don’t see that happening with e-publishers, particularly not these days. For one, e-publishers tend to offer niche titles NY doesn’t bother with, e-publishers offer low prices because they don’t have stockholders to keep happy and other parts of the media conglomerate to pay wages (not to mention e-publishers don’t have to deal with the costs of conducting a business in New York City), and e-publishers offer fiction in a variety of lengths and subject matter.

    Another biggie to deal with is the utter disdain many NY publishers have for the digital book marketplace–I don’t foresee Random House, or Hachette, or Macmillan following in Harlequin’s footsteps and forming a separate e-publishing arm unless they were arm-wrestled into it for the profits.

    As for buying habits, I never thought to see the day when I would bypass a bookstore to browse and buy ebooks online for my Sony Reader, yet, here I am. As others have stated, my books derive from three sources: ebooks, used book stores, and the library. I rarely buy print because it seems illogical to have spent nearly $200 on an e-reader only to continue to buy new releases from B&N or Wal-Mart. The more publishers continue to make attempts to kill the e-book market, the less I desire to buy their titles–particularly when e-publishers offer a variety of books, novellas, and short stories at affordable prices.

  70. roslynholcomb
    Feb 08, 2010 @ 01:08:50

    @kirsten saell: I agree wholeheartedly. This will level the playing field, at least temporarily for the smaller pubs, but I doubt they’ll go with option three for that very reason. Like I said, we’ve been here before, actually, more than once. Whether the NYC publishers have disdain for e-pubs or not, they definitely have respect for the bottom line. And if they don’t, their parent companies certainly do. We can actually see the handwriting on the wall with Harlequin. I doubt very seriously that the principals there wanted to start a vanity press, but their parent company, having seen the money made at other companies that had done so most certainly did, and voila! we have a vanity press. And what did Harlequin do when they wanted to start an e-pub? Hired someone with an e-pub background. Even if Quartet had not crashed and burned, they still would’ve been sniffing around the various e-pubs for talent. That’s what corporations do, that’s how Apple ended up with most of the people who used to work at Delicious Library.

    These companies are pretty much all owned by huge conglomerates. Doesn’t Murdoch own Random House and don’t they have a vanity press as well? I doubt very seriously that was their idea, but we already know that Murdoch has no compunction against anything that makes money. It doesn’t take much of a leap to understand that these huge corporate entities are going to go where the money is. Remember, there were once dozens of publishing companies in NY, now we have little more than a handful.

  71. roslynholcomb
    Feb 08, 2010 @ 01:15:44

    @Evangeline:

    I rarely buy print because it seems illogical to have spent nearly $200 on an e-reader only to continue to buy new releases from B&N or Wal-Mart.

    I think this is interesting as well. I’ve seen several posters with a similar mindset. You bought expensive e-book readers with the expectation that you would then be able to get e-books at a discounted price. That’s reasonable, given that’s what the sellers of e-readers have promoted. Unfortunately, they did that to sell their readers, and publishers don’t get a cut of that. Therefore there’s no incentive for the publishers to help Amazon, Sony, etc… sell their little electronic gizmos. If you follow this discussion, I think it’s interesting that the divide falls in a very distinctive pattern. Those of us without e-readers are more or less indifferent to what MacMillan does with prices. Those of you that have them are indignant. You seem to be angry that somehow you’ve been mislead, and you have, but not by MacMillan, or any of the publishers, but by Amazon and the others who’ve sold e-readers under the belief that the books would be cheaper. Publishers didn’t tell you that, Amazon did.

  72. Jean
    Feb 08, 2010 @ 02:00:02

    I am not indignant at the high prices because Amazon ‘promised’ me low ebook prices – I am indignant because I don’t feel an ebook, a digital file with none of the costs associated with paper books, should cost almost double the paperback book price. I’ve seen some prices of ebooks at $14.00 plus and the paperback has been out so long it’s no longer even available new. That’s outrageous and totally the fault of the publishers – not Amazon.

  73. Maili
    Feb 08, 2010 @ 02:26:47

    @Nadia Lee: Ah, I see. Thanks for clarifying. :)

    @roslynholcomb:

    You seem to be angry that somehow you've been mislead, and you have, but not by MacMillan, or any of the publishers, but by Amazon and the others who've sold e-readers under the belief that the books would be cheaper. Publishers didn't tell you that, Amazon did.

    There seems to be an assumption that readers buy standalone ebook devices to save money via cheaper ebooks.

    That isn’t the reason why my husband and I bought Sony Readers (yes, one each). For me, it’s easier to have a portable library without worrying about sacrificing books to save space in our home or save money on reducing the storage and moving costs of transporting physical books each time we have a house move (we moved roughly 15 times in 12 years). For him, he travels a lot so he reads whilst commuting. Backlit means sight fatigue (which is something he couldn’t afford, due to the nature of his job), so eInk is suitable.

    There are some readers who prefer ebook readers because it’s easier to adjust certain font sizes for readability or they may have mobility problems, such as holding a paperback open or holding up a heavy hardback. Accessibility.

    And some are blind or sight issues (short- or long-sighted), so they rely on their ebook readers to use the text-to-speech function or adjust font sizes of ebooks. Accessibility again. (Yes, there are some moronic publishers don’t permit text-to-speech function on their books, but there are some awesome publishers that do.)

    Clearly for some readers, there are practical or – more importantly, IMO – accessibility issues that led them to buy ebook readers.

    I get pissed off when publishers/retailers charge high prices for digital books. Not because I was told I’d get cheaper ebooks, but because of the idea people with disabilities have to pay more costs, just to have better access to books that ordinary readers enjoy with ease. It’s bat-shit crazy, to be honest.

    I mean, a reader can decide between a print book and a digital book while a reader with a disability has fewer choices. Sometimes they have no choice as they can only go for the one that works best for them, which means they may have to pay more. It’s unfair on them. And yes, it pisses me off.

    Then again, there is a long history of major companies forgetting to view people with disabilities as potential customers so both sides lose out. Sad, really.

    Sorry for going off-topic a bit.

  74. BlueRose
    Feb 08, 2010 @ 04:14:21

    I live in New Zealand, the land that currently has no access to either the Kindle or the iPad. While there are other options on the market, due to lack of competition, they are grossly expensive.

    So I have no ebook reader and I have never purchased an ebook. And I have no particular desire or expectation to do so in the next couple of years.

    I am also not a hardback reader – when the latest ones come out here for $45-65 NZD there is no way I can afford it. In fact my book buying of new books has dropped from being once a week, to less than once a month. Simply – I cannot afford it, and I can reserve a new book and wait patiently from the library for $2 per book ($5 if its a best seller and I am particularly impatient)

    And the price differences are the same whether its dead tree or ebook edition.

    So no ebooks here at all!

  75. DS
    Feb 08, 2010 @ 06:56:23

    Someone on the Amazon discussions reported that Random House is not going along with the agency model:

    http://www.geardiary.com/2010/02/07/random-house-stands-alone-with-amazon/

    As for the person who was asking about posting the prices of numerous etailers on reviews, there’s at least one web site that lets you compare all current prices for ebooks. Probably more than one but this is the one I used the other day:

    http://www.ebookprice.info/

  76. roslynholcomb
    Feb 08, 2010 @ 07:05:34

    I think at least part of the problem here is that people are forgetting something very important: People are willing to pay premium prices for readers. They understand that like all new technology readers will be more expensive. Unfortunately, they’re forgetting that the books themselves are new technology as well. I remember when VCRs first came out, the machines were expensive and so were the tapes. A blank VHS tape could cost as much as $20. Just like all technology as time went on they got cheaper. CDs and DVDs were much the same.

    There are always people who jump on the new thing right away, and those people always pay a premium price. Others take a wait and see attitude, some because of the price of the unit, formatting issues, etc… Some are concerned because a reader takes something that has always been inexpensive (at least compared to other means of entertainment) and makes it expensive.

    I think at some point we’ll have to adjust our viewpoint that e-book readers are new technology and thus worthy of their exorbitant cost, while e-books themselves are not.

  77. Deb
    Feb 08, 2010 @ 07:37:50

    I turned to digital reading after spending several trips to bookstores only to find the books were unavailable. First week of release, unavailable. I actually traveled to 2 different bookstores on the same day to support the authors during their release week. Too often, the books were unavailable. I paid a premium in gas for those forays. I also turned to digital because I could finally get the backlists, as they were unavailable.

    I did not turn to digital due to cheaper book prices. I have 2 hard cover released ebooks in a collection of well over 200 books. With the new pricing structures, some of the best selling authors mmpbs in some cases are $12.00+. That’s what I think most of us are objecting to. The ebooks are stripped, poorly formated in some cases, and locked down to one device. I accepted DRM restrictions when I bought the device. I did not anticipate the formatting issues. I certainly don’t accept paying a premium price for something the publishers don’t value enough to put out a decent product. A crappy formmated ebook devalues books, Mr. Murdoch.

    I use inkmesh.com to check pricing among the ebook resellers.I know there are other websites which do the comparison shopping as well.

  78. LVLM
    Feb 08, 2010 @ 07:41:50

    Those of you that have them are indignant. You seem to be angry that somehow you've been mislead, and you have, but not by MacMillan, or any of the publishers, but by Amazon and the others who've sold e-readers under the belief that the books would be cheaper. Publishers didn't tell you that, Amazon did.

    Not so in my case. I got an eReader because I wanted to read books that NY pubs weren’t offering. Erotic romance and such from EC and Samhain and so on. And I got accustomed to paying what are reasonable prices for them, around the $4-5 range for a novel.

    And now, I much prefer to read on my reader because it’s less painful for me- holding a book open is painful- and I can make the font larger- PBs fonts are so tiny- and I have a backlight, which means I don’t have to wear a light on my head at night to read in bed. All conveniences I’ve come love. I won’t switch back to paper now.

    And as far as ebooks being cheaper, I think that was more a selling point of epubs trying to get people to read their books. And they were around long before Amazon offered the Kindle and NY pubs even bothered about ebooks.

  79. buriedbybooks
    Feb 08, 2010 @ 08:30:52

    @Maili:

    I’m not saying it’s right, but publishers have been gouging those with accessibility issues for a long time. Or, if not gouging, then charging a premium due to a limited market.

    Large print editions are often hardcover or trade paperback only and up to 7 times the price of the publisher edition.

  80. Jane
    Feb 08, 2010 @ 08:45:52

    @roslynholcomb: Nope. I’m indignant because ebooks are being used to prop up brick and mortar book sales, because ebooks are too high priced given how much the reader gives up, and because the quality of ebooks from legacy pubs are shoddy works.

  81. Jane
    Feb 08, 2010 @ 08:46:57

    @DS: That quote comes from the PM article I linked to on Thursday and unfortunately, I think that geardiary and mobileread are inferring too much. MacIntosh sounded enlightened (she apparently worked for Amazon a couple of years) but she did not say that they wouldn’t move to the agency model.

  82. roslynholcomb
    Feb 08, 2010 @ 09:00:56

    @Jane: So it’s okay for Amazon to artificially deflate the price in order to sell e-readers, but not okay for the publisher who actually creates the product to artificially inflate the price to protect their market? (And yes, IMO, what Amazon is doing is artificial. In most forms of entertainment cheaper formats typically come out well after demand for the product has cooled off.)

    After all, that’s the essence of capitalism is it not, he who makes the widget sets the price and the market determines whether or not they’ll pay it?

  83. MariaESchneider
    Feb 08, 2010 @ 09:09:24

    @BlueRose: just curious–is the reader Mobipocket or Adobe’s version of an ereader available in NZ? (these are readers for the PC or laptop) I’m wondering if someone wanted to read ebooks, if they can download these types of tools (not suggesting you should, just wondering about availability.)

    I’m guessing the Kindle for PC and Nook for PC aren’t available.

  84. Edie
    Feb 08, 2010 @ 09:17:40

    @MariaESchneider:

    Yeah I am in AUS but I’ll jump in, we have access to things like Adobe etc – but the thing is we are restricted by the geo restrictions on what books we can buy. So even if we had access to the e-readers at a reasonable price, if we want to read anything that isn’t available from harlequin/M&B or from DRM free e-pubs we kind of up the creek.

  85. DS
    Feb 08, 2010 @ 09:21:52

    @Jane: @Jane: After giving it some thought, I agree that it isn’t necessary a statement of solidarity. In fact, I am wondering now if it wasn’t either an effort at either avoiding the appearance of price fixing or trying to get some concession from Apple. Apparently they are the only one of the big 6 that has not signed on.

    @roslynholcomb: Assuming you know my motives isn’t reasonable. I usually get my ass handed to me when I do that, and rightfully so.

  86. Moriah Jovan
    Feb 08, 2010 @ 09:26:28

    @roslynholcomb:

    After all, that's the essence of capitalism is it not, he who makes the widget sets the price and the market determines whether or not they'll pay it?

    Capitalism depends on an honest exchange of goods and currency between a producer and a consumer.

    Amazon is not a consumer; it’s the middleman, albeit an exceptionally TALENTED middleman whose value is its database, searchability, and one-click ordering.

    Macmillan doesn’t know its true consumers; if it did, it’d do some pricing research, throw up an online store, and undercut the hell out of Amazon.

    Amazon isn’t blameless, but it has staying power because it does know its consumers, has cultivated its consumers, has made it EASY for its consumers. Amazon’s value is its database.

    What’s happening here is a grand changing-of-the-rules-of-commerce and not in a way that benefits consumers. Macmillan won the battle but lost the war. And it doesn’t even know it.

  87. Jane
    Feb 08, 2010 @ 09:28:06

    @DS I’m not sure what it signals or why they haven’t signed with Apple. A horizontal cartel tacitly formed isn’t anticompetitive, so I don’t know that would be an issue. I think it’s interesting. Someone at MobileRead put up her bio which included a two year stint at Amazon (before she was with RH and she is currently with RH) and she shows some understanding of how complex pricing really is. Was it Kobo Books who said that some publishers would price it and forget it? I think that is likely to happen. It’s not like publishers have whole teams designed to review pricing on a daily/weekly basis as was suggested by Kobo should happen.

  88. Jane
    Feb 08, 2010 @ 09:31:30

    @roslynholcomb First, any manufacturer that engages in price restraints is bad for the consumer so that’s a strike against publishers. Second, a publisher who uses me, the ebook reader, to prop up its failing business model isn’t going to be supported by me (whether others want to support them is up to others). Third, I don’t think that Amazon is artificially deflating the price. I think it’s trying to price what the consumer believes is the right price and that it could absorb the losses better than anyone else because it made up for that in terms of volume. I believe that Amazon was pricing to the market to gain market share through proprietary format and hopes of inducing volume sales. Amazon is doing what is best for Amazon, certainly, but in this, my interests coincide with Amazon’s.

  89. roslynholcomb
    Feb 08, 2010 @ 09:33:44

    @DS:

    Assuming you know my motives isn't reasonable. I usually get my ass handed to me when I do that, and rightfully so.

    Huh? When did I assume to know anyone’s motives? In fact I specifically addressed the people who talked about the price of e-books in terms of the price of the reader. If that wasn’t you, so be it, but many people in this thread did so. I didn’t assume anything, I simply read what they said.

  90. roslynholcomb
    Feb 08, 2010 @ 09:35:52

    @Moriah Jovan: And if that’s the case the market will show them the error of their ways and that will be that.

  91. roslynholcomb
    Feb 08, 2010 @ 09:39:42

    @Jane:

    I believe that Amazon was pricing to the market to gain market share through proprietary format and hopes of inducing volume sales.

    But what happens when Amazon attains that market share? Are they going to be willing to take a bath on the price indefinitely? Why are we willing to believe that Amazon would be willing to do this, but we’re not willing to believe that MacMillan will do what they say they will do which is lower the price when the mmpb comes out? Seems to me that neither party comes to the table with clean hands, and both have been guilty of some rather hinky behavior in the past.

  92. Jane
    Feb 08, 2010 @ 09:49:55

    @roslynholcomb Are we now debating moral behavior on the part of companies? I can’t argue this point any more because I’m just rehashing previous statements.

    1. Publishers know nothing about pricing.

    2. Macmillan has an open policy of not liking ebooks and wanting to drive consumers away from ebooks to physical retail purchases.

    3. Macmillan’s past history is exorbinant pricing for digital books compared to their paper counterparts.

    4. Macmillan has not said that it will lower the price when the mmpb comes out. It has said it will engage in dynamic pricing which is a sophisticated form of price discrimination. There is no evidence that Macmillan will reduce prices for mass markets or trade, either in the form of past behavior, or in any public statements. It has merely said that some books may be priced at 5.99 (which I suspect will be titles Macmillan believes no one wants in the first place).

    5. Amazon is making money despite the loss leaders because it sells the majority of its digital catalog at a profit.

    6. Amazon’s relationship to the customer is much closer than that of a publisher.

    7. Amazon, like iTunes, would not be able to raise price without some perceived added value.

    8. The win win for Amazon would have been to get the pubs to sell the books to them at wholesale which would permit the lower pricing and not allow them to take a loss.

  93. roslynholcomb
    Feb 08, 2010 @ 10:09:55

    @Jane: I’m not debating the morality of corporations because the SCOTUS not withstanding I don’t believe that corporations are people. I’m debating several things:

    1. The logic of calling the pricing scheme that MacMillan has engaged in an “ebook tax”. This is no more true than the premium pricing of any new technology is a “tax”.

    2. I’m debating the idea that Amazon is anymore trustworthy than MacMillan after all we’ve seen both engage in some hinky behavior.

    And further, how do we know that publishers know nothing about pricing? Presumably they certainly know something about at least wholesale pricing if not retail. After all, MacMillan’s been doing it for almost two centuries now. I think this notion that publishers are a bunch of know-nothing Luddites when they’ve managed to sustain a business for a couple of centuries as compared to Amazon who has been around for less than a decade is questionable at best. At best guess I would imagine that both parties are very good at what they do, or they would’ve gone tits up a long time ago. Both parties have made some serious misfires along the way and will have to adapt to market realities, but this idea that it’s all a publisher issue is IMO misguided at best.

    I agree that there’s nothing more to debate, we’re obviously on different sides of this issue and that’s well and good. I didn’t hope to change anyone’s mind, but I do hope that I helped some to see that these issues aren’t as cut and dried as some might think. Not having a dog in this fight, and enjoying a good debate as I do I think this has been entertaining.

  94. Evangeline
    Feb 08, 2010 @ 10:29:20

    @roslynholcomb:

    I think this is interesting as well. I've seen several posters with a similar mindset. You bought expensive e-book readers with the expectation that you would then be able to get e-books at a discounted price.

    Um, No. I purchased my Sony because I like reading ebooks from e-publishers and I have no room for more print books in my apartment. I have no problem paying the same price for an ebook published by NY as the print book costs. I do not, however, support paying $14.99 for an ebook version of a mmpb–that is price gouging and has nothing to do with “new technology.”

    As for hardcovers, I rarely buy them unless it is non-fiction, but Amazon built their model on $9.99 for new hardcover releases. As Jane said, the inflated prices for ebooks is an attempt to force readers back to print to bolster a dying business model. While I do think there is merit to $14.99 or whatever for ebook versions of HCs, the issue is that if publishers force that price or higher for their hardcover releases, they will definitely inflate the price for MMPB ebooks, as Macmillan has done for a while, and as Harper Collins attempted to do until readers complained directly to their best-selling authors (like Eloisa James). Hence why many of us will cease buying the books produced by those publishers.

    Also, the charge that Macmillan has been in business for centuries, so they know what they are doing is laughable. Particularly when you compare the histories of Macmillan, Harper Collins, etc to that of Harlequin/Mills & Boon–a company which has always had a finger on the pulse of its readers.

    And Macmillan vs Amazon is an odd comparison as well: Amazon isn’t a publisher. However, at least they have more contact with their consumers than publishers, and Bezos has kept his ear to the ground regarding the e-book market (and regardless if Kindle sales numbers have been inflated, or some people refuse to read anything but print, the average Joe or Jane on the street knows what the device is and how it works).

  95. Jane
    Feb 08, 2010 @ 10:33:57

    @Evangeline: Interestingly, Chris Meadows of Teleread noted that

    85% of the entirety of Macmillan's e-books, including backlist titles, at Fictionwise are priced above $10. 40% are priced above $20. When I did a survey of the first results page of $20 e-books, 7 out of the 25 titles were in mass market paperback.

  96. kirsten saell
    Feb 08, 2010 @ 10:35:05

    Macmillan doesn't know its true consumers; if it did, it'd do some pricing research, throw up an online store, and undercut the hell out of Amazon.

    How’s Macmillan supposed to learn about its consumers if Amazon is in between them messing with the market data? Macmillan may well believe tons of people will pay $15 for an ebook, because it hasn’t been proved otherwise–and never would as long as Amazon was discounting those ebooks to $9.99.

    Now that Macmillan gets to set the price, I’d predict they’ll sell fewer ebooks AND not sell any more hardbacks than it already was. The numbers were skewed, but now they’ll tell the real story. And now that lower price + more sales = more money, instead of lower price + same #of sales = 1/4 the money, they might act on what they learn.

    Further, Amazon’s discounting allowed the idiotic Macmillan to successfully compete with smart, savvy publishers who know what the fuck they’re doing and offer value for money. Not just successfully compete, but rake in 3 to 6 times the profit per ebook than those smaller, smarter companies, on ebooks that sold to consumers at similar prices. It allowed them to compete as if they knew what they were doing, and penalized those companies that get it by subsidizing Macmillan’s stupidity and making their products look as attractive to consumers as those of companies who offer a quality product at a decent price.

    Like I’ve said, the more $15 ebooks there are out there, the more attractive epublisher’s products are going to look. Macmillan will see those publishers gaining market share and themselves losing it, and maybe they’ll wise up. Maybe they won’t.

    I own an ereader, and I’m far from indignant over this. A $9.99 ebook is just as out of my budget as a $15 one, so this won’t change my book-buying habits one bit. But the way I see it, now there’s at least a chance that Macmillan will do as it’s pledged, and lower prices of older titles to the $5.99 range–at which point, I’ll be able to buy them.

    It may be a slim chance, but it’s better than none–and the chances of them doing it before, when it meant cutting their profits from, say, $13.50 per book to $3 for a difference in effective consumer price that wouldn’t do a whole lot to increase sales, were pretty much nil.

    And at least now Macmillan won’t be growing fat–hell, morbidly obese–on subsidies that tilt the playing field so savvy companies can’t compete as effectively.

  97. Jane
    Feb 08, 2010 @ 10:39:41

    The one thing I’m not convinced of any longer is that this move will actually help Macmillan to break the Amazon dominance over the ebook market. I doubt the primary purchaser of the iPad will be ebook readers. I think it will be popular, but not because of its ebook capabilities. Jobs himself was very cursory in its review (oh, look, you can change the font…moving on to games, games, and more games).

    The fact is if everyone has the same price for an ebook, whether it is Fictionwise, Kobo, Amazon, Apple, then these retailers compete on something other than price.

    They will compete on service (Amazon wins this hands down. It takes five years for Fictionwise to get a CS response back to you); selection (again Amazon wins on this); ease of use; software (what’s the best ebook reading software right now); and maybe a rewards/loyalty program (I think Fictionwise has the best one currently).

    Apple is not going to be spending a lot of time making its iBook software feature rich. It’s core apps are really not that feature rich.

    If price is not part of the retail equation, why will Amazon not prevail in the end?

  98. Moriah Jovan
    Feb 08, 2010 @ 10:42:32

    @kirsten saell:

    How's Macmillan supposed to learn about its consumers if Amazon is in between them messing with the market data?

    A) Sales data is unreliable as a market indicator because you don’t know if people are buying what they want or they’re buying what you give them.

    B) Amazon doesn’t have a monopoly on sales data. You can get it from Bookscan.

    C) You hire a firm that specializes in market research. WHY would any corporation in its right mind cede its market information to a contrarily interested third party?

    Oh, wait…

    Never mind.

  99. roslynholcomb
    Feb 08, 2010 @ 10:44:38

    @Evangeline:

    Um, No. I purchased my Sony because I like reading ebooks from e-publishers and I have no room for more print books in my apartment.

    Again, I was referring to the people in the thread that did say that. For clarity’s sake I even quoted one. If it wasn’t you, then the statement was not addressed to you.

    I have no problem paying the same price for an ebook published by NY as the print book costs.

    Interesting. Just before this latest kerfuffle broke out people were having a fit of the vapors over that very notion. They wanted to have e-books available at the same time as newly released hardbacks at essentially half the price of hardbacks. They balked at the notion of publishers holding the release of ebooks for four months. As someone who has no problem with waiting a year for a mmpb because I don’t want to pay hardback prices, I thought that was insane, but many on this blog were proponents of that idea.

    I do not, however, support paying $14.99 for an ebook version of a mmpb-that is price gouging and has nothing to do with “new technology.”

    I agree, but since I don’t buy ebooks from traditional publishers I have no idea how prevalent this practice is. I would be very surprised if it’s ongoing, but as I’ve said, all parties have been engaged in what is at the very least questionable behavior.

    Also, the charge that Macmillan has been in business for centuries, so they know what they are doing is laughable.

    I’m not sure why that’s laughable. In a capitalist economy companies that don’t know what they’re doing don’t survive, at least not without government subsidies. I haven’t heard about any bailouts for publishers, but maybe I missed that story.

    And Macmillan vs Amazon is an odd comparison as well: Amazon isn't a publisher.

    I’m comparing the two because they are the parties engaged in the struggle. And I think Jane has been predicting for quite some time that Amazon has aspirations to become a publisher. If publishers have a similar suspicion I would imagine it would fuel their dislike/distrust of Amazon.

  100. Evangeline
    Feb 08, 2010 @ 10:49:28

    @Jane: I shop primarily at Books on Board since I’ve tried and given up purchasing from Fictionwise. *g* However, I just visited BoB to look up the prices for a few Macmillan titles, and oddly enough, a number of their books (the ones priced well above the mmpb price) have been pulled. To focus on a particular author–Carole Nelson Douglas–Macmillan not only inflated the price for ebook versions of mmpbs, but retained the HC prices for books long released in mmpb. If that’s not price gouging, I don’t know what is.

  101. Evangeline
    Feb 08, 2010 @ 11:04:32

    @roslynholcomb:

    Again, I was referring to the people in the thread that did say that. For clarity's sake I even quoted one. If it wasn't you, then the statement was not addressed to you.

    There’s a “reply” function which would have allowed you to reply directly to whomever you quoted. Using that would have directed your statement at that person, as opposed to seeming aimed at everyone who mentioned owning an ebook reader.

    I'm comparing the two because they are the parties engaged in the struggle. And I think Jane has been predicting for quite some time that Amazon has aspirations to become a publisher. If publishers have a similar suspicion I would imagine it would fuel their dislike/distrust of Amazon.

    Barnes & Noble has its own press and indeed, they partner with a POD company (I’ve seen fliers promoting this partnership)–just as Amazon does with CreateSpace. Since Amazon opened the Kindle to original works, hundreds of self-published authors have uploaded their books in Kindle format. So, right now, they already are elbowing their way into the publishing industry (and indie musicians can sell their music through Amazon’s digital music marketplace as well).

    However, for publishers to fear Amazon horning in on their racket, they would be concerned with e-publishers as well–but I don’t think NY is concerned with content provided via Amazon or e-publishers, but their profits–hence, why they want to control the price of their ebook releases.

  102. roslynholcomb
    Feb 08, 2010 @ 11:19:08

    @Evangeline:

    There's a “reply” function which would have allowed you to reply directly to whomever you quoted.

    I did hit reply and the person I quoted was you:

    I rarely buy print because it seems illogical to have spent nearly $200 on an e-reader only to continue to buy new releases from B&N or Wal-Mart.

    …but I don't think NY is concerned with content provided via Amazon or e-publishers, but their profits-hence, why they want to control the price of their ebook releases.

    I wouldn’t be so sure about that. It seems to me that Amazon, especially with this 70/30 split that they’re offering is trying to lure authors away from publishing houses. Certainly it’s a very lucrative offer for those who are already established. I think J. A. Konrath has said on his blog that he made more money selling his books for $2 on Amazon than he did otherwise. Presumably that would only apply to established authors, and my guess is that’s Amazon’s target. So, imagine all those authors with extensive backlists, some probably going back a decade or more, and their publisher doesn’t have the electronic rights. They go to Amazon and sell their backlist and discover that they can make a buttload of money off books they’ve already written. Further, what’s to keep them from dropping their NY publishers altogether, if they can get a 70% cut from Amazon? Obviously all authors won’t go for that, but my guess is many will. At the very least they’ll use it as a bargaining chip for higher royalties. If NY isn’t worried about this scenario they ought to be, and my guess is they are.

  103. Sandia
    Feb 08, 2010 @ 11:29:23

    Thank you Jane for the post. I will be doing the same thing.

    I just went to the Kindle store to see what Macmillian titles were back. Looks like all of them are, and all versions that have a paperback version, have a higher ebook edition price (i.e. Sarah’s Key: paperback 7.96 and Kindle 9.99, I Shall Not Want: paperback 7.99, Kindle 9.99).

    I’m just sick to death of this whole thing. Why should I pay MORE for my ebook edition when there is a comparably priced paper edition? And the issue comes down to – if the publishers don’t want me to read in the edition version I prefer, I just won’t buy. I’ll get these books from the Library instead. I will not be buying a paper version – the publisher’s preference. They’re just losing business, not forcing me to a different distribution channel of their preference.

    I wish I had enough money to post a 1 page ad in the NYTimes like Sargent does and give them and Hachette a big F*U.

  104. kirsten saell
    Feb 08, 2010 @ 11:41:52

    B) Amazon doesn't have a monopoly on sales data. You can get it from Bookscan.

    Ah, but the data they got from Bookscan was skewed. It wasn’t reflecting the number of sales of a $25 ebook, or a $15 ebook. It was reflecting sales of a $25 or $15 ebook marked down to $9.99.

    Macmillan wants to know what consumers will pay for ebooks. How can they find that out that if Amazon (and other retailers who follow suit to compete with Amazon) artificially deflates the consumer price of those books by 50-150%? Instead of the market dictating what it will bear, it was Amazon dictating what the market would bear.

    And yes, Amazon may be way more in touch with the consumer, but their interference pretty much dictated that those Macmillan ebooks would never be available to consumers for less than $9.99.

    Where was the incentive for Macmillan to ever drop the price from hardback equivalent to, say, $8? A $2 reduction in effective price isn’t going to translate into many more sales–certainly not enough to justify Macmillan cutting their per-copy profit from $13 to $4.

    Before, Macmillan reducing a hardback ebook from $25 (sold to consumers at $9.99) to $8 meant maybe a 10% increase in sales, but a decrease in per-copy profit of 64%–$12.50 down to $4. Why the fuck would they do that, when they could continue to move plenty of ebooks (and earn up to 6x what epubs get for titles that sell to consumers for similar prices) at Amazon’s expense?

    Now, Macmillan reducing a hardback ebook listed AND SOLD at $15 to the mmpb equivalent of $8 might translate into more than double the sales. That means their overall profits on a given title have a chance to go up as the consumer price comes down. Even if they break even, or see a small reduction in profits, it won’t result in quartering their net profit on a title, which is what would have happened before.

    As long as those ebooks were being discounted by Amazon, Macmillan had a disincentive to ever reduce them from hardback prices to mmpb. And Amazon helping Macmillan compete effectively with smarter publishers despite their being total dumb-asses–and handing them sometimes 6x more money per copy to do it–meant that those smarter publishers were being penalized for their intelligence.

    Rewarding the idiots–and then some–at the expense of those who get it right. How was that fair to more savvy publishers who were forced to compete at a similar consumer price point with a publisher that is not only moronically deluded about ebooks, but was raking in up to 6x the money per sale?

  105. Sandia
    Feb 08, 2010 @ 11:45:08

    @roslynholcomb:

    why are we willing to believe that Amazon would be willing to do this, but we're not willing to believe that MacMillan will do what they say they will do which is lower the price when the mmpb comes out?

    Because Amazon has already demonstrated that they understand where the consumer demand price point is, and Macmillian has not. Take a look at any books that are currently MMPB available and ebook available – they have higher ebook versions than MMPB versions. They just don’t have a history of actually reducing prices once it becomes available.

  106. roslynholcomb
    Feb 08, 2010 @ 11:56:13

    @Sandia: I think Kirsten just demonstrated that we don’t know what the consumer demand price point is. We know what price point Amazon set in their effort to keep the price low so that they could incentivize Kindles, but until the books are actually in the marketplace and sell (or don’t) we don’t know what people will be willing to pay for them. People on this blog say they won’t pay $15 for an ebook. I wouldn’t either, but then I wouldn’t pay $10 either. Then again I wouldn’t pay $200 for a gadget I can only use for one store, but plenty of folks have. What will the market bear? Who knows? Either the publishers are right, or they’re not. The market will tell.

  107. kirsten saell
    Feb 08, 2010 @ 12:06:17

    @Sandia: Because Amazon has already demonstrated that they understand where the consumer demand price point is, and Macmillian has not. Take a look at any books that are currently MMPB available and ebook available – they have higher ebook versions than MMPB versions. They just don't have a history of actually reducing prices once it becomes available

    Why would it do that when Amazon will do it for them?

    For example: L.A. Banks’ The Thirteenth is out in mmpb for a list price of $7.99 (info from Macmillan’s site). It’s listed on Kindle for $14.95 and marked down to $5.98 by Amazon. Which means Macmillan is earning $7.47 on an ebook that sells to consumers for $5.98.

    Why would they lower the list price to $7.99 and cut their profits almost in half when it won’t mean any more sales? Why the fuck would they do that?

  108. kirsten saell
    Feb 08, 2010 @ 12:16:33

    @Sandia: (i.e. Sarah's Key: paperback 7.96 and Kindle 9.99,

    Sarah’s Key is listed at $13.95 (info confirmed from both Macmillan and Amazon).

    Amazon marked down the (trade) paperback to $7.96, and the Kindle version to $9.99. AMAZON is the one making you pay more for the ebook than the print version on that one. Can’t blame Macmillan for that.

  109. Sandia
    Feb 08, 2010 @ 12:25:20

    @roslynholcomb: @kirsten saell:

    Because I am the consumer, Jane is the consumer, and many other ebook readers are the consumer who have made the comments that they’re not willing to pay more for a ebook version an a currently available MMPB version. Sure it’s all anecdotal right now, but I don’t think you can discount the many many voices I’ve heard on various discussion forums that have repeated the same thing.

    At the end of the day, Jane’s post was advocating consumers like myself vote with our dollars. What I saw were lots of concurring opinions that people were doing that already.

    I don’t understand why you guys are getting so upset from this??

  110. roslynholcomb
    Feb 08, 2010 @ 12:32:50

    @Sandia: Where have you seen anyone getting upset? I’m certainly not upset. As I’ve stated before, this is strictly an academic exercise for me that I have no percentage in. After all, I’m a consumer too, and the price point Amazon has set is far too high for me. That’s why the anecdotal evidence from this blog may or may not be relevant.

    Either way, I write for epubs. I buy from epubs. Frankly I’d love to see both sides in this little pissing contest get their collective asses handed to them. Unfortunately, I fear that when that happens they’ll turn around and eat up all the smaller pubs and thus leave me without a market, but hey, that’s the way it goes.

  111. MariaESchneider
    Feb 08, 2010 @ 12:46:19

    @Edie: thanks, that is good to know. I’m constantly trying to make sure that my stuff is available in the right formats for the right readers, for the right geographies! Very much appreciate the answers!

  112. kirsten saell
    Feb 08, 2010 @ 12:46:27

    @Sandia: Because I am the consumer, Jane is the consumer, and many other ebook readers are the consumer who have made the comments that they're not willing to pay more for a ebook version an a currently available MMPB version. Sure it's all anecdotal right now, but I don't think you can discount the many many voices I've heard on various discussion forums that have repeated the same thing.

    I’m a consumer as well, and I feel EXACTLY the same way you do. I refuse to pay more for e than print. I refuse to pay $9.99 for any ebook. I want Macmillan to lower list prices to less than the cheapest available print version.

    But I know they’ll never, ever do that as long as Amazon swallows losses in order to mark those books down. Why would they? Amazon’s been happy to provide them with similar effective consumer prices as the publishers who do what you and I want–and therefore similar sales numbers as those pubs–while at the same time paying them a shit-ton more money per copy sold.

    Under the old system, publishers like Macmillan who don’t do what consumers want, earned up to 6x more per ebook sold than the publishers who do do what consumers want. How is that supposed to encourage them to do what consumers want?

    And Macmillan isn’t penalized by fewer sales, because Amazon takes a loss that makes them able to compete with the guys who do get it right.

    Think about it. Amazon has been subsidizing Macmillan’s pricing stupidity. As long as Amazon enabled them to earn premium wholesale on a product that sold to consumers at a mid-range price, the status quo was destined to continue. Macmillan was profiting up to 6x more than publishers who did the right thing, and not being penalized by fewer sales because Amazon took their losses for them.

  113. meopta
    Feb 08, 2010 @ 12:53:38

    ” I agree, but since I don't buy ebooks from traditional publishers I have no idea how prevalent this practice is. I would be very surprised if it's ongoing, but as I've said, all parties have been engaged in what is at the very least questionable behavior.”

    @roslynholcomb: I would suggest, if one is entering a conversation about traditional publishers and pricing from an adversarial position, one might want to brush up on that information. That’s just how I roll. You roll how you like.

    It’s ongoing. It’s extortion pricing, it’s perfectly acceptable for the consumer to be outraged at a less fully featured product being sold to them late for twice the price of the full featured product they (for whatever reason) would prefer not to use. It’s bad consumer relations and it’s the issue.

    Not the ‘e-book readers who are cheap’ or ‘Amazon operating in a free market is bad, let’s allow corporations to engage in price fixing’

    Liz M

  114. Sandia
    Feb 08, 2010 @ 12:55:10

    @kirsten saell:
    Kirsten, it doesn’t matter what the list price to me – just what can I buy it for. I am the end user/consumer. When I go to Ann Taylor Loft I don’t say “gee, your original retail price was 15$, maybe I’ll pay that instead of your discount price of 7$”. I just buy it for 7. If it’s too much, I won’t buy – that’s it. There’s just too much content out there for my eyeballs for me to “comparison shop” – I don’t have the time for it. So for a consumer like me, I have brand loyalty for my retailer. I shop for clothes at Ann Taylor Loft, Target for miscellaneous, and shop at Amazon for books. I guess I’ll be visiting the library more if there are books I want to read that I won’t buy.

    My whole point is that for a consumer like me, I used to buy 1 to 2 books a year. I read exclusively from the library – about 2 books a week. Since I purchased my Kindle (since April 2008), I’ve purchased more than 300 books for my Kindle, spending well north of $2000. It’s excessive, but Amazon has me hooked on the quick availability of being able to read a book, and buy that authors entire backlist in a minute if I enjoyed a book.

    Publishers are at risk of losing me – a brand new market that is consuming content in a brand new fashion because of the Kindle – and that’s what they don’t realize. I will continue to use my Kindle – and just won’t buy books that are at the wrong price point. As the agency model gets deployed, they’ll see attrition in the reader ranks like me.

  115. MariaESchneider
    Feb 08, 2010 @ 12:57:41

    @Jane: Another thing that Apple hasn’t shown an interest in doing is going after backlist authors directly. Sure it isn’t excluded and their 70/30 split would make it attractive–but Amazon has the software for uploading ready and running. Amazon is also publishing a few authors here and there in print (4 runner ups from last year’s writing contest.) Apple has not said they will allow writers to upload directly. There have been articles implying Apple may still set a “floor” on the pricing of such novels–which would not be competitive with Amazon’s current model.

    To say that Amazon is not a publisher (not Jane, but someone else above) is not quite correct. They are not a traditional publisher acting in traditional ways. They are publishing. Their inventory of backlist authors is growing and bringing in revenue. Their inventory of self-published is also growing. The one thing I see out of Amazon that I don’t see out of any other publisher (Harlequin almost counts here) is innovation. They are trying various publishing models, pricing payments and so on. This is a win for some authors already. This is a win for many readers already.

    It’s easier for me to be impressed with Amazon’s model than with Macmillan–no matter how long Macmillan has been around, you get the wrong leadership in there and you can bury a company in the sand in a hurry–or leave them behind in the dust.

  116. Moriah Jovan
    Feb 08, 2010 @ 13:06:14

    In the end, it boils down to the consumers who aren’t early adopters, who aren’t here at DA debating this, who aren’t part of Bookville, who have no idea any of this is going on. There are a lot more of them than there are us.

    Those are the people Amazon is tapping, and those are the people Macmillan has no idea how to tap at all. OR they are pricing deliberately–in a manner to kill ebook sales altogether, and any profit made off ebooks at that price is gravy.

  117. NJB
    Feb 08, 2010 @ 13:06:59

    I have to admit I once paid more for an ebook than the list price of the paperback but I won’t do it again.

    Another thing we can do is to start complaining about the poor quality of many ebooks. If publishers want to charge more, I am definitely going to let them know if an ebook is poorly formatted. I can also put that info in reviews or tags on Amazon.

    A romance I read last week had the dog’s name spelled three different ways, wildly variable spacing between words (and some words that ran together), and random paragraphs were completely indented.???

  118. roslynholcomb
    Feb 08, 2010 @ 13:08:35

    …if one is entering a conversation about traditional publishers and pricing from an adversarial position, one might want to brush up on that information.

    That might apply if I Amazon or MacMillan were actually present in this discussion. I feel adversarial toward both of them. I’m certainly not entering an adversarial position with Jane, or anyone else on this thread. I have nothing to be adversarial about. None of this pertains to me one way or another.

    It's bad consumer relations and it's the issue.

    But surely if a company chooses to engage in bad consumer relations they’ll pay the price in lost profits? It’s not like MacMillan has a monopoly on books. The last I heard there were actually too many books being published each year.

  119. Castiron
    Feb 08, 2010 @ 13:08:58

    Sandia:

    Why should I pay MORE for my ebook edition when there is a comparably priced paper edition?

    You yourself shouldn’t, because it’s clearly not worth more to you. Someone else might find the ebook edition more valuable than the paper, because it takes up less space and is more easily searchable, or because they can get it immediately instead of waiting for shipping or paying for expedited shipping.

    if the publishers don't want me to read in the edition version I prefer, I just won't buy.

    If the publishers don’t want you to read an ebook, they won’t release an ebook at all.

    The ebook isn’t at a price you’re willing to pay? Great! Don’t buy it! You don’t want to buy the paper book at all? Fine! Don’t buy it! There’s thousands of other books out there; spend your money on the ones in the format you prefer.

  120. kirsten saell
    Feb 08, 2010 @ 13:24:20

    @Sandia: Kirsten, it doesn't matter what the list price to me – just what can I buy it for. I am the end user/consumer. When I go to Ann Taylor Loft I don't say “gee, your original retail price was 15$, maybe I'll pay that instead of your discount price of 7$”. I just buy it for 7. If it's too much, I won't buy – that's it.

    Me too. But I have eyes to see that when publishers like Macmillan are rewarded by Amazon for keeping their prices high, and publishers like Samhain are effectively penalized by Amazon for giving me good value, that isn’t going to translate into lower prices overall. It’s just rewarding the idiots and making it harder for the smart publishers.

    It means the publishers who do the wrong thing for consumers earn more for doing it, and those who do the right thing for consumers earn less for doing that. AND the ones who do right by consumers have a harder time competing with those who don’t, because Amazon was tilting the playing field.

    No one has to boycott Macmillan. No one has to kick and scream. No one has to flip out. All we have to do is what we do–insist on value for our dollar and not buy ebooks that are priced too high.

    This move means that if Macmillan wants to price their ebooks at $15, lots of people won’t be buying and they’ll ACTUALLY SEE THAT because Amazon isn’t artificially deflating consumer prices. If they price them at $5.99, lots more people will be buying, and Macmillan WON’T be taking a 75-80% hit in overall profits to do it–which means they will actually have an incentive to lower prices.

    It’s called competition, it’s called a free market. It’s called putting it in the hands of the consumer to support the publishers who offer value with sales, and penalize those who don’t with refusal to buy.

    Amazon deflating Macmillan’s prices only led to consumers rewarding Macmillan for doing the wrong thing. And it penalized all those publishers out there who were giving us what we all supposedly want by not only paying them MUCH less for doing it, but making it harder for them to compete.

  121. Sandia
    Feb 08, 2010 @ 13:28:41

    @Castiron: Yes, that was the point of Jane’s original post. As you can see, I was agreeing with her and reiterating the point… And you’re agreeing again with me right???

  122. Jackie Barbosa
    Feb 08, 2010 @ 14:08:11

    @Moriah Jovan: B) Amazon doesn't have a monopoly on sales data. You can get it from Bookscan.

    To my knowledge (which, I admit, may be flawed/incomplete), Bookscan does not currently report ebook sales. So, not sure any publisher can determine the appropriate price point/market for ebooks based on Bookscan data.

  123. roslynholcomb
    Feb 08, 2010 @ 14:08:17

    The bottom line is, why accept an artificial price set by Amazon at $10 when the consumer demand point might be $7 or even $5. (Isn’t that the average price at epubs?) Maybe J. A. Konrath is right and the sweet spot might even be $3, thing is, we’ll never know because there will be no incentive to go lower than the artificial price set by Amazon. And keep in mind, Amazon’s price isn’t set to sell e-books, it’s set to sell Kindles.

  124. LVLM
    Feb 08, 2010 @ 14:27:02

    @roslynholcomb:

    The bottom line is, why accept an artificial price set by Amazon at $10 when the consumer demand point might be $7 or even $5. (Isn't that the average price at epubs?) Maybe J. A. Konrath is right and the sweet spot might even be $3, thing is, we'll never know because there will be no incentive to go lower than the artificial price set by Amazon. And keep in mind, Amazon's price isn't set to sell e-books, it's set to sell Kindles.

    This, I agree with totally.

  125. Patricia Rice
    Feb 08, 2010 @ 14:37:57

    While I can’t disagree about the cost of e-books in comparison to print, that isn’t the essential problem. The problem is that the industry is in transition. If you’ve ever moved all your possessions from one house to another, you’ll know all the obstacles you’ll hit and new problems you have to overcome. That’s what’s happening now.

    The big publishers have an immense investment in authors, buildings, staff, the works. This investment is directed toward print publishing. They HAVE to make a profit to cover that investment to stay in business, and the only way they know to do that is sell print books. Right now, they’re still looking at e-books as competition to their print titles, a competition that will dilute their profit and their ability to receive a return on their investment.

    This is changing and will continue to change, but it can’t do so immediately. There is no good way to measure growth of e-books compared to print, and even if it was possible to suddenly switch all their activities toward e-book manufacture instead of print, they would put bookstores out of business if they did so.

    So right now, the way things currently stand, I suspect what will happen if publishers meet price resistance on e-books over $10, they’ll simply not issue the e-books until months after the print book to ensure that their overhead is covered.

    That’s how a market settles out–by push and shove.

  126. Ridley
    Feb 08, 2010 @ 14:53:18

    @roslynholcomb:

    You’re many times more likely to see a retailer cut prices than a supplier.

    I mean, Macmillan can’t even sort out its prices now. Lots of their ebooks are listed higher than the MMP, leaving it to the various retailers to try to mark them down. It’s been going on for a long time now and I imagine it will only get worse.

  127. roslynholcomb
    Feb 08, 2010 @ 15:03:10

    @Ridley: I’m sure you’re right, and if the consumer demand point really is $10 then those books won’t sell. Keep in mind, this situation has been this way for a while now with Amazon subsidizing MacMillan’s fucknuttery. Presumably when it starts biting them in the ass they’ll make a course correction. If they don’t they’ll lose money and at some point they’ll start losing authors. After all, Amazon is offering a 70/30 split on self-pubs. Presumably Apple will offer something similar, and pop goes the weasel.

  128. Ridley
    Feb 08, 2010 @ 15:13:57

    @Patricia Rice:

    You know what? Fuck bookstores.

    I can’t think of a set of businesses I dislike more, and I love local business.

    They’re almost always completely inaccessible to the disabled – with rugs and furniture everywhere making the aisles too narrow for wheels – and are completely snotty when it comes to genre fiction. Why should I mourn their loss? They’ve basically told me to get lost for years.

    Supposing I was able bodied, why should I want to make multiple trips for books? I want to buy my romance, my husband’s sci-fi, browse some non-fiction and grab a gen fiction book or two all in one go. I can’t do this in a small bookstore. If I try it, they all but judge you a moron if you ask to order some romance, sci-fi or anything else in mass market. They clearly don’t want the business, so to hell with them.

    People feel the need to protect these d-bags, and I just don’t get it. Fools needed to adapt.

    /thread hijack

  129. Evangeline
    Feb 08, 2010 @ 15:33:57

    @roslynholcomb:

    I rarely buy print because it seems illogical to have spent nearly $200 on an e-reader only to continue to buy new releases from B&N or Wal-Mart.

    And where did I state I “demanded” discounted ebooks simply based on the cost of my ebook reader? I bought my e-reader to purchase ebooks–not ebooks worth $5-7.99 in mmpb yet priced $14.99 by the publisher. Also, when I pointed out the fallacy of your claim that everyone who purchased an ebook reader is irrational b/c all new technology is initially expensive, you certainly didn’t say you were quoting me.

    It seems to me that Amazon, especially with this 70/30 split that they're offering is trying to lure authors away from publishing houses.

    And this would be a bad idea because…? Is your position that authors now having a choice to travel a route they feel suits them best for their vision for their career (and their profits) is bad because it undercuts NY publishers?

    Based on your comments, I don’t see how you have connected the dots between the ebook price war and the possible end of your career at an e-publisher…If Samhain, Loose Id, Ellora’s Cave, et al were in danger of being swallowed by Harper Collins or Amazon or Fictionwise, I think we’d hear rumblings of this right now.

    Ultimately, I think you’re barking up the wrong tree–this isn’t strictly about Amazon taking over the world, or about the Kindle. Visit publishers’ websites, Books on Board, and so on, and you’ll find inflated mmpb ebook prices from Macmillan in a variety of formats. Bottom line: if this continues to exist and other publishers follow suit, we as consumers have the choice to not buy. And shouldn’t you be happy? Many people have stated above that they will turn to e-publishers in lieu of buying NY published books–so I don’t think those aforementioned e-publishers will be cannibalized just yet.

  130. Amy
    Feb 08, 2010 @ 15:38:17

    @Patricia Rice:

    The big publishers have an immense investment in authors, buildings, staff, the works. This investment is directed toward print publishing. They HAVE to make a profit to cover that investment to stay in business, and the only way they know to do that is sell print books. Right now, they're still looking at e-books as competition to their print titles, a competition that will dilute their profit and their ability to receive a return on their investment.

    If this is truly how they think, why??? Why look at ebooks as competition to print titles as opposed to ebooks becoming complementary, simply another method of selling the very books they are trying to sell which will ultimately increase the number of copies sold for each book? This type of mindset on the part of publishers, if true, really makes no sense to me; it seems so lacking in logic and rationale.

    There is no good way to measure growth of e-books compared to print, and even if it was possible to suddenly switch all their activities toward e-book manufacture instead of print, they would put bookstores out of business if they did so.

    But no one here is advocating for the publishers to completely switch their activities 100% over to ebooks instead of print. With all due respect, I think this type of gross over-generalization of the position that the vast majority of the ebook readers on this thread are advocating detracts from the debate. And why is there no good way to measure the growth of ebooks? This statement also makes no sense to me. You generate a sale via download from your website or a retailer, and you record that sale. Why would the calculation of copies sold via ebooks be different than calculation of copies sold via print?

  131. kirsten saell
    Feb 08, 2010 @ 16:02:01

    And this would be a bad idea because…? Is your position that authors now having a choice to travel a route they feel suits them best for their vision for their career (and their profits) is bad because it undercuts NY publishers?

    I don’t think anyone thinks that’s a bad thing. In fact, authors leaping overboard so they can put out reasonably priced ebooks on their own could give the NY pubs something to think about as far as price goes.

    I’m an author advocate and a reader advocate because I’m both an author and a reader. Everyone’s heard me bitching about NY’s ebook prices and shitty author royalties, and how if Samhain and EC and LI can turn a profit almost solely on ebooks while pricing them reasonably and cutting their authors a higher percentage, NY should be able to do that too. Needless to say, in 12 years, when digital has carved out a bigger market share and out of print NY authors are earning a pathetic 25% on net for their ebook backlists, I’ll be earning my 30-40% on list and I’ll be a very happy woman.

    Visit publishers' websites, Books on Board, and so on, and you'll find inflated mmpb ebook prices from Macmillan in a variety of formats. Bottom line: if this continues to exist and other publishers follow suit, we as consumers have the choice to not buy. And shouldn't you be happy? Many people have stated above that they will turn to e-publishers in lieu of buying NY published books-so I don't think those aforementioned e-publishers will be cannibalized just yet.

    What I find is inflated prices that are marked down by retailers so those books can more effectively compete with Samhain, LI, EC on price point. What I find is Macmillan earning 6x as much as Samhain, LI, EC do on ebooks that are similarly priced for consumers. What I find is Macmillan still listing their ebooks at outrageous prices, and still selling plenty of them because retailers are willing to prop them up by swallowing their losses for them.

    At least with this new agency model, Macmillan sets the price. If they list their ebook at $15, 1) it’s not directly competing with those who list theirs at reasonable prices, and 2) they aren’t pocketing more profit per copy than consumers are paying for the damn book.

    Without artificial price deflation, the profit they earn on a title will be a direct reflection of the price point consumers are willing to pay. If no one’s buying that $15 ebook (and they turn to Samhain or LI, hooray, go epubs!) Macmillan will either lower the price to maximize profits, or lose out.

    But right now, with Amazon discounting outrageously priced ebooks in order to move them, Macmillan’s profits are maximized by keeping those list prices outrageously high. They’re a business. They’re about money. If they can sell just as many ebooks, and earn two and a half times the money on them, by listing them at $25 than they would listing them at $10, why would they do one damn thing differently?

  132. Lou
    Feb 08, 2010 @ 16:03:17

    I also refuse to pay for ebooks higher than the hard cover and paperback physical price, so I’ll keep on doing what I’ve been doing for months and simply not buy the ebooks that I deem to be too high.

    What gets my goat is why haven’t some publishers implemented this pricing plan previously – from lowering the prices from hard cover to paperbacks as they do with physical editions – which would have been fair. I’m not saying they do this for all ebooks, but I’ve come across too many for my liking. Does anyone see it as incredulous that they are promising to do it now. They should have done this a long time ago.

    So I’ll believe it when I see it when they say they’ll lower the prices respectively.

  133. meopta
    Feb 08, 2010 @ 16:03:35

    @Patricia Rice: I think you’re correct on both price experimenting and windowing. Which is unfortunate for some authors. I know from my own buying patterns that a purchase deferred is a purchase not made. Unless there is a new media push (like when a hardcover goes to paper) I just forget about it.

    HQN does seem to be an example of doing e-books well. Since I got the reader I went from one or two HQN annually (both by Kasey Michaels) to four or five HQN titles a month. Not a massive surge in business, but multiply it out by who knows how many others?

    Liz M

  134. kirsten saell
    Feb 08, 2010 @ 16:09:39

    You generate a sale via download from your website or a retailer, and you record that sale. Why would the calculation of copies sold via ebooks be different than calculation of copies sold via print?

    Actually, it’s a lot easier to calculate copies sold via ebook–that’s why epublishers can pay authors monthly or quarterly.

    With print, factoring reserve against returns, actual returns, remainders, predicting how many books are on store shelves versus in consumers’ hands–well, it can be a year or two before anyone even knows how many copies actually made it into shopping bags.

    The problem with NY pubs and ebooks is that they’ve integrated their ebook P&L into the print P&L, instead of working it out separately.

    So extricating set-up costs, ongoing costs and break-even points for ebooks is next to impossible, because they basically take all the P&L data and predictions for both formats and stick ‘em in a blender, and presto! Now no one in NY knows how much it costs to even produce an ebook, let alone where the break-even point will be at a given price.

  135. kirsten saell
    Feb 08, 2010 @ 16:22:56

    What gets my goat is why haven't some publishers implemented this pricing plan previously – from lowering the prices from hard cover to paperbacks as they do with physical editions – which would have been fair. I'm not saying they do this for all ebooks, but I've come across too many for my liking. Does anyone see it as incredulous that they are promising to do it now. They should have done this a long time ago.

    They haven’t because Amazon’s been paying them hardcover wholesale prices, then discounting the hardcover price to a consumer price attractive enough to still sell ebooks.

    If you could sell 100 copies at $8 and earn $4 per copy ($400 total), or 75 copies at $25 (marked down to $9.99) and earn $12.50 per copy (~$940 total), you wouldn’t be in a hurry to lower the price to $8, would you? Why do you think Macmillan would be?

    Now, we’ll have something more like Macmillan selling 50 ebooks at $15 and earning $10.50 per copy ($525), or Macmillan selling 150 ebooks at $5.99 and earning $4.20 per copy ($630).

    There’s Macmillan’s incentive to lower the list price.

  136. Jane
    Feb 08, 2010 @ 16:27:32

    @kirsten saell That presumes that Macmillan wants to sell ebooks and they don’t. M wants to move readers to physical purchases. Further, and again, vertical price restraints don’t bring down price. I haven’t seen an example of that.

  137. kirsten saell
    Feb 08, 2010 @ 16:54:28

    That presumes that Macmillan wants to sell ebooks and they don't. M wants to move readers to physical purchases. Further, and again, vertical price restraints don't bring down price. I haven't seen an example of that.

    And subsidies don’t facilitate a free market either, and Amazon’s discounting amounted to a subsidy.

    Macmillan doesn’t want to sell ebooks because they think ebooks cannibalize print. How did the current situation do anything to disabuse them of that notion?

    They’re happy to think ebooks hurt HB sales because Amazon’s discounting has resulted in lots of ebooks sales at a time when HB sales happen to be in decline. Cheap ebooks sell, expensive HBs don’t, oh noes! Digital killed the hardback!

    When Macmillan starts selling fewer ebooks because consumers don’t want to pay $14 or higher for them–and HBs still don’t move–maybe they’ll figure it out.

    I still don’t understand how anyone can defend the old system. Paying Macmillan $12.50 per book for trying to fuck over consumers, while ensuring their books are as attractive to thrifty consumers as books from publishers who aren’t trying to fuck over consumers. Oh, and let’s pay the good guy $2.50 per book for knowing his market. No good deed goes unpunished, right?

    That’s like giving a huge bonus and blammo perks to the dude who calls in sick all the time and treats your customers like shit, while the one does all the work and is a joy to be around with gets minimum wage.

  138. roslynholcomb
    Feb 08, 2010 @ 17:25:09

    @kirsten saell: What you said. And I’m done here.

  139. roslynholcomb
    Feb 08, 2010 @ 17:36:08

    @Evangeline: Sorry, I forgot to respond. I showed that I quoted you, by quoting you, twice.

    And I certainly don’t think authors jumping ship for a 70/30 Amazon split is a bad thing. I think it’s a great thing, both for e-book prices and publishing opportunities. It’s a win-win for writers (at least the established ones) and for readers. My point was I doubt NY will think this is a great thing, but I might be an incentive for them to get reasonable about e-books.

    If Samhain, Loose Id, Ellora's Cave, et al were in danger of being swallowed by Harper Collins or Amazon or Fictionwise, I think we'd hear rumblings of this right now.

    With the creation of Carina I think we’ve already seen the beginning of it. Trust, even if Quartet had not misstepped they would’ve been sniffing around the e-pubs for talent. And now that Amazon won’t be subsidizing their losses the issue will become urgent. Again, if not for the publishers themselves, certainly their parent companies will demand it.

    These publishers have not stayed around for a couple hundred years by being stupid. Corporations always eat the competition that’s how they stay current. Obviously, for my purposes it would be better that it not happen, but we’ve seen this continuously happen in publishing and pretty much every other industry. The best way to get up to speed is by consuming the Other.

    Paying Macmillan $12.50 per book for trying to fuck over consumers, while ensuring their books are as attractive to thrifty consumers as books from publishers who aren't trying to fuck over consumers.

    This. For the love of all things buttercream frosted. This.

  140. kirsten saell
    Feb 08, 2010 @ 18:08:28

    @roslynholcomb:

    Mmmmm….buttercream….

    My biggest fear if NY starts gobbling up epubs looking for “talent” is that instead of actually listening to their “talent”, they’ll just turn those erstwhile epubs who are now NY imprints into clones of themselves.

    That might be the one thing that convinces me–a newb with a pretty small following writing in an uber-niche subgenre–to consider self-publishing.

  141. meopta
    Feb 08, 2010 @ 18:16:40

    @kirsten saell: It may be a boon for small publishers – it may not. I agree with you that subsidy for poor business practice is bad, but I also dislike price control and lack of competition.

    When Amazon, Apple, Fictionwise, Books on Board, Barnes & Nobles etc are all required to set their price at whatever the publishing houses deem appropriate, that’s a price control that isn’t healthy for the market or the consumer.

    My personal experiences with some of the smaller publishing houses isn’t fantastic, so I think my library use would increase. Which is great for my library, but not for publishing. So while it may seem I am one of the defenders of the old system, what I actually am is a proponent of e-tailers controlling their own pricing structures.

  142. roslynholcomb
    Feb 08, 2010 @ 18:18:40

    @kirsten saell: Precisely. They will do exactly that. That’s why I said it would for the most part be the end of my career. Having tasted the liberty of being treated like everyone else, I’m not going to the back of the bus, so that will be that. I’m not sure I have a large enough following to go the self-publishing route, but I might try it anyway.

  143. Stach
    Feb 08, 2010 @ 18:51:00

    I’ve pretty much been doing this all along. I won’t pay more than the mass market paperback price for a novel, and I won’t pay more than $9.99 for the ebook equivalent of a hardback. I’m expecting prices to rise, and I’m stockpiling books because I’m anticipating my buying to slow way down when they do. Right now I buy only ebooks (and read them on my Touch), but if prices go up, I’ll switch to used books.

    I love ebooks and , but at this point, they’ve made me mad.

  144. kirsten saell
    Feb 08, 2010 @ 18:53:38

    When Amazon, Apple, Fictionwise, Books on Board, Barnes & Nobles etc are all required to set their price at whatever the publishing houses deem appropriate, that's a price control that isn't healthy for the market or the consumer.

    I’d agree, price control isn’t healthy. But an agency model doesn’t just generate higher prices. House sales work on agency models, and house prices go up and down all the time, based on both product quality and consumer demand. Insurance is sold on an agency model, and insurance companies’ rates and coverages are still varied.

    Does anyone here believe that if Samhain or LI suddenly got the same deal with Amazon that they’d raise their prices?

    Amazon was totally abusing its ability to discount books, and as long as it was doing that it was interfering with fair competition, hindering the success of “good” publishers and providing a double-edged benefit to Macmillan and other “bad” publishers–books attractive enough to compete and sell, and 3-6x the profit per book as the competition.

    It would be different if Amazon was varying their discounts–offering limited time specials, or rotating discounts on every publisher’s books, or even giving rebates that would let consumers decide whether they wanted one free $25 ebook or four free $6 ones.

    But only the “bad” publishers got help competing while earning sky-high profits, and they got it 24/7/52–the “good” ones got the shaft from two directions at once, 24/7/52.

    But Amazon got to sell more Kindles, so it’s all good, right?

  145. Jane
    Feb 08, 2010 @ 19:27:05

    @Stach: I think my used book consumption will increase dramatically this year which is ironic because with Harlequin and Random House and HC digitizing backlists, I’ve been buying more and more digital copies of books I would have bought used.

    I wonder how much of the market digital books is capturing from readers who would have sought out the used market.

    I think @Sandia indicated that she was buying more. It is a question I wish I would have phrased for the survey.

  146. Sandia
    Feb 08, 2010 @ 19:50:22

    @Jane: Yep, I’m buying much more than I did pre-Kindle. In my days before my Kindle, I probably bought 2-3 new books a year, and let me revise now that I think about it, probably 10 used books through Amazon’s vendors. I read about 2 to 3 books per week, and this used to be only done through books that I didn’t purchase. Now my purchasing habits are bad, I buy many many more books now that I have my Kindle. I pre-order many books that I would have just waited to read from the library, and my TBR “stack” now has tons of books I’ve bought on impulse.

    If I start running out of books to buy on my Kindle, I’ll just start reading my “paper” – I get a WSJ subscription too – all the way through, and probably subscribe to more periodical content. I’m not going to run out of things to read, I’ll just be reading different things…

    I just think it’s a shame because for the publisher and authors, because I’ll be a completely lost new sale. But this is probably a good thing for my pocketbook. Haha, maybe if the publishers raise all ebook prices, with all the money I save buying books, I may buy an iPad and start buying more movies/tv series content.

  147. Jane
    Feb 08, 2010 @ 19:54:34

    @Sandia: I’ve often felt that the biggest competition to books is not other books, but other forms of media.

    I’m totally buying an iPad but it’s primary purpose won’t be for reading ebooks. It will be for the video watching (oh, if only Hulu were available on it!), browsing the web, and doing mobile computing tasks.

  148. Sandia
    Feb 08, 2010 @ 20:43:25

    @Jane: Totally agree. I think part of what Amazon excelled at when they introduced the Kindle was that “impulse buy” which can be so easy with an ebook over a wireless network. The seamless integration of the Kindle store to my Kindle is what has made me spend money.

    I’m still unconvinced with the iPad right now though…. at about 1GB per movie, and the cheapest version at only 16GB, I really won’t have a device that I can store movies and shows on like I have on my Kindle. I don’t know how much I’d truly use it for mobile computing, I already have a laptop for home use. Sorry off topic!

  149. brooksse
    Feb 08, 2010 @ 20:53:47

    Those of you that have them are indignant. You seem to be angry that somehow you've been mislead, and you have, but not by MacMillan, or any of the publishers, but by Amazon and the others who've sold e-readers under the belief that the books would be cheaper.

    No, no, and no.

    Cheaper ebooks never entered the equation in my buying an e-reader. Ebooks were my preferred format, and that was the main reason for my buying an e-reader. I don’t care about hardback vs. $9.99 pricing. I don’t even care if I have to wait for the paperback to become available before getting the ebook.

    Some of us are upset because we see a publisher like Macmillan routinely listing ebooks at $14 while the print version is selling at half that price. We’re upset because we see Macmillan listing ebooks of more popular authors at $14, years and years and years after the mass market paperback was released. (Sue Grafton is an example.)

    We’re upset because that same publisher is now saying they’ll no longer allow their ebooks to be discounted. We’re upset because retailers like Walmart and Costco, and, yes, even Amazon, are still free to discount print versions.

    Lack of discounts, especially lack of occasional deep discounts, will mean I’ll be spending more to buy the ebooks of my favorite authors. Which means there will be less to spend on non-favorite and new-to-me authors. I’ll borrow those ebooks from the library, if I can; other people might buy them used (Ok for readers, not so much for the authors.)

    Some of us are upset because we perceive publishers like Macmillan as wanting ebooks to ultimately sell in the $10-$15 range to make up for a slumping hardback market. (Even for ebooks that were never released as hardbacks or trade paperbacks: http://us.macmillan.com/lovesmelovesmeknot.

    Many of us perceive ebooks as having less value than mass market paperbacks (and not because of anything Amazon has done, I don’t purchase ebooks from Amazon). But because the publishers have cheapened our perception of ebooks. Through their use of DRM that doesn’t stop pirates but could lock us out of ebooks we’ve legally purchased. And by selling ebooks that are essentially stripped down versions of the print version (e.g., not including the cover image or the cover blurb).

    I don’t mind paying mass market paperback prices for the convenience of reading in my preferred format – as long as ebooks are available at the same time, for the same price, and with the same option for retailers to offer discounts (at least occasionally), as are available for mass market paperbacks.

    And I’m not about to take Macmillan at their word and believe they’ll suddenly change their ways when it comes to ebooks. I’m judging them by what they’ve done in the past and what they continue to do.

  150. Miki S
    Feb 08, 2010 @ 22:09:59

    But only the “bad” publishers got help competing while earning sky-high profits, and they got it 24/7/52-the “good” ones got the shaft from two directions at once, 24/7/52.

    You know, not everything thinks the epubs are “all that.” I got tired of over-paying for too short books that were routinely (but not always) badly edited. I stopped buying from anyone but Samhain years ago.

  151. Castiron
    Feb 08, 2010 @ 22:33:30

    @Sandia: I’m definitely agreeing with you that the price of ebooks from major NYC publishers is generally{*} more than I want to pay for what I get. I’m not agreeing that it’s because they don’t want my ebook business — Kristen Saell’s analysis makes sense to me.

    {*}I say “generally” because while most of my ebook purchases have been mass market price or less, I have bought one fiction ebook for $23, of a book that I already own two editions of in paper. In that particular case, having an ebook version, even with DRM, was worth the money due to searchability and portability. But that book’s an exception, and the FW micropay rebate made the price a lot more palatable. For most fiction and popular nonfiction, if I’m spending $15, I want a paper copy that will still be usable in 2040. Or at least a DRM-free file.

  152. kirsten saell
    Feb 09, 2010 @ 00:39:13

    You know, not everything thinks the epubs are “all that.” I got tired of over-paying for too short books that were routinely (but not always) badly edited. I stopped buying from anyone but Samhain years ago.

    Well, I’m a tad biased in Samhain’s favor myself, heh. When I was initially shopping my first book, there were a few things I considered over and above expected earnings–editing, cover art and list price-point among the biggies. They won hands down, and I’m very fortunate to have landed a contract with them.

    I’ll admit, LI, LSB and EC can be a bit pricier than I’d like, but they’re still at least comparable to mass market paperback prices, and in most cases the editing is decent. And at least they give you a cover image, chapter links in the TOC, bonus content like excerpts, and best of all, the added value of NO DRM. Stuff a lot of NY pubs don’t want to give you for $15, or even $25.

  153. LizaL
    Feb 09, 2010 @ 03:28:58

    I’m willing to believe that publishers do not save much off the total cost of production when packaging books in code rather than paper. I find it harder to believe that the distributors have the same costs. Running a server is not free, but it can’t have the same expenses as a store, stocked with paper and salespeople. I would expect Amazon to leverage its customer access to take a high percentage of the cover price. Do ebook retailers typically keep the same 50% as print retailers?

  154. RStewie
    Feb 09, 2010 @ 08:52:19

    This is not a new resolution for me. I will only buy ebooks that are priced at less than $10, no matter the current release format. And since I ONLY buy ebooks, this means that publishers with pricing above that will not have my business.

  155. kirsten saell
    Feb 09, 2010 @ 10:05:16

    I would expect Amazon to leverage its customer access to take a high percentage of the cover price. Do ebook retailers typically keep the same 50% as print retailers?

    Amazon and other retailers take up to 65% of cover price from epubs. In addition, from what I’ve read, some retailers’ contracts with some epubs don’t pay publishers on list price, but on consumer sale price, which means their profits take a hit with every book sold for a discounted price. And since most epubs pay royalties from retailer sales on net, that means if FW discounts a $5 ebook to $250, the author’s royalties for that sale are cut in half.

    Also, unless I’m misinformed, some retailers’ contracts with epubs stipulate that the publisher can’t offer the title direct to consumers for less than the retailer. Which means the retailer undersells the publisher, driving sales of the book to the least profitable venue for the publisher and the author.

    It’s a tough row to hoe for a lot of the little guys, which makes it that much more irksome when you see the big boys getting permanent discounts that allow them to compete with the little guys, while earning more per copy than the book is actually selling for…

  156. Bonnie
    Feb 09, 2010 @ 19:18:35

    Here’s a little something:

    I pre-ordered JD Robb’s Fantasy in Death for Kindle on January 27th for $6.39.

    Today the price is $13.10.

    Damn! Strike while the iron’s hot!

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    Feb 14, 2010 @ 18:22:28

    @MariaESchneider:

    Maria, there are free versions of both the Kindle and the Nook available for PCs, and Kindle at least has it for the iPhone/iTouch. Dunno about Nook, because I tried both on PC and Kindle was far and away superior.

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