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Simon & Schuster to Cut Promotional Offerings and Ebook Royalties

I don’t know if this is company wide, but for Pocket books ARCs will no longer be made available to reviewers or bookstore owners. Instead, finished copies will be mailed earlier. Whether this will affect actual sales is yet to be determined.

On the royalty side, S&S will be offering a 25% of “net receipts for all sales of all electronic editions including eBooks and audio book downloads.” According to the ereads article, retailers take a discount of 50% of an ebook list price. For a paperback, that is $3.50-$4.75 so an author will get 25% of that. This is a 25% reduction in royalty. I suppose this is one reason that S&S is charging more for its ebooks. Most S&S ebooks are $9.99, a near 50% markup over the paperback pricing.

Guess what S&S, we readers don’t care about your royalty fights and your problems with etailers. We care about the end price of a book, the one that we pay in our checkout basket. Ratcheting up the price so that you can placate your authors (which assumes that they are stupid and they are not) by gouging both the etailer who passes that on to the reader, only serves to piss readers off. I’m not buying ebooks that are 50% more than the print version.

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

18 Comments

  1. Kathleen O'Reilly
    Mar 26, 2009 @ 07:57:46

    Speaking as someone who know spends 95% of my dollars on ebooks, I shop price. There are a few must-buy books where price is not an issue, but that list is small, small, small, and it’s getting smaller. When it comes to two books, one lower priced than the other, that will win out.

    When I see publishing houses tinkering with price as a tool to increase sales, (i.e. reduced costs, limited discounts, freebies), IMHO, they’re the ones who are going to flourish in this market. Ebook buyers are paying attention to price, and when it becomes part of the consumer awareness that one house is priced higher than another, ebook buyers will stop buying from that house. That seems a shame to me.

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  2. Randi
    Mar 26, 2009 @ 08:17:19

    Feel free to up the ebook price if you have additional value to offer. Like extra chapters, notes from the author, etc. People will pay for additional value (I mean, this is normal consumer pyschology-take a lesson from all the companies that started and flourished in the Depression). But should you have NO perceived extra value from the hard copy, increasing price is going to lose customers. It’s a damn shame. Someone send these management folks back to Business Management school…

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  3. Nadia
    Mar 26, 2009 @ 08:39:06

    Most S&S ebooks are $9.99, a near 50% markup over the paperback pricing.

    I’m not sure where you’re getting your 50% from.

    Most MMPBs are priced somewhere between $6.99 – 7.99 (mostly 7.99). That means S&S’s $9.99 is about 24-40% more. Not almost 50%. Also some MMPBs are now $9.99 anyway (those tall books which I absolutely hate because I have no place to shelve those suckers).

    Ebook buyers are paying attention to price, and when it becomes part of the consumer awareness that one house is priced higher than another, ebook buyers will stop buying from that house. That seems a shame to me.

    I’m not sure if readers buy by house or imprints (exception: H/S category romance). Most consumers buy authors they like. I highly doubt J. R. Ward’s fans are going to stop buying her books because she moves to Pocket, for example.

    If ebooks are priced higher than print books, people are just going to buy print books, provided they like the author. So the publisher still makes a sale.

    P.S. I do think it’s crummy to price ebooks higher than print books, and I do not buy ebooks priced higher than $7.99. I should clarify that I almost never buy ebook nonfiction.

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  4. Kathleen O'Reilly
    Mar 26, 2009 @ 08:47:50

    Nadia, I agree that readers buy by author now, but if a publishers gets branded as being higher-priced for their ebooks, I do think ebook readers will catch on, and buying habits will change over time.

    It won’t make them stop buying J.R. Ward, but it’s like the difference between me shopping Saks and Target. Sometimes I want to go to Saks, but on a day to day basis, it’s Target all the way. Who gets hurt in this is the new-author or midlist author of one of these houses, where people have to make a buying decision.

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  5. Louisa Edwards
    Mar 26, 2009 @ 09:04:05

    It won't make them stop buying J.R. Ward, but it's like the difference between me shopping Saks and Target. Sometimes I want to go to Saks, but on a day to day basis, it's Target all the way. Who gets hurt in this is the new-author or midlist author of one of these houses, where people have to make a buying decision.

    I completely agree. Another example of the publisher shooting itself in the foot by stacking the deck against new and emerging authors. I understand that the bestsellers foot the bill for debut novels to be acquired, but it’s short-sighted in the extreme to make it so impossible for a midlist author to build a career over time. This kind of thinking guarantees an ugly stratification on your list, where you have to keep paying higher advances to keep bestselling authors, lowering the profit margin you actually see from them, making it impossible to try new things.

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  6. kirsten saell
    Mar 26, 2009 @ 10:31:13

    If ebooks are priced higher than print books, people are just going to buy print books, provided they like the author. So the publisher still makes a sale.

    Not always. I have to convince myself nowadays to read the print books I already have on my TBR pile, because I much prefer the Sony reading experience. I have to really want the book to purchase print, whether it’s because there’s no digital version, or because of a price difference. If the ebook is priced way off the charts, I just don’t buy. Period.

    I do wonder how small presses like Samhain can manage to make a profit off of ebooks while still paying very good royalties to the author. It’s not like they have a print run to make up the difference if they take a loss on the digital version–at least not for ten months or so. Although the very fact that S&S has a royalty percentage that is two digits rather than one is kind of reassuring.

    Part of me wonders if S&S is using ebooks to subsidize the print run. If that’s the case, yeah, they need to go back to business school. You don’t use a product that’s both inexpensive to produce and is enjoying growing demand to subsidize an older product that’s in decline and often less profitable. That’s like jacking up the price on hamburger so you can offer discounts on striploin. (No, that isn’t a quality analogy, just a production cost/market demand/price point comparison.) I’m not paying more for ground beef so the guy down the street can eat steak more often.

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  7. MoJo
    Mar 26, 2009 @ 10:37:07

    Not always. I have to convince myself nowadays to read the print books I already have on my TBR pile, because I much prefer the [ebook] reading experience.

    Yeah, I’m right there with ya. If I get print, it’s from the library.

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  8. GrowlyCub
    Mar 26, 2009 @ 12:19:00

    I can hardly believe it, but I just this morning told my husband about how much I’m surprised at myself for preferring e-books after having a Sony 505 for only a couple of months.

    I was convinced I’d never give up print books, and they are still more convenient if you just want to re-read a section here and there.

    But for thicker books I’ve realized how much more convenient the e-reader is. I bought the new Balogh and it’s been in a PITA to hold open and the print is *tiny*. I still want the paper book as well, but I’m a firm convert to the e-reading experience! :)

    I for one will NOT shell out more for an e-book and I think S&S will find out that they are making a really dumb decision with this policy.

    What I really wish is for publishers to give me a coupon for a reduced e-book when I buy a paper book. I personally would be buying the same book, but I know for folks who do not re-read that wouldn’t make sense, so it should just be one e-book coupon per paperback purchase to be used as desired.

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  9. ReacherFan
    Mar 26, 2009 @ 13:45:42

    You know, I was very resistant to buy ebooks because 1 – I just don’t want to invest in yet another piece of electronic gear and 2 – I couldn’t give them away easily. SLowly, availability and pricing won me over for SOME classes of books. The kind I’d read once then toss – never one likely to hit the ‘keeper shelf’. I’d even spend extra over on Alibris to a print copy of an otherwise unavailable book. Now I’ll often buy a cheap ebook in pdf format, enjoy it and THEN decide if it’s worth chasing down in print.

    I still prefer a print book. Maybe it’s the bibliophile in me, but I love the feel of a book in hand. I like giving them away knowing someone else can enjoy the story too. There’s something isolating to ebooks. They’re not easily shared as print books are. Libraries are wonderful. I spent several summers working in a library. Basically,I just love books. They feel like friends. Electronic devices are evil, capricious things that make my life miserable when they malfunction. :-) All I need to read my books is light.

    Still, I have come to appreciate ebooks for convenience. It gives authors a chance. The price barrier of traditional publication often stops publishers from taking a chance on a new author. Come in with solid e-sales and suddenly you get a mainstream opportunity.

    The down side seems to be the conscious decision of tradition print publishers to do all in their power to sabotage the ebook. From DRM to pricing, it as if they are working to make ebooks fail. If history has taught us nothing else, it’s taught us that once technology is available, it WILL BE USED. You can be a part of it or you can eat their dust. It is a shame that more people in the traditional publishing houses can’t see ebooks for the opportunity they are – a great proving ground for new talent and a new market for established authors. Anyone who owns a reader would likely buy a digital copy of favorite books for ease of use. Hey, encourage re-sales instead of making the lives of ebook lovers a misery. I am afraid the last person any publisher thinks about is the reader. It’s never a smart business move to ignore your customers! The next guy won’t.

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  10. German Reader
    Mar 26, 2009 @ 14:33:54

    I read a lot and don’t own a fancy ebook reader – but since I’m a traveling salesperson I once bought a navigation device which is actually a PDA and has MSReader on it. Instead of taking a big bag of books with me now I just need a tiny SD card with hundreds of books. There will be no more heavy bulky boxes added to those holding the app. 5000 books I already own.

    Of course reading so much, price is a very big issue and I’m really glad ( or maybe not) I discovered fictionwise a year ago. My ebook library has grown a lot because I use the sales and buywise club.

    When I find an interesting book my first look goes to the price and the second to the word count! My limit for an acceptable list price is $1 per 10K words. If one takes the limitations and lower costs of ebooks into account I think that compared to print books that limit is quite high.

    So I was really shocked when I recently found an Amber Quill offering with 11k words ( I don’t call this a book as the printed version would only make a leaflet)for $ 5!!!, so shocked that I send them a very angry and sarcastic email.

    This “value for money” pricing is certainly a very creative way to increase sales and discourage ebook piracy.

    It is very obvious that staff at those publishing houses don’t know much about their customers.

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  11. Jayne
    Mar 26, 2009 @ 14:44:08

    So I was really shocked when I recently found an Amber Quill offering with 11k words ( I don't call this a book as the printed version would only make a leaflet)for $ 5!!!, so shocked that I send them a very angry and sarcastic email.

    I hear ya. I used to check out their new releases and enjoyed several of their authors’ books. But then I noticed pricing like this and thought “No F’ing way.”

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  12. kirsten saell
    Mar 26, 2009 @ 14:55:11

    So I was really shocked when I recently found an Amber Quill offering with 11k words ( I don't call this a book as the printed version would only make a leaflet)for $ 5!!!, so shocked that I send them a very angry and sarcastic email.

    I hear ya. I used to check out their new releases and enjoyed several of their authors' books. But then I noticed pricing like this and thought “No F'ing way.”

    That’s doubly sad, because ebook readers tend to be more publisher-loyal than print book readers, so when the publisher pulls crap like this it can hurt all their authors.

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  13. Shannon Stacey
    Mar 27, 2009 @ 05:57:57

    Although the very fact that S&S has a royalty percentage that is two digits rather than one is kind of reassuring.

    It may be two digits, but it’s on net. Not cool for the author.

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  14. DS
    Mar 27, 2009 @ 08:12:21

    I’ve been reading a Harperstudio posting and responses about eBook pricing where Bob Miller of Harperstudio said:

    I agree that e-books should be priced lower than physical books. But I don't agree that being profitable at $27.99 translates to being profitable at $9.99. It only costs us about $2.50-$3.00 less for us to publish the e-book, not $18.00 less. The right price is certainly one that a consumer will pay, but we won't have books for them to buy if authors and publishers can't make any money. So we need to find the right pricing somewhere between the hardcover list price and the money-losing $9.99 that Amazon is teaching consumers to expect.

    You can find it here.

    While I kind of boggle at the idea that eBooks only cost about $2.50-3.00 less to publish, the real interesting points are in the comments where Mr. Miller talks about, “I'm especially interested in combining formats into bundles that will encourage the sales of multiple formats.” Other than a few favorite authors I generally buy a book in ebook or dead tree or audio. What kind of customer research has Harpercollins been doing to think that trying to convince me to pay more than the single title price for a bundle would be a winning sales idea? And I should be one of the people they would like to target– good amount of disposable income and a voracious reader.

    He also talked about pricing for the future when Baby Boomers start dying off and thus few units are likely to be sold. Up the per unit price?

    Do publishers really want to be in a situation down the road where they have two products selling side by side in equal numbers, with the same content, and where one is less than half the price of the other? Not good, and a great way to kill the hard copy book for sure. Can our industry support its costs solely on sales of e-books at $9.99?

    I am left with the feeling that traditional publishers really do not get it. At all.

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  15. kirsten saell
    Mar 27, 2009 @ 09:27:21

    It may be two digits, but it's on net. Not cool for the author.

    Yeah, I noticed that. But if the retailer discount is 50%, they’re still making 12.5%, rather than the 6 or 8 some pubs pay. Still a far cry from 30 or 40%, but better than many.

    While I kind of boggle at the idea that eBooks only cost about $2.50-3.00 less to publish

    Um, yeah. In theory, an ebook will always cost the same by word count, regardless of whether the print version comes out in hardback, trade or mmp. So if he’s saying $250-3.00 less than it would cost to publish in mmp, I could probably believe that–which would make an $8 mmp or a $25 hardback both translate to about $4.50 in digital. Which, surprise surprise, is what Samhain charges for a short novel. A longer book–say 150k and $11 for the mmp ($40 in hardback)–would run you $8.50, still way less than $9.99.

    I don’t know what DRM costs, but I would assume that has more to do with NY’s continuing inability to make reasonably priced ebooks profitable.

    Do publishers really want to be in a situation down the road where they have two products selling side by side in equal numbers, with the same content, and where one is less than half the price of the other?

    Turn it around. Do readers really want to be in a situation down the road where pricing patterns have them paying the same for an ebook that can be read by one person, and a print book that can be enjoyed by half a dozen? You would think the non-sharable nature of ebooks would mean they would have more sales per reader, which would offset a lot of the perceived decrease in profit they might take per copy.

    Do authors really want to be in a situation down the road where it’s become the norm for publishers to pay the same royalty for ebooks as they do for mmp? Seems like a happy situation for publishers, who would be arguably selling more copies per reader, at a production cost that approaches zero the more copies they sell. Makes me wonder why publishers don’t do something interesting like pay 10% on the first 1000 ebook sales, 15% on the next 1000, up to 30% for sales of 5000+.

    Not good, and a great way to kill the hard copy book for sure.

    Seriously? Dude, even after the baby boomers are gone, there will still be print books. It might mean the death of the traditional print run for a lot of books, but POD technology is getting cheaper all the time.

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  16. ShellBell
    Mar 27, 2009 @ 21:55:36

    The mind boggles at the reasoning behind eBook pricing. I’m definitely becoming more selective about the eBooks I buy. With the exchange rate the way it currently is for me (US$1 = NZ$2) price is a huge consideration when I purchase eBooks. More so when I see complete rip-offs such as Lora Leigh’s Maverick and Sherrilyn Kenyon’s Dream Warrior. Both are available in MMP for $7.99 each and yet the eBooks are priced at $14 each from Mobipocket. These books are also restricted to US buyers only!

    I very rarely buy books in print now and I will very rarely buy a hardcover or trade priced eBook – there are only selective authors that I am willing to do that for. For those books that I won’t buy as eBooks, I try to borrow from the library. Some of these books I probably won’t even bother purchasing if/when the eBook becomes a reasonable price, so ultimately the publishers and the authors are losing out.

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  17. Keishon
    Mar 28, 2009 @ 08:06:27

    If ebooks are priced higher than print books, people are just going to buy print books, provided they like the author. So the publisher still makes a sale

    No they don’t. If the book is not available in ebook then I don’t buy it at all or get it from the library. I have quit buying paperbacks going on six months now. I still buy comics. But I am not a consumer who purchases an paper copy because the publisher hasn’t provided a digital copy of the book. I can wait or not buy the book at all. Lucky for me, most of the authors I read are in digital format. Carry on.

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  18. Bo
    Jan 27, 2010 @ 11:27:59

    Yes, we have seen Simon & Schuster lower the royalties rates. And, honestly, I thought that trend would continue. But recently both Amazon and others (Apple?) have announced or hinted that they are going to support the authors more, with much higher percentages (presumably around 50% or even more in some cases). So it is going to be interesting to see what the regular publishing houses are going to do next. What will Simon & Schuster do?

    For those readers who are especially interested in different types of ebook royalties arrangements and how much money they can make as authors, I have an educational-type page at my website (link below). Feel free to visit! :o)

    Bo
    Editor, EbookBrothers.com
    Ebook Royalties: How Much Will the Author Get?

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