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Thursday Midday Links: Agency pricing in the government crosshairs

In March 2011, EU raided publishers’ offices looking for evidence of price fixing.  Despite this, the agency model began to roll out this summer and now EU has officially opened an investigation into price fixing.

“The Commission will in particular investigate whether these publishing groups and Apple have engaged in illegal agreements or practices that would have the object or the effect of restricting competition in the European Union or in the European Economic Area,” the EU executive said in a statement.

Probably because of what Steve Jobs said at the original iPad launch.  The Wall Street Journal received confirmation that the DoJ is also investigating the agreement between the top publishers and Apple.

At a congressional hearing, Sharis Pozen, the Justice Department’s acting antitrust chief, said: “We are also investigating the electronic book industry, along with the European Commission and the states attorneys general.”

We’ve got two class action lawsuits, investigations from the EU, DOJ, and states attorneys general.  Either the publishers are right or they are really, really wrong and it will present an expensive mistake.

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What is a day without Amazon news. They announced the acquisition of a big children’s publisher.

In an aggressive expansion into children’s publishing, Amazon has acquired over 450 children’s titles originally published by Marshall Cavendish. The deal will bring a children’s category into the fold at Amazon Publishing, where, up until now, genre units, in categories like mystery and romance, have been built exclusively around adult titles. Margery Cuyler, current publisher of Marshall Children’s Books, said she will remain in her position and that her staff “remains intact.”

Then it launched an app that will offer you $5.00 to scan an item in a store and then buy it from Amazon.  This makes booksellers unhappy but as Paid Content points out, it isn’t the only price scanner app available either from Amazon or others.  It may be the first to offer an extra monetary incentive to use the app.

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Overstock will be selling ebooks sourced by Barnes & Noble.  I’m not sure why people would buy ebooks from Overstock and not BN.com but I suppose it gives BN a broader audience?  Honestly, this move puzzles me.  Apparently it is just an affiliate situation where Overstock links directly to BN so essentially Overstock features a certain number of books and then directs people to BN.com.

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Australian authors now have Dymocks self publishing offering.

After months of speculation Dymocks launched D Publishing Network last night!

Australia’s largest bookselling chain has launched a service to enable writers to to create, print, publish and commercially distribute their books and eBooks with Dymocks. Their web-based service allows anyone to become a published author with their books available on Dymocks.com.au and through Google ebooks.

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

23 Comments

  1. Courtney Milan
    Dec 08, 2011 @ 10:09:10

    While we’re at it, Amazon officially announced KDP Select today, which gives self-published authors incentives (they can make their book free for a limited number of days, and can participate in the Prime Lending library) if they make their book exclusive to Amazon for a term of at least 90 days.

  2. Anthea Lawson
    Dec 08, 2011 @ 10:28:13

    Yes, I saw that too, Courtney. Interesting indeed. As is the price-fixing investigation. Never a dull day in publishing!

    As for the Australian bookseller launching a self-publishing initiative – I went to look at their site. They are charging $399 to format an author’s manuscript to epub…

  3. Darlynne
    Dec 08, 2011 @ 10:40:52

    I am not gloating over the news about the global pricing investigations–and, lordy, it’s all over the place with every news outlet–but I will say this: Big 6, really, what did you think was going to happen when you created that unholy union?

  4. Tina
    Dec 08, 2011 @ 11:14:23

    @Darlynne:
    I don’t think they were thinking. I think they just wanted to screw over Amazon and get in bed with the cool crowd, Steve Jobs & Apple.

    Man, my metaphors seem a bit risque today.

  5. Shannon Stacey
    Dec 08, 2011 @ 12:28:13

    @Courtney Milan: It not only includes exclusivity, but has a non-compete clause, as well, with withholding of royalties as penalty. Murky waters.

  6. Jane
    Dec 08, 2011 @ 12:42:44

    @Shannon Stacey I don’t see the non compete clause in the “KDP Select” program. I see an exclusivity provision that runs 90 days at a time. I see that the exclusivity compliance is enforced through the withholding of royalties and possibly preventing you from participating in the program in the future.

    Ah, I do see it

    “1 Exclusivity. When you include a Digital Book in KDP Select, you give us the exclusive right to sell and distribute your Digital Book in digital format while your book is in KDP Select. During this period of exclusivity, you cannot sell or distribute, or give anyone else the right to sell or distribute, your Digital Book (or content that is reasonably likely to compete commercially with your Digital Book, diminish its value, or be confused with it), in digital format in any territory where you have rights. ”

    Entirety of agreement here.

  7. Shannon Stacey
    Dec 08, 2011 @ 12:59:20

    It’s so vague. “Reasonably likely to compete commercially” is reasonably likely to be any other book the author might write. If you launch Series B with KDP Select and, a month later, publish book 3 in Series A across the board, can Amazon keep your money from Series B?

  8. Moriah Jovan
    Dec 08, 2011 @ 13:00:06

    IMO, that’s a fool’s bargain.

  9. Jackie Barbosa
    Dec 08, 2011 @ 13:09:55

    I dislike exclusivity provision on principle, so I have no interest in “taking advantage” of KDP Select, but honestly, even if I didn’t object to exclusivity (and the horrible non-compete clause), I wouldn’t do it. Why not? Because I can’t imagine anyone using their one book a month borrowing privilege to “check out” an ebook that’s priced at 99 cents (or even at $2.99-$3.99). If I were an Amazon Prime member looking to borrow books from the Lending Library, I would choose books that I thought were overpriced. Any book priced between 99 cents and about $5.00 that I WANT to read, I will buy. If I don’t want to read it, I won’t borrow it, either.

    In other words, I’m not sure there’s much added marketing/distribution value to be had by including your book in KDP Select. I could be wrong about that, of course, but when I do the maths, I don’t see much benefit and an awful lot of cost.

  10. library addict
    Dec 08, 2011 @ 13:21:05

    I hope the investigation leads to the end of Agency pricing, but I am not holding my breath.

    I know Amazon has a giant market share, but there are so many readers out there who have ePub devices and don’t have Calibre to convert formats. Why do some authors think it’s good sense to snub those readers/possible readers?

  11. susan
    Dec 08, 2011 @ 13:44:17

    @Anthea Lawson: There is a US outfit called BookBaby that does the same thing at a reasonable price. I worked with them on a conversion project for my job, and we had some issues related to the graphics involved but the people at BookBaby were nice and ultimately did a good job. BookBaby has been in business for about a year, and is an offshoot of CDBaby, which markets music for independent musicians.

  12. Courtney Milan
    Dec 08, 2011 @ 15:35:18

    @Shannon Stacey: I know. And they can withhold royalties not just from the lending library, but from my regular royalties, too! So if I somehow run afoul of their murky noncompete that provides a dubious benefit, it could cost me money.

    Um…no, but thank you!

  13. Anthea Lawson
    Dec 08, 2011 @ 15:41:09

    Hi Susan – I should have clarified… PubIt (Barnes&Noble’s self-pub arm) will format your manuscript when you choose to sell with them… for FREE. Amazon clearly walks you through their conversion process… for FREE. Smashwords… again, FREE. I do all my own formatting, with very clean results. :)

    I don’t see any description where an author can choose to sell books with the Australian company *without* paying their fee. Not that it’s going to apply much to US authors, I just thought it looked like a rather overt money-grab on their part.

    Jackie, I’m in 100% agreement with you over the Amazon thing~

  14. Edyta
    Dec 08, 2011 @ 20:10:26

    I wonder what this investigation would mean to Canadians. I loath agency pricing and don’t see how it can be legal in any free market. It seems to be enforced here too, though publishers charge us some extra $. I wanted to preorder Stacey Jay’s upcoming book, but S&S priced it at 11.39 for Canadian Kindle (7.99 for US). With our currencies being at par for a couple of years I don’t see why we pay so much more. No way am I paying that, sorry.

  15. sarah mayberry
    Dec 08, 2011 @ 22:04:57

    @Anthea Lawson: That’s just the Australian way, Anthea. We love to pay for what others get for free. It’s a national pass time. We also love to pay more than everyone else. Why, just yesterday I *adored* having to pay 129 for upgrading my iworks 08 to iworks 09, when I could readily see online that USA consumers can do so for 79. I hope that Dymocks are roundly and soundly ignored by Australian writers for their greedy opportunism. Anyway, am not sure why an Oz writer would want to be with them when they could sell globally via Kindle and Smashwords etc, etc. Australian publishers might be limited to selling only in Australia, but not self-pubbed Australian writers.

  16. Brian
    Dec 08, 2011 @ 22:09:43

    @Edyta:

    I wanted to preorder Stacey Jay’s upcoming book, but S&S priced it at 11.39 for Canadian Kindle (7.99 for US). With our currencies being at par for a couple of years I don’t see why we pay so much more.

    Amazon must be tacking on a surcharge in Canada still??? (I thought they’d stopped) According to the publishers websites (.com and .ca) it should be $7.99 in the US and $9.99 in Canada. I love how you can pre-order the paperback directly from S&S for 20% less than the ebook too, NOT.

  17. Keziah Hill
    Dec 08, 2011 @ 22:31:31

  18. Brian
    Dec 08, 2011 @ 22:58:02

    @Keziah Hill:

    Thanks for the link. This part seems especially bad…

    Authors grant an exclusive license to Dymocks for commercial rights worldwide for the duration of the copyright, including all subsidiary rights to the work

    The Dymocks thing seems more like a vanity press type of thing than a deal like Amazon DTP or B&N PubIt.

  19. eggs
    Dec 08, 2011 @ 23:47:10

    The deal being offered by Dymocks is horribly exploitative, but you need to remember that Australian publishing created Rupert Murdoch. Murdoch was not considered abnormally nefarious by Australian publishing standards, merely the same as the others but better at making money out of it. The screwing over being offered by Dymocks is par for the course here.

  20. Edyta
    Dec 09, 2011 @ 00:26:01

    @Brian:
    It’s not Amazon, it’s the taxes that the publishes say we have to pay (though I’ve gotten books for my Kindle from non Bog 6 publishers and there was no tax, hmm). The rest of the difference in the cost is supposed to be the exchange rate, but wait a minute, since I can only buy Kindle books on Amazon.com I’m paying in US $, so again hmm. I hated paying 2$ extra for paper books so I got my Kindle, but evidently ebooks are now followed with “books (or ebooks) are just more expensive in Canada” mantra. I’ve certainly cut way back on the Big 6 books I buy.

  21. Kaetrin
    Dec 09, 2011 @ 04:34:34

    @sarah mayberry: Oh definitely. We pay a premium for internet access, mobile phone use and postage here. I had to return 3 dvds to Amazon UK today (they’re going to reimburse me thank goodness) and it cost $27. Argh!

  22. sarah mayberry
    Dec 09, 2011 @ 04:55:48

    @Kaetrin: Have you seen the differences in pricing between cars in the US and in Australia? It’s flat out scary. For eg: A BMW 335i coupe is sold at RRP $113,750 in Australia. In the US, the same car is listed at $44,900. When our exchange rates were way more out of whack, there was an argument to be made that *some* of that was currency exchange. These days… not so much. It’s about us being sitting ducks and them exploiting us. And it sucks, hard. The worst thing is that our politicians have had this brought to their attention again and again and they allow us to be bent over. Usually, I prefer a little reach around when I’m being screwed. But maybe I’m just cranky this evening…

  23. Kaetrin
    Dec 10, 2011 @ 01:33:05

    @sarah mayberry: well they could at least buy us dinner first! :D

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