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Wednesday Midday Links: Apple’s In App policy claims first victim

HarperCollins CEO doesn’t believe that consumer desire for lower ebook prices can be made up by lowered costs of production.  She also believes that online purchases are driven solely by price:

“The signs are that consumers expect e-books to be priced considerably lower than physical books. There’s no easier way to drive an e-book up the charts than by massive price reductions,” she said. Whereas in a bricks and mortar environment other factors, like the look and feel of books and recommendations from booksellers, can influence choice, most of these factors are stripped away in an online environment, Barnsley argued. “So, not surprisingly, brand and price become the deciding factors.”

More stats and breakdown here.

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iFlow Reader is the first ebook app to shut its virtual doors due to Apple’s impending restrictions on in app purchasing.  The review, the new Apple rules require any app that allows out of app purchases to allow in app purchases. The problem is that for every in app purchase Apple wants 30%.  Now consider Agency pricing wherein the retailer only gets 30% and you can see the problem. Amazon, Barnes and Noble, and Kobo will either get a special exemption like Time magazine got or they will have to take some action.

  1. They could provide just web based reading.
  2. Remove themselves from the App store
  3. Sue Apple for antitrust violations
  4. Remove the buy link in the app.  (This I am not sure of because why wouldn’t iFlow have just done that? )

More here about Apple’s change in policy and how this may affect readers who use a non iBooks app on their iThing devices.  Apple is expected to have over 400 million iDevices out in the wild by 2012.

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A Wall Street Journal interview (registration requ’d) with Penguin CEO John Makinson revealed that Agency pricing was adopted to obtain customer information. As the retailer of record, Agency publishers are entitled to some amount of customer information.  Makinson also acknowledged that the proliferation of self published works at the 2.99 price point meant that Penguin would have to compete while still maintaining the value of its high profile authors:

Mr. Makinson: This is a new market that can’t exist economically in print. You can’t manufacture, ship and store a book at those prices. But we as publishers probably need to participate.

We’ll look at new content that maybe we can popularize in different ways. We’ll also look at our backlist. Maybe there are customers for westerns at $1.99. What we need to be really careful of is ensuring that this new market doesn’t compromise the sales of Clive Cussler, Tom Clancy, Patricia Cornwell and Ken Follett.

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Washington Post interviews Bella Andre who will make $116K in the first quarter this year self publishing.  The danger of self publishing is that it is time consuming (where are the book service companies?) and the market is getting very crowded.  It’s crowded for authors using publishers too.  Self publishing, in my opinion, is for the entrepreneurs of writing.  Done right, an author is likely to make more money self publishing in a digitally dominant world, but doing it right is tough.

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Dr. Vivanco writes a fun piece about evaluating books dependent upon how we read them.

The position of the reader, she argues, is an indication of the reader’s attitude towards what is being read. A different posture is adopted for the reading of serious, valuable texts because these are texts which, supposedly, call for a different type of reading:

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

39 Comments

  1. rigmarole
    May 11, 2011 @ 10:07:21

    At this point, I’m not sure I would take an Apple product if they were giving them away. Everything about the way they do business leaves a bad taste in my mouth.

  2. Leslie
    May 11, 2011 @ 10:18:39

    If only the Apple stuff weren’t so darn cool looking! I am happy that my only reliance on Apple is with my little, two-models-back ipod, but if someone threw an ipad at me, I would catch it and run away. Of course, then the old owner could find me b/c Apple would track my every move and upload my location to SkyNet.

  3. library addict
    May 11, 2011 @ 10:29:48

    So now that Penguin has our info can they please go back to letting retailers discount their ebooks? I would buy a lot more of them than I do now. Plus, the big authors sales are being compromised because I know many people who now just get them from the library, whereas they would purchase them in e, but not at the price they set.

    And maybe I’m strange, but there were times I have in fact paid full price for a print book which was eligible for discounts because I wanted it and didn’t have a coupon or it wasn’t on sale when I was at the store. But now when I’m shopping on-line, I often find myself rejecting agency priced books, by both fave and new-to-me authors, simply because the books are not eligible for discounts. And it’s not as if I haven’t ever bought agency priced books on principle (as I know others have). So there’s some sort of disconnect there.

    What is Apple thinking?

  4. Jackie Barbosa
    May 11, 2011 @ 10:37:24

    Just an FYI, in the tags on your post, you have Bella’s last name as Andrew rather than Andre.

  5. Lisa J
    May 11, 2011 @ 10:45:03

    I agree with Library Addict, I would buy a lot more books from the agency publishers if they offered discounts. As it is now, I am buying more books from small e-pubs.

    I’ve been giving up series by well-loved authors like crazy and I am definitely not trying new to me authors from the agency publishers because of price.

  6. Amber Shah
    May 11, 2011 @ 11:29:33

    That info about Bella Andre is great. I have seen her books recommended all over, but I hadn’t even realized that she was self-pub. I know that’s a very-high-data-point, but I’ve been hearing so much gloom and doom about self-pub lately. It’s impossibly hard and you’re stuff is guaranteed to be crappy and read by no-one. It’s good to see someone shining.

  7. Kerry Allen
    May 11, 2011 @ 11:45:54

    “Where are the book service companies?”

    Companies charging writers for services such as editing, cover design, and printing have existed for ages, with names like Publish America and various other entities long and widely regarded as scams. It would be difficult to legitimize such a service after years of Writer Beware-ing every offerer of such services in the past.

  8. Jane
    May 11, 2011 @ 11:47:49

    @Kerry Allen: I disagree. This will be a sorely needed service in the new publishing world.

  9. Kerry Allen
    May 11, 2011 @ 11:56:25

    @Jane: It wasn’t that long ago that everybody got up in arms about Harlequin opening a vanity press, to the point of calling to revoke their publisher rights with writer’s groups. I don’t think that much has changed in the interim.

  10. Jane
    May 11, 2011 @ 12:00:07

    @Kerry Allen: I disagree. The market has changed dramatically since Harlequin Horizons was introduced. I predict that there will be an upsurge in Book Services companies because of increased demand. Many authors are looking for people to create covers, editors, and marketings. There will be individuals who will contract this out and there will be companies that offer package deals.

  11. Moriah Jovan
    May 11, 2011 @ 12:11:59

    In my little neck of the author services woods, I can tell you that we’re all swamped with work.

  12. JenM
    May 11, 2011 @ 13:19:43

    Ahh, the wonders of Agency pricing. I read 20+ books a month, 95% of those in ebook format, but of all those ebooks, only one or two per month are full priced Agency ebooks. Do the large publishers even begin to understand how much market share they’ve lost to smaller epublishers and self-pubbed authors over this? I’ve never before heard of a marketing plan in which a company actually thought it was a good idea to encourage their customers to seek out the competition.

    They also don’t seem to understand that I didn’t need much of a discount, just a $1 or $2/book off the MMPB price, and I would happily have kept buying their ebooks. Instead, they’ve inadvertently created a monster by opening up the door to ebooks priced in the $1-$3 range. These are books that I would never even have considered buying if their own prices had just been a bit more reasonable but now that I’ve tried the cheaper books, I’m finding plenty of enjoyable reading there and I have no desire to start paying more money again.

  13. Keishon
    May 11, 2011 @ 13:50:26

    @Jane: I agree. How rapidly do things change. Those book services don’t look like scams anymore to me and I’m no industry insider or writer but the view from this side of the room has changed. I’m excited for writers winging it and writing what they want while obtaining the services to get it polished and sold directly to their readers(editing, covers etc so forth). Aside from that, never have I appreciated a decent cover until I saw Catherine Cookson’s covers OMG. And others. Triple OMG.

  14. Gretchen Galway
    May 11, 2011 @ 14:06:17

    I think book services for authors are great–if it’s a flat fee. Freelance editors are terrific and easy to work with on a project basis, as are cover artists and formatters. It’s totally different than a vanity model where you are paying a company to make something for you.

    It’s kind of like hiring contractors to fix up your house before you put it on the market. (I’m stealing this analogy from DW Smith’s blog). As long as you don’t pay them in a % of the sale price of your house, you’re not being scammed. You just have to be careful not to throw good money after bad, or spend more money than you will ever recoup.

    And as for Apple, I’ve owned one of their products since ’87 in one form or another, but I’m at my limit. I’ve got a MacBook, an iPod Touch, an iPod Classic, Shuffle, and Nano–but I think I’m done. If I finally get a smartphone, it’ll be Android or similar. I’ve already joined the Linux Rebellion forces via geek husband, so it was only a matter of time…

  15. Courtney Milan
    May 11, 2011 @ 14:24:23

    @Jane: and @Kerry Allen: There is a big difference between Author Solutions and Harlequin Horizon and a freelance editor/cover artist. It’s this: Authors Solutions/HH all offered editing/cover artistry, but they didn’t give you the final product (you couldn’t take it elsewhere), so you were tied to them for distribution–and they took a cut out of every sale.

    Hiring someone on your own and then having control over the final product and distribution is different.

    There will, undoubtedly, still be scam artists. But Writer Beware has always differentiated between freelance editors (who can help writers) and scam services (like agents who refer writers to their “editing service”). I think that it’ll be harder to draw the line, but if you get referrals from people who have actually been successful, you look at the finished product, and you retain control and the rights to distribute the resulting work yourself, most people won’t run into problems.

    Now, whether the people they hire are any good is a second problem….

  16. Heather
    May 11, 2011 @ 14:24:49

    I disagree with the CEO’s comment about eBooks being based mainly on price, particularly with the “big” publishers, rather than the indies. Yes, some new authors are introduced because of cheap (or free) titles, and hardcover titles are priced less than hardcover, but some of the biggest genres are mainly paperbacks (mass market and trade), and there is no real price difference, unless they’re offering a promotion (i.e. book 2 or 3 in a series coming out, so book 1 is free or 0.99). So I have a hard time believing that price plays such a large factor as friend input, “if you like…” type suggestions, convenience of eReaders, etc.

  17. Elaine Golden
    May 11, 2011 @ 14:39:21

    THIS. A thousand times, this.
    @JenM:
    “They also don’t seem to understand that I didn’t need much of a discount, just a $1 or $2/book off the MMPB price, and I would happily have kept buying their ebooks. Instead, they’ve inadvertently created a monster by opening up the door to ebooks priced in the $1-$3 range. These are books that I would never even have considered buying if their own prices had just been a bit more reasonable but now that I’ve tried the cheaper books, I’m finding plenty of enjoyable reading there and I have no desire to start paying more money again.”

    If it was only ever about price, I’d get my books (or ebooks, for that matter) from the public library.

  18. GrowlyCub
    May 11, 2011 @ 14:54:34

    I guess that Harper Collins CEO isn’t on Twitter/other social media platforms or doesn’t have any minions who report to her what happens there with regard to book buzz, recommendations, discussions, squees, Netgalley, Goodreads, etc.

    As far as price is concerned, the big 6 definitely shot themselves in the foot as JenM said because I don’t think the $0.99-$2.99 books by unknowns/midlisters would have gotten much play if agency hadn’t come into existence.

    It is beyond baffling to me that all these supposed industry insiders cannot see as far as the end of their noses and they stubbornly cling to what has failed them before. Insanity=doing the same thing over and over again expecting a different result!

  19. CK
    May 11, 2011 @ 14:58:16

    @JenM: Amen to that! I read a lot too – I buy books, ebooks, use the library and paperbackswap.com. Now, with agency pricing, I tend to go to the library or swap for the book for more books than before. Again, like you, I don’t need much discount but keeping the price higher than I can buy the physical book with a coupon drives me away. I can loan or swap the physical book – the ebook, not so much.

  20. Courtney Milan
    May 11, 2011 @ 15:16:16

    @Gretchen Galway:

    It’s kind of like hiring contractors to fix up your house before you put it on the market. (I’m stealing this analogy from DW Smith’s blog). As long as you don’t pay them in a % of the sale price of your house, you’re not being scammed.

    And this is totally wrong. Contractors can scam you for a flat fee. Easily. And there are circumstances where I think it makes sense to pay someone a percent.

    While I generally like DWS’s blog, he routinely refers to everyone other than the author in the production of books as “day laborers,” and this is one of two things where I hugely disagree with him. A good editor is NOT a day laborer, not any more than an author is. A good editor can take a book to the next level, and I could easily think it justified to pay that person a percent.

    It often makes sense to give a key employee profit sharing in your small business. Sales people are often put on commission as an incentive. Why would that not hold true in the e-world as well?

    But there are also truly gormless editors and cover artists who are going into the business. And I mean really, truly gormless.

    I don’t see how paying an editor a percent is a scam, if she makes the book into something that 30% more people would want to read, whereas charging someone $500 to do something where you have no qualifications isn’t.

    The question you always have to ask yourself before shelling out a percent is: is this person going to make my pie larger than I could make it on my own? And they going to do a better job if I profit-share with them?

    If they are, it may make sense to hand out a percent.

  21. Gretchen Galway
    May 11, 2011 @ 15:24:01

    @Courtney Milan:
    Forgive the awkwardness of my phrasing. I don’t think we actually disagree. I’m merely trying to defend the idea of spending money upfront as a writer–regardless of your end goals–which some still insist is always bad.

    I don’t have a strong opinion (yet) about the possibility of giving a percentage to anyone who brings great value to your work (ie, an awesome editor). I simply believe that it is highly risky to enter an agreement like that on faith. If you have worked with somebody before, that’s different. But as you said, there’s a lot of random people out there trying to make money from this new market. I am personally not in a position to judge who is worth that much to me. Others may be.

  22. Cindy
    May 11, 2011 @ 16:19:15

    I totally agree with library addict et al. I find now that I’m easing over into Ebooks, I’m not at all willing to pay MMPB price for an Ebook. Especially when I am pretty certain I can go to the print side of the site and use my coupon on the same title. I have a coupon for a percentage off my first book at my reader’s site and nothing that I want is eligible to use it on. It’s not fair nor right.

  23. Carin
    May 11, 2011 @ 17:06:43

    I’m with JenM! Just a coupon. Come on!

    I’ve been shopping at AllRomanceebooks. They don’t have all the big publishers, but I’m finding plenty to spend my money on with what they do have. And they’ve got sales and a rewards program. I like feeling like I’m getting a deal.

    As for the Harper Collins CEO, I guess I’m confused.
    Harper Collins is following the agency model right? But her comments sound like she’s saying the model won’t work, and they won’t make money on ebooks until they move more volume. To move volume they’d have to lower the prices. But there’s no part where she says they are moving away from their pricing model, and in fact, she commends it. So, I’m not sure what her point is.

  24. Jane
    May 11, 2011 @ 17:08:51

    @Carin: When these CEO’s talk, they are always talking about the hardcovers.

  25. Mer
    May 11, 2011 @ 18:04:03

    Not commenting from my usual name, although not heavily disguised.

    I’m a huge ebook consumer. A recent example. Saw the Lincoln Lawyer. Bought the book – 7.99. Bought the next book 7.99. The next two are both 12.99! (One just came out.) I did end up reading them. I didn’t buy them. Whether it was library or something else, they lost those sales and while I would normally be hitting the other intertwined series – not so much. I’ve got a lot of books waiting to be read. I’m annoyed with the publisher, and while I know it isn’t the author’s fault, I’m not going to pursue reading the rest of them in any way that’s going to bring immediate income to the author. (The other series has a lot of stuff overpriced for paperback age equivalents.) And I may just not get into the author at all.

  26. Andrea K Host
    May 11, 2011 @ 18:17:16

    There are numerous different kinds of service companies springing up around self-publishing. These are falling, broadly, into three types:

    – Vanity Publishers (Publish America, et al) who try to give the impression that what you’re doing is not self-publishing, but something somehow more legitimate – all the while charging you through the nose for it.

    – Flat fee contractors who will give you a cover, format your book, place it in the usual distribution channels in your name, and give you the passwords. [Some offer editing, some do not.]

    – Percentage services. These do much the same as flat fee contractors, but sometimes include marketing, and instead of charging a flat fee they take a percentage of the profits, usually for the life of copyright. Often these keep the passwords.

    Frankly, self-publishing just by yourself doesn’t really take that much time/effort, especially if you have some moderate computer/word-processing skills. I do all but the cover art of mine. But for anyone who doesn’t have that comfort level with computer applications, and wants to self-publish, the flat-fee contractor is the way to go (you can find links to such people at many self-publishing forums).

    Percentage services are a horrifying thing – paying a percentage for the life of copyright for some really simple formatting and cover tasks. It also appears to be where some agents are heading. If you haven’t read it already, and are considering going into self-publishing with a percentage service, before doing so please read some of articles going around regarding this situation. Eg. this post from Kristine Kathryn Rusch (a much-published and awarded author):

    http://kriswrites.com/2011/05/04/the-business-rusch-advocates-addendums-and-sneaks-oh-my/

    [The real time cost in self-publishing is _marketing_, and of course you can choose to do as much or as little as you want. There’s no guaranteed formula for marketing.]

  27. Jane
    May 11, 2011 @ 18:41:25

    I have to push back against this idea that “percentage services are a horrifying thing.” Percentage services are a way for someone who doesn’t have the immediate capital to obtain services that are necessary for publication of work. Percentage services are also a way for an individual providing the service to take a chance on someone else who doesn’t have the capital. It is merely one other way of doing business. It is NOT a horrifying thing per se and it doesn’t have to be for the life of the copyright either. Percentage terms, flat rates, a combination of the two, limited terms, term of copyright are all things that business people should discuss when determining RISK. It’s always a trade off, how much of your revenue you want to cede to others and in exchange for what terms. A person getting paid on a percentage basis has a MUCH GREATER financial interest in seeing the product succeed than a flat rate person because the flat rate person gets paid regardless whereas the percentage basis person gets paid only if the product succeeds.

    To say “percentage services are a horrifying thing” is really doing a disservice to authors. I would disagree strongly with anyone, including a much published author, who would say such a thing.

  28. Deb Kinnard
    May 11, 2011 @ 18:52:53

    I agree that percentage-paid services might not be a horrible thing. After all, this is how we pay our agents for all the work they do for us — we succeed = they succeed.

    As far as publishing services, I’d be more apt to use such services and pay by percentage if ever I do decide to release one of my books on my own. Haven’t ruled it out.

    That said — that quoted above tells me that the Big Publishers simply do not listen to their customers. If they drive their readers into small/e-press territory, I guess I can be callous and say that’s fine with me, since that’s where my books can be found. I’d dearly love to steal readers from Big Print Houses, to tell the truth.

  29. JessP
    May 11, 2011 @ 19:22:39

    There would obviously be pluses and minuses in either the flat fee or the percentage setting. If you reverse the perspective – the person working for a percentage has a more vested interest in seeing that your product succeeds than a person who has been paid and has no further relation to any profit stream. The biggest question, on either the flat fee/percentage side, is finding someone reliable who does good work for a fair price. After that happens, start negotiating and see where you go from there.

  30. Andrea K Host
    May 11, 2011 @ 19:23:06

    @Jane: Hm, then I’ll qualify: “Going into a percentage service agreement without doing the maths is perhaps not wise”.

    Yes, some people will not have the money up-front to hire a contractor. So long as that person does the maths and is okay with paying potentially many thousands of dollars for a service which has a starting price range of $200-400, then that’s the choice they’ve made.

    Going into any business agreement without clearly setting out the potential gains and losses is horrifying to me.

    [Note: Editing and percentages is a somewhat different discussion and very dependent on an individual person’s situation. But to pay a percentage just for formatting and a cover? Particularly if we consider an established author’s backlist, then paying a percentage instead of a flat fee strikes me as an incredibly bad deal.

  31. Jane
    May 11, 2011 @ 19:57:16

    @Andrea K Host: If a book is sold based, in large part, on its cover, I’m not sure how paying a percentage is “an incredibly bad deal.”

    Again, it’s all about risk, transferring risk, etc.

  32. hapax
    May 11, 2011 @ 20:44:00

    Frankly, self-publishing just by yourself doesn’t really take that much time/effort, especially if you have some moderate computer/word-processing skills.

    Speaking only for myself, I will never pay a single penny for a book whose author brags that all that publishing services bring to a book can be replaced by “some moderate computer / word-processing skills.”

    I have read (well, read parts of) far too many books whose authors were convinced of their mad tech skillz and considered editing to be little more than running a text through spellcheck.

    An editor does more than scan for spelling, grammar, and continuity errors, although Heaven knows that that is important enough.

    A professional editor will detect unnecessary scenes and plotlines, note potential confusion, suggest areas for expansion, keep careful track of style and mood, and in general bring out the story the author *meant* to tell.

    And the same goes for professional design, cover art, marketing, even typesetting. (Those whom the gods wish to destroy they first publish in Times New Roman.)

    I’ll gladly pay for that, in whatever format. I’m tired of looking at “diamonds in the rough”. I want them fully cut, beautifully set, and sparkling.

    A pity that so many of the traditional publishers don’t seem to understand what value they truly bring to their products, and are frantically cutting all these “services” to meet the mad dash to the bottom of the price barrel.

  33. Jane
    May 11, 2011 @ 21:01:24

    @hapax – I agree. Getting a book done right is costly and time consuming. Publishers do offer important services and I expect a self published book to be as polished. Self publishing doesn’t give an author excuses to cut corners anywhere. We readers deserve a quality product no matter who is behind the “publisher” designation.

  34. Andrea K Host
    May 11, 2011 @ 21:07:32

    @hapax:

    Sorry, I wasn’t clear. I’m talking about the process of obtaining a cover, formatting and placing the book on distribution sites. Editing a book is an entirely different issue which I don’t think it’s possible for me to make a blanket statement about, since every author’s relationship with their editing partners is different. Prose of the highest standard is naturally something which should be a part of every book.

    @ Jane: “If a book is sold based, in large part, on its cover, I’m not sure how paying a percentage is “an incredibly bad deal.”

    Both self-publishing services are providing you with a cover, etc – one for a fixed fee, one for no money up-front, but considerably more in the long-run. There’s no guarantee of a better quality product in either model (that will be a matter of which individual service provider you choose), but there is a substantial difference between how much you could eventually pay for the service.

    Anyway, I seem to have slightly derailed your thread, so I’ll let it get back on track now.

  35. Sandir
    May 11, 2011 @ 21:20:22

    How can publishers STILL not get it? They continue to want ebooks to take a second spot to paper books and their focus is on hardcover profits. Why not just embrace this popular new technology instead of continuing to hamper it to pay for your outdated publishing model?

    And if Agency Model was developed to get consumer information, why do consumers not feel like they’re being heard? Here’s a hint publishers – we’re NOT happy. We don’t like paying more for ebooks than print books, we want better quality ebooks (including cover art), we want the ability to lend books to each other or to borrow from libraries, and we’re really sick of typos and crappy formatting. I read an ebook last night that had ten typos one one page and six pointless blank pages before the story started. Why don’t they care about this?

  36. Courtney Milan
    May 11, 2011 @ 22:58:36

    @Gretchen Galway:

    I’m merely trying to defend the idea of spending money upfront as a writer–regardless of your end goals–which some still insist is always bad.

    Oh, carry on then.

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