Wednesday Midday Links: Amazon Ups the Ante
Amazon’s offer of 70% applies only to those using the DTP platform so those who are vendors will not be affected. Amazon and publishers are in pricing death match that Amazon intends to win. Amazon’s first move was to discount all hardcovers to $9.99. Publishers have retaliated by withholding ebooks for its major hardcovers and by pricing the ebooks at super premium prices. For example, St. Martin’s Press, a Macmillan subsidary, and Pocket, often price the digital versions of paperbacks at $9.99 up to $14.99. Amazon’s response? We’ll give you 70% of the list price if you follow certain restrictions:
- The author or publisher-supplied list price must be between $2.99 and $9.99
- This list price must be at least 20 percent below the lowest physical list price for the physical book
- The title is made available for sale in all geographies for which the author or publisher has rights
- The title will be included in a broad set of features in the Kindle Store, such as text-to-speech. This list of features will grow over time as Amazon continues to add more functionality to Kindle and the Kindle Store.
- Under this royalty option, books must be offered at or below price parity with competition, including physical book prices. Amazon will provide tools to automate that process, and the 70 percent royalty will be calculated off the sales price.
- The 70 percent royalty option is for in-copyright works and is unavailable for works published before 1923 (a.k.a. public domain books). At launch, the 70 percent royalty option will only be available for books sold in the United States.
For epublished authors who are sold in the Kindle store, they might choose to self publish at 70%. I’ve heard from ebook authors that the Kindle sales far exceed every other retail source. This looks to be a big push for its self publishing platform.
Angry Amazon readers who can’t get the book in digital format have started leaving one star reviews on all books that are either priced too high or not in ebook format. This leads author Mindy Klasky to rage against Kindle readers who choose the “nuclear” option of the one star. I anticipate more of this conflict to occur because of the uncertainty of the digital publishing marketplace.
One Australian publishing guru suggests that ebooks are only additive and that traditional publishing will continue to flourish.
“Old media doesn’t get a lot of attention in a world where there is a lot of new media, but in fact people have a strong book buying habit,” said Melbourne University’s Professor Davis.
“There is a ritual to reading that people like to go through and I think a lot of people will continue to be attached to that ritual,” he said, adding that people enjoy going into a “private reverie” when browsing bookstore shelves.
Publishers Lunch has an indepth article (reg req’d) about Apple’s negotiations this week with the Big 6 publishers (what? no Harlequin?).
Though initially resistant to a new paradigm, by multiple accounts Apple has agreed in principal to do business with publishers under what is called the agency model–as opposed to the wholesaling model currently in place for ebook sales and most physical book sales. In the agency model, the publisher is considered as keeping possession of the actual goods (the ebook files) and it pays a commission to its authorized selling partners. So the publisher sets the retail price of the ebooks, and the commissioned agents have no ability to change that price. Ebooks sold under the agency model would be offered to any established trading partners who agree to the commission and other particulars.
One thing that we know is that the major publishers are worried about the ebook price point and want to raise it. Of course, publishers don’t really care that consumers don’t value ebooks because there is no resale, trade or share component; but they do want readers to value ebooks in the same manner as they value print books. Thus, the message here is that publishers will be in control of pricing with Apple. This is all well and good, but the Amazon App is available through the App store. How many readers will just download the Amazon App instead of buying the expensive Apple books and will Apple really stand for that? Apple was the one who pushed for the $.99 song price.