What Agency Pricing and EBook Lending Limits Mean for Readers
At first when I thought about the latest eBook news, this piece was going to be a mini rant about how publishers haven’t got a clue about eBooks and how popular they’ve become. But I suspect that isn’t entirely the case. According to the Association of American Publishers, eBook sales for 2010 increased dramatically, rising to 164.4% with eBooks bringing in $441 million, compared to eBook sales of 61.3 million in 2008. EBook sales have jumped 623% since 2008. Quoting Publishers Weekly, “For the first 10 months of the year, e-book sales from the 14 houses rose 171.3%, to $345.3%, 8.7% of the trade sales of reporting publishers…adult hardcover sales from 17 reporting houses fell 7.7%, and sales from 9 mass market houses were down 14.3%. Sales of trade paperbacks from 19 publishers were flat.”
From the figures above, it looks like readers are changing more and more from printed books to eBooks, and surely publishers know that. The Book Industry Study Group (BSIG) did three different studies in 2010 on eBooks finding that readers are picking eBooks over paper because of the affordability. Over the past year, this for the most part has been eliminated with agency pricing. For those that are new to this discussion of agency pricing, the bookseller is unable to discount eBooks, the price is set by the publisher in contrast to the discounts that booksellers are able to make on printed books. So many times the eBook costs more then the actual printed copy.
The problem with this for me as a reader is the preceived value. With a printed book I own it, allowing me to trade it, give it away, loan it freely to my friends. For the most part, none of this is available with eBooks. In addition, with printed books, the publisher has to pay for paper, shipping and so on. Since the cost of an eBook should be less, and I don’t have all the benefits that a print book gives me, I would expect to spend less. However, as a reader, it seems that publisher policies are throwing up roadblocks in an area that has actually shown growth in this economy. Why do I say this? Over the last week two different announcements have been made affecting e-books. First HarperCollins is seeking to limit the number of times your library can loan digital e-book to 26 times, and then the library must purchase another license. The New York Times article on the subject is here. Yesterday, Random House announced that they switching to Agency Pricing. With these two announcements publishers are affecting both availability and cost.
There are several different book sites that have already discussed the HarperCollins policy, and I would add to them by saying that this announcement sets a precedent that from a reader’s perspective, should be upsetting. Librarian in Black addressed it in such distinct way that I am just going to quote her:
“I believe that authors, writers, and publishers can flourish when their works are readily available on the widest range of media. I believe that authors, writers, and publishers can thrive when readers are given the maximum amount of freedom to access, annotate, and share with other readers, helping this content find new audiences and markets.”
HarperCollins request is contrary to all of the above. Libraries are looking to maximize their dwindling funds, and seeking ways to provide current media to their patrons. I use the library to discover new authors, but I doubt my library will be buying as many eBooks from this publisher. And why should libraries purchase eBooks that they cannot lend freely, when they can provide a hard copy with a longer life span then 26 patrons? HarperCollins explanation for the change is that unlimited access to eBooks by patrons will hurt eBook sales. As of right now tensions are high between HarperCollins and librarians, with some even going to the extreme of setting up web pages to encourage boycott of HarperCollins books as described by Publishers Weekly here.
I have had my e-reader (Kindle) for three years. I love it. At first my biggest concern was the availability of eBooks. Publishers were slow to offer all books in that format. Now most books are available but they cost the same as the printed copy and I refused to pay the same price. As the Agency six continues to devalue me as a consumer, I am taking my business to other publishers. As far as I know, Harlequin, McGraw-Hill, and O’Reilly Media are the primary holdsouts against agency pricing. Harlequin seems not only seems to appreciate me as a eBook customer, they also offer special promotions to readers of their print versions as well. Luckily they have many authors that I love. Also, I have looked more at the smaller independent publishers of eBooks. As of right now, I have two eBooks on pre-order with a released date of March 22. Both books are published by Random House. If the pricing stays the same, then I will buy the books. If the pricing increases, I plan to cancel both. I have already requested the hardback from my library, just in case. I will buy the paperback, if I find it discounted.
How do you feel about HarperCollins move to require libraries to buy a new licence for an e-books after it has been checked out 26 times? Do you think that this is feasible for libraries, facing budget cuts? If you have an e-reader are you still buying eBooks priced the same as paper copy or have these pricing policies affected your buying decisions as a reader of eBooks?
– Leigh Davis
DJ, I love the convenience and the immediacy of my kindle probably more then you. I like printed book fine, but I wouldn’t say that I have a preference for them. However, I am now buying the least expensive way I can. If my library has the book, then I am getting it from them. If not I look for used, or discounted.
I didn’t realize that the Nook could download library books. I have the kindle so I haven’t really tried to check out e-books. Still it is disturbing about the price change by Harper Collins.
E-books cost seems to be on very ones mind. I run across several articles lately about this.
Well, I think that policy is criminal. A library book should be able to be loaned as many times as it lasts, whether it is in print or electronic format. That is the point of a public library. And libraries have existed for a long time in conjunction with for profit book sales, I think only to the good of book sales.
For me, the only advantage of my e-reader is its portability and the ability to also borrow library books on it. I bought a Nook instead of a Kindle, simply because I can check out library books on it. I liked the Kindle machine much better.
But it annoys me to no end when electronic files cost the same as a lovely, print book. I really do feel that the printed books have a greater value than an electronic file. And, as you pointed out, the costs to produce them must be less, since they save on physical costs and shipping.
I fear that if libraries are prohibited from being able to lend e-books they have legitimately purchased, that I will find my e-reader is only a novelty toy, and that I will be returning to printed books. I’m sure my cash-strapped library system can’t afford to keep re-purchasing the same titles over and over again. Or if they did want to do so, it would simply mean a much narrower pool of available titles, since they wouldn’t have the money to broaden their collection beyond the very most popular titles.
I prefer to read hard copy books anyway, I just wanted the portability of having many with me on a trip in such a small machine. But if publishers are going to let greed affect their treatment of customers to such a degree, pff… I’m not so enamored of reading electronically that I won’t let it go.
A friend just brought this to my attention:
http://www.cbc.ca/news/canada/nova-scotia/story/2011/03/18/ns-library-ebooks.html
“”Well, would you believe that I occasionally get letters from American readers correcting my spelling – my books use UK English “”
Elizabeth, this made me smile. I have an online friend that when she started her blog wrote in UK English and put the US equivalent’s in quotes. I have to admit I went “”huh””, but I never thought about how different Canadien, eh? English can be from the US version. We seem to use a combination of British and US.
I dont have an ereader but I am thinking about getting one. As for pricing, I would not mind buying an ebook that was the same price as the regular because, generally, I only buy mass market paperbacks and those are plenty cheap enough for me, especially with a 10% discount, and I dont like to think that author royalties might be being cut into. However, I do not think I could for a second stand behind the decision as pertains to libraries. Faced with choosing between buying a digital copy of a mass market several times or buying a masmarket that ten times as many people are going to find and love – I can imagine which a library, many of which are sturggling to stay open, would chose. I also cant imagine the choice working for the favor of publishing companies. When I was desperate for a book, but low on cash (happens often at my age), I took whatever format that library had – I am sure there are plenty of people out there who are just the same. In the end, I think publishers will be hurting (if that’s possible…), because that option just seems untenable in the long run.
Jo-Anne W. I should do the same thing, instead of just complaining. Until more competition comes from indie authors, I think we are stuck with agency pricing. The projected growth of e-readers is like 40 million this next year.
Tinabelle, like you I love my kindle, and it is my preferred way of reading books. But over the next six months, I am going to consciously pick the least expensive route for books, whether library, paper, or e-book. I am not saying, I won’t buy e-books. It is so tempting. But I am going to try do utilized some delayed gratification. A pretty big challenge for me with books (grin)
Elizabeth Rolls – that is crazy. I just finished a book by an English author and loved the brief introduction to life there. The slang words, brand names were almost as entertaining as the story. I would love to visit Australia, and reading a book based there while not quite the same, would at least allow me to visit in my imagination.
Well, would you believe that I occasionally get letters from American readers correcting my spelling – my books use UK English – and even punctuation, because the London office house style is single quotation marks for direct speech. Early North American editions of Harry Potter and the Philosopher’s/Sorceror’s Stone changed various things, like Mom instead of Mum, booger instead of bogies, to make it more comprehensible to U.S readers. Admittedly we’re dealing with kids reading the books, but kids are not stupid.
I agree that it’s crazy, but the view is that readers like familiarity and the bottom line is that publishers will always cater to the majority. The thing to remember is that readers here at AAR are not necessarily typical of the majority of readers. Readers and reviewers here, and at other similar sites and blogs, might express the same view that you have, Leigh, but unless the Market Gods are convinced it is a majority view, they aren’t interested.
Take Susan Elizabeth Philips’ football books. You could just as easily have had an Australian author decide to write the same type of series set around our national football game. Assuming the author had SEP’s level of talent, would it get the U.S audience? Quite probably not. Unless SEP wrote it, and I’m blowed if I know why she would, or should.
Although I am not happy about the spread of the agency model to other publishers, I have accepted it for now. This model, along with the economy, has reduced my book buying slightly over the last year. I read new authors from the library rather than risk a fullprice purchase, and I am more selective about what I buy so there are consequences of lost sales.
That said, I confess that I have not bought a paper fiction book since I got my Kindle 3 years ago. I am a big rereader and just don’t have any space to store books anymore. Plus, I love reading on my Kindle. Unlike a lot of others, the authors I want to read are mostly published by the agency model group. I have learned that I can take a pass on many books if the ebook is overpriced. Although it grates, I am willing to pay the same price for an ebook but I will NOT pay more. I can only compromise so much.
Every time I see an ebook priced the same or more as the print book, I write the publisher and tell them I won’t be buying from them anymore until they change their pricing. And I mean it. There are tons of avenues to get books from so the publisher doesn’t get any money. I tell them that too because it seems as if they’re too stupid to realize that.
PatF, I can’t say enough nice things about my library. The people are great, and for the most part any book that I have requested, they have purchased, but I know that my library has to watch their money.The ability to search the library, request books, etc, online has just happened within the last two years. They still don’t have e-books listed. The city 30 miles away has a limited amount of e-books available. I can see this really making my library system re-evaluate even purchasing e-books.
Elizabeth Rolls, are you saying if an Australian author is offered a contract with U.S. publisher they are asked to change the setting? That sounds crazy. I would hate to think that U.S. readers are incapable of relating to a protagonist based in another country.
Leigh, it happens quite a bit. Not with Harlequin, but I do hear that from Australian authors. I could ask around and get names but would certainly hesitate to use them without permission. It is crazy, and of course U.S. readers are capable of relating to protagonists in other countries, but market wisdom says that there aren’t enough of them. I have no idea if that is true or not, except the success of Keri Arthur’s Melbourne-set books suggests it may not be quite as iron-clad as the market would like to believe. To be honest, I think they are just playing safe and it annoys the hell out of me when I see an unpubbed writer working on a manuscript set in the U.S just because she feels it is the only way she’ll get a North American agent or editor to look at it.
As a long-time trustee of our local county libraries, I have watched our library directors struggle to maintain their library appropriation every year and have set through many county government budget and finance committee meetings defending those budgets. This is not good news for public libraries.
If you are planning on purchasing a property then you will have been wondering the same thing as thousands of others in your position: “How much can I borrow for a mortgage?” The answer to this question usually involves applying for a loan with your bank but this is a time consuming process. If you want the answer quickly then you will need a mortgage calculator to do the job for you.
The nearest Chapters book store is 60min away. We had one and they closed it years ago. We have an indie and let’s be blunt… $30+ for a h/c… is beyond my budget. I’m sorry if they can’t compete, but I don’t sympathise. Harsh… maybe… but at the end of the day there’s only x number of dollars to spend. I don’t owe a business my business, I have the right to spend my money in the manner that is right for me and mine. Our indie gives pretty much the same discount as the Chapters card except you don’t have to buy it first…. $30+ for an indie h/c book, airmiles = Chapt gift card = 20% off h/c’s usually plus gift card… Especially now that they will ship at $25 instead of $39…. Why would I ever pay full price for “”e””?? Yes, you can now use your Chapters gift cards for kobo books…. full price vs 20% off or 25% at Zellers, Walmart etc…. OR 1/2 or less at the UBS OR free at the library….
As someone mentioned above… when you buy 100 books a year, $2 or so difference adds up significantly. Authors also need to talk to their publishers… That $200 or more, just cut into how many books I buy at $10 each for a pb and it could have been one of theirs.
Maggie,
Yes, for all my complaining e-books are wonderful for the housebound. . whether from health or weather or distance and well worth the price then. Perfect for libraries too . . . for that reason. . . except for the 26 times limit.
Some days, I dream of living in Podunk. . living in the mountains with just a fireplace, and books. (and of course electricity, running water, and inside facilities. . . I am not talking about roughing it.)
Elizabeth:
I can totally relate to where you are coming from. For a short, horrible time I lived in a town with no bookstore. No UBS within 100 miles. And friends who didn’t really read – or what they read came from the library. Amazon and I were good, good friends. . . . . .
I think e-books can be a solution to many people. I know an elderly lady who uses her Kindle all the time. It is easier for her since she has no real transportation. People in small towns, too. Or like you, who are somewhere where they are being really gouged for their reading.
Wish they’d had the kindle back when I lived in Powdunk. . . . .
maggie b.
Elizabeth, I had the same feelings before agency pricing. Love, love the instant gratification and convenience. I think that is why I get so provoked by this subject. Buying a book before was the same as me shopping at our discounted outlets. Now, it is the same as me shopping without discounts at my bookstore.
If I lived in the boonies and didn’t have access to discounted paperbooks, then it would be no big deal. But all I have to do is drive ten miles to Target.
I have always wondered why books were so high in Australia? Hope you guys have great library system. $20.00 for one book. . . sheesh, when I get a $7.99 book for $5.99.
The reason is fairly straight forward, and sadly there’s no easy right/wrong to it. We are a relatively small population and our local publishers publishing Australian authors just can’t compete with mass produced overseas books with huge print runs with lower costs per book. So the price of books is high all round to protect the local publisher industry and locally published authors.
And before anyone says anything about publishing overseas, let me point out that with few exceptions, the US market, agents and editors, tend to ask Australian authors if they would please consider changing their setting to the US. Keri Arthur got away with it in her Riley Jensen series, but she was fully expecting to be asked to change it to a US setting.
So if we want local content, then we have to make sure it can survive. But eventually our pockets win out over our noble sentiments and you see people like me sneaking off to Amazon and The Book Depository. I still buy books locally, but not many because it’s a 70 kilometer round trip to the nearest good bookshop down in Adelaide and that’s a day out of my working week. Doesn’t happen at weekends because I have kids involved in sport. And frankly, I can’t afford it.
Borders in Australia, along with Angus & Robertson one of the local chains, has gone into voluntary receivership in the last few weeks. Everyone is blaming people who buy online and screaming for the government to do something about it. Unfortunately these businesses have failed to keep up with changing technologies and business models.
I’m in a slightly different situation as regards e-books. I’ve just bought a Kindle and it’s great. The prices vary of course. Some books are very cheap, others less so, but they all have one thing in common. They are all a damn sight cheaper than print prices here in Australia, which are astronomical. We’re pushing AUD$20 for a paperback here, and a trade paperback rrp is over $30. So for me, especially with the AUD kicking butt right now (crash go my advances and royalties) e-book prices are a still a huge saving. That said, I do totally get what you people are saying. And you can thank your lucky stars that Australia is a relatively small market (hence the high prices) and unlikely to factor into publishers’ decisions on price.
I have to say though, that the sheer immediacy of the Kindle is its biggest danger for me. I want to read a book? I can have it in seconds. Seconds! And sadly, ten bucks doesn’t sound like very much for a book from where I’m standing.
R Smith,
R Smith, I gave my Kindle 2 to my brother & sister in law when I upgrade to Kindle 3 this Christmas, and they are able to read my books. But they don’t have the flexibility to pick and chose what they want, since it is still registered to my account. It is not that I am asking for an e-book to be 1/2 of the cost of a hb or paperback. I just want the publishers to acknowlege that the cost are less, and price accordingly. Book lending would be great too. . .
Sandy, I lost a post somewhere. I am not anti Apple. . . just frustrated that they had the clout to bring about agency pricing. The U.S. is known for its entrepreneurial spirit and here we are with fixed pricing. If it had been the best interest of Amazon, then I am sure that they would have made a deal too. And I not ready to admit, that I am living in the past(grin) so I try to avoid oldies.
I love my e-reader. I work at a library but I almost never check out books anymore because my e reader is so much easier. Print books are heavier, awkward, harder to read while you are eating, you can’t adjust the print size, and they don’t always fit in a purse. I spend over $100 a month on ebooks, and it does make me mad that I now frequently spend more for an ebook than I would for print. But if it is a book by a favorite author that I know I will read again, I pay the extra for the ease and convenience and to save shelf space. I just make myself remember that there was a time when you always paid cover price for a new book, before all these discount places drove out the mom and pop businesses.
Plus, I upgraded my device. Now I can share my ebooks by loaning out my old ereader to trusted friends, and I don’t feel like I’m being cheated quite as much.
Maggie, sign me up as a book trading buddy (grin)
For a while shipping kept me buying e-books vs. cheaper print copies. But I am grouping books now. . . and I am back to trading them in. . .
I think I got myself in trouble with my double negatives:
I said: But it seems crazy to think that anyone would not agree to terms where they don’t make a profit at all.
what I meant. . . It seems crazy to think that anyone would agree to terms where they don’t make a profit at all.
I notice I have some typos. . sorry. my keyboard is sticking (that would be today’s popcorn). . . Please excuse . . .
Carrie, when I first looked at e-books, I was very much willing to give up the ability to loan the book out, trade it in for other books for books that cost less. . But just having the convenience of getting the book, and storage is not worth paying the same price for a print book. . . It is upsetting the publishers don’t care that they are alienating their core customers.
JanetW, It is so frustrating when they try to put a positive spend on it. . saying e-books are not that much more to produce then paper. I like oh, really. . .Everything that I buy is going up at the grocery stores. . . the companies that I deal with love it when I change to e-bills vs. actual paper bills and gasoline right now is going sky high.
Em, you and I are on the exact same page.
Eggletina, I have back off a little from using the library. In fact yesterday, when I went in, one of the individuals ask where I had been. But I already have five books requested. Books that I might have bought. I live in a smaller town. . they haven’t gone the e-book route yet, and this change in policy probably will make them decide to wait until the dust settles.
Clothdragon, I don’t understand enough about the app pricing to know if you are comparing apples to apples. . . But it seems crazy to think that anyone would not agree to terms where they don’t make a profit at all.
Sandy, I washed my first iPhone so I did without one, waiting for the new release, so I got out of the habit of using my kindle app and haven’t really got back into using it. I not as mobile now, since I am taking care of a family member or working. . It is a great feature though. . .
@Sandy~ I think a lot of people will be upset if the kindle app disappears from the iHardware. But unless Apple negotiates a deal to split the 30% with Amazon, what reason would Amazon have to keeping the app active? They can still keep the PC app, the Droid app, etc.
And I have to agree with Leigh, most people using iBookstore aren’t the 200+ books a year readers, so paying an extra $2-$4 a book isn’t going to matter much. For me, an extra $2 a book can mean hundreds of dollars a year.
Apple brokered the agency pricing with the original 5 major publishing houses and effectively raised ebook prices for EVERYBODY, not just iPad/iWhatever users. In order to grab market share and keep Apple customers dependent on Apple, they cost *all* ebook readers more money.
Leigh, there is a whole lot of older music on iTunes, just sayin’.
I am a book lover and I will buy books because I will always buy books. I am an outspoken Kindle fan and I’ve written on this blog many times about that. But one of my favorite Kindle features is the iPhone app which I use ALL the time. It would seriously annoy me if I were no longer able to read Kindle books on my iPhone.
I don’t read Harlequin much anymore so I don’t share the love so many seem to feel for them. In fact, I have an attitude about Harlequin because I think they cynically title books with the most ridiculous titles possible and, therefore, contribute in a major way to the disdain outsiders feel for romance.
It’s possible to make any company the villain is all I’m saying.
I agree with Leigh. I learned how to use a computer on an Apple in school. I love my iPhone and it is my main source for surfing the net. However, with everything I’ve read about this issue, I become less enamored with them.
I keep thinking of Apple’s 1984 commercial. To me, they have become the Big Brother now, bullying everyone around.
Sandy, I love my iPhone, however, I rarely use iTunes. . . that happens, when you find you enjoy the songs from ten -twenty years ago, more then what is out there now. What irritates me, is that from what I read most people don’t read very much on their iPads. . . they are mainly occasional readers and buying e-books the same price as the paperback is not that big of deal to the person who doesn’t read that often. What is a couple of dollars. I do think Apple was one of the deciding factors that we now have fix e-book pricing and Europe doesn’t.
And I don’t see the publishing companies backing down now.
Agency pricing has put so many companies out of business, and for me it is price fixing.
I love the kindle. I love not having books piled up around the house. I love the portability and yes, I love the cost savings except that is being eroded by the agency six. I would rather read the book on my kindle then owing a copy of it.
I think what burns me, more is the feeing of being taken advantage of by the publishers more then the actual money. A good reading month means I buy a book every week. So at the most twenty dollars more for the convenience of e-books vs. hard copy.
So that feeling of being taken advantage of, keeps me from impulse buys on agency six. I do go through a period in December with nothing to read, and I bought a lot of Harlequin books. .
There have been several authors that have advertised their e-books here, and I have bought those.
I will always buy books . . . but less from companies that I feel are treating the consumer unfairly. . .
I’m amused to think of how angry people would be if Windows required every video game manufacturer to give them a cut of the profits. If every book or song downloaded to their system was required to send some money to Windows. But, because Apple was the underdog for so many years, from them it’s OK.
Leigh, I drank the Apple Kool Aid 25 years ago and I’m still snarfing it down. They have never been the bad guys to me and I think it’s a stretch to turn them into that now.
Apple wants to deliver the best products to their buyers. And they want to make money doing it.
If books are being bought on an app on a device they created and designed, I think it’s reasonable to expect a cut. Just to be clear, I’m not sure if some are thinking that this would be an extra fee tacked on to the price paid by consumers. They want a cut of the publisher’s cut. Too much, I’ll agree, but getting a cut is reasonable.
When I think of how my life is better because of Apple, it’s astounding. The iPod changed music and I jumped from a Blackberry with a crappy black and white screen and an even crappier browser to an iPhone and the Web in my hand wherever I went.
I wish they’d butt out of the book situation. Apple has a history of backing off from stuff that doesn’t work — and the iBookstore really didn’t.
Like Pat, I’ve noticed myself trying more lesser known/unfamiliar authors and publishers that are not part of the big six. It’s one of the reasons I started reading romance again. I can buy and read several romance books (ebook or print) for the price of one General Fiction new release. I’m also quite willing to wait for promotional deals. I don’t need to read every new book that comes out. Too many choices, not enough time.
I wonder what percentage of readers buy a sizable number of books each year? The average reader in the US probably reads less than a few doz books per year. I would guess a huge percentage of the reading public is still borrowing most of their reading material from libraries, so the HarperCollins precedent is very troubling.
At least Europe is examining the legality of the price fixing. This is from the UK news site The Drum.
“”European investigators have raided several unnamed publishers across Europe amidst allegations of price fixing ebooks.
This follows a similar investigation by the Office of fair Trading into the price of ebooks, which can be more than twice as much as their printed progenitors.
Questions have arisen around the legality of the so called “agency” pricing model, a quirk of the system qhich allows publishers to set their own prices on Apple’s iBook store, where previously retailers would have competed on price.
One title identified, The Fry Chronicles by Stephen Fry, will set back eBook owners £12.99, a third more than the hardback version which sells for £10 and nearly double the paperback’s £6.74 cover price.””
Apple colaboration with publishers is the way I understood agency pricing come about. I did an internet service, and that is pretty much I found:
When Apple came on the bookselling scene with iBooks for the iPad, it was facing a brand-new ebook market where Amazon ruled. In order to curry favor with the publishers, Apple offered them something Amazon wasn’t – the ability for the publisher to set the retail sales price. Instead of iBooks being like a traditional bookstore that bought books from publishers at wholesale prices and resold them to customers, iBooks would be a sales agent for the publisher, selling the publisher’s books at a price set by the publisher and taking a 30% agency fee for doing so. Hence the term, “agency pricing”.
I agree with this individuals logic. . .
Publishers are gatekeepers for physical bookstores, but Amazon’s gates are open to one and all. Each week seems to bring another announcement of a midlist author who is going indie with his/her backlist and new titles and looking forward to a much higher income self-publishing ebooks at $2.99 than their publisher paid them for a book selling at $9.99.
How bad is it?
[A] publisher on the private Reading 2.0 mailing list has said, to effect: there is no traditional publisher in the world right now that can offer Amanda Hocking terms that are better than what she’s currently getting, right now on the Kindle store, all on her own.
http://www.thepassivevoice.com/03/2011/the-apple-trap-is-agency-pricing-good-for-authors/
I am slow to go the ebook route because I am an old dog trying to learn new tricks. I am very price conscious, however, and will not buy an ebook that costs more than the paper copy. Putting aside that frequently you do not get rights to the books but only a license, I am still deeply offended. While I have seen the statistics quoted above and others like them, I have not seen the break down between paperback and hard cover. Ebooks of hardcovers are priced cheaper than the print version so that may be where a lot of the sales are. I would buy more ebooks if I did not think that I was being ripped off, which is what I feel now.
What I gathered from news stories last year when all the Agency pricing began is that Steve Jobs met with the big 6 publishers and they agreed the deal between them all. Maybe I’m wrong, but that’s what I remember. The Agency pricing was not in place until last April when Apple was announcing the iPad. I think it’s fair to say that Agency pricing would not exist without Apple and the iPad.
Carrie–
I still use iTunes but the Amazon app dumps the songs right into it so it’s not a problem. I have several other shareware programs–iPod Access is a great one–that I use to get around Apple’s limitations for the music I have legally bought.
Apple didn’t cause the Agency 5 ebook pricing (70% publisher/30% retailer). They did that on their own for various reasons, one being the discounting of the books by retailers which cut into the publisher’s hardback sales. Hardbacks are the cash cow for publishers and in all too typical head-in-sand way with businesses, the publishers can’t seem to flex with the times. Instead of thinking, “”Hey, how can we ride the ebook wave?”” They think, “”How can we stay in the 20th century and hold on to our dead-tree book sales??””
BUT, what Apple did was work with the publisher to help establish the pricing and added another wrinkle. Here’s the rub: in order to sell an ebook through iBookstore, the publisher has to agree that NO OTHER RETAILER can discount that ebook, nor can they allow coupon sales, etc. That agreement went into effect at virtually the same time the Agency ebook pricing went into effect: when Apple launched the iPad. Now, Apple is saying beginning in April, all external app sales are now converted in internal app sales and Apple gets 30% of ALL of the sales, even the ones that go through a third party such as Amazon. With the 70/30 model, that means the other retailers get nothing on the sale.
so Apple maneuvered it so if a publisher wants their book on iBookstore, they ahve to play by Apples rules and Effectively RAISe the ebook prices and not allow discounting by other retailers. Apple NEVER discounts and doesn’t want it’s iHardware coustomers to go elsewhere to buy books. What they’ve done is make consumers pay higher prices.
So, yeah, Apple is at fault.
@Sandy, I work next to a guy who’s connected to Apple so you can imagine that he totally swallows the koolaid (as does my Apple-loving daughter). He and I agree that for people who just want an immediate book to read, on their iPad, what’s the big deal? Even with Apple’s cut, it’s still cheaper than hardcover. But he couldn’t see — but I would think in this community we could — that very very very frequent book purchasers, like so many of us are — would see this like a extra user cost at the ATM withdrawal. They (the banks, the Apple, the everyone) do it ’cause they can. Thanks for that analogy @Em! My dh gets some banking deal where he doesn’t have to pay the extra fee but that makes me even madder for the regular gal buying e-books and wanting to read them on her favourite platform. Now I don’t have an e-reader so what to I know? But I understand gouging the customer — that translates! :)
Okay, I do not get how this is Apple’s fault. Publishers can screw up plenty just on their lonesome. I think the biggest problems are that publishers are slow to change and don’t view the consumer as their target market — they are still in the mindset of seeing booksellers as their customer, not the consumer. But it’s more than time that they get with the program and STOP viewing e-sales as somehow less desirable than print sales. Consumers have been quick to adapt to eBooks, it would be nice if publishers just settled this already.
I won’t purchase an ebook that is priced the same as the paperback no matter who the author is. I, too purchased my Kindle for travel. But I can’t stomach the obvious price gouging by the publisher. I have switched almost all my reading to borrowing from the local library or purchasing used.
As a Kindle owner, I’ve noticed that agency pricing has caused me to buy more books by authors whom I haven’t read before, from publishers with whom I wasn’t familiar. Instead of sticking to the bestseller lists (which don’t really reflect the real bestsellers on any given week but are published in the New York Times and other media outlets), I’ve opened myself to authors and houses I would never have known or tried before.
What this means is that Random House and the other publishers have lost me as a customer both in e-books and print. I figure I’m not missing much since there are so many good writers that I can’t read everything written. The agency pricing has helped me winnow the pool.
I bought my Kindle basically for 2 reasons: to not have to pack a pile of books when I travel, and for instant gratification. As a fairly non-technical person, the e-book complexities and possibilities fly right over my head. (I am in awe of all you Apple geeks!)
However, while buying from Amazon, I began to notice some weird pricing after reading that ubiquitous sentence, “”Price set by the publisher””: and thanks to sites like this one, I began to follow this Agency pricing story.
Even though I’m fortunate enough to be able to afford the ebook rise in price from these publishers, I simply refuse to buy ebooks from them any longer. It’s the principle of the thing–sort of like an aggravating rise in an ATM fee for no apparent reason except to gouge more money from users. Like maggie b. I can do more with my PB copies, and yet still fulfill my 2 original reasons for buying my Kindle without giving money to these publishing companies. They should understand that often, it’s the stupid little things (like raising ebook prices above PB copies) that cause people to walk away from their product or service.
Wendy the Super Librarian, whom I follow on Twitter, sent this link:
http://harperlibrary.typepad.com/my_weblog/2011/03/open-letter-to-librarians.html
It’s a letter from HC trying to turn their new lending policy into a positive. Most commenters saw right through that and called out HC on it.
In spite of owning a Kindle I am still buying most of my books paper back for a few simple reasons:
1. Discounts. My discounts often drive the paperback price to below the ebook price.
2. Resale. I cannot resell a bad ebook, meaning that I can’t use it to fuel additional buys like I can a paperback/hardback. I can, on the other hand, resell audio books, paperbacks and hardbacks.
3.Loan it to friends. I love my book borrowing buddies. But they are not getting my freaking kindle.
4.Relaxation factor. Yesterday I read while cooking and accidentally put a burn mark on my book. Imagine if that had been my ereader!
When I find a book available in kindle only or when I find one that is much cheaper than in pb, I buy it. Otherwise I will stick to print until all the kinks get worked out of the system.
maggie b.
Call me a dinosaur, but I refuse to buy any e-reader until I’m asured that I’ll be able to borrow or rent books reliably on the technology.
I used to have a $200.00/month book habit that I just couldn’t maintain, so I went the booksfree route. For a set fee, I get x number of books per month delivered to my house. The ones that come out in hb I get from the librarly. I only purchase books that I know will make it into my keeper shelf. A lot of authors that used to be auto-buys for me have been relegated to rent/borrow status until I can verify that their latest is a keeper. And even with these measures, I spend an average of $50/month on books.
If the powers that be keep pushing consumers away, especialy in these hard economic times, they’ll lose us for sure. As it is, I find myself watching hulu or trawling the internet for reading material when I can’t get a book for whatever reason. With as many options as are available now to consumers, it’s not sure that we’ll come back to our old habits if we’re pushed off hard enough.
These people need to realize books are like drugs. Get us started and we can’t help ourselves. Then, every so often, we’ll find one or two that we dislike or make us ill, and we try to step away.
Quit, cold turkey.
But the library is there and they’ll let us try for free. And really, what could it hurt? One more, maybe two, and we haven’t lost any money so, really, what’s the big deal. But then one of them is the absolute best. It makes us happy or shows us colors we’ve never heard before and we have to have more.
Then, that fast, there we go.
Hooked again.
Collecting everything we can find by that author, maybe branching out a little to the books listed on that last page.
But always, always. The first one’s free.
I thought everyone knew that.
Chris, and Farmwifetwo. – After getting my first kindle, I made so many impulse buys. Now agency six publishers are lucky if I buy two books a month from them.
I will continue to use the library for many of my books. I got out of the habit of reading series books, but after reading books by Fiona Harper, Molly O’Keefe, Sarah Mayberry, Karina Bliss, I am looking closely at Harlequin books each month.
I hope that many of these e-book only companies like Carina Press are very successful, inspiring others.
Digital readers in today’s market have MANY choices. For some, Agency has merely provided them with an opportunity to discover new authors and publishers.
Carrie, Christine, Dabney- like you I hold Apple responsible for this mess. Europe retailers were able to refuse agency pricing, and my feeling is that except for Apple the U.S. retailers would have been able to do the same.
While I can’t say that I will never buy an e-book again at full price, I am making a conscious decision to send a message to publishers. HarperCollins president stated that he expects 40 millions e-book readers to be sold this coming year. If you are looking for convenience the e-book is wonderful, if you are looking for cost savings, as of right now it is very minimum if any at all if you read Agency Six authors.
Carrie: I’m anti-Apple, too. I use Media Monkey to manage my music and buy my mp3s via Amazon.
Dabney~ What do you use to manage your music? I’ve only used iTunes. I’m also an audible member and love it. right now I use iTunes to mange my audiobooks and listen on my Touch. But at least with audible at this point we have other options for downloads. However, you’re right, if Audible is can’t get the new release books for some reason, it won’t make sense to be a member.
It’s interesting to me that people aren’t realizing that Apple is cornering the market on many popular consumer items by maneuvering and manipulation, NOT by competitive pricing and discounting. People get up in arms about Amazon (and Walmart, and Target, etc) because they discount to grab market share. At least in that situation consumers get in on the action. Apple doesn’t discount, and in fact has premium prices on all it’s hardware. It’s grabbing market share by brokering deals with the wholesalers and limiting access to the platforms. As someone who has lost too much when iTunes burps or my iPod dies (music, audiobooks), I no longer buy ANYTHING from iTunes. I only use it to manage my information.