More on e-book price resistance

Via The Passive Voice, I see the Wall Street Journal reporting on the decline in e-book sales from the major publishers.  This is in the wake of the new contracts they signed with Amazon, which allowed them to continue to set their own prices.

A recent snapshot of e-book prices found that titles in the Kindle bookstore from the five biggest publishers cost, on average, $10.81, while all other 2015 e-books on the site had an average price of $4.95, according to industry researcher Codex Group LLC.

“Since book buyers expect the price of a Kindle e-book to be well under $9, once you get to over $10 consumers start to say, ‘Let me think about that,’” said Codex CEO Peter Hildick-Smith

Hachette cited fewer hot titles and the implementation of its Amazon deal as reasons that e-books fell to 24% of its U.S. net trade sales in the first half of 2015, from 29% a year earlier. Declining e-book sales contributed to a 7.8% drop in revenue in the period.

Then there’s this paragraph:

One high-level publishing executive disputed that the Amazon pacts are contributing to the e-book sales decline. “This is a title-driven business,” he said. “If you have a good book, price isn’t an issue.”

This is, of course, insane.  Price is always an issue.  Maybe you’ll pay more for a new Stephen King book, but there is a price at which you won’t bother to buy it.  And how much money are big publishers leaving on the table by not appropriately pricing their backlist?  The novelist James Salter died recently.  I had heard of him but never read anything by him.  I went on Amazon, and all his ebooks were $9.99 or more; recently one showed up on BookBub for $1.99, so I scooped it up.  As the Passive Guy says:

Since Amazon is the biggest bookstore in the world, one which obsessively collects and analyzes data concerning customer behavior, it is much better qualified to set optimum prices to maximize revenues from the sales of ebooks than a bunch of provincial publishers who have never run any sort of store and have virtually nothing in common with a typical reader.

If you give a kid a stick of dynamite, why would you expect anything other than trouble?

My ebooks: sales, prices, reviews

I handed over my ebook pricing to a publisher in return for having them perform some sales magic.  The magic appears to be working.  First they made Senator free on Amazon, which got it near the top of the top of the “sales” list for free political novels.  Then they raised the price to $0.99, and now it’s up to $2.99.  In the meantime it’s gotten a bunch of great reviews.  Here’s a five-star review I liked because, when I started reading it, I had no idea how it could possibly end up being a five-star review:

The beginning of this book put me off. I generally do not care for novels written in the first person, and the first chapters were tedious, another overworked story of the dead mistress whose murder threatens to ruin her high-placed lover. However, once all of the players were identified, I found myself relating to the protagonists and many supporting characters on the same kind of personal level as when I first read Presumed Innocent so many years ago. Bowker creates the flawed hero of the classics, a man driven on the one hand by ambition and on the other,by a sense of honor. Even at the end, the Senator possessed strengths and weaknesses that are not entirely resolved. In other words, he is human. This is not just a fine tuned murder mystery, it is a journey into the very complex issues of guilt and innocence-good and evil. For nearly a quarter century, I was a prosecutor of serious felonies, a position not without personal as well as professional challenges. It was not uncommon for me to sometimes relate to the defendant sitting one chair away at counsel table on a very human level. That did not change the nature of my mission–I was considered a tough prosecutor– but it made me reflect upon the difference between the concept of legal guilt and that of moral evil. This is not a story in which the murderer is arrested, tried and convicted, but its resolution is gratifying. In the past 18 months I have downloaded more than 415 books on my Kindle, and read all but a very few. This is one of the better ones, perhaps when it comes to a political mystery, the very best.

Anyway, Senator is now #22 for political genre fiction on the Kindle store, in between a couple of novels by Vince Flynn–should I know who he is?–and two positions ahead of a volume containing Animal Farm and 1984, with an introduction by Christopher Hitchens.  Yoicks!  The book is also #2515 on the overall Kindle bestseller list.

So that’s pretty good!  On the other hand, my other current ebooks, Summit, Pontiff, and Replica, are still mired in the lower reaches of the Kindle sales list.  Maybe it’s time for my ebook publisher to do something about them.  You can help, of course.  If you’ve read any of them and liked it, please write a review!  It doesn’t have to be as detailed as the one I quoted above.  Reviews on other sites besides Amazon are also welcome.

Books without any reviews just seem sort of lonely.  No one wants to hang with them.  They eat lunch by themselves in the cafeteria.  They go home and watch infomercials on high-number cable channels.  They buy costume jewelry from QVC.

Please consider helping them out.  They will be forever grateful.

Here come the ebook price cuts

Apparently we were waiting for a federal judge to sign off on the settlement between the DOJ and the three publishers — Hachette, Simon & Schuster, and HarperCollins — before we got them.  Here‘s the story in the Times.

The settlement approved on Thursday called for the publishers to end their contracts with Apple within one week. The publishers must also terminate contracts with e-book retailers that contain restrictions on the retailer’s ability to set the price of an e-book or contain a so-called “most favored nation” clause, which says that no other retailer is allowed to sell e-books for a lower price.

For the next two years, the settling publishers may not agree to contracts with e-book retailers that restrict the retailer’s “discretion over e-book pricing,” the court said. For five years, the publishers are not allowed to make contracts with retailers that includes a most favored nation clause.

In other news, Amazon announced a new generation of Kindle Fires, probably putting them in direction competition with iPads.  (And who knows what Apple has up its sleeve at its announcement next week?)

So, clearly Amazon is going to cut ebook prices, presumably to help Kindle sales and freeze out other vendors:

Amazon, which in April called the settlement “a big win for Kindle owners,” has vowed to drop prices on its e-books, probably to the $9.99 point that it once preferred for most bestsellers and newly released e-books.

Then what?  Presumably some or all of the following:

  • Barnes & Noble and other ebook vendors will try to cut prices to match.  Maybe they won’t be able to, and they will lose their reason for existing.  Apple will obviously continue to exist, but they’re not gonna be happy about having to compete with Amazon.
  • There will be increasing pressure on the other three publishers in the suit to settle, as their ebook prices start looking ridiculously high next to those of the competition.
  • Brick & mortar bookstores will also come under increasing pressure, as lower ebook prices and better devices on which to read them cut into their business model.
  • Publishers will therefore need to reevaluate their own current business models, which rely on ebooks to be priced high enough not to cannibalize sales from print books.  With less ability to sell print books, some of them may lose their reason for existing.
  • New online ebook vendors will pop up that can figure out a way to compete with Amazon.  (Buy ten ebooks and get one free, 40% off all fantasy novels this week only, etc.)

What did I miss?  Whatever happens, the publishing world will start looking a lot different over the next couple of years.

The ebook settlement with the states

The three publishers (Simon & Schuster, Hachette, and HarperCollins) who settled with the Feds and the state AGs over collusion in ebook pricing have settled with the states.  Here‘s a good summary.  Recall the basics:

The feds’ lawsuit demands that publishers change their pricing model so that Amazon and others can set the price they want (even it the price is below cost). The lawsuit by the states is instead about money; the states want to collect refunds on behalf of ebook buyers.

The settlement with the states means people who bought ebooks from the publishers on Amazon or other ebook vendor will get smallish credits someday:

If you bought an e-book from one of the five big publishers between April 1, 2010 and May 23, 2012, you will get a 25-cent refund for each old title you bought and $1.32 if the title was a recent New York Times bestseller. The refund will come in the form of a credit to your Amazon, Barnes & Noble or iTunes account; you’ll get a check if you bought from Sony or Google. The retailers have your email address so it will not be hard to notify you.

That’s fine but, as the article notes, you’ll probably just take that credit and buy more ebooks, so it’s probably not that much of a hardship for the publishers.  Also, it will take years before you actually see the money.

In any case, this is small potatoes.  What really matters is getting Amazon to discount books from the publishers who have settled.  In an article in the Boston Globe, an expert says it’s happening.

“The price reductions are already happening,” said Michael Norris, a senior analyst in the Trade Books Group at Simba Information, a market research firm in Stamford, Conn. “Amazon is already starting to lower the prices of e-books.”

Hmm, I haven’t noticed this happening.  Have you?  A glance through some Simon & Schuster titles still shows most of them at the same old $12.99 price point.  Maybe I haven’t been paying sufficient attention.  I would think that Amazon would start aggressive discounting as soon as it can, to put pressure on its competition and to increase the value proposition for the Kindle.