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Doug_Pardee
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Decontrolled e-book prices not bringing high sales?

Publishers Weekly notes that although prices on HarperCollins e-books went back to being set by the retailers this week and some titles got significant price drops, none of HC's e-books broke into Amazon's top 10. I took a look here at B&N's "Top 100".

 

  • #6: The Happiness Project, reduced from $10.99 to $7.69
  • #33: The Ugly Duchess, reduced from $6.99 to $5.99
  • #68: Family Affair + The Bet, reduced from $3.99 to $3.49
  • #82: The Rise of Nine, reduced from $11.99 to $7.99
  • #83: Telegraph Avenue, reduced from $17.99 to $9.99
  • #88: Divergent, reduced from $9.99 to $7.29
  • #99: Insurgent, reduced from $11.99 to $7.99

The only e-book to take a big drop that's in the top 100 is Telegraph Avenue.

 

Some other HarperCollins e-books that took big price drops, along with sales rank (which isn't quite the same as the positions in the Top 100):

 

  • #166: American Sniper, from $14.99 to $9.99
  • #204: The Fallen Angel, from $17.99 to $9.99
  • #334: Bloodline, from $14.99 to $9.99
  • #386: Judgment Call, from $14.99 to $9.99
  • #509: The Orchardist, from $13.99 to $9.99
  • #580: Tiger's Claw, from $15.99 to $9.99
  • #752: Beautiful Ruins, from $14.99 to $9.99
  • #1370: Porch Lights, from $12.99 to $9.99
  • #1441: Delirium: the Special Edition, from $12.99 to $7.99
  • #1473: And When She Was Good, from $14.99 to $9.99
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Irishelf
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Re: Decontrolled e-book prices not bringing high sales?

I don't call these major price drops.  A major price drop would be like what happened to the book "Partials"- it went from $9.99 to $2.99 (I would have been happy if it had gone down to $5, but $3 is even better).  I don't think price really had anything to do with the sales numbers-I was only interested in 2 of the titles mentioned, one of which I already had.  I am disabled and on a fixed income.  I cannot afford to spend $10 for an ebook  and rarely do.  I almost always wait until a special is offered and then buy it (one of the reasons B&N's decision to stop the family daily deal in order to have an election daily deal upsets me-most of my daily deal purchases have been YA  dystopian books that were under the family category).  I have only bought 4 ebooks in the past year that cost $9.99 and NONE that cost more than that!

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keriflur
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Re: Decontrolled e-book prices not bringing high sales?

I don't know all these titles, but for the ones I know, they're all in books that have been out for months or years. For the newer books the prices barely changed at all. 

 

I expect the impact we'll see from this is that over time more people will wait to buy books until the prices drop. Under the agency model prices changes were infrequent at best. I expect we'll see them more often now, the way we used to before the agency model came into play. 

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MacMcK1957
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Re: Decontrolled e-book prices not bringing high sales?


keriflur wrote:

I don't know all these titles, but for the ones I know, they're all in books that have been out for months or years. For the newer books the prices barely changed at all. 

 

I expect the impact we'll see from this is that over time more people will wait to buy books until the prices drop. Under the agency model prices changes were infrequent at best. I expect we'll see them more often now, the way we used to before the agency model came into play. 


I don't really have a problem with this.  There are some people who always want the latest.  They'll rent a movie rather than waiting for it to hit HBO.  They want the newest books when they come out, and pay a premium to buy them when they only exist in hardcover.  These people are willing to pay more for the new releases, and the same marketing and pricing logic would exist on the e-book side.  Seems reasonable to me that the e-book price should drop when the mass-market paperback is released.

Doug_Pardee
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Re: Decontrolled e-book prices not bringing high sales?


keriflur wrote:

 

I don't know all these titles, but for the ones I know, they're all in books that have been out for months or years.


 I've added the month and year of release to each of those listings:

 

  • #6: 12/09 The Happiness Project, reduced from $10.99 to $7.69
  • #33: 08/12 The Ugly Duchess, reduced from $6.99 to $5.99
  • #68: 06/12 Family Affair + The Bet, reduced from $3.99 to $3.49
  • #82: 08/12 The Rise of Nine, reduced from $11.99 to $7.99
  • #83: 09/12 Telegraph Avenue, reduced from $17.99 to $9.99
  • #88: 05/11 Divergent, reduced from $9.99 to $7.29
  • #99: 05/12 Insurgent, reduced from $11.99 to $7.99

 

  • #166: 01/12 American Sniper, from $14.99 to $9.99
  • #204: 07/12 The Fallen Angel, from $17.99 to $9.99
  • #334: 06/12 Bloodline, from $14.99 to $9.99
  • #386: 07/12 Judgment Call, from $14.99 to $9.99
  • #509: 08/12 The Orchardist, from $13.99 to $9.99
  • #580: 09/12 Tiger's Claw, from $15.99 to $9.99
  • #752: 06/12 Beautiful Ruins, from $14.99 to $9.99
  • #1370: 06/12 Porch Lights, from $12.99 to $9.99
  • #1441: 08/11 Delirium: the Special Edition, from $12.99 to $7.99
  • #1473: 08/12 And When She Was Good, from $14.99 to $9.99

All but three are "frontlist", having been released in the past 12 months. Twelve of the seventeen — I bolded the dates on these — have been released in the past three months (well, stretching the definition of "three months" by a couple of days to include June 12th).

 

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gobasso
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Re: Decontrolled e-book prices not bringing high sales?

Does anyone else get the feeling the ebook marketers are all sitting in a circle staring at each other waiting to see who will blink first?

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patgolfneb
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Re: Decontrolled e-book prices not bringing high sales?

My only real problem with agency pricing was that it seemed to quicly morph from a tool preventing excessive lloss leading to a tool used to keep as many books or even all, regardless of popularity or publishing date in a very narrow price tier. Hopefully there will be a wider range of prices now. I think it is unrealistic for most books to decrease the 3.99 and less level of many self published works. I see no reason publishers shouldn't aim for 9.99 to 12.99 or a bit more for new e books. I would expect 5.99 to 9.99 for older e books depending on how popular. I think it will be tough to sell older titles for more than 7.99, especially the 3-6 book series popular in genre fiction. I might get suprised, readers seem to be pretty obsessive about series they like.
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deesy58
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Re: Decontrolled e-book prices not bringing high sales?


patgolfneb wrote:
My only real problem with agency pricing was that it seemed to quicly morph from a tool preventing excessive lloss leading to a tool used to keep as many books or even all, regardless of popularity or publishing date in a very narrow price tier. Hopefully there will be a wider range of prices now. I think it is unrealistic for most books to decrease the 3.99 and less level of many self published works. I see no reason publishers shouldn't aim for 9.99 to 12.99 or a bit more for new e books. I would expect 5.99 to 9.99 for older e books depending on how popular. I think it will be tough to sell older titles for more than 7.99, especially the 3-6 book series popular in genre fiction. I might get suprised, readers seem to be pretty obsessive about series they like.

In a free market economy, prices should be dictated by market forces.  There is nothing "magic" about $9.99, $7.99, or any other price for that matter.  If consumers perceive that a product, such as an e-book, is overpriced, they will not buy it.  Usually, this leads to a reduction in price.  If a competitor charges a lower price for an equivalent product, consumers will migrate to the other product, all else being equal.  This, also, usually leads to price reductions. 

 

If it costs a publisher far less to produce an e-book than a paper and ink book, then shouldn't those publishers be able to charge much lower wholesale prices and still earn healthy profits?  I mean, isn't that what Capitalism is all about?  Don't producers always seek ways to reduce costs so that they can become more competitive and profitable? 

 

What is it I am not seeing here?  Why should some e-books cost so very much more than other e-books, other than simple supply and demand factors?  If everybody settles on an average e-book retail price of $9.99, what's to prevent Amazon from establishing a new average price of $7.99 for Kindle books, thus driving average retail prices down for the whole market? 

 

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JenScheil
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Re: Decontrolled e-book prices not bringing high sales?

I believe that e-book (cheaper prices) are one of the main selling points of any e-reader. I hate seeing publishers charger darn near $30 for a hardcover release of a book. That is insane to me. Personnally I don't buy books priced over 9.99 and even that is a stretch for me seeing as I am not wasting "materials" as in paper when I buy a digital book. I am only buying the rights to read it, and rights should not cost 12.99. I would rather continue to get the "free books" or read in store than pay those prices. But unfortunately this is a period where everyone wants to get "theirs" as in money and will charge these prices. Whoever said the digital age would be cheaper lied! LOL

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Desert_Brat
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Re: Decontrolled e-book prices not bringing high sales?

Interesting to see that HarperCollins was the survey point, only because retail prices may not be the only culprit in their sales slowdown.

 

Many people are still boycotting HC because of their treatment of public libraries with high pricing and restricted digital licenses.

A lifelong reader, now may my life be long enough to catch up on my reading!
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patgolfneb
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Re: Decontrolled e-book prices not bringing high sales?

Deesy58, I feel you are employing broad economic principles in a situation where other market principles are factors. I was only predicting where I believe prices will head in the near term, not advancing any support or negation of broad economic principles. Certainly Amazon has served as a market price setter to some degree, but I believe they will be more reluctant to do so in the near term. They are soon begin collecting sales tax on many more sales, eeroding some of their price advantage. They are making large investments in tablets etc. The effects of supply and demand often take years to manifest. In the short term these kind of localized factors are often more important. Until e books are the primary way to buy books and barriers to competition placed by various countries are removed macro economic factors are less important than customers comparison of e book prices with traditional paper and hardcover books.
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bklvr896
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Re: Decontrolled e-book prices not bringing high sales?

There's an assumption that it costs significantly less to produce an e-book than a printed book.  There's no evidence showing this and some articles written when this all started put Printing at about 12%.  I used to review contracts as my job and rarely were materials even close to being a significant percentage of the costs, it was labor and overhead that represented the significant portion.  

 

How many of those who own ereaders focus on the price?  What we see here in the forums is generally not representative of the whole.  I know around 40 people with some type of ereader and none of them seem concerned about prices.  There's been only two or three who were even aware of the agency pricing and I'll bet a great majority of consumers are completely unaware of the DOJ action or the settlements.  They don't price shop, if they own a Kindle they buy from Amazon, if they own a Nook they buy from BN.  They may notice some price fluctuations, but they're just going to buy the books they want to read.  There may not be a flurry of high sales because if they wanted to buy the book, they did, regardless of the price.

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BearLion
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Re: Decontrolled e-book prices not bringing high sales?


Desert_Brat wrote:

Interesting to see that HarperCollins was the survey point, only because retail prices may not be the only culprit in their sales slowdown.

 

Many people are still boycotting HC because of their treatment of public libraries with high pricing and restricted digital licenses.


HC didn't raise their library prices, afaik, though their library licenses only last for 26 checkouts. Only Random House raised their prices (300%). (hachette has raised their prices too, but their front list is on,y at a few libraries currently participating in their pilot program).

 

 

PersonallWouk would expect more movement with other publishers who publish even more popular authors with long running series.

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deesy58
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Re: Decontrolled e-book prices not bringing high sales?


patgolfneb wrote:
Deesy58, I feel you are employing broad economic principles in a situation where other market principles are factors. I was only predicting where I believe prices will head in the near term, not advancing any support or negation of broad economic principles. Certainly Amazon has served as a market price setter to some degree, but I believe they will be more reluctant to do so in the near term. They are soon begin collecting sales tax on many more sales, eeroding some of their price advantage. They are making large investments in tablets etc. The effects of supply and demand often take years to manifest. In the short term these kind of localized factors are often more important. Until e books are the primary way to buy books and barriers to competition placed by various countries are removed macro economic factors are less important than customers comparison of e book prices with traditional paper and hardcover books.

I appreciate your clarification and explanation, Pat.  Thank you for that.

 

The way I see this entire issue is that there are two marketplaces, and two transactions taking place.  The first is the publishers selling to the retailers.  In this market, the publishers have every right to sell their products for whatever price the market will allow, and they do.  This is the so-called "wholesale model."

 

The second market is the retailers selling to consumers.  Again, the retailers have every right to charge whatever price the market will bear, and they do.  We see this every day when we compare prices between B&N, Amazon, Kobo, etc.  This is just plain retailing, and it has been conducted by humans for thousands of years.

 

There should be no interrelationship between the two markets.  They should operate freely and independently.  Apple and five publishers colluded to establish an artificial interrelationship that amounted to illegal price fixing.  The DOJ filed suit, and three of the publishers have agreed to withdraw from their illegal contract and stop controlling retail prices. 

 

Obviously, no business can perpetually sell products for less than they purchase them -- not even Amazon.  If, as some have asserted on these fora, it costs much less to produce an e-book than it does to produce a paper and ink book (and I am making no claim one way or the other on this aspect of the discussion), then it stands to reason that e-book prices must eventually fall to a level lower than that of paperback books.  Publishers and retailers are entitled to fair profits, but not to obscene profits.  Why, for example, shouldn't consumers expect e-book prices to stabilize at a point closer to $5 than to $10? 

 

Your statement that "macro economic factors are less important than customers comparison of e book prices with traditional paper and hardcover books" is exactly my point.  Why should anybody pay as much or more for an e-book (that they cannot resell or lend indiscriminately) as they would for a paper and ink book that they can resell, share or just look at on a bookshelf?  This is precisely an economic principle - the principle of perceived value. 

http://www.investopedia.com/terms/p/perceived-value.asp#axzz26bITM49D

 

I love my favorite authors.  I am, however, sufficiently patient that I am not willing to spend $14.99, $12.99 or even (sometimes) $9.99 for an e-book that is an intangible that cannot be resold, or easily shared.  Some people are willing to spend those amounts, but I would venture that the majority of current and prospective readers of e-books are not -- especially young people and the elderly with limited funds. 

 

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deesy58
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Re: Decontrolled e-book prices not bringing high sales?


bklvr896 wrote:

There's an assumption that it costs significantly less to produce an e-book than a printed book.  There's no evidence showing this and some articles written when this all started put Printing at about 12%.  I used to review contracts as my job and rarely were materials even close to being a significant percentage of the costs, it was labor and overhead that represented the significant portion.  

 

How many of those who own ereaders focus on the price?  What we see here in the forums is generally not representative of the whole.  I know around 40 people with some type of ereader and none of them seem concerned about prices.  There's been only two or three who were even aware of the agency pricing and I'll bet a great majority of consumers are completely unaware of the DOJ action or the settlements.  They don't price shop, if they own a Kindle they buy from Amazon, if they own a Nook they buy from BN.  They may notice some price fluctuations, but they're just going to buy the books they want to read.  There may not be a flurry of high sales because if they wanted to buy the book, they did, regardless of the price.


As with any new-technology products, early adopters tend to be the "cream" of the market, and suppliers always "skim" the cream.  That is a great short-term strategy, but it will not guarantee long-term survival in any market.  Sooner or later, producers (except for the producers of luxury goods) must target a different market segment, and price becomes more important in the purchasing decision. 

 

I believe that, over time, price will become a much more important consideration for most buyers in the purchase of e-books.  Libraries might begin to play a bigger role as suppliers of e-books to readers, and piracy schemes will probably gain popularity with criminals.  I, myself, have reduced the number of e-books that I purchase at "full" price.  The popularity of Kobo, and of bargain seekers on these B&N fora, indicate to me that many others who own e-readers are also seeking sources for less-expensive e-books. 

 

If price was not a major consideration in the decision to buy e-books, why would anybody be worried about Amazon's $9.99 e-book pricing strategy? 

 

We must also remember that a very large part of the fully absorbed cost of a printed book is the labor and overhead it took to print, cut and bind the book, not to mention inventory holding cost and transportation costs.  In fact, the entire cost of producing a book is normally included in the cost used by the manufacturer (publisher) to determine profitability.  The paper in a book has much, much more value on the shelf in a bookstore than it did when it was delivered in a big roll by a truck.

 

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Irishelf
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Re: Decontrolled e-book prices not bringing high sales?

When I complained about the high cost of large print books, I was told they cost more because of the printing and paper costs.  Now the same people are saying printing and paper costs are negligible.  They can't have it both ways!  And since we don't really own the book, why are we charged the same amount as a book we actually own- one that we can resell, loan or give away.  My mother bought the V.C. Andrews "Flowers in the Attic" series and so far at least 8 different people have borrowed them from her.  So eight people didn't buy the series.  The same can not be done with an ebook.  And while many people own ereaders because of the convenience, there are just as many that own them because of a visual or reading disability (which usually means a person with a low and/or fixed income.  I am visually impaired and almost all of the equipment necessary for independent living are expensive and not covered by insurance (magnifiers, white canes, etc.)

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bklvr896
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Re: Decontrolled e-book prices not bringing high sales?


Large print books probably cost more because the costs associated with printing and binding, along with all the other costs have to be spread over a much smaller number of sales.  As far as lending the books, tthat's what publishers want to stop and that print book has a limited loan life, it will eventually wear out.  An ebook can be loaned forever.

 

As far as price becoming or being more of a consideration in the future.  If price is not a big consideration in printed books, and since they sold thousands of ccpies of hardcover books, out does seem so, why would it become a bigger consideration in the future?  

 

Millions of people spend $10-12 (not incuding snacks) to see a 2 hour movie, so $12.99 may not seem FTP be such big deal.  I suspect it will become less of a consideration as people ssimply get used to the prices. Happens all the time, prices go up, cosumers complain, time goes by and it becomes the new norm.

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BooksOnTheKnob
Posts: 203
Registered: ‎09-03-2009

Re: Decontrolled e-book prices not bringing high sales?


bklvr896 wrote:

There's an assumption that it costs significantly less to produce an e-book than a printed book.  There's no evidence showing this and some articles written when this all started put Printing at about 12%.  I used to review contracts as my job and rarely were materials even close to being a significant percentage of the costs, it was labor and overhead that represented the significant portion.  

 

 


 

Actually, there is -- just go back a few years and pull those same publisher's arguments on why it started to cost so much more for paperbacks and especially hardcovers.  The paper is a small part of the cost (printing, shipping, often several times, warehousing, and much more goes into the paper cost of a book) and is one factor used to force payment to authors down to such a small percentage of the list price (since the publisher took 50% and claimed such high overhead).

 

Another factor ignored in ebook sales by publishers is the sheer volume - sure, they still are limited in total income when selling $35 books; but put backlist titles out at $3-$5 and they sell more than they could ever sell in a paper reprint, for most titles.

 

Sure, they have to scan and proof the books, but no editing is needed (they could farm this out for not much more than $50 per title, since that service is available to anyone, using overseas companies). They actually should already have the digital masters on most (although many are so short-sighted that they don't keep good backups), since they've printed everything digitally with their printers for many years.  For the vast majority of fiction titles, no fancy formatting is required and intern could mark them up to create TOC's, etc, in a couple of hours per title.

 

They might still need to charge $35 for the celebrities (and politicians) that they stupidly pay outrageous advances to, but that would be their problem.

Karen
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bklvr896
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Re: Decontrolled e-book prices not bringing high sales?

T he biggest factor ignored in all these discussions aboutcost and price is that cost rarely drives price, the market does, and maybe I live in some weird, abnormal environment but what I see is that a lot  ebook consumers don't seepage current prices as out of line, the reason the decontrolled environment isn't bring high sales is that consumers haven't been waiting for prices to drop, they've been buying the books as they want to read them.  The $12-14 best sellers. Wouldn't be on the ebook best sellers list people were waiting for te price to come down?  14 of the top 20 best selling ebooks are $12.99 or higher.  If you add in te 3 Fifty Sade's boos at 9.99 that's 17 of te top 20.  That doesn't sound like consumers are. To concerned about the prices.

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ivondale
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Re: Decontrolled e-book prices not bringing high sales?

I've gotten quite a few Luzme updates this week. I'd guess that more than half of them were price INCREASES rather that decreases.