Reply
Distinguished Bibliophile
ABthree
Posts: 4,123
Registered: ‎01-27-2010
0 Kudos

Re: Discounting

 


flyingtoastr wrote:

 

You're confusing "liking the agency model" with "hating the wholesale model". Both of them kind of suck, but the agency model (IMHO) sucks slightly less. If you can think of a pricing system that gives consumers below-cost-of-production ebooks without being abused by Amazon to shove everyone else out of the market I'm all ears.


Minor correction to my prior post:  OK, so there IS someone defending the Agency Model.  Kind of.  Tepidly.  To the point of it "sucks somewhat less."  :smileyhappy:

 

+LORD, preserve the good in their goodness, and+
+in your kindness, make the wicked become good.+
-- St. Basil the Great+
Inspired Contributor
JohnP51
Posts: 1,294
Registered: ‎12-31-2008
0 Kudos

Re: Publication costs

Yeah. Its why I can charge more than a bookkeeper does. I know all the secret buzz words. :smileyvery-happy:

John

"Books are for people who wish they were somewhere else." ~ Mark Twain
flyingtoastr
Posts: 3,053
Topics: 55
Kudos: 2,980
Registered: ‎11-11-2009
0 Kudos

Re: Discounting

[ Edited ]

 


ABthree wrote:

 

Minor correction to my prior post:  OK, so there IS someone defending the Agency Model.  Kind of.  Tepidly.  To the point of it "sucks somewhat less."  :smileyhappy:

 


There are lots of degrees of suck. Would you like grafs? :smileyvery-happy:

 

Distinguished Bibliophile
ABthree
Posts: 4,123
Registered: ‎01-27-2010
0 Kudos

Re: Discounting

 


flyingtoastr wrote:

 


ABthree wrote:

 

Minor correction to my prior post:  OK, so there IS someone defending the Agency Model.  Kind of.  Tepidly.  To the point of it "sucks somewhat less."  :smileyhappy:

 


There are lots of degrees of suck. Would you like grafs? :smileyvery-happy:

 


Hmmmm.  Lemme get back to ya on that.  :smileywink:

 

+LORD, preserve the good in their goodness, and+
+in your kindness, make the wicked become good.+
-- St. Basil the Great+
Inspired Contributor
JohnP51
Posts: 1,294
Registered: ‎12-31-2008
0 Kudos

Re: Discounting

My problem with the "Agency Model" is when it crosses over from a pricing scheme to a price-fixing scheme meant to drive out competitors. When it does that, call me. I happen to have a lawyer aquaintance downtown......

 

No I don't. I've just always wanted to use that line.

John

"Books are for people who wish they were somewhere else." ~ Mark Twain
Distinguished Bibliophile
ABthree
Posts: 4,123
Registered: ‎01-27-2010
0 Kudos

Re: Discounting

 


JohnP51 wrote:

My problem with the "Agency Model" is when it crosses over from a pricing scheme to a price-fixing scheme meant to drive out competitors.


 

I think I understand the distinction you're trying to make.

 

My problem with "Bank Robbery" is when it crosses over from walking up to banks to going in and stealing money from them. 

+LORD, preserve the good in their goodness, and+
+in your kindness, make the wicked become good.+
-- St. Basil the Great+
Inspired Contributor
JohnP51
Posts: 1,294
Registered: ‎12-31-2008
0 Kudos

Re: Discounting


ABthree wrote:

 


JohnP51 wrote:

My problem with the "Agency Model" is when it crosses over from a pricing scheme to a price-fixing scheme meant to drive out competitors.


 

I think I understand the distinction you're trying to make.

 

My problem with "Bank Robbery" is when it crosses over from walking up to banks to going in and stealing money from them. 


Its either illegal or it is not.

 

Well, with today's society of "Its all about me" I would expect a bank robber to use the "Its your fault. If you hadn't built that bank there I would not have robbed it" defense.

John

"Books are for people who wish they were somewhere else." ~ Mark Twain
Distinguished Bibliophile
ABthree
Posts: 4,123
Registered: ‎01-27-2010
0 Kudos

Re: Discounting

 


JohnP51 wrote:

Its either illegal or it is not.

 


Gee, John, I never took you for one of those "if it's legal, it's right" guys.  I didn't think that was even allowed in Texas. :smileysurprised:

 

 

So that fact that Jobs and the Agency Five found a contract structure that let them fix prices and evade the antitrust laws (so far) makes it A-OK?

 

Sorry, can't go there with you. 

+LORD, preserve the good in their goodness, and+
+in your kindness, make the wicked become good.+
-- St. Basil the Great+
Inspired Contributor
JohnP51
Posts: 1,294
Registered: ‎12-31-2008

Re: Discounting


ABthree wrote:

 


JohnP51 wrote:

Its either illegal or it is not.

 


Gee, John, I never took you for one of those "if it's legal, it's right" guys.  I didn't think that was even allowed in Texas. :smileysurprised:

 

 

So that fact that Jobs and the Agency Five found a contract structure that let them fix prices and evade the antitrust laws (so far) makes it A-OK?

 

Sorry, can't go there with you. 


I don't believe I said that. If it is legal, then the consumer has the right to vote with his or her dollars whether or not to support it and the vendor has the right to continue the strategy or not. Second, there is a huge difference between "evade" and "avoid". The former is illegal and the latter is not. If the Agency model is evading, then let the law come down on them hard. If not, don't buy anything that is sold under that model.

 

The last I heard is that we don't punish people or companies because its "not right". Smoking is not right in my opinion, but it is still legal to do it. Burning the American flag is not right in my opinion, but it is still legal to do it.  Building a mosque at ground zero is not right in my opinion, but it is still legal to do it. Not being allowed to pray in school or post the 10 Commandments in a courthouse is not right in my opinioin, but it is legal to ban them. The list of things goes on and on and until those things are deemed to be illegal, I have to tolerate them even if I do not like them and do not think they are "right".

 

Second, nothing I said advocates price fixing. In fact, I stated that price fixing is illegal as long as it is meant to drive out competition.

 

From what I've read so far is that if the "Agency Five" reduced their prices from $10.00 to $9.99, you all will rush to buy their products.

John

"Books are for people who wish they were somewhere else." ~ Mark Twain
Distinguished Bibliophile
ABthree
Posts: 4,123
Registered: ‎01-27-2010
0 Kudos

Re: Discounting

Generally, I think the more words an argument needs to back it up, the weaker it is. :smileywink:

 

 


JohnP51 wrote:

[T]here is a huge difference between "evade" and "avoid". The former is illegal and the latter is not. If the Agency model is evading, then let the law come down on them hard. If not, don't buy anything that is sold under that model.

 

My God -- you ARE an accountant!  That technical distinction between "evade" and "avoid" is applicable in tax law.  I've never seen it invoked in general conversation before.  But ok, I'll say "avoid" instead of "evade", until the confusion created by the Leegin case in 2007 -- before which it was clearly illegal -- is resolved.

 

The last I heard is that we don't punish people or companies because its "not right". Smoking is not right in my opinion, but it is still legal to do it.


We don't punish people for smoking?  What country do YOU live in?  What happened the last time you saw somebody light up in a restaurant?  On a bus?  On a plane?  In New York City, in a public park, outdoors?  In fact, anywhere but home, and some jurisdictions are trying to reach there, too.   When's the last time you saw a cigarette commercial on TV?  Had your voice even changed yet?    How about in a newspaper or magazine?  Please, Mary!  LOL

 

 The list of things goes on and on and until those things are deemed to be illegal, I have to tolerate them even if I do not like them and do not think they are "right".

 

One may have to acquiesce.  One doesn't have to tolerate:  one can continue to call the intolerable by its proper name.  I have to buy my own health insurance, so I have first-hand knowledge about the insurance companies.  I won't be self-destructive enough to "boycott" them, but I'll continue to say that they make the North Koreans look like humanitarians, and support every effort I can to weaken them.  Sometimes the little guy can only fight back in little ways; that doesn't make the fight meaningless, or even ineffective in the long run.

 

Second, nothing I said advocates price fixing. In fact, I stated that price fixing is illegal as long as it is meant to drive out competition.

 

No, you didn't advocate price fixing, and I'm sure that you don't advocate it.  But how would YOU classify an agreement between one store and the suppliers of all stores, under which the suppliers will not sell product to any store than undersells the one store with which they contract?  That's the Agency Model. 

 

From what I've read so far is that if the "Agency Five" reduced their prices from $10.00 to $9.99, you all will rush to buy their products.


You know that I'm more of a spendthrift than that, so I'll just take that line as a rip-roarin' flash finish.  :smileyvery-happy:


 

+LORD, preserve the good in their goodness, and+
+in your kindness, make the wicked become good.+
-- St. Basil the Great+
Inspired Wordsmith
sirwillard
Posts: 496
Registered: ‎06-10-2010

Re: I'm a good customer - it is BN's job to force the publishers down on price, not mine.

Lots of other people have covered the gory details better than I can, but let's break this all down to the simpler concepts we should all be able to agree with.

 

First, like many have stated, the $9.99 price point is artificial and stupid. For one, it doesn't take into account inflation. $9.99 isn't as profitable next year as it is this year, generally. That's the problem with arbitrary price points, they simply don't take into consideration ANY economic realities.

 

Next, the $9.99 price point is a retail price point. It's not taking into consideration the whole sale price point. B&N, Amazon and others are not the produces of the books. They have to purchase the books as well. In the days of the $9.99 eBook the price at which they were purchasing the book was often higher. This meant they were losing money. There's reasons why they were doing this, but simple logic will tell you that such a price point couldn't be maintained for any length of time, especially by the smaller retailers. The "advocates" of the Agency Model realize this. Amazon was abusing the market with prices that were simply too low, and if they'd continue long enough they'd probably end up with at least a defacto monopoly. At which point, you'd be wishing for the $13 Agency Model pricing. Personally, I doubt we could have gotten there. Economics would have ruled out, and Amazon would have had to start raising prices, at which point the competition would be back in the game. It would have been painful, and several retailers would probably be driven out of business, but some would survive, and new ones would come into the game, and the market would have self corrected.

 

Finally, prices are interesting beasts. The assumption that eBooks should cost so much less because it's digital is simply flawed. Digital media has many of the same costs, some costs no longer exist, and other new costs come into play. The end result to the actual cost is something very hard to pin down, but it's very unlikely to be a significant difference. There's also a problem with figuring out costs. Most people don't seem to be able to understand the concept of fixed costs, where the cost is the same regardless of the amount of product sold. The NY Times article that tries to prove $4 profits seems to be very flawed based on this alone. They talk about many fixed costs and give a percentage per book sale figure for them, but you can't really do that with fixed costs. Remember, the percentage per book will vary depending on the number of books sold.

 

Now, all of that said, the most important thing to keep in mind is that prices are only partially determined by costs. It's fairly obvious that the price can't go below the costs, barring the concept of "loss leaders". However, how much above the costs that the price can go is determined by different economic factors. Once you ignore costs and start looking at those other economic factors the $9.99 price starts to make even less sense. The market is willing to pay $26 for a just released hardback. They're also willing to pay around $7-9 for a paperback when it becomes available. The difference in price is due to basically two major differences between the two. First, the paperback is released much later than the hardback, but in general the market has said they want to pay less for something that's been out for a while. Second, the paperback isn't as durable as the hardback, and you can expect to reread a paperback only a couple of times before it falls apart. Now, strictly looking at these qualities, an eBook is much more similar to a hardback. It's released at the same time, and it will last even longer than the hardback. Given just these factors, you should really expect to pay AT LEAST as much for an eBook as you do a hardback. However, there's new factors that have to be taken into consideration. First is the cost of a device to read the eBooks on that the consumer must factor into the equation. Second is (unfortunately) the nature of DRM today. With DRM today you can't lend your book out (practically speaking, as the Lend Me feature is so crippled as to be pointless), you can't sell it when your done, and you can't even donate it to a library. Most people would probably expect to pay less, given these restrictions. How much less is something that no one knows, just yet.

 

Me, I'm willing to pay as much as I do for a hardback for new releases. Of course, I rarely buy hardbacks because of the cost :smileyhappy:. Once a paperback is available, I expect the price to drop. I'm not sure if it should drop as low as a paperback, though. I'm not sure how to weigh the difference between the fact that an eBook will last forever and the restrictions of DRM. I'll make a personal decision based on individual books. In the end, I expect the market will settle on a price where the cost of eBooks is a dollar or two higher than paperbacks (starting at the cost of the hardback when a paperback isn't yet available). I'll also make my purchases as I do today, where I'm unlikely to pay for a book by an author that is unknown to me, instead getting the book from a library or a friend (as a DTB until DRM restrictions allow). Most customers will probably be the same, and these silly $9.99 tirades will disappear.

 

I will say that I find it interesting that part of the $9.99 pricing is based on the music industry, where people perceive the $0.99 price as "cheap", when the reality is that the price on music wasn't really reduced when the digital format came about. Consider how much you paid for a CD full of music and you'll see that the price didn't come down. The market was different, because you were now buying only the songs you wanted, but the price actually remained about the same. The same thing can't happen with books, unless you want to start paying for chapters :smileywink:.

Check out my books on Goodreads: http://www.goodreads.com/profile/wekempf
Distinguished Scribe
sub_rosa
Posts: 812
Registered: ‎12-25-2009

Re: I'm a good customer - it is BN's job to force the publishers down on price, not mine.

Bad information.  Music prices have gone down.  CD prices were all over the board, and it wasn't unusual to find CD's priced at 15.99 and up.  Just about fifteen minutes ago I paid 12.99 for J Dilla's "Ruff Draft" double CD.  How much is it on iTunes?  9.99.  How'd you guess?  The music industry has adjusted after getting its brains kicked in when the digital revolution began.  You'd think the publishing industry would've learned something.

 


Don't buy from Random House, Macmillan, or Penguin until the agency model is COMPLETELY dead.
flyingtoastr
Posts: 3,053
Topics: 55
Kudos: 2,980
Registered: ‎11-11-2009
0 Kudos

Re: I'm a good customer - it is BN's job to force the publishers down on price, not mine.

 


sub_rosa wrote:

Bad information.  Music prices have gone down.  CD prices were all over the board, and it wasn't unusual to find CD's priced at 15.99 and up.  Just about fifteen minutes ago I paid 12.99 for J Dilla's "Ruff Draft" double CD.  How much is it on iTunes?  9.99.  How'd you guess?  The music industry has adjusted after getting its brains kicked in when the digital revolution began.  You'd think the publishing industry would've learned something.

 


That (again) is not the list prices dropping. List for music CD's still tends to hover between $13 and $19 depending on the artist. It's the retailer marking down heavily to try and get you to buy physical over digital.

 

Wordsmith
gandalf1369
Posts: 725
Registered: ‎08-13-2010
0 Kudos

Re: I'm a good customer - it is BN's job to force the publishers down on price, not mine.

Come on people - get a life . . . . .

 

All of us who bought an e-reader, be it the nook, Kindle, Sony, Kobo, etc. knew BEFORE WE BOUGHT THE DEVICE what the price of ebooks were.  None of the retailers try to hide the price - all the prices are prominently displayed on their respective websites.

 

If you don't agree with the price, then why did you buy an e-reader??!!

 

**** He Who Dies With The Most Toys Wins ****
Distinguished Scribe
schatzieWI
Posts: 648
Registered: ‎01-22-2010

Re: I'm a good customer - it is BN's job to force the publishers down on price, not mine.

I have been reading these boards since January 2010 when I ordered the Nook. The price discussion has always been widely debated on these boards.

 

My take on this is, I like e-books. I don't like to lend my books and then have to have friends feeling guilty for not returning them or just never returning them. I don't really want extra books cluttering up my house.

 

The books that I love I will buy in hard cover to have forever, but most books, once they are read, just clutter up my book shelves or end up in a box to be donated. The nook solves that problem for me.

 

As for the cost, yes it would be nice if the books were less expensive, but it would also be nice if my plumber charged me less than $100 per hour.

 

So, for me the nook is great and the authors and publishers deserve to be paid for their work. So does my plumber.

 

 

Bibliophile
bklvr896
Posts: 4,819
Registered: ‎12-31-2009

Re: I'm a good customer - it is BN's job to force the publishers down on price, not mine.

I'm also an accountant who's been working as a management analyst for the past few years.  So yesterday, I analyzed my book purchases.

 

I got my Nook in January.

 

Since then:

 

Purchased - 115

Free - 136

Average price per book (excluding free books) $5.91.

 

Purchase history

Before April 1 - 46 books, $305/total cost, $6.63/average per book

April - 24 books, $116/total cost, $4.84/book  (However I had $100 of discounted Sony Gift cards)

May 1 - today - 45 books, $$258/total cost, $5.74/average per book

 

The April and After costs per book would be a little lower if I factored in the 40% discount, which I may do, but not right now.

 

Anyway, the average price per book came out lower than I had anticipated.  I'm not factoring in the free books because a lot of them are the classics and I never would have purchased them in the first place.

 

If I get bored again, I may factor in other than the classics and the Sony discount.  But then again, I may never get quite that bored again. :smileyvery-happy:

Scribe
frantastk
Posts: 743
Registered: ‎06-29-2010

Re: I'm a good customer - it is BN's job to force the publishers down on price, not mine.

I've had my nook only a couple weeks.  I have over 200 ebooks (okay, they aren't all on there yet, most are still on my computer till I decide I want to read them), I've only actually bought 3 and they were all $6.99 each.  They were older titles, probably not high on the popularity list.  I started collecting free ebooks several months ago when I first started looking into an ereader and have gotten most of the BN free classics since they started.

 

My feeling on ebook pricing is that yeah the whole agency model thing sucks, but I will pay whatever I think the book is worth to me.  If it's a book I want to read and reread and continue to read whenever I feel like it I will pay quite a bit over $9.99.  I feel that's really an arbitrary price to make people feel like they're getting a deal because it's under $10.  If I don't think I'll want to reread it I'll get it from the library, just like I always did with DTB.  If I really like it and want to own it I'll buy my own copy if I think the price will be worth it to me. I've paid $40 for a hardback book I really wanted.  Then there are books I wanted that I was willing to wait for the cheaper paperback version because it just wasn't worth quite as much to me. 

 

I never really loaned books out to friends and family anyway (I've lost too many good books that way before I stopped) so that part doesn't bother me.  And I've only ever given books away or sold them because I started running out of shelf space in our tiny house to put books, so I started weeding out the ones I could live without.  With an ereader that won't be an issue for me.

 

Sure I wish books were cheaper.  It would be nice if everything was cheaper.  We have 3 kids on one income. It's not like I have money laying around I can throw away but if I think it's worth it to me, I'll save for it. 

 

Fran

Distinguished Scribe
sub_rosa
Posts: 812
Registered: ‎12-25-2009

Re: I'm a good customer - it is BN's job to force the publishers down on price, not mine.


gandalf1369 wrote:

Come on people - get a life . . . . .

 

All of us who bought an e-reader, be it the nook, Kindle, Sony, Kobo, etc. knew BEFORE WE BOUGHT THE DEVICE what the price of ebooks were.  None of the retailers try to hide the price - all the prices are prominently displayed on their respective websites.

 

If you don't agree with the price, then why did you buy an e-reader??!!

 


You get a life - and a clue.  When I bought my Nook, eBooks were advertised as bestsellers being $9.99 and under.  It was only a few short months later when the Agency Model Publishers changed their practices.

 


Don't buy from Random House, Macmillan, or Penguin until the agency model is COMPLETELY dead.
Distinguished Scribe
sub_rosa
Posts: 812
Registered: ‎12-25-2009
0 Kudos

Re: I'm a good customer - it is BN's job to force the publishers down on price, not mine.

[ Edited ]

flyingtoastr wrote:

 

That (again) is not the list prices dropping. List for music CD's still tends to hover between $13 and $19 depending on the artist. It's the retailer marking down heavily to try and get you to buy physical over digital.

 


 

 


Don't buy from Random House, Macmillan, or Penguin until the agency model is COMPLETELY dead.
flyingtoastr
Posts: 3,053
Topics: 55
Kudos: 2,980
Registered: ‎11-11-2009
0 Kudos

Re: I'm a good customer - it is BN's job to force the publishers down on price, not mine.

 


sub_rosa wrote:

This makes no sense in the context of the discussion.  You need to find another hobby.

 


 

The music industry hasn't changed their pricing a lick - list prices are the MSRP and they've stayed roughly the same since the digital revolution. They're still asking for the same amount for CD's, the retailers are just cutting their margins more in an effort to get you to buy physical over digital.

 

Seems quite pertinent when you're talking about how "CD's have gotten cheaper as a result of the digital sales from the industry's perspective". They haven't.