12 Replies Latest reply on Sep 10, 2010 7:45 AM by scjohanson5

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

      I've never been a big fan of the Kindle (nothing against it, just a personal preference)  but Amazon does have a somewhat better understanding of what the publisher/seller relationship should look like.  I'm seeing eBook prices continue to climb and I don't like it.

       

      I buy a fairly steady stream of eBooks, however, I will not now or ever buy an eBook that costs more than $9.99 (before tax) and I don't think that anyone could ever justify doing so.  I went to look for the new Stephen Hawking book  seen here:

       

       

       

      The Grand Design 

       

       

       

       

       

       

       

       

       

      I would have bought this book today (actually pre-ordered) but it is $13.61 while the actual hardback book, a real physical copy with no DRM, with additional costs to manufacture is only $15.12.  Explain to me how that is justified in any universe.  Book sellers such as B&N need to play hardball with the publishers.  Tell them your customers will not pay practically the same price for an eBook as they would for the DTB.

       

      Barnes & Noble, pay attention to this part:  You lost about $10.00 today on this one purchase. $10.00 that was pure profit - no cost to you or the publisher whatsoever.  You can continue to squabble over $2 or $3 dollars here and there in an effort to establish an artificially high baseline price or you can push back against the publishers and tell them how much you are going to charge for the book and not let them dictate to you, a book retailer, how to sell books.    Otherwise your customers will either go elsewhere, or forgo the purchase of these overpriced eBooks altogether.  As for me, if I can find a better price, under $10.00 I will buy the book elsewhere, otherwise I'll probably just wait and try to get it from the library or borrow it from a friend.

       

      -Mark

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

          Don't plan to buy any new releases, as most of them are in the $13 and up range.  If the publisher is part of the Agency 5, B&N has no say in the price.

           

          This one is Random House, which is not part of the Agency 5.  Sometimes B&N has to see what others are pricing books at and then they'll adjust.  Wait until it actually comes out to see if the price goes down.

           

          Amazon is showing the same price as B&N for the e-book.  Don't pre-order.

          • Re: I'm a good customer - it is BN's job to force the publishers down on price, not mine.
            bklvr896

             


            Mark_F wrote:

            I've never been a big fan of the Kindle (nothing against it, just a personal preference)  but Amazon does have a somewhat better understding of what the publisher/seller relationship should look like.  I'm seeing eBook prices continue to climb and I don't like it.

             

            I buy a fairly steady stream of eBooks, however, I will not now or ever buy an eBook that costs more than $9.99 (before tax) and I don't think that anyone could ever justify doing so.  I went to look for the new Stephen Hawking book  seen here:

             

             

             

             

             

             

             

             

             

             

            I would have bought this book today (actually pre-ordered) but it is $13.61 while the actual hardback book, a real physical copy with no DRM, with additional costs to manufacture is only $15.12.  Explain to me how that is justified in any universe.  Book sellers such as B&N need to play hardball with the publishers.  Tell them your customers will not pay practically the same price for an eBook as they would for the DTB.

             

            Barnes & Noble, pay attention to this part:  You lost about $10.00 today on this one purchase. $10.00 that was pure profit - no cost to you or the publisher whatsoever.  You can continue to squabble over $2 or $3 dollars here and there in an effort to establish an artificially high baseline price or you can push back against the publishers and tell them how much you are going to charge for the book and not let them dictate to you, a book retailer, how to sell books.    Otherwise your customers will either go elsewhere, or forgo the purchase of these overpriced eBooks altogether.  As for me, if I can find a better price, under $10.00 I will buy the book elsewhere, otherwise I'll probably just wait and try to get it from the library or borrow it from a friend.

             

            -Mark

             


             

            They pretty much just went through this fight with the publishers earlier in the year and they lost, even Amazon lost the fight.  As the pp said, 5 of the 6 major publishers are now setting the price, so you won't see it cheaper anywhere else that is legal.  Amazon tried to fight Penguin and wound up not selling any new releases from Penguin for a month and they finally caved on it. So Amazon has entered into the same agreements with the publishers as BN and the other retailers. Books from the Agency 5 will be the same price everywhere.

             

            And in my opinion, and this is just my opinion, $9.99 is an artificial price point set by Amazon who was willing to sell new releases at a loss.  I figure if I want to read a new release right away, I will pay more for it, just as I did before, when I would purchase the HC version as opposed to waiting for the paperback.  You are paying partly to read the book immediately.

             

            And if you pay $9.99 for an eBook, how is that pure profit?

             

            I'm more upset by the fact that paperbacks at BN tend to run around $7.19 because they can discount it and the eBook is usually $7.99.  That annoys me.

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

               


              Mark_F wrote:

               

              Barnes & Noble, pay attention to this part:  You lost about $10.00 today on this one purchase. $10.00 that was pure profit - no cost to you or the publisher whatsoever.  You can continue to squabble over $2 or $3 dollars here and there in an effort to establish an artificially high baseline price or you can push back against the publishers and tell them how much you are going to charge for the book and not let them dictate to you, a book retailer, how to sell books.    Otherwise your customers will either go elsewhere, or forgo the purchase of these overpriced eBooks altogether.  As for me, if I can find a better price, under $10.00 I will buy the book elsewhere, otherwise I'll probably just wait and try to get it from the library or borrow it from a friend.

               


              When you were paying 9.99 for every new release BN was losing $3 off every transaction. You really don't seem to understand how book pricing works, would you like a primer?

               

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

                OK, let's take this one apart:

                 

                1. "I'm a good customer" -- the implication here is that good customers deserve some consideration.  Fair enough.  About how many eBooks are you buying per month, and what's the average price you're paying per eBook?  A "good customer" by any rational definition is a profitable customer.   Buying a lot of eBooks for $9.99 doesn't count since, as Flyingtoastr points out, B&N loses money on each of those transactions.  Needless to say, there's no profit on free eBooks.  So, what exactly makes OP a "good customer"?

                 

                2." I will not now or ever buy an eBook that costs more than $9.99 (before tax) and I don't think that anyone could ever justify doing so. "

                 

                That was a number that Amazon picked out of thin air to encourage eBook sales volume.  There's no rational or economic basis for it, so what makes it the critical price point for a buy/don't buy decision?

                 

                3. "I would have bought this book today (actually pre-ordered) but it is $13.61

                That's actually one of the lower prices for the pre-orders, according to Inkmesh.  The price will probably come down after the book is released -- that's how pre-orders run.

                 

                4. "while the actual hardback book, a real physical copy with no DRM, with additional costs to manufacture is only $15.12."

                 

                Yeah, just one copy, and the only way to share it to lend it or give it away, and then you don't have it.  Works a lot like DRM, hunh?

                 

                 5. Explain to me how that is justified in any universe.  

                 

                As for costs, this topic has been so extensively debated that there's no need to repeat it all here.  A search of the boards on "Agency Pricing" or "eBook pricing" or "book production costs" should produce plenty of clarifying information.

                 

                6. Book sellers such as B&N need to play hardball with the publishers.  Tell them your customers will not pay practically the same price for an eBook as they would for the DTB.

                 

                Or, you could write to the publisher and tell them yourself.

                 

                7. Barnes & Noble, pay attention to this part:  You lost about $10.00 today on this one purchase. $10.00 that was pure profit - no cost to you or the publisher whatsoever.

                 

                Check the cost discussions.  $10 is a losing number.  For just one example:  author royalties based on hardcover prices have to come out of that $10 -- one cut into that "pure profit".

                 

                 8. Otherwise your customers will either go elsewhere, or forgo the purchase of these overpriced eBooks altogether.  As for me, if I can find a better price, under $10.00 I will buy the book elsewhere, otherwise I'll probably just wait and try to get it from the library or borrow it from a friend.

                 

                All good choices.  That's the great thing about Nook:  you have options.  Since B&N created those options, trying to use them as threats to change behavior may not be ... very effective. :smileyvery-happy:

                 

                 

                 

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

                  I, like you, noticed how close the price of the ebook format and hardcover are.  My solution to this problem is simple.  I will not be purchasing this book at that price point.  I would not normally purchase the hardcover even at that discounted price (it's not absurd, just not what I'm willing to pay for the material).  Likewise I am unprepared to spend that much for the eBook version.

                  • 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:.

                    • 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.

                       

                       

                        • Re: I'm a good customer - it is BN's job to force the publishers down on price, not mine.
                          bklvr896

                          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:

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

                              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

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

                            Mark,

                             

                            You are 100% right.  I have over 25 books on my e wishlist and I check the prices everyday.  While it is so annoying that the prices flucuate daily i refuse to buy an ebook for more then $ 9.99.

                             

                            When I purchased my nook back in October 2009 the e books were advertised at $9.99.  I have not seen that price in months. 

                             

                            Barnes and Noble is losing money on me monthly, weekly and daily and what I will do is wait until my e wishlist books become available as used books.

                             

                            They are ruining, what I thought, was a great idea.

                             

                            I am sure thousands of other customers agree.

                             

                            Gail