New eBook Prices Ahead; How Do We Fight Back?

Posted on 05 February 2010 by


First, Macmillan slapped Amazon around and demanded new pricing. Now, Hachette and Harper Collins are joining the bandwagon, meaning three of the six major publishers have now started pushing for “agency models”, which will allow them to set the prices, rather than Amazon.

So what does this mean for consumers? Well, for starters, it looks like a done deal that we will be saying good-bye to $9.99 pricing on most new eBooks. With the publishers in control of pricing, figure something in line with what the iBooks app will be offering, roughly $12.99-$14.99. The bigger issue is that every store “converted” to this new model means there will be virtually no price competition. Amazon, Apple, and (with time, I’m sure)Sony, Kobo, and  Barnes and Noble will all match, because the publisher is choosing the pricing, and these stores all want to sell books.

In case my “rough draft” of Macmillan’s open letter yesterday wasn’t clear enough, I think this is, quite frankly, pretty awful. I know many authors are for it, since they are getting a higher payout, and I am sympathetic to the situation for them. It’s not easy to be caught between your audience and the people who bring you to said audience, and unfortunately they are the public face of all this in the end. However, there are a few reasons why this is a dangerous path.

One, the way the publishing companies have handled this shows they have no pulse on what the consumer wants. Amazon sold 3 million Kindles, along with their 6 kindle books per 10 paper books. Barnes and Noble sold out of the nook almost immediately, as did the Sony Reader Daily Edition. eBooks exploded this past year, and apparently the publishers seem to think price points have nothing to do with it. Sales in actual bookstores are dropping, so the answer is to fleece your one bright spot?

Two, if they’re going to force this uniform pricing on us, it really cuts down on how ebook retailers are going to differentiate themselves. Amazon and Barnes and Noble have both made it clear this isn’t about the hardware, it’s about a vehicle to offer content. Now they are about to lose a key way to separate themselves on the content front; are Macmillan and company going to crack down beyond list price? Will they complain over coupons and discounts? And don’t get me started on the fact these new, higher prices will still carry with them digital rights management!

Three, it is seriously troublesome that any industry would strongarm a retailer into this kind of price uniformity. Amazon took the loss leading, not the publishers, and for them to come in and force a change is just not acceptable. It cuts down on the idea of competition and free markets, and in an industry that is fighting every day to bring a nascent digital movement into the mainstream and still staunch the bleeding from the paper book business, it’s ridiculous to force this kind of change.

So what do you do as a consumer? If you’ve already bought a Kindle and built up a library, you’re not so quick to necessarily give up the hardware. Here are two ideas:

-Buy/download your books from Smashwords, Manybooks or Feedbooks. Some of these may not offer books in Kindle’s format, but any unprotected eBook can be run through Calibre and converted to Mobi, which is compatible with the Kindle. I’ll have a tutorial up in the next few days on how to do this easily.

-Don’t buy Kindle books from publishers forcing the higher prices until they reach paperback. Avoid buying new releases, where the publishers are really counting on these increased prices to bring parity with the hardcover side.

Now, the reality is that you probably will buy books for your Kindle at some point, probably even at the higher prices. And maybe you’ll be buying or downloading from an alternate source for your books. Either way, here’s what I want everyone to do. Whenever you buy a book, or download it, or actively choose not to because of the prices, send the publisher an email and let them know! The only way for them to know what’s really going on is to hear from their customers. To help, here is the contact information for Macmillan, Hachette and HarperCollins, and some suggested language to use when you email them.

The more contact they get, especially polite emails explaining your views, the more likely they are to make changes to their policies.

I was shopping around for ebooks today, and looked at ______. I chose not to buy it because the new pricing made me decide I didn’t really need to buy a book today. Had it been $9.99, I probably would have clicked buy without hesitation. Please consider this when you next evaluate ebook pricing, and maybe then you’ll get a sale from me.

Thank you,

<your name>

I was shopping around for ebooks today, and I thought about buying _____ from Amazon.com. Instead, I decided to support an author I found through Smashwords/Feedbooks/Manybooks. These websites allow me to support authors without being subject to the higher pricing currently in place on certain ebooks. I believe in supporting authors, but I do not believe in doing so at the expense of the consumer and the growth of ebooks. Please consider this when you next evaluate ebook pricing, and maybe then you’ll get a sale from me.

Thank you,

<your name>

Macmillan: customerservice@mpsvirginia.com

Hachette: customer.service@hbgusa.com

HarperCollins: feedback2@harpercollins.com

What’s your take on this? Is it souring you on ebooks? Sound off below!

This post was written by:

- who has written 925 posts on Gear Diary.

Carly has been a gadget fiend for a long time, going back to her first PDA (a Palm M100). She quickly went from researching what PDA to buy to following tech news closely and keeping up with the latest and greatest stuff. She loves writing about ebooks because they combine her two favorite activities; reading anything and everything, and talking about fun new tech toys. What could be better?

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  • http://www.geardiary.com Douglas Moran

    Perhaps it’s uncharitable of me, but I don’t give a flying frack what Rupert Murdock thinks with regard to the “value” of books and the viability of hardcover book retailers. The increase in eBook sales has shown that the current book publishing and sales model no longer works. Until the publishers get that, they are going to find themselves marching down the same path that record companies did starting in the 80s.

    eBook readers have no interest in supporting the viability of the current hardcopy book publishing and sales model, and trying to charge them a third more is not going to make the situation better. The sooner that Murdock and his fellow hidebound oligarchs recognize this fact, the sooner they’ll be able to move to a model that still allows them a profit. Otherwise, piracy will explode.

    So get a grip, publishers, or you’ll be left behind just like record companies.

  • dbmurray

    These are good suggestions that will hopefully have the desired effect of keeping eBook pricing affordable for the masses.

    It’s interesting watching how the market works these things out. I was once employed by a national bookstore chain with more than 300 locations. The previous owner of the location where I worked was an individual, so I got to see the difference between how the publishers interacted with the chain vs. the private owner.

    The big chain got bigger discounts on books, although the location proved to do less business under corporate ownership. The store was actually growing by 20% every year under the individual owner. Under the chain, sales were flat after one full year and started to go down after that.

    The big chain told all the publishers that defective products damaged during shipping and amounting to less than $100 retail would be thrown away and billed back to the publisher. The individual owner had to deal with nit-picky returns policies.

    The big chain told some publishers they’d only stock their products on consignment.

    What does this have to do with eBooks? All the bigger online stores like Amazon, B&N, etc. need to do is stand their ground if they truly want to keep prices at the current level. If a 300 store chain can bully publishers around, then so can a store doing business at the level of Amazon.

    If they go for it, be assured THEY are happy to pocket more $$$ per sale as well, rather than trying to make their money on volume. The irony is that with digital content, there is no inventory…so there’s no downside to aiming for volume sales like there is with physical product.

  • Joel McLaughlin

    Depending on the book, I would be happy to pay $15.99. That is, depending on the book. However, at $15.99 for a eBook it is approaching the price of a hardcover book and the fact is a eBook is NOT THE SAME as a hardcover. Period.

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  • jelliott25

    It’s not really even the price so much for me. I’ve put a couple of $14 books on my Kindle prior to this dust up because they were books that I wanted and was willing to pay extra to get them. I never thought of the Kindle as a way to get cheaper books but rather, a way to make books more convenient. I’m more disturbed that the publishers are going to get away with what they’re planning to do to the retailers. The Kindle boards over on Amazon have been an infuriating mixture of comments by folks who either don’t understand what has happened or are angry because they’ve had to wait a week or two to get a book the want to read. Gosh how horrible for them. How will we live through this ordeal? After the fiftieth person came in and said “I don’t think Amazon should be able to tell publishers how much they get paid” despite repeated explanations that the publishers WERE getting paid the price they wanted, I was ready to hurl my laptop out the window.

    What’s next on the agency model bandwagon? TV’s? Cars? Running shoes? Let’s all pay MSRP for everything.