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Amazon using corporate muscle again

For discussion about particular book sellers (brick-and-mortar bookstores, online book sellers, auction sites, swap sites, etc.)
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Divia
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Post by Divia » Sun January 31st, 2010, 10:21 pm

[quote=""SarahWoodbury""]http://jakonrath.blogspot.com/2009/10/k ... shing.html

Obviously, I'm on a roll! Maybe this can help too.[/quote]

What I got from that...sell books at a lower price and make more money. Which makes sense.

I think we all know that we sniff around the discount table and even though we might not need that one book for 3 bucks cause it isnt our era or whatever...we still buy it cause its 3 bucks.
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Margaret
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Post by Margaret » Sun January 31st, 2010, 10:22 pm

(Note that Amazon have been trying to grab a larger share of the cake by dipping into the publishers -- and the authors -- share of what meagre profits there are (book publishing is notoriously, uniquely unprofitable, within the media world), even though they've already got the wholesale and retail supply chains stitched up.
This is the key sentence in the article EC linked to.

Note that the "Newbie's Guide to Publishing" author does best with self-pubbed Kindle ebooks, which she sells a raft of at $2, and nets a much higher percentage because there is no publisher involved in these sales. Note also that her high sales figures are unusual for self-pubbed authors - she also has books published by Hyperion, which has probably helped her to gain a following for her self-pubbed books. Note, finally, that she currently makes about $20,000 a year (on a variety of books she probably spent many years writing), and evidently works very, very hard for her money.

The cost of a book involves a great deal more than the cost of the paper and ink it is printed on. Most of the labor is the author's - a few writers churn out a couple of books a year (quality usually suffers), while many others spend 2-10 years on every book they write. The typical novelist's income is already pathetic, with advances of $10,000 vastly outnumbering the ones in the $100,000 and up range (and remember, this is usually for several years of work - a $100,000 advance sounds like a lot of money, but average it over, say, 4 years of writing and polishing a novel, and the author is really only making $25,000 a year). Publishers have to pay for office space and pay salaries to their staff of editors, sales managers, graphic artists who design covers and the folks who go through the mountains of submissions to find the gems that readers will love. Most successful writers also have agents who work very hard and need to eat, dress and house themselves just like the rest of us do. (It's hard to be successful without an agent - these folks earn every penny they make.)

I worry about the intense pressure to cut book prices. Most likely, this is going to come out of the authors' pay, because the author is the only person in this particular food chain that is willing to work purely for the love of it rather than for the money. Novels typically make less money than diet books, celebrity tell-all books, political rant books, and the like. At some point, it seems to me that readers will get stuck with novels that are slapped together and full of typos, because neither authors nor publishers will be able to afford to spend the time necessary to produce a well-conceived, well-crafted, well-executed novel.

I say, three cheers for Macmillan for resisting the pressure.

Readers who can't afford a $15 book can check books out of the library. Libraries are wonderful institutions.
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Divia
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Post by Divia » Sun January 31st, 2010, 10:35 pm

This is what i dont understand. So if someone can please explain it that woudld be great. :)

We have our paperbooks that sell for x amount of dollars. These books are done..edited and packaged using paper, ink, artists(for the covers).

Now we have the ebook. It's been edited. We have no paper(cut costs that way). No ink(another cutting cost) do they have bookcovers? If they do we can use the one that was used on the orginal book. Then we can sell copies of this book for less and sell more of them. Plus we dont have ink or paper costs.

So how does that not equate into more money for everyone? We are expanding the ways we can sell this book.

Now if we only had e books then I could understand this argument, but this isn't the case. Publishers now can sell their books two different ways.

Like I said someone needs to explain this to me.
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Post by Misfit » Sun January 31st, 2010, 10:46 pm

For those who follow Dear Author they've had several posts about this as well.
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Post by Misfit » Mon February 1st, 2010, 12:35 am

And speaking of Dear Author a new postfrom them wherein Amazon folds.
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Post by Chatterbox » Mon February 1st, 2010, 12:40 am

I went back & looked at my contract & talked to my agent in light of all this stuff. I realized that under the terms of my contract (signed June 2008), if Amazon opts to price my book at $9.99, i will get a set percentage (15% to 25%) of that $9.99. Whereas if it's north of about $10.50 (i.e. a certain fraction of the cover price), I get the same percentage of the COVER price! The difference? Well, it's about $1.50 vs $4.20 or something like that. So if Amazon opts to price my June release at $9.99, I will take a big financial hit that volume won't compensate for.

I don't imagine that Macmillan is thinking of its authors when it does this, but looking into the details has elicited some surprising sympathy for the publishers. I realize that the publisher could change this by readjusting the terms of the contract, but mine was crafted when Kindle was in its infancy and the whole debate over pricing/control of pricing hadn't arisen. Similarly, it could adjust this by tweaking the price -- although the price was set as a function of the advance I was paid and in hopes of recouping that advance. Still, as an author, I now know I will suffer disproportionately from this bargain hunting by readers: a reader who insists on paying $9.99 rather than $10.99 saves $1 for themselves, but costs me $2.70 in lost revenue...

A plague on both their houses. As a reader, I want access to affordable books. As an author, I want to be compensated for the value of what it is that I provide, which if I were pricing it on a per dollar basis, is WAY higher than $10. (It ranges from $25 to $200, in fact...)

Just throwing that out there; not sure what it means for anyone's opinion. I do think that Amazon has the right to set its prices, but when those prices undercut the perceived value of the product?? Hah, maybe both Amazon and Macmillan should be forced to allow the author to make the final call on Kindle pricing -- do they want to build an audience? earn as much as possible? Find a price that would balance the two? Amazon could come up with a price, Macmillan could propose one, and the author could choose which they prefer, with the various tradeoffs in mind.

As a reader, I'm looking at the value of the book to me. Value? It's the price I pay, but that isn't an arbitrary number. $9.99 isn't some magical point, beyond which books lose value. It depends on the book -- some are bargains at $14.27 or whatever, some are ripoffs at $9.99. As long as a new hardcover is a few dollars cheaper than the DTB, it's not a book I want or need to have in hardcover, and/or it's not a book I want to find shelf space for to be forced to pay shipping for to get it out of the house via Mooch or PBS, then I'm not that fussed. If a book I want to read is $14 and I think it should be $10, I'll just get it from the library or BookSwim. If $4 -- the price of a cup of Starbucks coffee -- is that big a dealbreaker, then obviously the book doesn't hold that much value to me.

Sorry, a bit rambling...

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Post by SarahWoodbury » Mon February 1st, 2010, 12:45 am

From Publisher's Lunch:

Amazon Answers: "Ultimately....We Will Have to Capitulate"
Could publishers have triumphed so quickly with their strategy to use Apple's entry into the market to move to an agency model for selling ebooks? (Note that the etailer says "ultimately." Immediately after posting this "announcement," disabled Macmillan buy buttons had not been restored yet.) Early Sunday evening, The Amazon Kindle team has just posted this to a forum on their site:

Dear Customers:

Macmillan, one of the "big six" publishers, has clearly communicated to us that, regardless of our viewpoint, they are committed to switching to an agency model and charging $12.99 to $14.99 for e-book versions of bestsellers and most hardcover releases.

We have expressed our strong disagreement and the seriousness of our disagreement by temporarily ceasing the sale of all Macmillan titles. We want you to know that ultimately, however, we will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books. Amazon customers will at that point decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book. We don't believe that all of the major publishers will take the same route as Macmillan. And we know for sure that many independent presses and self-published authors will see this as an opportunity to provide attractively priced e-books as an alternative.

Kindle is a business for Amazon, and it is also a mission. We never expected it to be easy!


As reported previously here, other major publishers do in fact have plans for pursuing "the same route," so this may be just the first chapter.

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Post by Chatterbox » Mon February 1st, 2010, 6:17 am

Ultimately, Amazon will capitulate, and ultimately Macmillan will decide whether their sales warrant their insistence on this price, which will be a function of readers ultimately deciding on the price/value continuum -- which is kind of as it should be, really. If too few people pay that price, what they gain in $/book won't offset what they might otherwise have earned, and perhaps they'll respond to the market forces. That's really the only way to address this -- by letting the book buyer make the ultimate decision on what a book is worth to them. Price it too high, and either they won't read it or they'll head off to the library.

I think Sarah is right. This is just the first step of a series of changes that could well be as major for publishing as they have been for the mainstream print media -- in an electronic age, how do you maintain revenues? When the old business model is disrupted by new technology, what do you do? This is simply the beginning.

Personally, I just wish the '$9.99 Kindle vigilantes' would stay off the review pages. It's at the point where I can't figure out if a book is a good read any more!

chuck
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Post by chuck » Mon February 1st, 2010, 6:01 pm

A very bothersome thought.....with all technology taking over(so to speak)...are hardback/paper books going to be a thing of the past?.....Magazines/newspapers publishers and the media are really struggling to make ends meet.....I love the Internet....But not to read ebooks....tried it...No can do.....Hooked on page turning books......Does the Marketplace drive the business....... or does business drive the Marketplace?

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Post by LoveHistory » Mon February 1st, 2010, 6:51 pm

It's a combination really, chuck. As long as people are willing to pay for printed books, they will be available. But the prices may go up.

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