While I believe they saw these numbers, specifically that lowering the price from $15 to $10 lead to a 74% increase in purchases, I don't believe that this is a good general rule of thumb. Here's the problem: there are only so many potential ebook readers out in the world, and they only have so much time. This means there will be market saturation at some point, or at least market movement. This elasticity is there, for sure, but the relationship between price and purchases is not going to stay the same, especially as everyone follows this advice. Basically, everyone will price their books at $10 and the playing field will be level. Then the advice will be to price your book at $7. Then at $5. Then at $2. Then at $0.99 cents. This is the problem we currently see with Apple's App store and the Google Play Store: too many apps, all priced similarly. For most apps, and probably for most ebooks it would almost be better to go in the exact opposite direction: one sale at $1000 is better than 10 sales at $1.
Also, why would Amazon care so much about how others market their content, to the point of trying to interfere? If your content is not worth $15, then nobody will buy it. If you suck at marketing, nobody will know to buy your (possibly great content). Why does Amazon get its hands dirty instead of simply giving you analytics-backed suggestions? Oh, that's right, because controlling the publishers is more profitable for them, and using their market position as leverage against publishers is a great way to do so.
The reason is: paper. Dead tree books weigh a lot and waste space. Therefore owning a library is a cost. Costs to move, costs storage space, costs effort to collate and maintain and protect.
E-books do not have that cost. Having a hundred e-books in your purse is a normal thing. Having a thousand? Well, it might make sorting through your personal equivalent of a branch library a little more fussy, but it won't weigh more or waste space.
People may not have more time, but they can divert time to books, and they can divert re-reading time to new-book reading time.
I don't know exactly what you mean by market saturation in this case, as your logic seems to imply that each book has a finite market of N customers, and enough of a subset of them, M, are willing to pay $1000 (or whatever), such that M(1000) > N(5).
The error in your logic is that the size of the market for a given book actually depends on the price of that book. There's millions of books out there. Why would I pay $1000 for one when I can get so many others for $5? By lowering the price of books, Amazon increases the market size of each one.
There's also some behavioral economics involved, as I would assume people are far more likely to make a $5 impulse purchase (and look at that, Amazon has "one click send to Kindle!") than a $15 one.
Maybe Amazon cares so much for the same reason Apple/Jobs cared about the pricing of music: too high a price point encourages piracy.
Once piracy becomes an easily accessible and socially acceptable mainstream habit, it's going to be very hard to claw back market share.
Right now, ebook piracy is by far not as easy and convenient as video or music. That could change as long as ebooks remain overpriced compared to physical books, and DRM impaired to boot. (Sooner or latter the general public is going to find out the hard way how much DRM devalues their "property".)
I dunno about the US, where Amazon is king, but in most countries ebook adaption is stagnating and price is quoted as the #1 reason.
I initially thought as you do: cheaper ebooks cannibalize the more expensive. But remember books are competing with social networking, tv, radio, iphone games, console games, computer games, the outdoors, friends, pot, bars, etc. While a controlled study would be interesting, I bet books can steal some time share.
All I see in your argument is preconceived opinions with speculative statements and nothing to back them up. Sorry but you did not add anything to this discussion, not even in the form of new questions or pointing out flaws in the post's arguments using evidence.
There is also the problem of cannibalization which is not mentioned in Amazon's post; it's obvious that some of the people who buy eBooks when they're <$10 would have bought the paper book instead if it were cheaper, or even the same price.
So the "total revenue" figure is pretty abstract; publishers (or authors, or distributors, or anyone, really) don't need to consider media as completely separate; what matter is total sales, including paper, on-demand, and ebooks.
> specifically that lowering the price from $15 to $10 lead to a 74% increase in purchases
So, if Amazon takes $5, then whoever provided the book lost money on that deal. (Profit went from $10 to $5 while sales did not double). In fact, if Amazon takes more than about $4, it's a wash (which is actually a loss because some of those 75% more customers would likely have bought the book later at a different price point). If, Amazon takes $3, profit goes up by about 2% maybe 3%, if and only if that 74% increase occurs. If that increase doesn't happen, sucks to be the publisher, but Amazon's profit went up.
If Amazon wants to move more Ebooks, why doesn't Amazon reduce the amount they take? Simple, because it doesn't pay in profit. So, Amazon wants somebody else to eat the price drop. Not exactly altruistic.
All of the arguments about Ebook (less distribution cost, marginal volume cost, etc.) apply MORE to Amazon than the publishers. The publishers at least have to find authors. Amazon does, what, exactly, to justify taking $3 an Ebook? Um, right, it provides the market domination that is effectively a monopoly to the point that it thinks it can dictate pricing to publishers.
For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000.
That seems like a hard won data point, I'm surprised they threw it out to the public domain. It makes intuitive sense to me though. I buy a lot of ebooks and when they're really cheap I just buy them immediately rather than track them somewhere to go and purchase when I have time to read them later. My kindle has probably a half dozen books to read on it at the moment, and I imagine if they were $20-30 each I wouldn't be that flippant about it.
I imagine there's some sort of non-disclosure agreement attached to specific results (which is why I said effectively), but the universe of people that have access is so large (every KDP author), I don't think that matters much in practice - especially for general data points like this one.
In fact, the 30% share of total revenue is what Hachette forced us to take in 2010 when they illegally colluded with their competitors to raise e-book prices.
They are giving people advances so that they can live while they write the book full time. An example is someone who used to be a journalist can use their success as a journalist to sign a book deal and work on that. It's similar to raising a seed round.
IMO they are going the way of the record label. Some publishing houses and record labels will continue to add value, while larger ones who used to use their brand to add value and had scaled to a point where that is their main value proposition are going to have a hard time, as we are seeing right now in OP.
The publishers and record labels are doing the same thing they were before - curation and editing. The book printers & CD burners are out of the mix, but they were never that expensive anyway. There are still fixed costs associated with a book (editor) or an album (studio time), not to mention the marketing costs.
Are they worth 35% of the profit? I don't think so. But probably more than 0%. I personally think it should be 70% author, 20% publisher, 10% Amazon.
First of all, ebooks still make up only a fraction of the book market (especially outside the US). Most big publishers will have to support hardcover, paperback, and ebook version in parallel and price them so that they make a profit for everything combined. Hardcover and paperback versions are not going to go away anytime soon, either.
Second, publishers also make losses on books that don't sell and that they have to recover. The majority of books don't actually sell a whole lot of copies, so the fixed costs associated with producing a book can be a pretty high percentage of revenues for the average book.
Finally, publishers provide editing, translation into foreign languages or negotiation with foreign publishers (assuming your agent didn't retain translation/foreign publication rights), production, marketing, accounting and sales services, distribution, and warehousing (for dead tree books).
Note also that you can equally ask what Amazon provides with regards to ebook distribution: In the end, it's just another middleman that got a head start because it was first to market with the Kindle, but is otherwise unnecessary. In some markets, publishers selling directly to readers (on non-Kindle platforms) makes up a significant part of sales.
Amazon is using language like "e-book(s) sold" when the reality is that they mean "e-book license(s) sold." The difference may be subtle, but if an e-book comes with DRM, the buyer certainly does not "own" it. Amazon even makes that point themselves, as they promote e-books as having "no secondary market."
This is an important point when you consider the vendor lock-in of the Kindle "ecosystem." Instead of "e-book," a better phrase might be "Kindle software."
Amazon should be careful of throwing stones about illegal collusion as they approach market domination. It will be very easy for them to make a mistake which runs afoul of anti-trust law.
This old blog post of mine needs a refresh, but there's nothing magical or permanent about $9.99: the average price of an e-book bestseller (= Amazon Top 100) has been trending down roughly by a dollar a year, and was already at $7 last year. Likewise, the share of $5 books in the top 100 is already close to 50%.
(Shorter Scalzi: Amazon are presenting as "good for authors" policies which, in fact, are only indisputably "good for Amazon"; the only authors they might be good for are those who cleave unto Amazon like limpets and don't do business with the other 70% of the book distribution business, and even then, it's somewhat questionable: Amazon's T&C's for authors publishing directly are invidious and include binding arbitration clauses and boilerplate giving AMZN the right to vary their terms unilaterally -- meaning AMZN basically have those authors by the short and curlies, in a manner that no real publishing company even attempts in their author contracts.)
"Amazon’s assumptions don’t include, for example, that publishers and authors might have a legitimate reason for not wanting the gulf between eBook and physical hardcover pricing to be so large that brick and mortar retailers suffer, narrowing the number of venues into which books can sell."
So Scalzi and Hachette want me to subsidize Barnes & Noble? Mighty nice of them.
"...it appears to come with the ground assumption that books are interchangable units of entertainment, each equally as salable as the next, and that pricing is the only thing consumers react to."
That's an interesting statement to appear next to the Kirkus review of Lock In: "...yet more evidence that Scalzi is a master at creating appealing commercial fiction." My impression is that Amazon is more correct than Scalzi concerning the specific market in "commercial fiction".
Further, I'd be a little more sympathetic to him if he didn't include the argument, "...then I feel perfectly justified in considering your cost of production position vis a vis publishing as entirely hypocritical," if the publishing industry had not made that same argument for all of the price increases in the thirty years previous."
And then, of course, there's the bit about "Which is to say that between my publisher and Amazon, one of them gets to utter the immortal Darth Vader line “I am altering the deal. Pray I do not alter it further” to authors doing business with it and one does not."
It contrasts entertainingly with the fact that neither he nor his publisher are operating under the terms of the Kindle Direct agreement with Amazon, although I suspect his publisher has more authority than he admits, if he wants to get anything new published. Also with the fact that "Amazon is just 30% of the market."
Scalzi, like usual is ~90% correct and what little he is off about is easy enough to ignore. ;)
I easily see #3 resulting in the bottom end selling at $5 and the top end selling at $9.99 because I suspect the reason Amazon picked that number is, overall, it generates more total sales [by dollar volume]. One of the few things Amazon is good at is accurately pricing products to maximize gross revenue.
That being the case, I don't think its likely to be the disastrous price point Scalzi thinks it is even if it squeezes the publisher's margins on the higher end books. Ebooks, once created, are a sunk cost...not an ongoing one so maximizing gross revenue works in everyone's favor.
While I buy into many of the arguments being made here, Some of these points don't make sense. For example,
". And that 74% increase in copies sold makes it much more likely that the title will make it onto the national bestseller lists. (Any author who's trying to get on one of the national bestseller lists should insist to their publisher that their e-book be priced at $9.99 or lower.)"
Well, that's all well and good until everyone prices their e-books at $9.99 or lower, at which point we're back to square one. Unless the objective is to then have people who want a leg up to price their books at $8.99...
Also got a bit nasty when they mention, "ilegally colluded with their competitors" - was this ever established? I thought the publishers settled before it went to court, and only Apple was found guilty.
Finally, Love how Amazon is now trying to drive a wedge between the publishers and authors - "While we believe 35% should go to the author and 35% to Hachette, the way this would actually work is that we would send 70% of the total revenue to Hachette, and they would decide how much to share with the author. We believe Hachette is sharing too small a portion with the author today, but ultimately that is not our call."
This is Amazon turning up the heat on the publishers. Remember, Amazon/Bezos are ruthless - they could not care at all what is fair - but they are going to use every tool in their kit to win at this negotiation.
> Remember, Amazon/Bezos are ruthless - they could not care at all what is fair - but they are going to use every tool in their kit to win at this negotiation.
In what sense? In the sense that we know to a fairly high degree of certainty that it happened? Yes. In the sense that you would never lose a libel suit for saying that it happened? Also yes. In the sense that a final judgment was entered in a trial case to this effect? Only then would the answer be no.
Well, that's all well and good until everyone prices their e-books at $9.99 or lower, at which point we're back to square one.
No. At least not according to OP. They suggest that books compete against other forms of information and entertainment and that below $9.99 a larger share of that market would be occupied by ebooks.
I'm a bit surprised that Amazon said listed "no returns" as one of the differences with ebooks. I have personal experience with their incredibly generous ebook return policy (right in line with their other generous return policies).
Is this an implicit admission that Amazon is eating the cost of those returns? Or do they mean something specific like the physical infrastructure for returns?
I've written a book, it's available on Amazon (including kindle).
What % I get when it's sold (kindle or dead tree) is absolutely none of Amazon's business. I negotiated with my publisher (not Hachette), I'm happy with the results, I don't need other people telling me what's best.
If you're an author the absolute best you can hope to get is 35% of the sale price -- that is, the price your readers are willing to pay to read your work. Usually, it's even much less.
The publisher keeps at least 35%; the distributor, 30%. It's unclear to me what value these actors are offering, for this amount of money.
Disintermediation hasn't happened yet (what happened is, Amazon took the place of bookstores, and publishers are still around).
But disintermediation will happen eventually; when that day comes this discussion will sound silly and strange.
It's also important to understand that e-books are highly price-elastic. This means that when the price goes up, customers buy much less.
But what is the alternative for those customers: do they maybe buy the paperback
version instead? If that's the case, Hachette might miss out on revenue, but
they also keep their paper-based business running and stay somewhat independent
of Amazon.
Amazon has mastered the art of saying nothing with a lot of self-serving words :)
Their post is titled "Update re: Amazon/Hachette Business Interruption". However, they don't state what their specific demands are and why the business was (in their words) interrupted.
Amazon's proclaimed objectives aren't as important as knowing what their specific demands (from Hachette) are. I'm not a book-author, but as a developer, I set the prices of the software products I develop (Apple and Google let me do that, Amazon doesn't). So my sympathies are with the book publishers, but even if they weren't, I'd still like Amazon to explicitly spell out their demands instead of using self-serving pricing elasticity theories to sway public opinion.
You set your wholesale price. You don't get to set retail prices. If I want to buy something from you at $1000 and resell it at $1, that's my business. eBook publishers have this delusion where they get to set retail prices, and it's backwards and wrong.
From the perspective of the publisher and author, this analysis is somewhat meaningless because it doesn't factor in any impact on sales of the book in other formats.
Books aren't video games. People don't collect them. I don't consider a game I don't finish to be a failure, a waste of my time. I do so a book.
Despite Amazon's talking points, they are relatively price inelastic. Perhaps, right now, they aren't, since people are still dealing with market novelty, but over the long term, time is a bigger sink than money, when it comes to books.
People don't have business relationships with software, apps, content, games, photos, websites. People have business relationships with people.
Ever "follow" someone on social media because you like their writing? Collecting books from an author is like that, except that you're also feeding the author, so they can write more books for you to read. So you get 64,000 words in a book instead of 64 words in a tweet.
A lower starting price increases the initial pool of people who are exposed to an author's fiction or non-fiction worldview. Authors need more input into the price curve which modulates growth of their community of readers. Neither publisher (old boss) nor Amazon (new boss) is maximizing the use of technology to improve relationships between reader-people and writer-people.
time is a bigger sink than money, when it comes to books
I'm reading less at the moment than I used to, but I regularly have periods of reading around three novels a week. If it were not for the existence of libraries and second hand book stores, I would find money to be a far bigger restriction than time, especially when I was a teenager.
[+] [-] IgorPartola|11 years ago|reply
Also, why would Amazon care so much about how others market their content, to the point of trying to interfere? If your content is not worth $15, then nobody will buy it. If you suck at marketing, nobody will know to buy your (possibly great content). Why does Amazon get its hands dirty instead of simply giving you analytics-backed suggestions? Oh, that's right, because controlling the publishers is more profitable for them, and using their market position as leverage against publishers is a great way to do so.
[+] [-] JulianMorrison|11 years ago|reply
The reason is: paper. Dead tree books weigh a lot and waste space. Therefore owning a library is a cost. Costs to move, costs storage space, costs effort to collate and maintain and protect.
E-books do not have that cost. Having a hundred e-books in your purse is a normal thing. Having a thousand? Well, it might make sorting through your personal equivalent of a branch library a little more fussy, but it won't weigh more or waste space.
People may not have more time, but they can divert time to books, and they can divert re-reading time to new-book reading time.
[+] [-] chatmasta|11 years ago|reply
The error in your logic is that the size of the market for a given book actually depends on the price of that book. There's millions of books out there. Why would I pay $1000 for one when I can get so many others for $5? By lowering the price of books, Amazon increases the market size of each one.
There's also some behavioral economics involved, as I would assume people are far more likely to make a $5 impulse purchase (and look at that, Amazon has "one click send to Kindle!") than a $15 one.
[+] [-] jamesaguilar|11 years ago|reply
They make $3 on every sale, so obviously it is in their interest to set the price to maximize revenue.
Your whole bit about "everyone doing it" and "race to the bottom" is an instance of the zero-sum fallacy.
[+] [-] bowlofpetunias|11 years ago|reply
Once piracy becomes an easily accessible and socially acceptable mainstream habit, it's going to be very hard to claw back market share.
Right now, ebook piracy is by far not as easy and convenient as video or music. That could change as long as ebooks remain overpriced compared to physical books, and DRM impaired to boot. (Sooner or latter the general public is going to find out the hard way how much DRM devalues their "property".)
I dunno about the US, where Amazon is king, but in most countries ebook adaption is stagnating and price is quoted as the #1 reason.
[+] [-] x0x0|11 years ago|reply
[+] [-] lotsofmangos|11 years ago|reply
You seem to have not understood what books are for.
[+] [-] ashr|11 years ago|reply
[+] [-] bambax|11 years ago|reply
So the "total revenue" figure is pretty abstract; publishers (or authors, or distributors, or anyone, really) don't need to consider media as completely separate; what matter is total sales, including paper, on-demand, and ebooks.
[+] [-] walterbell|11 years ago|reply
[+] [-] bsder|11 years ago|reply
So, if Amazon takes $5, then whoever provided the book lost money on that deal. (Profit went from $10 to $5 while sales did not double). In fact, if Amazon takes more than about $4, it's a wash (which is actually a loss because some of those 75% more customers would likely have bought the book later at a different price point). If, Amazon takes $3, profit goes up by about 2% maybe 3%, if and only if that 74% increase occurs. If that increase doesn't happen, sucks to be the publisher, but Amazon's profit went up.
If Amazon wants to move more Ebooks, why doesn't Amazon reduce the amount they take? Simple, because it doesn't pay in profit. So, Amazon wants somebody else to eat the price drop. Not exactly altruistic.
All of the arguments about Ebook (less distribution cost, marginal volume cost, etc.) apply MORE to Amazon than the publishers. The publishers at least have to find authors. Amazon does, what, exactly, to justify taking $3 an Ebook? Um, right, it provides the market domination that is effectively a monopoly to the point that it thinks it can dictate pricing to publishers.
[+] [-] krschultz|11 years ago|reply
That seems like a hard won data point, I'm surprised they threw it out to the public domain. It makes intuitive sense to me though. I buy a lot of ebooks and when they're really cheap I just buy them immediately rather than track them somewhere to go and purchase when I have time to read them later. My kindle has probably a half dozen books to read on it at the moment, and I imagine if they were $20-30 each I wouldn't be that flippant about it.
[+] [-] SDGT|11 years ago|reply
"Why not buy this game if it's only $5?"
20 minutes, 10 purchases, and $50 later with another set of titles to stale in the library.
[+] [-] WalterBright|11 years ago|reply
[+] [-] fpgeek|11 years ago|reply
https://kdp.amazon.com/help?topicId=A22DBITFA52H1S
I imagine there's some sort of non-disclosure agreement attached to specific results (which is why I said effectively), but the universe of people that have access is so large (every KDP author), I don't think that matters much in practice - especially for general data points like this one.
[+] [-] nickporter|11 years ago|reply
[+] [-] nsx147|11 years ago|reply
Shots fired
[+] [-] coryl|11 years ago|reply
What do publishers even do with regards to e-book distribution? Are they going the way of the record label company?
[+] [-] wdewind|11 years ago|reply
IMO they are going the way of the record label. Some publishing houses and record labels will continue to add value, while larger ones who used to use their brand to add value and had scaled to a point where that is their main value proposition are going to have a hard time, as we are seeing right now in OP.
[+] [-] krschultz|11 years ago|reply
Are they worth 35% of the profit? I don't think so. But probably more than 0%. I personally think it should be 70% author, 20% publisher, 10% Amazon.
[+] [-] rbehrends|11 years ago|reply
Second, publishers also make losses on books that don't sell and that they have to recover. The majority of books don't actually sell a whole lot of copies, so the fixed costs associated with producing a book can be a pretty high percentage of revenues for the average book.
Finally, publishers provide editing, translation into foreign languages or negotiation with foreign publishers (assuming your agent didn't retain translation/foreign publication rights), production, marketing, accounting and sales services, distribution, and warehousing (for dead tree books).
Note also that you can equally ask what Amazon provides with regards to ebook distribution: In the end, it's just another middleman that got a head start because it was first to market with the Kindle, but is otherwise unnecessary. In some markets, publishers selling directly to readers (on non-Kindle platforms) makes up a significant part of sales.
[+] [-] matthewowen|11 years ago|reply
Are venture capital firms going to go the way of the record label company?
[+] [-] isomorphic|11 years ago|reply
This is an important point when you consider the vendor lock-in of the Kindle "ecosystem." Instead of "e-book," a better phrase might be "Kindle software."
Amazon should be careful of throwing stones about illegal collusion as they approach market domination. It will be very easy for them to make a mistake which runs afoul of anti-trust law.
[+] [-] jpatokal|11 years ago|reply
http://gyrovague.com/2013/03/26/down-down-down-books-e-books...
Some crappy code for pulling these stats from Amazon:
https://github.com/jpatokal/amazon-price-watcher
[+] [-] cstross|11 years ago|reply
http://whatever.scalzi.com/2014/07/30/amazons-latest-volley/
(Shorter Scalzi: Amazon are presenting as "good for authors" policies which, in fact, are only indisputably "good for Amazon"; the only authors they might be good for are those who cleave unto Amazon like limpets and don't do business with the other 70% of the book distribution business, and even then, it's somewhat questionable: Amazon's T&C's for authors publishing directly are invidious and include binding arbitration clauses and boilerplate giving AMZN the right to vary their terms unilaterally -- meaning AMZN basically have those authors by the short and curlies, in a manner that no real publishing company even attempts in their author contracts.)
[+] [-] mcguire|11 years ago|reply
"Amazon’s assumptions don’t include, for example, that publishers and authors might have a legitimate reason for not wanting the gulf between eBook and physical hardcover pricing to be so large that brick and mortar retailers suffer, narrowing the number of venues into which books can sell."
So Scalzi and Hachette want me to subsidize Barnes & Noble? Mighty nice of them.
"...it appears to come with the ground assumption that books are interchangable units of entertainment, each equally as salable as the next, and that pricing is the only thing consumers react to."
That's an interesting statement to appear next to the Kirkus review of Lock In: "...yet more evidence that Scalzi is a master at creating appealing commercial fiction." My impression is that Amazon is more correct than Scalzi concerning the specific market in "commercial fiction".
Further, I'd be a little more sympathetic to him if he didn't include the argument, "...then I feel perfectly justified in considering your cost of production position vis a vis publishing as entirely hypocritical," if the publishing industry had not made that same argument for all of the price increases in the thirty years previous."
And then, of course, there's the bit about "Which is to say that between my publisher and Amazon, one of them gets to utter the immortal Darth Vader line “I am altering the deal. Pray I do not alter it further” to authors doing business with it and one does not."
It contrasts entertainingly with the fact that neither he nor his publisher are operating under the terms of the Kindle Direct agreement with Amazon, although I suspect his publisher has more authority than he admits, if he wants to get anything new published. Also with the fact that "Amazon is just 30% of the market."
[+] [-] opendais|11 years ago|reply
I easily see #3 resulting in the bottom end selling at $5 and the top end selling at $9.99 because I suspect the reason Amazon picked that number is, overall, it generates more total sales [by dollar volume]. One of the few things Amazon is good at is accurately pricing products to maximize gross revenue.
That being the case, I don't think its likely to be the disastrous price point Scalzi thinks it is even if it squeezes the publisher's margins on the higher end books. Ebooks, once created, are a sunk cost...not an ongoing one so maximizing gross revenue works in everyone's favor.
[+] [-] ghshephard|11 years ago|reply
". And that 74% increase in copies sold makes it much more likely that the title will make it onto the national bestseller lists. (Any author who's trying to get on one of the national bestseller lists should insist to their publisher that their e-book be priced at $9.99 or lower.)"
Well, that's all well and good until everyone prices their e-books at $9.99 or lower, at which point we're back to square one. Unless the objective is to then have people who want a leg up to price their books at $8.99...
Also got a bit nasty when they mention, "ilegally colluded with their competitors" - was this ever established? I thought the publishers settled before it went to court, and only Apple was found guilty.
Finally, Love how Amazon is now trying to drive a wedge between the publishers and authors - "While we believe 35% should go to the author and 35% to Hachette, the way this would actually work is that we would send 70% of the total revenue to Hachette, and they would decide how much to share with the author. We believe Hachette is sharing too small a portion with the author today, but ultimately that is not our call."
This is Amazon turning up the heat on the publishers. Remember, Amazon/Bezos are ruthless - they could not care at all what is fair - but they are going to use every tool in their kit to win at this negotiation.
[+] [-] shiven|11 years ago|reply
I fail to see how the authors getting 35%, unhindered by the publisher's whims, can be unfair.
[+] [-] tedks|11 years ago|reply
Does any company of that size care what's "fair"?
[+] [-] jamesaguilar|11 years ago|reply
In what sense? In the sense that we know to a fairly high degree of certainty that it happened? Yes. In the sense that you would never lose a libel suit for saying that it happened? Also yes. In the sense that a final judgment was entered in a trial case to this effect? Only then would the answer be no.
[+] [-] spindritf|11 years ago|reply
No. At least not according to OP. They suggest that books compete against other forms of information and entertainment and that below $9.99 a larger share of that market would be occupied by ebooks.
[+] [-] fpgeek|11 years ago|reply
Is this an implicit admission that Amazon is eating the cost of those returns? Or do they mean something specific like the physical infrastructure for returns?
[+] [-] preinheimer|11 years ago|reply
What % I get when it's sold (kindle or dead tree) is absolutely none of Amazon's business. I negotiated with my publisher (not Hachette), I'm happy with the results, I don't need other people telling me what's best.
[+] [-] bambax|11 years ago|reply
If you're an author the absolute best you can hope to get is 35% of the sale price -- that is, the price your readers are willing to pay to read your work. Usually, it's even much less.
The publisher keeps at least 35%; the distributor, 30%. It's unclear to me what value these actors are offering, for this amount of money.
Disintermediation hasn't happened yet (what happened is, Amazon took the place of bookstores, and publishers are still around).
But disintermediation will happen eventually; when that day comes this discussion will sound silly and strange.
[+] [-] andor|11 years ago|reply
But what is the alternative for those customers: do they maybe buy the paperback version instead? If that's the case, Hachette might miss out on revenue, but they also keep their paper-based business running and stay somewhat independent of Amazon.
[+] [-] hownottowrite|11 years ago|reply
http://newscienceofretailing.com
[+] [-] credo|11 years ago|reply
Their post is titled "Update re: Amazon/Hachette Business Interruption". However, they don't state what their specific demands are and why the business was (in their words) interrupted.
Amazon's proclaimed objectives aren't as important as knowing what their specific demands (from Hachette) are. I'm not a book-author, but as a developer, I set the prices of the software products I develop (Apple and Google let me do that, Amazon doesn't). So my sympathies are with the book publishers, but even if they weren't, I'd still like Amazon to explicitly spell out their demands instead of using self-serving pricing elasticity theories to sway public opinion.
[+] [-] gergles|11 years ago|reply
[+] [-] notatoad|11 years ago|reply
[+] [-] matthewowen|11 years ago|reply
[+] [-] hartator|11 years ago|reply
Won't this mean actually the reverse?
[+] [-] unknown|11 years ago|reply
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[+] [-] a3n|11 years ago|reply
Well, with Amazon there could be lost sales due to refusing to stock/sell.
[+] [-] WalterSear|11 years ago|reply
Despite Amazon's talking points, they are relatively price inelastic. Perhaps, right now, they aren't, since people are still dealing with market novelty, but over the long term, time is a bigger sink than money, when it comes to books.
[+] [-] joshAg|11 years ago|reply
If I stop collecting books, can I become a people? Is there like a specific process or licensing body?
[+] [-] nnethercote|11 years ago|reply
I'd be surprised if your data was better than Amazon's.
[+] [-] walterbell|11 years ago|reply
Ever "follow" someone on social media because you like their writing? Collecting books from an author is like that, except that you're also feeding the author, so they can write more books for you to read. So you get 64,000 words in a book instead of 64 words in a tweet.
A lower starting price increases the initial pool of people who are exposed to an author's fiction or non-fiction worldview. Authors need more input into the price curve which modulates growth of their community of readers. Neither publisher (old boss) nor Amazon (new boss) is maximizing the use of technology to improve relationships between reader-people and writer-people.
[+] [-] RexRollman|11 years ago|reply
[+] [-] lotsofmangos|11 years ago|reply
I'm reading less at the moment than I used to, but I regularly have periods of reading around three novels a week. If it were not for the existence of libraries and second hand book stores, I would find money to be a far bigger restriction than time, especially when I was a teenager.