ebook pricing

Shocking WSJ Discovery: Higher Prices=Lower Volume!

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This piece by Barry Eisler originally appeared as a guest post on A Newbie’s Guide to Publishing on 8/4/15.

Barry Eisler here. Joe, thanks as always for the guest slot. I was going to mock this Wall Street Journal article somewhere, and there’s no better place than A Newbie’s Guide for that…

So okay, today the Wall Street Journal ran a piece headlined, “E-Book Sales Fall After New Amazon Contracts: Prices Rise, but Revenue Takes a Hit.” The article is behind a paywall, but you can access it by cutting and pasting the headline into your browser and clicking on the result of the search.

I just want to make sure I’m the first to congratulate the Wall Street Journal on its shocking discovery of a correlation between higher prices and lower demand. And, while I’m no economist, I’d like to humbly propose that the WSJ call its discovery something like, “The Demand Curve.” If this doesn’t win the newspaper a Pulitzer, I have one more suggestion: an even more radically new article on how a round object fastened to an axle can work as something called…a wheel.

Apologies for the snark, but where else but in publishing could a notion like “higher prices lead to lower revenues” even be controversial, let alone newsworthy? But the publishing industry is notoriously special, and Joe has been beating this drum for years. Five years ago, he wrote:

Naturally, people would rather pay less for something than more. And in a digital world, like we’re rapidly becoming, consumers have shown consistently in other forms of media that they place less value on downloads than on physical products.

When companies price digital content too high, consumers respond by pirating that content. That’s the ultimate in “devaluing.”

 

Read the full post on A Newbie’s Guide to Publishing.

 

Soliloquy on Book Prices (or How I Learned To Love eBooks)

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This post by Greta van der Rol originally appeared on her site on 5/17/15.

You know how sometimes things you’ve been reading/talking about kind of merge? That happened to me this morning. Somewhere I read about author earnings and the cost of books. Somewhere else I wrote an article about the power of the franchise in writing and that led me to the Thrawn trilogy and mention of a book where Grand Admiral Thrawn is an important, though rarely visible, character and that led me to dig out that very same book. Troy Denning’s Tatooine Ghost, to see if I still thought it was as good as I remembered.

I’ve also been re-reading one of my favourite books, McDevitt’s Slow Lightning. It’s face down on the desk beside me as I write. And the sticker with the price is waving at me.

I bought the book (a 5×8 paperback) in about 2003. It cost AU$19.95 from Readers Feast in Melbourne. Same for Tatooine Ghost.

Wow, I thought, glancing along a row of paperbacks on a shelf (just one row). There’s over $400 worth of books there. At least, that’s what I paid for them. They’re worth squat now. And as for that glass—fronted cabinet behind me, the one full of hardbacks… Then I thought some more and wondered if these prices were from before the Big Row about book prices. I don’t recall the details, but it was all about the excessive cost of books in Australia. So I thought I’d check the current price of some of those books.

 

Read the full post on Greta van der Rol’s site.

 

How to Price Your Work on Amazon

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This post originally appeared on Writer’s Circle.

So you’ve decided to publish a book on Amazon (and hopefully read our helpful guide for doing so). Before those pages hit the presses – or the Kindles – you’ll need to price your work on Amazon, and we’re here with a bit of advice on finding the right price for your readers.

Think about your motive. This is a great tip from Publishers Weekly, which advises writers to think about the purpose of their book: readership or revenue? Ideally, of course, you could get both, but a lower price will likely earn more readers (e.g. people will be more willing to try a new e-book author when the price tag is only a buck or two) while a higher price could earn you more revenue. The latter is true, of course, especially if you already have an established fan base – but many new authors prefer to price on the lower side to attract new readers.

Consider paperback vs. e-book. E-books should not cost as much as paperback books, for two reasons: Firstly because fewer resources are needed to publish the work, and secondly because research shows that expensive e-books don’t sell well, according to Mill City Press. While paperbacks can easily find success priced above $10, e-books do best when priced between $2.99 and $9.99 – in fact, PBS says $3.99 seems to do really well.

 

Read the full post on Writer’s Circle.

 

May 2015 Author Earnings Report

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This post originally appeared on Author Earnings in 5/15.

Welcome to the May 2015 Author Earnings Report. This is our sixth quarterly look at Amazon’s ebook sales, with data taken on over 200,000 bestselling ebooks. With each report over the past year and a half, we have come to see great consistency in our results, but there is always something new that surprises us. Often, it’s something we weren’t expecting, like the massive shadow industry of ISBN-less ebooks being sold, or the effect Kindle Unlimited has on title visibility. This time, we went into our report curious about one thing in particular. But we were still not prepared for what we found.

If you’ve been shopping for ebooks on Amazon lately, you may have seen this new addition to many ebook product pages:

Nelson Book

This announcement can be found on ebooks from several of the largest publishers, and it appears to serve as both an apology from Amazon and also a shifting of the blame for high ebook prices. Amazon has stated in the past that they believe ebooks should not cost more than $9.99. Self-published authors are no doubt familiar with this price constraint, as their royalties are cut in half if they price higher than this amount. But after a contentious and drawn-out negotiation with Hachette Book Group last year, Amazon relinquished the ability to discount ebooks with several publishers. Prices with these publishers are now set firmly by them.

 

Read the full report on Author Earnings.

 

‘Who Decided Our Worth?’ Do Free Books Give Away Authors’ Value?

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This post by Porter Anderson originally appeared on Thought Catalog on 1/28/15.

‘There’s Something Badly Wrong’

For those following the industry! the industry! in its digital melodrama, tossing books to the crowd free is not new.

But the question of whether today’s plethora of free offers may devalue books and/or authors in readers’ minds is not going away as easily as some folks wish it would.

The London-based author Roz Morris (both traditionally and self- published) became concerned enough about the issue this week to write Free book giveaways – when do they work? When don’t they? In it, she writes:

I’ll admit that I worry we give away our work too easily. If we create a culture where a book costs less than a sheet of gift-wrap and a greetings card, there’s something badly wrong. An ebook may not have material form, but it does give you more time and experience than something you glance at and throw away. And tellingly, the people who get cross with me for speaking out are the ones who say they refuse to spend more than a couple of dollars on a book, or berate me for not putting my books into Kindle Unlimited.

Indeed, the question of her headline — when do free books work? — is not the interesting part.

 

Read the full post on Thought Catalog.

 

The Self-Publishing Sky is Not Falling

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This post by James Scott Bell originally appeared on The Kill Zone on 1/11/15.

Toward the end of last year a meme started to develop, asserting that the salad days of self-publishing are over. Only spotty hors d’oeuvres remain. One blogger put it this way:

I’ve been luckier than many Indie writers. I heard the complaints about falling sales, but for a time I hung in there, made more money every month than I had the previous month. But then the other shoe dropped and my royalties, rankings and readership tanked. New readers are not discovering me as they’ve done for years. I can’t ignore reality. Things might pick up, but I doubt it. And I’m not taking any chances.

Much of this despair was drummed up because of what many authors experienced in the Kindle Unlimited program. Indie superstar H. M. Ward had this to say:

Ok, some of you already know, but I had my serials in [KU] for 60 days and lost approx 75% of my income. That’s counting borrows and bonuses. My sales dropped like a stone. The number of borrows was higher than sales. They didn’t compliment each other, as expected.

Kristine Kathryn Rusch, one of the more astute observers of the writing biz, wrote that the “gold rush” is over, and that 2014 became “The Year of the Quitter.”

 

Read the full post on The Kill Zone.

 

Ebook Publishing Gets More Difficult from Here – Here's How to Succeed

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This post by Mark Coker originally appeared on the Smashwords Blog on 11/19/14.

First the good news.

For indie (self-published) authors, there’s never been a better time to publish an ebook. Thanks to an ever-growing global market for your ebooks, your books are a couple clicks away from over one billion potential readers on smart phones, tablets and e-readers.

As a Smashwords author, you have access to tools, distribution and best practices knowledge to publish ebooks faster, smarter and less expensively than the large publishers can. In the world of ebooks, the playing field is tilted to the indie author’s advantage.

Now the bad news.

Everything gets more difficult from here. You face an uphill battle. With a couple exceptions – namely Scribd and Oyster – most major ebook retailers have suffered anemic or declining sales over the last 12-18 months.

The gravy train of exponential sales growth is over. Indies have hit a brick wall and are scrambling to make sense of it. In recent weeks, for example, I’ve heard a number of indie authors report that their sales at Amazon dropped significantly since July when Amazon launched Kindle Unlimited (I might write about Kindle Unlimited in a future blog post). Some authors are considering quitting. It’s heartbreaking to hear this, but I’m not surprised either. When authors hit hard times, sometimes the reasons to quit seem to outnumber the reasons to power on. Often these voices come from friends and family who admire our authorship but question the financial sensibility of it all.

The writer’s life is not an easy one, especially when you’re measuring your success in dollars. If you’re relying on your earnings to put food on your family’s table, a career as an indie author feels all the more precarious.

At times like this, it’s important for all writers to take a deep breath, find their grounding, remember why they became an author in the first place, and make important decisions about their future. It’s times like this that test an author.

Don’t fail the test.

Back in December, in my annual publishing predictions for 2014, I speculated that growth in the ebook market would stall out in 2014. I wrote that after a decade of exponential growth in ebooks with indies partying like it was 1999, growth was slowing.

I wrote that the hazard of fast-growing markets – the hazard of the rapid rise of ebooks – is that rapid growth can mask flaws in business models. It can cause players to misinterpret the reasons for their success, and the assumptions upon which they build and execute their publishing strategy. Who are these players? I’m talking about authors, publishers, retailers, distributors and service providers – all of us. It’s easy to succeed when everything’s growing like gangbusters. It’s when things slow down that your beliefs and underlying assumptions are tested.

I urged authors to embrace the coming shakeout rather than fear it. Let it spur you on to become a better, more competitive player in the months and years ahead. Players who survive shakeouts usually emerge stronger out the other end.

 

What’s causing the slowdown?

While every individual author’s results will differ from the aggregate, I think there are several drivers shaping the current environment.

 

Read the full, lengthy post, which includes further analysis and specific action items, on the Smashwords Blog.

 

Why the Amazon–Hachette Deal Is Likely Good for Writers and Publishers

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This article by Vauhini Vara originally appeared on The New Yorker on 11/14/14.

The end of the months-long impasse between Amazon and Hachette over e-book pricing was a bit anticlimactic for those who had been watching the drama unfold. For months, the companies and their supporters had been accusing each other of bad behavior, warped motives, and plain dimwittedness. At one point, Amazon, apparently hoping to put pressure on the publisher, began delaying shipments of hard copies of Hachette-published books ordered through its site, to the ire of those books’ authors. In response, many writers signed an open letter from a group called Authors United, begging Amazon to back off; later, Authors United announced that it would ask the U.S. Department of Justice to investigate whether Amazon’s delays, or other tactics, amounted to antitrust violations.

Journalists covered each of the escalations attentively, and the negative publicity hurt Amazon’s reputation and maybe even its bottom line. The company posted disappointing earnings results in late October, including the slowest growth it had seen for North American media sales (which includes books, movies, and music) in more than five years. But then, on Thursday morning, the companies issued a joint press release announcing that they have agreed to make Hachette responsible for setting e-book prices, as Hachette is thought to have sought. It is believed that Amazon, which has typically favored keeping e-book prices low, had hoped to set those prices itself. Instead, with this agreement, Amazon will, according to David Naggar, Amazon’s vice-president for Kindle, offer “specific financial incentives for Hachette to deliver lower prices.” The agreement will take effect in early 2015.

 

Read the full article on The New Yorker.

 

Big Publisher Bashing Again With Fictional Facts

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Today we present two opposing viewpoints from industry professionals regarding the Amazon/Hachette dispute. This post by Mike Shatzkin originally appeared on The Shatzkin Files on 9/14/14, and was written in rebuttal to the Clay Shirky piece we are also sharing today (link to the full Shirky’s post included immediately below).

The estimable Clay Shirky has written a lengthy piece called “Amazon, Publishers, and Readers” on medium.com saying, essentially, that an Amazon-dominated world would be an improvement over the Big Five “cartel”-dominated world of publishing we have today. This is an apples to oranges comparison. The Big Five are not nearly as broad a cartel as Amazon — which reaches way beyond the consumer books they publish — is a monopsony. Amazon touches much more of the book business than the Big Five publishers do. To make his case, Shirky recounts some very questionable history and employs some selective interpretation to get from his own impression of the current Hachette-Amazon dispute (about which he says “Amazon’s tactics are awful, the worst possible in fact”) to a completely different conclusion.

My complaint with the facts and logic start at the top: with the two paragraphs Shirky uses to set up his argument and establishes the “holier-than” context for his position. He says:

Back in 2007, when publishers began selling large numbers of books in digital format, they used digital rights management (DRM) to lock their books to a particular piece of hardware, Amazon’s new Kindle. DRM is designed to transfer pricing power from content owners to hardware vendors. The publishers clearly assumed they could hand Amazon consolidated control without ever having to conspire with one another, and that Amazon would reward them by passing cost-savings back as inflated profits. When Amazon instead decided to side with the customer, passing the savings on as reduced price, they panicked, and started looking around for an alternative conspirator.

Starting in 2009, five of the six biggest publishers colluded with Apple to re-inflate ebook prices. The model they worked out netted them less revenue per digital sale, because of Apple’s cut, but ebooks were not their immediate worry. They wanted (and want) to protect first editions; as long as ebook prices remained high, hardback sales could be protected. No one had any trouble seeing the big record companies as unscrupulous rentiers when they tried to keep prices for digital downloads as high as they had been for CDs; the book industry went further, violating anti-trust law as they attempted to protect their more profitable product.

Almost every sentence of this is subtly or blatantly wrong.

1. Publishers did not begin selling large numbers of books in digital format in 2007. Amazon started Kindle in late November 2007. Significant sales of ebooks didn’t start to occur until after Christmas and continued to grow rapidly thereafter.

2. Although an uninformed person would be led to infer from reading this that DRM was somehow created for Amazon, in fact DRM was routinely used for ebooks for their entire existence before Kindle. DRM on Kindle continued current practice; DRM was not created for Kindle or at Kindle’s behest.

 

Click here to read the full post on The Shatzkin Files.

 

Amazon, Publishers and Readers

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Today we present two opposing viewpoints from industry professionals regarding the Amazon/Hachette dispute. This post by Clay Shirky originally appeared on Medium on 9/12/14.

In the current fight between Amazon and the publisher Hachette over the price of ebooks and print-on-demand rights, Amazon’s tactics are awful, the worst possible in fact: They are denying readers access to books, removing pre-order options and slowing delivery of titles published by Hachette. Amazon’s image as a business committed to connecting readers to books is shredded by this sort of hostage-taking. The obvious goal for readers in should be to punish anyone using us as leverage.

This skirmish will end, though, and when it does, we’ll be left with the larger questions of what the landscape of writing and reading will look like in the English-speaking world. On those questions, we should be backing Amazon, not because different principles are at stake, but because the same principle — Whose actions will benefit the reader? — leads to different conclusions. Many of the people rightly enraged at Amazon’s mistreatment of customers don’t understand how their complaint implicates the traditional model of publishing and selling as well.

Some of the strongest criticism of Amazon comes from authors most closely aligned with the prestigious parts of the old system, many of those complaints appearing as reviews of “The Everything Store”, Brad Stone’s recent book on Amazon and Jeff Bezos. Steve Coll, Dean of the Columbia Journalism School, wrote one such, “Citizen Bezos,” in The New York Review of Books:

At least two qualities distinguished Bezos from other pioneers of e-commerce and help to explain his subsequent success. The first was his gargantuan vision. He did not see himself merely chipping away at Barnes & Noble’s share of retail book sales; he saw himself developing one of the greatest retailers in history, on the scale of Sears Roebuck or Walmart. Secondly, Bezos focused relentlessly on customer service — low prices, ease of use on his website, boundless inventory, and reliable shipping. To this day, Amazon is remarkably successful at pleasing customers.

Coll does not intend any of this as a compliment.

He writes about book-making and selling as if there are only two possible modes: Either the current elites remain firmly in charge, or else Amazon will become a soul-crushing monopoly. The apres nous, le deluge!-ness of this should be enough to convince anyone that the publishers are bullshitting, but if your worry is market manipulation, the publishing cartel we have today has has already created decidedly non-hypothetical harms.

 

Click here to read the full post on Medium.

Click here to read Mike Shatzkin’s rebuttal to Shirky’s post, on The Shatzkin Files.

 

In Defense of Amazon

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This post by Neal Pollack originally appeared on Slate on 9/2/14.

I’m a writer, and my experience with this supposedly evil corporate behemoth has been fantastic.

Last August, Amazon flew about 80 writers on its Thomas & Mercer mystery and thriller imprint—including me—to Seattle for a conference. They put us up at the Westin downtown, a nice hotel by any standard, and spent the weekend feeding us well and serving us top-shelf booze at an increasingly fabulous series of parties. There were tourist outings, the usual conference mix of panels and workshops, and a non-stressful visit to the Amazon Death Star. Also, they gave us a free Kindle Paperwhite, a nice touch.

With a few exceptions, none of the writers at the conference were particularly famous; some had only published one or two books, all with Amazon. The Seattle trip wasn’t normal treatment for them, or for anyone. I’ve published books with independents and with big corporate imprints, and I’ve published books on my own. Each of these experiences was positive in its own way. But never before had I been treated quite like this. It felt like I’d entered a glorious new age. Amazon had given me a free sneak preview of what book culture would be like from now on.

As usual, I was naive.

 

Click here to read the full post on Slate.

 

What Does Amazon/Hachette Have to Do With Me?

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This post by Barry Eisler originally appeared on his blog on 8/9/14.

In connection with the $100,000 ad some reactionary authors bought to run in tomorrow’s New York Times, Amazon has sent a letter to its self-published authors. It’s a good read, with some interesting historical context, for anyone who values low-priced ebooks and fair royalties for writers. And if you want to share your opinion on those topics with the CEO of “Big Five” publisher Hachette, you can email him — just scroll down the Amazon letter. Here’s what I said:

Hi Michael, even if the Big Five (why would anyone imagine something called the Big Five could be a cartel?) still had the power to control the market — and you don’t — the best you could do through agency and windowing and the like is delay the inevitable mass market transition to digital. Is that really who you want to be? A reactionary, focused on shoring up the next quarter rather than expanding your opportunities for the long term?

I don’t want big publishing to die — I want it to get well. But to get well, you’re going to have to change the lifestyle that’s led to your ongoing decrepitude.

Please, think about the future. Think about your place not just in the Big Five, but in the world. Stop impeding what’s best for readers, writers, and reading. Don’t fight progress. Be progress.

Sincerely yours,
Barry Eisler
www.barryeisler.com

I’ve seen some interesting reactions to the Amazon missive. I responded to some of them over at The Passive Voice, which consistently has some of the best industry coverage I’ve seen (both for Passive Guy’s presence and the insights of the people who comment there). I’ll address those reactions here, as well:

1. Amazon and/or Hachette are trying to get me to do their bidding, drag me into their war, dragoon me, etc.

 

Click here to read the full post on Barry Eisler’s blog.

 

Michael Cader of Publishers Lunch In Conversation With J.A. Konrath

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This post by J.A. Konrath originally appeared on his A Newbie’s Guide to Publishing blog on 8/1/14.

Joe: Yesterday I fisked Mike Shatkin, who openly brags he doesn’t read my blog, and has removed my comments from his blog because he felt them too long.

I also fisked Michael Cader from Publishers Lunch.

Cader, however, showed he doesn’t fear debate, and had no problem sharing his opinion in a forum where many have a contrary point of view. He responded to my points in the comment section, and that took integrity and more than a little bit of guts.

Michael Cader: Hi, Joe. I’m glad we have at least some points of agreement. Some of your other replies are tangential rather than on point.

Joe: Thanks for responding, Michael. While it isn’t unprecedented for people I blog about to respond, it is certainly unusual, and shows both an open mind and a willingness to engage. You have my respect.

Cader: Amazon is very careful with their words, even if not elegant. The post begins, “A key objective is lower e-book prices.” A lot of traditional media have written the post up as if it said “The key objective…” What are the other key objectives, Amazon? Why do your conversations with people in the trade talk about looking for your fare share of the “business efficiencies” produced by a rising ebook market and your investments, while your public words are only about pricing objectives.

Joe: Well, we agree that Amazon is careful with their words. It’s unusual to hear an observation like that leveled as a criticism. Does Cader prefer the Hachette approach, which is to clear English what a chainsaw is to a tree…?

 

Click here to read the full post on A Newbie’s Guide to Publishing.

 

Amazon Speaks: We Want Lower eBook Prices from Hachette

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This post by Nate Hoffelder originally appeared on The Digital Reader on 7/21/14.

Amazon hasn’t said much concerning their ongoing contract dispute with the French media conglomerate Lagardère and its US publishing subsidiary Hachette, and today the retailer broke their silence with what is only their third official statement (not counting the leaked letter).

Like the first two statements, Amazon isn’t saying much. According to a message posted on Amazon’s forums (and copied below), one of the sticking points in the negotiations is the price of ebooks. We of course knew this from the WSJ interview in which Russ Grandinetti said little and avoided defending Amazon, but Amazon expands upon that earlier statement with a call for higher author royalties on ebooks.

The statement below lays out the math Amazon uses to justify their push for lower ebook prices, but it’s worth noting that the statement is somewhat misleading.

Amazon would like you to think that most ebooks can be priced at or below $10, even going so far as to point out that “there will be legitimate reasons for a small number of specialized titles” that will cost more, but what they hope you won’t realize is that they are glossing over whole swathes of nonfiction content, including textbooks, reference manuals, professional books, and works that are much longer and more expensive to create than your average novel.

 

Click here to read the full post on The Digital Reader.

 

Kindle Book Pricing and How the Big Guys Don’t Get It.

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This post by Dennis Blanchard originally appeared on the K1YPP blog on 7/10/14.

I love to read. For some reason, as a young reader, I missed many of the classics. I’ve made up for lost time over the years by “catching up.” Books like The Catcher In The Rye, Of Mice And Men, White Fang and On The Road have been books that I’ve only read in the last twenty years or so. The same goes for movies, I’ve caught up on The African Queen, Casablanca, The Godfather and others in the last few years. How did I miss them? I don’t know, perhaps I just spent so much time outside when I was younger, I just missed them. That is a subject for another time.

Yesterday, I read a news piece on CNN about an author that was gored running with the bulls in Pamplona. Bill Hillmann, author of “Fiesta, How To Survive The Bulls Of  Pamplona.” How ironic. It occurred to me that I had not read anything much by Hemingway recently, so I decided to take a look online and see if I could find his book, “The Sun Also Rises.” I figured that, surely, by now, it must be on Kindle for an inexpensive price, or perhaps, even free. Surely.

 

Click here to read the full post on the K1YPP blog.