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Sunday, April 25, 2010

Amazon v. Print Publishers

We've covered the story of Amazon's battle with print publishers over e-Book pricing. The Christian Science Monitor has a concise summary of the strange number game behind this battle. In short, it's all about defining the market, for now, rather than profits. Here is a summary of the players'...shall I call it voodoo economics? Nah, that dredges up too many dead topics. Um, here is a summary of what the players want:

Amazon: dear Sirs and Madams: we'd like to buy your e-Books for $13 and sell them for $9.99. Thank you.

Dear Mr. Bezos: thank you for your concern. However, for your benefit, we prefer that you make a nice 30% fee for selling our e-Books. $18.50 sounds like a much nicer retail price.

Motives: Amazon is willing to lose money for now to set the buyers' expectations for low prices for e-Books and own the market. The publishers cringe at the effect that such a low price for e-Books will have on print book sells. Who's in charge here?

In another related article, I saw another motive: Amazon allegedly wants to take the "middle man" (publishers) out of the equation and deal directly with authors.

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Tuesday, February 2, 2010

Muscular Macmillan Wrestles Amazon on eBook Pricing

I've let this story percolate for a while until it took a direction: the publishers' fight with Amazon over eBook pricing. Amazon has been selling eBooks of newly released books for $9.99, which some publishers consider predatory and which undermines their print book sales.

This story has been covered extensively, which is not surprising. SFWA now has a nice article summarizing this issue following Macmillan's muscular move to control its products' pricing on Amazon. Macmillan changed its terms of sale from the wholesale model, in which resellers buy at a discount and sale at any price they wish, to an agency model, in which the reseller takes a commission from the sales. Under the latter arrangement, Amazon would have to sell new Macmillan titles in eBook form at prices starting at just under $13 USD. Amazon responded by yanking the "Buy" button from Macmillan books, but later recanted. It did not go unnoticed that this decision was made in the shadow of Apple's acceptance of the agency model for its new Apple iPad.

Here is SFWA's article on Macmillan vs. Amazon by Victoria Strauss.

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Thursday, January 7, 2010

eBook Market Analysis

Here is an interesting analysis of the fledgling eBook market and its relationship to the traditional book market. The analysis was done by TBI Research, a new market newsletter that will eventually be a subscription-only publication. I found this by way of agent Kristen Nelson's Pub Rants blog (highly recommended). Adding to the interest of the article are the comments that round out the coverage, including one by Tim O'Reilly, the publisher of the "O'Reilly zoo" software/Internet-related books found profusely in a bookstore near you.

One of the main points of the article is that Amazon is nearly alone, at present, flexing its muscles trying to bring down the cost of eBooks, while losing $2 per sale. It seems logical that eBooks should be cheaper to produce, and they are to a degree, but the degree is not as flexible as one might expect. There are many analogs between the newspaper print/online shakeouts that are happening now and the eBook/online/print book industry. It will be bloody.

One commenter mentioned that eBooks can be sold as iPhone apps. I think the iPhone app market is telling. Presently, many game and utility apps sell for $0.99. The reasoning is that people will pay 99-cents for anything on a lark, even apps that merely make rude noises...and sell 20,000 copies nearly instantly. I'm not suggesting that the book market can sell new books at that price level (and pay the authors a reasonable amount!), but part of the struggle is to find the what-the-heck level for eBooks. There is a point where print copy buyers eyes will arch at a bargain and past non-readers will say, what-the-heck.

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