Left Coast Voices

"I would hurl words into the darkness and wait for an echo. If an echo sounded, no matter how faintly, I would send other words to tell, to march, to fight." Richard Wright, American Hunger

Economic Greed or Strategic Conspiracy?

There have been numerous discussions regarding the correct price of ebooks, including on this blog. While Amazon has allowed publishers and authors to lower the price of their books, they have resisted allowing them to raise the price above $9.99.

This has generally been seen as a commitment to market penetration (helping the reader to become used to purchasing ebooks through offering an attractive price). The question is: why are so many publishers resisting?

The publishers, McMillan, recently confronted Amazon’s policy and told the online giants that they planned to sell their ebooks at a higher price. They wanted to maintain the right to set the price of the book, allowing the retailer (Amazon, Nook, iPad etc.) to set their own commission percentage.

Amazon refused to accept this and actually pulled the “buy now” buttons from the Amazon.com pages of McMillan books (both their ebooks and tree books). While a compromise was quickly reached, the impact of Apple’s iPad and their willingness to accept the agency model that McMillan and other publishers prefer, has led to an erosion of Amazon’s ability to control the price of ebooks.

What puzzles me is why are publishers (and many authors) preferring to raise the price of ebooks especially given that the market is still in its nascent strange? True, they will make more money per copy, but surely they realize that they are going to sell considerably less copies.

Many authors (non A-list) are discovering that once their ebook price drops to less than $5, or even $3, given that Amazon are now offering an unprecedented 70% royalty, their sales become far more prolific. Sales of Oilspill dotcom grew when I reduced the ebook price to $4.99, and Amazon have since dropped it periodically to as low as $3.17.

Given that one assumes the publishing houses have economists with strategic experience, is their decision to raise the price above $10 simply short-term greed, or is it a subtle strategic decision to try and slow the growth of the ebook market.

I doubt I would have thought this a few years ago, but given the recklessness of financial institutions, housing and energy multinationals, doesn’t it make you wonder?

Alon
http://www.alonshalev.com/

Oilspill dotcom is available on Amazon’s Kindle for the price of a large, fancy cup of coffee. Be warned: the coffee gets cold before you finish the first third of the book!

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4 thoughts on “Economic Greed or Strategic Conspiracy?

  1. Gerardo Javier Gálvez Arellano on said:

    Writing a good in depth book about a rather “difficult” subject can cost an author between 5,000 and 10,000 hours of very hard work. Unless this hypothetical author is surrounded with dozens of top level assistants, secretaries, etc., that also cost a lot of money that someone should pay, s/he is going to put in a lot of work and very probably also money from his pocket. Making a good great book means years of hard work preceded by years of learning and gaining very costly experience and God’s help. Within the covers of a good book you may have the life or a good part of the life of an author. It does not matter if you publish it in paper that has an extra cost and take down a few trees or you publish it in digital form. How much is worth an eBook? I know that first hand because I am the author of an eBook that was previously printed in paper. How much is worth 10,000 hours of work of an expert in a field? How many copies of the book should be sold for the author to recover the investment of time and money that he did? The author more likely will be thinking about transferring ideas and knowledge rather than making money. Should we be fair with the work of an author? Is it convenient for the world to treat well an author? But it is true we expect for an eBook to be cheaper than the paperback or hardcover. But the author should get a good reward for the effort that he put in. Probably as the author sells more and more the price of the book should be going down until it is almost given for free. Restricting the price to under $10 when the retailer will keep a percentage does not seem a good idea. But I hope for a world in which books can be within the reach of every body. Probably at the end the market itself will establish the right price. How much is worth an eBook? It is a tough question to answer but we should find the answer to successfully sell a book and have a happy author willing to continue his fine work.

    • I think you make a very legitimate point, Gerardo. We need to separate fiction and non-fiction. Your time is an important part of the equation. My only concern with your book being priced the same, whether as an e-book or tree-book, is that people will choose the tree book. My only contention with what you write is that we are talking about more than ‘a few trees.’ It is also the resources used in transportation, storage, handling etc.

      Good Writing,
      Alon
      ALON SHALEV
      Oilspill dotcom – in paperback & currently on Amazon’s Kindle for $3.19.
      More info at http://www.alonshalev.com/

      • Gerardo Javier Gálvez Arellano on said:

        Alon: By what you say it is becoming clear to me that an eBook should be priced may be half the way the price of that same book in physical form. I failed to mention that I published my book in physical form (or as you rightfully, properly, call tree form) some years ago by myself. Also I realize that a lot of work was put into the recording that accompanies by book even when the actual recording was carried out by highly prepared professional people but working in tandem with me. The reader that buys the eBook saves also money from not paying freight. The idea of separating fiction from not fiction seems to me as a very clever idea but without belittling the efforts of very talented people that write fiction. Now I am struggling with the idea of how much to price my book and audio that with the advent of computers and Internet and the push toward e-writing I am now publishing as an eBook. This conversation helps me much. I am going to price it at a price that I consider fair and my only concern is that a student may not have the cash required to pay for it. And I would be lowering the price if necessary according with how the market responds always with the idea in mind to sell it finally at the lowest possible price to keep the operation sustainable and providing a reasonable income to me. How do this ideas sound to you? That feedback is extremely important to me.

  2. Gerardo Javier Gálvez Arellano on said:

    Alon Shalev: You are an excellent writer.

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