Amazon concedes, grants $13-$15 e-book prices to Macmillan - Page 2

A lot of people have been talking about the huge savings in textbooks by going to an iPad/e-book model. This is great evidence that textbooks will only be as cheap as the publishers want them to be, and they'll only work on the e-reader of choice for as long as they want it to. I'm all for eliminating paper based books (just not an industry that can stand to exponentially grow over the next few decades), but anyone who thinks that books will be cheaper under the iPad/e-reader model is fooling themselves. You won't be able to buy used textbooks, you won't be able to sell your textbooks, you won't be able to give a textbook to a friend or younger sibling. Piracy will be rampant (as piracy is among the young who don't have a lot of money), and those of us who try and go the legitimate route will be paying for it.

Well, it will keep me from buying them.... It seems if you cut out the cost of printing, warehousing, shipping to retailers, the retailers cost of stocking, selling then the prices should be cheaper than what they are now. The only thing that keeps from using e-books full time is the costs are incrementally cheaper with a steep reduction in benefits. I only buy Kindle books (for the iPhone) if I can't make it to a store beforehand.

I think Macmillan's win is that they can determine what the market price for a book will be, which by their own statements won't simply be more but determined by the individual book.

Also I think this is to stop Amazon from setting themselves up as a Publisher and make the relationship more of an Agency one.

Let's rewrite that (CAPITALIZATIONS are mine):


That would be iTunes which bizarrely plays my music and videos while also syncing my calendar, contacts, and e-mail to my iPhone and offers to sell me music (by the track!), bonus content, videos and apps all in the same application and also activated my iPhone when I bought it! And its FREE!


A device with a 60% profit margin! None of the savings are passed on to you! http://venturebeat.com/2009/07/29/at...to-60-percent/ (or the original article at http://financial-alchemist.blogspot....bstantial.html)


Damn iTunes "Recommendations for you"! and that crazy "Genius" thing! Yeah, well, my massive iPhone app catalog is my own fault actually.

As someone already pointed out, this discussion was about eBook prices not music, TV shows or movies.

But lets see...


When it comes to music, I very rarely purchase anything from iTunes. Why? Because I buy whole albums and they can ALWAYS be found cheaper some place other than iTunes. Either via Amazon's mp3 store, Amazon's regular store or a local retailer. The only music that gets purchased from iTunes now are songs that are exclusive to the store. Also, please point me to the $0.69 songs on iTunes. The selection is so small as to be practically non-existent (and consists of content very few people ever consider purchasing). The same goes for any song under $0.99.

I also never buy TV shows from iTunes. Why? Because I'm stuck playing them in Apple-only devices. I generally never buy digital downloads of TV shows anyhow, but if I were I'd buy them from Amazon's On Demand service. Why? Because I have a choice of devices to watch them on (including the TiVo I already own instead of having to buy an AppleTV to have a decent TV viewing experience). If I want to own a season, I'll buy it on DVD or Blu-Ray because it can ALWAYS be found cheaper than iTunes (for DVD) or in the case of BR the quality is better than iTunes (or any other legal download service).

And movies are the same situation as TV shows. Stuck tied to Apple-only devices. Thanks but no thanks to the lack of choice. And at $4.99, some of those movies would be cheaper to buy on DVD than RENT on iTunes.

If by "up" you mean "upwards", as in helping to get the book dealers better deals and charging the end user more then you're correct. Amazon wanted to charge less, but because of Apple they no longer can. It's indirectly Apple's fault.

Let's be honest--for a digital book $13 to $15 is just wrong. The publishers should have the sense to go with the $9.99 model and sell many more books. In the long run I'd reckon they'd make "A LOT" more money. Less profit per book, sure, but a price point that would get many-an-iPad-owner in to the buying book 'habit'. You see they just see the price and their business sense ends there. I'd say I'd eventually buy an iPad but I won't be buying books at those prices, and not many will.

Apple held off as long as possible to keep music prices at $.99 because they know what will grow the market. Music publishers got greedy and finally forced prices up 30% to $1.29. If you recall, Apple wasn't even mentioning MacMillan at their event, probably because they wanted prices at $9.99 and MacMillan was being greedy in advance (thus the problem with Amazon.) So now they get their 30%-50% increases. The consumer loses by paying more; the publisher loses by getting less; Amazon and Apple win by getting more.

Yet another industry fails to understand how the interwebs function. If something is priced reasonably, then people will buy it, learn where they can legally get copies and will spend money. If it is priced unreasonably, then you are one step away from TPB (The Pirate Bay) and "free".

This is going to cause books to become third(or fourth) in pirated stuff after movies and music and/or software.

What is even more ridiculous is how these prices are pretty much based on hardcover prices. When distribution costs for e-books is only a fraction of that for a normal book.

Oh well. Maybe someday, these morons will learn.

Hi Guys,

I believe those who are disparaging Apple don't really understand how little best-selling authors make -- and how much Amazon was further limiting the compensation writers (and publishers) make from their books.

Until the pressure from iPad forced Amazon to change their compensation structure, Amazon was taking a whopping 70% of the sale from $9.99 e-books sold for the Kindle. That leaves a pitiful amount of money available for the publishers ... and even less for the authors who slave away to write great books.

(Many best-selling authors cannot even afford to write full time -- they must have another job in order to make ends meet.)

Under the new Apple 70-30 compensation structure (where the seller only takes 30%) that Amazon was forced to adopt in response ... the publishers/authors will make as much as $10.50 cents for every $15.00 e-book sold. This will make things much more sustainable for writing and publishing industries, and ultimately lead to better work.

And honestly, regardless of the savings that comes from not having to print and physically distribute the books, the content of a great book is still an amazing value at $12.99 - $14.99. There are so many books I've read that have changed my life, and if we continually push them to basement prices ... we devalue what authors do, and will ultimately starve a group of creatives who brings us ideas and content that greatly enhances our lives.

I'm all for conscious capitalism and fair free markets, but kudos to Apple for a) creating a new device that will facilitate more e-book sales .... b) dramatically enhance the reading experience (my opinion, based on what I've seen from the iPad's book app) ... and c) help better compensate dying publishers and struggling writers so that their industry, craft and contribution can grow.

I don't believe Steve Jobs is "saving" the publishing industry, but he is definitely helping it -- even if he is causing consumers to pay slightly more for information that is well worth the price.

That's my two cents.

Tony

I agree with all that and I'd add that I've been burned lately by apple's DRM on its music. Non-MP3 format is annoying to me right now, and I've hit the limit of machines i can authorize with the stuff i've paid for. In the end, I'd rather buy a CD and rip it.

n/m. Don't feed the trolls.

If you wish to play the songs you bought on iTunes on devices that don't use the apple format ACC then, in iTunes, select all the songs you want converted and ask iTunes to convert them into MP3, pretty much everything can play MP3.

I've just tested it so I know that works. Also, it is my understanding that as DRM has been removed from iTunes bough music (the price for this from the music companies was variable pricing) you can now do what you want with your music.

You can for example, in iTunes, select all of your music, convert it to MP3, then drag and drop the whole lot into a folder on your desktop and move it else where.

On the point of pricing and DRM it's important to note that none of us on these boards really know where the price comes from and what for. Does Apple want to reduce the cost of music but the music labels wont allow it? Do the music labels want to reduce the price of music but Apple refuse?

Certainly the recent deals in dropping DRM has proven that Apple never wanted DRM and removed it as soon as it was legal to do so, after taking steps to convince and bribe the music labels to make dropping it legal.

Really hope this was sarcastic comment, since you making me very nervous thinking increased prices indirectly by Apple is win.

You wouldn't lose your library everytime you lost your iPad (although expecting to lose an iPad multiple times probably means you should never consider one). Your books would be backed up to your computer from your itunes syncs. Time Machine could then back those files up again on an external hard drive, and you could even keep a hard drive backup outside of your home or utilize on online backup service. Electronic copies allow for far more redundancy than a physical copy, if you leave your book somewhere, it is gone, if your house burns down your entire library is gone (to be fair, that would probably be the least of your concerns). That doesn't have to be the case with digital versions.

I find it really amazing that people can somehow twist the ability to carry your entire library with you into a disadvantage. There are reasons to buy physical books, but protecting books from loss is not one of them.

Even $10 for an e-book is high, I think. There is no printing cost, little distribution cost, less-costly promotion because Amazon and Apple will do a lot of the promoting; plus, social media makes promoting much less expensive these days.

I think the only way to justify higher prices would be to include extra material, like videos or other things that may be expensive to produce.

It's not about price. It's about control over price. MacMillan saw that Amazon was using low ebook prices as a means to promote Kindle and they realized that a customer base addicted to cheap books is bad for their (MacMillan's) long term business. Just ask GM, Ford & Chrysler about rebates.

Oh yes they will try raising the price of ebooks but, the record company idiots notwithstanding, anyone who thinks a publisher will keep books overpriced well into its own corporate demise reveals an astonishing lack of common sense. Of course they'll try to feel out higher prices, if it sticks and piracy doesn't rise, then they'll stay with it. If it doesn't, then they won't.

"things have to cost money or people won't (can't) make them."
-exactly
@pmz, @Tonyflo: I agree. The only people who want to pay nothing for content are people who've never produced any themselves.

-Don't know if I exactly agree with MacMillan's price points, as I think the public does understand some of the reduced costs.

But goddammit, every time I hear of some broke-a$$ 16-year-old Klepto-Communist talking about how he's entitled to free content, and how he's going to try to steal something that I worked on for 2 years, I feel like cutting off the li'l f'er's head with a samurai sword.

How about this, you can steal all the content you want if you work 9-5 40h/wk job making at least $50k, but return all your paychecks and agree to work for free in exchange for the privilege. The idea of stealing from someone whose work you think is good enough to steal in the first place boggles the frakking mind.

You pay the ones you love to keep them in business.

Sounds like a good idea to me, if everyone did this, it wouldn't be perfect, but nothing is. Maybe I misunderstand the concept of Communism but that sounds like it, would it be so bad?

Excuse my French, but it's BS!

What books are talking about? Let's go to NY Times site and see the top bestsellers
Hardcover Fiction
1. THE HELP, by Kathryn Stockett - $9.50 hardcover at Amazon, $13.72 at Borders

Hardcover Nonfiction
1. GAME CHANGE, by John Heilemann and Mark Halperin - $13.00 hardcover at Amazon, $15.39 at Borders

Paperback Trade Fiction
1. THE LOVELY BONES, by Alice Sebold - $12.83 hardcover at Amazon, $10.79 at Borders

What are the ... $26 you talking about?

And sharing books is an issue! Nook reader from Barnes and Nobles will allow some kind of sharing. But if I buy a printed book I can share it with my family, my friends without limitation. I'd like to see if Apple provide any mechanism that will allow us to share e-books

Stop talking out of your ass. There's simply no way to justify that price. It's a file, it downloads in 10 seconds, and it should be priced accordingly. It's not a "real book" whatever way you try and spin it. Even eye strain alone should bring down cost. If the publishing industry ever expect books on the iPad, or any other device "to take off" the need to rethink their pricing: "DRAMATICALLY". New releases or bestsellers should be $9.99, and all other books should be $6.99.

You see, the thing they fail to see is pricing books at this sort of price point (7-10 bucks) would get people who read books buying more books, and it would get people who don't buy any books reading books. They don't have to cut down trees, they don't have to ship the books all over the planet, and they don't have to print the bloody things. Rest assured this is saving them money.

These publishers lack the vision, intelligence and foresight to see the obvious. They are sitting on money. This "instant books" industry would be "HUGE" if the price was right. I'd say even at those prices they'd make more money, possibly quite a bit more than currently. The books can't even be resold.

Amazon was losing money on every ebook sold so it could establish the Kindle format and the Kindle reader as the dominant format and reader in the ebook market.

Once that happened, it either would've forced the publishers to lower their prices by threatening to leave them out, or it would've raised prices since there would be no real competition.

To fully understand what's happening from the perspective of authors, here are two links:

http://www.antipope.org/charlie/blog...outsiders.html

http://www.tobiasbuckell.com/2010/01...le-via-amazon/

To add to this: Like most things, new books are priced higher. As time passes, the price decreases.

Macmillan wanted to be able to do this, and control the rate at which it happens.

(The music industry finally got this control out of Apple as well - $1.29, 0.99, 0.69.)

Which is a big mistake because there is no way on god's green earth that Amazon could ever beat the Apples of the world in the hardware business. They are sacrificing what they do best (online retail) to pursue what they do worst (hardware). Amazon shareholders should be up in arms and beating down Jeff Bezos' door to tell him to stick to the knitting. Instead of betting the company on the Kindle pipe dream, he should be working to install an Amazon app on every mobile device out there.

Whether a book is a 100kb file or printed on paper, the real value of a book is not determined by the file size, the paper it is printed on, or how quickly you can download it. The value of a book is in the content. I can understand why book publishers and authors would want to try and maintain a price that reflects the value of the content being offered and is not determined solely by the method of distribution. People may not accept these prices but from the publishers point of view, it is not unreasonable to want to set a price that doesn't undervalue from the beginning. If they have to I am sure that they will adjust their prices accordingly or stop selling ebooks all together if people don't see the value in them and they can not make a reasonable return on their investment from selling them at lower prices.

Agree, but what if Amazon thought Apple was coming after the ebook market, since Apple had already swooped into other digital goods markets? What should Amazon have done?

Yes, and software, which also downloads in 10 seconds should never cost more than $0.99.

The cost of printing isn't much. The cost of production is rather high relative to everything else.

MOST of the costs are from middlemen.


Except it doesn't according to authors. And prices do get down to $6 or less when the paperbacks appear.


Not even Baen books with extremely inexpensive ebooks is seeing a huge uptick from ebook sales. Their e-books range from free to $15 ish for advanced reader copies (i.e. you get to read it before it even gets published).

The Amazon Kindle contract sucked. The Apple one is far more fair and I think you'll see more ebooks AND price competition. Amazon 30-70 split contracts REQUIRES that you never sell your ebook below the Kindle price and Amazon gets to set that price to whatever it wants.

hey- I couldn't agree with you more. Well put.

That is a great thought, and I hope you're right.

Apple has always been an innovator, and has never settled for so-so products. The iPad which is supposedly 'one the greatest things Steve Jobs has ever been involved in' offers ZERO innovation.

Think about this:

Since the debut of the iTunes music store in 2003, Apple has sold over 6 billion songs. Apple's cut is 30%.

[6bil x .3] / 7 years = 257 mil

*Not including movies or any extras, just $1 songs*

The App store since it's debut in 2008 has sold just over 1 billion apps. Apple's cut is again 30%.

[1bil x .3] / 2 years = 150 mil

*Many apps are more than $1 and many apps are free. For my simple point I'm averaging each app to be $1*

This means that Apple has made over $4.8 billion by simply hosting and distributing other people's content, which averages out to $685 mil per year. Now there ARE costs such as servers, programmers, bandwidth, etc., but nothing that comes to be $685 million per year. Yet, Apple claims to only break even on this?

What has happened is that Apple has gone from innovator to middleman, and the iPad is just another device to milk the profits of selling the same content. (Now including eBooks.)

So Amazon was selling many of their ebooks at a loss to attract more Kindle users and gain market over any other competitors. And the publishers were very unhappy with this because it would eventually make Amazon the only game in town and give them no choice. And they were overjoyed that someone else was offering them sustainable terms that helped serve them and meant that other ebook stores could stand a chance at competing again.

And this is Apple FORCING the price higher? (From an already losing price.) And BAD for consumers? (Who get low prices now but face an unstoppable Amazon that can start dictating whatever they want.)

I find that lack of forethought disturbing...

I wholeheartedly agree. It seems a human perception to equate value with size. Hence packaging small products in huge boxes, and "supersizing". When it becomes non-physical, some people believe it should be priced closer to "free" since it now "costs nothing to make".

But I've found that if you set the value of something low, people tend to follow your lead. Give free lessons and people don't pay attention. Give a free service and people don't credit its worth. Ask for a fee and suddenly people take it more seriously.

If there is value in the content, it should be priced to reflect that. And people can then decide for themselves if they agree with that value. Those who do pay will appreciate it. If they don't then they will return it. The market then becomes a conversation between the creator and the consumer.

Amazon seems to want to step in and dictate what the conversation is.

The problem with this attitude is that it takes a short term view of things. For things like music and software, having the ability to share with friends has long been how they rose in popularity. The same is true with pirated music and software. As a one-time software developer, I was never upset when people pirated the stuff because it was so popular on the whole it made money. The knee-jerk reaction to piracy is to raise prices, which is what they doing with books albeit for another reason. This only serves to get more people to pirate it, to teach them how to use piratebay instead of itunes and generally promotes illegality.

I firmly believe that what is important is to make buying the stuff simple and easy, then over the long term people will buy it. Maybe broke college kids won't, but you know what? They never did. i'd rather have them listening to my music or software than not. And when they grow up and get a 50k per year job they will buy stuff.

So i agree with you somewhat, but I think your view is too shortsighted.

amazon and apple just closed the door for 10 yrs on real competion for E BOOK WARES

but IN 24 months apple will offer 5 dollar classics for sales and stuff like that
it will take time
apple will also have great authors sell direct to apple

and think of al the tons of paper not being used
whole forrest of trees will not be cut

apple will redefine book reading
schools can give the kids 20 texts books
on a simple metal slab \\called ipad
and info in the books can be updated very quicky

so igenie come =join the apple cult
come be one of us
stev does love you ya know
he does


peace


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