“Amazon.com Inc., the world’s largest Internet retailer, will have to raise prices of more digital books as publishers seek to match an agreement forged with Macmillan, according to the Authors Guild,” Joseph Galante reports for Bloomberg. “After saying that Macmillan could charge higher prices for Kindle versions of its electronic books, Amazon.com set the stage for the other five biggest publishers to negotiate new terms, said Paul Aiken, executive director of the guild.”
“Amazon.com, which offers best-selling e-books for $9.99, said this week that Macmillan could sell its titles for as much as $14.99. Amazon.com has sought to keep prices of digital books low to maintain the popularity of the Kindle,” Galante reports. “The concession shows a ‘chink in Amazon’s armor’ and may make the Kindle more vulnerable to competitors, according to Collins Stewart LLC. Amazon.com shares dropped 5.2 percent yesterday. ‘There are at least five other publishers who can get this deal from Amazon,’ said Aiken, whose New York-based group advocates on behalf of writers. ‘The other publishers are going to follow suit. It would be irresponsible for them not to.'”
“The Macmillan deal followed Apple Inc.’s introduction of the iPad last week, which gave publishers a new outlet for e- books. Apple is opening its own digital bookstore, using a similar model as its iPhone App Store. The company will let publishers set the price of titles and give them 70 percent of the revenue, according to people familiar with the agreement,” Galante reports. “That’s more attractive to publishers… Amazon.com currently buys digital books from publishers for $12 to $13, Aiken said. Since its price for best-sellers is $9.99, Amazon.com is taking a loss on those titles. That’s left publishers waiting for the retailer to demand lower wholesale prices, he said. ‘Nobody expects Amazon to keep losing money on e-books forever,’ Aiken said.”
“Under the new terms, Macmillan would be able to set the prices of electronic books individually, with most new titles costing $12.99 to $14.99. Retailers would get a 30 percent commission under the proposal, Macmillan said. A deal hasn’t been formally announced,” Galante reports. “The terms would resemble an agreement Apple worked out with publishers. On the iPad, publishers will be able to set a range of prices on e-books, with most best-sellers going for about $12.99, according to the people familiar with the matter, who declined to be identified because the talks are private. ‘We haven’t announced iBook pricing and will provide more details as we get closer to iPad availability in late March,’ said Colin Smith, a spokesman for Cupertino, California-based Apple.”
Full article here.
[Thanks to MacDailyNews Reader “Fred Mertz” for the heads up.]
And the complaining about Apple raising ebook prices starts in 3…2…1…..
And Stanza on the iPhone is FORCED by apple to lose USB syncing functionality. if this isn’t bait and switch on Apple’s part, I don’t know what is. The App was already approved with this functionality openly stated, an now apple seems to feel threatened by it because of the iBook store? I hoped the iBook experience would be far superior to Stanza. There was no need for such monopolizing restrictions.
App Developers set their own prices. Let Authors and Publishers do the same. Let the market decide. Don’t be a DickTator.
Jeff Bezos must be fuming. It’s not only the ebook prices. The entire Kindle business model has been upended. Steve really tore a hole in their armor without selling one iPad. Amazon was on their way to monopolizing the ebook market and nobody could stop them–except for Steve Jobs.
Those prices r ridiculous for a non-physical, non-resellable product! The market has decided this is nuts!
The public library looks better all the time. No hardware required and the software is free.
<<Amazon.com currently buys digital books from publishers for $12 to $13, Aiken said. Since its price for best-sellers is $9.99, Amazon.com is taking a loss on those titles.>>
This is a TOTAL LIE! Amazon does not pay $12 to $13 to publishers. They had been paying about $3, and taking the rest as their profit! They make nothing on the Kindle, but take the lion’s share of the ebook price.
KenC:
Absolutely incorrect. Amazon has indeed being paying publishers $12/$13 for bestsellers and selling same at $9.99. This whole issue is about who controls the retail price. In the past Amazon set the price for best sellers. Under the new agreement Macmillan will. There (Macmillan) goal is to keep e-book prices sufficiently high in order to protect DTB prices. Next time you post, get your facts straight before yelling TOTAL LIE.
I probably won’t buy any ebooks, but the price hike seems to be a bad move. They need to keep prices lower in order to induce consumers to buy ebooks. The book publishers are not being as ridiculous as the music industry was pre-iTunes, but they should think about the long term with this instead of profit per unit.
Norinn: shut your whiny hole
Maconynous, it is iBooks store, not iBook store. An iBook is a model of computer that Apple made. Don’t be so lazy!
@ DRMSSDB
“Norinn: shut your whiny hole”
Well, since you asked so nicely.
I think all this uproar about pricing of ebooks is just silly. The truth is the market will decide the price of ebooks. Not Macmillan or the other big 5 and not Apple. If bestsellers are flying off the virtual shelf at $14.99 – you can expect them to stay at that price. If no one is buying them – the price will drop in a big hurry. The only people setting the price of ebooks are us – the consumers who either choose to buy them at a certain price or we don’t.
Authors are responsible for making their contracts with publishers, who are in turn responsible for making their contracts with retailers. If they are all irresponsible and the books are too expensive – they fail – and the prices will fall. I expect to see a lot more independent authors (like musicians with iTunes) start to bypass publishing houses altogether. The bigger ones won’t – but time will tell.
DRMSSDB: They need to keep prices lower in order to induce consumers to buy ebooks.
How low do the prices have to be? I think people are enamored of the $9.99 price point because it reminds them of the $9.99 you pay for most albums on iTunes. But how much of a discount does that $9.99 represent? A physical CD is what, $12 these days? $15 at the most. So that’s a discount of 20-30%. A new hardback book is $20-$25 (unless the store is running a loss-leader sale on it). So a $9.99 ebook is a 50% discount at least! That’s a little ridiculous.
Honestly, $13-$14 for a new eBook isn’t a bad price, especially considering you’re going to get, at the least, several days of enjoyment out of the thing. It isn’t like a CD that lasts less than an hour.
(And if you start selling books at a loss “to induce consumers to buy ebooks”, you’re going to be stuck at that price point. Better to start the business off with a modest profit that start with a loss, jack up the price later, and piss everybody off.)
——RM
KenC and tbsteph: There is obviously conflicting information in your posts. I am wondering if either or both of you could provide reliable information on the sources for what you state.
I am somewhat suspicious that Amazon was losing money on every ebook they sold. It might make sense to have a lost leader concept when they first introduced the Kindle, but why keep it going for an extended period of time? That does not make much sense.
sorry, even at 9.99, the price is too high. books are essentially free, people are just too damn lazy to WALK into a library.
KenC and tbsteph are both right!
For big publishers like MacMillan, Amazon has been paying them a “wholesale” price (the same as for hardcover books). For small independent publishers like myself, they pay crap. (I make like $3-something on my $9 ebook.
I can’t wait for Apple’s store.
I’m not complaining about Apple making ebook prices go higher. No one is forcing the publishing companies to raise prices. It’s their decision.
They just appear to be taking their business model cues from the music labels.
Generally speaking, 70%± of the costs of publishing are in printing and distribution. Considering that pre-press work will also be considerably less for digital than print, there’s an even lower cost for producing digital ebooks.
The remaining 30%± covers all other business expenses for operating a publishing company, which expenses should at least remain the same or even go lower due to digital.
There will be fewer production artists required for digital ebooks. As someone with a background in that line of work, I think we may be looking at a graphic arts position on its way to extinction.
Won’t the upping of prices just encourage piracy of books. I don’t mind paying higher prices for hard copy books because more than 1 person can read it but to pay big bucks for a book that only you can read seems out of line.
“The truth is the market will decide the price of ebooks. “
Norrin is correct. The key is “eventually”.
What puzzles me is how and when an independent author (you or me) can just sell ebooks in a ‘click and buy’ feature on an individual website, or website of a 3rd party.
How are the publishers going to keep authors in the corral?
I have not spent even one dollar on ebooks to this point.
I have no interest in the one-trick-pony-Kindle, but $9.99 seems to be the point at which I would begin to consider doing so, for a title that works with my existing digital lifestyle.
I find the iPhone to be less than ideal for long reading sessions, and I don’t lug my laptap around everywhere I go. An iPad, with $9.99 new releases, would likely be the key to earning my business on digital books.
For $15, I can buy the actual book from various book stores and discount warehouses (Sam’s Club, etc).
There is the drawback of carrying around the extra bulk of a physical book this way, but I don’t have to worry about battery life either.
At $15 per title, I will still buy physical media. At $9.99 per digital copy, I would likely increase my reading budget.
I know I’m not alone in this, because my wife feels the same way.
This is a short-term benefit for authors and publishers, but I believe it may have negative effects in the long run, as they may otherwise make more sales overall.
@ LordRobin–
“Honestly, $13-$14 for a new eBook isn’t a bad price, especially considering you’re going to get, at the least, several days of enjoyment out of the thing. It isn’t like a CD that lasts less than an hour.”
When you buy a physical book, you can pass it along to someone else when you’re done reading it. When you buy an ebook, you’re unable to do so, because of DRM restrictions.
Most people, don’t read a book more than once.
This isn’t the same for music. People tend to listen to music over and over. I still have music from 15 years ago that I listen to.
Comparing e-book prices to hard cover first editions is total bullshit.
A movie at a theater is $8 to $16. A newly released DVD is $20 to $30. Used DVDs are $4 to $10. A newly released rental DVD or pay per view is $2 to $4. The longer you wait, the cheaper the experience is.
E-books are the same. If you want it now, buy a $25 hardcover. If you can wait, get a $10 e-book in 3 months. If you are really cheap, wait a year for the $3 to $5 discount e-book.
That’s the way it should be. That’s the way it will work eventually.
If publishers were getting $12-$13 per title, why are they clambering to board the Apple train with a 30% fee on the price tag… $15.00 iBook will pay them $10.50; even less for cheaper titles.
I’m confused.
@ TheConfuzed1
“When you buy a physical book, you can pass it along to someone else when you’re done reading it. When you buy an ebook, you’re unable to do so, because of DRM restrictions.”
Would it be possible, actually through iBooks, to implement some sort of system whereby you could give a book to someone else when you are finished with it? It would transfer to their library and be erased from your own? I’m just throwing darts in the dark here because the technology is beyond me – but do you think that cold be possible? It would certainly make $14.99 a whole lot more palatable.
I think I would be willing to pay MORE for this product convenience. Regardless of how much a publisher will save by creating content suitable for delivery via “thin air” , I find the content options for ipad to be worth more. I don’t want to drive to Costco or Walmart to buy a book that just takes up more space. With the ipad I will have at my fingertips a full library and I can instantly find what I want or highlight and bookmark and always have it close by. I don’t waste gas or trees. Sure it consumes AC but on a tiny tiny scale when compared even to an iMac or a lightbulb. My point is that with such compelling features and as much as I and many others are Apple fans I want this product because it makes the content I consume that much more enjoyable. So while I love a good deal I want and am willing to pay for some really cool version of Sports Illustrated. I think books will follow with rich content. I imagine books will eventually incorporate clips from movies to create a blended experience. There is much to be excited about. Finally the iPhone software platform has an opportunity to really shine and flex it’s muscles with a 1 ghz A4 processor. I can’t wait.
Everyone should remember that, just as with older songs on iTunes, older books will cost less, even low single digits. Look at how competitive the App Store is, with most paid iPhone apps in the $1 – $3 range, much less than comparable apps on the Blackberry or WinMobile platforms. If Apple is similarly successful in creating a vibrant e-book market through iTunes, prices will come down to what is really appropriate/necessary to compensate authors, publishers, etc. (except a handful of the current “hot”–Harry Potter type–books).