“Here’s another publisher publicly throwing its weight behind Apple–and against Amazon–in the e-book pricing war,” Peter Kafka reports for AllThingsD. “Hachette Book Group says it will pursue the ‘agency model’ for pricing e-books: It sets the retail prices and the retailer gets a 30 percent cut.”
“Translated into more practical terms, this means Hachette will demand that Amazon and other retailers–but really, this is aimed at Amazon–raise the prices on their e-books from the $9.99 standard they’ve adopted. Instead, the publisher will want them to use the $12.99-$14.99 standard for new books, which Apple introduced last week along with its iPad,” Kafka reports.
“Hachette is one of five publishers that participated in Apple’s iPad launch event last week. Macmillan, one of the other five, has spent the past week engaged in a public battle with Amazon over the pricing model. On Sunday, Amazon said it would capitulate to Macmillan’s demands,” Kafka reports. “Meanwhile, look for the other three publishers that have allied with Apple–Pearson’s Penguin Group, News Corp.’s (NWS) HarperCollins and CBS’s (CBS) Simon & Schuster–to fall in line. On Tuesday, News Corp. CEO Rupert Murdoch said he expected to renegotiate his publisher’s deal with Amazon soon.”
Read more in the full article here.
MacDailyNews Note: Author Charles Stross blogs, “Just before Apple announced the iPad and the agency deal for ebooks, Amazon pre-empted by announcing an option for publishing ebooks in which they would graciously reduce their cut from 70% to 30%, ‘same as Apple.’ From a distance this looks competitive, but the devil is in the small print; to get the 30% rate, you have to agree that Amazon is a publisher, license your rights to Amazon to publish through the Kindle platform, guarantee that you will not allow other ebook editions to sell for less than the Kindle price, and let Amazon set that price, with a ceiling of $9.99. In other words, Amazon choose how much to pay you, while using your books to undercut any possible rivals (including the paper editions you still sell). It shouldn’t surprise anyone that the major publishers don’t think very highly of this offer.”
Full article here.
Excellent, can’t wait to start paying more for my e-books…
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Hey Amazon, ain’t competition a bitch!
I hope the press villifies Apple for higher prices for consumers! The books exist as bits on a server! WTF makes them so expensive?!! Use once and nothing to sell or even give away! Pure greed IMO!
I’m not complaining. As long as the eBook content has been enhanced to take advantage of the iPads capabilities, I’m all for it.
More like “joins the anti-consumer club”.
Just the thought of saying “bloodbath” and “iPad” in the same comment makes my stomach hurl…
Can’t say that higher e-book prices thrills anyone, but Amazon taking 70% as a middle man seems excessive. Presumably they make money off their Kindles, too?
It would be nice to see a breakdown of how the $12.99-14.99 is distributed. Let’s hope the deal for the authors is better than the one record companies give musicians.
Amazon picked the Microsoft/Google Model for their ebook venture (The Microsoft/Google Model is, I’ll profit off your content and you’ll thank me for doing it!), now that Apple is in the game the publishers are saying shove off Amazon we now have a clear choice from someone who knows how to sell electronic virtual stuff really well. Jeff watch out the publishers are about to eat your lunch while Apple cheers them on , and goads them into going after your cookies too. If you had not been so greedy the Kindle might have stood a chance. Now however, it’s dead like the surplus 1970’s plastic that the Kindle’s case is made out of.
This isn’t good for the consumers, AKA ME! I fully support Amazon as far as fair pricing goes. The 70/30 split they were getting is ridiculous though!!! The content owners deserve to get paid a fair amount.
@ iMaki – I agree. Will you be able to share ebooks like you can with paper books? Can you read it on your PC or Mac? I doubt it. So you would have to lend someone your iPad if they want to read something you have. You also can’t sell it like you can with a regular book.
Apple’s bookstore could be dead in the water with this pricing. iTunes success was down to their fair pricing. They make 30cents per song but will make $4 per book. I doubt very much that the file size will be bigger than a song.
It’s funny but I think Apple have done to Amazon what the record labels and other music services tried to do to them. They have managed to force Amazon change their business to stay in the market.
Hopefully in a few years, a free market will exist for ebooks where true competition will be available.
In a free market, capitalist society, authors and publishers have the right to profit from their efforts. Some things should cost more.
The thing to find is the right price. In the case of music, Apple’s was correct that a lower price fuels much higher volume and thwarts much piracy. But in the case of print content, current low prices set by Amazon, et al, will not sustain writers and publishers.
@iMaki
I think the $14 -$15 price is basically the top of the range. There will books discounted down from that. From reading your comments the last couple of days, it is apparent that you place absolutely no value on the creative content of a book. You see it’s worth only in the physical elements of its conveyance ( “The books exist as bits on a server!”). Bits don’t cost anything, so neither should a digital book, is that it? Or, $9 should be the limit? Even Apple had to finally reach the conclusion with music that some products are worth more than others– EVEN if they cost the same to deliver. $15 for a digital best-seller is still highly discounted over it’s printed bretheren
this is like the competition between Visa and MasterCard, only more perverted. Visa outmaneuvered MasterCard by raising the fees for POS transactions and giving banks a higher cut, therefore the vendor paid a higher fee, which he maybe tansposed to higher price for his goods.
Now Amazon set a ceiling of 9.99 USD for its books, which is very pro-consumer, but gives only a 30 % cut to rights owners.
Apple does not care what the pricing is and gives 70% cut to the right owners.
The right owners like Apples model better for 12.99 they get 9 dollars with Apple and with Amazon for 9.99 they get only 3 dollars. So Apple gives them 3x more. This is all great for the rights owners.
Where does it leave the consumer ? I guess the competition got perverted, because it works between Amazon and Apple as platform providers, catering to rights owners. The consumers must vote with their money, however, this is only possible in case that all books are available as well through iBooks as well as Kindle. Books are not interchangeable. If I want Harry Potter, there is no substitute for it. The future will show us.
If the books are only text, no pictures, I see no reason for an elevated price. The reason for paper books price is mostly paper, printing costs, distribution costs, shelf costs and margins of the distribution channels. In digital publishing you cut all these costs, You do not even have to lay out the book. Just write and publish. Only cost is advertising.
I just hope the authors get paid more after such arrangement and not only the publishing houses.
I think that it’s perfectly fine for an ebook to sell for around 50% of the price that the book sells for in the bookstore.
So, for example, a paperback copy of Eric Schmidt’s 1633 goes for about $8; the ebook should sell for no more than $4. (If it has special iPad features, maybe $5 – no more.)
If this rule of thumb is adhered to by the publishers and Apple, I’ll be a customer. If not, I guess they’ll have to keep killing trees to keep me satisfied.
I’ve said it before. I’ll say it again – the market will determine the eventual price for ebooks. Consumers will vote on pricing structures by what they do and do not buy.
@imaki – if enough people are buying best sellers at $14.99. The price is going to stay there. If no is buying at $14.99, the price will come down. All this takes time. And besides – it seems to me this is the appropriate way to determine pricing – the author/publisher are responsible for the content. The retailer only provides distribution – and as you’ve already pointed out, the cost for the is virtually nothing (I think I saw 5 to 10 cents somewhere was the actual cost of the download). Have some faith in the consumer. They ARE the price determining factor.
@iMaki
What do you do for a living?
Wanna work for free for a month? That’s what your asking the writers to do. “The books exist as bits on a server! WTF makes them so expensive?!! “
Define expensive?
Go to the bookstore and look at new release hard cover books. They are $25 to $35.
Online they are $12.23 to $28.46. (I just looked)
Apple is looking at $14.99 doesn’t seem out of line to me. That is for new releases.
What happens to the book after so many weeks at the exclusive hard cover price? They then come out with a paperback that is cheaper, the eBook version should then be cheaper.
The third step is the discount shelf where the prices are knocked down even more. Maybe that’s when we’ll see eBooks at $7.99 or less.
You want the brand new release, you pay the premium price. Don’t want to pay that, then you wait for the paperback.
That is how book pricing has been done for decades.
Please educate yourself.
I’ve aslo noticed on Amazon that ebook prices of most paperbacks is $6.39. I’d pay up $8 for current books in paperback. But then, I’m a patient bastard and rarely buy books in hardcover – if I need to read them before that – library.
Actually there’ll be level-field competition on the iPad itself. Amazon will port its Kindle reader to the iPad, as it already has to the iPhone. Users will be able to get books from Amazon or Apple and read them on the iPad. Publishers will know which pricing model gives them the most profit, taking volume into account.
Readers will also be able to choose their model: the closed Amazon system to “borrow” books that can’t be distributed or backed up and the so-far unknown Apple system.
The thing you’ve gotta remember here is that many people who have bought an ebook version of a novel are unlikely to go out and buy that book again physically. Essentially this means that every ebook purchased means a physical copy isn’t, therefore that’s a potential book sale gone, and if they can’t get the money from the sale that way, then logically they have to charge the same amount for ebooks, or they’ll start making a loss.
@ Think
I agree. Only people who have never written a book think that the price is all in the duplication, warehousing, and shipping. An eBook is no easier to write than a paper book. It still takes an author(s), an editor, a designer, an artist (for graphics), a copyeditor, a compositioner, a publicist, accountants, a distributor, and a publisher. All of these living on Amazon’s $3 means the quality and quantity of new books goes to nothing. For an example, just look at what’s happening where newspapers are replaced by bloviating bloggers.
The MDN take, or rather Charles Stross’ take is what I have been trying to point out.
People have been focussing upon the higher potential price, but the real thing that people are opposed to is that Amazon has been ripping off authors and publishers by also trying to take a publishers’ cut.
“Go to the bookstore and look at new release hard cover books. They are $25 to $35.”
Exactly! I think these people complaining have never bought a hardcover of a new or top ten release. The prices that Apple has set for the iPad is a great deal. You’ll get enhanced content vs that POS BW Kindles with an outdated hardware form/design and usability.
Is this Amazon we’re talking about? …or Walmart?
@84 Mac Guy: Competition is supposed to drive prices down for consumers, nit up.
Since when should anybody celebrate price gouging? e-books cost almost nothing to prepare or distribute are wrapped in DRM and they want to charge you full price. This is not an improvement, an advance or anything other than greed.
MDN railed against MiddleBronfman and now is celebrating a print MiddleBronfman because they are ostensibly ‘on Apple’s side’. This is blind fanboism of the worst kind.
Nothing like being someone’s bitch…