"Have publishers already lost the war over agency pricing?"

Are publishers who raised e-book pricing the past year losing the ebook-pricing war?   I'd like to think so.

 The blog article's subject title is from the headline on the article by Philip Jones at Futurebook.net commenting on the higher-priced e-books not appearing very much in Amazon's topmost besteller lists (UK).

  Actually, he's commenting on The Guardian's article by Sam Jordison on "EU anger over ebook deal suggests hard times ahead for publishers."

  Describing again (1) the circumstances leading to the use of Apple's "Agency Plan" by the Big5 (and now Big6) publishers, which raised e-book prices by 30-50% average, this last year, and (2) the raids by the European Commission on publishing houses in the UK to investigate possible anti-trust violations, seizing not only paperwork but also "smart phones and laptops from senior executives," the Guardian's Jordison sides with the publishers against what he describes as a monopolist Amazon against angelic publishers who are just trying "to get a good deal for everyone."

  They do, however, have the sense to see a valid point in the complaint "The only reality we readers know is that we want to buy the book but can't."

  They continue, nevertheless, "But the fact that customers have a distorted view of how much ebooks should cost is hardly the publishers' fault.  Especially since a new breed of "self-published" authors are starting to sell millions of the things at $0.99 or less on Amazon – which casts an interesting light on the recent declarations about ebooks outselling paper books."

  Imagine that!  But then, new technology has been a problem through the ages for those wedded to older technology and unwilling to adjust to it.

Futurebook's article
Philip Jones thinks that Sam Jordison is an advocate of publishers setting of bookseller prices "but he is concerned that publishers may lose the battle legally, and that they have already lost the battle in the hearts of the consumers."  

Yes, and Jordison might do a bit more wondering about why that is so, and it's not just about pricing.  It also says a lot about what publishers think of their reading customers.  I've seen publisher statements (and reprinted them) that anyone well-off enough to buy an e-reader can afford the high book prices.  (Thanks to Joe Besser for the correction.)

 In marking books up by almost 50% when new, and also OVER the price of their paper back copies too often, they display a real disdain for e-book customers who are expected to spend almost as much OR MORE on a product that cannot be resold, and in most cases still cannot be lent to anyone.

  This goes against the traditional attitude toward books.  The publishers prohibit, for the most part, lending as is normal with paper books, and prohibit entirely re-selling the books.  Yet they price them higher than paperback books, and often only a few dollars less than a hardcover.  And now they're targeting libraries, with e-books to be disabled after x number of loans.  And the latter is with publishers willing to lend e-books at all to public libraries.  Macmillian and Simon & Schuster won't.  Jones points out:

'... publishers such as Hachette, Harper, Penguin, and Simon & Schuster, should be getting their titles into the Kindle charts, even at higher prices.  But I just checked the hourly Kindle chart, and there are no agency priced books in the top 20.  The highest placed title is David Nicholls' One Day (Hodder/Hachette), which also happens to be the fourth most expensive Kindle Edition in the current top 50.

Furthermore, and this is even more worrying.  The average price of paid-for books in Amazon's Kindle top 50 chart today is £1.79.  It is little wonder Guardian commentators [people commenting on the article] think e-books should cost less than agency publishers are making them available: they do.

Read some of the reviews appended to those self-published titles in the Kindle chart, and we could be forgiven for thinking that price has superceded quality in the minds of Kindle users.  This is not just worrying it is tragic.  Agency publishers have a limited period of time to prove Amazon wrong by getting their titles up the Kindle bestseller chart, before the OFT rules one way or another. The concern must be that by then, the war may already have been lost. '

His numbers are from the Amazon UK Kindle store, but in the U.S. the UK site's Kindle book pricing is not displayed except in the Bestseller listings.

Actually, there ARE e-reader customers who give cost a very high weight in the economy we're in today.  Many are also finding quality writing although they may have to dig deep and wide, but when they find it, word of mouth is a huge factor in online book sales.

  The online community is important for those not wanting to wade through it all, and there is actually a way to find quality writing without depending on large publishing houses and publicity machines, to the extent that some writers discovered by price-conscious readers have been offered contracts by large publishing houses; an important trend now is seen in authors who are hesitating to go with the contracts offered, as it may be more beneficial for them to continue to 'self-publish' because the large publishers have not had a reputation for paying the authors/creators what they are due.

  For the Amazon UK customers' rather raw feelings on all this (and publishers should really pay more attention to what is said), see the Agency pricing thread on their Kindle forums.  It's similar to what is seen on the U.S. forums but UK customers are even more angry about it because the increases by the Big5 publishers have been quite outrageous in the UK where general e-book pricing had been lower than it had been Amazon US's Kindlestore.

BESTSELLER E-BOOK listings for UK and US stores
  Here is the current Bestseller listing (paid and free) for Amazon UK,
  and here's the current Bestseller listing for for Amazon US.



Kindle 3's   (UK: Kindle 3's),   DX Graphite

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    Also, UK customers should see the UK store's Top 100 free bestsellers.

New Yorker piece on altruistic publishers and devil Bezos

This is an update to the earlier Amazon plays hardball to keep lower pricing option which gives a lot of details with sourcing of statements.

Today, FAIR (a media-watch organization established in 1986) comments on the New Yorker article by Ken Auletta titled "Publish or Perish: Can the iPad topple the Kindle, and Save the book business?"

That title will give a clue to the focus of the New Yorker Magazine's article (or maybe The New Yorker itself, which is sharing the financial plight of other publishing organizations).

"Can they... CAN they? "topple the Kindle" (Keep Hope Alive?) followed by, can they also "save" the book business - the two thoughts in tandem there.  But the idea of toppling another type of device came before the idea of saving the industry (or in connection with it).

  Already, many columnists have pointed out that the iPad and Kindle are two different animals -- one is a dedicated e-reader and the other has a multiple focus with an altogether different technology, dazzling for multimedia, but with an e-book reading display that many feel can fatigue the eyes in the long-form, serial reading area (from direct light to the eyes, not from refresh-rates), not to even mention the variance in Size and Cost.

 But these are factors raised by other authors when writing about the possibility of "toppling" another, altogether different device.

Note also that it's not even "Will they" (a fair question) but "Can they" as if that were a hoped for result.

  Even if the headline was done without thought, word-choices are often good indicators of underlying thoughts.

The New Yorker's Conclusions
I'll get on to fair.org's, as usual, informative and to-the-point commentary in a minute, but The New Yorker, as FAIR points out, gives a detailed history of the e-book pricing battles and then goes on to paint the publishers and Apple's Steve Jobs (even pulling in the cancer card of all things -- and as a survivor myself I think that was cheap) as rather saintly in their hopes to save publishing from Bezos.

  Apparently, from Auletta's telling, their main focus is to help authors, which is why they are pricing e-books 30-50% higher.  Well, there does have to be a way to try to justify the much higher pricing, which is causing e-book audiences to write in several device forums that they are not interested, thanks.

  The closing few paragraphs in the article actually quote mainly "Apple insiders" and they're quoted for the ending conclusions.

  As detailed by others and in my own (b)logged history of events ((1) Hardball and (2) Steve Jobs role), this is a rather rich, purple battle between 'ruthless' protagonists on all sides.

 They all want what's best for them (if it also benefits the consumer, that's appreciated by consumers).  That's what's missing from this article.

  But the story uses hearsay (no one named source) to paint only one of the three as "ruthless" while the others are just hoping to help authors and to 'survive.' They are of course victims doing their best.

WILL the Agency plan "save" publishing" ?
Let's ignore that raising prices that much in THIS economy will help no one survive.

  The key is 'selling' a book at all, and the current prices that the publishers and Steve Jobs have decided on will not be helpful.

Pricing Difference Example
  One example of what is going on here (and this is a repeat of the actual $-situation with regard to money going to publishers from which they are then able to pay authors -- although authors have had to take a percentage cut recently from some publishers):

' On a $26 publisher-set-list price book on a book that's currently a NY Times bestseller, the traditional wholesaler arrangement would have meant about $13 (approximately 50%) going to the publisher EVEN when the bookstore/retailer charges only $10 for the book as Amazon did, which treated bestsellers on the NYTimes list as loss-leaders.

As Steve Jobs inserted into his Agency agreements with the Big5 later, he later wanted, after all that, the ability to sell the 'hottest' books (apparently the first 10 of the NYT bestsellers) for only $10 and did get that. In other words, he did want to 'devalue' those (in the publishers' eyes, $10 was a devaluing) and got it.
  All bookstores would want guarantees from the publishers that if they went with Apple's agency plan (70% of bookstore selling price to publishers) other stores would not get the ability to sell lower.

So, now the Big5 publishers, on the $10 e-books, receive $7 with the Agency plan instead of the $13 that Amazon did pay them under the wholesaler arrangement, meaning there was MORE money for the authors from the older non-agency arrangement as they affected the most popular books.

 Control is the issue, of course, and the publishers hope Apple will always give them this, despite remembering history.  The latter needed to get a foothold in the e-books area and this way they did.  Who benefits or loses from this?  Probably consumers and authors.

 Yet the publishers carry on about wanting the authors to get more.

FAIR.Org's Commentary
FAIR's headline is (deservedly so) even more scathing than my words.
"Unlike Amazon, Publishers Understand Authors--and How to Rip Them Off"

  Jim Naureckas recently analyzed the New York Times article about a "threatening" Amazon in his piece NYT Exposes Amazon's Fiendish Plot to Sell Books for Less Money.

  In the current article, Fair.org's Naurecka writes:

' Amazon is depicted as controlling and mercenary... [with examples]

  Publishers, on the other hand, are remarkably altruistic: "Publishers' real concern is that the low price of digital books will destroy [brick and morter] bookstores, which are their primary customers," Auletta writes. But they're equally concerned about the well-being of authors '

However, Auletta's piece is, as I said, a nicely-detailed one, but the closing paragraphs, practically written by "Apple insiders," paints Bezos as wanting to destroy publishing altogether and take it all over by himself and Steve Jobs is just wanting a 'win-win' situation, because now he is aware mainly of his 'legacy' and his 'vision.'  However, as magazine negotiation reports have mentioned, publishers are trying to get Jobs to 'win' less now that they're talking details.

Auletta does end, after all that publisher/Jobs image polishing, with the words from a "skeptical literary agent"

' Asked about publishers’ efforts to raise prices, a skeptical literary agent said, “You can try to put on wings and defy gravity, but eventually you will be pulled down.” '

Nicely put, just as long as those are not painted as angel wings.

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1. See later follow-up article on Auletta's Live Chat about his New Yorker article.

2. A discussion of the New Yorker Article and the pricing wars, on Stacey Cochran's Book Chatter,
with Fair.Org's Jim Naureckas and Kindle author Bufo Calvin.

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