Harper’s Droppers: post Agency Model savings

Harper’s Droppers: post Agency Model savings

Thanks to my reader Bailey, I was able to  report yesterday that the “This price was set by the publisher” line was gone from HarperCollins’ books in the USA Kindle store.

Harper recently settled with the Department of Justice in the government’s legal action against the Agency Model.

That meant that Amazon could go back to discounting the price of HarperCollins’ e-books.

While that seemed very likely to mean lower prices, it was a bit more complicated than that.

The publisher could raise the list price, which would raise the cost to Amazon, which would make it more expensive for them to discount the book.

Let’s say HarperCollins was selling the book for $12.99. Amazon would get thirty percent of that for being the sales agent…about $3.90.

Now, let’s say that Amazon wants to sell the book for $9.99, and still make that $3.90 on it. $9.99 – $3.90 = $6.09.

Not counting costs of sale, if the publisher sets the digital list price at…higher than $12.18, Amazon doesn’t make its $3.90.

I know, that was math geeky. :)

Of course, Amazon doesn’t have to continue to make that $3.90…they could choose to make $2.90 or $1 or even lose money…

But would they?

That’s where

http://www.ereaderiq.com/

comes in.

I’ve recommended them many times before…eReaderIQ is the most valuable site for Kindle owners on the internet.

In addition to helping you find free e-books, giving you search capabilities superior to Amazon, and letting you know when a book you list has been Kindleized, they’ll send you a free e-mail when a book you choose drops a specified amount in price.

As part of that, the information-rich site tracks (even graphing) the prices of Kindle store books which have recently seen price reductions.

Of the last twenty most recent drops they see, nineteen are from HarperCollins or its imprints.

The price graph for all of those HarperCollins titles looks pretty much the same…and it looks like it fell off a cliff. :)

Stable price, stable price, stable price, boom!

I thought I’d list the ten most recent HarperCollins price drops for you, and note the percentage of drop:

As you can see, those are substantial drops.

I also did some spot checking…some HarperCollins books (especially teen ones) have dropped fifty percent and more. For example:

The Sharing Knife, Volume Three by Lois McMaster Bujold $7.99/$3.99/50%

It’s also worth noting that eReaderIQ has been tracking that since December 21, 2010 (which would have been when somebody requested the tracking)…and this is the first time the price has dropped during that period.

Two other interesting things: while I was writing the post, another wave of HarperCollins price drops happened…it may be taking them some time to adjust.

Also, many of the books have already dropped twice since September 9th…that could be due to automatic adjustment to prices at other retailers. There was no price competition between retailers under the Agency Model.

How would you know about these drops if I didn’t tell you? Sign up at eReaderIQ…if you don’t, you could be wasting a lot of money (if you can wait for prices to come down).

Thanks to the Department of Justice for bringing this case!

Thanks to Amazon for reducing the prices!

Thanks to HarperCollins for settling! Yes, they went in on the Agency Model, but we can be thankful they settled, rather than continuing to fight. One could argue that the publishers and Apple which haven’t settled are standing up for what they believe to be their innocence, rather than caving to legal pressure…

Thanks (once again) to

http://www.ereaderiq.com/

I use them for a lot of purposes, and I do buy through their links when I’ve signed up for something there and they notify me about it…that helps them, and I do want to reward them for their efforts.

Update: my Flipboard app had this story this morning:

paidContent:
“Apple is already fighting Amazon in the ebook price wars”

and I was also alerted to it by regular reader and commenter Lady Galaxy.

Amazon’s price war right now might, ironically, be with Apple. As the hardware company continues to fight the Department of Justice in court to retain the Agency Model, which keeps the consumer prices the same everywhere, they are lowering the prices on iBooks, to counter Amazon. They are competing on prices, in a race to the bottom…which would seem to be  what they were complaining about Amazon doing before the Agency Model.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog.

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8 Responses to “Harper’s Droppers: post Agency Model savings”

  1. Lady Galaxy Says:

    I also subscribe to the Mac Observer blog. I thought you might find this post interesting:
    http://www.macobserver.com/tmo/article/apple-goes-toe-to-toe-with-amazon-in-ebook-discounts

  2. wigwam2theorem Says:

    Bufo, I believe the publisher raising the list price could be considered a retaliatory move, which I believe is prohibited by the terms of the settlement. Is that your interpretation?

    • Bufo Calvin Says:

      Thanks for writing, wigwam2theorem!

      I think it could be reasonably argued that going back to list prices that they had some time prior to the Agency Model (when we did commonly see digital list prices that were the same as hardback prices) is not retaliatory.

      The Wholesale Model is a different economic model. The digital list price should not be the same under the Wholesale Model that it is in the Agency Model, I believe. The publisher makes 70% at $12.99 under the Agency Model, and only 50% in the Wholesale Model…it’s not unreasonable for them to want to make the same amount of money by raising the digital list price to achieve that.

      Just my thoughts on it, though…

  3. Jj Hitt Says:

    In Other News: Whispersync free samples:
    http://www.amazon.com/s/?node=5744839011

    This is a huge deal if only for the number of audio recordings they are giving away. Some of the readers are A-List actors like Elijah Wood, Tim Curry and Anne Hathaway. Great giveaway.

  4. Zebras Says:

    Bufo & JJ:

    I too loaded up on the audio books offered for free as its really an incredible value, I really don’t think I will go back and forth between audio and reading for the Audible books, as the audible readings give a characterization to the characters and the story, and I would lose that in the scenes I read in plain text. TTS is good when you are already reading text, and need to go audio for some reason, as its a neutral personality. Usually I just change books when I change format, and only use TTS if I’m in the middle of a book, and have to go to the car, and can’t wait to hear what happens next.

    I also think its cost prohibitive to have to buy a book and then still pay a reduced price to have the companion audible version. I would tend to pick one or the other. As it is, I have collected so many audible freebies and purchases even before this special, that it will take me years to catch up.

    This synchronization along with the eliminated TTS on the “Paperweight” Kindle, makes me think they are trying to increase audible sales.

  5. Round up #113: Print on Demand blooms, States suit approved « I Love My Kindle Says:

    [...] avoid criminal prosecution. That will result in Amazon being able to lower e-book prices. As I wrote about recently, we are already seeing that happen with books from HarperCollins. Within weeks, we’ll almost [...]

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