Paperback or e-book: which costs more?

Paperback or e-book: which costs more?

I recently wrote about how the AAP (Association of American Publishers) was reporting lower e-book sales, and how I thought that didn’t indicate that people were reading fewer e-books overall:

E-book sales are dropping…off the radar

One of my readers, Wildsubnet, commented that tradpubs (traditional publishers) charging more for Kindle books than for paperbacks might be having an impact.

That’s an analysis I haven’t done in a while, so I thought it was worth a look. 🙂

What I did was look at the bestselling paperbacks at Amazon.com, although that really sorts now by “Featured” (that’s likely to get more tradpubs)

Featured paperback books at Amazon.com (at AmazonSmile: benefit a non-profit of your choice by shopping*)

Before I do, though, let me address the situation a bit more.

From very early on, people would bring up (in the Amazon Kindle forums, for example), this idea that e-books should cost less than p-books (paperbooks). They often based it on the idea that it didn’t cost a publisher anything to put out an e-book, and that the natural materials cost was less.

The first one was based on a couple of ideas that didn’t tend to be true. One was that the publisher already had the e-book rights if they had the p-book rights, which was very often not the case. Another was that all it took was scanning the book if they didn’t already have a digital copy…in reality, the formatting is considerable. It also leaves out royalties for the author for the e-book.

The second one assumes that the list price of a book is set primarily to cover the cost of production…specifically, the cost of the “parts”. That’s actually quite a small part of the cost…there are legal costs, marketing, editing, proofreading, cover artist, lay-out, and so on.

When I would go to check, there were usually a few reasons why an e-book might be more than the p-book:

• It was a case of Amazon discounting the p-book more…the publisher had set the price of the e-book lower, but Amazon had discounted the p-book more deeply
• The comparison was to a p-book which had not yet been released…it was on pre-order
• The p-book was used or remaindered

I can eliminate the second two when I look. I’ll also try to pick just from the Big 5 US trade publishers…although smaller publishers could also be included in the AAP survey.

Okay, here are the top ten that fit those parameters:

Rank	Paper List	Paperback	Kindle	Diff	Comp to List
1	$      16.00	$         9.89	$  11.99	$ (2.10)	$           (4.01)
2	$      16.00	$         9.52	$  11.99	$ (2.47)	$           (4.01)
5	$      15.99	$         9.39	$    8.04	$   1.35	$           (7.95)
6	$      20.00	$       12.00	$  12.99	$ (0.99)	$           (7.01)
7	$      15.99	$       10.53	$  13.99	$ (3.46)	$           (2.00)
8	$        9.95	$         5.81	$    9.95	$ (4.14)	$                  –
9	$      14.99	$         8.99	$    7.99	$   1.00	$           (7.00)
10	$      16.00	$         9.60	$  11.99	$ (2.39)	$           (4.01)
12	$      16.00	$         9.40	$    9.99	$ (0.59)	$           (6.01)
13	$      16.99	$       10.19	$  11.99	$ (1.80)	$           (5.00)

“Diff” compares the Kindle price to the paperback price…a negative number (in parentheses) means that the Kindle book costs more…which is the case in 8 out of 10 here. There are negative savings. In the last column, a bigger number means more  savings with the Kindle  book compared to the print list  price. Every Kindle book is lower than the print list price.

Is this the same situation it was in the past? Is it because Amazon can freely discount p-books, but not e-books?

Generally, Amazon’s agreements with the biggest publishers are, reportedly, a modified version of the Agency Model. What that means is that Amazon has a limited ability to discount the books.

It still shows that the e-book price is “set by the publisher”, at least when I checked. We no longer see a digital price list.

My guess is that the publishers are setting the price of the e-books relatively high, but not higher than the list price for paper.

Wildsubnet’s comment got me thinking about something else.

I would not buy a p-book instead of an e-book, for me to read, if  it was just a few dollars different. It is simply so much easier for me to read an e-book…I’d skip the book, in most cases.

That’s me, though…let me ask you:

If you don’t see an answer there that works for you, feel free to let me and my readers know what you think by commenting on this post.

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* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get.  Shop ’til you help!  By the way, it’s been interesting lately to see Amazon remind me to “start at AmazonSmile” if I check a link on the original Amazon site. I do buy from AmazonSmile, but I have a lot of stored links I use to check for things.

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

It’s over for Apple: Supreme Court denies certiorari in e-book pricing case

It’s over for Apple: Supreme Court denies certiorari in e-book pricing case

It’s the end of the line.

I’ve been writing about this literally for years, and it has been a very important story. It’s also been perhaps a tale of unexpected consequences.

First the quick headline, then some thoughts about it.

On Monday, the Supreme Court of the United States denied Apple (and a bunch of other cases) “cert”. What that means is that they did not certify that Apple’s loss at a lower court level in a case brought against it by the United States Department of Justice over e-book pricing deserved additional review.

The lower court’s ruling was clear enough that it didn’t need to be re-examined.

Even simpler: Apple loses.

Consumers will get some credit to buy e-books.

Now, let’s look at the stories within the story.

Apple is vulnerable

The DoJ also went after the biggest U.S. trade (the kinds of books you would have bought in a bookstore…not textbooks and such) publishers…all of which settled.

Apple fought on, and many people figured Apple had the resources to fight on as long as they wanted.

The thought was that Apple is so big, has so much money, and does so many court cases that, unlike the publishers, it was worth it for them to keep pouring money into this.

One again, they lost.

I’m not sure, but it’s possible the vacancy on the Supreme Court affected this. I’ve read that Justice Scalia would likely have supported Apple…and if this needed a majority and it was split (they don’t tell us much when they deny cert), that would have done it.

The tradpubs made a crucial strategic error

Here was the situation:

Amazon entered the very marginal e-book market (Sony was in it, but not much was happening in the USA with e-books) in 2007.

Part of their strategy was to promote that most bestsellers and new releases would be under $10…considerably less than the hardback equivalents (at least based on the publisher’s suggested retail price…but even discounted, those hardbacks were often above $10).

To do that, they clearly often sold the books at a loss: they paid more to the publisher than they got from the customer.

The publishers didn’t like that.

One of  their biggest concerns was “price value perception devaluation”. Who would pay $25 for a hardback when, according to Amazon, $9.99 was the right price for a popular new release novel?

While it does cost somewhat less to produce an e-book than a hardback (an early analysis said it was about 12.5% lower, as I recall…many of the costs, such as editing, lay-out, legal are the same), the margin on hardbacks (the profit you can make) was higher…and they were selling a lot more p-books (paperbooks).

What could they do, though? Realistically, if they wanted to be in the exploding e-book business, they pretty much had to go with, and cooperate with, Amazon, which absolutely dominated the market.

Then, in the tradition of tempting Apples 😉 , the maker of the iPod offered the tradpubs (traditional publishers) a path.

Apple was getting ready to release a new device…a small, flat, super-portable  computer. There were precedents in fiction (Star Trek: The Next Generation’s PADD, for one), but what would become the massively successful iPad was a big project.

The hardware innovator wanted to include books as part of the package and launch. It’s questionable if they really were that focused on the books in and of themselves, or whether they saw them more as a selling point for the device. If Apple hadn’t been introducing the iPad, would they ever have launched the iBooks store?

They wanted to get  the prestige of having the major publishers onboard, and they knew those companies weren’t happy with Amazon.

Apple offered to let the publishers set the prices the consumers paid (within certain parameters) through something called the “Agency Model”.

The Agency Model is not, in and of itself, illegal. The DoJ alleged that Apple and the tradpubs coordinated in its use to raise e-book prices…that was the problem.

In my opinion, the tradpubs made a very big error.

They accepted the plan, and raised  e-book prices on the most popular titles.

Why was it a mistake?

I’m seeing so many stories reporting this as it slowing the growth of the e-book market…perhaps critically wounding it.

I don’t think that’s what happened at all.

What it did was cede the market, in large part, to indies (independent publishers).

Indies had a very hard time having much of an impact on p-book sales. I was the manager of a brick-and-mortar bookstore…it just wasn’t practical for us to carry independently published books, for the most part. They didn’t have the resources to make selling their books practical. If I needed 100 copies in two days, they couldn’t do it, for example.

E-books changed all that.

You didn’t need book factories and distribution Godzillas. You didn’t have to fight for shelf space…it was pretty much infinite.

Indie e-book sales were present before the Agency Model came into being in 2010, but I think that move by the publishers and Apples greatly accelerated the market growth for the “outsiders”.

When I did an analysis of USA Kindle store bestsellers in January 2012, three of the top twenty them were from indies:

Top 20 analysis January 22 2012

When I did a similar analysis in January of this year, the story was different: none of the top ten were from Big 5 publishers.

None of the top 10 bestselling USA Kindle store books are from the Big 5

That’s not exactly apples to apples (so to speak), but it seems very clear to me.

At least at Amazon, the Big 5 share of the market for bestsellers has significantly eroded.

I think the tradpubs thought that raising e-book prices would mean that they would make more money…because people would keep buying their books at the same rate.

Instead, many readers instead discovered other options…and they’ve stuck with them.

You can’t undo that discovery.

The news stories reporting e-book slowed growth are actually reporting the Association of American Publishers reporting slowed growth…which might be more than offset by indies (although those stats are hard to get).

I think the publishers may also have wanted to “teach Amazon a lesson”. They did: they taught Amazon that the e-tailer could do its own publishing, at least for e-books, and do very well. 😉 Brick-and-mortar bookstores didn’t, for the most part, want to carry Amazon’s p-books, but in e-books, they are often at the top of Amazon’s bestseller list (thanks in part to Kindle First books (at AmazonSmile*)).

It’s about journalism

This case would have been very different without journalism.

Journalist Walt Mossberg was chatting with Steve Jobs at the iPad launch…and Jobs said that e-book prices would be the same at the then launching iBooks store and Amazon.

All Things Digital post by Kara Swisher

That was major evidence against Apple.

I think it’s also important to note that, while Mossberg had mainstream credentials, this was much more a new media incident. It wasn’t a sit down interview. It wasn’t even an ambush interview at Apple’s front door. It was a casual exchange which was recorded on a handheld, shaky Flip cam (remember those?), and then posted online.

You can watch the video (the e-book exchange is right at the beginning) in that Kara Swisher post (I’m relinking for those using screen readers: All Things Digital post by Kara Swisher).

I think those are the three main stories. It’s possible the pay-out to we consumers will boost the e-book business…we’ll get a credit to buy more e-books, as I understand it, not cash.

While this has been an important story, and I’m happy to have been able to provide whatever help to people in understanding it and its implications that I could, I won’t deny some relief in seeing its conclusion.

What do you think? Have questions? Do you think this was a good decision? How does it affect the future of e-books? Feel free to tell me and my readers what you think by commenting on this post.

Join thousands of readers and try the free ILMK magazine at Flipboard!

All aboard our new The Measured Circle’s Geek Time Trip at The History Project!

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get.  Shop ’til you help!  

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

 

Percentage of books priced $14.99 in USA Kindle store leaps up

Percentage of books priced $14.99 in USA Kindle store leaps up

I was looking at the

USA Kindle eBooks storefront (at AmazonSmile: benefit a non-profit of your choice by shopping*)

By default, Amazon now sorts them by “featured” books…presumably, one they have chosen to promote on the site. That doesn’t mean the list itself is manually stacked…it could be that the list is based on something which is manually stacked.

It was interesting to me how many of the books were priced at $14.99. They were popular books from tradpubs (traditional publishers).

If I look at the

USA Kindle store paid bestsellers (at AmazonSmile*)

the story is very different: only two of the top twenty sellers are priced at $14.99.

The number in the featured titles felt intuitively like a big jump to me…but I don’t like to just go with my intuition. 😉

Fortunately, on the first of the month, I do my

Snapshots

and that let me go back and compare the percentages of $14.99 book in the USA Kindle store.

I started with looking at the percentages for the months of this year…and it was dramatic!

That’s right…even though they aren’t yet 1% of the books in the store, the percentage doubled from October to November.

My next thought was that maybe it is seasonal. Maybe the prices go up every November.

So, I ran Novembers for the past five years:

2011	2012	2013	2014	2015
0.11	0.17	0.23	0.22	0.8

I also checked the trend for $9.99 over the past five years, to see if there might be a direct correlation:

It’s a very interesting chart, although it doesn’t show a direct correlation.

The Agency Model, where the publishers set the consumer prices, came into effect for e-books in 2010. That situation ended in 2013.

Now, I think most people who follow this would have expected the percentages of books priced at $9.99 to go up with the Agency Model ending…and the opposite happened (at least based on these November 1st numbers).

It’s worth noting that a modified version of the Agency Model is back…but it certainly doesn’t appear that Amazon lowered a bunch of prices to $9.99 when the Agency Model was over.

It’s intriguing…and not out of line with one of the possible scenarios I’ve suggested.

Tradpub frontlist titles may become more expensive…with hardback brand name author new novels getting, at least in some cases, to a $50 list price. Many are close to $30 now.

That doesn’t mean that everybody will pay that much for books to read. There are many inexpensive Kindle store books…even free ones.

While they aren’t the tradpub frontlist, there are former New York Times bestsellers available as part of

Kindle Unlimited (at AmazonSmile: benefit a non-profit of your choice by shopping*)

We may be moving back towards a much more tiered system of readers. Top tier people paying a premium for the latest books by the best known authors.

Something like that is how it was for a very long time…essentially, until paperbacks in the 1930s.

Then, we would have  a tier that pays for books, including through subsers (subscription services) like  KU.

Third, we would have people who read books for free. They would be much better off than lower tier readers were even ten years ago. There are so many legal free e-books! If a lower tier reader wants to read the latest Stephen King, for example, one possibility is that they’ll be on a waiting list at the public library…a list which might be months long.

How do tradpubs survive with brand name authors in a situation like that?

They charge more for books…and they lower their costs and risks. They stop taking chances on unproven authors…they let someone prove themselves by self-publishing first and showing an audience.

I wonder if that might actually flatten the prices for prestige books. Right now, a publisher will put out a small market book that gets them awards…and charge a lot more for it than for a popular novel. If everything is an expensive micromarket (even popular novels when first released), though, they might not need the price disparity. In other words, a 500 page book on an obscure historical topic might be much closer in price than a 200 page novel is currently.

I’ll keep my eyes on the pricing…

Join thousands of readers and try the free ILMK magazine at Flipboard!

When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get.  Shop ’til you help!  By the way, it’s been interesting lately to see Amazon remind me to “start at AmazonSmile” if I check a link on the original Amazon site. I do buy from AmazonSmile, but I have a lot of stored links I use to check for things. 

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

 

Apple’s appeal denied: SCOTUS bound?

Apple’s appeal denied: SCOTUS bound?

It says something about the size of your company when you can say that you aren’t really concerned about the nearly half a billion dollar you stand to lose…it’s the principle of the thing. 😉

Quick recap first:

When Apple was going to introduce the iPad, five of the then six biggest USA trade publishers (trade books are the books you would have bought in bookstores…not textbooks and such) switched to the “Agency Model” for e-books. In the Agency Model, the publisher is the official seller of the book (not the retailer, like Amazon or Barnes & Noble)…and the publisher sets the price the customer pays for the book. They offered that as the only arrangement to Amazon, which fought at first, but eventually adopted the model.

The United States Department of Justice went after Apple and the publishers for anti-competitive actions.

The five publishers settled.

Apple took it to court.

Apple lost.

Apple appealed Judge Cote’s decision.

According to this

Yahoo News post by Aaron Pressman

Apple lost this round, in a two-to-one decision.

Macmillan and Simon & Schuster, despite having settled, joined the appeal…essentially arguing that the restrictions placed on Apple also affected them.

I recommend you read the

decision

Here is a key section in a small excerpt:

11 We conclude that the district court’s decision that Apple orchestrated
12  a horizontal conspiracy among the Publisher Defendants to raise ebook prices is
13  amply  supported  and  well‐reasoned,  and  that  the  agreement  unreasonably
14  restrained trade in violation of § 1 of the Sherman Act.  We also conclude that the
15  district  court’s  injunction  is  lawful  and  consistent  with  preventing  future
16  anticompetitive harms.

Continuing, the court is, shall we say, unimpressed with the arguments presented:

17    Significantly,  the  dissent  agrees  that  Apple  intentionally  organized  a
18  conspiracy among the Publisher Defendants to raise ebook prices.  Nonetheless,
1  it  contends that Apple was entitled to do  so because the  conspiracy helped it
2  become an  ebook retailer.   In arriving at this  startling  conclusion — based in
3  large measure on  an  argument that Apple itself did not  assert — the dissent
4  makes two fundamental errors.  The first is to insist that the vertical organizer of
5  a horizontal price‐fixing  conspiracy may  escape  application of the  per se rule.
6  This  conclusion is based on a misreading of Supreme Court precedent, which
7  establishes  precisely  the  opposite.

I have skimmed the entire decision and the dissent, and will probably get through all of it in the next week or so.

The judicial dissent to the decision, to me, doesn’t seem to be defending what Apple did specifically (saying it was a good thing), but arguing that the majority misapplied the law.

Where does it go from here?

Apple could pay about $450 million…consumers would get some money.

Apple could appeal, getting to the Supreme Court…which might, as is argued in the Yahoo piece, decide in Apple’s favor, at least based on the current makeup of the court.

I’m not a legal expert, although I do follow things at the Supreme Court, somewhat. My intuition is that SCOTUS (Supreme Court of the United States) might simply decline to hear the case. I think it depends, to some extent, as to whether the or not the Supreme Court agrees with the dissent in this most recent decision: was the law misapplied.

Otherwise, the bar is pretty high. You appeal a decision asking the higher court to determine if what the lower court did was right…it’s not exactly about your “innocence or guilt”, it’s about the competence of the lower court.

The lower court is, in a way, innocent until proven guilty. When you argue your Supreme Court case, we start with the assumption that the lower court was correct…and the appellants have to  prove it wasn’t.

It’s worth noting that the Agency Model is back. It wasn’t the Agency Model itself (much as I dislike it personally) that was the problem, according to the DOJ: it’s that it was used collectively to control prices.

Why do I dislike the Agency Model?

I’m a former brick-and-mortar bookstore manager, so I freely admit that I could be prejudiced…but I want the retailers to compete on prices. I want Amazon, Kobo, and Barnes & Noble to set their own prices as a way to affect sales…not have the publisher set the same price for all stores. The new version of the Agency Model at Amazon modifies that a bit, allowing Amazon to do some discounting…but, as a customer, I like stores having pricing as a tool.

What do you think? Will Apple appeal? If they do, will they win? How invested are you in getting money from Apple over e-book pricing? Feel free to tell me and my readers what you think by commenting on this post.

Join thousands of readers and try the free ILMK magazine at Flipboard!

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get.  Shop ’til you help!  

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

Penguin Random House: heading for Hachette style fight…or joining KU?

Penguin Random House: heading for Hachette style fight…or joining KU?

Reports in the media suggest we may be heading for another

Hachazon War

with Amazon playing hard ball (hardback?) with Penguin Random House, the largest of the Big 5 USA trade publishers (trade books are the ones you bought in bookstores…not textbooks and such). Articles such as this

The Guardian article by Jennifer Rankin

suggest, not unreasonably, that we may be looking at another public and prolonged contract negotiation dispute. That involved Amazon making it harder to get books (both e-books and p-books…paperbooks) from Hachette, another of the Big 5. The e-tailer allegedly pulled pre-order options, kept prices high, took books off sale, and suggested that customers buy other books right on some books’ Amazon product pages.

PRH is the last of the Big 5 in this round of negotiations…Amazon has already reached agreements with Macmillan, Simon & Schuster, HarperCollins, and yes, Hachette.

Yes, that sort of war is possible…but little old optimist me wants to suggest another possibility. 😉

Random House has always been willing to stand alone from the other tradpubs (traditional publishers).

Sometimes I agree with them and see it as a benefit to readers, sometimes I don’t…but I have always admired their strength of conviction.

I disagreed with Random House when they blocked text-to-speech access in all of their e-books (at least, that was their officially stated policy).

I agreed with them when they were the lone member of the then Big 6 (their merger with Penguin reduced it to five) to stay out of the Agency Model agreement which also involved Apple (and resulted in successful action by the U.S. Department of Justice).

Interestingly, in both cases, Random House eventually reversed their positions…widely allowing TTS access and joining the Agency Model.

Even though that’s the case, they both show Random House’s willingness to lead.

I think it’s possible that these negotiations may involve another opportunity for PRH to lead.

They might become the first of the Big 5 to join

Kindle Unlimited (at AmazonSmile: benefit a non-profit of your choice by shopping*)

That’s Amazon’s subser (subscription service). You pay $9.99 a month for “all you can read” access to close to one million books (we should pass that before the end of the summer, I think).

I’m a happy KU member….even without the presence of the Big 5.

I still see threads from time to time in the Amazon Kindle forum asking if KU is “worth it”.

That’s going to depend on your use patterns.

For example, if you have more than one user of your account, KU is worth more to you than if you have just one.

You can have up to ten books out at a time.

That mean that, easily, my Significant Other and I can both be reading different KU books at the same time. It’s much more likely that I’m reading several and my SO is reading one, but you get the idea. 🙂

A family of four could save even more.

I also find that what it does it have me reading a selection of different, somewhat more expensive books. There are so many free and low cost books that I don’t need KU to have just something to read. What it means is that I’ll read a book that costs maybe $7.99 and up which I wouldn’t have read otherwise.

You might be surprised that there are books that are that expensive in KU…it seems like many people think that KU books are all indies (independently published), which are typically a lot cheaper than that.

That’s simply not true.

While we don’t have the Big 5 (yet), we do have well-known, tradpubs and well-known books. Publishers already participating include:

• W.W. Norton (Moneyball)
• Houghton Mifflin Harcourt (the Lord of the Rings, What If?…which was in KU and a New York Times bestseller at the same time)
• Scholastic (The Hunger Games)
• Mariner (Life of Pi)

However, it’s also clear that having the Big 5 in there would bring in more readers.

It’s not that the Big 5 are completely averse to subsers…some are involved (at least with the backlist…older books) in Oyster and Scribd.

I think that some participation in KU would be a very good thing for the Big 5. It’s going to increasingly become a source of discovery. You don’t need every one of your books in there. Having short stories in a popular series could be a big draw, and could lead people to buying the series (not just for themselves, but for gifts).

It would take guts, though, for a Big 5 tradpub to join KU. It could not help but be seen as a signal. Joining another subser? That can be seen as a statement against Amazon, not necessarily pro-subser (which worries some authors). Joining KU? That’s an endorsement of subsers generally.

In my annual

The Year Ahead: 2015

I predicted (shakily) that a Big 5 publisher would join KU this year.

I used Macmillan as an example, but Random House (now PRH) was always the most likely to blaze the trail.

The two might not be announced together…general contract agreement and KU participation. It might make sense to separate them by a bit. Amazon also may not announce a general agreement, but it will get into the media.

I would guess that they may also be trying to do this by summer. That’s a great time to promote KU, when people often have more time to read (not just students, but people going on family or other vacations).

We’ll see what happens, but I do think this would be cool! 🙂

What do you think? Does it matter to you if a Big 5 publisher gets into KU? If one joins, will others follow? Will we have a…Random House Rumble like the Hachazon War? Will Amazon.co.uk and Amazon.com settle with PRH at the same time? Feel free to tell me and my readers what you think by commenting on this post.

Update: thanks to reader and commenter rogerknights for a comment which improved this post.

Join thousands of readers and try the free ILMK magazine at Flipboard!

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get.  Shop ’til you help!  

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

 

 

Settlement pay-outs are here

Settlement pay-outs are here

I just got this e-mail from Amazon:

===

eBooks Antitrust Settlement Information

Dear Bufo Calvin,

Good news! You are entitled to a credit of $11.20 for some of your past Kindle book purchases. The credit results from legal settlements reached with publishers Hachette, HarperCollins, Simon & Schuster, Macmillan, and Penguin in antitrust lawsuits filed by State Attorneys General and Class Plaintiffs about the price of eBooks.

You don’t have to do anything to claim your credit, we have already added your credit to your Amazon account. We will automatically apply your available credit to your next purchase of a Kindle book or print book sold by Amazon.com, regardless of publisher. The credit applied to your purchase will appear in your order summary. If your account does not reflect this credit, please contact Amazon’s customer service.

For more information about the settlements, please visit Information for eBooks Antitrust Settlement (at AmazonSmile: benefit a non-profit of your choice by shopping*) [link added to e-mail]

Your credit is valid for one year and will expire after 03/31/2015. If you have not used your credit, we will send you another email 90 days before it expires to remind you that it is still available.

Thanks for being a Kindle customer.

The Amazon Kindle Team

===

That’s more than I expected, since I didn’t think we bought that many books under the Agency Model, but it’s still nice. 🙂

Here is the breakdown:

Category	Non-Minnesota	Minnesota
NY Times Bestsellers	$3.17	$3.93
Other Books	$0.73	$0.94

Check your e-mail: you may have one, too. However, it’s worth noting that you don’t need to check anything: the credit will apply automatically when you buy a Kindle store book or a paperbook from Amazon.

A few notes:

• This has nothing to do with Amazon having done anything wrong. I’m sure a lot of people will think, because they are being notified about the credit from Amazon, that Amazon is being forced to pay them for something. Amazon is simply the conduit for getting you the money that the publishers are being forced (well, agreed) to pay out for their actions
• This is also unconnected to the US Department of Justice legal action against the publishers and Apple (Apple is appealing the decision against them). This is a separate legal action, brought by the Attorneys General of most of the US States and some US territories
• This specific pay out is for Amazon customers. Customers who bought qualifying e-books from other sources are entitled to the settlement…but the mechanism for getting it may not be as easy as this

Here are Amazon’s FAQs (Frequently Asked Questions) on it:

Customer FAQ for Attorneys General E-book Settlements (at AmazonSmile)

and here is the general page for the settlement (not just Amazon):

https://ebooksagsettlements.com/

The short story on what made this happen:

Amazon transformed the e-book market with the introduction of the Kindle in 2007 and its own e-book store.

Amazon priced many (it was never promised to be all e-books) bestsellers and recent releases at$9.99, sometimes taking a loss on a sale.

The publishers didn’t like that. One of their concerns was “price value perception”…that the customers would get the idea that a book (paper or e-book) should cost $9.99, and that that would hurt their p-book business.

The publishers, prompted by Apple (according to the DoJ case) instituted a new pricing model, where the publishers set the prices customers paid (“the Agency Model”).

The Attorneys General sued on behalf of the customers, saying that this resulted in higher prices.

The publishers involved settled, agreeing to pay the customers back.

Now, I think one of the most interesting things here is that you can use this credit to buy books from any publisher.

That’s something to consider.

If you take your settlement and use it to buy books from a publisher which wasn’t part of this (an independently published book, perhaps…or, you know, ten of them!), that is really making a statement to the ones who did participate (Hachette, HarperCollins, Simon & Schuster, Macmillan, and Penguin…and all of their various imprints).

I am an independent publisher like that, in a very minor way (I’ve only published my own works through Amazon’s Kindle Direct Publishing). I also am not particularly mad at the tradpubs (traditional publishers) who settled.

However, I can certainly see indies using this for advertising: in fact, I think I’ll suggest that over at

The Writer’s Guide to E-Publishing

after I finish alerting you. 🙂

I’m going to suggest an ad like, “Don’t give them your money back”.

It’s nice to see this chapter closed…enjoy your books!

What do you think? Did you get an e-mail? Was it more or less or about what you expected? Are you going to spend the money any differently (perhaps splurging on a more expensive book) than you normally would?  Is this a fair result, or should have there been bigger (or smaller) penalties? Feel free to tell me and my readers what you think by commenting on this post.

===

Nominate a child to be given a free Kindle at Give a Kid a Kindle.

===

* I am linking to the same thing at the regular Amazon site, and at AmazonSmile. When you shop at AmazonSmile, half a percent of your purchase price on eligible items goes to a non-profit you choose. It will feel just like shopping at Amazon: you’ll be using your same account. The one thing for you that is different is that you pick a non-profit the first time you go (which you can change whenever you want)…and the good feeling you’ll get.  Shop ’til you help!  

This post by Bufo Calvin originally appeared in the I Love My Kindle blog. To support this or other blogs/organizations, buy  Amazon Gift Cards from a link on the site, then use those to buy your items. There will be no cost to you, and a benefit to them.

Kindle New York Times besteller prices drop dramatically

Kindle New York Times besteller prices drop dramatically

Thank you, US Department of Justice!

I’ve been tracking the prices of New York Times bestselling fiction hardback equivalents in the USA Kindle store in my monthly Snapshot analysis posts since September 1, 2010, and this is the lowest I’ve seen them.

This follows on the heels of the last remaining publishers dropping the Agency Model, which had meant that Amazon could not discount those publishers’ e-book prices.

Penguin had been the last to settle with the DoJ, and Random House was bound by the settlement (that was sort of a condition of the two of them merging).

The average NYT bestseller hardback fiction equivalent is down to $10.08…that’s the first time it has been under $11 since I’ve been tracking it, and that’s way under!

No title is as high as $12.99, which had been the de facto standard after the Agency Model, although many books were higher.

While, interestingly, none of them are at exactly $9.99, several of them are below that.

We can also thank Amazon, of course…they didn’t have to lower prices just because they had the power to do so again, but they have.

This is the current list:

1. The Cuckoo’s Calling: $6.50
2. Inferno: A Novel (Robert Langdon): $10.99
3. Mistress: $11.99
4. And the Mountains Echoed: A Novel: $10.99
5. The Third Kingdom (Richard and Kahlan): $11.04
6. Night Film: A Novel: $10.99
7. The Bone Season: $4.99
8. Gone Girl: A Novel: $10.99
9. The Kill List: $10.99
10. The Husband’s Secret: $6.50
11. The English Girl: A Novel (Gabriel Allon): $9.00
12. The Ocean at the End of the Lane: $8.00
13. A Dance with Dragons: A Song of Ice and Fire: Book Five: $11.99
14. Rose Harbor in Bloom: $10.99
15. William Shakespeare’s Star Wars: $7.48
16. Book published by Atria (an imprint of Simon & Schuster) not listed due to blocking text-to-speech access*: $10.67
17. The Girl You Left Behind: $11.99
18. Compound Fractures (Dr. Alan Gregory): $11.99
19. The Last Witness (Badge of Honor 11): $10.99
20. Book published by Simon & Schuster not listed due to blocking text-to-speech access*: $12.60

While some of you may be wondering why the average is over $9.99 if Amazon is setting the prices, well, there were always some (the original November 19 2007 press release said “…current New York Times Best Sellers and New Releases, which are $9.99, unless marked otherwise…”). That price was set more than four years ago…and the Agency Model did create price inflation.

On the other hand, look at the books on this list that are under $7.50! Also, compare these to the p-book (paperbook) prices. That weird situation where the e-book prices were sometimes higher also ended with the Agency Model (although it can happen from time to time due to other reasons, like the paperback being a pre-order and the Kindle price still being based on the hardback).

It’s a great time to be a reader. 🙂

Here are some of the earlier stats:

August 1, 2013:

11.99 12.99 9.99 12.99 11.99 10.99 9.99 12.99 9.99 9.99

12.99 12.99 11.04 12.99 8.52 12.99 14.99 10.91 11.04 11.84

Average: $11.71

July 1, 2013:

7.99 12.99 11.04 12.99 12.99 11.04 11.04 7.99 11.04 11.04

12.99 12.99 7.99 7.49 11.04 14.99 7.49 12.99 10.99 12.74

Average: $11.09

June 1, 2013:

12.99 12.99 12.99 11.99 8.99 12.99 13.99 12.99 12.99 9.00

14.99 12.99 9.99 9.99 10.99 14.99 10.99 12.80 9.68 12.99

Average: $12.12

May 1, 2013:

12.99 10.99 12.74 12.99 7.99 12.99 10.99 12.99 12.99 12.99
12.99 14.99 12.99 12.99 10.99 10.99 12.99 7.49 14.99 12.59

Average: $12.23

April 1, 2013:

12.74 12.99 11.99 12.99 12.99 12.99 12.99 12.99 12.99 9.45
11.99 14.99 14.99 9.68 12.99 12.99 12.99 9.78 11.04 10.67

Average: $12.36

March 1, 2013:

12.99 12.99 12.99 12.99 N/A 10.99 12.99 12.99 11.99 12.99
12.74 12.99 12.99 12.99 12.99 12.99 12.99 12.99 12.99 14.99

Average: $12.92

February 1, 2013:

N/A 12.99 12.74 12.99 9.99 12.99 12.99 12.99 11.04 12.99

9.99 8.00 12.99 11.99 12.99 12.99 12.99 14.99 12.99 13.59

Average: $12.38

January 1, 2013:

12.99 12.99 12.99 12.99 11.04 11.04 12.74 11.43 12.74 12.99

11.99 9.99 12.99 7.50 12.99 8.00 19.99 13.49 13.99 14.99

Average: 12.49

December 1, 2012:

12.99 12.99 12.99 12.99 12.99 12.99 14.99 12.99 12.99 11.99

12.99 12.99 19.99 9.50 12.99 12.99 12.99 12.99 12.99 12.99

Average: $13.22

November 1, 2012:

12.99 12.99 14.99 12.99 12.99 12.99 19.99 12.99 9.50 12.99

11.99 12.99 12.99 11.99 12.99 13.99 14.99 12.80 11.99 12.99

Average: $13.26

October 1, 2012:

19.99 12.99 12.99 9.50 12.99 12.99 9.99 12.99 12.99 12.99

12.99 12.99 14.99 12.99 11.99 9.45 12.99 11.99 12.99 12.99

Average: $12.84

September 1, 2012:

12.99 12.99 12.99 12.99 11.99 14.99 12.99 12.99 12.99 12.99

12.99 12.99 12.99 11.99 12.99 12.99 9.99 14.99 12.99 14.99 1.99

Average: $12.49

August 1, 2012:

12.99 12.99 12.99 12.99 12.99 12.99 12.99 14.99 12.99 12.99

12.99 12.99 12.99 11.99 12.99 12.99 12.99 12.99 12.99 12.99

Average: $13.04

July 1, 2012:

12.99 12.99 12.99 12.99 12.99 12.99 12.99 12.99 12.99 12.99

12.99 14.99 12.99 12.99 12.99 12.99 14.99 14.99 12.99 12.99

Average: 13.29

June 1, 2012:

12.99 12.99 12.99 12.99 12.99 12.99 12.99 12.99 12.99 11.99

12.99 9.99 14.99 12.99 12.99 12.99 12.99 11.99 12.99 14.99

Average: $12.94

May 1, 2012:

12.99 12.99 12.99 12.99 12.99 12.99 12.99 12.99 12.99 12.99

12.99 12.99 12.99 14.99 11.99 12.99 12.99 12.99 12.99 12.99

Average: $13.04

April 1, 2012:

12.99 12.99 12.99 12.99 12.99 12.99 12.99 12.99 12.99 12.99

14.99* 12.99 12.99 12.99 14.99 11.9912.99 12.99 12.99 12.99

Average: $13.14

March 1, 2012:

12.99 12.99 12.99 12.99 12.99 14.99* 12.99 12.99 12.99 12.99

9.99 12.99 14.99 12.99 12.99 12.99 12.99 12.99 12.99 12.99

$13.04

February 1, 2012:

12.99 12.99 12.99 12.99 12.99 14.99* 12.99 9.99 12.99 12.99

12.99 12.99 12.99 12.99 12.99 12.99 14.99 12.99 12.99 12.99

Average: $13.04

* There was also an enhanced audio/visual version of this book for $16.99. I chose to enter it here only in the standard version, since that most closely represents the comparison between paper and e-book versions. It isn’t necessary to pay $16.99: it’s an additional payment for more features

January 1, 2012

Average: $13.14

December 1, 2011

Average: $12.40

November 1, 2011:

Average: $12.45

October 1, 2011:

Avg: $13.09

September 1, 2011:

Avg: 12.99

August 1, 2011:

Avg $13.29

July 1, 2011

Avg $13.09

June 1, 2011

Avg: $12.81

May 1, 2011

Average: $12.84

April 1, 2011

Average: $12.69

March 1, 2011

Average: $12.83

February 1, 2011

Average: $12.25
Agency Model average: $12.86
Non-Agency Model average: $9.99

January 1, 2011

Average: $12.52

Agency Model: $12.99

Non-Agency: $9.99

December 1, 2010:

Average: $12.78
Agency Model average: $13.52
Non-Agency Model average: $9.99

November 1, 2010:

Average: $12.83
Agency Model average: $13.59
Non-Agency Model average: $9.99

October 1, 2010:

Average: $12.38
Agency Model average: $12.79
Non-Agency Model average: $10.87

September 1, 2010:

Average: $12.52
Agency Model average $12.99
Non-Agency Model average $9.99

* A Kindle with text-to-speech can read any text downloaded to it…unless that access is blocked by the publisher inserting code into the file to prevent it. That’s why you can have the device read personal documents to you (I’ve done that). I believe that this sort of access blocking disproportionately disadvantages the disabled, although I also believe it is legal (provided that there is at least one accessible version of each e-book available, however, that one can require a certification of disability). For that reason, I don’t deliberately link to books which block TTS access here (although it may happen accidentally, particularly if the access is blocked after I’ve linked it). I do believe this is a personal decision, and there  are legitimate arguments for purchasing those books. 

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

Agency Model ends for Random House, Penguin: new discounts

Agency Model ends for Random House, Penguin: new discounts

Earlier today, I gave you a heads-up that something was happening, when some of the New York Times bestseller hardback fiction equivalents were unavailable in the USA Kindle store. I noticed they were from Random House (including its imprints), and speculated that it had to do with the end of the Agency Model for that publisher.

Well, that was it!

It no longer says, “This price was set by the publisher.” for Random House or Penguin (they merged recently).

Penguin was the last of five publishers to settle with the U.S. Department of Justice in a legal action against them (and Apple) for price-fixing, utilizing the Agency Model.

That is now over for e-books in the USA.

The Agency Model could return in a couple of years, but the situation would be different.

The key thing is that Amazon (and other retailers) can now discount e-books from Penguin and Random House again…and we’ve started seeing those already.

This will allow for price wars for the holiday season..yay!

We should also stop seeing e-books priced higher than the p-books (paperbooks) as much…it will still happen sometimes. A few reasons it happens that are unaffected by this:

• The paperback price is a pre-order, and the e-book price is still based on the hardback
• The p-book is either used, a bargain copy, or not coming from Amazon
• Someone is looking at two different territories when doing the comparison (the USA and France, for example)

There are many imprints (typically, a part of the company that specializes in a particular sort of book, like mysteries or science fiction, and that has a different name) for Random House and Penguin, which makes a comprehensive search complicated. Here are a couple of links for their books in the USA (outside the USA will not be directly affected by this change) Kindle store, and then I’ll link to some books that recently dropped.

Penguin books in the Kindle store
Random House books in the Kindle store

Note that the price-changing won’t happen on every title, and it make take a few days for them to process it all. Amazon now gets to decide the consumer prices again, and there is a lot involved in that (as a former bookstore manager, it surprised me that the publishers wanted to set the consumer prices, which the Agency Model enabled them to do…it wasn’t their area of expertise).

Here are a few titles I noticed. I got these by going to the most useful site for Kindle owners on the internet:

eReaderIQ

Among their many free and excellent services is tracking price drops for you. You can list books, and they’ll send you a free e-mail when it drops an amount you specify. You should go check those lists, your wishlists, and any other way you are tracking books to see what has gone down. They list the most recent drops…that’s what I checked.

I specifically chcecked price drops in the past 24 hours, and went down at least a dollar.

As usual, I won’t knowingly link to books which block text-to-speech access.

• A Game of Thrones 4-Book Bundle: A Song of Ice and Fire Series: A Game of Thrones, A Clash of Kings, A Storm of Swords, and A Feast for Crows (Song of Ice & Fire) by George R.R. Martin (down to $15.72…it’s been as high as $35.99…the bundle does not have TTS blocked, although the individual first book does. Consider this a bargain for these books, and think about it as a gift for a holiday or birthday…you can delay when gifts are delivered)
• Augustus: A Novel (Vintage) by John Williams (down to $8.39)
• Defending Jacob: A Novel by John Laday (down to $6.83)
• The Guernsey Literary and Potato Peel Pie Society (Random House Reader’s Circle Deluxe Reading Group Edition): A Novel by Mary Ann Shaffer and Annie Barrows (down to $7.79)
• The Outsiders by S.E. Hinton (down to $6.42)

There are, of course, many, many more.

By the way, I’m going to try some new code here…it’s supposed to let you see a preview of the book cover when you hover over it (that probably will work in a browser, maybe on a Fire, but probably not on a non-Fire Kindle. I’d appreciate feedback on it…I don’t want to cause anybody any problems with it, and I hope it helps. I just tested it on this computer (which I have borrowed), and it didn’t seem to do or hurt anything. 🙂

Enjoy the discounts!

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

Amazon makes an announcement about e-book settlement pay-outs

Amazon makes an announcement about e-book settlement pay-outs

In this

Kindle Forum Announcement

Amazon gave more information on the e-book pay-outs from the settlements between publishers and most US states (Minnesota chose not to participate…they may be pursuing something separately).

This is not the Apple Agency Model court case: we’ll likely hear more about that one next week, but it’s not likely that one results in direct payments to customers (which this one does).

Amazon says in part that the amouts are :

“… estimated that it will range from $0.73 to $3.82 for every eligible Kindle book that was purchased. To be eligible, customers must have a U.S. billing address and must have purchased a Kindle book published by Hachette, HarperCollins, Simon & Schuster, Penguin or Macmillan between April 1, 2010 and May 21, 2012.”

This is higher than previously announced, because two more publishers had settled since the first estimates were made.

Random House isn’t part of this, because they didn’t join the Agency Model when everybody else did…they joined it later. The concern here is an alleged conspiracy, not the Agency Model iteslf. You can’t be a conspiracy by yourself. 🙂

You don’t need to do anything, and it isn’t quite all finalized yet (the next big date is December, 2013…and then there could be appeals, although since the publishers have already agreed to this, I think appeals are unlikely). The total pay-out is something like $165 million.

You can see more information here:

Customer FAQ for Attorneys General E-book Settlements

I also see a lot of people confused about this, and think that Amazon is being punished. The money is being sent to you by Amazon, but they didn’t do this…the publishers did, and appear to have forced the Agency Model on Amazon, according to that Apple trial. Think of it like your local store giving you a manufacturer’s rebate…the store gives you the money, but it comes from the manufacturer.

Update: thanks to reader jjhitt for letting me know I had a broken link…should be fixed now. I’m away from my normal resources, which is making things a bit more complicated.

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

DoJ proposes Apple punishment…and it’s a doozy

DoJ proposes Apple punishment…and it’s a doozy

It’s not approved yet, and Apple will appeal…but the Department of Justice (DoJ) is definitely looking to have Apple punished for their behavior in the e-book pricing conspiracy…and it goes way beyond just addressing specific consumer losses.

The

DoJ press release

gives you the highlights…and some of them will certainly affect some of my readers.

One interesting one: Apple would be prohibited from stopping Amazon (and others) from having links to buy books in their apps (for two years).  That’s a biggie: right now, if you are using Amazon’s Kindle for iPad app, you can’t buy books directly from it…you have to leave it and use a browser. There was a lot of talk about that when that prohibition was put into the Apple Appstore (I wrote about it in Bye-bye, Buy: Apple changes app policy? more than two years ago).

The proposed rules would also go beyond e-books, affecting music and movies in specific ways.

Here are some of the proposals:

• Apple would have to terminate its contracts with the five publisher co-defendants (who all settled before it was in court). Terminating contracts can cost you big money, since negotiations begin again…and who doesn’t think Apple would be more constrained in negotiating this time?
• For five years, Apple can’t enter into e-book distribution contracts which would “constrain it from competing on price”…I would think this means no “most favored nation” contracts (“you can’t sell it for less somewhere else), and possibly no Agency Model
• Apple can’t serve as a conduit of information between publishers. That means they can’t say, “We have three on board with our deal already”, for example. Again, that hurts negotiations
• Apple can’t retaliate against publishers that don’t adopt an Agency Model (maybe they are okay…I need to read the actual proposal, and we need to see what the court approves)
• I’m going to quote this one: “Apple will also be prohibited from entering into agreements with suppliers of e-books, music, movies, television shows or other content that are likely to increase the prices at which Apple’s competitor retailers may sell that content.” I doubt Apple expected videos to get pulled into this court case
• A full-time external compliance monitor would be hired…and Apple would have to pay all of the salary and expenses? I assume somebody like that makes six figures. I was also amused by this part of it: “The antitrust compliance officer will be responsible for training Apple’s senior executives and other employees about the antitrust laws and ensuring that Apple abides by the relief ordered by the court.” Like they didn’t already know the rules…I couldn’t help but be reminded of being sentenced to Traffic School 😉

Again, this is not final, and Apple will almost certainly fight it.

It feels a little to me like the DoJ is trying to seize on a rare legal victory over Apple…like putting Al Capone in Alcatraz for tax evasion. 😉

We’ll keep an eye on it (this one might even affect Apple stock), but feel free to tell me and my readers what you think by commenting on this post.

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