Amazon’s three plan strategy for customers

Amazon’s three plan strategy for customers

Amazon is clearly moving into a new era, and they’ve come up with an interesting new plan for customers (or purchasers, for those who prefer alliteration) 😉 …or rather, perhaps it is three plans.

They are extending this through the different types of content…and let’s take a look at them.

The three plans are this:

1. Pay by the item (Piece): these people have Amazon accounts (I’m not counting “no account” as a plan), but make decisions one item at a time. When they want to watch a movie, read a book, or listen to a song, they are willing to pay for it that point
2. Amazon Prime (at AmazonSmile: benefit a non-profit of your choice by shopping*) members (Prime): they pay (typically) $99 a year, and want to get the most out of it. They certainly may pay for individual items, too, but are generally pretty satisfied with the selection
3. Premium payers: they may have Prime (Premium), but they will pay more for even more stuff. 🙂 They’ll lay out more money for other subscriptions

Let’s take a look at how this works for e-books first:

“Pay by the item” folks just buy e-books when they want them. They aren’t Prime members at all…if they pay $0.99 for a book or $9.99, that’s what they pay.

The Amazon Prime members, which Amazon just started really serving with Prime Reading

Frequently Asked Kindle Questions: Prime Reading edition

have access to a rotating set of about 1,000 titles.

For people who will pay more for the most options, they subscribe to

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

perhaps on top of Prime (which is what we do). That gives them close to one and a half million titles.

Amazon also just introduced

Amazon Music Unlimited (at AmazonSmile)

which sets up a similar system for music.

Some people will buy music as they want it.

Others will be Prime members, and will be satisfied with Prime music, which has about 2 million titles (although rumor has it that some songs have moved from Prime Music to the Premium Amazon Music…causing some previously created playlists to have gaps).

Amazon Music Unlimited has “tens of millions” of songs…and you can download music. There are more than 41 million digital songs at Amazon, so this may not be all of them (that will depend in part on the deals they strike with rightsholders), but it will be most of them.

Prime members can pay an additional $7.99 a month (or $79 for the year), non-Prime members by $9.99 (and they don’t show a discounted annual option), and Echo owners can get it at $3.99 a month (for a single Echo device…$14.99 or $149 a month, in the upcoming Family plan).

What about games?

Yet another recent addition for Prime members (see the pattern?) 😉 is Twitch Prime. People can buy games one at a time, take what comes with Prime, or subscribe ($4.99 a month, with other options).

With video, you get pay by the piece, Prime, or pay for additional content through Streaming Partners subscriptions:

Amazon unplugs cable…and recent e-book price drops

It’s an interesting strategy, and I can see it being successful.

For us, we were Piece buyers for a long time. I was, I would say, relatively slow to subscribe to Prime. At the time, the one big advantage was free shipping in two days on many items, and I would do the calculations and think it wasn’t worth it. I was underestimating the convenience factor, and then Prime added all of these other perks!

When Kindle Unlimited was released, we went for it…and have been happy with that. What was available for Prime members then, the KOLL (Kindle Owners’ Lending Library) was just so limited (one book a calendar month), that after a while, I didn’t even pay attention to it. We went from Piece to Premium…but there wasn’t much of a Prime choice. Now that there is, we are staying with Premium (keeping our KU subscription), because, well, I read weird books. 😉 Those tend to be in KU, but not in Prime Reading.

I like music, but feel adequately served by Prime Music. At this point, I don’t see becoming a Premium music family…and we don’t play videogames much (my Significant Other plays Candy/Soda Crush and Scrabble, but I think that’s about it). We’ve been Prime music consumers, and now, even though we’ll probably never use, we are Prime videogame consumers

Let me just ask this for e-books…which one of the types of purchasers are you/the people on your account?

What do you think? What makes your decision (if anything) to pay for a premium subscription? Do you like the recent additions to Prime? Feel free to let me and my readers know by commenting on this post.

Note: this post was updated when the short names for the three plans occurred to me, and to add more content and the poll to it.

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! Do you have what it takes to be a Timeblazer?

* 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.

“It’s discounted…just trust us”

“It’s discounted…just trust us”

This is a fascinating

New York Times article by David Streitfeld

The main thrust of the article?

Amazon is eliminating list prices from many product pages.

As a former retail manager, that seemed odd to me at first, especially for a discounter to do.

A number of people re-flipped the article from my free ILMK magazine at Flipboard so it has caught the attention of other people as well.

First, what are we discussing?

The “list price”, similar to the MSRP (Manufacturer’s Suggested Retail Price) is what the publisher suggest that the price of a book should be in a store (or online).

Nobody is mandated to use that price…it’s possible a book never sells for the list price, although small bookstores may certainly do it.

It’s valuable as a comparative measure…if the list price of a book is $20 and one store sells it for $20 and another sells it for $16, most people will feel like they are saving $4 by shopping at the discounter (and they are, if they have already committed to buying the book, and if the cost of buying it is the same…for example, the cost of gas is the same if you are going to a physical store).

One of Amazon’s three tenets is price (the other two are selection and customer service).

I decided to take a look at the

Monthly Kindle Book Deals for $3.99 or less each (at AmazonSmile)

which I wrote about here:

Monthly Kindle Deals for $3.99 or less each: July 2016

I checked some of the tradpubbed (traditionally published books).

Interestingly, this is promoted as “up to 80% off”…but sure enough, I wasn’t seeing the list prices on the product places.

However, I could see it on the deals’ page, before I tapped on an individual title.

That means that if you get to the book, you can’t see how much Amazon could be saving you.

I think they may be experimenting with this, but how could it be a positive for them?

I suppose it could get people to stop thinking about price. That would give Amazon two advantages I could see.

If you aren’t thinking about price and list price, you aren’t thinking about the competitors.

That’s where I am with Amazon. I don’t tend to comparison shop any more: I just want to buy from Amazon. It’s so much easier…I trust them with my credit card information and shipping address. I can order right through our

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

just using my voice.

They don’t need to entice me based on a single discount.

I’m fine with that.

I’ll shop around if I’m not satisfied with Amazon’s price, but that would be the decision not to buy something from Amazon…I think price isn’t much influencing my decision to buy something.

The other thing is that, by not having a list price shown, it would make it easier for them to raise the price in the future. You would notice if a book went from $5 below list to $3, but you might not as easily notice a book going from $6.99 to $8.99.

Now, I’m not saying that’s the plan, but to me, this is a major shift away from Amazon promoting itself on the basis of being a discounter. It moves the more towards what I’ve said they want to be…the “infrastructure of the internet”.

What do you think? Does it bother you that Amazon might not show list prices? Do you think they’ll stay with and expand this strategy? Do you think of Amazon as a discounter now, and comparison shop before you buy something? 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! Do you have what it takes to be a Timeblazer?

* 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.

Recent price drops…and do you still care as much?

Recent price drops…and do you still care as much?

Note: my apologies, but I inadvertently left off listing some recent price drops, which I intended to do from the start of this post! You’ll find them towards the end of it.

My Significant Other is a big fan of Fannie Flagg’s writing…although when you say “Fannie Flagg” to me, I still think first of The Match Game. 😉

It was interesting to get an e-mail from Amazon announcing a new Fannie Flagg novel:

The Whole Town’s Talking (at AmazonSmile: benefit a non-profit of your choice by shopping*)

Interesting…and then exciting!

Why that progression?

I had to go to Amazon to see if text-to-speech (TTS) access was blocked.

We don’t buy books where the publisher has chosen to insert code into it to block TTS access, as regular readers know. It’s not so much for us, although I typically use it for hours a week. It’s more because I think it disproportionately disadvantages those with print challenges and disabilities.

In fact, my SO wouldn’t have wanted me to mention the book to them if the access was blocked…but it wasn’t!

Others had been, but in writing this post, I see that at least one of them which was blocked no longer is…more good news!

Still, we didn’t pre-order it (it comes out October 25, 2016 in the USA).

What was the issue now? 😉

It’s more expensive than we usually pay for an e-book now: $14.99.

That’s not out of range for New York Times hardback-equivalent bestsellers, which this is very likely to be. This was what I recorded in my April 1st Snapshot:

—

Price Point Analysis of New York Times Hardback Fiction Equivalents

April 1, 2016

14.99 14.99 13.99 9.99 13.99 12.99 13.99 14.99 13.99 14.99
13.99 12.99 12.99 12.99 12.99 13.99 10.99 12.99 14.74 11.99

Average: $13.48 (+0.04) 1 title under $10

—

Three of those were $14.99…and by October, there may be more.

We just don’t usually buy current Big 5 bestsellers for ourselves any more.

As happy members of

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

we pay $9.99 a month (well, we took advantage of being able to get it on sale, when that was possible). That, and gifts, are how we tend to read current books from tradpubs (traditional publishers).

This is a book we’d especially like to read, though…actually, my SO will really want to read it, and I like to read what my SO reads. 🙂

What’s the answer?

Listing the book at

eReaderIQ

That way, I’ll get a free e-mail if the price drops an amount I specify. I expect this one may have price drops, because retailers will compete on the price (as much as they can under the current agreements with publishers).

How much would we pay for it?

When a book is more than $2.99, it feels like a luxury. 🙂 I think we might pay $9.99 for this one, so I’ll set that as the level.

Well, actually, what I ended up doing, since it looks like more of the books may not have TTS blocked, is tracked Fannie Flagg the author…so I’ll find out if any of the books go down in price. You do that here:

http://www.ereaderiq.com/track/authors/

Again, though, I used to do this much more often. We just aren’t that emoionally tied up in current tradpubs any more.

There are so many more options that cost less and can be equally satisfying, at least for us. I don’t mind reading older books in KU, or  new indies (independently published books).

How about you? Do you still care as much about when a tradpub books goes on sale as you used to care?

Let’s do a quick poll. If you can’t find a good choice between the options, you can always comment on this post:

The e-book is price considerably lower than the hardback, by the way. The hard-covered is list priced at $28, and Amazon has the pre-order discounted to $22.21.

Huh, that’s interesting! The trade (larger size) paperback is the same price as the hardback…and not discounted. So, you can pre-order it this (from cheapest to most expensive):

• E-book $14.99
• Hardback $22.21
• Trade paperback $28.00
• Audiobook on CDs $40.00

These prices may (and likely will) change before it is released, and they are just the prices I see now for the USA.

I see that they do have a “Pre-Order Price Guarantee”. When the publisher sells the book, they don’t technically have to do that, but they generally do.

Update: here are some recent price drops…(prices can change at any time and may not apply in your country)

• The Lords of Discipline by Pat Conroy from $9.60 to $2.99
• The Left Behind Collection by Tim LaHaye from $47.39 to $21.99
• Dragonbane: A Dark-Hunter Novel by Sherrilyn Kenyon from $14.99 to $8.99
• Animals Make Us Human by Temple Grandin (I strongly recommend it) from $10.99 to $2.99
• How to Succeed in Business without Really Crying by Carol Leifer from $18.99 to $2.99

What do you think? Do you care less about  Big 5 books being discounted? Do you think that will be increasingly true? What are the factors which effect that? Will we see popular tradpubbed books go up farther in price? Alternatively, will begin to lower the prices if the sales go down (they’ve generally been having good sales on hardbacks, but it could happen)? 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!

*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.

The three tiers of readers

 The three tiers of readers

There was a time when only the rich could read.

Literacy was actively limited. It was illegal to teach some groups of people to read.

For example, there is this bill from 1830 in North Carolina:

A Bill to Prevent All Persons from Teaching Slaves to Read or Write, the Use of Figures Excepted (1830)

Books were also very expensive: rare, hand-crafted items.

Certainly, Gutenberg was one of the most important changes, in the mid-15th Century. The new tech made books more easily reproduced, and more widely distributed.

The early 19th Century, with the Industrial Revolution, brought a new level of literacy and leisure…cheap books in “low brow” genres flourished: penny dreadfuls in England, and later (into the early 20th Century), dime novels in the USA.

Another major change came in the 1930s with the rise of paperbacks: inexpensive, “mass market” versions of the same books that came out in relatively expensive hardbacks. That was the notable change from the penny dreadfuls and dime novels: while mass market paperbacks did have genre novels, it was also possible to read the same content as the upper class.

In the 21st Century (especially following the release of the Kindle in 2007), e-books further democratized books. Super low cost distribution transformed publishing from being mostly in the hands of a few companies that could afford to develop and distribute p-books (paperbooks) to something anyone could do.

However…

Those traditional publishers (tradpub) still exist, and still have a concentration of power. There is still prestige in owning books. As reading competes with other forms of entertainment, it hasn’t simply become what television was before “pay TV”, where almost everyone could see the same shows.

I’m seeing indications of a three-tiered market for books. This is not something I’m saying definitively exists right now. It’s a hypothesis for what may be happening, and how things may develop.

If things do turn out to follow this pattern, it will matter to you as a reader.

Publishers and retailers would develop for and market to the different tiers differently. Since advertising is now very channeled (different people see different things), you might not even be aware of a book you would otherwise want to read.

What I’m going to do next is lay out the characteristics of the three tiers of readers. I’m also going to poll you, to see which one you think you might be. I also want to be clear…you could be more than one, but my guess is that one of them will be the strongest affiliation for you.

Top Tier

• Price point: ten dollars and up
• Buying window for new releases: right away
• How much they read: usually reading one book, but might take a couple of weeks or more to read a novel
• High end brand user: more likely to use an Apple tablet than an Amazon one, but may own a Kindle Voyage or other top of the line EBR (E-Book Reader) in addition
• Authors: John Grisham, Michael Connelly
• Publishers: the tradpubs, limited release editions from specialty houses
• Discovery: old media, especially magazines and newspapers, like the New York Times
• Summary: doesn’t compromise, likes paying more to get a book right away

Middle Tier

• Price point: under ten dollars, but still costing something. $1.99, $2.99, $0.99, $4.99 are popular
• Buying window for new releases: waits for them to go on sale, but will likely read a favorite author within a year or two of release
• How much they read: usually at least a book a week, may be more than that
• Doesn’t worry about having the very best brand: wants value for the dollar. Still wants functionality. Reads e-books on an Amazon device, but more likely to have a Paperwhite than a Voyage
• Authors: Marko Kloos, Jana Aston
• Publishers: many independents through Kindle Direct Publishing and other sources; some tradpubs, but mostly backlist and frontlist on sale
• Discovery: the Amazon website, Goodreads, word of mouse (blogs, Twitter, Facebook, and other social media)
• May use subsers (subscription services, like Kindle Unlimited ((at AmazonSmile: benefit a non-profit of your choice by shopping*))
• Summary: committed reader, but money matters. Willing to experiment to save some money

Lower Tier

• Price point: almost always zero (including getting gifts from others)
• Buying window for new releases: release day doesn’t really matter
• How much they read: constantly, but quite likely to abandon books before they are finished. Doesn’t waste time on a book they don’t like
• Reads on a SmartPhone,  a computer, or a cheap tablet. May have an inexpensive EBR, maybe one they got as a gift. Doesn’t have the latest generation
• Authors: people you’ve never heard of (and possibly they’ve never heard of), but also a lot of the classics which are free because they are public domain
• Publishers: indies, especially authors who self-publish
• Discovery: digs around for book bargains, uses Project Gutenberg, Twitter, free book forums, the public library. Update: reader Kacey Llano made the excellent point that some Lower Tier readers will use the same discovery as the Upper Tier readers. They’ll find out about a newly published, frontlist, tradpub book…and then go to the public library to get it (or to go on a waiting list for it). They still aren’t directly spending the money for the book
• Summary: passionately committed to reading, but doesn’t care about the status of having read the latest book. It’s not so much about what you read: it’s the reading itself that matters

Those are my initial ideas on it. I’m interested in your feedback on it, which may help to refine it. For example, I think the top tier readers may use subsers…and may have several subscriptions, but don’t end up using them very much. Middle tier readers may use the public library.

Let’s do the poll next…if you think you are equally two or more tiers, you can choose more than one.

Update: reader Kacey Llano asked me if this was about your reading habits or how much you spend, in terms of choosing a tier. It’s about how much you spend. My whole thinking on this is about the marketing of the books. If you get the books from the public library, the publisher has to market to the library, not directly to you. Certainly, they could try to get public buzz to influence a library to buy a license, but I think they would be more likely to market to top tiers and directly to libraries (or library suppliers).

 

Now, what do you think? Am I underestimating how much Top Tier readers read? Are there other strata you would suggest? What other characteristics identify these three? Is it too soon to figure out where marketing is going to go for e-books? If these are right, how do you see it affecting publishers, retailers, and readers? 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.

 

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.