Friday, April 02, 2010

A Crazy Day for E-Books

Yup, yesterday was a crazy day in the publishing biz. With the Apple iPad about to launch, April 1 became the day that e-book pricing switched to the agency model--a pricing system in which the publisher sets the price for the e-book, and the online seller can't discount below that price. Amazon has fought hard against this new system, wanting to keep its old system in which it dictated the price of an e-book, generally at $9.99. That was an unfairly low price, said the publishers, and they're now winning the battle. Amazon has now agreed to agency model pricing with two of the big five conglomerates--Simon & Schuster, and HarperCollins. Under the new agency model, e-books of new releases are more likely to sell between $12.99 to $14.99.

This whole battle started because of the iPad, with Apple negotiating agency model agreements with four of the five major conglomerates (the exception being Random House). The deals gave publishers some fighting power to negotiate with Amazon. And boy, did Amazon fight back. When MacMillan held out for higher pricing of its e-books a few weeks ago, Amazon struck back in a major way. Suddenly the buy buttons for all MacMillan books disappeared from the site. (They came back a day or two later.)

In last-minute negotiations March 31 Hachette and Amazon also reached an agreement regarding the agency model. But with the change-over on April 1, and Amazon saying it couldn't make the changes for Hachette e-books until April 3, that means two days of no available sales for Hachette e-books. Amazon blames Hachette for the glitch, and Hachette blames Amazon.

As for Penguin, another of the large conglomerates, it could not reach an agreement with Amazon. Which means Penguin e-books released beginning April 1 will not be available for the Kindle. (Older e-books are still for sale at the $9.99 price.) No doubt negotiations will continue.

Here's the irony of the whole thing. The wars are hot and heavy. But they're not really about current sales. They're about the future. According to Bowker, last year e-books were a measly 2% of all book sales. That, of course, is an overall number. To many individual authors, e-book sales are less than 1%.

A few days ago I was teaching at Mount Hermon writers conference. One night a number of authors and agents sat around talking. One of the agents insisted that e-book sales would take a generation to increase significantly. He gave an example of one of his clients: with sales of the print version of one title at 55,000, the same title had sold a mere 200 copies in e-books. Then again, 11 months ago Jeff Bezos, CEO of Amazon, said its Kindle sales at that time had grown in a just a few months from an average 13% of any given book title to 35%. Doesn't quite seem to fit with the Bowker statistic, does it.

Meanwhile, however, publishers don't want precedents for too-low pricing being continued. They needed to move to protect their authors and their product. And with the impetus of the iPad, they've gotten their chance.

Who knows what Monday will bring in the e-wars.

When do you think e-book sales will match or exceed print sales?


Wandering Writer said...

I think with a rise in the cost of ebooks, it may take a while longer for sales to catch up to printed material. People perceive ebooks to be less expensive because there is not paper, ink, and binding costs.

As a side note: I was surprised to find how high prices for books were in Australia! Books we would normally pay $14.99 for (paperback) were well over $20. But they also have a lot of used books stores.

Unknown said...

Definitely not until the cost of an e-reader goes down dramatically. There is very little use for an e-reader unless you work in publishing (or for some other reason need multiple books at a given time), are running out of bookshelves, or are a tech junkie. I'd like one simply because when asked to endorse a book, I'd rather read it in bed with a Kindle than sit perched on my bed with the laptop. But, spend $200-300 for one or two books a year? I think not. I prefer paperbacks anyway.

Julie said...

Personally, I don't think hard copies will ever take a backseat to ebooks. Ebooks work for a small segment, but frankly reading for me just isn't the same when it's computerized. Not as relaxing.