Amazon’s E-Book Pricing A Constant Thorn For Publishers | Hacker News Reader

Amazon’s E-Book Pricing A Constant Thorn For Publishers

nytimes.com

23 pointsiProject28 comments

"The publishers wanted to stop Amazon from using what one of them called “the wretched $9.99 price point,” according to court papers."

I can't say that I care about the specific price point... but when I see an ebook costing more than a physical copy which has to be printed and shipped to me, I feel a certain amount of annoyance knowing that it's the publishers who're causing that. Even costing the same is pushing it.

Am I being reasonable in holding this position? Maybe not, economically. But I doubt it's an uncommon one.

Printed, stored, and shipped to you.

While I'm not sure exactly what shipping costs across the industry (not just Amazon sales, where you can see exactly what you'll pay for shipping) for getting physical books into people's hands, shipping is only getting cheaper for e-books (some more recent Kindles don't support 3G whispernet, so there's an infrastructure middleman cut out, and the cost for shipping approaches zero as the cost for bandwidth approaches zero), there by widening the gap between physical and e-books.

Yeah, this is why I'm siding with Amazon for now. Publishers need to be hurt first, and then we see what we can do about Amazon's monopoly. At least right now I think Amazon is the lesser evil.

The publishers may be more than one, but they are acting like a monopoly anyway (or oligopoly if you will) by trying to price ebooks a lot higher than they should cost. I don't care if they do it through the agency model, the wholesale model or the whatever model. The point is they are doing it, and at least Amazon was trying to bring the price down with the $9.99 price tag, and with the $1-$3 Singles, even if that's forcing the publishers' hand.

For anyone out there still thinking the publishers weren't colluding - just think of it this way - no big publisher would've tried to price the ebooks $15 if the others didn't agree to do it as well. Also Apple wouldn't have agreed to have $15 prices for its books, unless the publishers forced Amazon to have the same prices, too.

If the publishers are so worried about Amazon, maybe they should stop giving them so much power themselves as a gatekeeper by asking them to use DRM. Amazon has a huge lock-in because of that, and it's only getting stronger. If they know what's good for themselves, they will make e-books DRM-free yesterday (and obviously that doesn't mean giving Apple a pass on DRM either).

What's totally bizarre about the publishers pricing is that other goods that have gone digital have benefitted by lower prices, or at least, temporary price drops. My knowledge is particularly in video games, but those Steam sales that keep popping up are not through the goodness of Valve's hearts. Publishers are doing gangbusters on those sales, and consumers are buying far more games than they'll ever play.

They screwed up. The agency model wasn't necessarily bad, it's that they used it to screw the consumer to pay higher prices. Had they used it to lower prices, they wouldn't have this problem now, where they forced themselves into wholesale and let Amazon marginalize them further.

Oh, I don't know. I remember CD's being more expensive than records. And DVD's were more expensive than VHS tapes.

Those all involved physical supply and distribution chains, each with their own added costs. They also represented an advancement in technology. Yes, there are costs with digital distribution, but I find it hard to believe they are greater than distributing a physical product. My dad gave me a Kindle he got for free. I have a hard time paying $10 or $15 to buy a book I don't really own, among other reasons.

If ebooks were priced at $.99 rather than $9.99, I'd be likely buy more than 10x as many books. They become a complete impulse buy, even if I just have a mild curiosity about the contents.

Heck, the local thrift shop sells paperbacks for $.99, and I buy piles of them (and don't feel guilty if I never get around to reading them!). I wouldn't have bought any at $9.99.

Right!

I bought a number of ebooks from Amazon that were priced at $2.99 because, on impulse, I wanted to explore new authors in my favorite genre.

Amazon is no different than Wal-Mart. Growing up in a small town, I remember Wal-Mart coming in and decimating numerous small businesses in it's wake. But of course we shopped there, the prices were cheaper, even if it did close our neighbors business.

It wasn't until years later when my uncle's business landed the desirable Wal-Mart account that I understood how they were doing it. It was his best day and worst day of his life (in hindsight), as Wal-Mart nearly shut down his business with it's demands (and once a business lands WM as a customer, they become the dominant customer by their design), so once you as a business owner realize what you've allowed them to do to your business, it's too late.

And so many people I know despise Wal-Mart and it's practices, but worship at the altar of Bezos because it's "online".

You're discounting the big difference here: online makes moving fast easy. Big box stores win because they are unassailable, Amazon surely is not. If enough authors don't like Amazon's policies, BAM, up pops a new site as a collective of authors selling their e-books direct to the consumer and not through Amazon. Amazon loses. If Amazon starts being a terrible company to its customers, BAM, up pops a new site which is nice to them. Amazon loses.

Amazon is not winning because it's buying out the pot, it's winning because it's providing a better service. Publishers lose out because they're the middle-men. They know this. They're too cowardly to directly deal with the customer. If they wanted to, they could have bought out Barnes & Noble and really slugged it out with Amazon, but they won't. They'll let B&N fight the battle for them, and if B&N go bankrupt, well, that's B&N's problem.

It's just plain wrong to equate online with offline. Online is a far more competitive and risky market to be in.

I respectfully disagree. There is also lock-in from Amazon because most people will have no clue how to remove the DRM on the Kindle titles and move them to another e-reader should they decide to do so. So the parent comment is valid.

Lock-in here only prevents sales on the content side. Yes, you can't shift your whole collection between hardware vendors yet but you also can't buy from several content vendors yet. If someone announced DRM free books they could sell to all of their competitors' devices. Opening up content sales is more important than opening up hardware from a consumer point of view. You can buy a ebook reader from hundreds of vendors but you can only buy books for it from a couple (including the one that sold you the reader).

There is no technical reason preventing you from creating your own ebooks & distributing them and having them work on the kindle.

You can create & supply ebooks readable on the Kindle without ever going through Amazon.

The DRM on the Kindle was largely forced by the publishers, was it not?

Wal-Mart has rarely been a terrible company to it's customers, same with Amazon. But the customer is only part of the ecological equation. You can be great to the customers but destroy the whole ecosystem. This is what happens with companies like Wal-Mart and Amazon.

Wal-Mart didn't start out destructive. They become destructive once they were large enough to bend the manufacturing companies to their will. Amazon has and is doing the same. And once again, like Wal-Mart before it, the destruction is only seen in the aftermath. I've shopped at Wal-Mart. It's convenient and cheap, the same reason I still shop at Amazon (convenience trumps morality for me many times, as it does for a lot of people). But what you can end up with are corporations that employ a scorched earth policy and will design their business to make little or no money so they can outlive the competitors.

And what happens when they win? Have you ever driven through a small town and seen a vacant Wal-Mart building? I have. They end up destroying the market and then leaving because they know people have no choice but to drive 30-45min to the Super Wal-Mart in the next town. Pure capitalism can easily become parasitic and will kill of the host then move to another.

The idea that online is riskier than offline is a joke (competitive yes, but because there is less risk to online). It's easier now than ever before to start a business, fail, then pivot, pivot, pivot (who even heard of companies pivoting in the 80's). If offline is so easy why isn't hacker news all about opening up a competitor to Wal-Mart? I assume by that comment you probably have never started an offline business.

The ideal outcome to all this would be for Amazon to remake publishing into a market where the bulk of the profits go to the author/creator. That would be great to see. But don't think for a second that what Amazon is doing to the publishers, they won't also do to the authors when the time comes. And if there is one (or two) dominant ebook reader(s), that is exactly what will happen. But in your eyes that would be alright because Amazon is making it cheaper for the customer.

You read what you wanted to read in that statement, not what I meant. What I meant was: big online companies are vulnerable in a way big offline companies are not. Of course I am not suggesting that Mom and Pop small business is easy. It's not, it's incredibly hard. That's one of the reasons why big offline companies are able to destroy the markets they move in to.

It's no mistake that just a week or so ago pg was asking for applications to YC to disrupt Amazon. pg doesn't fund things he doesn't think have a chance of winning.

Yes, you are correct, I read that differently than you intended. My apologies. Online companies typically are more susceptible to competition.

But in Amazon's case, they don't have real competition for the same reason Wal-Mart didn't for so many years, they have the economic power to sell at a loss and/or force their suppliers to sell at little to no profit until their competition withers away.

The odds of beating Amazon as a new start-up are about as slim as any rigged casino game. PG will fund it because the payout would be huge, not because the odds are good (imho, as I'm not in the mind of PG).

It seems like all these stories about Wal-Mart's effect on local economies focus almost entirely on the vendors and not at all on the cost/convenience savings that is reaped by the local consumers

I'm not denying the effect on local businesses but it seems like the other side of the ledger needs to be considered also.

Absolutely. For the customer's pocketbook, Wal-Mart and Amazon are definitely a win. The problem is the whole ecosystem can lose, even when the customer wins. We often act as the customer is the end all/be all of the transaction and that if the customer is happy, it must be a great company. Of course that ignores the company's employees and everyone else affected by the success or failure of that business.

And I'm not proposing a boycott of Wal-Mart or Amazon, but I do believe it's to everyone's benefit to think of the whole ecosystem.

I think what publishers miss is that people (if they are anything like me) are buying and reading more books because e-readers are much more convenient. So, whilst Amazon may be pushing down the mean price of books (books that have no production cost or risk of returns/unsold quantities), I think people are buying/reading more.

I've always been a reader. Since I (finally) got a Kindle for xmas I've ordered more books and spent more money than normal. Not so much because it's a new toy (that wore off fast enough), but because it really is convenient.

“Amazon wants the price of books to be very, very low — lower than the publishing community can support,” said Curt Matthews, IPG’s chief executive. “Making a book is still a craft industry. Books need to be edited, to be publicized. Someone needs to say this is good and this is not.”

Publishing industry: You should pay us 80% of a book's price to decide what's good.

Amazon: We'll let the customer do that and give the extra money to the author, thanks.

There are plenty of freelance editors and typesetters who will fix a book for a fraction of the 70% royalty Amazon gives authors. No matter their popularity, it can only be good for an author to move to self-publishing now.

Authors, musicians and film makers need to realise that they no longer need a middle man. Remind me again how much of that $9.99 the authors were actually getting? The old world media is slowly dying. It needs some euthanasia to speed up the process. They need to stop telling us what, how and when we can and can't consume. They need to learn that lesson and fast because Generation Y is almost lost to them.

I see the argument that $9.99 is a bad price point for publishers but is there any real evidence that this price is too low to sustain profits for a publisher? I mean... 10 bucks doesn't seem very low to me. It seems... reasonable for a book. Especially given that there is no cost for storage or printing of ebooks.

If the 7,000 people do valuable marketing, then pay them for it directly.

Why all this big fuss about "Cutting Off Amazon"?

Ouch..

Throw enough shit and some of it may stick..

Someone's really got it in for Amazon, this is the third post in two days.

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