Correcting the Record – Amazon’s Naggar Tells Publishers to Slash eBook Prices … to Help Unknown Authors

Correcting the Record - Amazon's Naggar Tells Publishers to Slash eBook Prices ... to Help Unknown Authors Amazon DeBunking

There's a story going around this week that the Amazon VP of Kindle Content, David Naggar, advised publishers to slash their ebook prices to boost sales.

The story, as originally reported in the Daily Mail and The Bookseller, centers around statements and quotes like this:

The US giant uses a complex computer algorithm to recommend books to customers, taking account of how many people have looked at a title before, how many have bought it, its price and what sort of reviews it has received.

...

Mr Naggar, Amazon's publishing chief, said: "I look at price as a tool for visibility. You can either spend a lot of money on marketing or you can invest it in a super-low price until they get the flywheel going of the recommendation engines – and this is just for Amazon.

"What self-published authors will do is they will publish a book and sell it for 99p right out of the gate… Publishers [with new authors] could much more afford to do that than self-published authors."

I followed up with Amazon, and they disputed the story in a couple significant ways.

For one thing, I was told that price is not a factor in Amazon's search algorithm. That was an assertion of the Daily Mail's story writer, not something Amazon told her.

Amazon also told me that Naggar's statements were very much taken out of context by the Daily Mail. The rag twisted Naggar's words to imply that Naggar was speaking about all publishers and all authors, when in fact Amazon said that Naggar was specifically talking  about how to maximize sales for unknown authors.

He didn't say that all publishers should slash ebook prices; I'm told that Naggar was saying that publishers could boost the sales of new and unknown authors by pricing ebooks low so that readers would be more inclined to take a risk on someone they don't know.

That advice came out of a discussion of the tactics indie authors in KDP use to drive discovery, specifically how some indie authors initially lower a book's price to build awareness, and then gradually increase price until they find the point on the demand curve that maximizes book revenue.

Nothing I have heard from Amazon is all that shocking; in fact, there's absolutely nothing new or controversial here.

I have heard any number of authors and pundits say that publishers are sabotaging the careers of new authors by pricing ebooks at $14.99. The high price discourages readers from taking a chance on an author they don't know, and as a result kill trad pub careers before they can even get started.

There is literally nothing here I have not heard before, so really, any controversy in this story arose from the Daily Mail framing their story using things Naggar never said.

Publishing chief David Naggar says traditional shops should slash their prices

...

Amazon is involved in a new row with publishers after one of its most senior bosses told them that they should simply drop their prices if they want to sell more books.

Of course, that is SOP for the Daily Mail; when they don't invent a story out of whole cloth, they twist statements and leave out facts to such a degree that they are publishing fiction.

Next!

image by Tomasz Stasiuk

About Nate Hoffelder (10891 Articles)
Nate Hoffelder is the founder and editor of The Digital Reader:"I've been into reading ebooks since forever, but I only got my first ereader in July 2007. Everything quickly spiraled out of control from there. Before I started this blog in January 2010 I covered ebooks, ebook readers, and digital publishing for about 2 years as a part of MobileRead Forums. It's a great community, and being a member is a joy. But I thought I could make something out of how I covered the news for MobileRead, so I started this blog."

6 Comments on Correcting the Record – Amazon’s Naggar Tells Publishers to Slash eBook Prices … to Help Unknown Authors

  1. Yup. This is the logic behind KDP’s pricing structure — to encourage indie authors to price their ebooks between $2.99 and $9.99. The traditional publishers’ ebook pricing structure is incomprehensible.

    And yup — the Daily Mail is a rag. No news there.

  2. Good reporting, Nate. Thanks for getting the real scoop.

  3. Mark Williams Int. // 6 September, 2017 at 5:00 am // Reply

    Thanks for this. The Daily Mail is notorious for reporting news minus certain key acts, so no real surprise.

    It does of course put the response of publishers and the SoA in a different light too, as they were responding to what the Daily Mail had led them to believe Amazon had said, not what Amazon actually said.

  4. The Daily Mail has some of the worst journalists in the business such that I ignore all links to that website.

  5. Of course the other half of the low price equation is the Amazon/publisher piece. Will they lower their part of costs as a percentage too?

  6. Mark Williams Int. // 6 September, 2017 at 2:11 pm // Reply

    “Of course the other half of the low price equation is the Amazon/publisher piece. Will they lower their part of costs as a percentage too?”

    The fact that Amazon takes 65% at 0.99 is certainly one factor that deters authors and publishers alike from offering more ebooks at that price.

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