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Agency Pricing Continues to Hurt eBook Sales in the UK (Just Like in the US)

30287204662_64cb11e967_bHere’s another set of stats which call to question the claim that publishers may have "read too much into the ebook hype".

The Bookseller reports on new revenue stats from the UK Publisher Association. Apparently the decision by HarperCollins, Penguin, Hachette, and Simon & Schuster to control their ebook prices through agency pricing is continuing t have a negative impact on their ebook sales.

The PA reported ebook revenues were down last year, and now they report that ebook sales are down in the first half of 2016.

Sales data provided to the PA by UK publishing houses across trade, education and academic sectors show that print sales increased by 1% in the first six months of the year (January-June 2016) to £898m in comparison to the same period a year earlier, driven in particular by a 6% growth of trade books.

However, digital sales have declined 7% year-on-year across the board to £182m, driven by a marked decline in digital revenue for trade publishers, which was down by a steep 19%. Digital revenues for education and English Language Teaching publishers by contrast were strong, up 32%, whilst academic/professional digital revenues were also up, by 9%.

Overall, book sales when combining physical and digital, have remained the same.

Audiobook sales continue to boom, with downloads increasing year-on-year by 24% to £6m, the figures also revealed. Non-fiction and reference print books sales saw marked growth in the period, up 13.3% to £281.2m, and schools publishing has also performed well, with physical and digital sales up by 7%. Children’s print book sales continued to perform strongly in the first half of 2016, up by 5%.

The publishers had given up control of their ebook prices in a 2012 settlement with the European Union. That settlement was a little ridiculous given that price controls are written into the laws of several EU member states (including France and Germany), but one positive outcome was that it freed the UK ebook market to start growing again.

But in recent years the publishers regained control of their ebook prices in the UK, and stopped Amazon from maintaining a sensible pricing policy.

Penguin Random House, for example, adopted agency pricing in the UK last year at the same time as in the US, and that decision has had the expected result.

The CEO of the Publishers Association, Stephen Lotinga,  is disingenuously claiming that this is a sign that readers still like print. "Last year we saw the first sign that the UK’s love for print is far from over. Today our half year results show that this was not a one off phenomenon. Publishers are increasingly using digital tools to make content more adaptable, personal and accessible than ever before. But there is a unique pleasure in reading a physical book, and these figures show that consumers are finding that this is not something digital books can easily replace."

That’s just more self-serving industry spin which conveniently ignores how the publishers have set up a command economy in the digital market.

P.S. Curiously enough, from what I see in the Kindle Store UK, Macmillan ebooks are not under price controls in the UK. Do you suppose they are seeing better than average ebook sales?

image by internetsense


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sam November 6, 2016 um 2:58 pm

Why is it a "command economy" if it is your product? Do you not have the right to determine the price? Also, those complaining don’t want to acknowledge that large publishers (and medium and small) take huge risks, making investments on books they don’t know will be successful, and whether or not the writer will go off the rails and sink the book (think Jared from Subway) causing the publisher to lose the investment. For every huge success, like Grisham, there are tons of books that no one is interested in, but still get published.

Is there any other industry where there is so much complaining about the price or where those not in it think they have the right to set the prices? When was the last time you complained about the price of your shoes or your haircut or your steak? Hmmm…So why do those complaining not put their houses up for sale and creating their own "great books," and taking the risk? After all, publishing is just so easy, or not.

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