Pearson Reports Non-Specific "Weak eBook Sales" at Penguin Random House
Pearson has released its first quarterly report following PRH signing an agency ebook deal with Amazon (and adopting agency pricing), and it does not sound good.
You can find the press release on the Pearson website. Here’s the relevant section for Penguin Random House:
Penguin Random House had a solid third quarter performance, with the benefit from number one bestsellers which included The Girl on the Train by Paula Hawkins; Harper Lee’s Go Set A Watchman; Grey by E L James; and Lee Child’s Make Me; partly offset by weaker ebook sales. The company continues to make progress with the integration of its businesses, and remains on track to realise benefits in 2016 and in the long term. The fourth quarter will benefit from new fiction, nonfiction, and movie tie-ins across all formats from bestselling and prize-winning authors.
There are no other details mentioned in the publicly available documents.
UK-based Pearson owns a 47% stake in Penguin Random House, which is the largest trade publisher in the US and one of the largest publishing conglomerates in the world. The other 53% is owned by Germany’s Bertelsmann.
Mike Hall October 21, 2015 um 5:09 pm
I can’t help wondering how much of the success of the four named best sellers came from e-books, as none of them has the kind of silly prices we have been seeing from trad publishers. Currently the most expensive is "Make Me" at £7.99 – more than I like to pay (my normal limit is £6.50) – but there are quite a few much less successful books out there for much higher prices.
I’m not sure who controls these e-book prices (they don’t say "price set by the publisher" on Amazon) but someone at least ensured that they cost less than the heavily discounted paper versions and are not too expensive (given that the books have mostly only been out for a few weeks and mostly don’t yet have a paperback edition).
Nate Hoffelder October 21, 2015 um 5:18 pm
That brings up an important detail: the US listings say that the price was set by the publisher.
I guess this means that PRH’s agency contract has not spread to the UK.
Liz October 21, 2015 um 7:09 pm
Their sales would be better if ebook prices were more reasonable. I read a few of their authors and I am always a book behind in the series I read from them because I refuse to pay more than $10 for the current ebook in the series. Once next year’s book comes out 2015’s book will drop to significantly under $10. I really think they would sell more if they were so crazy with their pricing.
Mike Hall October 21, 2015 um 7:10 pm
I thought I had seen "price set by the publisher" on amazon.co.uk but my memory may be playing me false as I cannot now find any examples (so I may have been looking at amazon.com at the time).
I would really like to know if we do have agency in the UK or if I have to seek some other reason for high priced books. In fact what I would really like to know is whether an agency pricing model would even be legal given that Amazon seems to be a distributor and not an agent.
Mike Hall October 22, 2015 um 6:40 am
To add to – and contradict – my previous comment, Amazon emailed me this morning about new fantasy books and, checking on one from a series my wife reads, I found the dread words "This price was set by the publisher". So agency is here in the UK.
A further check showed that quite a few of the featured books had publisher set prices and that, with one exception, they were all published by Hachette inprints. The exception comes from Simon & Schuster, so at least two of the big 5 have agency agreements in the UK.
fjtorres October 22, 2015 um 8:41 am
I thought the Randy Penguin only adopted Agency in the US in Sept.
Given the leads times in most financials, this report would only cover (at most) 1 month of Agency.
Besides, even before Agency redux, a lot of their more popular titles were running at $10.99.
Nate Hoffelder October 22, 2015 um 8:48 am
The deal was struck in June.
fjtorres October 22, 2015 um 9:46 am
But it didn’t go into effect until September.
I’m pretty sure I saw that mentioned in a few places.
Nate Hoffelder October 22, 2015 um 10:09 am
Nate Hoffelder October 22, 2015 um 6:06 pm
Felix, are you sure about that? I didn’t see September mentioned in PW, PubLunch, or The Bookseller.
fjtorres October 22, 2015 um 11:32 pm
Author Earnings linked to this publishers lunch report from Sept 1st:
"The one significant factor in Penguin Random House’s US performance not mentioned in yesterday’s half-year report from Bertelsmann was the artificial boost to ebook sales while the house stood alone since mid-April as the only big trade publisher that still allowed significantly discounting on their ebook prices. (Harper returned to full agency in mid-April; HBG on February 1; and Macmillan and Simon & Schuster in early January.)
"But as of today, September 1, PRH has followed their peers in returning to full agency ebook pricing in the US (except, as required by the court, Apple retains discretion to discount, and competitors appear allowed to price match when Apple does so)."
I took that "but as of today" to mean they weren’t under agency the day before, Aug 31st.
Nate Hoffelder October 24, 2015 um 2:31 pm
BISAC codes and KDP Categories vs. Amazon Storefront December 8, 2015 um 4:41 am
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