WSJ: High eBook Prices Result in Reduced Revenue
The Wall Street Journal has noticed that one of the classic laws of economics, namely the inverse relationship between price and demand, has been playing out in the US ebook market over the past six months.
It seems the agency contracts that the major publishers struck with Amazon really were as counterproductive as they appeared:
When the world’s largest publishers struck e-book distribution deals with Amazon.com Inc. over the past several months, they seemingly got what they wanted: the right to set the prices of their titles and avoid the steep discounts the online retail giant often applies.
But in the early going, that strategy doesn’t appear to be paying off. Three big publishers that signed new pacts with Amazon— Lagardere SCA’s Hachette Book Group, News Corp’s HarperCollins Publishers and CBS Corp.’s Simon & Schuster—reported declining e-book revenue in their latest reporting periods.
“The new business model for e-books is having a significant impact on what [the big] publishers report,” said one publishing executive. “There’s no question that publishers’ net receipts have gone down.”
A recent snapshot of e-book prices found that titles in the Kindle bookstore from the five biggest publishers cost, on average, $10.81, while all other 2015 e-books on the site had an average price of $4.95, according to industry researcher Codex Group LLC.
The WSJ must have good sources, because while we know that S&S and Hachette both reported declines in ebook revenue, the publicly available data from HarperCollins lacked specifics as to whether ebook sales had increased or declined.
Leaving that aside, it is true that ebook prices are higher, with ebooks gtom the major publishers sometimes costing as much as the hardback:
In some cases e-books cost almost as much as the hardcover. Amazon is selling the hardcover edition of Jonathan Franzen’s new novel “Purity” for $15.10—11 cents more than the $14.99 e-book price set by Macmillan Publishers, a unit of closely held Verlagsgruppe Georg von Holtzbrinck GmbH. The publisher declined to comment.
On Thursday morning, there wasn’t a single title priced at $9.99 among the top 20 titles on the company’s Kindle best-seller list. Last summer, Amazon offered the digital edition of James Patterson’s thriller “Invisible” for the bargain price of $8.99. Mr. Patterson’s newest tale of suspense, “Alert,” went on sale Aug. 3 on Amazon for $14.99, a price set by Hachette, Mr. Patterson’s publisher. The unit sales for Mr. Patterson’s e-books weren’t available.
Those ebook prices are so high that you might almost think that Amazon was engaging in a price war by slashing the prices of hardback books.
But that’s just crazy talk.
All we really know at this time is that, Mike Shatzkin put it in the understatement of the year, "unfortunately, it may be that consumers aren’t happy with the higher prices".
image by Jo Jakeman