Could it be any Clearer?

For the longest time, getting a word out of Amazon required rubber gloves, lube, a stick of gum, and a length of string. During the ongoing negotiations with Hachette, that has changed. I mean, Amazon practically won’t shut up these days. Their latest blog post is particularly dense with revelations, and it should serve as a wake up call for authors and readers.

Here’s a link to their post. You should read it. Seriously.

As many have been predicting, Amazon is fighting for lower prices for their customers. It has also been posited over and over that lower ebook prices would generate more revenue for all involved, and now Amazon backs this up by revealing calculations pulled from their industry-best sales data. So who is Hachette fighting for, if they are resisting terms like these? The only people I can think of are those who sell millions of physical books at bookstores. You know, the Prestons, Pattersons, and Colberts. The top 1%.

Just as immense here is Amazon’s call for higher pay for authors, which is neatly tucked within the folds of their post. Amazon comes right out and states that they are asking for 30% on the sale of ebooks, which is what they currently get from most self-published titles. It is an entirely reasonable percentage for a retailer (bookstores get 40% – 50%). What I love, though, is that Amazon then suggests that the remaining 70% should be split evenly between the author and the publisher.

As Barry Eisler points out, Amazon just became the closest thing we have to a writers’ guild. Not only are they fighting for lower prices, which sell more books, capture more of an audience, and make more income . . . but Amazon just came out in favor of ebook royalties of 50% of net. That is twice what authors are currently offered.

Authors currently make 25% of net on ebooks, which is unconscionably low. To have an organization like Amazon mention fairer pay is more than most writing groups have been willing to do. Imagine if those groups (like SFWA and the AG) actually applied some pressure as well. I mean, can you believe that our guilds and associations aren’t fighting our employers for better pay, so it’s being left up to a retailer to even mention it?

I’m getting a metric ton of email and messages about Amazon’s public statement. Authors are getting in touch to let me know that after reading Amazon’s position in these negotiations, they immediately went and signed the petition at Change.org that asks Hachette to negotiate in good faith. That petition now has over 7,500 signatures. I hope now that Amazon has stated that they are fighting on behalf of readers, writers, and book culture, that even more people sign the petition.

There will be those who continue to doubt Amazon’s sincerity and motives. There will be those who continue to lionize publishers because they produce the books we know and love. But one of these companies has a long history of making reading accessible while paying authors more than they have ever made in history. The other has a history of illegally colluding with competitors to raise prices on their readers while paying authors shit.

Which of these companies do you support? Which one does your writing group or organization support? The correct answer has been clear to me for a long time. But with this last public statement, it just got even clearer.

COMMENTS (65)

It’s very clear who the saavy business people are here. Yes, Amazon’s top priority is profit, as it should be. But they also understand what their greatest resource is: authors. They understand that an author needs to motivated to continue to grow and improve. If you ask me to sit at a desk for 3000 hours or more a year and sweat out a novel, then give me 15% of the earnings, I will not grow. I will seek employment at Wal-mart so I can eat.

I compare it to the forestry industry at the turn of the 20th century. At some point, a smart businessman realized that they were eliminating their number one resource. So after harvesting their trees, they replanted and nurtured new trees.

The big publishers are in the clear-cutting business. Why do they think the vast majority of writers quit after one or two publications? Amazon is replanting. They understand that you don’t kill your best resource. What happens in the end is profit for all. Time will tell whether the publisher choose to pick up the hatchet or the watering can.

I agree with Hugh. That’s a great analogy. Seems Hachette is aptly named.

I don’t think the giant international corporations that control the big publishers aren’t savvy, they just aren’t being honest about their real agenda. They are not interested in helping writers, in fact, their interests are in discouraging writers and keeping writers powerless.

They are not interested in maximizing profits from fiction. They are interested in using profits from fiction to finance their other goals.

Those goals are primarily cronyism, influence peddling and retaining their dominance over the flow of books. The focus is on providing plum jobs in New York to executives and rich kids out of Ivy league schools who want to feel like they are part of something creative without really doing any creative work. They want to be in control of who gets books published and read, so that politicians and others of influence and wealth have to seek them out for favors. They want to make sure if they want to highlight a political issue, or suppress it, they control what books representing those ideas get prominence in bookstores and reviews. And they want to make sure no one gets in the way of their continued control.

Making actual profits is secondary. Once you understand those are the main goals, you quickly realize that in the majority of cases, they want writers to give up after one or two books. They don’t want writers writing lots of books, except for a few favored “best sellers.” They would rather sell one hundred different James Patterson novels than five novels from twenty different writers. They would rather discourage the independent minded writers from even getting into the business, and if they happen to make it through the slush pile by accident, they are more than happy if they give up after a book or two. Less competition.

That is the real threat of self-publishing to them. Putting power in the hands of individual writers.

And that is why this isn’t just about raising prices, it’s about price fixing. They want to force Amazon into an agency model so that Amazon has to offer books at the same price as Apple and Google and any other on line publisher. That way Amazon can’t have a competitive advantage. Their hope then is they can drive Amazon’s market share down from close to 50% to 30% or less so Amazon loses power over the book market.

That, of course, is not in the interests of self-publishers since Amazon is the most innovative and powerful friend writers have right now. Other ebook competitors might be less self-publisher friendly in very subtle ways (ghettoized search) that can discourage the growth of that market. The last thing we want, for example, is for Google to be the main outlet writers have to go to for self-publishing. They so far have a terrible history with You Tube of supporting the big corporations over independent creators.

But if everyone knows that a book costs the same whether you buy it from Google Books or Amazon, maybe Google can use their Android platform to eventually match or eclipse Amazon in ebooks.

I just read the Amazon blog post. It seems to me that this was aimed directly at all the mid-list authors who are getting screwed by their publishers. Over the past several years I’ve put an enormous amount of pressure on my publisher (who still controls three of my books) to be reasonable. To no avail. They’re as arrogant as ever.

Of course, Amazon will now be accused of trying to start a war between authors and publishers. I just hope more writers find the courage to speak out.

I spoke with a Hachette author at RWA last weekend who has been trying to get Hachette to lower the ebook price of her debut work. She says it is killing her to see the ebook priced so high, which friends with lower priced ebooks are gaining an audience and making more money. She doesn’t even feel like she can share the link or promote the ebook, because she can’t ask others to pay that much.

I had something similar happen with a book I believed in. I was sent an advance copy, loved the book, and wrote a blurb. The blurb was put on the cover of the book, and when the release day approached, the publisher asked if I would share a link to the work. I was delighted to. Until I saw the price. There was no way I could ask my fans to pay that much for an ebook. They would get angry at me for even suggesting it.

That’s pretty sad for that author. This is what doesn’t make sense to me: Tradpub seems to want higher ebook prices to protect print, but then they admit that ebooks make up almost half their revenue, and help to prop up print. If they kill their own ebook sales, it’s not going to make the ebook adopters go out and buy a ton more hardcovers – they’ll just look for other, cheaper ebooks, and the trend will continue. They have literally become the snake that is eating it’s own tail, and thinking it’s feeding itself.

I am a self-published author, on Amazon.com of all places. If I see a book that I want that is priced above $12.99, especially $14.99, I immediately check the reviews. If it doesn’t have at least 4.5/5 stars with 50+ reviews which I can peruse, I will either 1) add the book to my Wishlist (meaning it’ll be bought in 1-3 years, maybe), 2) forget about it completely, or 3) look for a pirated version of the book (if not available, repeat 1-2). About 80% of the time, there is a pirated version of the book. This process has never occurred for books $8.99 and below.

I was stunned when my publisher priced the ebook version of my novel, The Lost Village, at 9.95. I begged and pleaded with them to be reasonable. But they wouldn’t. It’s a big novel, 258,000 words, and that was their justification for pricing it so high. That was four years ago and thankfully the rights revert back to me in a year.

Like you, I’ve been embarrassed to even promote that book. In the beginning I got all sorts of flaming comments when I tried. Although it does sell a reasonable amount of copies at that price, I believe it would have done much better as an independent book priced sanely. I’ll get to find out next year.

I signed contracts on those three books just before kindle exploded onto the scene. My bad. Since then all my books have been independently published and the income difference between my independents and traditionally published books is astounding.

I only wish more writers would see the light before it’s too late.

“Since then all my books have been independently published and the income difference between my independents and traditionally published books is astounding.”

If I had a dollar for every time I’ve heard this, I could afford to traditionally publish my next book.

Is Amazon in business to make a profit? Yep. Investors cursed with short-term thinking don’t think so, based on recent losses being reported, but that’s their problem.

Amazon is a corporation, they are in business to make a profit, and they have what is (for most companies) a “missing” ingredient…

… they truly understand where those profits come from. The fact this post by their book team had the words “price elasticity” in it, should tell every single Big 5 publisher to go back to business school.

Amazon might mess with the terms for authors in the future, sure. They won’t make all authors happy, all the time … okay… so what?

What publisher or retailer has?

Amazon has a LONG way to go before they enter the realm of “screwing” authors. And Amazon also knows that if they do that, it would hurt business, because authors would probably go through other distribution channels.

Amazon won’t do that. The “asset” created by treating authors fairly is too valuable to their business for now. Until that changes, I don’t see any future where Amazon will just outright screw authors over. They might “fudge” the numbers, like they have recently … but nothing more.

That’s a LONG way from what Big 5 publishers are doing to their authors (except for the top percentage of their authors).

If anyone from a big 5 publisher can read Amazon’s recent post … and with a straight face tell people (in public) that ebook prices should be kept on the high side (that is, above $9.99 in general) … there is no hope for them.

Because math is math, no matter HOW you look at it.

Is Amazon in business to make a profit? Yep. Investors cursed with short-term thinking don’t think so, based on recent losses being reported, but that’s their problem.

We have to remember that those short-term investors have done very well with Amazon. The stock has been an excellent performer. The short term can deliver profits to investors through either the income statement or stock price.

I’m in agreement with you Terrence, I was basically “flowing” with the typical “media spun” story that because they show a loss once in awhile that things are “bad” at Amazon.

Amazon is doing well, and I actually think Jeff Bezos is a very gifted person when it comes to seeing “what’s next” in business.

I’m curious what your thoughts are on the ideal price for an eBook by a self-published author. When I first released my debut novel a couple months ago, I priced the Kindle version at $5.99. At a block party, a ‘friend of an enthusiastic neighbor’ was going to purchase the book, but laughed and said there was no way he was forking over $5.99 for a new author’s Kindle. Over the following couple weeks, I sold few, if any, copies a day at that price. The reactions were pretty much the same: “A friend was going to buy it . . . and then they saw the price.” It didn’t matter that the book was a 141,000 word full-length thriller that had great reviews coming in from strangers. For many of them, I was self-published and they didn’t see the need to pay me more than a few bucks. In mid June, I lowered it to $2.99 and sales jumped substantially overnight. I went from selling 1-3 copies a day to selling 25-40 a day, before falling back down and hovering around 10 or so a day. Now, any time I creep the price up over that $2.99–even by a dollar–sales plummet.

I (think) I’ve seen it mentioned on forums around the web that $3.99-$5.99 is the sweet spot for a self-published author. However, I also see Amazon’s beta pricing feature on KDP claim that $6.99 would be the ideal price for my novel to maximize my earnings. I know $6.99 might be lower than other works out there by published authors, but that seems awful high for a eBook and I can’t help but think it would kill sales. Though writing will continue for me regardless of my income, the dream is to eventually earn enough to justify writing more and working those ‘real’ jobs less.

Many Kindle readers have been trained by the price wars to view ebooks as less valuable. But that will change in the near future. It’s already changing, in fact. Being a brand new author with no following does tend to suppress pricing options, which is why so many great mid-list writers in trad-pub never got the chance to build a following. Their publishers stubbornly priced their print books at points that wouldn’t sell, at least not in large enough numbers to build a readership.

Many of these same writers, along with equally talented newcomers who skipped the trad pub detour altogether, quickly formed the so-called “outliers” in the indie world. Instead of the tsunami of crap so many predicted, a bunch of great writers who were denied a real chance in the trad pub world started delivering amazing quality at low-low prices. Once they built a readership, they were able to increase their prices experimentally to find the sweet spot between reader satisfaction and author earnings.

So yes, it’s true that a new author needs to price lower to give themselves a chance to build that following. But it really should be kept within reason. When you bargain-basement price your book, you actually devalue it in the eyes of readers because you lump yourself in with the enormous number of writers out there who know that their work really isn’t worth more than 99 cents, if that. If you truly believe your work is worth more, you need to price accordingly to find the balance between perceived value and sales. For a first book, one that you truly believe in, the low end of the recommended range you mentioned really is ideal, coupled with discount promotions to build momentum.

But as far as the notion that ebooks are inherently less valuable, I think readers will continue to get over that in time. The value of a book has never been in the cover, or the “feeling of holding it in your hand”, or the smell, or any of that nonsense. Those things are nice, but when the content stinks, they don’t help at all. The value of a book has always been in the content. In fact, wonderful content is what caused those other sensory attachments to form by association in the first place.

If it’s full-length and really good, there is nothing morally wrong with selling it at a higher price. Again, within reason. The satisfaction of your readers is really the guiding principal in all of this. For a well-established author, if the readers are happy and satisfied, if they feel they have gotten their money’s worth, even at 7.99, then there’s nothing morally wrong with pricing it there for something you have poured your soul into for such a long time. But becoming THAT well-established, with that kind of readership, is a very high pinnacle to reach. Definitely go with the recommended range and experiment from there.

The fact that you can’t loan or resell an e-book decreases it’s value compared to a paper book

the fact that it doesn’t deteriorate over time, and can be with you wherever you have a screen available increases it’s value compared to a paper book

the status of inheriting e-books is unsettled, which lowers the value

readers also recognize that e-books cost less to produce (no printing, shipping, warehousing, returns, inventory tax, etc), and with justification, expect to benefit from that fact.

so yes, e-books do have less value than paper books.

If you truly believe your work is worth more, you need to price accordingly to find the balance between perceived value and sales.

So, $2.99 means the author really values a medium Americano from Starbucks?

As someone who buys multiple books a week, and these mostly on Kindle format, I’ll give you my take: It depends on the author and how badly I want the book. For my top 5 authors, I’ll even pay legacy prices (to a degree). I won’t buy the hardcovers anymore (stopped last year), but I’ll preorder for Kindle and pay the 11 or 12 bucks. But ONLY ONLY for books from my faves that I won’t wait for price deductions. I go by my gut: how badly do I want to read this. Standalones, generally, I wait for the price to lower. Series, I jump on those: I want to know what happens next.

New authors, self-pubbed, that I don’t know, these I want lower prices. I tend to try almost anyone who looks good at 99 cents. I think more for anything above that. I almost always pass if it’s above 7 bucks. I laugh at 99% of them over 10 bucks.

I think most reader go by variables–how much they like an author, how much they like this genre, that blurb, story elements. It’s not just one magic number to buy; but it may be one clear ceiling to turn away and leave. I don’t want to pay more than 5 bucks for an ebook. I need motivation to do that. And I prefer not to pay more than 4.

Someone else’s ceiling may be 3 bucks (budget concerns) or 9 bucks (lots of book money).

I think that sweet spot that’s reported is not unreasonable (the 3.99 to 4.99). It covers a lot of people who have to be careful with their spending, while feeling “fair,” that you’re not totally ripping someone off.

Finding your sweet spot in pricing isn’t a one time thing. It’s something you have to constantly evaluate and work on.

For a first book, the readers will often look to see what else you’ve written by clicking on your author name on Amazon. When they see nothing, then there can be a bit of a speed-bump before the buy button is hit. Then pricing comes into play.

Those first few books establish your presence and the quality of your work…and whether or not you are entertaining to readers. Lower intro prices for the first few, even if it hurts a little, is a pretty common strategy. I think that might be why so many savvy business minded authors do shorter works at first. It doesn’t hurt as bad to price lower.

YMMV, of course. :)

My goal is and really always had been to use my first novel ‘The Crimson Fall’ as a foundation to bolster my reader base. When it comes down to it, I guess I’m fine keeping that book at $2.99. Though I love the support of friends and family, I thrive on the reviews, comments, and purchases made by strangers. In the end, my dad and grandpa can only buy so many copies of my book to hand out to friends. Without building up a base of strangers, I’d have no hope of building a career and the $2.99 price point has helped me do that. However, as I’ve begun to build that foundation, I fear I might be putting myself into quite the precarious situation with these strangers.

I recently decided that I would release the sequel in four parts, the first to be announced early this coming Autumn. I see the inherit value in that model and I loved reading Hugh’s books in parts. In a way, it’s a lot like television. For example, some people chose to follow George Martin’s relentless murder mystery as it unfolds throughout the year, while others are incapable of watching Game of Thrones unless they binge watch the entire season in one caffeine driven weekend. Releasing the sequel in parts will allow me to get something new to my fans who are itching for more within a few months, instead of waiting a year for the finished novel to be released.

My only concern–thus the reason I was curious to see what others thought–is if I keep my first book at $2.99 to grow my fan base, then what are they going to think when I release the first part of the sequel at $1.49? I hope most of them wouldn’t think twice about it, but others might be upset that I’m charging half the price of the first book for a fourth of the content, even though this ‘first part’ will be near 50k words. Do I really charge $0.99 for 50k words? In the end, I suppose only time and reviews will tell. It’s good to hear your opinions though.

Hi, Jordan:

I price my novellas at $2.99, which clock in at 33,000 words. My full length novels (90,000+) are all $4.99. I started out charging $4.99 for all my full-length novels, even my first novel. I figured that was a fair price for an eBook and stuck it out, despite low sales in the early days. I had occasional sales at 99c, which helped increase my audience and I gave away a lot of books during free days. Now, I have a monthly 5-figure income and I am now considering increasing the price for my new series to $5.99 but I think that would really be the top of the line for me.

Pricing your debut at $2.99 to encourage readers to take a chance on a new author is a great strategy and one I wish I took because I might have seen my audience grow more quickly than it did. Once you have a few novels under your belt, and good reviews, you should be able to increase the price of any subsequent books you publish. You might think of keeping the first book in a series at a low price as a lost leader or even have it permafree. Many authors do that to keep growing their audience.

Amazon is right that author earnings are greater at higher prices than many indies charge but it depends on where you are in your career. If you are new and just starting to build an audience, a low priced-intro make sense and even Amazon acknowledges this. If you have established yourself and have an audience ready to buy your next book, you can increase your price of subsequent books to find that sweet spot that maximizes number of books sold and revenues.

As to the idea of charging $1.49 for 50,000 word serials, I would not feel bad because that is “novel length” but it really depends on what your audience will tolerate. Try it out — in the indie world, nothing is written in stone and if something doesn’t work, you can respond quickly and change price.

Good luck!

I’m not sure why this is being treated as such a big revelation. Hasn’t Amazon been saying for a long time that they’re fighting for lower ebook prices? Sure, we have math to back it up now, which is greatly appreciated and helps inform the debate, but I thought this was their line for ages.

They are playing this whole PR game very smartly by targeting midlist authors though, as one of the previous commenters mentioned. They’re the authors who will be most affected by this, not the top 1% or those barely selling at the bottom.

I do like to see big companies pushing progressive policies. Apple did a lot of this with iTunes, when they forced low prices for songs ($0.99-$1.29/song, $9.99/album) and the removal of DRM on music companies. If Amazon can do similar things in books, more power to them. I’ll still chide them for pushing exclusivity on indies and other policies I disagree with though.

So who is Hachette fighting for, if they are resisting terms like these?

In my opinion, this is probably the biggest mistake in your post. To think that Hachette is fighting for anyone but themselves is folly. They’re not fighting for the top 1% of authors or anyone else, they’re fighting to preserve their largest profit centres, which Amazon is trying to take away.

Publishers make great profits from ebooks, and despite the math showing otherwise, they believe reducing prices will reduce their profits, and they obviously don’t want to give more to authors, because again, that means less profits. It could also shift more spending from print to digital, which I would assume they see as a threat to profits as well. If the rumour about Amazon demanding to be able to print out-of-stock books with POD is true, that’s obviously another threat to their print book business, which is still highly profitable.

In the end, like in all other entertainment mediums, the traditional entities are fighting to preserve the conditions of their times of record profits. They’re not doing it for authors or for retailers or for whoever else, they’re doing it for themselves.

“To think that Hachette is fighting for anyone but themselves is folly. They’re not fighting for the top 1% of authors or anyone else, they’re fighting to preserve their largest profit centres, which Amazon is trying to take away.”

You answered the question Hugh was asking right here.

That was Hugh’s point, I think.

Hugh answered his own question, differently than I did.

The only people I can think of are those who sell millions of physical books at bookstores. You know, the Prestons, Pattersons, and Colberts. The top 1%.

I agree. I’ve been saying for a while that people have this wrong. All these folks saying the publishers are fighting for print and protecting the print culture are buying a line. They’re not protecting print, they’re winding it down. Slow ebook adoption enough so that you don’t get a massive short term drop off in print revenue you can’t deal with, then let it decline gradually to the point it’s no longer a risk and discard the leftover shells of what you don’t need anymore. All the while, locking in ebook royalties that pay them enough more per book that they aren’t leaving much on the table in the short term from less sales at higher prices. The author is the one taking the haircut in this scenario, bearing almost all the costs of their publisher’s transition from principally print to principally digital. And once it happens, if they make it that far, legacy print expenses have been slashed, ebook prices dip, sales shoot up and profits are in the stratosphere with authors stuck trying to recoup advances on strictly far-too-low ebook royalties. That’s what I think, anyway.

I love Amazon’s clarity of purpose, and the way they simply spell it out. “This is not fair, and this is why….” And further how they point out that Amazon is willing to take 30% (and why) and how Hachette has the other 70% and how they “should” divvy it up, giving authors at least 35%, but that it’s not their call. It’s not, it’s Hachette’s call. And what stating that does is point out exactly how Hachette has been skinning their authors alive by not paying them anything but a lowly 12%, if that. All the math in the world is fine, but in the end Amazon has very clearly pointed out that being a Hachette author is really tantamount to low-paid slavery.

While I side with Amazon in this debate, I think it’s overly optimistic to believe their motives are altruistic. If Amazon wins, legacy paper will be more expensive than the ebook version. That drives many more people to tablets to take advantage of the savings. That, in turn, decreases the power of legacy print distribution. As the number of ebooks sold increases at the expense of print versions, Amazon’s market share increases, potentially dramatically. Moreover, at some point authors will start to look at legacy’s abusive terms for authors and see past the ‘precious snowflake’ strawman to realize they’re not worth the dwindling print market share legacy can offer. Those authors are likely to flock to Amazon. So, in the short term, lower ebook prices mean more sales and better profits for everyone, but in the long term, Hachette takes a huge hit on market share as well as the only thing that makes it relevant to authors–it’s print distribution monopoly. And Amazon is likely to gain most of what they lose. Cast in that light, the dogged determination of both sides starts to make some sense.

Their (Amazon’s) motives aren’t altruistic, and their statement actually shows that.

They are basically using their data (the “math”) to justify their way of pricing ebooks. It just so happens, that is what customers want as well. As it normally is when price is the only value point.

But, Hachette’s motives aren’t anywhere near altruistic either. They aren’t “protecting literature” or “preserving the print book” (in the altruistic sense)…

They are trying to maintain the “status quo” of their way (and their top author’s way) of doing business. Instead of using math that favors the customer though, they are using math to justify their internal profit structure.

The customer (the reader) doesn’t care about how much profit Amazon or Hachette makes … they just want a book at a fair price.

Amazon is closer to providing what the customer (reader) wants in this case.

Yes, paper books will get more expensive. That is the whole point. Hachette wants high priced e-books to subsidize the high cost of paper books. Printed books are a “white man’s privilege” and Hachette wants e-books to subsidize that privilege.

Yes, yes, authors just love to see their book on someone’s bookshelf or coffee table. It’s such a great conversation starter – a conversation about moi. And yes, some people are so insecure about whom they are that they really do need to have a bookshelf in their home so they can point at it and say, “Yes, that’s who I am. That’s what I know.”. Yes indeed, this will be a bland, impersonal world without all those vinyl records stacked neatly in racks under the turntable.

The future belongs to those who get there first – and Hachette isn’t going to be one of them.

I’ve been lurking here for a while, ever since I heard of Wool and Hugh’s success as an indie, and I appreciate your (Hugh’s) work in bringing this to light. Of course like many here I’m an aspiring author as well, although still working on whittling down the voices with all their ideas in my head so I can focus on just one until it reaches completion.

Anyways, I’ve been talking to my wife about this situation since it began, and she tends to agree with me of the stupidity of the publishers tactics. As an example, there are two authors my wife discovered recently who she can’t find the print books at the library. She asked about the ebooks, so I looked. For the dozen or so books I checked, there were 2 or 3 priced at $8.99, again 2 or 3 at $9.99, the other half of them were $14.99 or above. She doesn’t swear, but she almost did when she heard that. No bloody way was she going to pay that much for an ebook. If they were at $2 or $3 apiece, we would have bought all of them. $30 to $40 dollars doesn’t sound like much, but you’d think it sounds better than $0, especially if you spread that out over the millions of consumers like me. I refuse to pay $15 for an ebook or a paperbook, $40 for a hardcover, that I usually end up reading in a single afternoon, then donating to the library or getting $0.50 for it at a garage sale. I quite simply cannot afford it, the amount I read I would lose my house and my kids would starve.
It’s so foolish and short-sighted of them, they have failed to learn the lesson of the internet. We’ve seen the rise of freeware and shareware, and piracy, with the flip side that the old behemoths never seem to get is that by adjusting to this not-so-new world, even including the piracy, can and does lead to an increase in sales if you treat the people right.

As much as I hate to say it, at some point the dinosaurs will die out (I don’t say that to be insulting to the trad-published authors, but in my mind they are the huge beasts that have been pulling the old houses along all this time, the Prestons and Connellys and Pattersons and Kings, who keep their readers coming back). When the backs these publishers have ridden go away, they are going to be faced with several generations of IT-savvy consumers who are accustomed to paying no more than a couple bucks for apps, ebooks, etc, or $10 for a monthly subscription, or donating what they feel something is worth.

If they don’t get with it, they are going to price themselves out of existence.

If John D. MacDonald’s backlist was priced at $3.99 each, I’d buy all 20+ books he wrote. Instead, I buy none. That’s publisher logic.

As would I. I read them all in used paperbacks bought by a friend’s fiancée at a garage sale. Those were ditched while packing for a move, and I’d love to have them in ebook. That’s the sale they’re managing to discourage: someone willing to buy books that have already been read.

Meanwhile, they find other ways to spoil the purchase. When Ray Bradbury’s books were released on Kindle, they were nearly all on sale. I bought a bunch. Several of them are riddled with typos and what looks to be un-proofed scanning/OCR. Now I won’t buy anymore of them—and he’s one of my favorite authors. Bad way to treat a customer. Terrible way to treat the legacy of a beloved creator who deserves a lot better.

I’ve got John D. McDonald’s entire Travis McGee series in paperback, sitting in a box in my garage.

I’d buy ’em all in ebook, too — all 21 of them — if the price were reasonable. But $9.99 each? Seriously?

What a joke. I’ll buy 50 – 70 great indie books, instead.

Though I did get rid of them, those old paperbacks were great. Obviously bought by someone over a long period of time, their covers spanned everything from ’60s pulp temptress (The Quick Red Fox) to early-’80s-leisure-suit McGee (Free Fall in Crimson).

Writing-wise, there are lessons to be picked up from MacDonald, certainly. Because of him, I learned that scenes can be far more disturbing when offering only suggestions of terrible acts rather than graphic detail. Both Bright Orange for the Shroud and One Fearful Yellow Eye include vague events that freak me out to this day. (And apologies for both taking this discussion too far off-topic and for posting hard-to-read HTML if this comment doesn’t render.)

I can’t tell you how many times I’ve checked on John D. McDonald’s works hoping to pick them up and read them (for the 3rd, 4th, 5th + time each) and I’m stunned that they cost so much. Now I know why. Guess I’ll have to laminate the paperbacks sitting on my parent’s shelves and keep them as artifacts or museum pieces. “Look kids, see what your grandparent’s preserved for you in their eternal wisdom (amongst all the other crap they saved from the Great Depression onwards.)”

Maybe you should check out the booksfreeswap – they do a monthly rental of books for some price that I believe works like NetFlix. I’ve looked into it, but it’s too expensive for how fast I finish books now. And like you, I prefer e-books – easier to carry around. But it’s hard to rent e-books, though Amazon has something going on with Kindle Unlimited…

+++ that the remaining 70% should be split evenly between the author and the publisher. +++

How does this impact the 35/65 split for books above $9.99?

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Any chance the Author Earnings data can confirm Amazon’s claim? “For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99” and/or provide a ratio at other price points?

See my answer to Chris Meadows below.

Amazon’s statement had some bait for author’s to sign on to one of their imprints.

“Hey authors, sign with us and get double what anyone else would give you. Come on in, the water’s fine!”

Shrewd. Very shrewd.

There will be those who continue to doubt Amazon’s sincerity and motives.

I don’t care about their sincerity or motives. I care about their actions.

Here’s a question for you and Data Guy.

Is Amazon’s statement of selling 74% more books for 16% greater revenue supportable using the Author Earnings statistics you’ve gathered? Are you getting something in the same ballpark?

Here’s what the authorearnings.com data from July can tell us about comparative sales at different Kindle ebook price points. Taking the Top 500 Best Sellers at each price point and eliminating the top 10 from each, we see:

$9.99 ebooks outsell $14.99 ebooks by a huge margin in units.

$9.99 ebooks outsell $14.99 ebooks by a huge DOLLAR margin, too, despite their lower price.

Even when looking only at the Top 10 (outliers) for each price point, the pricing sweet spot at $9.99 or above seems to be $10.99 (with $9.99 running a close second).

The Top 10 bestselling ebooks at $12.99 and $14.99 generate fewer gross DOLLARS (as well as selling fewer units) than the Top 10 at $9.99 and $10.99.

But… $4.99 beats $9.99 across the board. $4.99 sells more units AND brings in more gross DOLLARS than any other price point. This is true even for the Top 10 Best Selling outliers at each price point.

Once again, we see that lower ebook prices = higher author earnings.

The Top 500 Best Selling Kindle books priced at $4.99 are out-earning those at $9.99, $10.99, $12.99, $14.99, and every other price point.

(Below the Top 10, $3.99 runs a close second to $4.99.)

Thanks Data Guy. This deserves to be a post onto itself.

I posted this over on Joe Konrath’s blog, but will put it here also:

I have a question. It is pretty well established that trad publishers have used high ebook prices to slow the adoption of ebooks. My question is has anyone ever tried to analyze if it actually works? I am not sure how you could pin it down, but maybe if you looked at the rate of decline of paper book sales (Bookscan data?) over the years before, during and after the time that they had agency pricing: Did the rate of decline of paper sales actually lessen while agency pricing was in effect? Or maybe it did not work to reduce the decline in paper sales. In essence, is it even true that higher ebook prices are effective in slowing down the decline in paper sales? It seems logical, but then maybe it is not actually true. Much stranger things have happened and maybe there is actually little overall effect on people’s choice of how they read. It would be especially interesting to see if any effect was great enough to directly offset the reduced profit from ebook sales, or is it possible that publishers could have been selling more ebooks all along without worrying about it hurting their paper sales?

Someone over on Passive Voice shared how Ballantine tried releasing both a hardcover and paperback version at the same time for a while in the 50s and had success doing so. They only stopped because the other publishers froze them out of the distribution channel. So maybe delaying the paperback does not actually increase hardcover sales, but nobody even knows because nobody since has dared to try. And maybe reducing ebook sales through higher prices has no effect on paper book sales, but no one has ever thought to check the data.

John Scalzi has had a different take on this subject: http://whatever.scalzi.com/2014/07/30/amazons-latest-volley/

I’d love to see the two of you debate this issue because you both have interesting, yet different, opinions on the matter. It might also clear things up a little in my mind (or make it worse, I dunno).

Scalzi’s take is dependent on not understanding the math and misinterpreting the Amazon statement. He doesn’t understand that an average result is going to be applicable across a broad spectrum of all books (not every book, but a large percentage).

I refuted each of his points in the comments and his response was to question my expertise rather than actually address the actual arguments. At that point I broke my usual rule of not sharing credentials (I prefer arguments to stand on their own based on logic and evidence). Of course his response was to cast doubt on my credentials and say they weren’t applicable to this case (the special snowflake argument) even though my points were all based on basic math.

It wouldn’t have mattered what we were talking about – books, apples, lugnuts, if the data shows you’ll make more money at a one price point than another, then that is what the data shows. It doesn’t become untrue because you are talking about books.

Your credentials were that you are particularly good at math, had a high IQ and scored well on your SATs. Nowhere did you indicate any experience in the field of publishing, market economics or sales. You entered in the discussion and asserted that John was completely wrong about a field he has worked in for 20 years because you worked on an electron microscope in your past. It wasn’t a terribly compelling argument, however much you may think otherwise.

No – I was simply pointing out that John was disregarding simple mathematical principles like the concept of “average” – which is not dependent on the field being talked about. Rather than dispute the actual concept, John did the same thing you are doing by saying I’m not an expert like him so I must be wrong.

That’s called an ad hominem attack. My credentials have nothing to do with the basic logic and evidence, but since John felt the need to bring them into question I showed that wasn’t a very good counter argument.

Conversely, you seem to think 20 years publishing fiction makes John automatically correct. But how does 20 years publishing make John an expert in pricing (something he has no control over in the traditional world) or market economics, or just basic math?

Any credibility John Scalzi might have had was invalidated when he became more concerned with mythological political issues in the speculative fiction community. Being a moral relativist who sees phantoms among the ranks of people trying to make a living as writers doesn’t make him an expert in anything except sophistry. It certainly doesn’t mean he has my best interests at heart; if anything, I’d tend to disagree with his conclusions based on his tendencies.
I’d trust the math and take my chances with Amazon rather than an argument based on imputed expertise. We’ll see.

Scalzi is not someone I would go to for picking apart business disputes. His reading of the Kindle Worlds contract was bizarre. And his complaint about Amazon’s KDP agreement allowing them to update terms at any time ignores the fact that we can unpublish from KDP at any time. Why would we have the right to terminate our agreement without any warning, written or otherwise, but Amazon have no right to change their side of the agreement?

He says that publishers can’t change their contracts on authors. Yeah, and you don’t own the rights to your work. You signed them away for good. This sort of poor reasoning leaves me enjoying Scalzi’s fiction and considering him a fine writer of make-believe, but not a very strong or sound thinker.

Had this sitting around for a little bit. You gave me the courage to publish it.

https://www.goodreads.com/author_blog_posts/6738305-on-the-importance-of-perspective

So there are people who actually believe that Amazon is advocating for authors and customers in these dustups with publishers? Really?

WOW…

Another deliberately misinterpreted take by you Otto, couldn’t expect much more I guess. What most people on Amazon’s side are saying is that at the moment their goals (yes, we admit they are self interested goals) bring the most benefit to readers and authors. Hachettte’s goal is to drive ebook prices up to protect print books, thus doesn’t benefit readers or authors.

Sorry Matt, but Amazon and Hachette’s goals are exactly the same: To make more money. Amazon cares about you no more or less than Hachette or any other corporation.

Wow… arguing a point I didn’t make. If you read my response again you’ll see I said at the moment Amazon’s goals bring the most benefit to readers and authors. Who said anything about them caring for me?

No. I believe they pay me 70% of sales, and transfer to my bank account each month.

For now, Terrence. For now.
I hope you read that Kindle publishing contract very closely.

And watch out for that asteroid heading this way in 1500 years.