Amazon agrees to agency pricing model with two more publishers, Jobs prophecy coming to pass
By Vlad Savov 
posted April 1st 2010 3:58AM
posted April 1st 2010 3:58AM
posted April 1st 2010 3:58AM
A look back on popular stories from today in a specific year.
Now that we've thrown 'em off the trail, use the form below to get in touch with the people at Engadget. Please fill in all of the required fields because they're required.
April Fools!
it's a shop.. those keys are waaay too pixelated to be real..
wow, i really hope this is an April fools!
Boy good thing they're getting more $, I know now more than ever the publisher has to do sooo much to get an e-book out there.....Thanks a lot Steve. Coming soon is author direct publishing.
@ttoo Are u sure that means more $'s for them? They are going the same way as the Music Industry... raising prices till noone BUYS it and everyone just downloads it...
Love all the big news waits for April 1st almost to give companies an excuse if they change their minds. Oh that was just a joke.
Ha you'd think competition would bring prices down, sadly this time it's the other way round.
@kitsune Well, the marketplace wasn't very competitive 2 years ago, with one e-Book wholesaler, Amazon, they had a monopoly to serve the buying public. Then, as more wholesalers come into the marketplace the price will go where it is "optimal", but yes, it reads the same: customer getting screwed.
@juanvaldez
You're absolutly right about the fact that amazon had a monopoly on that market, and I thought apple coming in would even out prices, but not on the upwards spiral. And the pricing should be optimal for customers, not an excuse for book companies to sell digital media (read : less cash for them to produce than regular hardcover books) at a higher point. Like you say, customers get screwed.
@kitsune
This is the problem. People don't look for "a book", or "an album", they look for the Da Vinci Code or the Red Hot Chilli Peppers and only those specific products. The publishers have a monopoly on these and can charge what they like.
@kitsune It's like single payer. If you have multiple health insurers, then the providers (hospitals) can negotiate high rates for the different insurers because they can tell insurer A, "You're not paying me enough for a colonoscopy, so I'll just stop servicing your members and service members from insurer B because they pay me more." So insurer A has little choice but to increase how much they pay the provider for colonoscopy.
With the Kindle monopoly, we had a pseudo-single payer system whereby publishers only had 1 (viable) revenue avenue for eBooks. Now that Apple decided to break up that single payer method, publishers can raise their rates on Apple and Amazon. So thanks Steve Jobs for screwing up single payer!
@kitsune I think you misunderstand competition when it comes to media. For each particular book, there is only one supplier, that is the book publisher. Amazon, Apple, and BN are distributors. It's not if you want the latest "insert author here" book, you get your choice of publisher. Now, if Amazon doesn't play ball, then the publisher can go to Apple or BN for an "exclusive" tittle. I agree with your conclusion though, the customer gets higher prices.
As an aspiring writer, I welcome this. You'd end up in the poorhouse by selling books through Amazon with their Kindle-augmented model.
@(Unverified) No, it's the publishers that get you, not Amazon.
@Unverified User
Congratulations...for making the exact same money. The ONLY one that wins in this situation is the publisher.
@BigJayDogg3
Or even less money, as this will hurt sales.
This is nothing more than bullying profiteering - what savings are made by the book companies by simply putting together a digital copy and bunging it off to Amazon, Apple, etc?
No distribution costs, no binding costs, no printing costs - they save a fortune and in all likelihood ebook readers are going to raise the overall amount of books being sold.
So all in all, they are trying to make the same money whilst eliminating most of their costs, on top of which even more books are being sold!
The book companies should be wearing stripy jumpers and masks...
@PAJO23 NY Times did a article on just that point. Apparently it's complicated, depending on who you believe..... http://www.nytimes.com/2010/03/01/business/media/01ebooks.html
@Son Goku Thanks for that - I knew I couldn't be the only one to be asking this question!
@Son Goku
that article is sooooooooooooooooooo biased. 80 cent per copy for the cover designer?
LOL.
@PAJO23 In capitalism, costs are often irrelevant (assuming your business model is profitable and there isn't an easier money grab that you should invest in, but then you'd shut down shop). Case-in-point: CDs. CDs/DVDs were cheaper than tapes to manufacture, distribute on the fractions of magnitude, but it greatly raised the costs of the music and movie industries.
@juanvaldez
Wow - you almost sound like you know what you are talking about. Costs irrelevant in capitalism? They are never irrelevant; what you might be talking about is the fact that the actual margins for any valuable product are sometimes driven by other economic forces.
@Curious G
Methinks in your haste to correct someone, you misunderstood what he was saying. The point was even when moving to a cheaper process, prices sometimes won't drop.
@BigJayDogg3 Yes, exactly, costs [savings] are irrelevant...and costs, in general, are irrelevant if you don't have an alternative source of greater return on you're money (again, presuming you are making money, or at least not losing more money than shutting down operations would force you to lose). So, something can be free to produce, but cost an arm and a leg if there is a market and a monopoly on it. Imagine if we had to buy the air we breathe from the government (one could argue we do), they can charge us anything they want for it if we either get enough benefit from living their and/or we don't have an alternative place to live.
Forget Jobs and Murdoch - they can't stop the inertia of jailbreaking books. I thank them for shepherding the digital content movement.
Thanks ipad.
However, I hope they invest wisely as one cannot help but think this is more a battle and war scenario.
In the end, traditional publishers must already know the secret and be feverishly trying to keep it from everyone else.
That is - they are not at all necessary in a digital publishing age.
The publishers may think this will save the industry. Maybe there are enough people out there who'll fall for it. Me, I've noticed two ebooks from Macmillan that I want to get, which are listing for FULL hardcover pricing. This despite the fact that paperbacks for the books have been out for years.
So... not buying it. When the price gets down to reasonable (i.e. same as the paperback or lower), I'll buy. This is the only way the publishers will ever change their minds on this. People have to vote with their money.
Isn't this what's known as pricefixing?
@hvakrg It's actually an outdoor variant called price hiking.
@rederikus So if you are stuck clicking links over and over without them telling you the exact price would that be price rambling?
It's a self fulfilling prophecy. Jobs told all the publishers if they sign with him they can charge more, and then says that publishers will in fact start charging more. Thanks a lot douche.
@Prevacator
< sarcasm >
oh no he said steve is a douche. all apple haters are going to flame you now! run while you can!
< / sarcasm>
true that. double true. steve jobs is a douche. someone should teabag him.
@WP7S Maybe. If true, it's yet another example why giving any 1 company too much power is bad for consumers, if not sooner, then later.
If publishers' views don't change, it's only a matter of time before eBook companies sign agreements with authors directly.
@User Formerly Known as Dave I can't wait for your statement to become true. We need more indie published books from large and small names alike.
The consumer appreciates your effort to raise ebook prices. It wasn't better when Amazon strong armed lower prices, so thanks again for more expensive content. Also, are you going to ban books like the communist manifesto? I think you should definitely start limiting peoples exposure to bad content. Maybe you can develop a book burning app so others can join in the fun!
/sarcasm
I might buy an e-book when it costs around 30% less than it's paper version.
Punctuation police here ...
The title should say "Jobs' Vision" not "Jobs Vision"
Looks like I won't be buying first run books anymore. I'll just wait a year until it drops to the "Paperback" price. It kills me that these industries don't understand that selling larger Volume of widgets can be just, if not more, profitable than selling less at a higher price. It makes me mad that Amazon didn't stand strong. All they had to do was threaten to quit selling their paper books until they succumbed to Amazon's pricing model for E-Books. Amazon needs the publishers less than the Publishers need Amazon.
@Critic2029 Especially with digital widgets, since you actually don't have to make anything else.
I think Amazon is saving that play for the numbers to come in from the iPad sales, maybe after the first couple of months. If they notice they can't compete at the same price, I wouldn't hold it against them to threaten that type of action to get their price for books lower.
@WP7S
As much as I'd like to write this off as an April Fools joke, somehow I doubt it is. Which is sad, because apparently these publishers don't realize that by edging ebook prices closer and closer to standard book prices, they are cannibalizing the e-book business model and degrading one of the primary attractions of going to the electronic book format for potential users.
I just won't buy anything over $9.99 - There are plenty of books out there that will be priced reasonably to not worry about the others. Eventually, the prices *will* drop as newer ones come out. And I would venture to say, there are a lot more people out there who will be doing something similar.
What everyone seems to be missing here is that these publishers want to be able to charge higher prices for books that go BEYOND simply dropping the text in a file and selling it. Interactive books or books LOADED with graphics and/or links come to mind. Penguin's iPad demo comes readily to mind: http://www.youtube.com/watch?v=jdExukJVUGI
I don't think this whole thing is really about a fairly standard text-only book.
@jeffhrsn
I doubt anyone could argue that and ''enhanched'' ebook with media shouldn't charge more. However, this isn't about that. This is about the publishers charging Amazon the wholesale price they want for a book; lets say 15.00. Then, Amazon decides to sell it for 9.99, making Amazon, not the publisher, lose 5.00. This fuels Amazon Kindle sells and impulse buying.
This is about the publishers saying that Amazon low price devalues their books. That they rather sell none then let Amazon sell it lower for a lower price point. Forget Amazon's argument that Kindle owners out buy traditional book owners and not by a small margin either.
The publishers see today's generation are headed towards wanting everything handy and on the fly. And E-books are on the rise and they will either bring prices up to paper book levels or squash its growth.
The only thing this is going to do is help fuel piracy. Its sort of like the movie industry. Instead of helping Netflix with newer titles they hamper them when a model like Netflix's streaming probably cuts down on piracy.
Few people want paper books now, they want electronic., Few want to buy DVD's, they want to stream it. These companies better get with the program and adapt.
Dear Reader Store Customer,
The publishing industry is turning a page and so are we.
Beginning April 1st some major publishers will be instituting a change in the pricing of eBooks, which puts decisions on eBook pricing firmly in their hands. As a result, prices of bestsellers and new releases from these publishers will be changing on the Reader Store, and during the transition time, some titles may be unavailable. Although most of these eBooks will be priced from about $12.99 to 14.99, there will not be a broad pricing change across the Reader Store. In fact, new releases and bestsellers from other publishers will still be priced at $9.99.
Starting a new chapter can be a good thing. With this change, you may see more of your favorite books available in eBook format at the same time they’re released in print. Book lovers like you are driving a revolution in digital reading and the Reader Store is committed to providing you access to the widest selection of digital reading content. Since its inception in September 2006, Sony’s Reader Store has introduced a wide offering of new releases, bestselling eBook titles and newspapers. Today it features access to more than one million titles and links to borrow eBooks from local libraries nationwide.
For more information please visit the Reader Store FAQ: http://ebooks.custhelp.com
Thank you,
The Reader Store
@Tensor
I'm willing to bet that the iPad's market it will sell to aren't the book readers the publishers are hoping for. I think they are the texting, movie,gaming and music crowd. I could be wrong, but I hope this bites them in the ass.
@Synergi I hope so too as I am an avid reader ... love my Sony Reader (there was no Kindle in my Country) and wouldn't change it for an iPad to read books no matter what. But an almost 50% price hike is ridiculous.
They have made me wonder if its time to start looking for pirated books, which is a first for me.
Things like this make me hate apple more and more. Don't get me wrong I love their products, but I'm anxiously waiting to see them fail and loose that power that has been hurting consumers more than benefitting them.
I mean, stop with your bullying apple. Just because you want things a certaing way, don't screw everyone else in the process.
"...but we can at least grimace a little at having to face a more expensive e-reading future. who cares? You don't have to pay anything for books when you download them for free as torrents."
Hahah. Hooray for piracy!