Are Publishers going to withhold books from Kindle?

Yes. It certainly seems so.

Here’s the transcript from a mini-interview of Steve Jobs by Walt Mossberg -

Mossberg: Why should she buy a book for $14.99 on your device when she can buy that for $9.99 on the Amazon Kindle?

Jobs: Well, that won’t be the case.

Mossberg: Meaning you won’t be $14.99 or they won’t be $9.99.

Jobs: Aah … the prices will be the same. (Laughing by the audience and then by Jobs) Publishers are actually withholding books from Amazon. They’re not happy really.

Check out the Walt Mossberg and Steve Jobs video at All Things Digital.

Why Publishers are withholding books from Amazon

We’ve had Hachette and Simon & Schuster and a few more of the big Publishers delay ebook releases by 1-4 months.

There are lots of reasons Publishers are wary of Amazon -

  1. Amazon already has a lot of power due to its physical book sales. 
  2. Amazon’s $9.99 pricing for eBooks scares Publishers – They feel that $9.99 is an unsustainable price. 
  3. Amazon’s lead in the eReader market scares Publishers. 
  4. Amazon’s alleged 90% share in eBook sales threatens Publishers.
  5. Amazon getting into Publishing with Encore also worries Publishers.

Thomas Brookside comments at GalleyCat and points out one reason that hasn’t been discussed before (he also points out the $9.99 factor) -

The publishers are angry at Amazon because Amazon takes a loss on some titles to be able to sell them at $9.99, and the publishers don’t want people to get used to paying $9.99 for ebooks.

The publishers are also angry at Amazon because Amazon allows authors to self-publish directly to the Kindle and price however they want, and this had led to a lot of indie authors selling books for $2.99 or less outselling midlist authors from traditional publishers.

Why Apple seems a better option to Publishers than Amazon

The Big Money blog points out that Publishers, despite the higher prices, will make less from eBook sales on Apple iPad than they do from sales on Kindle.

Why then are Publishers going to withhold from Amazon and give to Apple?

  1. Publishers don’t want users to get used to $9.99. They think Amazon are going to start paying them less eventually so they want to push $14.99 as the new price.
  2. Amazon has too much power – Publishers want to weaken Amazon and play off Amazon against Apple against B&N and so on.
  3. Publishers want their status as gatekeepers upheld. If the iPad Books Store doesn’t allow indie authors then we have a third reason Publishers love iPad.

Thomas Brookside’s comment above is spot-on. Publishers are desperate to find a weapon against Amazon and the iPad is just that.

What exactly are Publishers going to do?

They’ll try to create an artificial distinction -

  1. eBook Hardcovers that are released at $14.99 and only sold on platforms that agree to that price.
  2. eBook Paperbacks that can be sold for $12.99 and $9.99 a few months after release of the eBook Hardcovers.

Why? Because they know eBooks are taking off and they want to keep their iron grip on book profits and what books get published.

Since Apple is willing to play along with eBooks at $14.99 they get those at the same time as the hardcover is released (via Big Money) -

The Wall Street Journal has Hachette Group CEO David Young announcing that nearly all of his firm’s titles will now be released simultaneously in electronic format with the print editions.

The implication in the story is that Apple is offering trading terms attractive enough to motivate the company to do so.

The one unknown is how customers are going to respond.

Customers are going to pick the eReader and the Authors/Publishers that are pro-customer

We’ve had over 2 years of $9.99 eBooks. Publishers can’t just reset prices to $14.99.

Here’s what’s going to happen -

  1. Readers start boycotting Publishers who push $14.99 and delay the release of $9.99 versions.  
  2. Readers will start pirating more.
  3. Independent Authors and Smaller Publishers will start getting read more.
  4. Amazon’s Encore program will start seeing more success.

Publishers and Apple will, inadvertently, rally readers around the Kindle and $9.99 prices.

If Nook being late seems like a Christmas Present – imposing $14.99 prices and locking out the Kindle and readers (thereby driving them into each other’s arms) will be the gift of the decade.

Are customers really going to pick the company that gives them lower prices?

That is a stupid question. Except to Publishers.

You have to wonder what Publishers are thinking. It’s exactly what Walt Mossberg asked Steve Jobs -

Why pay $14.99 on the iPad when you can get books for $9.99 on Kindle?

Well, Publishers are saying they’re not going to let Amazon sell $9.99 books – even if it is Amazon subsidizing prices.

That’s pretty ridiculous and a stand like that paints Publishers as evil and Amazon (and the Kindle) as good. As long as Amazon keep improving the Kindle rapidly they’re set to dominate eBooks for a long time.

Will Publishers, Apple really push $13 to $15 ebooks?

Apple Insider writes that Apple and Book Publishers are in negotiations to provide books for the Apple iSlate with new hardcovers prived at $12.99 to $14.99.

That sounds like a rather unreasonable rumor to me.

Will Publishers use Apple iSlate to attack $9.99?

This section from the Apple Insider article is key -

 Apple would rather charge a higher premium for its content, sources told the Journal.

It said the tablet will create a major battle between Apple and Amazon over how books are priced and distributed.

It also said that while Apple would recommend prices of $12.99 and $14.99 for new bestsellers, publishers would be able to establish their own prices and “re-set the rules” with the tablet.

Wait a minute -

  1. $13 to $15 prices for ebook versions of hardcover bestsellers. 
  2. Letting Publishers set their own prices.

Those are both major threats to $9.99 and not exactly progress.

A lot of this doesn’t make sense

  1. Why would Publishers choose 70% of $12.99 (which is $9.09) or 70$ of $14.99 (which is %10.49) over 50% of list price from the Kindle Store (which is usually $14 or so).
  2. Why would readers choose $12.99 or $14.99 over $9.99?

Are Publishers counting on users paying a premium to get ebooks at the same time as hardcovers? Or do they expect a premium simply for being able to get ebooks on the new magic iSlate?

$9.99 can’t be beaten by eBook release delays or Using a Different Device

This is a pipe-dream.

People are not going to go back to another pricing paradigm – $9.99 is set and past efforts to go higher haven’t worked well.

  1. First Publishers tried to sell books at $14 or so and they didn’t see good sales so they had to go back to $9.99. 
  2. Next Publishers tried the ‘delay ebooks by 2-4 months’ strategy and users killed them with 1 star reviews and boycotts.

Publishers are pushing their luck again.

Is the Apple iSlate going to improve the reading experience and justify higher prices?

Publishers might have deluded themselves into thinking they could do things like add color author interviews and charge $3 to $5 more.

However, it’s a book.

  1. The Kindle and eInk readers are  great for reading.
  2. There’s not much that can be done to improve the book.
  3. We aren’t talking about games or movies or even illustrated textbooks – these are books that are just fine on black and white eReaders. 

The higher prices aren’t going to work – If anything, it’s a great way for Publishers to ensure the iSlate doesn’t have massive impact on eBooks and eReaders.

Besides you’re going to have Kindle for iSlate and that’ll have ebooks at $9.99.

70%, $9.99, eReaders, Apps – Irreversible Changes

Freedom is like an incurable, infectious disease. People get one whiff of it and they’re hooked for life.

70% share for indie authors, $9.99 price for ebooks, eReaders that let you change fonts and read books to you, Apps for eReaders – These are all being disregarded as transitory and merely strategic moves by eReader companies.

Publishers think they can get back control and then undo all these changes.

However, each of these initiatives is one more stake into the heart of the vampire squid Publishers (due apologies to Matt Taibbi). A step closer to freedom for readers and freedom for authors.

Authors, Readers will never give up their new Freedoms

Authors and Readers are not going to go back to the abyss Publishers had them trapped in.

  1. Publishers decided what to publish.
  2. Publishers set prices. 
  3. Authors got scraps i.e. 8% to 15%.
  4. Readers and Authors had no insight into actual costs of book publishing.  
  5. Publishers were the only ones with the finances to market a book.
  6. Publishers had the hooks in the distribution channels.  

All of this is dissolving. The concept of Publishers as gatekeepers is fading away.

There is no way to fool authors and readers now.

Could new middle-men arise?

Yes, of course.

However, these will increasingly be benevolent platforms like Kindle and iTunes that want only 30% and handle nearly all the work.

70% is for the author.

Even if another middle-man or another company takes over -

  1. Readers will not forget the days of $9.99 eBooks.
  2. Authors will not forget the days of 70% of revenue/profit.

How do you fool people who, after centuries, have been liberated? You don’t. These are the people most acutely aware of how precious freedom is.

The Role of eReaders and eBook Stores and App Stores

 It’s crucial to understand all the contributions these have made (and will make) -

eReaders 

  1. An eReader is a device that allows for more value than a book could provide i.e. changeable fonts, greater capacity, new features like text to speech, and more. 
  2. eReaders let us work with eBooks and negate the advantage Publishers had i.e. economies of scale.
  3. An eReader basically liberates reader and author from the tyranny of the physical book as a non-ideal distribution mechanism. Also a mechanism that middle-men could control and use to enslave both readers and authors.

eBook Stores

  1. An eBook Store allows for extremely easy discovery and distribution of eBooks.
  2. eBook Stores are ridiculously convenient. Find a book in 5 minutes, buy it with 1 click, get it in 60 seconds – at any time of the day.
  3. eBook Stores allow for free distribution in the sense of no one is deciding what you can access.
  4. eBook Stores allow for cheap distribution in the sense that very little is added to the cost of the book.

 App Stores

  1. App Stores allow absolutely anyone to help readers and/or authors.
  2. App Stores allow readers to choose what their book can do and cannot do.
  3. App Stores allow developers to change publishing and eBooks.

App Stores make the eco-system very vibrant and rich and free of monopolies.

70% and $9.99 are ridiculously important and firmly established

Consider where we are at the moment -

  1. We all know that Books could and should be $9.99 or less.
  2. We all know that Apple and Amazon are both willing to give authors 70% of that $9.99 (or whatever price authors pick).
  3. We know lots of sales are happening at $9.99.
  4. We know Amazon has managed to keep the $9.99 price intact for over 2 years.

How do you un-teach the lessons of 70% and $9.99?

  • You just can’t. 
  • What possible rationale could Publishers come up with to convince readers that they ought to pay $15 or $20 for an eBook?
  • What story could they spin to authors to get them to accept 15% royalties?

What Happens Next? The 10% Platform is inevitable

Sooner or later a company is going to figure out how to create a 10% platform.

Yes, a platform that gives authors 90% of revenue.

How could you possibly survive on just 10%?

Well,

  1. 10% of $25 billion a year (just in the US) is a pretty huge number.  
  2. You’ll have billions of dollars a year in eReader revenue.

It’s possible and likely that a company will dominate both eReaders and platforms (via a 10% Platform).

In 2 years we’ve jumped from 8-15% royalties to 70% royalties – Does a jump from 70% to 90% really seem that improbable?

What Happens Next? Attacks on the Platforms

Amazon and Apple are doing two things that will get a lot of people upset -

  1. Breaking down barriers in Publishing – Publishers and retailers and distributors get upset because they lose out.  
  2. Creating Cash Cows – Rival companies get upset because Apple and Amazon get healthy revenue streams from both devices and eBooks.

We will see all sorts of ‘openness’ initiatives, eBook delays, threats, advertising based strategies, and a lot of dirty tricks.

The Platforms enable a lot of things – cheap books, advances in technology, new features. However, they are evil because they are not open.

Thanks to Amazon and Apple we have 70% profits for Authors (Apple) and $9.99 prices (Amazon) – and yet they are evil because they don’t let Publishers and new middle-men undo all the progress and put authors and readers back into shackles.

Nook Vs Kindle eBook Prices

There seem to be all these posts popping up about people finding Nook eBook prices too high.

  1. Is it some sort of bias i.e. people found a book they liked and it was too expensive so they think Nook eBook prices are too high?
  2. Is it that those ebooks are higher at all stores?

This post will simply list eBook Prices in the Kindle Store and at Barnes & Noble Nook Store for a wide variety of books and you can draw your own conclusions about whether the Kindle or the Nook is better for you. Check my Kindle Vs Nook review for a more detailed comparison.

Nook Vs Kindle eBook Prices – NY Times Bestsellers are a Wash

These are all $9.99 in both stores for the most part.

This is the Hardcover Fiction List (with list prices noted – 10 of these are just $9 at Amazon, WalMart and Target) -

  1. The Lost Symbol ($29.95) – Kindle $9.99, Nook $9.99. 
  2. Pursuit of Honor ($27.99) – Kindle $9.99, Nook $9.99. 
  3. Nine Dragons ($27.99) – Kindle $9.99, Nook $9.99. 
  4. The Help ($24.95) – Kindle $9.99, Nook $9.99. 
  5. The Last Song ($24.99) – Kindle $9.99, Nook $9.99. 
  6. A Touch of Dead ($23.95) – Kindle $9.99, Nook $9.99. 
  7. Half Broke Horses – Kindle $9.99, Nook $9.99.  
  8. Rough Country – Kindle $9.99, Nook $9.99.  
  9. An Echo in the Bone – Kindle $9.99, Nook $9.99. 
  10. The Professional – Kindle $9.99, Nook $9.99. 
  11. Heat Wave – Kindle $9.99, Nook $9.99. 
  12. Evidence – Kindle $9.99, Not Available on Nook.
  13. Death Troopers – Not Available on Kindle. Not Available on Nook.
  14. Her Fearful Symmetry – Kindle $9.99, Nook $9.99. 
  15. Wolf Hall – Not Available on Kindle. Not Available on Nook.
  16. Deep Kiss of Winter – Kindle $9.99, Nook $9.99. 
  17. The Ghost King – Kindle $9.99, Nook $9.99. 
  18. South of Broad – Kindle $9.99, Nook $9.99. 
  19. Dead and Gone – Kindle $9.99, Nook $9.99. 
  20. And Another Thing – Kindle $8.88. Not Available on Nook.
  21. The Wild Things – Not Available on Kindle. Not Available on Nook.
  22. The Unseen Academicals – Kindle $9.99, Nook $9.99.  
  23. Dracula The Un-Dead – Kindle $9.99, Nook $9.99. 
  24. The Girl Who Played With Fire – Kindle $9.99, Nook $9.99. 
  25. The Perfect Christmas – Kindle $9.99, Nook $9.99. 

This is the Hardcover Non-Fiction List -

  1. Have A Little Faith – Kindle $9.99, Nook $9.99. 
  2. Arguing With Idiots – Kindle $9.99, Nook $9.99. 
  3. Highest Duty – Kindle $14.29, Nook $9.99. 
  4. True Compass – Not Available on Kindle. Not Available on Nook.
  5. Moonwalk – Not Available on Kindle. Not Available on Nook.
  6. Outliers – Kindle $9.99, Nook $9.99. 
  7. The Greatest Show on Earth – Kindle $9.99, Nook $9.99. 
  8. Where Men Win Glory – Kindle $9.99, Nook $9.99. 
  9. The Murder of King Tut – Kindle $9.99, Nook $9.99. 
  10. The Time of My Life – Kindle $9.99, Nook $9.99. 
  11. America For Sale – Kindle $9.99. Not Available on Nook.
  12. High On Arrival – Kindle $9.99, Nook $9.99.  
  13. Official Book Club Selection – Kindle $9.99, Nook $9.99. 
  14. The National Parks – Not Available on Kindle. Not Available on Nook.
  15. Half The Sky – Kindle $9.99, Nook $9.99. 
  16. Justice – Kindle $9.99, Nook $9.99. 
  17. Born To Run – Kindle $9.99, Nook $9.99. 
  18. The Good Soldiers – Not Available on Kindle. Not Available on Nook.
  19. The Case For God – Kindle $9.99, Nook $9.99. 
  20. A Bold Fresh Piece of Humanity – Kindle $9.99. Nook $20.80.
  21. The Boy Who Harnessed The Wind – Kindle $9.99, Nook $9.99. 
  22. The Big Turn – Not Available on Kindle. Not Available on Nook.
  23. American On Purpose – Kindle $9.99, Nook $9.99. 
  24. Culture of Corruption – Kindle $9.99. Not Available on Nook.
  25. End The Fed – Kindle $9.99, Nook $9.99. 

Pretty much all the New York Bestsellers are available and at $9.99 for both the Kindle and the Nook. Not much of a difference.  

 Nook Vs Kindle eBook Prices – Non Best Sellers.

This is a combination of books that people have mentioned in various forums and books picked at random -

  1. Atlas Shrugged – $12.80 on Nook. Not Available on Kindle.
  2. SuperFreakonomics by Levitt and Dubner – $12.95 on Kindle, $14.99 on Nook.
  3. The Untamed Bride – $6.39 on Kindle, $7.99 on Nook.
  4. East to the Dawn – $9.99 at both.
  5. LakeShore Christmas – $9.99 at both.  
  6. Prodigal God – $9.99 on Kindle. $15.96 on Nook. 
  7. Shalimar the Clown by Salman Rushdie. $9.99 on Kindle. $11.96 on Nook. 
  8. The Lion, the Witch and the Wardrobe – $6.39 on Kindle. $7.99 on Nook.  
  9. Ender’s Game – Not Available on Either.  
  10. It by Stephen King – $7.19 on Both.  
  11. Bite Marks by Jennifer Rardin – $9.99 at Both.
  12. Eclipse by Stephanie Meyer – $7.79 on Kindle. $10.39 on Nook.  
  13. Enchanted by Nancy Madore – $7.96 on both.
  14. Bound to Shadows – $6.39 on Kindle, $7.99 on Nook.
  15. Breaking Dawn by Stephanie Meyer – $9.99 on Kindle. $18.39 on Nook. 
  16. Outlander by Diana Gabaldon – $6.39 on Kindle, $7.99 on Nook.
  17. Vision in White – $9.36 on Kindle, $12.80 on Nook. 
  18. Wolf Tales by Kate Douglas – $9.32 on Kindle, $8.32 on Nook.
  19. The Keeper – $6.99 on Kindle, $11.99 on Nook.
  20. Clan Daughter – $6.99 on Nook, $5.59 on Kindle.
  21. Alex Cross’ Trial – $9.99 on both.
  22. Too Big To Fail – $9.99 on Kindle, $14.99 on Nook.
  23. Freakonomics – $9.35 on Kindle, $9.99 on Nook. 

Here are Kindle Store Books the B&N store didn’t have -

  1. Your Next Move.  
  2. The Power of Collective Wisdom. 
  3. The Missing by Beverly Lewis.
  4. Blood Revenge.
  5. Why Does E=MC2.
  6. Ender in Exile.

Have left out some of the obvious ones (an eBook that was $40 in the Nook Store) because they seem to be outliers or mistakes.

Conclusions on Kindle Vs Nook eBook Prices

Its two different sides of the Nook Store -

  1. Nook does do a good job of selling all the bestsellers for $9.99. 
  2. Kindle Store seems to have more books available. Nook’s 1 million plus books doesn’t seem to include the newest ebooks.
  3. Kindle Store seems to be cheaper for 25% to 40% of ebooks outside of the bestseller lists.
  4. When the Kindle Books are cheaper it’s a 10 to 20% price difference.

The Kindle is still ahead of Nook in book prices (and book availability).

Why $9.99 works, ShortCovers gets it

Now that almost every ebook store is going with $9.99 it’s worth understanding why it works.

My 2 cents on $9.99

The reasons that $9.99 works as compared to $15-$25 prices -

  1. Obviously the actual price savings i.e. instead of a $24.96 hardcover or a discounted $14.95 hardcover you get the book for $9.99. 
  2. Customers feel ebooks should be cheaper and a sub-$10 price ‘seems right’.

Why the $9.99 price works much better than $11.99 or even $10 -

  1. We tend to use shortcuts all the time (to avoid getting overloaded and overwhelmed with information). So $9.99 is read as $9.

    This means that a 1 cent difference gets translated as a $1 difference. Studies claim that changing the price from $10 to $9.99 can increases sales by as much as 200%.

  2. We have purchase buckets i.e. sub $10 = impulse buy, sub $100 = think before buying, over $100 = read reviews before buying, etc.

    Pricing below $9.99 pushes purchases into the ‘impulse buy’ bucket for a lot of people.

There’s a very good post on Elia Insider about Psychology of iPhone pricing that speaks about pricing and finding the sweet spot. 

An additional thing to keep in mind is - Even when you know about this, it still works.

$9.99 and a lot of Consumer Psychology is Guaranteed to Work

The thing about

  1. Knocking 1 cent off of prices.
  2. Having a celebrity endorse a drink.
  3. Showing a cool guy as the Apple Mac and a not-cool guy as the PC.

Is that its really, really hard to avoid the impact.

That’s why Apple’s lawyers called up Microsoft to complain about the Laptop Hunter Ads and forced a change -

In the original version of the ad, Lauren, who wants to spend a maximum of $1,700 on her computing dreams, offered this competing statement: “This Mac is $2,000, and that’s before adding anything.”

Her mom, Sue, asks her why she would pay twice the price. To which Lauren gives her the steely look of a future prosecutor and says: “I wouldn’t.”

This loving familial exchange has now been edited out. The old version has been removed from YouTube and replaced with a new version, in which Lauren merely says: “It seems like you’re paying a lot for the brand.”

Apple knows that even people who believe Apple is a quality product will have the mother-daughter pair’s conclusion that Apple is not worth the price lodged in their heads.

ShortCovers hops on $9.99 bandwagon

Shortcovers is the latest ebook retailer to reduce prices of bestsellers to $9.99.

They blogged that  -

  1. They are in the process of adding 200 additional publishers.
  2. All bestsellers will be sold at $9.99 -

    How does $9.99 sound? It has a good ring to it, doesn’t it? We thought so too, and that’s one of many reasons that all New York Timesbestsellers (www.shortcovers.com/NYTBestsellers) are now available on Shortcovers for less than ten bucks ($11.99 in Canada)!

Well, $9.99 has more than just a good ring to it – it’s psychologically guaranteed to work better.

Obviously every single eReader company is waking up to this as they’re pricing their ebooks at $9.99 and their ereaders at $199 and $299.

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