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Emmanuel Dunand / AFP - Getty Images
The Amazon Kindle Fire tablet.
New versions of e-readers from Amazon.com and Barnes & Noble will no doubt grace Americans with their now-more-affordable presence beneath Christmas trees this holiday season.
But what happens when the price of the e-books to be read on a Nook or Kindle suddenly shoots up, making the whole arrangement a lot less affordable than previously thought?
The problem of so-called "e-book sticker shock" is becoming a reality ever since six of the top book publishers banded together and agreed to set prices for the electronic books they sell, according to a story in The Wall Street Journal. In some cases the price for the e-version of a book is actually higher than the physical version, the article said.
Retailers have been selling e-books for around $9.99, or sometimes less, making the ownership of an e-reader look like a value proposition when compared with the double-digit price of buying a new hardcover book.
But the new pricing agreement among publishers effectively prevents retailers from discounting e-books without a publisher's permission, and no such agreement exists when it comes to printed books, according to the story.
That means retailers can still slash the price for physical books as much as they please in order to entice readers to buy, but they'll have to comply with the new, higher prices for e-books set by the publishers. The wholesale price charged by the big publishers for both e-books and hardcover books was $12.50, meaning that before the agreement, Amazon.com was losing money by selling e-books at $9.99, books, according to the Journal, but the low price encouraged consumers to get in the e-reader game.
The Journal story goes on to explain the reasoning behind the change:
“Under the new pricing model, a $25 hardcover is often priced at $12.99 for the e-book. And because publishers receive 70% of the e-book retail price -- while retailers retain 30% -- that means publishers receive only $9.09. Publishers were willing to accept the lower profits because they felt the new arrangement preserved the value of books and encouraged other retailers to enter the e-book market. Indeed, the new arrangement means guaranteed profits on best-selling titles for retailers like Barnes & Noble Inc., which today claims about 27% of the digital books market, as well as Amazon.”
The whole agreement was actually launched at the behest of Apple’s Steve Jobs, who had wanted to create an e-bookstore for the iPad but didn’t want to compete with Amazon.com’s cheap titles, according to the story. And now the Justice Department is looking into whether Apple and book publishers improperly colluded to prevent price discounts, the Journal said.
Some examples of these pricing snafus? Well, the WSJ cites Ken Follett's 985-page novel "Fall of Giants," which costs $18.99 as an e-book, but can be purchased in paperback for $16.50 on Amazon.com
And while e-books do offer advantages -- such as portability, convenience, and the ability to highlight and take notes, which might account for an elevated price -- comments on the Journal's story showed readers were less than thrilled by the new prices of e-books.
Reader Melanie Premo, for example, wrote:
“I bought a Kindle when ebooks cost 9.99. Since Amazon raised the prices for ebooks, my Kindle mostly sits, unused. If I'm going to pay 15 bucks for a book, I want to be able to loan it out or give it away when I'm done with it.”
Leave a Comment:
Doesn't this fall under the Sherman Anti Trust act or some form of antitrust law?
They're basically forming a cartel and setting agreed upon prices in order to maintain inflated prices...how are the people who bothered with the e-readers not up in arms about this?
I have a kindle, and most of what I'm reading on it comes from the 'promo' titles- free or very cheap books usually by unknown authors, and not from the big publishers. I've also gotten a lot of free classics that I've been meaning to read for ages. As for the big name authors/publishers, I pick up those books at the library.
Price fixing is definitely against the law, but the current government of this country has decided that corporations are people who are exempt from certain laws.
I agree Sono it is price-fixing, but they may get away with this under the Resale Price maintenance practice; the relation between manufacturers (publishers) and (e-book) resellers (amazon/ b&n/apple etc..). We'll see....
This is just the death throes of a dying middleman. Publishers and Record Labels are all going extinct in the near future. Authors and artists no longer need the infrastructure provided by these middlemen, they can directly sell their products as e-books or mp3's with no manufacturing costs, so why give any money at all to a 'publisher'?
Remydon- maybe. Some of the self-published authors don't think they need an editor at all, but if they have problems like poor spelling, formatting, etc., they'll end up with bad reviews. Too many of those and they won't be able to even give their book away.
@ Composer, that was the Supreme Court that made that determination, not the "current government."
Steve in WA-2586156 Is absolutely correct. It is the conservative members of the SCOTUS that allow this crap.
I believe this is called "price fixing" and is illegal under federal guidelines. I hope they face criminal charges for this because I am certain you and I would.
Meanwhile, Amazon is rapidly signing authors (over 120 already) who contract with Amazon to sell their books only through Amazon. They get a slightly higher royalty and Amazon gets the rest, cutting out the agents, publishers, book stores, shippers, and everyone else in between. This article didn't even mention it.
Antitrust laws have all been repealed in this country. Very quietly. While they distracted all of you with Dem vs Republican BS like any of that stuff really matters. Your children will hate you for being so stupid as to fall for their party BS diversions. If any of your children actually survive...
Why do you think that in a region all gas prices are within a nickle of each other? It is called price fixing and...book sellers are no different than big oil. They got it, and you want it, so pay up sucker.
Is anyone really surprised about this?
I'm glad I found this because I am really thinking about buying an e-book for myself after christmas. this is the kind of thing I need to know, but I was really hoping to just buy a few books, and borrow a lot from the library. I was thinking of doing this for traveling.
Do you think it is a good investment?
"The problem of so-called "e-book sticker shock" is becoming a reality ever since six of the top book publishers banded together and agreed to set prices for the electronic books they sell, according to a story in The Wall Street Journal."
Perhaps someone should remind the publishers that 'price-fixing' is illegal, and conspiracy to set prices is a felony, punishable by imprisonment.
no paper, no shipping, that much more profit. And people are shocked that after being led with the rest of the sheeple into e-books that this would happen? pure greed. Hmm lets see DVD's were 9.99 as were CD's when they first came out to get people to leave VHS and Cassettes. then look what happened? history is just repeating itself. I really hope it changes course. The publishers will come up with some excuse. even at ten dollars for an e-book they are still making more and wasting a whole lot less, but $15+ is better for the bottom line isnt it? now that you got people invested with the reader.
I was going to buy my wife a Kindle for Christmas. Boy am I glad I waited. After hearing this. Looks like I'll be buying her a tablet PC instead, and then she can CHOSE if she wants the Kindle or Nook application or not. Or maybe she can just go to the Gutenberg project and download books for free on her Tablet.
Just to pick up a thread....Steve in WA and ranks....the Supreme Court is also part of the "current government." It was never stated that it is the Executive Branch only in charge of government these days.
Steve in WA / ranks: You do understand that the Supreme Court decision also protected the unions like NEA, UAW, etc... groups like trial lawyers associations and lots of other left wing organizations and environmental groups that are incorporated. Corporations are not limited to only the right. Apple, Microsoft, Progressive Insurance co, almost all of the broadcast networks, most major newspapers, etc, all pretty much lean to the left.
But, I tell ya what, I'll trade ya the right wing corporations for the left wing unions and associations. If your argument is they shouldn't have access or be able to influence (give campaign contributions), that's fine with me, as long as it is applied to every group... including the unions, trial lawyers, environmentalists, etc... equally.
I mean after all, liberals are always talking about fairness, so let's make it fair and take away that status for all of them.
That works for me if it works for you. Whaddya say?? You willing to compromise and agree to that?? I am.
Price fixing is illegal, but no one told Apple, either. Even Walmart holds the line on their products. The vendors just don't cross the line. Whether you're on Apple's site, Best Buy, Mac Authorized dealers--same price.
To date, the selection is far too thin in the e-book market. There's no printing, shipping, bookstores to cut in on profit. Up the offerings and let market set the value of your product.
Price fixing schemes likely don't apply to copyrighted content from the source because, for the most part, copyrights already grant monopoly over that specific product.
It'll be interesting since they colluded on all prices for all content, rather than just the content on individual works, but it'll still be tough.
what did you expect to happen?
someone offers you something or gives you a 'deal' on something, you really need to expect you will be paying a price, sooner or later.
or as P.T. put it, 'a fool is born every minute'. and amazon took most of you as fools.
send a big thanks to mr jeff (p.t barnum) bezos! what a guy!
The real disconnect is that it costs a LOT more to produce a printed book than it does an e-book. Consider the cost of paper, ink, printing, packaging, distribution, handling, stocking, etc of paper books. e-books sit on a hard drive and are zipped electronically (with no shipping fees) directly to the consumer. It should be MUCH cheaper!
inmissouri:
Freelance editors are the answer. Professional authors understand that there is some cost -- however small -- involved in bringing their product to the market.
Publishers have always screwed authors and Amazon is no longer functioning as a bookseller, but a publishing conglomerate of the worst kind. It encourages new authors to work for even less money than the print publishers of old, and takes even more than they did, so that the author can't possibly earn a living and talented people won't even try.
Example: Amazon encourages authors to price their work at $2.99 and then they have the noxious greed to take 70% of it! How can anyone pay rent on a cheap room for that, let alone make a living?
Authors need to say enough is enough and the reading public needs to support them.
I work in a highly technical field in which quality information for newbies is desperately needed. I am capable of writing in this field, but won't do it because writing a good book takes a lot of work and I'm not willing to do it to enrich Amazon from my sweat.
Publishers have always sucked the life out of writers. They are parasites. They need to go. Period.
This is idiotic. It costs virtually nothing to create an ebook and the publishers want the same profit as if they are actually producing a physical product?
I'll buy the book.
Or I won't buy either which is not what they had in mind, I'm sure.
I think a lot of people don't realize that the libraries offer these ebooks too. You can check them out online and download them to your device. They expire after a couple of weeks and you delete them. They are adding books all the time. All you need is a library card. Support your local library!!
Sono
I would suspect that very few people who were willing to blow that much money for a dumbed down laptop are going to be bothered by a relatively modest price increase for a bit of electronic data.
oh really? Ask Netflix how that went...
Doubling the cost of an ebook is a "modest price increase?" I'm glad you are paying for them.
The Rich get Richer! They just had to wait a bit longer than normal, so all of us saps would buy the hardware. If enough of us do not buy the ebooks, they will eventully cone down.
Load up on classics until the 'agreement' is broken down. They're good for you (kinda like veggies!)
The Gutenberg Project is an excellent start. Certainly don't pay the grave robber fee if you want to read any of these classics.
They just convinced me to scratch my kindle-fire off Santa's list. I'll keep reading the physical books rather than "ether" books. Like another poster, I can loan them out and then return them to a bookstore for a credit toward other books.
I have no use for one, but was gonna get one for the wife for Christmas. NOT!
I was also asking for Kindel for me and my wife for Christmas, but lets see the advantages???
1. I can pay more for an electronic copy of a book and
2. I can loan or give my paper book to a friend and I can pay less for the book
This is a no brainer.
If you like Sci/Fi-Fantasy Baen Books has a selection on thier website for free in several formats including kindle and noof. baen.com
David- thanks, I'll have to check that out this weekend!
I buy indie books that don't determine their price based on the publisher since they self publish. I have bought several ebooks from bit time authors because of the convenience and the lower price but will probably just get them at the library. Just when you think publishers might 'get it' they pull something stupid like this. Publishing has been changing and this seems like a knee jerk move.
bit=big
stupid auto-fill!
Particularly for those who have Amazon Prime, there is little incentive to buy e-books any more. And, of course, the Kindle Fire really encourages people to join Amazon Prime, so this makes little sense, at least to me. Glad I never fell for the e-reader fad; and a fad it will certainly be given the new pricing.
sounds kinds like the recording industry.... not accepting the new reality. where are CD sales these days compared to 15 -20 years ago. then they controllled the arena and refused to se the handwriting on the wall.. They fought Napster (et. al.) and while they were winning that battle they lost the war. Singles at 99 cents.. buying only what I want... not an album with 1 or 2 good tracks and the rest 'filler'
Publishers are facing the same war...People will stop buying and authors will start using amazon as a new "publisher' and in 10 years or so the traditional publishers will go the way to the reconding industry
Give me a good old fashioned normal book any day, because you do not need to make sure the battery is charged in ordered to read it. I deal with e-books in my college class books and it sucks.
Until they make an e-reader that is flexible like a paperback and doesn't use batteries like a paperback I see no reason to own one.
I enjoy the tactile sensations of holding and touching a book made of paper.
I remember one Bloom County strip back in the 80s where Opus (the Penguin) asks Oliver (the computer nerd boy) if he can borrow his copy of a book. Opus wanted to curl up in his recliner with a blanket and a book. Oliver hands him a CD that had the book saved on it.
No thanks.
I keep a bucket of horse@!$%# in my car and throw a scoop out every few miles, just for nostalgia.
@cheetah: The comparison doesn't work, but I still laughed at that comment.
Me too....lol
I love eBooks -- I just don't like Amazon.
I am an obsessive book-lover and have hundreds. But I also love to travel and even if I break my back lugging a load of books, I always need the one I didn't bring.
eReader to the rescue. I can carry thousands of books in my pocket. The battery is not an issue -- it lasts a long time and I'm hardly ever away from electricity to recharge it for more than 24 hours at a time. After all, I need to recharge my cell phone, not to mention my laptop. LOL
Most eReaders let you highlight, bookmark, and make notes in the margin, so that's not a problem. And I like the fact I can search a book or entire group of books for that important point I can't remember where I read. Just the other day I spent hours searching through a group of print books and never did find what I was looking for. VERY frustrating.
I love eBooks. I just hate Amazon. They were very good at what they did, but what they did was decimate neighborhood book stores and set themselves up to get filthy rich by exploiting writers worse than ever.
This is price fixing, plain and simple. It is illegal. Sorry, Apple (not really).
Just watch, next the publishers will start whining about book piracy and untold millions in lost sales.
True - the only sensible response to this is to unlock the book and post it on a file-sharing site.
It's going to happen more and more. It is absurd that they would charge more for a digital copy than a physical copy. If they don't get with the program, they're going to watch their profits go the way of the movie and music industries.
I asked for one for Christmas. I hope that's still a good idea.
I have a plain ol' kindle and I love it... I don't get much in the way of big-name books, but it's loaded with classics and 'promo' freebies... (and the battery lasts a week on a basic black n white one)
You'll be fine. There are lots of books distributed directly from authors that are reasonably priced.
I got the NookColor for Christmas last year and have really enjoyed it. But I also am cheap so most of the books I've purchased fall into the $.99 to $4.99 price range. I've found some new authors that I really like. User ratings and comments help in making my selections.
As others have noted, many books are now self-published. Some of those do have some formatting issues but most are ok. I noticed this week that several of the books I have on my Wish List are suddenly no longer available. Guess I now know why.
I have yet to buy a book from any of my big name favorite authors. I'm just too cheap to spend $13+ for an electronic book. Even at $9.99, I can't justify the purchase. And those aren't even LendMe books where you and a friend could trade off buying the new releases and share them! I could get them through the Library, so I may end up doing that.
One thing I do like about getting the eBooks from B&N is that I can always check to see what books I've already read. Also, if my Nook dies, I never 'lose' my books. Further, space is at a premium where we are now living and practicality is forcing us to donate most of our hard cover and paperback books. (We were always the ones who bought from the used book store but never traded any in.)
Anyway, no regrets for buying an eReader. I like it more than I expected. And having it doesn't preclude my buying a physical book if I want.
Rustyboy - It's still a good idea. I've had a nook since Aug. 2010. I have approx. 350 books on it. I've only paid for a handful of them and most of those were $2.99. Any bestsellers I want, I borrow the epub from the library. There are plenty of good books under $5. Several are self-published.
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Absolutely, collusion by the marketer to protect the seller and penalize the buyer. A free market must always have a seller that is free to offer any product or service completely un-hindered by any 3rd party marketers self interests.
Unfortunately, the entire purpose of copyrights is to break the free market so that the copyright holder can charge much more than the free market would allow.
I think you are missing the point of the article(and my comment). The hardcover books have no restrictions by the seller to the price that it can be sold for. The seller can offer it as a "lost leader" for any price they choose, above or below cost. This philosophy is a very common approach by many retailers to drive more sales in other categories and net a higher volume and margin overall. However the e-books are restricted by a predetermined price point (Manufacturer advertised price, MAP) that is contractual between the seller and the 3rd party marketer. A common analogy would be to call this "price fixing" which is not a legal.
I think you are missing the point of the article(and my comment). The hardcover books have no restrictions by the seller to the price that it can be sold for. The seller can offer it as a "lost leader" for any price they choose, above or below cost. This philosophy is a very common approach by many retailers to drive more sales in other categories and net a higher volume and margin overall. However the e-books are restricted by a predetermined price point (Manufacturer advertised price, MAP) that is contractual between the seller and the 3rd party marketer. A common analogy would be to call this "price fixing" which is not legal.
Renee -
No. The purpose of copyright is to prevent thieves from stealing another person's work.
Your idea of a "free market" is apparently that the person who worked hard to create something ought to give it away.
It takes years of blood, sweat, and tears to learn to write well, and even good pulp fiction takes months to write. And yet you think authors should give their work away? Here's a flash for you: few people can afford the luxury of working for free.
Authors would be more willing to sell directly to the public if there weren't so many thieves out there who think nothing of stealing their work and even circulating it on the web for others to steal.
You know, e-books were supposed to be cheaper than their printed counterparts due to lower costs of "manufacturing." No trees to harvest, no paper to mill, no ink to print, no glue to bind. No cost for fancy book covers and jackets. No distribution costs for shipping books from the printers to the retailers. What happened to passing these cost savings onto consumers/readers? It's called GREED.
There is also the issue of "instant gratification": for eBooks, there is no significant cost to "store" it and when someone buys it, the publisher sends it out and gets instant payment. For real books, to sell, they have to be available, so they sit around until sold, plus there is always a lot of waste and left overs.
And Yes, a Merry Christmas to all to greedy Grinches. I hope everyone avoids eBooks like the plague until they reverse this silly collusion...I mean decision.
I just love how the government works. In Idaho, about 6 doctors decided they would not take Workmen's Compensation anymore since it was such a pain to work with and did not pay them enough. The government was on those guys in an instant and now they are all in a big time trouble and facing possible jail time!!! Whereas these pricks openly collude to screw everyone and they get a pass...at least for now. I'm sure these people are also right wing Republicans who tout the wonders of Capitalism and competition. Dam Hypocrites, that's what they are.
Wow....forcing the doctors into contracts they don't want to be in???? Why are they being charged with a crime...looks like they are just "striking" for higher wages.
Is it just me or rather those that live in the Twin Cities of Mpls/St Paul that can log on to their public library and download the current best sellers to their Kindles?
This is the first electronic toy I've really gotten behind and used. Now, if they can just hook up to Project Guttenberg
moonie - Libraries all over the country have electronic copies that can be downloaded for nooks & kindles (among other ebook readers).
I have never been a book buying person. I read too much, and I think having books that take up physical space is clutter. I got a kindle for Christmas last year and have only bought 4 9.99 or over books. The rest are .99 cent or indies. Libraries are starting to build up their lending libraries for e-books. . I borrow 2-3 a week from the library. No need to leave the house either.
I have a kindle fire and use my Online Library Account to download all the books I care to read on it. My local library provides Kindle Versions of books through Amazon. So while most of you are paying for your one time ebook, I'm getting mine loaned to me free of cost.
nice person statement: "Just an FYI, you might be able to get ebooks free from your local library. Check it out."
Douchebag statement: "Oh, you mean you don't get your ebooks for free? Well, I do. Suckers."
Guess which one you fall into...
I never buy books! I get more than enough to keep me happy from my local library. Also since I have a nook I can get free books from Barnes & Nobel, sometimes better than others. Love my nook, one of my favorite toys!
@krazymop - WORD
Why do we allow greedy corporations to commit crimes like this? When are the executives at the publishing houses going to be put in jail?
Don't worry, they'll get fired once they destroy the company, and then get millions for doing so. Jail time is only for those that make the 1% mad.
There is the same pricing problem with newspapers, which are often cheaper to have delivered to your door than to get a Kindle subscription. No reason for this, especially when the newspaper can be used for a lot of other things, but the E-paper can't.
OK, So the publishers want to "price fix" their books? They will also creat an environment more favorable to bootlegging and piracy, This cost gouging mentality is the complete opposite of what they should be doing to sell more units. Well, it's their loss and to H3LL with em all!
Good lord...the "big 6" price agreement happened well over a year ago...I've owned a Kindle for almost 2 years now (just got a Fire), and believe me, there are PLENTY of books available for well less that $10. I am glad to see that somebody is looking into the "agency agreement" though, because I do believe it falls under the catagory of price fixing, but if your going to write a story on it, at least comment on how long the fixing has been happening.
This is a reflection of the major publishing houses' (and agents') terror at their impending superfluousness.
Authors are now able to get their work published as e-books and avoid having to pay their percentages to those publishing houses and the agents who are required for an aspiring author to even get their foot in the door in one of those publishing houses. Publishing houses don't get to decide what gets published anymore, either, which really has to tick them off further. They are no longer the "last word" on what people want to read.
It's interesting that the publishing houses get 70% of the asking price of the book, with the retailer getting only 30%, leaving very little remaing for the author. I use Amazon's Kindle Direct and set my own prices (kept deliberately low), and I get that 70% (minus electronic delivery fees) and there are no middlemen to take bits of MY money.
One would hope that the Sherman AntiTrust legislation would cover this situation, as it is blatant price-fixing on the part of the publishing houses.
Chill people. It's supply and demand. The supply of e-books is unlimited, and the demand is controlled by the consumer.
So, if they set the price too high, don't buy. Publishers can see the sale of e-books almost instantly, so just re-read some of your e-books or old hard backs and watch the price of e-books start falling.
Unless the manufacturers of the device have got you to buy on the promise of cheap books and then increase the price...
That still leaves you with angry birds and a nice $200 (kindle fire) wifi color web browsing device. There are literally thousands of free or very cheap books available as well.
Granted, if you are exclusively a new release reader then a kindle may not be your best option.
This is going to get the industry in antitrust trouble.
I hope you are right but looking at the current situation of our economy and government- I doubt it !
It seems to me something like the unfair pricing (at that time among railroads) that spawned the Interstate Commerce Commission Act. And from a little reading it seems to directly violate the Clayton Antitrust act.
Information from my memory of 7th grade history and Wikipedia, so take it with a grain of salt!
I think the kindle is still a great deal. There are plenty of free books out there, and loaning from the library...just don't buy the pricey books.