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Is Agency Ebook Pricing Suppressing Sales? Hard to Say

30 April 2015

From Digital Book World:

The latest monthly data from the Association of American Publishers (AAP), for January 2015, show ebook sales in slump.

Comprising just 20% of trade sales, digital formats clocked in at $100.3 million, down more than 10% to what Publishers Lunch notes is the lowest monthly sales figure since April 2012, when the AAP reported digital sales at $99.5 million.

Some suspect the progressive restoration of agency ebook pricing that began late last year is a likely culprit for the decline.

While that may turn out to be the case, the fact is it’s very difficult to tell.

Publishers Lunch, which tracks and analyzes the AAP figures each month, has noticed considerable variation in what participating publishers report month-to-month, as each successive report includes revised data from the corresponding month twelve months prior.

Which is just one of several reasons why the latest snapshot, as Michael Cader commented yesterday, “shows how far we still have to go in obtaining reliable, consistent basic statistical measures of what’s happening in even a portion of our marketplace.”

Link to the rest at Digital Book World

Higher prices reduce sales? Amazon knows more about pricing ebooks than Big Publishing? Impossible!

Amazon, Big Publishing, Pricing

54 Comments to “Is Agency Ebook Pricing Suppressing Sales? Hard to Say”

  1. “shows how far we still have to go in obtaining reliable, consistent basic statistical measures of what’s happening in even a portion of our marketplace.”

    In other words: ‘These numbers don’t support our beliefs so we’ll wait until someone comes up with a new set that says Stay the course – customers love higher prices!

  2. Let me guess, they’re only considering ebooks of the bigger publishers? So any growth in indie won’t cause harm to the numbers the big publishers want to see?

    As Andrew says above, “Stay the course” big publishers, stay your overpriced course. The tighter you squeeze, the more sales will wiggle out of your hands and into the cheaper (and sometimes better) small pub and indie ebooks — and once they’ve discovered higher prices don’t always mean ‘better’, they may never come back …

  3. And there’s this follow up: http://www.digitalbookworld.com/2015/dont-expect-better-sales-data-soon/

    You see, the problem is that Amazon is withholding data.

    • Hmmm…that’s funny. Amazon gives me my sales data. 🙂

      Oh, wait, but they don’t give me Hugh’s, or Libbie’s, or Randy Penguin’s, or any other publishers’ (big or small). Why? Because it’s not my effing business!

      If the BPHs want better data, why are they sharing sales numbers with each other? 😛

      • Steven Zacharius

        Actually publishers do have access to ebook data from everyone who subscribes to this particular service from Bookscan. If you share your ebook sales, you can see the sales from the other publishers. It’s all lumped together and you can’t see by account though. But it’s a very accurate view now of how a traditionally published author is performing in both e and p. There’s no more making up numbers; they’re easy to see. This is the way people have gotten around certain accounts not sharing ebook sales. There is of course a reporting delay but it’s a very good start. This is only traditionally published authors.

    • Hmmm, the way you can check your sales and the way data guy gets his info suggests that it isn’t that Amazon is withholding data, but that the big publishers don’t like the data they’re seeing. And as Amazon can no longer ‘sale price’ their books.

      “Some suspect the progressive restoration of agency ebook pricing that began late last year is a likely culprit for the decline.”

      Whose fault be that? Not Amazon, they’d love to sell more books (and anything else.)

    • If I was Amazon, I wouldn’t share either. While they are a retail reseller, they are also the big five competitor (both in the realm of publishing AND providing a platform for self-publishers).

      So why would you give your competition extra data?

      • That follow up was classic DBW.

        Bigpub returns their e-books to agency pricing. Prices go up, sales go down. Writer’s with BPH e-book’s suffer. But never mind that whole thing, inconsequential. What matters is that legacy world doesn’t have a Gods eye view of every single e-book data pt. in the universe!

        Who’s at fault? Why, it’s evil, data-hoarding Lord Bezos. Who else?

  4. This left me completely confused. Publishers have to keep adjusting their monthly e-book sales because their initial reports, which already have a time lag of 3 months, don’t accurately reflect those sales? Because even internally by company they don’t know how many e-books their titles are selling? For this to be true, Amazon and other e-book distributors would have to be providing nothing more than a lump sum payment to publishers with no accounting by title. But then how do publishers figure royalties for individual authors?

    Of course, another possible explanation is that Amazon and other distributors lag far behind in reporting sales to publishers. Considering the games trad pubs play with author royalty statements that could be considered a form of divine justice.

    • Self publishers have the Dashboard to see our sales/borrows. Anyone know if BPH have a “dashboard” or are they using an old, outdated system? (This could be why they have no idea of what’s going on with their sales.)

      • @ Diana

        They probably using abacuses (abaci?) to run their data numbers! 🙂

        But, hey, that’s better than using fingers and toes!

    • Well, it could be that their contracts only require payment and reports every quarter and then it takes them six to nine months to process the data by hand. There is no guarantee the BPHs have heard of Visicalc.

      • LOL. They probably print off all the reports from amazon and have an intern type it back into excel or something.
        I once had a co-op job like that. They handed me a fourteen inch high stack of sheets, each one showing details of a single ECG test. The printed screenshots even had a little ‘export to Excel’ button at the top but nobody ever bothered to look into it.
        Twenty minutes in the data center and I was able to spend two weeks reading Hornblower…

        • You were way to smart for that job, Andrew! 😀

        • Their negotiators probably insist Amazon print and bind the reports and send them out by Federal Express.

          • The whales process the numbers and spend the rest of their time noshing krill.

          • FedEx? Pshaw! BPH’s don’t believe in using any of those new-fangled services. Costs way too much anyway, would bite into the record profits and the $5k bonuses to the interns. 3rd class, freight transit USPS all the way!

            It’s only writers royalties. No need to rush anything. They’ll wait patiently for their BPH to eventually stir in their regard. And they’ll like it.

    • Or is it possible publishers are adjusting their numbers downward just in time to pay royalties to authors (which are paid months in arrears)?

  5. In a typical year, I read about 100-120 books and buy close to 300, 80% or more being e-books. (Yes, my TBR pile is huge.) I’m lucky in that my wife is a librarian and can usually get first crack at pricey releases by King, Child, etc.

    Out of the 25 books I’ve read so far this year, 14 were library print copies. Nine of those (published as far back as 1991) have never appeared in mass market editions because publishers decided that readers prefer to buy $15 trade paper ‘special snowflake’ editions rather than affordable mass market. I’d have bought these in a heartbeat had they been in mass market or e-book editions for $7-10 or less. But by setting a bottom price limit of $15 they are eliminating me from the market and preventing new readers from discovering these authors. About the only print books I now buy are rare or OOP copies I find at used bookstores. None of this is helping authors or publishers. That’s how agency pricing has affected me and the authors I read.

    • Ron wrote, “I’m lucky in that my wife is a librarian and can usually get first crack at pricey releases by King, Child, etc.”

      Is that how it works all over? That librarians take first crack at much awaited new releases? Doesn’t seem kosher somehow.

      • My library system adds books to it’s catalog (which is online) even before they are processed. It’s possible she knows when the book is entered into the system and can put a hold on it as soon as it is in the catalog. I have luckily gotten holds on new books that were just added to the catalog (because I looked for them at the right time) and received them right after they were processed. A hold is a hold, it’s not like jumping to the front of the line.

        As I’ve written elsewhere, libraries are not like bookstores. They don’t aspire to having shelves of books waiting for you to browse. They want all their books checked out and in readers hands. The online catalog and user account system that almost every library now has is the best friend and secret weapon of today’s reader.

      • Just a perk of the job, I imagine.

      • Definitely a perk of the job. Working at Waldenbooks back in the day was great–we’d unpack the boxes of new books and the employees always had first crack at the new book and DVD releases before we put the rest of them up on the shelf for customers.

        • I miss my Waldenbooks. There were some Hastings employees who were actually helpful way back when (like when they actually stocked books and video I wanted) but that Waldenbooks had a manager who knew books and her customers. It also had at least 2 other employees who ranged from pretty darn helpful to fantastically helpful.

      • The larger (as in waaaay larger than the library where I work) library I use enters books on order into the catalog so they can be requested. I notice release dates and know if a book or more usually for me the audio version by a favorite author is due out soon I can check and put a request in for it and be the first “in line”.

        We strangely don’t have a huge call for audios at my library so we don’t buy many but I love them. I generally order the book for my library but will request the audio versions for myself from the “big guys”.

  6. What? 9.99 ebooks aren’t selling very well? It must mean that ebooks are in decline! Hooray for paper books making a comeback!

    … Yeah, you publishers just keep drinking that cool-aid and I’ll keep churning out 2 and 3.99 ebooks. A friend of mine one time said that she used to buy paperbacks that were about the same price as a loaf of bread. Last I checked, decent bread was about 3.49. So yeah, we’re in the right price range.

    • $9.99? Last trade-published ebook I looked at was $28.

      Needless to say, that suppressed the sale to me. I bought a few indie ebooks for $3-4 instead.

    • I could handle a few at $9.99, but I know of at least a handful of new releases by my favorite authors where they want $12.99-$14.99 for the next ebook in the series! Sorry, you’ve priced yourself out of my market. If, at some future point they lower the price to something I find more comfortable to pay for an ebook, then they might have a sale. Until then, I’ll look and buy elsewhere.

      • Me too. I am only buying a few books above $9.99 this year, and with agency pricing the average price on my lengthy wishlist is at least $10.99. Recently I got tired of waiting for more than a dozen of them and ordered them from Abe’s. Average price $3.50 (including shipping) for very good condition, mostly hardcover copies. As an unfortunate result, there are no payments to BPH and no author royalties, but I will be able to share them with friends.

        I had assumed that they hoped the loss of ebook sales would be offset by an increase in hardcover. Whatever they thought would happen, it will be interesting to see how their new business model works out for them. I can’t imagine it’s going to be that great.

  7. When one of my fave authors has a new release, I check it out on Amazon. If the ebook price is over ten bucks, it goes on my wish list. If after a few months the price hasn’t come down, I take it off the wish list and put it on my “pick it up at the library if I remember” list.

    So, no, can’t see how high publisher prices have any affect on sales at all.

    I love how they blame the third party data collection for the numbers they don’t like. Don’t they track their own sales?

  8. I can tell you it suppressed one sale. I saw something about a book I thought sounded interesting, a new (to me) author in the so-called “flintlock fantasy” sub-genre, so I went to Amazon and checked it out. I’m not kidding, the Kindle edition was $19.90. That’s right, nineteen dollars and ninety cents. The hardback and trade paperback weren’t much cheaper. And of course it had that notice saying “This price was set by the publisher.”

    I guess I’ll get it from the library, if I can remember what it was and if I ever run out of more affordable things to read on my Kindle (in about 70 years).

    • Kyra, are you saying the paper version was cheaper than the eBook?

      • Yes. The trade paperback, at least. The hardcover was about the same (though it might have been discounted by Amazon). I was too in shock from that Kindle price; all I remember is that the other prices also started with “1” and that the trade paperback also seemed expensive compared to usual trade paperback prices.

        • So they’re trying to hold back the flood, I suppose. The problem is that a lot of readers won’t simply trash their eReaders and go back to paper like good little consumers. The pressure will continue to build and the publishers don’t even seem aware of it.

          • There will be no flood, at least not for the publishers with overpriced books/ebooks. Their dam is leaking away the water they want it to hold; on the one hand they have Amazon and others selling books/ebooks cheaper that they do, on the other they have writers not signing their rights away — writers that are getting more bang for their buck self-publishing, which is money the publisher might have shared had they not tried to shear the reader and writer so closely …

            They’ll wake up one day and discover the dam is dry, not by any ‘attacks’, but by their own hand.

          • High ebook prices *will* keep casual readers from buying ebook editions. But since those are bandwagon readers who typically buy at Costco…

            It is perfectly logical to suppress sales of your highest margin product to promote sales of your lower margin products.

            It’s Whale Economics.™

      • This is normal, at least on Amazon. A number of times in the last year, I’ve looked up a book there, intending to buy the Kindle version, seen that it’s $2-3 more expensive than the paperback, and bought the paperback instead.

    • Geez, the poor author. And then a year from now they’ll cut him/her loose because the book never found an audience.

    • Ahh, that’s a shame. I hope Jen is right and the publishers cut the author loose, so the book can be re-published more sensibly.

      I love that we’re seeing more settings in fantasy these days. I have a trilogy where one country has advanced to flintlock level and I like knowing that it won’t be the only such story.

    • This was a screw up somewhere by the publisher or Amazon. The current price is $14.99 (still high, I know), and all the 1 star reviews from people complaining about the price have been scrubbed by Amazon. They’re still there, but the book currently has “0” reviews and no rating.

  9. I have been wondering if the BPHs were feeling the reductions in their sales that many indie authors have been reporting this past year or so. Maybe Kindle Unlimited is lowering their ebook sales also even though none of them have joined it, along with all of the factors mentioned already in this thread (high prices, indie competition).

    • I would imagine if us indies are feeling a bit of a pinch due to KU cannibalization, then the prices of BPH using agency pricing would create a bruise-inducing pinch, indeed.

      I’m not a romance reader, but a lot of my friends are, and all I keep hearing is that they can get all they want in that genre under KU. Thrillers and such as well. Those are volume readers, so I can easily see why that would cut very deeply into the numbers BPH reports.

    • Steven Zacharius

      We have not seen a decline in sales due to KU, quite the opposite. And books that are in KU are still selling very well to people who aren’t enrolled in KU.

  10. As I wrote more than a year ago, the absence of truly comprehensive industry-wide sales data leaves “many in the publishing world…to rely on precedent, strategic gambles and gut instincts.”

    OK. So what?

  11. I recently came across a swords n’ sandals series that sounded right up my alley. I looked on Amazon and found that the Kindle version of the first book was around £6.50 and the paperback was £6.99.

    I didn’t consider this £0.49 difference a tempting bargain. I considered it an insult to my intelligence. The Kindle price was also well above my normal ebook maximum price-point of £5.00. Did I buy it? No. I looked for something as good, but cheaper. Of which there was plenty.

    Weirdly, books #2, #3 etc. in the series were all priced at £4.49 or lower. I’ve seen this a few times now – the first book in a series priced much higher than the rest. Surely it should be the other way round?

    • The first book was higher priced? Apparently someone at that publishing house skipped the lecture on effective sales hooks and loss leader strategies.

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