Friday, September 4, 2015

Publishers Earning Less Revenue From High e-book Prices


Major publishers have all signed new deals with Amazon, giving them the power to set their own prices. This has dramatically increased the cost of the average bestselling title and customers are steadily buying less of them.

Within the last calendar year Penguin/Random House, Simon and Simon & Schuster, Hachette and Macmillan have all signed long term contracts with Amazon. In the past, Amazon had the ability to sell e-books on a wholesale basis.  Due to the rising popularity of the format, and the billion dollar digital book market, publishers wanted more control over the price. The end result is e-books costing significantly more money.

This week there wasn't a single title priced at $9.99 among the top 20 titles on the company's Kindle best-seller list. Last summer, Amazon offered the digital edition of James Patterson's thriller "Invisible" for the bargain price of $8.99. Mr. Patterson's newest tale of suspense, "Alert," went on sale Aug. 3 on Amazon for $14.99, a price set by Hachette.

The average e-book a year ago cost $9.99, and many customers found that was the ideal price for a digital title.  It was cheaper than a paperback and dramatically more affordable than purchasing the hardcover edition.  Now, things are almost reversed. Many new digital titles cost in excess of $17.99, which are driving away people looking for digital deals.

Publisher e-book sales have been stagnating since 2013, when they fell 2.5%, according to Publishers Marketplace's analysis of AAP data.  The Association of American Publishers has just released their annual data report a month ago and in the first three months of 2015 e-book sales have plummeted 7.5% from the same period last year. Meanwhile, Hachette is reporting that  e-books fell to 24% of its U.S. net trade sales in the first half of 2015, from 29% a year earlier. Declining e-book sales contributed to a 7.8% drop in revenue in the period.

The high e-book prices we pay now are directly attributed to publishers greed. They wanted to prevent Amazon from lowballing e-book prices and putting other digital bookstores out of business and they have now shot themselves in the foot. e-Book sales are falling all over North America because people don’t want to pay an arm and a leg for an e-book.

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