Not much is known at this time about what options are being discussed by the publishers under attack by the Justice Department. We do have good information that there are settlement options on the table and that the Agency Model pricing model currently to blame for high Kindle Edition eBook prices will be on the chopping block regardless.
Reports from unnamed informants close to the matter have indicated that there is reason to expect a settlement within the next several weeks. Neither Apple nor the publishers have responded to any requests for comment at this time. The Justice Dept declined to say anything.
Whether this is a sign of consensus among the defendants or merely that one or two are feeling the pressure and wanting to end what they see as a losing battle should not matter much in terms of the outcome. In the event of one publisher involved in the price fixing scheme reaching a settlement, the terms would undoubtedly involve release of evidence necessary for ensuring a successful prosecution of the rest.
Basically, assuming the news is true, this means that the end of the Agency Model is at hand and that the Kindle has made it through possibly the most harmful barrier to eReader adoption without so far becoming irrelevant. A return to the wholesale model, even temporarily, will mean more affordable reading material for Kindle owners. This in turn should spur sales of the eReading line. Amazon’s willingness to take a loss on bestsellers to promote their product line is what game them over 90% of the eReading market before the Agency Model was imposed and there is no reason to see this practice changing overly much if the Agency Model is destroyed.
The big question will be what comes next. Settlement or unfavorable ruling aside, publishers are not going to give up on their position that readers have no right to expect inexpensive books. It is incredibly unlikely that they will all pull out of Amazon in reaction to this, but they’re going to have to find some new way to prevent Kindle customers from being too happy with digital books.
The case at hand is all about how the defendants collaborated to impose the Agency Model on Amazon. The means to achieve this goal is in question, not the model itself. Depending on the terms of the settlement, publishers could be permitted to go back to it in time. They could also turn to something even more unpleasant for potential customers. It is hard to tell at the moment.
In the short term, the clear winners will be customers. Prices on eBooks should drop abruptly, especially in the Kindle Store, following official announcement of the deal being made. In reality, expectations may need to change with regard to how profitable a new bestseller should be per unit sold. Big 6 publishers will be forced to come to terms with this. Beyond the immediate benefits to Kindle customers there is little that can be asserted reliably about the effects of this situation. It will be interesting to see how the situation evolves. Any thoughts or predictions?
If you follow the e-book publisher news, you might have seen some mention of the major publisher Penguin Group’s decision to take away, then restore their titles to OverDrive. OverDrive is used by many libraries to deliver e-books to their patrons. States including North Carolina have a digital library that is run through OverDrive, and it is the place where patrons have to go to download books for all e-readers, tablets, and smartphones.
A couple of months ago, Amazon began offering Kindle e-books to 11,000 and counting libraries nationwide through a partnership with OverDrive. The service is extremely popular with library patrons, and there are already long waiting lists for popular titles.
Penguin will restore their titles at least until the end of 2011, and is working with OverDrive to write up some regulations that will fit their needs.
Does this whole issue mean that publishers are starting to freak out about whether allowing library lending will impact their e-book sales? Probably. But at the same time, it is also adding libraries to their consumer list. Libraries have to purchase copies of the e-books just like they do regular ones. I wonder if there was a big fight with the publishers when libraries started buying books way back when?
I think that the bigger thing that is hurting e-book sales overall is the higher prices. Kindle e-book prices have gone as high as $16.99, which no one could reconcile paying that for an e-book unless there is no other cheaper option. The good news is that there are plenty of Kindle e-books out there that are free or reduced price. Most of them are older ones, or ones written by self published authors.
On another thought, in the past, library patrons have checked out newly released books at the library, and then purchased them later if they really liked them. The same idea will most likely go for e-books.
I can understand the fear that books might end up like music once did with the rise of Napster and other music sharing sites. I can also understand that it is important to make everything secure so no one gets misled. But, I think that it is important to keep the consumers in mind because they are the ones who are reading the books.
It will be interesting to see what other major publishers such as HarperCollins and Random House do as Kindle library lending becomes more popular.
While the focus of Amazon’s new content duplication policy for the Kindle Store is clearly an effort to eliminate the Kindle spam that has become an ongoing problem for customers, it has a couple less obvious effects that work to the advantage of both the company and the customers. Much of the speculation regarding how the Kindle Store could be cleared of worthlessly repetitive content revolved around the most efficient and advantageous methods that they might have available and clearly an interesting one was found.
The most obvious change, though not entirely new, is to the out of copyright publication. Perhaps the biggest problem that these have posed many consumers is their variety. Now, normally variety is always a good thing. When you know that the content you are acquiring is going to be the same no matter where you get it, however, having ten, twenty, or even fifty versions of the same thing to choose from is simply not helpful. The in-text annotation and added content that one expects with the many different print editions available to choose from do not translate well to the Kindle experience just yet. Amazon has done quite well in the past few months at reducing the clutter among these titles, but with the apparent automation of the duplicate-checking that they now have in place it will be that much easier and more reliable.
They have also done a great job of ensuring the most up to date content library available for Kindle customers. While it would be illegal and quite definitely against all policy to post a stolen work to the Kindle Store, it has not been an unknown occurrence. Since I started publishing through them, I have personally had three books stolen and attributed to other authors and I know that I am far from the worst affected. Now, so long as I am the first one to upload my work, there is no need to worry about it. Not only does this do an excellent job of protecting authors and simplifying the review process for Amazon, since they no longer have to worry about nearly as many theft complaints, it gives further incentive for all self-publishing authors to head to the Kindle Direct Publishing first.
If only to save on the headache of dealing with verifications and lost sales due to delays, authors will likely now feel that much more inclined to give the Kindle priority. After all, once it is up on the Kindle Store, nobody else should be able to post that content unless the original posting is removed first. Why risk having to go through the trouble of eliminating an illegal copy made by somebody who downloaded the work elsewhere?
Overall, while I can see specific situations where taking the review process out of human hands could result in over-enforcement, this will do a lot to improve the shopping experience for Kindle owners. It will do even more to protect authors. When you take those two groups and keep them happy, it makes life easier for Amazon and makes it even more likely that people new to publishing will choose the KDP. This would seem to be wins all around.
Owing perhaps to the impressive holiday sales figures for the Kindle, Nook, and others at the end of 2010, an announcement from the Association of American Publishers has confirmed that February 2011 saw eBooks outselling every other format of book available. While this isn’t precisely a surprise given the not too far gone announcement from Amazon that Kindle Editions were their bestselling format, it demonstrates that the trend is ever on the rise.
According to the same announcement, compared to February 2010 the sales figures for this past February have increased by over 200% for eBooks and sales of print books in all formats combined declined by nearly 25% over a similar period. Downloaded audio books also saw a bit of a boost with over 26% growth from the prior year. Everything digital is getting increasingly acceptable to the average consumer, especially the sorts of things that can fit on a Kindle. What is perhaps the most impressive part of this for me is that judging by the tone of the text, publishers are attempting to pass this off as a demonstration of how great they’re doing at providing readers with what they want. I’m going to have to say that I disagree.
What we’re seeing now is, in some ways, a bit like the move from audio cassettes to compact discs. Sure it takes a while to catch on, but most people are eventually at least willing to give it a try and very few people find themselves truly disappointed (and to head off complaints, no I am not trying to extend the metaphor to say that paper books will inevitably cease to exist. We know that’s not likely to happen). As people adopt the new format, they go back and grab their favorites. According to the AAP, there is a trend reported from many publishers where a reader will buy the most recent work of an author and then go back to pick up the entire catalog of that author’s work. Is the logical assumption really that the reader in question has never read one of this author’s books before and was so impressed that they blew a hundred dollars grabbing the rest? I’d say it’s more likely that these figures reflect fans picking up old favorites.
For an industry that has resisted what seems to be a logical and inevitable progression to the point of imposing arbitrary format-wide pricing schemes aimed at countering popular adoption, it seems a bit hypocritical to be throwing out quotes like “The February results reflect two core facts: people love books and publishers actively serve readers wherever they are” and “publishers are constantly redefining the timeless concept of ‘books.’” It’s almost amusing to think of how hard it is going to be in coming years to keep things going the way they are in the face of authors taking advantage of the ability to self-publish for things like the Kindle and still manage to get on bestsellers lists. These figures aren’t a reflection of how well the publishing industry is adapting to serve its customers, they are demonstrative of the increasing momentum of eReaders in spite of the best efforts of the industry to prevent change. Not so great for them, but amazing for readers.
Looks like the publishers are not through making Kindle eBooks over all a much pricier place. After Hachette followed in MacMillan’s foots steps, it looks like Harper Collins might be the next publisher to re-negotiate their terms with Amazon. Rupert Murdoch has expressed his dislike of Amazon’s $9.99 policy for eBooks and he says that it hurts hardcover editions of the the same books.
Rupert Murdoch is the chief at News Corp, the company that owns, amongst multiple other media outfits, publishers HarperCollins. Hence, if he thinks Amazon is hurting Harper Collins book sales, there might be trouble for Amazon. Yet again that is.
It hasn’t been all that long since MacMillan settled their deal with Amazon to have their books priced higher on the Kindle. Murdoch has mentioned that even though Amazon pays them the usual $14 or whatever wholesale price they do charge, the ultimate low price hurts over all book sales from other outlets. According him, Amazon is willing to sit down with them and renegotiate the terms.
Even though he puts it as if they will talk things over, there is no doubt that he will really try to push Amazon into accepting a higher pricing scheme for HarperCollins eBooks. If this goes through, it might become the turning point in Amazon’s eBook pricing scheme. Once three such major publishers force their deals through Amazon, there will be little in the hands of Amazon to change the over all pricing of eBooks.
Of course, a lot of people will see opportunity in this and will offer books for cheaper than the major publishers. For light reading thus, a lot of people might choose cheaper alternatives. But for best sellers and major titles, buyers are the ones who will bear the price difference. Interestingly, Amazon will finally be gaining money on &9.99 books instead of losing it as they do now. But it will serve to lower their appeal to buyers, which is ultimately not a good thing.
In a recent drama, MacMillan made it publicly known that they were having problems with Amazon over the pricing scheme of eBooks on the Kindle platform. MacMillan was apparently already in talks with Amazon for quite sometime about the prices being raised from Amazon’s current $9.99 maximum price.
Whilst everyone can see that over pricing digital content can really backfire (look at digital music or movies for lots of examples), it seems like MacMillan has been really hell-bent on increasing the pricing based on their latest agency model. Under this model, MacMillan would like to make sales through agents, who would charge the normal 30% commission that standard throughout the industry. The extra cost of course gets pushed on to the buyers and this is where Amazon did not want to comply with MacMillan’s requests.
After negotiations broke down, Amazon took off all MacMillan books from the Kindle store. However, even then the Kindle makers acknowledged that MacMillan owned too many important titles for Amazon to be able to keep those books away from Kindles. And true to their predictions, Amazon ultimately had to give into MacMillan’s demands to increase the prices.
Under the current model, the eBook prices will be capped at a maximum of $14.99 instead of $9.99 as per existing models. The average prices are supposed to start from $5.99 and go up to $12.99 but the real situation would be that most important titles will be priced between $12.99-$14.99. MacMillan gave everyone a glimmer of a hope saying that they will bring the prices down dynamically. However, that simply means that they will gradually reduce prices on existing titles but will likely price newer titles high.
These new prices put Kindle costs on the same level as those on iPad, making the gap between the two become much smaller when it comes to pricing.
An Amazon.com press release today revealed that 11 top Christian publishers are to make available thousands of e-book for the Kindle.
From the Amazon.com press release;
Amazon.com, Inc. (NASDAQ:AMZN), today announced that Christian book publishers Augsburg Fortress, Crossway Books & Bibles, David C. Cook, Gospel Light, Group Publishing, NavPress, Strang Communications, Thomas Nelson, Tyndale, Wm. B. Eerdmans Publishing Co. and Zondervanp have committed to making the majority of their catalogs of books available to Kindle owners by the end of 2008.
The response to our Kindle editions has been remarkable,” said Alan Huizenga, Director of Digital Publishing at Tyndale House Publishers. “We are excited to know that for readers who own a Kindle, they can download and begin reading bestselling Tyndale authors such as Joel Rosenberg, Tony Dungy, Francine Rivers, and Tommy Newberry in under a minute!”
“For years Eerdmans readers have enjoyed our extensive selection of titles from the scholarly to the popular,” said Sam Eerdmans, Vice President of Sales and Marketing for Eerdmans. “Now Eerdmans is excited to announce that many of our titles will be readily available on Kindle. Fans of Eugene Peterson or Joan Chittister can quickly find and access their new books using the extremely easy interface of Kindle.”
“Thomas Nelson is excited to offer our books in the digital format on Kindle,” said Robert Edington, Vice President of Internet Channel, Thomas Nelson, Inc. “Our readers have enjoyed works by Max Lucado, John Maxwell and Ted Dekker for a long time, and now those who have a Kindle can quickly and easily download them in 60 seconds.”
It looks like more and more publishers are jumping on the Kindle bandwagon, the more the merrier!