![]() This is often why the price of an ebook is more than a paperback, which doesn’t sit well with people who read lots of ebooks. Paperbacks and Hardcover books are frequently on sale, when you visit a bookstore, you can often get them far below market prices. This is why the price today on a new ebook is the price you will pay a year from now, ten years from now and so on. This is because they would have to go back and manually edit all of the prices and this creates more work, for lower revenue on a per title basis. When a new ebook is released and the publisher sets the price, they hardly ever discount the ebook at a future date. ![]() It is very rare that publishers ever reduce the price of an ebook. Retail bookstores are in the same boat, they keep the hardcovers high when a book just comes out and then a couple of weeks later, they reduce the price by 25% to help clear the inventory. Amazon is gambling that the low price will equal more sales, which will make up the lost profit margin. When Amazon sells books for lower than the recommended retail price, that discount is coming straight out of Amazon’s profit margin. The retailer can then sell them for whatever they like. Physical books get sold to retailers at around half the list price. How much money do publishers and retailers make selling ebooks? Generally, the publisher gets 70% of every sale and a company like Amazon would gets the remaining 30 percent. Kobo has a similar program with Kobo Writing Life and Barnes and Noble has Nook Press. Some of them sell really well, but most of them are never sold. Kindle Direct Publishing for example is the most popular way that authors can submit their ebooks to Amazon and have them listed by side by side with all of the other books on the store. The only control over prices that Amazon and other retailers have, is when independent authors self-publish. The problem, is that Amazon had such a giant head start, that they utterly control the ebook market. The thought behind the agency model is that all bookstores would charge the same amount of a particular ebook, so nobody would have the advantage. ![]() This is why when you visit the Amazon product listing it always says, that the price is determined by the publisher. ![]() Every ebook would have its own price, and bookstores had to charge that price and could not change it. The lawsuit could not stop agency pricing that the publishers created. In that case, the five publishers settled for $166m (£120m), while Apple lost at trial and was order to pay out $450m in 2016, after a lengthy legal process that ended when the US supreme court declined to hear the company’s challenge. This created a multi-year saga with the US Justice Department vs Apple and all of the publishers. This was known as a cartel, which is illegal. He wanted them to gain more control over the digital publishing business and create a uniform pricing structure. When Apple launched their iBooks Store, Steve jobs met with the heads of all of major publishers. This created a price war between Amazon, B&N, Kobo, Google and other players.Īll good things come to an end. Amazon was losing money on every ebook sale, but they did this to grow their ebook business and spur Kindle adoption. This made ebooks way cheaper than paperbacks and significently more affordable than the hardcover. Amazon pioneered the concept of paying $9.99 for a new ebook, from a major publisher the day it was released. Why are ebooks so expensive now? Agency Model Keeps the Prices Highĭigital books used to be really affordable and this helped the e-reader industry grow. Major publishers who control the vast majority of the market, control the prices and users end up paying more than the paperback and in some cases, the ebooks are more expensive than the hardcover. Digital books on the Kindle, Nook or Kobo are way more expensive now, than ever before.
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