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Apple Raises E-book Prices For Everyone 327

Posted by timothy
from the here-a-penny-there-a-penny dept.
Nom du Keyboard writes "I was informed by my publisher this week that they would have to raise my e-book prices because they planned to sell them through the Apple iBooks store. How could this happen? A lot of my individual stories sell in the $1 to $3 range, which is well within the impulse purchase amount for many people. In this price range a 50-cent price difference may well be the difference between a purchase and a pass. Meanwhile, Apple is touting its new 'agency model,' whereby the publishers set the prices. However, it seems that Apple requires books sold in its iBook store have prices ending in .99 — nothing else." (More below.)
"Furthermore, Apple requires that if you sell books through them that you absolutely cannot sell them for less through anyone else. To my understanding Amazon also requires this, so Apple and Amazon prices should be identical in the future, but Amazon doesn't force prices to end in .99. What this means is that an e-book that the author was quite happy to sell for $2.29 or $2.49 is now going to cost $2.99 from everybody. While that sounds like only a few extra cents, it adds up over time and can lead to resentment against authors for charging higher prices, even though they have little real control over pricing. I, for one, do not understand why Apple computers only understand numbers ending in .99, or just how Apple is making it better for the consumer this way."
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Apple Raises E-book Prices For Everyone

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  • by Anonymous Coward on Friday April 30, 2010 @07:03PM (#32051098)

    I thought we'd all be used to spending more money for the same thing because Jobs slapped his gay little Apple logo on it.

  • Less maybe? (Score:5, Insightful)

    by Sporkinum (655143) on Friday April 30, 2010 @07:05PM (#32051126)

    Because you obviously couldn't charge $1.99 for that book both places?

  • by Anonymous Coward on Friday April 30, 2010 @07:09PM (#32051176)

    Which makes no sense to me. Apple gets to keep all of those pennies...

  • Bitch all you want (Score:3, Insightful)

    by frodo from middle ea (602941) on Friday April 30, 2010 @07:12PM (#32051204) Homepage
    If you don't like Apple's policy, simply don't sell via their store.

    This is ridiculous , you perfectly know how Apple operates, so either conform to their wish or say to hell with you Jobs, I am taking my business elsewhere.

  • My speculation (Score:3, Insightful)

    by assemblyronin (1719578) on Friday April 30, 2010 @07:12PM (#32051210)

    I, for one, do not understand why Apple computers only understand numbers ending in .99, or just how Apple is making it better for the consumer this way.

    Two thoughts come to mind:

    1) Possibly, it's just for uniformity sake. When all the prices end in the same digits it might appear to Jobs that it looks cleaner in the store app?

    2) It could also be to prevent snowballing pricing wars (thus keeping the costs of e-books somewhat buoyant which doesn't help the consumer at all). For example, publisher A lists a book for $1.99; publisher B lists a similar competing book for $1.97; publisher A strikes back pricing their book at $1.89, etc. This behavior is discouraged, if the publisher has to drop the books price by $1.00 when the price is only $1.99.

  • by Anonymous Coward on Friday April 30, 2010 @07:14PM (#32051236)
    Except that 30% is actually really low.
  • by Loconut1389 (455297) on Friday April 30, 2010 @07:16PM (#32051272)

    I truly hate the .99 gimick. I actually wish they'd roll tax into the prices so what you see on the label is what you pay and its a nice round number $X.10 $X.20 $X.50 $X.00. Worse is the stupid gas stations with 9/10's of a cent. Why is it they can charge a fraction of a penny you can't possibly pay, ensuring they skim 10ths of a cent gazillions of times. I think they did that in Superman III or something. How is it after all these years, they're still stealing money?

  • by fermion (181285) on Friday April 30, 2010 @07:18PM (#32051296) Homepage Journal
    The nice thing about the iPad, as opposed to the Kindle or the Nook, is that there are many ways to buy a book. I buy many books as applications on my iPhone, and apps sell for the exact price this author wants to sell books for. Sure there is some investment in writing the App, and Apple is allowing sales through Apps, I believe. I also read books through my Kindle app. Sure Amazon might require that books be sold at the same price, but an App is not a book. It seems to me the author could also set up a store front and sell DRM free ebooks that could be read on many ebook readers.

    About the only reason to sell through iBooks is that Apple is very good at marketing and riding on Apple coat tails could increase sales. The fear, as I get from the submission, is no one would buy any of these books if read some of it first, so the only hope is to sell it so cheaply that people will just read it, and not feel ripped off when they find out it is crap. The solution, then, is obvious. Write book that people are willing to pay for.

    So it is not Apples fault or Amazons fault that the price is going up. There is no reason at all for anyone to sell books through them, except that Amazon, and soon Apple, are going to be selling a lot of books and both have already set up infrastructure and pay for advertising that is unfeasible for most authors. But that only matters to authors who want to sell a lot of crap. For the author in question, who obviously cares much more about the fact that Apple is out to rip off the public rather than volume sales, I think DRM free ebooks or Apps is the answer.

  • by Brandee07 (964634) on Friday April 30, 2010 @07:19PM (#32051308)

    The problem is that Apple has and Amazon will shortly have a "you can't sell your book for cheaper at other ebook stores" clauses in their agreements. (The Amazon one is part of their newer pricing model, which matches Apple's 70% cut but adds restrictions on pricing, which should go into effect this summer.)

    A hypothetical:
    You've been selling your ebook on Amazon, and you've done some pricing experiments. You've found that you sell half again as many books at $2.49 than you do at $2.99, and the volume more than makes up the difference, so you set your price accordingly. In order to expand to the iBookStore, you must price your book at $2.99 there, and take the hit in sales. But wait! Apple will refuse to sell your book if you're selling for cheaper on Amazon, so you have to raise your price to $2.99 at the Amazon store as well.

    So, now all your customers are paying more, even the ones who are not buying from Apple, and you have fewer of them. You are not making as much money, and neither are any of the distributing companies that make their money by taking a cut off yours. Everyone loses, all for the sake of a nice round (?!) number.

  • by Phroggy (441) <slashdot3 AT phroggy DOT com> on Friday April 30, 2010 @07:20PM (#32051326) Homepage

    It sounds like the problem is really between you and your publisher, not between you and Apple. It may be time for you to find a publisher that shares your position on the situation, because it doesn't sound like your publisher does.

    Did you RTFA? This is Apple's policy, not the publisher's. His options are:
    1) Raise his prices across the board
    2) Lower his already-low prices across the board
    3) Lower his prices on the Apple iBooks store to below the prices on other stores
    4) Not make his books available to iPad users

    His publisher has chosen option 1 for him, but if he wanted to go with one of the other options, I'm sure an agreement could be reached. The problem is that none of these options are desirable.

  • Re:Meh. (Score:2, Insightful)

    by thestudio_bob (894258) on Friday April 30, 2010 @07:23PM (#32051340)

    You know why we can't watch any TV or Movie through iTunes? The content providers.

    You know why we have DRM on iTunes? The content providers

    You know why prices go up on iTunes? The content providers

    Get sick and tired of people bitching about this, blaming Apple entirely. It's just not true.

  • by Low Ranked Craig (1327799) on Friday April 30, 2010 @07:23PM (#32051344)
    A 30% flat rate is really cheap, considering you don't have so set up and maintain distribution yourself, and that you are going to reach 80 million potential customers.
  • by chicago_scott (458445) on Friday April 30, 2010 @07:29PM (#32051438) Journal

    Did you RMFP?

    The publisher made a decision the poster disagrees with. If it's a big enough deal then the poster should find a new publisher that refuses to sell through Apple until Apple changes their policy.

  • by Low Ranked Craig (1327799) on Friday April 30, 2010 @07:30PM (#32051442)

    Except you might make more money if you drop the price to $1.99 and now sell in 2 marketplaces instead of one. Who says that the price adjustments have to be positive?

    If Amazon really wants to fuck with Apple they'll force their pricing to end in .98 which would mean that books on iTunes would be $1.01 more (until Apple adjusted their pricing to .97)

    Whatever. I'm heading down to the Apple store to get a new 3g iPad and hit In-n-Out for a Double Double. Cheers.

  • by Low Ranked Craig (1327799) on Friday April 30, 2010 @07:35PM (#32051502)

    No, it's not. It would be price fixing if Amazon, Apple et al got together and set the minimum price to ensure profits, but this is more like a low price guarantee, and besides the publishers set the prices for the most part anyway.

    I think the premise of the article is wrong and I don't think the author understands economics that well. I think that while we might see higher prices on specific or new e-books, having Apple and Amazon competing will drive the prices down as they compete for market share.

  • 99.95 (Score:3, Insightful)

    by Bo'Bob'O (95398) on Friday April 30, 2010 @07:35PM (#32051508)

    Seriously, will this .99 and .95 thing ever die? Does anybody really look at a price-tag that says $4.99 and not just think in their head "$5"?

  • by JesseL (107722) on Friday April 30, 2010 @07:36PM (#32051514) Homepage Journal

    I want to see a constant reminder of how much of my money is going to taxes with every transaction and on every receipt. As soon as taxes get rolled into price tags, they become less visible and easier to jack up. Same reason income tax withholding is evil - people lose track of how much is being stolen and get excited just to have the government give some of their money back to them.

  • Re:Meh. (Score:2, Insightful)

    by calmofthestorm (1344385) on Friday April 30, 2010 @07:37PM (#32051516)

    You have a point in general, but in the context of eBooks, who is the content provider? Seems to me it's the guy bitching he can't sell his books for less. I think blaming the Cult for this is completely reasonable.

  • by Low Ranked Craig (1327799) on Friday April 30, 2010 @07:52PM (#32051688)
    OK. You write an app and put it on a webserver set up to take credit cards, pay-pal,etc, and charge $1.99 for it (as in you have to charge their card before they download it). I'll write a similar app and put it in the App store for $1.99. I guarantee you I'll make way more money than you even with the 30%.
  • Re:Meh. (Score:3, Insightful)

    by MrHanky (141717) on Friday April 30, 2010 @07:53PM (#32051690) Homepage Journal

    "Content provider" is a euphemism for publisher, to make it seem like they represent the actual creators. (And they actually do an important job — just look at the low quality of even the best blogs to see how important actual editors are — but most of these newfangled expressions are made up only to confuse.

  • by Xrikcus (207545) on Friday April 30, 2010 @08:15PM (#32051948)

    Why not just be honest and stop pretending that the money that was "taken" in tax was ever yours to begin with? Without the tax the system wouldn't work and you wouldn't have been able to earn the money. Such is the way of the world and it might as well be accepted.

    I'd happily pay slightly higher prices to have the tax included in the quoted price, too. If they also (as in the UK) display the charged tax on the receipt so much the better. The same can be true of service, if they like. Quote all service charges in the prices of the food and stop using "tips" as an artificial way to have higher food prices. If necessary, say on the receipt that a proportion of the food charge was specifically for carrying it to you as opposed to cooking it, which for whatever reason is already included.

    The 0.99 gimmick should absolutely die, though, irrespective of whether tax is going to be added on or not.

  • Except that the pool itself enlarges due to the increased number of sales outlets, which should also increase sales.

    For example, if the pool on Amazon was 100, and you saw 20 sales at $2.99 for a profit of $59.80, and 30 sales at $2.49 for a profit of $74.70, yes; you are making more at $2.49.

    Then Apple joins in. Let's say Amazon's pool is now 90 (some will leave Amazon for Apple, but not all, nor even likely half.) And Apple's is 50, half the previous Amazon's. So you now have a TOTAL pool of 140. Same percentage for $2.99, 20%, sees 28 sales (18 from Amazon, a net loss of 2 from the old Amazon pool at $2.99 and a net loss of 12 from the old Amazon pool at $2.49; plus 10 from Apple, which are brand new,) for a profit of $83.72. You still make more, even though you have technically "lost" two customers aggregate over selling at $2.49.

    I'm not arguing that prices should be artificially limited to x.99, nor that these policies should be in place. Just that the argument isn't quite valid, because you're still gaining customers. You may be losing some compared to the original cheaper price pool, but the pool itself got larger. You can't just assume that the same number of people would buy it at the higher price as before, because there are more POTENTIAL customers now, therefore you will get an increase commensurate with this increase in potential.

  • by Low Ranked Craig (1327799) on Friday April 30, 2010 @08:39PM (#32052172)

    Wow, who shit in your cheerios?

    The point is that the analysis that is lacking from his post is, will a lowering of the price to $1.99 while at the same time making the app available in another large marketplace net him more money. I don't know the answer to that, and apparently neither does he.

    Your example is not that relevant to the point. In the stock market, the price is (supposed) to be set solely by the people buying ans selling stocks - the price finds its own level. In retail the seller decides the price and may adjust it as they see fit. So it's similar but not the same.

    Amazon and Apple shouldn't be involved in driving the price anywhere.

    So would you further suggest that Safeway, Sears, etc, should let the producers of the products set the retail prices? That's basically what you are suggesting. iTunes and Amazon are retail stores. They have the absolute ability to set whatever price they want until and unless Jobs and Bezos have a call to fix the price in both stores.

  • by Anonymous Coward on Friday April 30, 2010 @09:52PM (#32052668)

    There is a fair bit of indy music on iTunes. For example Openspace [apple.com] - I can't find what established record company they signed with. Nor is KFog to iTunes [apple.com] a record company at all

    To get one's music on iTunes, getting one's music on CD Baby [cdbaby.com] will get it on iTunes too.

    Or, you could do it directly through iTunes connect [google.com]

    I believe that publishing a book would be the same process.

  • Re:Meh. (Score:1, Insightful)

    by Anonymous Coward on Friday April 30, 2010 @10:17PM (#32052834)

    You know why we can't watch any TV or Movie through iTunes? The content providers.

    I stream movies to my PC, 360, and PS3 from Netflix.. Tv through Hulu and others.

    You know why we have DRM on iTunes? The content providers

    There are MANY non DRM mp3 for sale by many online music stores and have been for years.

    You know why prices go up on iTunes? The content providers

    Maybe, maybe not. I have not compared prices with Rhapsody with iTunes for a while.

    The more consumers that tie themselves into Apples way of doing things, the more Apple seems to tighten it down. Basically, the critical mass is there, now it's time to make more profit from it. The more Apple products you invest in and have "tied together", the more Apple has you by the balls. They know it and for some reasons, most consumers don't want to believe it or they blame it on someone else like the content providers. How many people with an iPad, iPhone, iTunes, and ebooks from Apple are going to give all of that up when the prices go up $1 or if Apple makes another change or declines yet another app from the app store? They won't, they will make excuses and pay $1 more.

  • Re:Meh. (Score:5, Insightful)

    by BasilBrush (643681) on Friday April 30, 2010 @10:22PM (#32052866)

    The DRM-less iTunes tracks still have lots of private tracking information inserted into them.

    What's wrong with that? Remember, the legitimate argument against DRM on commercial media is that it gets in the way of a user making legitimate use of media that he has bought. For example by stopping him making backup copies or playing the media on multiple devices. Having your identity embedded in the media metadata doesn't get in the way at all.

  • by tomhudson (43916) <.barbara.hudson. ... bara-hudson.com.> on Friday April 30, 2010 @10:34PM (#32052934) Journal

    30% for built in exposure to 80 million potential customer and application distribution is actually pretty cheap.

    I see the "Let's place an ad in the New York Times and we'll be rich because SO MANY PEOPLE READ IT" fallacy made it to the net intact.

    Your "exposure" to 80 million customers is bogus. There are tens of thousands of apps - how many people are going to see YOUR app?

    And the more apps in the closed store, the less that being in that closed store is worth.

    Think of it - if everybody had 10,000 friends on facebook, it would become even more useless than it already is. You'd have to filter out 99% of it somehow.

    Network effects don't scale when the amount of time a person has doesn't scale.

    If it's such a great model, and the best way to get your apps sold, then why is Apple afraid to let people install stuff from outside the App Store? They should welcome inefficient competition as a way of demonstrating their superior approach - except that, like any pyramid scheme, it's only superior for those at the top.

  • by Low Ranked Craig (1327799) on Saturday May 01, 2010 @12:22AM (#32053624)
    Well, if I have a well written app that serves a particular niche that isn't too crowded, then potentially a lot of people. If I have a 99 cent fart app or a tip calculator, then not probably not many.
  • by eyrieowl (881195) on Saturday May 01, 2010 @02:23AM (#32054254)

    Safeway and Sears let producers set prices all the time (more or less). Or do you think everything costs the same and then the retail store chooses a bunch of different prices? Producers set the price they sell their product at. The store buys it, applies their own markup, final consumer price. Producer raises price? Price generally goes up. Producer lowers price? Who knows...depends on sales contract between producer and store.

    But that's really all irrelevant because in this model, the store doesn't buy ANYthing from the producer. They're acting as a sales agent, not a buyer-and-seller. A better example would be realtors. How many people do you think would stand for realtors getting to choose the price they have to sell their house at? Given that that's a better analogy, why would people feel better about Amazon and Apple making a Very similar decision for them?

  • by BarryJacobsen (526926) on Saturday May 01, 2010 @09:45AM (#32055722) Homepage

    In the parent post it says the author did some trials and found out $2.49 was the price where he made the most profit. At a lower price, enough new customers weren't created to offset that lower price. A higher price caused customers to chose not to buy. Profit was optimized. So selling at $1.99 means forgoing revenue, as would selling at $2.99. Now if parent didn't say they had experimented with pricing, either pricing higher or lower could end up creating more revenue.

    If only it weren't mandatory to sell on the Apple store. Oh wait, it isn't, and he can keep selling as he is now. Seriously, this guy is bitching because he wants to add another retailer, but doesn't like their rules - DON'T FUCKING ADD THEM THEN.

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