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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 gilroy (155262) on Friday April 30, 2010 @07:20PM (#32051316) Homepage Journal

    ... but I'm genuinely interested: What exactly does a publisher of e-books "publish"?

    I'm serious. You've written the book, you've put it in whatever form you decided on. I understand that you need some vehicle to distribute it -- isn't that what Apple and Amazon are doing? So what is your publisher doing? What value does he/she/it add?

  • by Anonymous Coward on Friday April 30, 2010 @07:24PM (#32051372)

    Suppose Amazon started pricing all their books at $N.98? Remember, you can't sell your books for less on Amazon than on iBooks.

  • Re:Meh. (Score:5, Interesting)

    by JesseL (107722) on Friday April 30, 2010 @07:31PM (#32051466) Homepage Journal

    Whoever the blame lies with, my choice is the same - I don't buy DRM.

  • by Anonymous Coward on Friday April 30, 2010 @08:01PM (#32051782)

    Actually, the .99 thing originated not so much with trying to make the price appear lower but with forcing the cashier to give change. I.e. nobody even pays 4.99 exactly, the always give a $5 bill. If the price was exactly $5 the cashier could just put the money in his/her pocket and not record the transaction, but when he/she has to give 1c of change the he has to open the cash drawer and record the transaction, hence having less opportunity to steal from the store. Of course this was only relevant back when cash was widely used in stores. But stupid habits die hard :)

  • by Low Ranked Craig (1327799) on Friday April 30, 2010 @08:26PM (#32052058)

    So selling at $1.99 means forgoing revenue...

    selling at $1.99 in one market place.

    I've worked for a large software company and we used to analyze this all the time. It is exceedingly difficult to account for all the variables. Did he, for example control for seasonality? Did he try to calculate if the potential additional sales from another marketplace would offset or erase the potential loss?

    Obviously if he simply lowered the price in the Amazon store (my assumption) he would leave money on the table based on the information provided. But that is not the case we are discussing. I am suggesting that a simultaneous lowering of price and availability in another large marketplace might offset the price reduction and even net him more revenue. just a thought, hence my use of the word might above.

    Regardless, you'd think that would be an analysis he would perform before posting.

  • by tomhudson (43916) <barbara.hudsonNO@SPAMbarbara-hudson.com> on Friday April 30, 2010 @10:45PM (#32053016) Journal

    You'd probably be wrong. You're competing for attention with tens of thousands of others in a limited store. The other person has the entire world to work with. Plus the freedom to develop their app using any technology they want - like flash, for example. It worked for youtube ...

    They also have the opportunity to sell it as a service, and to continually add new features to grow the customer base. YOU, on the other hand, are competing in a market where everyone is either free or 99 cents to "get market share." Adding new features? Let us know how customers feel about being charged for their updates.

  • by JesseL (107722) on Friday April 30, 2010 @10:55PM (#32053098) Homepage Journal

    You can't give people freedom, you can only help them to free themselves.

    The problem with pointing to failed stated like Rwanda or Somalia as examples of why anarchy doesn't work is that they're full of people who didn't set themselves free. They're slaves who were unfortunate enough to have had their masters disappear on them, with the predictably ensuing chaos.

    A people who choose for themselves to live as a society based on relationships of mutual consent and free of coercion would be an entirely different story.

  • by dieth (951868) on Saturday May 01, 2010 @12:14AM (#32053572)
    Isn't corporations collaborating to fix prices in the free market an offense?
  • by BasilBrush (643681) on Saturday May 01, 2010 @06:42AM (#32055040)

    ... in other words, if Apple didn't have a lock on what Apps can be installed on non-jail-broken iPhones, these guys would be getting 100 cents on the dollar, instead of 70 cents (or almost 45% better). So tell me again how you figure the App Store is such a good idea?

    You're forgetting the transaction charges for credit cards/paypal. You're forgetting the cost of aquiring/developing/setting up your ecommerce system. You're forgetting that when your sales are already good on the App Store, the appearance on best seller lists pushes your sales into high gear. You're forgetting the time taken to set up your own registration number scheme or whatever other form of rights management you do. You're forgetting all the time that you would otherwise spend looking up users registration codes that they've lost. There's no such thing as 100 cents on the dollar.

    But the main thing that you're forgetting is that the one stop, easy route to purchase of the App Store means that you will sell orders of magnitude more copies on the App Store than you would from selling mobile apps from your own store. 70% of 50,000 downloads is a lot more money than 100% of 500 downloads.

    Yes, I have been there and done that. You haven't.

  • by voidptr (609) on Saturday May 01, 2010 @09:19AM (#32055594) Homepage Journal

    Also, while you were selling on Amazon at $2.49, they were taking a 70% cut. (74 a copy to you)

    Now you're selling on Apple AND Amazon, and they're both taking a 30% cut. If you drop your price to $1.99, you're still taking home almost twice as much at $1.39 a copy, and you're reaching a larger market, and you're selling more at a lower price. Also, not only do you have a second storefront, but there's now a boatload of iPads floating around with the Kindle app too, so even Amazon's market just grew some.

  • by tomhudson (43916) <barbara.hudsonNO@SPAMbarbara-hudson.com> on Saturday May 01, 2010 @02:24PM (#32057754) Journal
    One fact that can be verified:

    For developers that get their software into bricks and mortar stores, guess what percentage they lose? Well on a average $30-$50 product, they'll net about $1-$2. In other words, they are losing >95% of the retail price of the software. You didn't know that did you.

    I'm well aware of the retail margins - and no, the publisher doesn't get $1 - $2 on a $50. A buck doesn't even cover the cost of packaging and production. Look in the trades - $10 to $20 is the norm on a $40-$50 retail product. Why do you think the retailers are screaming about thin margins - they're the ones who only get a 5% to 10% markup.

    Nintendo actually published their figures. Look around for them. ISTR that Microsoft also did for their XBox titles.

    Still, this doesn't address the real issue - control. As long as people have to funnel through the App store, you have a chance. However, the iPhone is under serious attack, and the leaked next-gen phone doesn't hold up all that well against the competition - especially against the latest droid from HTC. Android phones might outsell iPhones this year - they already surpass iPhones in terms of web surfing activity [yahoo.com].

    And the leaked iPhone falls short when set beside the Evo 4g. [phandroid.com] I'm not a google fan, but this phone just looks NICE!

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