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Apple Raises E-book Prices For Everyone
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."
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.
Because you obviously couldn't charge $1.99 for that book both places?
"He's lost in a 'floyd hole"
Almost all my ebooks come from Baen. They may cost a little more, but they are 100% free of Apple-style dickery, including DRM.
"Prefiero morir de pie que vivir siempre arrodillado!"
See, whenever there is a book transaction, a few cents go into a bank account. They're shaved off as a remainder. Initech will never know it's missi.. oh wait.
Yeah, this sucks.
Which makes no sense to me. Apple gets to keep all of those pennies...
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.
for the last time people, I am "frodo from middle eaRTH", not "middle eaST".
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.
now its 42.99 according to jobs.
... 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?
The Mongrel Dogs Who Teach
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.
I still cannot find the droids I am looking for...
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.
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.
"Prefiero morir de pie que vivir siempre arrodillado!"
Apparently there's some research that indicates that people are actually slightly more likely to buy a $x.99 priced product over its $x+1 identical counterpart.
Even if it's just 0.01%, when you're looking at inventories as massive as Wal-Mart or Amazon, that can be a LOT of sales.
which means the developer would get $700,000 without the requirements of setting up distribution and to a large extent marketing. Clearly you've never run a business and had to pay for sales, marketing, advertising and distribution expenses.
30% for built in exposure to 80 million potential customer and application distribution is actually pretty cheap. Plus it's a flat pay-as-you-go situation. Generally you have to pay for marketing sales and distribution channels up from and hope you make enough to cover your costs.
Personally I don't like Apple's schizophrenic approval process, but the model is brilliant.
I still cannot find the droids I am looking for...
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%.
I still cannot find the droids I am looking for...
The role Apple and Amazon have with regard to ebooks sold through their respective roles is a combination of the role of retailer (in terms of being the person who sells directly to the customer) and distributor (in terms of being the person who buys directly from the publisher.)
The role of the publisher continues to be played by the existing publishers.
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.
http://en.wikipedia.org/wiki/Price_elasticity_of_demand
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.
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"?
Quite the opposite: a lot of people think $4. That's the whole point.
http://en.wikipedia.org/wiki/Psychological_pricing
I've caught friends doing this on a few occasions, and when I call them on it they do a sheepish "oh, yeah". :)
and they hate that.
On the iPod they had no competition when selling content so they sold inferior content for higher prices then their competitors (who sold 192Kbps for $0.79, but never got far cause they couldn't license Apple's DRM).
They won't be able to repeat that trick for eBooks but their is a solution that allows them to avoid competing and continue selling things at Apple high prices: force the other retailers to raise their prices to Apple's levels. They can do this because of their clout and the new U.S. law that allows the publishers to enforce the recommended sales price. Actually, the publishers didn't mind and are happy to enforce the higher price now that they have a powerful ally.
This is primarily aimed at Amazon (though smaller publishers and consumers get hurt, of course) who could have competed on the iPad. Now, with everyone selling books on the iPad at the same price users are very likely to choose Apple because of the ease and the integration.
(If you think you detect some dislike of Apple, you are right. I have no personal interest in any of this, but I have grown increasingly disgusted by this company.)
It sounds like someone doesn't want to live in the paradise that is Somalia.
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.
This wasn't even some crazy coup by Steve Jobs, it's in fact actually the standard publisher price. I heard the business model on Fresh Air this week and it's quite interesting.
Amazon has been taking a loss on almost every new ebook in their store. They did this to gain marketshare (they have about 80% of the ebook market) and hoped to make up the difference on kindles. The publishers feared that Amazon would demand lower prices from them over time since they have a huge marketshare and because Amazon wants to drive sales of kindles. Amazon is also trying to cut the publishers out by providing publishing services for books. The old publishers hate Amazon right now.
Along comes Apple and the iPad, and Steve basically made an agreement with publishers that they like. Steve doesn't compete on price, he competes with flash and glamour, and does to very well. The publishers in fact like the fact that there's more competition now, and that Apple has agreed to, for one year, a price structure favorable to what they want. Now Amazon will lose marketshare and be in a less favorable negotiating position and publishers can increase their prices again.
Yes Apple did agree to this, but besides the .99 thing, Steve could care less about the true price of the book. The price increases came from the publishers directly.
It's the 4/29/10 podcast of Fresh Air on NPR, check it out.
"All great wisdom is contained in .signature files"
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.
I still cannot find the droids I am looking for...
I, for one, do not understand [...] just how Apple is making it better for the consumer this way."
Well, there's your problem. Apple's goal isn't to make things better for the consumer, it's to make money.
rooooar