• Zetta Brown
  • Random House Adopts Agency Model for eBook Sales - Now You TOO Can Pay Too Much for Ebooks! :)
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Random House Adopts Agency Model for eBook Sales - Now You TOO Can Pay Too Much for Ebooks! :)
Written by
Zetta Brown
March 2011
Written by
Zetta Brown
March 2011

Today's article in Publishers Weekly announces how Random House has finally caved to the agency model pricing for ebooks. 

The article says how "Publishers believe low e-book prices devalue their books and cannibalize hardcover sales."

Obviously they are only considering traditional publishing houses who are johnny-come-latelys to the ebook market and they are still not listening to the paying public.

Low ebook prices do not devalue books but actually makes them more attractive as an option. If someone really wants to read a book but can only get it for $14.99 in print...but the ebook version is say, $4.99...sounds like a potential sale to me. Plus, it's not uncommon for people who buy an ebook version to get the print version too, should they like it. That's 2 potential royalty payments for the author: one for ebook, one for print.

I'd rather sell an ebook and get a new reader/customer than make them wait weeks/months/years for the print price to drop--and risk their enthusiasm for the book disappearing. Or they buy the book used, meaning one person has bought the book and one royalty payment made, but now the original buyer has given it up for resale, meaning no more royalty for the author.

Hmmm...a potential sale--and possible double sale in print and e--versus no sale or a singlesale...

And the quote from the American Booksellers Association's CEO Oren Teicher, “We have believed from the beginning that the agency model is in the best interest of not only the book industry, but the consuming public as well," is bogus IMHO. Of course they're happy. They can charge higher prices and theoretically make more money.

HOWEVER, the consuming market sets the price. If an industry tries to set the price higher than what the market wants to pay, then how is that good for the consumer? And I'm sorry to hurt anyone's feelings, but unlike many other things, books classify as a "want" rather than a "need."  With such a crappy economy, discretionary income is even more limited, so why pay more than necessary for something you don't really need? Publishers are and should be free to set their prices as they want, but it IS possible to price yourself out of your market.

In the end, readers don't care who publishes what book. What they do care about is how much things cost and whether or not it's worth the price. 

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  • Zetta Brown

    Personally, I wouldn't pay half those amounts for an ebook unless there is something REALLY special about the ebook (e.g. imbedded videos, music) and other special features. Textbooks and enhanced reference books can fall into this category, but not your standard fiction or nonfiction. 

    What agency pricing does is allow publishers to set their own price, which is fine. The problem is that major publishers are setting their ebook price at the same price (or slightly lower) as the print price--and then trying to pay authors the same miniscule royalty as the print book. It's not like they have massive overheads to justify being stingy with ebook royalties.

    The cost in producing an ebook is less than print. If you want an excellent ebook, of course you need to have excellent content so you must make sure the content is well written, edited, etc. Cover art is important too. These things cost money. But all in all, the cost of producing an ebook is less than print.

    For standard fiction/nonfiction, ebook customers have said that ebooks priced at around the $5 mark or less is perfect for spontaneous buying. But if it creeps above that, they think twice and debate if they really want the book at all.

    Speaking as a publisher--for ebook sales, we have a 50/50 split with the author. This is good for sales direct from our site, but if the sale comes from a 3rd party (e.g. Amazon) after they take their cut, we split the rest 50/50 with the author. 

    Speaking as an author, I'd rather get 50% from an ebook sale than get nothing from no sale.

    Speaking as a reader, I'm not going to pay any more than I'm willing to pay for anything. There are millions of people willing to overspend on something because if they spend more it must be worth more. But I've found that this is not always the case. It's like when you pay full price for an item and then the exact same item goes for sale for 50% off the next week. Same item, different price.

  • Rev. LaWaughn Rouse

    So Zetta what do you think is a good price for a e-book. I just brought two. One was $35.00 and the other was $23.00 however I'm from the school of "this is what I want and need...for some odd reason I felt they were reasonable however I could have written both of them...ha,ha...but what would the average person feel comfortable paying. I'm coming out with one that will be a work book as well and I don't want to overcharge no body would buy it or if its undercharge people might think its not worth it. RevLa

  • Zetta Brown

    Thanks, Rev.  LaWaughn.

    And that is what's important. Publishers and authors can try to set whatever price they want, but it is the people spending the money who will decide. I have yet to come across an ebook worth the price the "big dawgs" are charging. Now, as more places are starting to produce textbooks as ebooks, that may change. But for recreational reading? No. There are social groups full of consumers who talk about their spending habits. My husband is in one of those groups and because of the info he gleaned, we've revised our price structure for our ebooks because we WANT people to buy our books, not feel like they can't afford them. 

  • Rev. LaWaughn Rouse

    Very good points and something to think about. The part I like the most is your ending which really is the bottom line the cost and is it worth it.

    Rev. LaWaughn Rouse