>The Inmates are Obviously Running the Asylum

>(Before I get to today’s post, I want to take a moment to thank all the men and women who have given their lives in the service of their country. Tomorrow is Memorial Day here in the U.S. I tip my hat and offer my sincerest thanks and prayers to those who have served, those who are currently serving and to their families and loved ones. Thank you.)

Anyone who has a Kindle, or who has been following the never-ending saga of the Agency Model proposed by certain publishers, knows that Amazon and Penguin Books have finally come to an agreement. The terms of this agreement haven’t been released. All we know for sure is that Penguin books published since April 1st are finally appearing in the Kindle store. Oh, we know one more thing — a number of these books have prices that aren’t just surprising, they are absolutely unbelievable.

Atlas Shrugged by Ayn Rand is now available as an e-book. Now, my first question about this is that it is advertised as the “Centennial Ed. HC) edition. Well, last time I looked, a book on the kindle was made up of nothing but a bunch of electrons and was not — could not — be hard cover. But it gets worse. The Kindle version is listed at $27.99. Yes, that’s right, $27.99. Now, I have to wonder what Penguin Publishing was thinking when they set this price since the school & library binding version is $14.88, the tpb is $15.82, mmp is $9.99, the audio version is $23.07.

Okay, maybe this is just a fluke and Penguin hasn’t completely lost its corporate mind. So let’s look at some others. The Help by Kathryn Stockett has been out for almost a year and a half. That means it is out in paperback at $10.20. The Kindle version — $12.99. According to Kindle Nation Daily, this is $3.00 more than it had been offered in the Kindle store prior to the Agency Model blowup. (Check out the KND post. It has a lot of good information not only about the possibility Penguin is giving Apple preferential pricing but also how we, as consumers, can let our voices be heard.)

Jim Butcher’s Changes, which is offered as a hard cover at $10.95 by Amazon is being sold as an e-book by Penguin for $12.99. This is $3.00 more than the paperback price announced for the same book. (In fairness, I’ll note here that the pb won’t be out until next year.)

One more example: Sue Grafton’s U is for Undertow has been out since December. I can buy the hard cover from Amazon for $18.45 — less than that if I buy from one of the Amazon associates and not Amazon itself. Yet, if I want the Kindle version, I’ll have to pay $14.99. This is almost twice as much as they will be selling the pb version when it comes out later this year.

To be fair, this oddity in pricing isn’t reflected in every Kindle book being released by Penguin. Sarah’s No Will But His is listed at $9.99 for the Kindle and the tpb is being sold for $10.20. That is reasonable for an e-book being released at the same time (relatively speaking) as the tpb or hard cover.

If you think Penguin is only trying to slow down the sale of e-books, think again. In my opinion, to kill those sales, check out this article. Penguin’s David Shanks says this about e-books: “more than 90%” of the business was still in paper. “We need to protect as long as we can the apparatus that sells physical books.” While I agree that we need to promote bookstores and find a way to let them remain in business — especially the independents — you can’t put the genie of e-books back into bottle, no matter what the publishers want.

To me, this paragraph sums it all up: In the end, while Prichard spoke of ours being “one of the most exciting times,” Galassi [Jonathan Galassi from Farrar, Straus and Giroux] spoke of it being a “scary time”.

Unfortunately, it is scary for all of us, and for authors in particular, because of the way publishers are burying their heads in the sand and, on the whole, refusing to adapt to new demands and desires from their readers, new technology and changing times.

So, what is your tipping point on prices for e-books. How much will you pay and why?

34 thoughts on “>The Inmates are Obviously Running the Asylum

  1. >Move over, the marketing division of the Syrius Cybernetics Corporation is all I can say. The part about looking after writers is SO comforting… 😉

  2. >Three times as much for a eBook as a paperback edition? Somebody is smoking something interesting at Penguin. Maybe they also make buggy whips?My "tipping point" price is "about the same as a paperback", so call it $5.00-$8.00 depending on the age of the book. Interestingly, since all the fighting has started, I've only bought from Baen. A whole bunch of titles I bought at Fictionwise vanished when one of the distributors (Hachette) got into the moaning match as well. And they also seem to have pulled the Mobipocket format (Mobipocket being owned by Amazon, which–of course–competes with Fictionwise). Given DRM-restrictions (imposed by Amazon) where I can only have one DRM-locked eBook program on my gadget (no technology restricts this–just Amazon's stupid rules), I really have no incentive to buy non-Mobipocket format eBooks at Fictionwise.End result? Only Baen is getting my business. And sites like Gutenberg, Manybooks, etc.

  3. >Dave, isn't it so. The way they look after writers sort of reminds me of the way the wolf looks after the hens in the hen house. And it is that attitude which confirms, in my mind at least, that we are going to see more and more authors selling directly to Amazon, B&N, etc., just as we're going to see more and more authors banding together and forming their own e-publishing groups. All I have to say is more power to them. From what I've seen on various discussion boards around the internet, readers are looking for e-books that are well-written and that are NOT published by the houses following the agency model. In short, they are asking for e-books by indies and small presses. So the lemmings of publishing will run off the cliff and those who can innovate and adjust will survive. It's just a question of how it will all shake out.

  4. >Fred, there are times I wonder if they have even moved to buggy whips yet. My tipping point for an e-book is $9.99. (Although I will admit that, like many others, I have paid $15 for an E-ARC or three from Baen but those are a different horse, imo.) But for me to pay $9.99, I want to buy the book the day it comes out in any format and it will be by one of only a very few authors. On the whole, my tipping point is the $5 to $6 range. This is one thing Baen has done very right, imo.As for Fictionwise, I've noticed the disappearance of some of their books as well. Whether it is because of the agency model stupidity or because they are owned by B&N and B&N didn't want to be competing with itself when it comes to some books, I don't know. But I will admit it is frustrating. Now the only books I buy there are the non-drm'd and very few of those.I hadn't heard about Amazon limiting the number of drm-locked e-book programs on a device. I guess since I only read e-books on my kindle or on my computer, it hadn't been an issue. On my computer, I have programs for several other e-book providers. Still, I agree that it isn't the best way to engender loyalty with readers.I guess the whole lesson from this year's BEA with regard to e-books is that there are many publishers who are scared to death and willing to do whatever it takes — including alienating readers — to maintain the status quo while authors and even distributors realize the times, they are a-changing and so must the publishing business model if the industry is to survive.

  5. >The only books I've "purchased" from Amazon are books one through five of The Lost Fleet series by Jack Campbell. Since Ace deigned to not publish the last book on Kindle, I was forced to buy the paperback of that. Everything else has been Baen, purchased off the Baen webscriptions site.My standing tenet is that DRM'd books are worth less than a dollar unless otherwise noted. This is because they are effectively rentals rather than purchases.For Baen e-books, they have apparently set their price point a little below their currently available hardcopy. This is exactly what I see as reasonable. The truth is that there is a loss of tactual enjoyment by reading e-books. You lose the colorful cover. You lose the non-volatile storage format (excepting things like fire and water). You end up with weird layout bugaboos and editing glitches from the combined effects of data-format transfer and whatever point in time the manuscript was ported over during the production process.What you gain? Well, the books are readable if not necessarily as friendly or professionally laid out. You get more shelf-space. The ability to have multiple "books" in one device. Library portability. And the recurring need to recharge your reader.And it can all disappear in any one of a number of technical or business model ways unless you back up your library of non-DRM'd books regularly. With the DRM'd stuff, you're just screwed.Anyway, I like my Kindle, in the end. I hate DRM and the publishers and retailers who use it. Therefore, I refuse to pay them any more than absolutely necessary. And, thanks to Baen, it's not been necessary much at all.Sadly, given their editorial staffing and recent buying decisions, there are signs they've been infected by the same terminal leftist irrelevance that runs amok in the rest of the industry. The end may be nigh for any of my interest in e-books from major houses.

  6. >Darwin, my dislike for DRMed anything is well-known, I'm not quite as pessimistic when it comes to Amazon as you are. For one thing, Amazon does allow publishers — be they big name publishers, indies or the authors themselves — to opt out of DRM. That is a big step in my book. The fact that there are still too many publishers who feel DRM is the means to combat piracy instead of realizing it only serves to increase piracy still amazes me. But it is a way of life so work arounds have to be found.I agree, there may come a time when the current crop of DRMed books go the way of the betamax. I've lost too many e-books over the years because of changing technology. Because of that, I do keep backups of everything I buy, DRM or no. That way, if Amazon or Fictionwise or Webscriptions go under, I have copies of what I've bought.What I wish publishers would realize is that e-books really are good promotions for their dead tree books. I'm not the only e-book advocate who buys hard copies of a book I've really liked in electronic format. If the publishers realized this, and realized they could be making a lot more money for themselves and their authors with reasonable pricing of e-books, the industry might not be as badly off as it appears to be now and in the near future.As for Baen, while I don't always like some of the books they've bought recently, I also realize this might be something they've had to do to expand the house's audience. By limiting itself to one type of book either politically or by genre and sub-genre, a publisher limits its audience. That is something no publisher can afford to do right now. That said, I hope Baen never strays too far from its roots because I happen to like those roots very much.

  7. >First, I hope you directed a portion of your opening wishes to yourself and your family. Thank you for your thoughts, and thank you for your own service.There is a staggering degree of irony in the first example you cited. Of all the possible works to involve in a battle over evolving technology and intellectual property, the publisher chose Atlas Shrugged to serve as their most egregious case?I still haven't made the jump to e-books, but my wife is looking at them very seriously at the moment. I've been encuraging her to come here and read the posts on this topic from the past few months as part of her research. (She still generally views my writing simply as "spending time on the computer", and associates this with that, so she hasn't, yet.)Once we do make the jump into the e-book realm, I expect our tipping point will probably be something very much like the current Baen model — the e-book should cost slightly less than whatever paper version is currently available, or it's not worth buying.

  8. >eh I've commented on it before so I won't say much on the subject SO I'll just repeat one of my favorite arguments. "Uh helloooo? Baen Books heard of them have you. They don't charge those extortionate prices for ebooks and you don't see THEIR dead tree sales hurting do you? thought not" btw the next person to use the excuse "niche market publisher" to my face will have my size 9.5w steel toes shoved so far up their asses that they'll taste shoe leather for a decade.On a more personal note: Amanda you said…."The way they look after writers sort of reminds me of the way the wolf looks after the hens in the hen house. "Now Now Amanda. comparing these mental midgets to my 4legged brethren is an insult to wolves everywhere. I will forgive you how ever because I'm such a gentle, giving soul. 😉

  9. >Stephen, the irony of the choice of Atlas Shrugged and The Fountainhead which is also priced at $27.99 didn't escape me. While Rand might approve of the price if she was receiving it, I doubt very much she'd approve of the publisher taking the lion's share of the cost and her estate getting a mere pittance from it. Seems sort of like Dagny Taggart doing all the work for the Taggart Transcontinental and her brother Jim taking all the credit.E-books are great, imo, because I am always reading and it is easier to carry my Kindle around than half a dozen books. But I still buy dead tree books, many of them because I've read the book in e-format and want a hard copy. Others because I've discovered an author through e-books and decide to add them to my collection.Still, I won't pay $25 – $30 for a hardcover any more than I will pay $9 – $10 for a mmpb. Nor will I pay more for an e-book than I will a paperback. I know there is cost involved in preparing an e-book. However, it isn't nearly what the publishers would have us believe. Good luck with your writing and if your wife has any questions about e-books or e-readers, send her this way or http://www.mobileread.com/ or the ebook reader forum on Baen's Bar.

  10. >Wolfie, you know I agree with your about Baen and webscriptions. My only complaint — and this comes more on behalf of the authors than as a reader — is that Baen has yet to make most of the books available on other e-book sites, for ex: Amazon, B&N, fictionwise, etc. As for the wolf in the hen house comment, you know I wasn't referring to your four legged relations. I was referring to those who haven't figured out that zoot suits are cool, guns are fun and there's more to be gained by letting Rex improve the chicken than to eat them yourself.

  11. >I'm not negative on Amazon, only DRM. The fact that most of what comes out of Amazon is DRM'd illustrates the ignorance of publishers. The point being, I do not buy DRM'd books except under extreme duress (or idle curiosity on the functionality of the process, which is how I ended up with the Lost Fleet series on my Kindle.)Still, when a non-DRM book I want to have on my Kindle shows up, I buy it where I can get the file to port over, not from Amazon. That way, they can't "remove" the content from my "library" on a whim. The only exception to that would be if Amazon was the only place it was available in a Kindle-friendly Mobi format.As for Baen, oh well. They still have Ringo and Weber to pay their bills, so I guess they feel like they need to lose that money on a bunch of insane moonbat commies (both as authors and editors) for a while.

  12. >Darwin, I hear you on publishers and DRM. In fact, there was another conference this week where one of the main topics was DRM and its effects on publishing, piracy and sales. I'll be blogging about that next week probably.As for Book 6 of the Lost Fleet series, it is now available on the kindle. Here's the link if you're interested — http://www.amazon.com/The-Lost-Fleet-Relentless-ebook/dp/B0020BUX0Y/ref=sr_1_1?ie=UTF8&m=AG56TWVU5XWC2&s=digital-text&qid=1275235569&sr=1-1 — It's even reasonably priced at $6.99, a dollar less than the dead tree version.

  13. >Gee, books are cheap in America. A paperback here costs $30. Makes the Kindle prices affordable here.(Maybe the publishers are just looking after the Australian market???? We have such a huge slice of the world market, after all.)

  14. >Darwin, I think you put what we want from e-books and the pros and cons very succinctly. (I've quoted you on my blog).People in the US don't realise how cheap they get ordinary books. Over here we pay around $20 for a standard paperback.

  15. >Frogdancer (Wow what a name, by the way).I've seen paperbacks in Australia at around the $30 mark. They tend to be ones that come in via the US, rather than published by local publishers.

  16. >I bought two short story collections from Baen last night (the Liaden Universe ones) for a total of $10.Yes, of course, these are not in print anywhere but I think that the price is about right.I still want paper versions of the e-books that I have. (Except for _Ghost_. I am most profoundly thankful that the book does not exist in paper in my house.)

  17. >Well, certainly can't think of too many situations where I would actually pay more for the ebook. In general, I have not been able to take the leap into ebooks. Part of this is the local availability of the equipment, part is lack of time to research and chose a platform – but mostly the fact that I spend my working life reading off the computer screen. Sorry. Hardcopy for me – at least for now.

  18. >Lost Fleet:Victorious is now available as a Kindle download. Well, isn't that a kick in the nuts.The B&N marketing machine got an extra $1 out of me to pay their wonks and some over valued marketing jackass. I hope Ace Publishing chokes on it.I'd much rather that translated directly into an extra dollar for Jack Campbell, but I'm sure it won't.

  19. >With regards to book costs in Oz versus the US:I'd love to see the pie chart of where the money goes for both markets. I'm sure some of it probably has to do with available consumer population, but I can't shake the sneaking suspicion that there's probably some sort of incestual publishing-government protectionist/subsidy/planned economic pillar supporting non-market driven pricing at work.

  20. >Frogdancer – "Gee, books are cheap in America. A paperback here costs $30."The wholesale (from publisher in the US) is around 45% of the cover price. Call it Aus$4.00 for ease of calculation. US Retail markup (without discounting) tends to be 50% (the other 5% is distribution). According to that formula, it must be costing Aus$11.00 to get it into the store. I make no comment except to ask just who was fronting this 'Campaign for cheaper books'?

  21. >Frogdancer, I don't know why books are so much more expensive there but I suspect it is a combination of import fees, licensing, and the publishers knowing they have a captive audience so to speak. But it does make the Kindle prices look more reasonable. Just don't say it too loud or the publishers will decide they can raise all their prices and that truly will be disastrous for everyone involved.

  22. >Rowena, out of curiosity, how much do paperbacks originating in Australia cost ooks, as opposed to those coming from the U.S. or from Europe?As for e-books, the problem truly is two-fold right now. The first is the insistence by some publishers that books must contain DRM. The second is the lack of a common format. Right now there are too many different formats available and not all are readable on the different e-readers. Until those two issues are resolved, most particularly the DRM matter, e-books will always be something of a problem child for the industry.

  23. >Synova, those collections are prime examples of a market so many publishers refuse to admit exists. They don't see the importance of releasing an author's back list electronically to build interest in new works by that author. As for Ghost, I have to admit it isn't one of my favorite books either and, no, I don't have a hard copy in my house although I do have the electronic version.

  24. >Chris, I'm not sure there is much that can convince me to pay more for an e-book than I would for a paperback. Perhaps if the e-book contained material not in the hard copy — and that means more than just a preview of the author's next book.As for spending so much time reading off a computer screen that you don't feel any pressing desire to read e-books, I understand. I think that is one reason I like the Kindle so much. The e-ink display is nothing like a computer display. I can read it for hours without any problem and, by not being back lit, it doesn't remind me of a computer screen in any way. I have no desire to go back to a non-e-ink screen for that very reason.

  25. >Darwin, I did that on a different book not too long ago. Really burned me when it finally came to the Kindle at a lower price. What worries me with the agency model is that the publishers will either price books the same across the board at mostly unreasonable prices or they will favor one e-book provider over another. Penguin already appears to be doing so, not only with their prices in the Kindle store but with the e-mail responses they sent to folks who wrote asking when their e-books would return to Amazon. Their response across the board was basically, "you can find our e-books for the nook or the ipad or the Sony reader. Buy one of them instead of the evil Kindle."

  26. >Dave, thanks for the breakdown on costs. They're pretty much what I expected. As for the Campaign for Cheaper Books, doesn't that fall in alongside of the Bring Back Betamax?

  27. >Oh, it hit me last night that there's an obvious component of why Oz book prices are out of whack: like many modern Euro-style socialist governments (no matter how well hidden behind a well-entrenched former prison colony veneer) they have a VAT – a "value added tax".This is a great example of why any American congress critter who expresses its fundamental stupidity by mouthing support for adding a "VAT" tax should be shot on sight.

  28. >Darwin, the VAT very well may have a big impact on the pricing. However, we are getting into politics now and that's something we try to stay away from as much as possible here. I admit we were veering there, myself included, with earlier comments about why Australian prices are so much higher. But let's not go any further into the political realm, okay?

  29. >Actually – book prices in Australia were double and then some US book prices long before the GST (which is part VAT and part general sales tax) came into being. A big chunk of the differential lies in generations of Oz governments of all political stripes putting fairly heavy import duties on just about everything, the fact that most books are imported to Oz – which isn't cheap – and then have to go through the usual customs checks (also not cheap). Add in a very small market (the Oz population is roughly the same size as the population of Texas – spread across an area the size of the continental US) and you've got a recipe for very high prices.That's why my husband jokes that I came to the US for cheap books.

  30. >Some random thoughts on the subject by a grumpy old trucker.When I was a youngster in the fifties(like about eight) I'd walk the bar ditches looking for "coke" bottles. After finding a few I'd take them to the local grocery story and redeem them for, I think, about three cents each. With that bonanza I'd buy comic books. Twelve cents a copy if I recall.(four coke bottles)Flash forward A few years: I'd be able to buy paperbacks, for less than a dollar, almost ANYWHERE that retail commerce was taking place. Just about everywhere money was exchanged there was a wire rack with paperbacks for sale.I detest DRM and won't have it. I also won't have anything produced by any company that, to my knowledge, deals in DRM. DRM is the kiss of death as far as I'm concerned. I don't do Sony.Paperbacks are hard to find today…relatively. You reckon that might affect sales?I buy all my "stuff" from baen. Lots of "stuff" on the internet for free. Some of it's legal.I hate, despise and wish harm upon brokers and all middlemen of any sort. This is unreasonable. I don't care. I've been a trucker too long. Screw 'em.

  31. >EvMick, our ages aren't all that different. I miss the days of the wire racks with the paperbacks that weren't all "best sellers". I miss being able to walk into the local grocers and having a couple of dozen different titles to choose from. Hell, I miss the independent bookstores where you had someone who actually read and enjoyed books to help make recommendations.As for DRM, I hates it I does. The one thing I really give Amazon props for is offering the option of not having DRM on books published through their digital service. That makes is so obvious DRM is a product of the publishers and not of the reseller. While I generally agree with you about middlemen, there are a few good ones. Of course, they are the exception these days.Keep truckin' out there, Ev, and be careful. And thanks for dropping by.

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