The international agreement to gouge e-book customers
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An international agreement between publishers has driven massive increases in the price of e-books for Australian readers, who also continue to be treated as mugs by companies selling the same titles more cheaply overseas. Crikey’s tip last week about e-book prices has generated a big response from readers, with example after example of how prices had risen significantly in recent months and how titles were more expensive in Australia than overseas. The issue has generated extensive discussion at Amazon’s Australian Kindle users’ thread and at the Teleread site where Blue Tyson has detailed some remarkable pricing differentials for titles from Hachette, News Corporation’s Harper Collins and MacMillan. The recent surge in e-book prices arose from an Apple-initiated agreement with major publishers designed to stymie Amazon’s dominance of the e-book market and its loss-leader approach to e-books, which saw many popular titles selling for $US9.99. In 2010, when Apple launched the iPad, it convinced major publishers Hachette Livre, Harper Collins, Simon & Schuster, Penguin and Macmillan to begin switching to “agency pricing” whereby retailers must sell at a fixed price, but receive a large share of the price. The move was a deliberate attempt by Apple to destroy Amazon’s dominance of e-book sales. The US Department of Justice and European Commission are now investigating the deal as a possible illegal agreement and at least one class action is under way in the US. The ACCC declined to say whether an investigation was currently under way here or if it had received complaints about e-book prices, despite some subscribers indicating they’d contacted the Commission. As many Crikey subscribers explained, e-book title prices have soared in recent months. Many titles available from Amazon more than doubled from their previous $US9.99 price. Several people identified Stephen King’s new novel 11.22.63 from Hachette, which had been sold by Amazon for $US9.99, but is now $US17.51, after temporarily selling for over $US20. Subscribers reported a similar price spike effect for many titles, suggesting publishers had realised they had pushed agency prices too high. Broadcaster Derryn Hinch contacted us about a similar spike with his own book. “Many Australians are paying far too much for e-books,” he said. “It ultimately hurts the authors. My latest, Human Headlines, was first listed at $16.95 with some sellers. I discovered that Amazon has a $9.99 policy and won’t push anything over that. I also talked to a senior editor who loves e-books but says she only ever looks at the ‘under 10 bucks’ lists. Mine’s now listed at $9.99. You hope the increased volume pays off.” But worse, and not directly related to the agency pricing agreement, the Kindle edition of 11.22.63 sells more cheaply to US readers, at $US14.99. In both cases the price is set by the publisher. For once, though, Australians aren’t being ripped off any more than some other non-US customers: Canadians can only buy the King e-book for $US22.39 and UK users for $US15.62 — in all cases the prices are set by the publishers. The case for investing in a US billing address for Amazon purchases appears stronger than ever: last year Crikey explored international pricing differentials on a wide range of products, which revealed Australian consumers were being dudded compared to US purchasers. The higher prices mean that, in what is becoming an increasingly common differential, the e-book version costs more than the hardcover version available via Amazon, albeit before delivery costs, undermining the entire format. Speculation from industry observers is that the model is designed to both undermine Amazon, which publishers feel is “devaluing” books with is $US9.99 e-book strategy and becoming too powerful, and to prop up their print operations. Of course, we’ve seen this strategy before, from other sections of the copyright industry, trying to protect their analog business models by refusing to provide online content in the form consumers want, encouraging the remorseless rise of filesharing, while digital natives move into their space. E-book piracy is a growing issue but plainly of a wholly different order of magnitude to music, movie and software piracy. And the irony of course is that in trying to undermine Amazon, Apple know perfectly well what it is doing, because it has played exactly the same role as Amazon, even more effectively, with music via iTunes. The outcome is the same, though: industry treating consumers like mugs. Hachette did not respond to Crikey’s request for comment by deadline. |
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24 Comments
Until the publishing industry - and I include books, films, TV and music - learn to treat their customers with something other than contempt, they can NEVER expect to win the internet piracy battle. If I believe a company is treating me fairly, then I have no problem doing business with it. If I believe a company is ripping me off, I will refuse to do business with it, and look for alternate sources. Therefore I will continue to do business with Amazon, but the publishers you have listed can go bust as far as I am concerned. Sorry to their authors, but maybe it’s time to find a more ethical partner to get get your work published.
I think the publishers are foolishly misunderstanding the psychology at work here. Up to last year, I hardly ever bought a book - I had no room on my shelves, and I could borrow them for free from the local library.
Then I bought an iPad. Since then I’ve paid for dozens of ebooks, a big increase in my outlay for publishers’ wares over previous years. However - and this is the rub - the “sweet spot” for me to buy an ebook without hesitation is about $10. If it’s $15 or more I’ll think twice and probably not buy it - after all, there are plenty more good books out there, and limited reading time.
The point I’m making is that a $10 price tag has the ability to increase book sales; whereas trying to make them the same price or more than print books (which you can at least resell or lend to a friend) instantly quashes demand.
Luckily for publishers, I feel obliged to resist being tempted by piracy because I’m a content producer myself. But you can see why people become tempted, given these brazen attempts to charge more for something less transferable. It’s time for publishers to drop the King Canute act and embrace a lower-priced, higher-volume new model.
Thanks Crikey for such a comprehensive review of the eBook pricing issue.
One thing you didn’t point out was the deliberate and insensitive timing of price increases by Australian publishers in early December just in time for the Christmas trade. This is the first year that Australians could buy an Amazon Kindle eBook reader locally via Big W, Dick Smith and even Woolies, instead of ordering it from the US. Thousands of new Kindles would have been gifted at Christmas and many new eBook readers will not realise that the current prices set by publishers have been increased so substantially recently.
Fortunately for the big readers, there is a now a two speed market for eBooks, those marketed by publishers and self-published books (already nicknamed “Indies”). Thousands of aspiring authors are now publishing their works via Amazon without great cost and offering them at very low prices - the average price is about $2.99. While this is a low price the self publishers get about 75% of this price instead of around 17.5% if their book had been handled by one of the large publishers. They can also promote their books for a few days at $0.00 to stimulate positive reader comments that are the best form of advertisement for their books.
This is a real game changer and I applaud the initiative of these authors. Of course some are pretty awful but others are as good as some published books of the same genre. Since the price rises I have found some really good Indie books and haven’t purchased any inflated priced publisher books.
I like a real book that I can borrow from the library and smell the paper and ink.
Dammit, I wrote a detailed comment and it disappeared when I changed tabs to chase a URL.
Summary: in the past three years, ebooks from the oligopoly of big publishers have gone from being cheap (usually under $5) and universally available to being ridiculously expensive and fenced by “geographic limitations”. Don’t feed the troll: don’t pay paperback or hardback price for an ebook which currently (due to bullying from the copyright lobby) you aren’t allowed to resell, convert or transfer to other software when a format collapses. You should pay less than half the paperback price for an ebook.
Outside the Big 6 publishers, you can find great stories from independent ebook publishers (indies, as Sunsite mentions above), from self-published authors, from author sites (which often sell backlist titles and provide free stories) and from the public domain. You can also sign up with an Australian library offering ebooks (e.g, Yarra Plenty in Victoria: they welcome everyone).
I posted to Oz Ebooks about this a while back:
http://oz-e-books.squarespace.com/news/2011/4/30/clytie-siddall-no-australians-allowed-the-joys-of-geolims.html
shepherdmarilyn - there will always be a place for print books and there should be a place for both print and eBooks depending on your preferences.
My wife shares your view and has kept every book she has bought over the last 10 years, many of which she hasn’t read and her bookshelf space is overflowing. She refuses to look at my eReader.
Since I bought my Kindle eReader last August my study bookshelf is really tidy for the first time in years and only contains my favourite books I will probably read again some time. My Kindle books are organised into Collections (folders) so are much easier to manage.
Last year we went on a long cruise and my hand baggage was overweight with books. Now all I need is my Kindle.
Sunsite,
You said exactly what I was going to say!
Although we still have bookshelves groaning with paper books lining many walls of our house, we mainly buy e-books now. As well as needing no bookshelf space, or kilos of extra weight in the suitcase (I’m a speed reader) ,with a e-book I can increase the font size to compensate for my not-so-young eyes, and I can read in cars and buses which I can’t do with paper books.
In the two years that I’ve had a Kindle I have found some superb Indie authors. OK, I’ve also found a few duds but usually reviews and recommendations on the Amazon forum help me to avoid those.
Like xoanon, I only buy books under $10 and I can find plenty to read in that price range. In those two years I have never been short of a new book to read whereas with paper books I could never afford to buy enough books.
My sympathies lie with the authors that are represented by those price gouging publishers as they are the ones who will be the most affected by any drop in sales caused by the higher prices. Perhaps those authors should consider self-publishing themselves.
My most recent example related to the different pricing for one book. A new release by Peter Lovesey a UK author.
eBook - US$27 Amazon
Hardcopy - US$14 plus shipping Amazon
Paperback - A$13 on website with a .com.au link
Paperback - not available in Australia stores but his previous book was selling for $25
Go figure the logic behind any of that…
The other thing which amazes me in this day and age is that some audiobooks listed on audible.com are not available for download in Australia.
And streaming sites such as Rhapsody, MOG etc are still not available in Australia because why???? Given 99% of the artists are controlled by the companies that have already signed up with Rhapsody, MOG etc this is really hard to explain.
My local Library is my book shop for books and the mags . With bike mags at $7.50 to $15 each , why buy when you can go online and order it though my Library and get a email to pick up ?? You can even suggest certain books and mags for them to purchase,
Mark from Melbourne
Just checked that the Peter Lovesey book - Stagestruck - is $27.00 for Amazon’s Australian customers (publisher Hatchette) and $9.00 for Amazon’s US customers where it is published by Soho Crime.
No further comment needed.
I think the Agency publishers are sneaking prices up all over the world.
I just checked Di Morrissey’s latest, The Opal Desert, which I bought on 1st December for $9.99. It then jumped to $20.83 and is now $21.38.
Other Amazon regional prices are:
UK - $18.48
Europe - $17.23
US - $14.99
Africa, Asia & Pacific (incl NZ), Middle East - $11.99
Canada, India, Latin Am. & Caribbean - $9.99
I also checked Dymocks online:
Google e-book $19.99
Trade paperback - $32.99
I think I spotted it at Coles the other day at $19.99 for the trade paperback.
Unfortunately it wasn’t available through the Book Depository.
Publisher in Australia is Macmillan.
You can of course tag Amazon books
hachette is australian for ripoff
macmillan is australian for ripoff
etc.
Yep. Good one.
I love how these hypocritical bunch of prats wark on about piracy when they simply continue to encourage it by short sighted money grabbing arrogance.
About time that Australia stood up to these copyright parasites.
Return copyright terms to some kind of sane length.
Stop enabling the exploiting of local consumers. If copyright owners respond to the generous grant by the public of a temporary monopoly (which is what copyright is) by trying to rip us off - then don’t enforce it. Make it a complete defence to a charge of “copyright infringement” if the item in question is not available lawfully in the consumer’s region at the same price as elsewhere.
Oh, and with region-coding rubbish in media players and consoles - make it clear that if a mod-chip or other circumvention device overcomes a region block that discriminates against local consumers, then it is lawful, even if it has the effect of undoing other anti-copying measures. Give the bastards an incentive to stop trying to gouge us.
Does the Australian government represent Australian consumers or US conglomerates?
Some academic eBooks are as much as $500 - this is the new wave of academic publishing extortion: http://www.amazon.com/International-Relations-Critical-Political-ebook/dp/B000OT87MU/ref=sr_1_4?s=digital-text&ie=UTF8&qid=1327415456&sr=1-4
Have also started to find that as an Australian I can’t buy some books as e-books anymore. Strangely an account that I have with a south african address works.
NAJ Taylor:
“Some academic eBooks are as much as $500 - this is the new wave of academic publishing extortion.”
And that’s the 72% off price; the full price is an unconscionable $1,785! This is why more and more academics are publishing their works in free, peer-reviewed, online-only journals. They never see a cent of the retail price of their works anyway, so they may as well give it away for free.
But when did anyone finish a book and say “The story was crap, but gosh it smelled good”? It’s the content that’s essential, not the wrapper.
I have a new appreciation of indie authors currently. Good stuff available and very cheap to buy via Smashwords and Amazon. The agency publishers can take a running leap.
Agree with the comments above. If publishers are going to treat me with contempt, I have no qualms in downloading dodgy copies or buying via a US or even NZ address. They miss out all around
I’ve actually seen some books that were cheaper with a NZ address than a US one - e.g. Alastair Reynolds’ Blue Remembered Earth, which again being Hachette is far more expensive in Australia than any other country.
So probably worth having NZ, US, UK, maybe South Africa and Singapore addresses or somewhere nearby in Asia if you are keen, too.
Like deciding whether to use bookdepository.com or bookdepository.co.uk depending on which is cheaper.
This is really useful given the Kindle Select 5 days free out of 90 for their authors fun :-
http://www.ereaderiq.com/free/
Music and movie piracy is predominantly downloading one track/album or movie at a time.
Because the file size of an eBook is so small, pirates are not bothering to make most books available individually.
Instead you are more likely to find the book that you are after in a large collection of books - download what you want and you might have 100 or more other books as well.
The publishers should be bending over backwards to provide cheap books so that book lovers don’t feel any need to learn how to pirate books.
Pirating books also leads to people downloading huge collections just because they can.
Of course 99% of these books will never be read (or even opened). But such downloading enables the industry to claim that their losses from piracy equate to full market value of every book in the huge collection.
I see a great future for eBooks. I see authors making money, I see Amazon and Apple making money, and I see the publishers quickly driving themselves out of business.
Certainly those publishers who continue to supply e-books at exhorbitant prices deserve to go out of business.
Those that take a more reasonable stance will survive.
Those that will flourish are independant authors who write good quality books, and I have found quite a number of these already.
e-books are here to stay. I certainly don’t want to go back to reading paper books, my eyesight is not as good as it used to be, and paper books are heavy. Plus I’ve run out of room on my bookshelves.
Personally I don’t see the need to buy pirated books. I’ve bought 77 books from Amazon already this month at an average cost of $1.12 each. Lots of legal freebies, some low-priced ( < $3) Indies, some medium price ($3-$8), and a couple at the maximum price I'm prepared to pay($9.99).
Just buy from a US site. I did this for virus software, almost half the price and I got more users