Amazon’s Incentives for Lower e-book Prices

Low Prices

LOWER PRICES

Amazon and Hachette settled their months-long dispute over e-book prices.

The agreement includes incentives for Hachette when the publisher chooses to deliver lower e-book prices to customers.

Simon & Schuster reached an agreement with Amazon last month, which also included an incentive for delivering lower e-book prices to customers.

How low? That’s a good question.

Kindle Direct Publishing (KDP) has provided such an incentive for years: e-books prices above $9.99 pay a royalty of 35%, whereas book prices between $2.99 and $9.99 pay a royalty of 70% (minus delivery costs).

The terms are no doubt different for the big publishers. The percentages won’t be the same, for one. But the KDP model offers some idea for what to expect.

Don’t expect bestselling traditionally published e-books to dive down to $2.99 or 99 cents. I’m thinking closer to $9.99.

Who wins?

  • The readers win with more affordable e-book prices. The readers are most important, as the entire business fails to exist without them.
  • The big publishers win with incentives to offer lower e-book prices. In addition to the incentives, it may actually be a more profitable business model; if so, that will be an added bonus.
  • Traditionally published authors win, too. In addition to the publishers’ incentives for lower e-book prices and perhaps reaping greater overall royalties as a result, Hachette titles will now “be prominently features in promotions,” according to a joint statement from Amazon and Hachette.
  • Amazon wins by helping to create more affordable e-books for customers.

There don’t have to be any losers. There is such a thing as a win-win solution, or in this case, a win-win-win-win.

As a reader, I thank Amazon for pushing for this. I realize that not everyone will agree that this is a good thing, and others will question the motivation and the future, but personally I believe this is a good step for the future of e-publishing.

The holidays are almost here. No doubt this timing helped this dispute reach its conclusion.

FURTHER READING

  • Hugh Howey offers some great insights on this:

http://www.hughhowey.com/amazon-and-hachette-come-to-terms

  • Yahoo Finance:

http://finance.yahoo.com/news/amazon-hachette-end-monthslong-dispute-171616398.html?soc_src=mediacontentsharebuttons&soc_trk=tw

  • CNN Money:

http://money.cnn.com/2014/11/13/media/amazon-hachette-reach-deal/index.html

Read Tuesday

Imagine a Black Friday type of event just for book lovers.

You don’t have to imagine it. It’s called Read Tuesday, and it’s free: www.readtuesday.com.

Please support the Read Tuesday Thunderclap. This will help spread awareness on the morning of Read Tuesday (December 9, 2014). It’s easy to help:

  • Visit http://thndr.it/1CkO2Bg.
  • Click Facebook, Twitter, or Tumblr and sign in.
  • Customize the message. (Optional.)
  • Agree to the terms. All that will happen is that the Thunderclap post about Read Tuesday will go out the morning of December 9.
  • (The warning message simply means that Facebook, Twitter, or Tumblr need your permission to post the Thunderclap message on December 9. This is the only post that Thunderclap will make.)

Chris McMullen

Copyright © 2014 Chris McMullen, Author of A Detailed Guide to Self-Publishing with Amazon and Other Online Booksellers

  • Volume 1 on formatting and publishing
  • Volume 2 on marketability and marketing
  • Boxed set (of 4 books) now available for Kindle pre-order

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On Amazon’s Call for Support vs. Hachette

Call for Help

Amazon’s Request for Support

Amazon recently sent this letter to KDP authors and posted it at Readers United. (You can find a balanced introduction to the Amazon vs. Hachette battle by clicking here.)

I wrote a balanced introduction previously, largely because I hadn’t seen many balanced arguments. There seemed to be a need for one.

Now that I’ve thought about this more, I’ve come to realize that I should take a stand.

A couple of points recently occurred to me, which I haven’t seen expressed in myriad articles and discussions regarding Amazon’s letter:

  • Prior to Amazon’s letter, this article in the NY Times shows that readers had been asked to contact the CEO of Amazon, Jeff Bezos, “demanding that Amazon stop using writers as hostages in its negotiations.” Perhaps one motivation for Amazon’s request for indie authors and readers to contact the CEO of Hachette was in response to this. (According to the NY Times article, it was Douglas Preston, an author, asking his readers to contact Jeff Bezos. The article didn’t say that Hachette was directly involved in this request.)
  • I frequently hear indie authors complain about lack of communication from Amazon, feeling lost in the haystack, etc. Here, Amazon contacted all indie authors, no matter how big or small. Amazon evidently believed that indie authors can make some difference. You can look at this two ways. I’ve read a lot of negative reactions to this. But it’s also an opportunity to show Amazon that indies can make a difference. You might be thinking, “Why should I care?” That’s a good question. Maybe there is a reason.
  • Amazon did provide good publicity to prominent authors who have provided support in this battle with Hachette. Check out the references at the bottom of the Readers United website. Three of the twelve references are from author Hugh Howey.

Why You?

If you think it feels strange that Amazon would ask you to provide some measure of support in its battle, it’s no more strange for you to be asked to contact Hachette’s CEO than it was for readers to be asked to contact Amazon’s CEO.

Amazon asked people who love to write to express their opinions to Hachette. Amazon could have just asked traditionally published authors to do this. But indie authors were invited to do this. Maybe Amazon believes that indies can write well, both when it comes to publishing books and writing letters. I believe that many indies can write well; I’ve seen it firsthand.

You don’t have to look for the worst possible motivation behind it. Sometimes, people in high positions in large corporations are much better than many people would give them credit for. When I think of what Amazon has done for me, I see only reasons to think the best, not to think the worst. (People from Amazon have personally reached out and contacted me on multiple occasions. Every experience has been very positive.)

Will it Matter?

We’re writers, aren’t we? Have we stopped believing that words can make a difference? When you believe that words are a waste of time, it’s time to retire. Where is the Thomas Paine in you?

If you don’t feel comfortable contacting Hachette, there are other ways that you can show support. For example, you can sign this Change.org petition. You can blog. You can tweet. Supporting Amazon is easy, if you choose to do it.

Why Should You Care?

Wait a minute. Are you an indie author? Are you an Amazon customer? Most indie authors depend on Amazon’s success. Amazon’s customers also want Amazon to succeed so they can continue to enjoy the benefits of shopping at Amazon.

You don’t have to be a reader of traditionally published books to have a reason to support Amazon.

Most indie authors probably see no reason to care about Hachette. If you don’t plan to publish with Hachette and don’t plan to read any of their books, it would be very easy not to care.

Well, I’ve heard some indie authors say that they prefer for Hachette to keep their prices high, as it accentuates the indie advantage of low prices. But still, $9.99 is still very high compared to most indie books that it really doesn’t matter.

What matters more is that Amazon continues to succeed so that indie authors can continue to enjoy the benefits of KDP and CreateSpace. It’s not just that Amazon opened up this great opportunity to self-publish, but that we want that door to remain open. (Sure, there are alternatives, but most indies find the vast majority of their customers at Amazon.)

There is reason for indie authors and Amazon customers to support Amazon.

Show Them

You have a choice:

  • You can stand on the sidelines.
  • You can complain about Amazon’s email request for help.
  • You can be a supporter of a company who has supported you.

Maybe Amazon didn’t open the door to self-publishing for noble reasons. Maybe they did. Does it matter? They not only opened the door, they rolled out the red carpet, and it sure does feel grand to walk on it.

Chris McMullen

Copyright © 2014 Chris McMullen, Author of A Detailed Guide to Self-Publishing with Amazon and Other Online Booksellers

  • Volume 1 on formatting and publishing
  • Volume 2 on marketability and marketing

Follow me at WordPress, find my author page on Facebook, or connect with me through Twitter.

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