Ripple effects

A few weeks ago, I wrote about price elasticity and the value of testing the sales of eBooks at a range of price points.

At the time, I hadn’t seen a BusinessWeek/GigaOm post, “Publishers are still missing the boat on eBook prices“. In it, Mathew Ingram describes instances in which eBooks are offered at or above the price of print books, even though most eBooks are very limited in the ways that they can be shared, lent or resold.

Ingram also notes an unintended consequence, identified by Market Partners’ Lorraine Shanley: high prices for mainstream books open up a profitable middle ground for self-published authors. These authors have access to a range of publishing platforms at Amazon, Apple, Smashwords and elsewhere.

I’d add an unintended consequence of a similar sort. When the largest publishers negotiated agency pricing, they did so in a way that made their share (70%) a matter of public discussion. Authors whose eBook royalty rates may have been 15% to 25% of the net price could easily compare their shares to the traditional publishers’ much higher return.

The explicit gap has motivated some authors to push for a higher royalty rate, withhold eBook rights or go out on their own. That may end up being an even higher price to pay to protect the near-term sales of hard-cover books.

About Brian O'Leary

Founder and principal of Magellan Media Consulting, Brian O’Leary helps enterprises with media and publishing components capitalize on the power of content. A veteran of more than 30 years in the publishing industry and a prolific content producer himself, Brian leverages the breadth and depth of his experience to deliver innovative content solutions.

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