Okay, fine, I’ll write about the latest from Amazon. So there.
The great dispute between Amazon and Hachette seems to be over E-book pricing, right? Here’s my opinion:
Oh, I’m sure Hachette authors care—it’s their livelihood, after all. And Hachette cares, because they also make money off E-book sales. And Amazon cares because . . . why?
I’m guessing because there are SO MANY lower-priced books on the Amazon site. But surely, you ask, aren’t people buying books from Hachette authors, even at those high prices? Yes, yes they are.
Let’s look at this from the perspective of indie authors and even small press:
We’ll start with a typical fiction E-book, roughly 80K words or so. A Hachette book (and I’m using them because, really, that’s who this is about) is priced at $14.99—that same book, in paperback, is roughly the same price. Should it be? Probably not. An electronic book is not a physical object, but in this day and age, well, maybe. Blood, sweat, tears have gone into its production, its writing, regardless of the medium a reader chooses.
Now look at an indie book, same size, same blood, sweat, and tears. That book is priced at, on average, $3.99. Why? Because that’s a price point at which it will sell. Look up the statistics. Again, why? Because that seems to be what readers are willing to pay for a book by Joe Blow, versus one written by a nationally known bestselling author.
Come on, don’t you go to the dollar store sometimes for certain products? Don’t you comparison shop? Don’t you sometimes get suspicious because something is priced too cheaply, and you think, therefore, that it might be crap? Be honest.
Now, you can find all over the web where someone quotes figures as to how many MORE Hachette books would sell at a lower price, and I stink at math so I’m not going to get into all that. Doesn’t matter. In fact, I’m almost tempted to raise my E-book prices, just to see what would happen. Hmm. Not a bad idea.
Times are tough for everyone, even people who read for entertainment. The fact remains that, for every Hachette E-book purchased, a reader could buy 3-4 indie books, right?
So why does Amazon care?
Look at your average physical bookstore. They sometimes have sales, discounts, specials, etc. They are under no obligation to do so, they can usually set their own price for the books they sell. If a book retails for 14.95, the store can sell it for as little as they want, technically. It depends on how much money they’ll make off each sale—that’s what effects their decisions.
Amazon is an online bookstore, right? (Yes, yes, among other things.) So why can’t they sell at whatever price they want? They don’t discount RHP E-books, but they DO discount our paperbacks.
I think the dispute comes down to royalties and contracts.
Many E-book publishers pay 40-50% royalties on E-books—on the retail price. Does Hachette do that? I don’t know. Maybe they pay on net. See, as indie authors know, you have to price your E-book above a certain rate in order to collect that 70% royalty, minus, of course, the cost of delivery. Amazon earns 30% of each book, without any costs. So, to make it simple, if your book is priced at $4.00, you earn $2.80 on a sale, minus a few cents. Amazon earns $1.20, for giving you the means in which to sell your book.
If you have a small press handling your book, or an E-publisher, same figures, you would earn $1.60 to $2.00 per E-book sold.
Now a Hachette book, priced at $15.00, would earn $10.50 for the publisher; Amazon’s cut is $4.50. The author would earn $6.00 or $7.50, depending on royalty percentage. That’s a big difference: on average, $2.20 versus $6.00 or $2.40 compared to $7.50. No wonder Hachette authors want a higher-priced book—don’t you?
But what is Amazon’s deal? They could make $1.20 or they could bring in $4.50 per book. Seems like a no-brainer. Why penalize a big money-maker?
And then. Gee, says Amazon, let’s take it to the readers. And authors. OF COURSE readers want cheaper books. Duh.
And you know what? Authors want more money. Another duh. So now, I’m thinking, a lot of indies are saying, “Hey, maybe our books should cost MORE!” What’s Amazon going to do then? Refuse to carry E-books at all? Aren’t they cutting their own throats over this whole thing? If Hachette lowers prices, Amazon makes a lot less.
What’s their game, anyway?