Chapter 1 Defining Marketing for the 21st Century by:
May Author Earnings Report Share this: Self-published authors are no doubt familiar with this price constraint, as their royalties are cut in half if they price higher than this amount. But after a contentious and drawn-out negotiation with Hachette Book Group last year, Amazon relinquished the ability to discount ebooks with several publishers.
Prices with these publishers are now set firmly by them. Soon after these agreements went into place, industry observers noted an upward move in average ebook prices. The blue bars show the price of self-published ebooks for each of our reports.
The purple bars show the average price of Big 5 published ebooks. What will the effect of these pricing decisions have on unit sales, revenues, and author earnings?
We were eager to find out. For comparison, we included the same graph from our January report.
This is a measure of the average rank of each ebook. Just as publishers study the New York Times bestseller lists to gauge the strength of their competition, we are looking at the same thing. But with a sample size of , rather than Remember that prices on these titles have gone up.
Publishers are trading lower volume sales for more dollars per title. And authors seem to understand this, as many implored Amazon to continue discounting their works during negotiations with publishers last year. Now it is impossible for Amazon to discount these books, and publishers and their authors are losing revenue as a result.
And in each of these graphs, we can see that long term trends have become much more pronounced.
Ebooks may be on the downward slope for them, but not for everyone else. Late January unit sales are on the left. Our latest report on early-May daily unit sales is on the right. Higher prices and a return to agency pricing seems to be seriously impacting sales.
And self-published authors are moving into that lost market share, with an increase in daily revenue of In fact, one of the complaints from publishers in their negotiations with Amazon is that Amazon was no longer discounting as per usual.
As you can see, there is no take from the Big 5 publishers. Notice the brand new block of green atop the Big Five bar? Their authors are earning less, as royalties are calculated as a percentage of net revenue.
Summary Publishers fought hard to take back control of ebook pricing from Amazon.
This was a stated intent by Hachette to its investors inand it was touted as the end result of their lengthy negotiations. What has that control brought?
Lawyers were also successful in showing at trial that a move to agency pricing resulted in a sudden and drastic shift upward in ebook prices, harming consumers, but also harming publishers pg One does not need to theorize on why publishers would make these decisions. So speculation is not required.
The court decision in United States vs. Studying the market and all available data is critical for writers today. It is equally critical to understand the decisions being made by retailers such as Amazon and Apple, and publishers such as the Big 5.
Without this understanding, authors may place their trust in partnerships that do not have their best interests in mind. Not all publishers are alike, of course. Some have not yet returned to agency pricing. This may be worth considering when entertaining offers from various publishers.Find helpful customer reviews and review ratings for Viable Vision: Transforming Total Sales into Net Profits at ph-vs.com Read honest and unbiased product reviews from our users.
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