images.jpgThis past week the New York Times reported that two Amazon Kindle ebooks, Ken Follett’s Fall of Giants and James Patterson’s Don’t Blink, are priced higher than their hardcover counterparts. This is the result of the Agency 5 pricing scheme for the ebooks (for some background, see Agency in eBooks: Just the Start? and The Decline & Fall of the Agency 5) that allows the publisher to set the ebook price and the ebookseller to set the pbook price.

I hadn’t planned to note this “event” as it has been noted numerous times since its discovery, and I considered it just another rip off of consumers by publishers. I suppose the biggest fools in the unfolding of this event are us commentators who cry about the high price of the ebook in comparison to the pbook. Why are we made to look so foolish? Because thousands of the ebooks are being sold despite our negativism. So perhaps the publishers are a bit smarter than us in terms of sales, even if dumber than us in terms of actual revenue.

(In terms of revenue, booksellers pay 50% or more of the suggested retail price as the wholesale price on a pbook. Consequently, the publisher receives more per-unit-sold revenue on the sale of a heavily discounted pbook than it does on an agency price ebook. I know, the logic of that situation escapes me as well, but the chiefs at the Agency 5 get much bigger salaries and bonuses than I do and have the pleasure of telling shareholders how they are cutting costs by laying off the grunt workers.)

But I was finally agitated enough by the ripping off scenario to write today. The rip off today is a Barnes & Noble masterpiece of legerdemain. I am a B&N member whose membership “privileges” have been steadily eroded by B&N since the advent of ebooks. Yet today’s legerdemain is the best yet. Granted we aren’t talking big bucks on an individual purchase, but in the corporate world, pennies add up to dollars, and I’ve now gotten a glimpse into how Leonard Riggio plans to save his world.

Like all B&N members I received an e-mail touting new publications with offers of discount coupons — either for the store or online. First clue: I received 2 separate e-mails — one offering me a 30% discount (members save 40%) coupon and the second offering me a 40% discount (again, members save 40%). Apparently the offers have changed so that even nonmembers get these coupon offers. I do concede, however, that B&N can legitimately offer the discount to both members and nonmembers (but why would you want to kick your members, your most loyal customers, in both the stomach and the head?).

Clue 2: To take advantage of the online coupon discount, you need to click the Get Coupon button, which takes you to a special offer page at the website where you get the book of your choice (from among those being offered with the coupon) at the discount.

I am interested in buying Chernow’s George Washington. So the first thing I did was go to B&N’s online store to see what the price is. If I just buy it at its regular discount price, the hardcover cost is $23.40 — a 41% discount — and this price is available to everyone, member or nonmember. If I click the coupon for my special discount price, the price is $24.00, the member’s price. So for being a member of B&N, I get the privilege of paying 60¢ more than the price everyone who isn’t sucker enough to use the coupon pays.

Is this a rip off or not?

Of course, in B&N’s case they aren’t even matching Amazon’s current hardcover price of $21.60, which makes one wonder what life after death there will be for B&N. But Amazon doesn’t sit pretty here either. Just 3 days ago, as the New York Times reported, the Follett book was being sold by Amazon for $19.39. What happened in 3 days to cause the price to rise by $2.21? The need to make the Kindle edition, which is still $19.99, appear to be a bargain compared to the pbook?

Why shouldn’t an Amazon customer who wants to buy the Chernow pbook be angry today that the price has been raised? Especially when there is no assurance that it won’t rise or fall tomorrow. There is no logic to the changing prices other than to extract the most possible from consumers. We aren’t talking about precious metals that are traded on commodities exchanges that have price fluctuations based on availability. There is no shortage of pbook copies.

Bottom line really is that both B&N and Amazon (and probably other ebooksellers as well) are simply playing their customers for suckers — B&N by the coupon legerdemain and by offering all comers the same buy price at the expense of members and Amazon by shifting the price up or down as it sees the interest in a book wax and wane.

It’s a war of nerves for book buyers, because one has to guess when to jump on the offer and when to hold steady. Who ever thought buying a book would be a high-stakes poker game?

Via Rich Adin’s An American Editor blog


  1. why is ANY ebook as high as $19.99?????? I live in California, so our bankrupt government fiddling while the city burns is fresh in my mind. All this crazy pricing is killing the book industry with a death by a thousand small cuts.

    Amazon’s cost is basically zero to present the web page and at most a nickel to send me the ebook. Publishers must live in very large houses, for now anyway.

  2. Simple problem to solve. I own a K3 and a jetBook. I can shop almost anywhere. I can look for the best price.

    Yes, it’s expensive, although I didn’t pay much more total than an early adopter of the prior generation of e-ink devices. Until reasonable standards shake out, if you want the convenience of ebooks, you have to be able to handle both.

    Look at DVD+R and DVD-R media. Modern drives can handle both. Someday, ebook readers will do the same, but not for another generation or two of hardware.

    Jack Tingle

  3. “I suppose the biggest fools in the unfolding of this event are us commentators who cry about the high price of the ebook in comparison to the pbook. Why are we made to look so foolish? Because thousands of the ebooks are being sold despite our negativism. So perhaps the publishers are a bit smarter than us in terms of sales, even if dumber than us in terms of actual revenue.”

    You couldn’t be more wrong Rich. They are selling far far far fewer copies that they would if the price was halved. That is self evident. It is they who are the fools.

    I do agree with you that they are playing their customers for suckers. Absolutely.

    But parallel to that they are being complete dumbasses themselves. They are suppressing the market for eBooks with one hand while trying to boost it with hardware on the other hand. They are creating a bad reputation for themselves for ripping off. They are creating a widespread impression that eBooks are too expensive. They are messing with customers by padlocking their purchase with DRM, and DRM that is not even consistent or reliable. They are crapping on the very customer base that they will be trying to sell to in the next decade. Idiotic and mindless!

  4. “They are selling far far far fewer copies that they would if the price was halved.”

    I suspect you are right, and by the time the price does come down many of the people who would have impulsively purchased at that lower price have gotten it from other sources – some of which (used books stores, piracy, libraries) give little to no profit back to the author and publisher.

    I’m in the camp that believes big publishers actually want ebooks to fail, so they are happily doing exactly what they need to to make it so. I think they will soon regret the wasting the opportunities they are fighting so hard against right now.

  5. Very simple. Practice patience, a virtue, and wait for a used physical copy. Or wait until until it makes it to the clearance section at B&N.

    If I feel a publisher is ripping me off on an ebook, I place that book on my wishlist until the used price is a couple of bucks.

    I rarely purchase new hardbacks, only if it’s one of my favorite authors and I know I’ll keep it forever, or if I get a gift card or something.

    Frankly, there are a lot of ebooks I just won’t buy. Why should I pay the $7.99 retail price of a paperback for the ebook when I can get that same paperback at a grocery or discount store for $5.39? There are plenty of other books out there to read.

    Thanks to Amazon’s free books and strong indie book program, I have hundreds of books on my Kindle, most of them free or under $2.99.

  6. As for moveable prices, it may annoy consumers but it makes economic sense. If a company can maximise its return by charging $20 on Monday, $15 on Tuesday and $25 on Wednesday, why not? If business is slow on Tuesday then why not make it a cheap day and spread the workload?

    As others have commented, you should be prepared to pay what the book is worth to you. If it’s not worth what you paid then that’s your problem, not the publisher’s. Chalk it up to experience. Caveat emptor still applies.

  7. Not true Jon Jeremey. It’s more that just “your problem” in that if the consumer perceives the publisher “ripping them off” they won’t purchase future books from said publisher. This will affect the profits and bottom line of the publisher and the income of the author.

    John Scalzi’s latest analysis of his sales clearly shows this fact. For his more expensive books published by a publisher, he makes alot less in profit than his less expensive self published books.

    Consumers aren’t stupid. If the publisher hits them in their wallet long enough, the consumer will fight back…either by not buying the book or by finding free copies of the book on google/irc/torrents.

  8. You are so right Chan. Pricing that is well done and smartly implemented finds that sport where profit is generated while satisfying the customer on value.

    In principle there is nothing wrong with floating/variable/moving pricing. Clearly time is a factor in relation to many products. Early buyers often pay a premium. We only have to look at technology product and also, say, the airline ticket industry.

    But even variable pricing needs to satisfy enough of the customers so that they don’t feel taken advantage of. Value must be preserved.

    Right now with many eBook, value is not being offered. Super profits are being gauged and customers wont stand for it. Not only that but they have an alternative and they will remember long after the Publishers learn their less, which they inevitably will.

    Unfortunately large corporations tend toward short term goals because CEO’s are paid on short term targets and results.

The TeleRead community values your civil and thoughtful comments. We use a cache, so expect a delay. Problems? E-mail