Along with most citizens of Kindle Nation, I happen to believe that some of the big publishers are making a big mistake by trying to control retail ebook prices and raise those prices by 30 to 50 percent. This mistake is compounded, in my view, by the apparent circumstance of its having been arrived at through a collusive, anti-consumer process in which the "Apple 5" of MacMillan, Simon & Schuster, Hachette, Penguin, and HarperCollins have been lured by Steve Jobs into trying to fix prices and restructure retail relationships all at once.
That being said, congratulations to MacMillan CEO John Sargent for having the guts and transparency to speak up and address readers directly in this post on the company’s blog yesterday:
I had been critical of Sargent previously for addressing his earlier comments only to authors and literary agents, and consequently trying to position them to speak up on his and his company’s behalf, and this new post is well worth reading. He has not changed my mind, and I doubt he will change the minds of many ebook readers, but we will see. There are dozens of comments that give a good sense of the range of views generally in the ebook pricing controversy, and you may want to add your voice to those of other readers.
There are reasons for optimism about the way that this will play out, and I see glimmers of hope both in the fact that Random House has yet to join the Apple 5 and in the fact that Sargent cracks open the door of flexibility an inch or two by acknowledging that some ebooks will be priced lower than $12.99 during their "hardcover new release" period. If readers are in a position where they are able to make buying decisions based on price as well as interest in particular books, it will be easier for publishers to gather information about the importance of competitive pricing.
Credit should be given to Sargent for staying away from two "that dog won’t hunt" arguments, at least for now:
- He doesn’t try to claim that these dramatic increases are based on cost.
- He doesn’t try to justify these dramatic increases by saying they will be good for authors or even lead to higher royalties for authors.
One omission that hurts his case involves the actual price that consumers usual pay for hardcover new releases. It is a classic case of apples and oranges for Sargent to compare the hardcover suggested list prices of $25 to $35 with the $12.99 to $14.99 prices the Apple 5 wants to fix for ebooks. The retailers responsible for most hardcover book sales in the U.S. (Amazon, the chains, and the big box stores) have been discounting most hardcover new releases by 25 to 46% for years, and MacMillan is not taking any steps to limit this discounting. With publishers insisting that no discounting be applied to ebooks, the actual terms of comparison should be between $13-$15 ebooks and $15-$18 hardcovers, which doesn’t quite rise to the level of Sargent’s claim of "a tremendous discount from the price of the printed hardcover books."