Is Declining Ebook Revenue Related to Publisher-Amazon Feud?

Sep 08, 2015


BEST PRACTICES SERIES

Article ImageSeveral publishers have made headlines over the past few years as they battled Amazon.com for the right to set their own ebook prices. Amazon.com wanted to contractually obligate the companies to set the prices at $9.99 or less. Big-name authors got involved, as did Stephen Colbert-whose publisher, Hachette, was in one of the longest and most contentious contract negotiations with Amazon (which, for its part, tossed its weight around by taking pre-order buttons off of Hachette books, and purposely filling books for Hachette books late). But Hachette and other publishers, like Harper-Collins and Simon & Schuster-as well as the rest of the so-called "Big 5"-eventually won the right to set their own prices. But as the Wall Street Journal points outin "E-Book Sales Fall After New Amazon Contracts," that may be coming back to haunt the companies now, which have seen their ebook revenue fall.

According to WSJ, ebooks from the Big 5 cost an average of $10.81 in the Kindle Bookstore. Compare that to an average price of $4.95 among other 2015 ebooks. Amazon.com has long argued that publishers will ultimately make more money if they sell more books at lower prices, than if they sell fewer books at higher prices. And by the looks of things, Amazon may have been right-and even some publishers seem to be admitting that. Jeffrey A. Trachtenberg wrote in the WSJ, "Hachette cited fewer hot titles and the implementation of its Amazon deal as reasons that e-books fell to 24% of its U.S. net trade sales in the first half of 2015, from 29% a year earlier. Declining e-book sales contributed to a 7.8% drop in revenue in the period."

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