Nothing New in e-Book Price Wars

Author Earnings Report states: Self-published authors now command more daily income from digital royalties than all the Big Five published authors combined. Why? 

In the lawsuit of 2009 it was already shown that the agreement the Big Five fought to win with Apple resulted in a reduction of profits per e-book sold.  Even now some publishers price their e-books much higher than others, which certainly doesn’t improve sales.  Freed from Amazon’s discounting, and with complete control over pricing, these publishers made a decision to push the price of many of their e-books above $9.99.

The latest Author Earnings Report mentioned the massive shadow industry of ISBN-less e-books being sold, and the effect Kindle Unlimited has on title visibility.  Other findings were:

  • The average e-book price by independent authors is $3.87 – while the average price set by the Big Five publishers is $9.53 (gone up in the last two years by 17%).  Publishers are trading lower volume sales for more dollars per title.  Their higher prices aren’t just hurting readers; they haven’t been good for their authors either.  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.
  • Self-published authors now command more daily income from digital royalties than all Big 5 published authors combined.
  • In just the last three months, Big Five publisher e-book unit sales have fallen another 18%.  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 12.4% since January 2015.


Author Earnings Report concludes:
“By our data, which matches industry reports, this control has brought higher prices to consumers, lower sales for publishers, and fewer earnings for their authors.  It has also brought greater market share for self-published authors.  For authors who want control over their pricing, so they can avoid becoming casualties in wars between retailers and publishers, the choice of publication method is clear.  And it’s becoming even more clear from quarter to quarter, that self-published authors continue to win market share, and continue to take control of their careers.”

One commenter on this report: “Publishing is a weird business. Many authors are so eager to get published that they don’t negotiate things like price. You wouldn’t do this in any other business. You supply a product to a wholesaler, you want to discuss cost, manufacturing, MSRP, and the like. “Published” Authors tend to assume that publishers are going to A) Know what they’re doing and B) Do what’s best for the author.”

Why being so naive? Bestseller author Hugh Howey (Wool): “A writer’s chances of earning a living are now better by an order of magnitude than they were at any previous time in history.”

The Observer wrote in an article:
“Meanwhile, all told, more writers are producing more books and making more money than ever before. A lot of that increase has occurred outside major publishers, though.  This is also a point that Amazon has made in the past. Last summer, it gave the public a peek into its data around prices and e-book sales.”

The Amazon Books Team posted on the Kindle Forum, writing:

“For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000.”




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