Inside the Australian and New Zealand book industry

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Amazon tells UK publishers to lower ebook prices to sell more books

In the UK, Amazon vice-president of Kindle Content David Naggar, has suggested publishers lower ebook prices as a form of marketing, prompting a number of responses from the UK book industry, reports the Bookseller.

In his original interview with the Daily Mail, Naggar said traditional publishers should follow self-publishers’ lead and use a lower price point to drive sales.

‘I look at price as a tool for visibility,’ said Naggar. ‘You can either spend a lot of money on marketing or you can invest it in a super-low price until they get the flywheel going of the recommendation engines … [Self-publishers] publish a book and sell it for 99p right out of the gate … Publishers [with new authors] could much more afford to do that than self-published authors.’

Several members of the UK book industry have rebutted Naggar’s comments, including Stephen Lotinga, chief executive of the UK Publishers Association, who said ‘Amazon have a vested interest in lowering prices as much as they possibly can because it helps them maintain their market share.’ ‘Effectively, they’re saying, “In order to promote your book, we’re going to dictate the price” … Our members are running a different business model than self-published authors are. They invest a lot of money in authors and feel that they price their books appropriately. We are not seeking to sell very low [priced] commodities.’

Chief executive of the UK Society of Authors Nicola Solomon also pointed out the difference between traditional and self-publishing models, calling Naggar’s comments naive.

‘Self-published authors on the Kindle Direct Publishing (KDP) platform earn between 35%-70% of the ebook retail price (where traditionally-published authors earn 25% royalty one-books),’ said Solomun. ‘That’s why they can discount to that level and still enjoy a decent income if their book is successful.’

Solomon also took issue with how discounting affects authors’ incomes: ‘The routine discounting and implied devaluing of printed books—often at the authors’ expense—is already a big problem. The last thing we need is to encourage even more discounting on digital platforms.’

An independent publisher, who declined to be named, told the Bookseller that publishers do experiment with the price of ebooks, but that ‘price alone doesn’t make much of a difference to sales’ as Amazon chooses which ebooks to promote. ‘What is definitely true and unhealthy for the ebook market is the near-monopoly position—nearly 90% in the UK—that Amazon has at the moment.’

However, digital publisher Endeavour Press CEO Matthew Lynn observed that ‘ebooks are still overpriced’ and the industry is ‘stuck where the music industry was five years ago’. ‘The market decides the price, and it’s the job of the publisher to make money at that price … If you can’t make money, then lower your costs’.


Category: International news