December 17 – December 24, 2009 Edition

Publishers Delay e-Books to Curb Price Wars

NEW YORK, NY/AUTHORLINK NEWS/12/17/09—Several major publishers, including Simon & Schuster and Hachette, are delaying e-book releases of their book titles to combat price slashing of bestsellers by retailers such as Amazon, Wal-Mart and Target, The Wall Street Journal reported this past week.

Simon & Schuster will delay by four months the e-book versions of 35 hardcover book titles due for release next year. Lagerdere SCA’s Hachette Book Group is planning a similar move.

“The right place for the e-book is after the hardcover but before the paperback,” said Simon & Schuster CEO Carolyn Reidy. “We believe some people will be disappointed. But with new readers coming and sales booming, we need to do this now, before the installed base of e-book reading devices gets to a size where doing it would be impossible.”

Publishers are concerned about how best to maximize book sales not only of e-books on the web, but the growing number of titles on smart phones and e-readers.

Hachette will delay e-book editions of its potential bestsellers by three to four months. “We’re doing this to preserve our industry,” said Hachette’s CEO David Young. “I can’t sit back and watch years of building authors sold off at bargain-basement prices. It’s about the future of the business.”

“Authors get the most publicity at launch and need to strike while the iron is hot,” argued an Amazon spokesperson. “If readers can’t get their preferred format at that moment, they may buy a different book or just not buy a book at all.”

The pricing conflicts go beyond e-book sales. Many hardcover bestsellers are now sold for $10. The American Booksellers Association, representing many independent bookstores, recently accused several retailers of predatory pricing. The organization charges that retailers such as Amazon, Wal-Mart and Target have been selling the hardcovers at a loss.

A book that retails for $35 typically carries a wholesale price of around $17.50. The ABA claims the retailers have not received special pricing, but are nonetheless selling each title at a significant loss in a pricing war designed to lure customers. The group is asking the Department of Justice to investigate the practices, including the pricing of print books and digital editions.

[Authorlink Editor’s note: Though rarely reported, the practice of slashing book prices may have a deep impact on authors because many publisher contracts call for the author’s royalty rate to be reduced by half if a book sells for less than 40% of its list price to a retailer.]

While traditional book publishers seek new business models to maximize profits in the age of e-books, magazine and newspaper publishers have been preparing to reinvigorate their segment by optimizing media for the latest mobile devices. Condé Nast, Hearst, Meredith, News Corp and Time recently announced a joint venture aimed at distributing their respective content through a common portal and optimizing publications for computers, smartphones and tablets. They expect the unnamed company to develop digital magazines that will be readable on many platforms, including different operating systems and screen sizes, such as computers, smartphones and tablets. The technology will also be designed such that it should scale up to color reading devices with mixed media like animations and video, according to geek site, Electronista.