E-book Sales Decline for Some “Big 5” Publishing Companies after New Amazon Contracts

Written by Kate Leboff

Articles by Jeffrey A. Trachtenberg, writer for The Wall Street Journal, on September 3, and Ashlee Keiler for the Consumerist, on September 4, report that the sales of e-books have sharply (and surprisingly) declined in 2015 after Amazon allowed three of the biggest publishing companies in the world to set their own prices for their digital books. So, prices were raised, and revenue has dropped. It seems that readers not only dislike paying more for e-books as they do for tangible, print editions but are even less likely to buy those marked at an even higher price than their print versions.

Lagardere SCA’s Hacette Book Group, News Corp’s HarperCollins Publishers, and CBS Corp.’s Simon & Schuster, three of the biggest and baddest publishers in the industry, have cut deals with Amazon recently. Winning the autonomy to set their own prices seemed to be beneficial for publishers and the industry, keeping that aspect of the publishing process out of Amazon’s hands, but instead it is hurting their sales and revenue.

“Publishers succeeded in preventing Amazon from lowballing prices, but ‘unfortunately, it may be that consumers aren’t happy with the higher prices,’ said Mike Shatzkin, chief executive of publishing consulting firm Idea Logical Co.”

Photo sources: Farrar, Straus & Giroux; Alfred A. Knopf; Hachette Book Group
Photo sources: Farrar, Straus & Giroux; Alfred A. Knopf; Hachette Book Group

In contrast, Amazon’s Kindle e-book sales and revenue have gone up and continue to do so in 2015 for their books not published by the “Big 5.”

The “Big 5,” who choose to sell books on Amazon via the Kindle bookstore, sell their titles about $5.86 more, about 118% more than all other e-books listed, according to Codex Group LLC.

“’Since book buyers expect the price of a Kindle e-book to be well under $9, once you get to over $10 consumers start to say, ‘Let me think about that,’ said Codex CEO Peter Hildick-Smith.”

Hachette priced James Patterson’s new e-book release at $9.99 in 2014, but his latest at $14.99. WSJ’s Trachtenberg reported that the company has seen a 24% drop in their digital book sales for the first half of this year. And things aren’t looking promising for companies with these raised prices on their e-books in comparison of those, which are significantly cheaper, set by Amazon.

Many publishers are claiming that this drop in e-book sales is not due to the Amazon deal that allows for higher pricing but a decline in fewer “hot” titles.

One publishing executive told the WSJ that the industry is a  “title driven business. If you have a good book, price isn’t an issue.”

It seems unclear and is too early to tell if this claim is true or that publishers do not want to admit that the deal cut with Amazon for the ability to set their own e-book prices was a flop rather than a success.

Will publishers need to change their game to halt major cuts in their sales and revenue or will e-book consumers eventually accept these higher prices in their desire to read and own those titles published by and sold on Amazon by Hachette, HarperCollins, Simon & Schuster and other big name companies?

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Kate Leboff

Kate Leboff works in marketing in Knoxville, TN, and works as a proofreader, book reviewer, and literacy volunteer teacher at a local organization called Friends of Literacy. She writes fiction, poetry, and nonfiction and has published numerous articles while working as a journalist and reporter. Kate holds a Bachelor of Arts in English (Creative Writing) with a minor in Digital Studies from the University of Mary Washington and is pursuing her Masters in Publishing at The George Washington University. She hopes to start her own trade book publishing company in Nashville, TN, in the near future.

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