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Summary:

Just a few days after a federal judge approved the Department of Justice’s settlement with HarperCollins, Hachette and Simon & Schuster, Amazon and other digital bookstores have begun discounting HarperCollins ebooks, revealing that the publisher quickly entered new contracts.

Amazon Package
photo: Flickr / William Christiansen

Just four days after a federal judge approved the Department of Justice’s settlement with HarperCollins, Hachette and Simon & Schuster for allegedly colluding with Apple to fix ebook prices, Amazon, Barnes & Noble, Google and other ebook retailers have already begun discounting HarperCollins ebooks. For now it appears that Hachette and Simon & Schuster ebooks are not being discounted yet.

“We are happy to again be lowering prices on a broad assortment of HarperCollins titles,” an Amazon spokeswoman told me.

“HarperCollins has reached agreements with our e-retailers that are consistent with the final judgment,” a HarperCollins spokeswoman told me. “Dynamic pricing and experimentation will continue to be a priority for us as we move forward.”

Jane Litte, who runs the romance blog Dear Author, first discovered the discounts that Amazon and HarperCollins have confirmed:

My advanced search for HarperCollins Kindle books turns up many more discounted titles. Eloisa James’ romance The Ugly Duchess, which is #9 on this week’s New York Times bestseller list, is $6.64 in the Kindle Store, for example, and $7.99 (its list price) on Barnes & Noble Nook. Other titles are only discounted very slightly: Pittacus Lore’s The Rise of Nine is $9.59 in the Kindle Store, for example, compared to its $9.99 ebook list price at B&N. Update: Discounted prices on HarperCollins titles are now appearing at other retailers, like Barnes & Noble and Kobo, as well.

In addition, some HarperCollins titles are already appearing in the Kindle Owners’ Lending Library, which lets Amazon Prime members read them for free. For example, some HarperCollins books by Stephanie Bond — an author who had previously made her self-published ebook “Our Husband” available through the KOLL — are now available in the lending libraryUpdate: Though Amazon lists HarperCollins as the publisher on the Bond titles in the KOLL, the books’ copyright pages suggest that the rights actually reverted to Bond and that she’s offering them in the KOLL herself.

As I reported earlier today, the settlement gives HarperCollins, Hachette and Simon & Schuster seven days to terminate their contracts with Apple, and as of this afternoon HarperCollins’s ebooks seem to still be appearing in Apple’s iBookstore under their list prices.

According to the settlement, non-Apple retailers can terminate their contracts with the settling publishers with thirty days’ notice, but I had not expected any  changes to take place nearly this fast. HarperCollins’ quick price changes suggest either that HarperCollins either began these contract negotiations with retailers before the settlement was approved or immediately afterwards. It’s also clear that neither side adhered to a thirty-day waiting period.

Digital bookstore Books on Board sent out an email this afternoon (thanks again, Jane Litte) with an announcement that “BooksOnBoard welcomes back Discounts for Harper Collins eBook titles! This week only! 24% Off all HarperCollins eBooks!”

  1. Of course…authors of those books will suffer. They receive only a small percentage of the amount paid to the Publisher. Amazon will next destroy newly non-competitive independent bookstores, then every other producer of e-book-readers. ( They’ll give away theirs for a short-term loss and take over the entire e-book world). The DOJ has assured the newest monopoly and a new class of paupers. Thanks!

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    1. If this is true, then why sell through Amazon at all? Publishers can sell directly in format than be used on a Kindle or any order e-reading device.

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      1. Amazon has many means with which to turn the screws on non-cooperative vendors. The famous example was de-listing Macmillian titles in 2010 when they didn’t like the introduction of the agency plan. They can also fudge what titles surface for searches (on their site) as well as what editions and formats first appear — essentially pushing a vendor’s list to the back of the bus. Amazon went after nearly all vendors at the end of 2011 with new demands for “co-operative advertising” funds concessions, and IPG was one vendor that balked. They stopped selling IPG’s ebooks. Right now, with Amazon’s market size and reach, it could be financial suicide not to sell through them.

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      2. Simon says it: anything a writer might lose in percent per unit is likely more than made up by the additional units sold through Amazon, as compared with other distributors. Unit price versus volume of sales, that’s biz.

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    2. Even if that’s true, it’s irrelevant to the collusion case. Publishers can’t collude to raise prices, even if the net effect would be beneficial in some ways.

      If Amazon is practicing predatory pricing, that’s a different lawsuit, and much harder to win.

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    3. Actually, Amazon is probably obligated to still pay the publisher against the title’s digital list price. Let’s say that’s $20 and Amazon’s discount with the publisher is 50% off but Amazon wants to sell the ebook to consumers for $5. Amazon will therefore pay the publisher $10 for every copy of the ebook it sells, despite the fact that they’re only taking in $5. Yes, Amazon loses money on every sale but the DOJ says that’s OK as long as Amazon doesn’t lose money across that publisher’s entire list. In the end though, the publisher gets the full discounted price off digital list and passes along the appropriate royalty off that list price to the author. This makes the consumer happy because they’re getting a terrific deal. It probably concerns the publisher though because (a) it can cheapen the publisher’s product and (b) the retailer with the deepest pockets ultimately wins and knocks the competition out of business.

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      1. And what is truly stunning, given that they’ve just introduced new Kindle product at prices that suggest they’re subsidizing the sales of the devices as well as the content, is why the shareholders don’t revolt against Amazon management and demand some profit. The endgame, as many publisher/vendors feared all along, seems likely to be that Amazon will demand the content subsidy be extracted from the producer surplus in the near future.

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      2. “The DOJ says that’s OK as long as Amazon doesn’t lose money across that publisher’s entire list.”

        The DOJ says that’s OK period. The requirement that money must be made across the entire list was optional at the publisher’s discretion (read: if the publisher can somehow get the retailers to agree to it)

        Is there any word on if Harper Collins actually implemented this anywhere? It appears all ebookstores are discounting HC titles now, even Apple (actually, Apple has been offering some of the steepest discounts).

        My guess going in was that if a publisher tried to bargain for this sort of program, Barnes and Noble and Kobo would probably be the only takers- Apple, Amazon, and Google want to use their cash stockpiles- and the publisher would need to offer B&N and Kobo something in return for participating.

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      3. To Peter: I haven’t seen HarperCollins’ retailer contracts (not surprisingly), so I don’t know if they were able to get retailers agree to these types of agreements (here’s the exact language from the settlement: “a commitment from an e-book retailer that a retailer’s aggregate expenditure on discounts and promotions of the Settling Defendant’s ebooks will not exceed the retailer’s aggregate commission under an agency agreement in which the publisher sets the ebook price and the retailer is compensated through a commission”). If they were able to get that included, though, retailers could discount some titles a lot and not others.

        We don’t really know how onerous/limiting that would be for a retailer. We have little-to-no data on how it would actually work; it’s just so early. I’m not sure though that it would be a major concession if a retailer is primarily interested in discounting new frontlist titles.

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      4. David Thomas,

        Many growth companies show little short term profit, as they invest in infrastructure for growth or use tight margins to build their customer base.

        And the endgame may well be to renegotiate more favorable deals with publishers, but the middle game currently appears to be to encourage authors to disintermediate and self-publish their books directly to Amazon (while retaining copyright, and the right to also offer their books through other sellers). There appear to be a number of authors who are quite successful with this strategy, mostly previous unknowns.

        Perhaps this will ultimately prove terrible for authors, but it’s also possible that it will prove to be just fine for authors and bad merely for publishers.

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    4. Not true. The publisher gets a fixed price no matter what Amazon sets their price as. If they are to receive $3 per copy sold and Amazon sells it for $.99, the publisher still gets $3.

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      1. Yes, that’s right, the publisher gets the same amount of money even if Amazon is taking a loss on the book. However the amount of money that the publisher gets differs based on whether they have an agency or a wholesale contract with Amazon.

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    5. What a load.

      As though the old publishing model in which the publisher retained all the rights and gave a pittance to the author was really in the author’s interest.

      This about sums up the silly notion that the traditional publishers are the author’s natural friend.

      http://libertarianstandard.com/2012/04/12/ebook-price-fixing-and-bad-journalism/

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  2. As an independent author [makes the sign of the cross] this is all very interesting, but I don’t much care one way or the other. Getting a publisher has always been difficult, and the outcome is not always related to the quality of the book in question. The publishing world is tilting on its axis, and the “publishers” want to tilt it back. Good luck with that…

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  3. The general problem here is the same with music and movies, and all types of content that can now be transferred digitally and consumed digitally, and for all those the distribution era is ending, it doesn’t make sense anymore, an Author can write a book, and publish directly through Amazon, and if he puts a price even of $3 he can earn as much as 66% or $2 for each copy and that’s a lot more than they earn now, the cost for publishing directly to digital and digital distribution is almost 0. This already happens for software mobile Apps.

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    1. I don’t see the new access to the demand market as a general problem at all, and certainly not germane to the issue of Amazon v. Publishers. The fact that new self-publishing opportunities have the potential to be more effective than in the past doesn’t make publishers irrelevant. The issue here isn’t even legality of the agency plan that publisher’s put in place — DOJ doesn’t have a problem with it. The issue is weather the digital book is the same thing as the physical book — and I would argue that it isn’t. And that fact makes it entirely different than music and movies, which have a long history of being copied and reproduced with increasing efficiency and was dependent on a device to use. Those conditions are entirely new to the book and the agency plan is an attempt to address that issue.

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      1. Also, I’m pretty sure music and movies, when they are distributed digitally are distributed on the agency model.

        The fact that ebook “retailers” incur no marginal costs is the whole point of the agency model. For price competition to be sustainable and meaningful it must also be accompanied by competition to lower costs. When there are no costs there can be no cost competition.

        But, because it’s unreasonable to expect people to work for free, e-retailers instead receive a commission.

        But, logic has lost.

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  4. Thank goodness for this. It’s about time something brought about the end of the nonsense that was ebooks actually being MORE expensive than their paperback equivalents. For instance, I have on my Kindle wishlist Neal Stephenson’s Quicksilver. Well, when I added it to my list, it was $9.99 vs. the mass market paperback of $7.99. A 25% premium for a non-physical, 9 year old book? Come on. Now, Amazon has it at $7.59. A slight discount (5%) but, from a consumer perspective, a more appropriate pricing strategy.

    The argument around Amazon becoming a monopoly is born by those who cling hopelessly to DRM (guess what? it doesn’t work!). For those people, I’d encourage them follow the Tor model and go DRM free. Then you can sell from wherever you like (on the publisher’s site, the author’s, fans’) onto any device the consumer has. Adapt or die.

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  5. Well, this discussion is on the mark but if you are an independent writer who has had 4 books published by mainstream publishers, and with the passing of time have lost favorite publishers and agents, there is a lot to be said for Amazon. I brought a book out with them 2 years ago – and I’m bringing one out now. We are in changing times. I won’t tell you the names because it would be advertising. But you can find out easily enough. Pat Silver-Lasky

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  6. I think that e book reading will become more popular in coming years because the way to get knowledge or fun by reading book is more available that way. Im from Czech Republic and around is huge development of e reading and especially Amazon Kindle e books. You can find these books in public libraries and I do believe schools will buy E readers as accessories soon.

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