Amazon and Wal-Mart are fighting a book-price war. Walmart cut the price of their new hardcovers (blockbusters by Stephen King, John Grisham etc.) to $10. Amazon matched them. Wal-Mart dropped theirs to $9. Amazon again matched and announced it will offer same-day delivery in select cities (New York, Philadelphia, Boston, Baltimore, Las Vegas, Seattle and Washington). Wow, readers might be thinking, this is awesome–cheap books! Well, yes. And no. If this continues, the ones who will suffer are the writers and, as a result (writers not writing = fewer good books) you, the reader.
Richard Curtis explains it all here.
Typically, publishing contracts reduce author royalties when the discount offered to retailers reaches a certain threshhold. I’m looking at some contracts with big houses that state that when the discount reaches 56%, the author’s royalty is cut from one based on list price to one based on net receipts. For example, on a $25 book that means your 10% royalty drops from $2.50 (10% of the list price) to $1.10 (10% of the $11.00 your publisher actually collects from the retailer).
So, authors, this is not merely a spectator sport. Some of you are gonna get killed.
This doesn’t currently affect me; I’m not a blockbuster seller. (Wow, never thought there’d come a day when I was pleased about that.)
I’m not saying, Don’t buy these cheap books! For one, it would be pointless–you’d do it anyway, right? I know I would. (Actually, I’m eyeing the Stephen King book as a present for K; that price, wow, it can’t be beat.) I’m simply saying that there’s no such thing as a free lunch. Models will change, whole niches in the publishing ecosystem will soon be laid waste, things will get worse before they get better. They will get better. It’s actually pretty exciting (as I’ve said before). But change is hard and price wars are wasteful.
I can’t fix this, so for now I’ll ignore it. I’ll go write some more Hild. I wonder what kind of publishing world she will debut into…
Nicola Griffith 
Talk about alienated labor! As usual, the workers who sweat blood to produce what is useful, beautiful and necessary to life, get screwed. It's not like it's so easy to write a book. Most people can't, so we should pay accordingly.
Amazon at least has somewhat of a teneble model– I mean, dodging costs by not having retail locations is one thing. Big box buyers, on the other hand, I'm not so down with. Running that line, pushing the envelope, exploiting the post-industrial subsidies & chewing up the environment to boot? Not so classy.
Then again, I worked for the indies, & now work with the indies, so I am slightly biased towards the local mom & pop stores. Call me crazy. Perks of living in a city– we still have stores that aren't Wallmart here.
Barbara, I don't know what the 'right price' for a book is. That's one of the things that will come out in the wash (as we say in Yorkshire). Do know that current models are not sustainable.
Mordicai, we don't have a Wal-Mart anywhere near us, either. Never been in one. I think my brain would melt at the sheer input. (I can hardly bear walking into a Borders or B&N, never mind a serious Behemoth.)
Actually, I think this may level the playing field. Many authors might just quit if they can't make any money. It might slow down the things like the Patterson Book machine and allow writers that don't do it for the money to get more attention!
Real writers write, no matter what. They just don't write as much when they have to pay the bills with two other jobs.
Besides, I know a lot of people who like Patterson's books. They'd be unhappy if he (and his cohorts) pulled out of the game.
Was really hoping that the stores were eating the loss and the price war wouldn't have much of an impact on the authors. Bummer.
Honestly, I don't see it lasting. Price wars like this are generally fast and furious and then they blow over.
But while they last, it can be interesting. I got an advance copy of the new Stephen King, and if you're getting it for $9, then at least by weight it's a seriously good deal!
Aren't lower prices going to increase sales? In the math in the Curtis quote above everyone seems to be assuming that the author makes less than half as much. I'd assume people would buy a lot more books if they are that cheap.
I personally would buy more and especially writers I don't have on my current hardback purchase list. In book stores I usuallly glance at the discount table and pick up all kinds of books marked down to $5 that I would never buy at list price.
john, lower prices do improve sales–but enough to offset the reduced list price? I simply don't know.
These books, certainly for Wal-Mart, are loss leaders. Just like the 69 cent bottle of Coca-caola that a supermarket advertises to get you into a story. They may well be taking a loss on these 10 books as a way to get people to check out their online story as a place to shop for books in the future.
A common retail tactic, that the book industry seems to be going crazy over. Which is, of course, from Wal-marts point of view, all the better!
Personally, I took advantage of it just as I would any other great sale.
This is part of why I buy from indy stores whenever and wherever I can. Fortunately, I live in a city where that's still possible.
I heard this podcast this morning. It's only moderately interesting overall, but there was one point in there seems pertinent here even thought it's about ebooks.
Susan Bratton interviews Tim O'Reilly. He talks about one of their recent books – “The iPhone Missing Manual.” He said that the hard copy sells for about $20. They sold an iPhone app of the book at an intro price of $4.99. They sold lots of them. Then they incresased the price to $9.99. They sold 1/4 as many books. They made more money at the lower price, so they dropped the price back down. And he doesn't think that it diluted print sales. That's about 5:30 in if you're interested.
Doesn't seem to be any way to know what will work best without testing it.
Forgot the link.