Do Retailers Benefit Materially From Ebook Discounting?

Prices for some of the best-selling ebooks are falling – and fast. In the past several months, the average price for a top-25 best-selling ebook has dropped by about $3 – to $8.23 from $11.37.

The culprit? Retailer discounting of titles that they were previously unable to discount due to contracts with so-called “agency” publishers like Hachette and HarperCollins. As soon as they got the chance, retailers like Amazon and Barnes & Noble started discounting titles from those publishers.

While it may be good for readers and it doesn’t really hurt publishers materially in the short term (they get the same amount every time an ebook is sold, regardless at what price), what about the retailers themselves.

It’s been suggested (by us), that sometimes discounting doesn’t result in a lift in sales numbers that would equal the same revenue if the ebook had not been discounted. Plus, the discounting comes at the expense of the retailer (essentially, they pay). So, what we’re seeing in the case of many discounted books is a migration of money from retailers to readers, who save money on each ebook bought.

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