Or: Why I think Waterstones has lost the plot
Amazon has launched its UK Kindle store
Since buying my Sony PRS505, I’ve bought thirty seven books for it from Waterstones; now, I know there are other places out there, and that’s the great thing about ePub – you can (unless you’re using an iPad) buy your books from a range of stores. But Waterstones is the site that Sony pushes their customers towards, it’s a known name on the High Street and I suspect it’s one of the highest profile eBook sellers in the country.
Anyway, between May 2005 and Jun 2010, I’ve bought 37 books from Waterstones in ePub format, costing me £208.65. How much would it cost me to buy those on a Kindle, I wondered. So I popped along to Amazon’s UK Kindle store
Big savings, and a death wish
The headline figure: I could buy the same collection of books that I’ve bought, right now, from the UK Kindle store for £163.60. Now, the astute amongst you will see that that’s actually a saving of around £45 for shopping at Amazon, so how did I come up with the headline of this post, claiming a Kindle is a year of eBooks from Waterstones?
The price I quoted is what I spent, so the prices relate to how much a book cost at the time I bought it. What, I wondered, if I were starting out with eBooks, and wanted to buy everything from scratch, today?
You might think that, with the biggest name in the eBook business opening up shop in the UK, Waterstones would be striving to protect their business and, perhaps, being just a little bit competitive, wouldn’t you? I’d certainly do something if a big competitor was moving onto my turf.
But the thing I probably, almost certainly, wouldn’t do is put my prices up. Yet that seems to be what Waterstones has done. If I bought the same collection of books now, it would cost me £239.59, or thirty quid more than I’ve spent over the last year. In fact, it’s a bit worse than that; one of the books is no longer listed on the Waterstones site, so in all the other comparisons from here onwards, I’ll remove that book, and we’re now looking at a selection of just thirty six.
For those thirty six books, then, my original cost was £203.39. The price I’d pay to get them from Waterstones now has gone up by £36.20, to £239.59, which is about 18% more.
Meanwhile, those same thirty six books would cost me £158.97 on from Amazon, a saving of £80.62. Still not quite the cost of a Kindle, but I’ve not given up on paper books entirely yet, and probably still buy around a dozen or so a year from the Stoke Newington Bookshop. If those paper books were also replaced by electronic ones, I’m pretty confident that the saving from all my book buying in a year, by using Amazon rather than Waterstones, would amount – at the very least – to the cost of the WiFi edition of the UK Kindle.
Essentially, if you buy a lot of eBooks (say 40-50 a year) from Waterstones, even if you already have a Sony Reader, it’ll probably cost no more, and likely be cheaper, to switch to Amazon and stump up the cost of the new Kindle too.
What the hell are Waterstones playing at?
Buying elsewhere, and VAT
Of course, one of the things about ePub (except on iPad) is that you can buy from elsewhere, and there are other bookstores. The other High Street name that’s involved in selling eBooks in the UK right now is WH Smith, and so I did the same comparison on their website. The same selection of thirty six books would cost me £205.61 from WH Smith, which is a little more than I paid originally, but £33.98 cheaper than buying from Waterstones now. That still leaves Amazon about £47 cheaper, though.
One thing to note is that eBooks are subject to VAT. As far as I can tell – neither the online receipts nor the email versions from Waterstones list the VAT rate charged, which I’m pretty sure is against the regulations – Waterstones charges UK VAT. That means that all those books I bought in 2009 had VAT at 15%, while those I’ve bought this year have it at 17.5%; so have I been unfair in accusing Waterstones of a price hike?
I went back to the figures, and readjusted the price of all the books, as if there had been 17.5% VAT on them. That made the adjusted total for Waterstones £205.56, around £2 more. In other words, the change in VAT has had no significant impact on the prices. Even after allowing for the VAT increase, the price of the thirty six books I bought from Waterstones has gone up by £34.03 since I started buying them, in May 2009.
There are – and I intend to write something later in the week – many objections people have to the Kindle business model, or simply to the idea of a large foreign-owned company coming in and cleaning up the market.
But, frankly, when the UK book stores aren’t competing, and one of them seems to be actually putting up the prices of eBooks in the face of Amazon’s arrival, they deserve everything they get, and the public deserve much better service.
Note: some of the links in this article use my Amazon Associates id. Not that I’ve ever made any money from it, but I thought I should make that clear.
A very interesting article – and yes, I think Waterstones and WH Smiths need to change their sites radically.
What’s all this about iPads though? I use the iPad and iPhone for reading and buy most of my e-books in epub format. I also have the (free) Kindle for iPad app which means I can also buy Kindle books and read those.
As an author whose latest book has been published digitally, I welcome Amazon’s UK Kindle store with open arms and I do think/hope it will make UK stores realise they need to compete.
The issue with iPad and ePub is that, for reasons of their own (either a desire to control the market, or another aspect of their childish spat with Adobe), Apple’s version of ePub is not quite the same as everyone else.
The ePub format doesn’t say which type of Digital Rights Management should be used. There was a de-facto standard, which is the Adobe ADEPT system, used in Digital Editions, and supported by pretty much all the various readers like the Sony, Cooler, and many others, which use ePub. It’s also used by various libraries that lend in ePub format, and you can buy books from many online retailers.
However, although Apple uses ePub for their books in the iPad, they have decided to use their own DRM system. That means that, unless they allow other people to sell books using that system, the only place to buy content for iBooks on the iPad will be from Apple’s store (or from somewhere that doesn’t use DRM).
It also means that while you might have a collection of ePub books that you’ve bought from places like Waterstones, you won’t be able to read them on the iPad, because while it understands the format, it doesn’t understand the DRM. Nor could you buy a book from Apple’s store, and read it on a Sony Reader.
Of course, ePubs without any DRM can be moved freely, but I think it will be a long time before most publishers are happy to sell eBook without any protection.
There are work-arounds, some of which you can read about on the eBook magazine website, but it’s not exactly an ideal situation right now, and one that is, pretty much, entirely of Apple’s making
The reason books are cheaper for the Kindle is that Amazon has decided to suck up the difference between the wholesale price and the price they sell at in order to reduce the price of most books to the same level. Waterstones doesn’t have that money to spread around. Blaming them is like blaming other newspapers for not following Murdoch when he was reducing the price of The Times to 10p for a short while.
Certainly, it’s not wholly the fault of Waterstones, and the publishers do have a very large role to play in the pricing. Is it just that Amazon has more money to throw around, or are they getting a better deal from the publishers in the first place? And if they are, what does that say about how publishers view the UK booktrade?
As one of the biggest vendors of eBooks in the UK, though, you would have thought that Waterstones would have more leeway. I’m not necessarily expecting them to be the cheapest, but if Smiths can manage to sell these books for around £1 less, then I think the self-proclaimed “UK’s leading high street bookseller” might be able to do a little better.
Nigel,
regarding the iPad and ePub. I understand that this single format may not be wholly or properly supported on the iPad but your article gives the impression that there is no open market at all on the iPad.
I have:
iBooks
Stanza
Kindle
Kobo
and
eReader
all installed and all have their own on-line stores (apart from Stanza).
That’s not the impression I was trying to give at all – the point of the article was the pricing, rather than compatibility, and I just mentioned in passing that when it comes to ePub sales in the UK iPad is in a slightly different position, and can’t use the existing stores like Smiths and Waterstones, rather than a general point about iPad as a whole. I do intend to address the whole compatibility issue later, but didn’t really want to get sidetracked when the main point was about pricing.
Those are good questions Nigel.
It may be the UK’s biggest ebook retailer (for about another week?) but the ebook market is still tiny, so any discounts would be dependent on the relative power of the companies selling physical books – and indeed other things since the big six publishers are owned by multinational parent companies who sell lots of other things via these stores. And Amazon, more than any company, has shown itself willing to bring a nuke to a knife fight. (Also bear in mind Amazon sells *physical* books as loss-leaders, driving people towards the clothes and white goods and third-party sellers and so on that provide its profits).
Although HMV, Waterstones parent company, is doing ok, Waterstones itself has been doing poorly and they have replaced the management team in an attempt to turnaround. They probably have their hands full and other priorities for spending money. And the introduction of the ‘agency mode’ and other uncertainty means that they really don’t know how pricing is going to shake out or even, in the long-term, if Waterstones is going to survive or go the way of Borders.
Forget disparity between ebooks on different stores, how about the waterstones difference between printed paperback and ebook.
A £5.99 paperback, on sale for £2.99 or as an eBook for £14.39
I doubt that the £11.40 extra all goes to the author either.
I don’t think I really need to say anything other than I own a Sony eReader, but never use if because I cant afford the price hike to buy eBooks and end up getting the paperback instead.
Want eBooks to succeed? They need to be CHEAPER than printed books. (or at least the same!)
And the industry wonders why piracy is a problem! geez.
Pyrofer, one of the reasons eBooks are not lower than paperbacks is that they tend to come out at roughly the same time as hardbacks. The extra money publishers can get from people willining to pay more for first access (and a slightly prettier package) is incredibly important, as well as being a beautiful case study of how to sell the same thing to people willing to pay different prices. One price for ebooks is not a good idea, no matter what it is (yes, even if it’s 99p!), and it’s yet another wrong thing that Amazon has introduced. Lowering prices over time would be better, but that has been made difficult by Amazon itself.
(Can I also note in passing, one of the benefits of ebooks, that they need no physical storage, actually acts against reducing prices since you don’t need to sell them off at a a discount to make room for new stock. The Digital giveth and the Digital taketh away.)
Other than that, to the extent piracy is a problem it’s not because of prices, but fear among executives that it is is one thing that keeps the silly DRM. So shush. And I’m not sure why not all the difference going to the author makes it less justifiable. Publishers need to eat too.
The problem with the eBook version, of course, is that while you might get earlier access (though that’s not always the case), you certainly don’t get a prettier package. Very often (around half of the books I have in my library) the cover art isn’t even included. Harper Collins seem pretty bad at that, with most of their eBooks in my collection having a blue HC logo down the side of the front page, and then just plain text for the title and author.
What I’d really like to see (and mentioned in my other posting on eBooks) is some more innovative pricing. For example, I’d happily pay a couple of quid above RRP for a print edition, if it included a voucher entitling me to the eBook as well – so when I’m travelling, I can take the books with me, but not be weighed down, or have them on my computer in searchable form, as well as the physical object.
On the extra cost and where it goes, I think there is a general feeling – and it applies to music as well – that despite the much touted benefits of digital technology, somehow the actual content creators never seem to be much better off, and the ‘middle men’ are raking it in.
Of course, they might not be making as much as people imagine, but there certainly is a perception – and the actions of big media companies don’t often do anything to dispell it – that for all the talk of protecting intellectual property and rewarding creators, it’s actually the big media companies and their shareholders who get most of the rewards. That’s reinforced by the way that, in the area where I write (periodicals), the companies grab more rights, over wider areas, and seldom actually pay any more to the creative people who are doing the original work.
The two books (about computing stuff, so hardly mass market) that I wrote were long before electronic publishing; but a friend who has a book out tells me that he does get more royalties on the eBook edition, by about 5% – but the cost of the eBook, compared to the paperback, does suggest that the publishers are getting rather more out of that edition than he is.
Finally – I’m supposed to be at work – I think it’s often forgotten that the vast majority of authors don’t do it full time, and don’t make millions (or even thousands) out of it; the big names like JK Rowling or Ian Rankin might be able to exist full time as authors, but most of them don’t, and while no one has an absolute right to be able to live off the proceeds of their writing, I’m sure many do feel that the creators should be a little more fairly remunerated than at times is the case.
I agree that selling ebooks with print is one way forward, and I’d like to see more of that (in fact, my job mostly involves creating electonic adjuncts for printed educational material). There’s also opportunity for extras a la DVDs. However, I think we need to bear in mind that it’s not always trivially cheap to produce, as opposed to distribute, an ebook version and/or extras, and that there are rights issues – for example, if authors get a larger royalty for the digital rights, what does that mean if the digital version is sold as a print extra not as a product in itself?
The thing about creators receiving more – nobody really disagrees, in public at least, but I don’t think it really has anything to do with what the ideal prices for ebooks are. If you want to support an author, buy another copy (print, of course) and give it to a friend or library, or buy another book by them – higher sales make it more likely they will get more and better deals. Saying I want to pay £5 for an ebook (what I think they will level out at, with time delays from hardback/premium) but I will pay £7 if I know 90% of that goes to the author… it’s getting into another area entirely.
All very well KIndle/amazon selling thier books cheaper than anyone else at the moment, Is this just a come on like banks with attractive rates for the first year?