Random House Raises eBook Wholesale Prices Significantly

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Random House announced their library ebook pricing, effective as of March 1, which will dampen some of the enthusiasm for the house's commitment to the "unrestricted and perpetual availability of our complete frontlist and backlist of Random House, Inc." in ebook form. The new prices, which librarians tell The Digital Shift represent up to a tripling, are calibrated to "bring our titles in price-point symmetry with our Books on Tape audio book downloads for library lending. These long have carried a considerably higher purchase price point than our digital audio books purchased for individual consumption." The new price structure for library wholesalers is:

New hardcovers, "for the most part" are $65 to $85.
Titles available for several months, or generally timed to paperback release, move to a range of $25 to $50.
New children's hardcovers are $35 to $85.
Older children's titles and children's paperbacks are $25 to $45.

eBooks were already sold to wholesalers at prices close to the print retail price. A library ebook sale of an expensive hardcover like Robert Massie's Catherine the Great, for example, now wholesales for $105--which is actually 10 times what Random House receives for the individual consumer sale of the same ebook, agency-priced at $14.99, and yielding them $10.50. A lower-priced harcover, like Anne Rice's THE WOLF GIFT, yields a library ebook wholesale receipt that is more like 8.5 times the yield of a single consumer ebook sale.

Random House says their "new library e-pricing reflects the high value placed on perpetuity of lending and simultaneity of availability for our titles. Understandably, every library will have its own perspective on this topic, and we are prepared to listen, learn, and adapt as appropriate." They say elsewhere, "We believe that pricing to libraries must account for the higher value of this institutional model, which permits e-books to be repeatedly circulated without limitation. The library e-book and the lending privileges it allows enables many more readers to enjoy that copy than a typical consumer copy. Therefore, Random House believes it has greater value, and should be priced accordingly."

Significantly, the first paragraph of their statement is a request for better data about library ebook lending: "We are requesting data that libraries can share about their patrons' borrowing patterns that over time will better enable us to establish mutually workable pricing levels that will best serve the overall e-book ecosystem." For now, the company says it has "far less definitive, encompassing circulation data than the sell-through information we use to determine our retail pricing for e-titles." The full memo is reproduced at The Digital Shift.