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Do e-reader price decreases matter in face of e-book price increases?
July 26, 2010 | 8:15 am
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By Chris Meadows
On our sister blog Gadgetell, Sue Walsh wonders when e-readers will hit $99, (inspired by a PC World article also so wondering). But more importantly, she also has some angry words for the publishers who fomented the agency price model, which raised prices from Kindle’s originally-promised $9.99 per e-book to $12.99 or more.
That leads me to wonder, what good are falling e-reader prices when the publishers are determined to jack up the price of ebooks? I will never understand why they hate ebooks so much. Everyone I know who has an e-reader says they actually read MORE books since getting it. Sales of Kindle books outdid sales of hardcovers on Amazon. Overall sales of ebooks have skyrocketed while sales of traditional books have shown much less growth. Yet publishers are still doing everything they can to crush e-books.
But on the bright side, Walsh notes, this is also leading to opportunities for independent and self-publishing authors, as they are able to draw attention by pricing their own e-books considerably below the $12.99 level. Their books gain exposure from listings on Amazon that they could never have hoped for alone.
The publishing industry is going through considerable change and turbulence, what with the pricing hassles on one side, and agents deciding to publish e-book backlists directly through Amazon on another. Things look pretty rough right now. Hopefully, over time, the market will settle down, publishers will find an equilibrium price point for their books that pleases themselves and consumers alike. We’ll just have to wait and see.
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Thank you, publishers, for opening the door to me and thousands of other authors who believe in giving our readers a fair price and a shared experience.
Scott Nicholson
http://www.hauntedcomputer.com
Did Amazon ever promise $9.99 books in perpetuity? I always thought it was ONLY NYT bestsellers, and was meant to be an introductory price.
I am rather surprised that Amazon would raise prices, in light of Macmillan’s CEO revealing recently that their eBooks priced below $10 were outselling every other variety, including those from the ‘best-sellers’ list.
It does not seem logical to raise prices in a bad economy.
There’s one itsy-bitsy problem with the premise of the question posed: ebook prices have *not* gone up universally.
The Price-fix five don’t make up the entire publishing universe. Even before they hatched their scheme they only controlled a fraction of the market; now that they have implemented it, they control a *smaller* and shrinking share.
So yes, dropping ebook reader prices matter *a lot* because they bring in new readers to the ebook environment. And these readers are, in fact, more price-sensitive than the early adopters (Otherwise, *they* woud be early adopters.
)
With more price-sensitive buyers in the market, we’ll see increased sales of the properly-priced content, resulting in even lower market share for the Price-Fix Five.
By eliminating ebook discounting and fixing retail margins on *their* ebooks at a hefty 30%, they are in effect giving retailers “extra” money to play with, which B&N and Amazon are using to make up for lower hardware margins; in effect subsidizing their hardware with Agency-Priced content. These discounted readers are then bringing in buyers more likely to buy *other* publishers’ content. (Lovely, isn’t it?)
Those “wonderful” BPHs are, in effect, enabling the evolution of a retail environment best suited to supporting their competition.
Let us take a moment to salute these clueless execs for (hopefully) we’ll not see their like again.
Under the Agency Model, the publishers are the ones who set the prices, and Amazon doesn’t have any choice but to go along with them. It’s not Amazon that’s raising the prices, it’s the publishers.
It’s *some* publishers.
The ones who know what they’re doing aren’t raising prices and getting the extra traffic from the price-sensitive consumers.
It’s no different than any other market.