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Hachette feels ebook pricing could kill hardbacks,
August 31, 2009 | 7:18 am
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By Paul Biba
So says an article in the Financial Times (registration required).
Hardback books could be killed off if Amazon’s e-books and Google’s digital library force publishers to slash prices, Arnaud Nourry, chief executive of French publishing group Hachette, has warned.
Mr Nourry said unilateral pricing by Google, Amazon and other e-book retailers such as Barnes & Noble could destroy publishers’ profits.
He said publishers were “very hostile” to Amazon’s pricing strategy – over which the online retailer failed to consult publishers – to charge $9.99 for all its e-books in the US. He also pointed to plans by Google to put millions of out-of-copyright books online for public use.
On the other hand, the same article states that some publishers feel that the lower production cost of ebooks can end up resulting in higher profits even if lower prices for print books result. No unanimity yet. However, Hachette is the world’s second largest publisher of books, by sales, so we have to take Nourry seriously.
Note: TeleRead has covered this issue in the past, most recently here.
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Comments:
Publishers and authors should be worried. Amazon is playing the game in order to win huge profits for itself at the expense of those who actually create its content. They’ve already done it with computer games. They acquired one of the largest independent portals, slashed prices unilaterally, and now independent game developers can barely scrape by.
What should authors expect? I imagine Amazon will do a three-tiered system. It will still sell physical books, but charge a premium for them. It will begin to really hawk ebooks and its proprietary e-reader and force those prices down, causing the majority of casual readers to make the switch.
And it will make a killing off of all the independents and self-published authors that publish on the Kindle. Amazon already takes an outrageous cut of the profits on these sales. I wouldn’t be surprised if Amazon ups that margin even more, and makes unilateral decisions to sell those books at bargain-basement prices, as well. (Think less than $5.00 – and the author doesn’t have a choice except to pull his book.)
The result? The public will love it – super cheap content! But authors who work “within the system” are going to find it even harder to make any money at writing. Face it, most authors already earn almost nothing. Amazon is going to find a ton of mediocre writers to fill its shelves for a pittance.
And I predict a number of publishing houses are going to fold within the next few years.
I also predict that five to ten years from now we’re going to see a backlash, and some publishers will profit from selling high-quality books at high prices.
Considering the reactions of many people who read to ebooks and ebook readers, and the ease of use, low cost entry, and resale opportunity, of paper books, I think the demise of publishers as a result of the “popularity” of ebooks (a pittance in the overall publishing world) is greatly over-rated. Publishers have yet to prove that an ebook sale reduces the sale of paper books. In fact, the limited studies done to date suggest the opposite. Publishers should be worried, not because ebooks are coming in greater numbers, but because their inability to embrace this new technology and create the rules of the market place has created an opportunity for Amazon and others to call the shots.
I’ve noticed that Baen Books, for example, thinks that giving sample e-books away free has actually increased their sales of hardbacks. Not only that, they offer cheap e-book bundles of all their published hardbacks. I haven’t heard that Baen was going out of business any time soon.
That is pretty funny.
He is tacitly admitting that he thinks that hardbacks are most likely overpriced and not valued by people at all, so easily replaceable.
How do such twits get to be senior executives?