2.05.2010

Jeff the Great Lowers E-Book Prices


At Christmas I became the proud owner of an Amazon Kindle. I am an avid reader so I was excited to finally own an e-reader. I've found myself reading more than ever before. I buy a new book the minute I finish the last.

I am in love with my Kindle.

Apple recently announced their tablet computer, the iPad. With the iPad, Apple will launch an e-book store that iPad users can use to wirelessly purchase books....similar to how I currently buy books on my Kindle.

Amazon charges $9.99 for most e-books. Publishers don't like it but Amazon is such a powerhouse in both print and digital sales, they have gone along with the pricing. Apple says that they will either allow for higher pricing or let the publishers decide pricing on their own (honestly, I am not sure which of the two). Either way, publishers have come out saying that $15 is their preferred price for most popular books. Fifty percent or $5 more than what Amazon charges. Publishers are using the Apple announcement as leverage against Amazon to raise prices.

I believe that publishers are wrong and consumers will not pay $15 for digital books. Increased competition typically leads to lower prices, but in this case publishers want to use more competition to deliver higher prices to consumers.

You'll notice is that the best seller list for the Amazon Kindle includes many free books. As I write, the #2 best selling Kindle book is the free, public domain version of The Adventures of Sherlock Holmes. The 4th best selling Kindle book is a 25 cent book on how to use a Kindle. Numbers 6 and 12, more freebies. In fact, the top 10 list includes only 1 book in the $9 range. The rest are free, $8, $5 or less.

When looking at the current best selling print books, we find more evidence showing that a $15 pricing plan wont work. As I write, the current #1 best selling print books is Food Rules: An Eater's Manual for $5. The Kindle version is also $5, where it is ranked 7th. The #2 best selling print book is $9.56 (Kindle version for $8.55). In fact, of the top 15 selling print books, not a single one sells for $15 or higher. Why would e-book buyers pay $15 for a less-tangible version of a book they could buy a print version for less and retain the ability to keep, lend or re-sell?

The Barnes and Noble e-book store for their reader, the Nook, is even more telling. The best selling e-book at Barnes and Noble is Dear John for only $4.39. Number 2, $4.99. Just like Amazon, most of their best selling e-books are well under $9.99, not to mention the $15 that major publishers say they want to charge.

So how is it that we get more competition in both hardware and online stores but the publishers expect us to pay less? Don't expect me to start spending more money than I would spend purchasing a physical book. If that's the case, my Kindle will become a newspaper reader, blog reader and free book reader. I'll go back to reading books in print.

3 comments:

Anonymous said...

"Hayden the terrible" will always prefer print media. Hayden the terrible does not have to worry about dropping a book. he also does not worry about losing battery power with a book. Reading a book does not hurt his eyes. He can easily lend my book without fear of copyright or piracy laws. He can donate his old books to the public library.

Also, the cost should be significantly lower for an e-version due to the lower cost of manufacturing. He is sure print companies are not thrilled with the move to electronic versions. This is similar to newspapers. While online content is freely available "hayden the terrible" still reads the print newspaper on a daily basis.

Perfect markets will arrive at equilibrium.

Jack O'Bannon said...

I'm not a big fan of Kindle...it hurts my eyes. Ahh the painn

Steve Butabi said...

Yeah, I am not a big fan of the $9.99 E-BOOK kindle is offering.

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