The Great Ebook War of 2010
A GREAT BATTLE is waging between Amazon.com, arguably the world’s most powerful book retailer, and the major publishing houses in the United States. And it revolves around ebooks and their prices. Although ebooks are experiencing exponential growth, they still represent a tiny minority of books sold in the US. But this war is not about the present. It is about the future. E-ink devices such as Sony’s Reader have been around for quite some time, but the emergence within the last few years of three new players have upped the stakes: Amazon’s Kindle, Barnes and Noble’s Nook and, most recently, Apple’s iPad are all aimed not just at the current crop of ereaders, but at those yet to be converted to digital publishing.
Amazon's Kindle
The first major skirmish in this ongoing battle to define the future of digital publishing occurred in the end of January when Amazon removed the buy button from all MacMillan books (including the TOR and St. Martins imprints) in retaliation for MacMillan’s refusal to allow a $9.99 price ceiling for their digital titles. The collateral damage here wasn’t restricted to sales of digital titles, authors or publishers though. With Amazon’s decision to punish MacMillan by removing the Buy buttons from the publisher’s PRINT titles, book people everywhere were affected, including those who prefer print and had never seen (or perhaps even heard of) a digital ebook.
Apart from Amazon’s vested interest in maintaining low ebook prices to promote the sales of their Kindle reading device, there is another group anxious to avoid price increases: the extremely loyal set of readers who are already fully or mostly digital readers. Those readers are accustomed to a certain price point for their books. They expect, due to the various restrictions on the content, to pay significantly less for an ebook compared to a print version—especially considering the cost of printing individual, physical books is eliminated. Per unit production costs are minimal and, they feel, should justify lower prices.
These readers are the ones traditional publishers risk alienating by raising digital prices. Most will forgo buying an ebook with a high price and choose one with a lower price instead. They do not have the same level of brand or author loyalty that would “force” them to pay the higher prices. And, if they choose not to buy digital, they certainly won’t be buying print.
Apple's iPad
Amazon and MacMillan eventually worked things out—with MacMillan winning this round, deciding what prices to charge and having the buy button restored on Amazon’s site. But who really lost? Readers. Both print and digital. Print because this dust up affected their ability to buy the books they wanted from the site they preferred. Digital, because MacMillan is notoriously anti-ebook. The company is convinced that digital books cannibalize hardcover sales—despite evidence to the contrary that suggests ereaders are not hardcover readers at all. Which means they will continue to have high ebook prices that often exceed the price of their print copies. And because this set a precedent that will be followed by other publishers when their contracts with Amazon expire. With the iPad’s official release next week, the stakes have been raised on the ebook pricing game. Apple changed the way we purchase music and could change the way we buy books as well. One thing is certain: the ebook pricing wars have just begun.
Amber McMichael is an online bookseller and reviewer. You can find her blog at http://buriedbybooks.blogspot.com
Really well written. You should write more about this.
Thanks for the nice post.
Come on, dude. These are facts and proof?