Friday, May 22, 2009

So is $9.99 the eBook Price Point?

BooksOnBoard, the online eBook and Audio Book shop, has announced a massive discount on current New York Times Bestsellers, slashing prices from around $20-$30 to the price point of $9.99 and below. The price reduction is scheduled to last until Wednesday, May 27. So we see short term promotional price discounting similar to that done by Fictionwise, who some may say had one every weekend to celebrate everything and nothing. So what is the big deal?

Firstly $9.99 happens to be the price point chosen by Amazon for its ebooks and irrespective of whether they held it or not the perception sticks. So just like Apple did with the iTunes price point we now see others following with the $9.99 ebook price point.

Digital pricing may now no longer be established by the publisher or even the retailer but by the market. Once you have a recognised price point it is hard to drive consumers away from it. Look at the recent reaction when many raised concerns that they perceived Amazon was trying to raise the price from $9.99.

The question is not whether $9.99 is right or wrong but what is that impact on both the value chain and the author, publisher, aggregator, reseller etc? What is the knock on impact on the physical book model? Is the price point sustainable or merely a promotional price and how is that managed?

We have seen many readjustments in the ebook model such as the initial author rewards split being pegged back, with some advocating that they should now only receive a flat fee on digital.

Whenever we look at pricing there is that classic cause and effect implications that have to be thought through but in a market which has tens of thousands of authors, thousands of publishers, thousands of titles the point of aggregation often makes the decision and often based on their needs and their margins.

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