Sunday, April 05, 2009

eBook Pricing

A number of Amazon customers have started an informal boycott of digital books priced more than $9.99. It was Amazon who created the $9.99 price point that made sense to many, but not all Amazon ebook prices have stuck to the $9.99 point. Customers have now started a tag group, who are tagging all books on Amazon that are over the price point and looking for these to be boycotted.

It’s unclear if the informal movement is about ebook prices or Amazon’s price point breach and why they have picked on a retailer who is clearly trying to make a compelling offer and break the mould is even more puzzling.

Pricing of ebooks is at best questionable and is a complex issue and one the industry has to leave to individuals and market forces. Pricing the ebook on parity to the physical book may be logical to some but not always to consumers. It makes sense to authors who don’t want their royalties diluted. It makes sense to publishers who face uncertain digital revenue futures. However consumers see the same content in a different wrapper that doesn’t have the same level of user rights and have to buy the reading device. Some may argue therefore ebooks don’t have the same value.

As we reported last month, some publishers have adopted the policy of aligning the price to the current print copy. These may have a logical point with respect to a release strategy, but are potentially inviting a consumer backlash by changing the price overnight when the paperback is published. After all it will be the same content, the same format and even the same usage rights but the price will be less because it will now be competing with the paperback. Some argue the cost is currently high to fund the huge digital investments being made by publishers – an argument that in many markets doesn’t endear customer loyalty.

It’s disappointing that a time that the digital market appears to be gaining consumer, press and general market attention we have still to sort out the fundamental pricing strategy let alone create the volume of digital content itself. Some would suggest that the boycott should not be aimed at the resellers, who are not in full control of the price only their margin, but at the publishers who set the prices and terms.


Emilio said...

Publishers may not agree with the $9.99 price point for eBooks, but I believe that it will become the standard price with a few exceptions.

A perfect example is the book The Snowball by Alice Schroeder. The hard cover price is $35 (you can get it for $23.10 on Amazon). The Kindle price is $9.99.
I would not buy this book at even $23.10. I wouldn't hesitate purchasing the Kindle version.

While the content between the hard cover and the eBook is the same, the costs associated with each version is vastly different. It costs about $500 to prepare the book in all conceivable electronic versions and a minimal amount to store and deliver the eBook. The hard cover version is enormously expensive to print, store, and deliver. And we haven't even talked about the thousands of unsold copies and their associated costs.

There will always be a demand for both formats. Publishers who insist on pricing eBooks on par with the print version will be left in the dust.

Emilio Corsetti

Unknown said...

If this is done properly, the fact alone that publishers will be able to avoid distribution costs should guarantee not only a lower price for the consumer but a larger royalties share for the intellectual proprietors.

Anonymous said...

If Amazon created the $9.99 price point, how is it, then, that "publishers ... set the prices and terms"?