The good times never last. According to Sony, tomorrow publishers are taking the reigns on e-book pricing, enacting a dramatic paradigm shift from the previous market model of retailers setting the prices.
What does this mean? E-books are going to start to cost more, and there will be wider price discrepancies between different titles. Expect new releases and best sellers to see the largest price increases.
Amazon, who for some time has enjoyed a relatively comfortable position at the head of the e-book market has been forcefully trying to keep e-book prices around the ten-dollar price point for some time, against constant pressure from publishers looking for higher sticker levels. Amazon recently surrendered to Macmillan’s demands for pricing flexibility; this is a further abdication.
The iPad Effect
Why is this happening? It’s not because Sony has a few e-book readers on the market. Amazon, for the moment, has a gigantic market share lead on everyone. In effect, they are the only game in town. That was of course true until the iPad was announced.
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You could almost feel publishers grinning during Job’s presentation of the device, with its integrated iBooks application for using e-books. Given how many iPads Apple is expected to sell, it will become in quick order not just the number two e-book platform, but a serious contender for the crown that the Kindle currently wears.
Apple has made it plain that it wants publishers to set their own prices for books. Apple gets its usual 30% cut, so the higher the price the more Apple can make off of the deal.
New Pricing Rollout
Expect to see new prices coming out across Amazon in the next few days. Given that Simon & Schuster, HarperCollins and Macmillan, are now to be out and about setting their own prices, also expect that prices will be jumpy over the next few months as new schemes are enacted to find sweet spots in pricing.
Thinking more broadly, this is both positive and negative for e-books. The introduction of the iPad will spur new sales and converts to the digital format, but more expensive and less consistent pricing will work in the opposite direction. It’s market evolution, and as the e-book market expands expect more of it.
Right now, the publishers just scored. By renegotiating with Amazon, Sony, and with the iPad on the way they are on more platforms at a better revenue position than ever before. People who just want to read are going to be annoyed by the price hikes, but if they already have a device, they will not likely cease to use it.
Not confirmed, but expect many e-books to ratchet up 30 to 50 percent. Hate it or love it, this is the new world order in electronic books.
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