Are eBook prices edging a little too high for people’s comfort? Josh Quittner writes in Time:
If only the Kindle 2 were cheaper! Despite its other shortcomings, Amazon’s new and improved digital-book reading device does enough right that it could become the Model T of e-readers, capturing the imagination–and discretionary spending–of the masses. But in this wretched economy, in which most of us will purchase only nonessentials that save us money or make us money, I doubt folks will pony up $359 for a pleasure-reading gadget. And thanks to Amazon’s mysterious pricing policies, the old argument–that digital books are so much cheaper than their hide-bound ancestors–no longer holds.
Before a recent visit to my dear old mum, I purchased The Kindly Ones, by Jonathan Littell, a 992-page Nazi-palooza that, given the nearly 3-lb. weight of the new English translation, makes for an ideal Kindle selection. But when I got ready to buy it on Amazon, I blanched at the $16.19 price. Every Kindle text I’ve purchased since Amazon started selling the device in November 2007 has been $9.99. Indeed, that was one of the Kindle’s main draws: you could buy books wirelessly, on demand and at a fraction of the cost of their printed peers. Case in point: Littell’s book was listed in Amazon’s Kindle store with a hardcover price of $29.99, making the digital version seem like a real bargain. But later I discovered that Amazon’s bookstore was selling the new hardcover for $17.99. So the Kindle saved me all of $1.80. Big whoop.
Customers aren’t stupid. They realize that an eBook like that on the Kindle or on other electronic bookstores doesn’t cost as much to print, warehouse, or to distribute—because those things don’t cost anything. Quittner himself writes about an “old argument” that “digital books are… cheaper” than print pieces. A lot of people are used to purchasing a large portion of their books at the $9.99 price point on Kindle, because that’s an automatic discount applied to both new titles and to titles on the NYT bestseller list.
What shows the intelligence of the customer is that I don’t recall any publisher ever saying in public that eBooks would be less expensive than print ones. Amazon makes a big to-do about the $9.99 price point, enough so that Quittner believes in his article that Amazon is also the one who set the list price for the book he was trying to buy. (This is not true; list prices are set by publishers; Amazon decides what the sale price is, at least when it comes to Kindle titles. I don’t know how the print side of things works.) Customers are intuiting that digital books should not cost as much as print ones.
I ran into this myself just a few days ago. Now having the Kindle app for iPhone, I went to look at a few books to see if I wanted to buy anything. I landed on a book that in print is a mass market paperback. Its Kindle price? $7.99—identical to the pricing of the hard copy version. I don’t think I need to write long on how quickly that decision was made for me.
Companies—and this is not limited to publishers—are underestimating the human desire to own physical objects. To many people (and at least to me), physical ownership of a piece of property, such as a DVD on which a video game is coded, or a stack of paper on which words are printed, is more valuable than a collection of bits that make up even a functionally equivalent electronic version of the same product. In addition, I have more control over the physical piece of property, especially when DRM enters the picture on electronic files and I’m being told what I can and can’t do with it.
What do you think? When you have a choice, which one would you buy? Would you buy both? What do you expect to pay for it?
Discuss, and feel free to answer the poll in the sidebar.
There is a perception that the electronic version of a book is cheaper. Regardless of the actual arguments concerning cost of development, etc. publishers cannot escape the public perception. It is the same perception that has brought music prices lower for digital versions.
The reality is that a digital version of anything (except music now) is still encumbered with DRM and there is ultimately NOT as useful as its analog equivalent. Books are a very good example. While there are certain conveniences to the digital version (search is a great example), there are also huge inconveniences. They cannot be read anywhere and anytime. They are not ultimately as portable. They require some sort of power source. With DRM, the electronic book cannot be lent, shared, or passed on to the next generation. These are not material costs, but instead are practical costs, which decrease the value of the product. I hope that publishers can understand and account for these constraints in their pricing decisions. The iTunes pricing model makes a lot of sense, because a song is "cheap enough" to purchase if it's recommended to me. The current structure of pricing for digital books does not fit that model.
I embrace digital books when the practical value exceeds the cost. There are all sorts of tensions surrounding this equation, based on the needs of the buyer, the promise of the book, etc. But that balance needs to be found, and publishers need to be ready to experiment and abandon their preconceived notions when necessary in order to find it. The ones that can do this will ultimately be very successful.
Agreed.
Do you think that a similar collapse/freaking-out of the industry like what happened in music pre-iTunes will happen to the publishing industry as well? It's that reaction that's led to even iTunes being DRM-free now.
Until publishers can get on board with providing a beneficial cost/value proposition, I think digital books in particular have a rough climb ahead. What do you think of a program like NelsonFree?
http://michaelhyatt.com/2009/03/nelsonfree-more-b…
Ryan, I do think that there are some similarities to the publishing industry's position right now as compared to the music industry. The difference is two-fold, I think: 1) There is not a particularly high demand for published goods, compared to the demand for music, and 2) There is no specific technology that is catalyzing digital publishing like Napster/MP3 did for music.
However, just like the music industry has now learned their lesson in regards to No-DRM, I think the publishing industry is headed down the same road. I went into this above. I think something like NelsonFree, or like what Augsburg Fortress does with some of their books, is a good median solution. Provide digital copies as part of the printed cost. Nowadays this can done as easily as a download website that requires a code from inside the book, or a specific word from a specific page of the book (randomly generated at every request). This median step can provide those who are interested in digital books to begin to make use of them, while still keeping a product out there for those who like dead trees. Additionally, it can begin to get people who might not be comfortable with digital, comfortable. This is merely a transition, though, until digital paper technologies reach a point where they are attractive to, and affordable for, the mass market.
I still think the trick will be non-DRM encumbered books, however. It is very clear that consumers are waking up to the concept that DRM is a barrier for them, not a help. If digital publishing is to really take off, then both price/value must be figured out, and DRM must be removed. Otherwise I think it will remain a niche market (since books in general are nowhere near as popular as they once were).
One of the difficulties that is facing publishing is that it doesn't have widespread piracy to force its hand. The eBook market is fractured in more ways than I can count, and there's no clear frontrunner. I think Epub will eventually dominate, but it will only do so when DRM has been pushed to the side.
I absolutely believe that non-DRM is important for the future, and I've written at length since this post on especially NelsonFree and that unique approach to selling books. Michael Hyatt NelsonFree will be well-received enough by the customer to offset any sharing of the eBooks—something I'm certain is even part of the strategy.
I don't think that paper books are going away. Perhaps the method for printing and/or distributing them will change, but I still foresee a very real desire for the printed word. It will be interesting to see how digital books continue to be received by the market and how they progress in terms of usability and availability. I do fear—as Steve Jobs has said—that "no one reads anymore."
One of the difficulties that is facing publishing is that it doesn't have widespread piracy to force its hand. The eBook market is fractured in more ways than I can count, and there's no clear frontrunner. I think Epub will eventually dominate, but it will only do so when DRM has been pushed to the side.
I absolutely believe that non-DRM is important for the future, and I've written at length since this post on especially NelsonFree and that unique approach to selling books. Michael Hyatt thinks that NelsonFree will be well-received enough by the customer to offset any sharing of the eBooks—something I'm certain is even part of the strategy.
I don't think that paper books are going away. Perhaps the method for printing and/or distributing them will change, but I still foresee a very real desire for the printed word. It will be interesting to see how digital books continue to be received by the market and how they progress in terms of usability and availability. I do fear—as Steve Jobs has said—that "no one reads anymore."