Much like happened with mp3s, consumers want ebooks. If there is not an attractively priced option consumers will get it regardless. Value is in the eye of the beholder. There always will be someone willing to pay high prices.

The quote from Carolyn Reidy, chief executive of Simon & Schuster. “What a consumer is buying is the content, not necessarily the format.”, does that mean that she will throw in hardcover and ebook copies with a paperback purchase?

It comes down to authors will go unpaid as long as realistic options are not available. A publisher that is unable to make money from books priced under $9.99 has a broken business model.

When I buy a hardcover, however, I’m also getting a book with sturdier binding, better paper, larger type, and so forth. There is more physical value. When moved to digital, the only extension of value is in timing. Plus, I don’t really own it.

David: I think you’re making a simple comparison between ebooks and print books that doesn’t really hold. With an ebook I can take notes, jump to links inside and outside the book; jump to footnotes and citations and graphics. I can reference a different book and then go back to my original book. No more looking up words in dictionaries. Wikipedia at my fingertips. I can listen to music or audio.

And as far as I know you get licensed access to the book forever – a personal library maintained by Amazon available through the Internet anywhere in the world.
This provides a lot more value than a bound shock of paper. That’s value I’m willing to pay for.

As for raising prices, yes, competitors could try to undercut him. But then he’s got people accustomed to buying books from him for their Kindles or Kindle apps.

Of course he could simultaneously work to keep advances down on bestsellers by building up unknowns rather than paying through the roof for books from the big boys–or at least by not paying as much as the large publishers do.

Simply put, things could go a number of ways. Let’s hope they shake out well for writers, publishers and, of course, readers at large.

As usual, thanks for your perspective.

David

If Amazon charges lower prices now, they will drive publishers out of business as they have booksellers. If they then raise the prices, they will be providing an opportunity for competitors to undercut them.

I’m aware at how hardcovers are marked up beyond cost. When I buy a hardcover, however, I’m also getting a book with sturdier binding, better paper, larger type, and so forth. There is more physical value. When moved to digital, the only extension of value is in timing. Plus, I don’t really own it.

A digital copy of The Great Gatsby is a different product than the printed version. If it’s not, somebody in the e-book space is not doing their job.

Lastly, I find it odd in the new digital world that creators and consumers would allow middlemen to price their terms of exchange. The power of digital is to break these distribution hierarchies. Do travel agents set airline prices or real estate agents set house prices? Of course not. The scary thing for publishers and distributors is that pretty soon they will be price takers, not price makers.

It’s a brave new world and it’s ours to make.

And “Publishers are caught between authors who want to be paid high advances and consumers who believe they should pay less for a digital edition, largely because the publishers save on printing and shipping costs. But publishers argue that those costs, which generally run about 12.5 percent of the average hardcover retail list price, do not entirely disappear with e-books. What’s more, the costs of writing, editing and marketing remain the same.” Well, first, the 12.5% is totally deceptive. It doesn’t consider the cost of warehousing, which is not a problem with e-books. It doesn’t consider things like the huge cost of remainders, which is also not a problem with e-books. It also doesn’t consider that you don’t have to have salespeople go to convince the B&Ns to order a certain number of copies of an e-book.

I’ve worked in publishing, and I’ve written/edited numerous books. The idea that Amazon (or anyone else) should be paying the same for an e-book as for a new hardcover is absurd. The costs of distributing a physical product are far more than the costs of printing and shipping.

I am not writing this to endorse Amazon, the Kindle format, or a universal $9.99 price point. But this article, and most of the publishers that are quoted in it, are full of it.

There is a huge difference between this situation and the housing crisis, however. House prices were artificially inflated 100% and more because of speculation, greed, and exploitation. They *should* come down. In my area, you still can’t buy anything but a tiny nothing house for less than $600k. Amazon notwithstanding, publishing has never been like that in any way.

They are increasing fast! Amazon now says that they account for 35% of sales when an electronic version is available. This is fast growth being that it only took a year or 2 to accomplish. The problem now is that publishers are either terrified of losing sales, or more likely holding the line in order to have people like Greg M., foolishly set the market equilibrium price high. On that note Greg M. said

“An ebook priced at $9.99 for an otherwise hardcover book is an excellent deal, with or without DRM. For example, my last Kindle purchase was Woodsburner by John Pipkin: retail price is $24.95, or, with a 40% discount, $14.97; the best used price is (Very Good condition) $11.46 + $3.99, or, $0.48 more expensive than new at Amazon…If you think $9.99 is too expensive: read public domain, creative commons, older books, or independent publishers with low prices–there are plenty around so you don’t ever have to pay more than want.”

This type of user determined value idea is an absolute abomination when it becomes the default position of consumers. The folks boycotting get it, that by not allowing manufacturers/publishers to dictate market terms, means that the consumer wins. Not a cent more I say! As far as free content goes we must ask ourselves the following “How much longer will we have access to it?” With some of the moves being made by Amazon and Google I say not much longer.

If you think $9.99 is too expensive: read public domain, creative commons, older books, or independent publishers with low prices–there are plenty around so you don’t ever have to pay more than want.

When I click through the link (at 4 PM Eastern time) the article title is “Steal This Book (for $9.99)”; an allusion to the 1971 work Steal This Book by Yippie Abbie Hoffman.

Interestingly, some of the comments in the discussion thread on my story insist that, no, that isn’t so, Amazon actually isn’t losing money because they have already dictated the prices they will pay to the publishers. I wonder where they get their information, and why both the NYT and PW disagree with them?

In any case, it only changes the timetable, not the actual facts of the matter…

As for the “problematic headline,” if you click through now you’ll find that the New York Times has changed the headline since the story was originally posted. They often do that.

As for whether $9.99 is or is not a “steal,” well, if you compare it to the full-hardcover prices that non-Amazon e-book stores charge for the same e-books, it starts to look better and better.

As for cheap eBooks destroying the market, it’s hard to say for sure, but I sincerely doubt that eBook sales will increase so fast, and pBook sales drop equally fast, that publishers can’t adjust to the changing sales base.

I will point out that we saw similar arguments a few years back concerning movies. The argument is that enough people now have home theaters and the patience to wait for a movie on DVD that cheap DVDs won’t allow the movie studios to recover the costs of production.