E-Books Center of Price War
When Apple announced its flagship device you couldn’t avoid reading about, the iPad. Book publishers stepped up to support its new e-book store.
The rise in popularity of the e-book is just getting started with devices like Amazon’s Kindle, and Barnes and Noble’s e-book reader Nook steadily being adopted. It hasn’t gone mass market yet, likely because of its prices, which are around $300.
The iPad, which will retail at $499, will be a new contender in that market. In deals with publishers, Apple would take 30 percent of the book sales, where 70 percent would go to the publisher.
This has gotten publisher Macmillan in a public spat with Amazon over just this system. Where as Amazon wanted to keep their $9.99 price tag on all bestsellers, Macmillan came to the table looking to negotiate to charge consumers more.
Amazon removed their books from the store for a week before caving to the demands of the publisher, letting Macmillan charge more money for hardcover bestsellers.
Make no mistake; Macmillan is in the wrong for wanting more money for e-books. The price is hardly for delivery of the content and there are no packaging costs. Amazon created the standard price for best-selling e-books.
At the same time however, Amazon should have let Macmillan raise the price and not remove the content from the store. Amazon needs to realize that their business relies on selling products and regardless, the publisher should maintain that control.
When the product that Amazon is selling to read books on is over $250, do they really think that an extra three dollars tacked onto the price of a Macmillan book will mean a lot to the people who adopt the technology early?
At the end of the day, when e-book reader prices come down and more people are able to afford the devices, they will be the ones who vote with their wallets.
Consumers always have the power to not buy products if they can find it elsewhere for lower prices.
While e-book readers will go down, e-book prices will likely stay cheaper than most hardcover best-selling books, the consumers will always dictate the ultimate location of the prices.
Amazon shouldn’t try and fight a battle that they couldn’t win.