Monday, February 1, 2010

Let the Price Wars Begin

The Kindle is far from perfect. Its screen is small and the light-gray background doesn't provide optimal contrast for comfortable reading. Color isn't available on Kindle, so graphics are limited. The pages aren't numbered like ordinary books, which can be confusing. There's no backlighting for reading in the dark. I don't love everything about my Kindle, but up until now I've loved the $9.99 price of downloading an e-book. With the advent of the iPad, though, that's all about to end.

Amazon has just announced that it will temporarily cease selling books published for Kindle by Macmillan. This after Macmillan indicated that it wants to charge $12.99 to $14.99 for bestsellers and most hardcover releases. Apparently, Apple, the manufacturer of the iPad, will allow Macmillan and other publishers to set their own e-book prices and Apple will take 30 percent of the revenue.  This type of arrangement is known as the agency model, as opposed to the merchant model (currently used by Amazon), in which the retailer purchases stock from the publisher for an agreed-upon price and then sets its own price for sale to consumers. So far, Amazon has priced its e-books at $9.99, even if that means taking a loss on sales.

Now, though, it's likely that e-book prices will rise. Amazon admitted as much in a letter posted by the Kindle team on a customer forum. The letter states that while Amazon will temporarily suspend sales of Macmillan titles, "We want you to know that ultimately, however, we will have to capitulate and accept Macmillan's terms because Macmillan has a monopoly over their own titles, and we will want to offer them to you even at prices we believe are needlessly high for e-books. Amazon customers will at that point decide for themselves whether they believe it's reasonable to pay $14.99 for a bestselling e-book."

With the might of Apple behind it, iPad stands to make inroads on Amazon's e-book territory. The iPad offers multimedia and color, making it more appealing for certain types of books and other publications. Thus, even before the announcement of Macmillan's new policy, it appeared that Amazon was in for a competitive ride. Now, things should get really interesting, though not necessarily in a good way for consumers.


  1. I'm looking to a library model, where you can sign out books for a period of time, for a fee perhaps, but less that $10. Ownership of these books doesn't make sense to me. I believe you can't even transfer the ownership to another. So in what sense are they "yours?"

  2. You do know that you can download many, many classic books absolutely free at Project Gutenberg? George Eliot, Jane Austen, James Joyce, Hemingway, Fitzgerald, Trollope, etc. I use my iPod Touch for reading these days. It took getting used to, but I love it now! So much easier than dragging a 1,000-page edition of Trollope around! And you can flip it from light on dark to dark on light. Great for lights-out reading and unexpectedly long waits in doctors' offices!

  3. Apple already sells e-books in its App store, and they are very cheap. They take 30% of the revenue, and the rest is split between the publisher ans the authors. The books are cheap, but they sell well and in the end, they are profitable (to everyone concerned). The pb up to now, was that often they could only be read on an i-phone, i-Pod touch or an MP3 reader, not even on a computer screen.
    You did not mention the Sony e-reader, that is at last Mac-compatible and much cheaper (if still expensive in Europe, at least) than the Ipad - true, black and white only, and no other applications, but still, very convenient when traveling. (Yes, I definitely agree with Mia!!!)
    Amazon are not the only ones to sell e-books aither. You are right, the competition is only just starting, with publishers themselves turning out e-versions of new books, and they are sometimes half the price of the printed books. This is the case with my publisher,(EDILIVRE- Editions APARIS - France) who also practises "printing on demand" - no wasted paper...
    I am really interested in the future developments, of the e-readers themselves, of how the publishers will adapt to the changes, and also how it may affect the writers and their writing, eventually.

  4. Meanwhile, I am a forlorn Kindle owner, wondering why I jumped into the ebook fray so quickly, without looking before I leapt.

    Oh well...