I’ve been aware of the rising cost of eBooks and have always thought that publishers would find a way to finagle higher prices. And, after reading a report on an article written by The Wall Street Journal, describing how eBook buyers would soon find that the cost of an electronic version of a book would be higher than the hard copy version, I was not surprised.
Now that many of us have purchased a Kindle, NOOK, or enjoy reading a book on iPad2, what’s being called “e-book sticker shock” will soon become a reality.
To answer the “why” of it all, allegedly six of the top book publishers had a meeting and agreed to set prices for the electronic book market. The agreement prevents retailers from discounting e-books without the publisher’s permission. There is no similar agreement with hard copy books, so you can expect to continue to see discounts.
Readers are probably aware that book sellers have been selling a newly released book as an eBook for $12.99 which, until now, is a lot less than buying a newly released hard cover book for about $25 or $26.
The whole eBook agreement was actually launched by Steve Jobs of Apple. It’s reported that he wanted to create books to read on the iPad and, at the same time, didn’t want to compete with Amazon.com’s cheap titles.
Apparently, Amazon.com lost money selling eBooks for $9.99 but the low price was designed to encourage consumers to purchase an eReader.
The Justice Department is investigating the situation to see if there’s an ethics problem with Apple and the book publishers colluding to prevent price discounts. I really hope something is done about this.
“Under the new pricing model, a $25 hardcover is often priced at $12.99 for the e-book. And because publishers receive 70% of the e-book retail price — while retailers retain 30% — that means publishers receive only $9.09. Publishers were willing to accept the lower profits because they felt the new arrangement preserved the value of books and encouraged other retailers to enter the e-book market. Indeed, the new arrangement means guaranteed profits on best-selling titles for retailers like Barnes & Noble Inc., which today claims about 27% of the digital books market, as well as Amazon.” Cite WSJ.
Another example of pricing cited by The Wall Street Journal was “Ken Follett’s 985-page novel “Fall of Giants,” which costs $18.99 as an e-book, but can be purchased in paperback for $16.50 on Amazon.com.”
Do you feel like you’ve been ripped off yet? Don’t forget that your local library is a wonderful place to borrow a newly published book for free.
If you’d like to read the article report click on BottomLine.
If you’re a WSJ subscriber click on The Wall Street Journal to read the original.