By Quentin Fottrell
E-books generally cost less than their print counterparts, but government regulators say they may need to be cheaper still.
The pricing of e-books by publishers is coming under public scrutiny. The European Union’s antitrust watchdog is reportedly investigating five publishers and Apple over the way they sell e-books through their “agency pricing model.” Five publishers agreed to the same pricing scheme and then let retailers act as agents for each sale, taking 30% and returning 70% to the publisher. The U.S. Justice Department has been conducting a similar probe into e-book pricing since last year, according to people familiar with the matter.
Publishers may be forced to lower their prices with government intervention on both sides of the Atlantic, says Seth Rabinowtiz, partner at management consulting firm Silicon Associates. He says e-book prices – while cheaper than paper books – are still artificially high as most e-books don’t yet exist outside of the traditional book publishing world. (That is, the brick-and-mortar publisher allows them to be used by e-book makers.) E-books should boast knock-out prices for e-books, given that they don’t have the same distribution and printing costs of actual books, he says. “The e-book prices consumers should be enjoying are being distorted.”
There is a striking similarity between prices of e-books across different publishers, experts say. The typical e-book price is around $12, according to BlogKindle.com, an unofficial website for Amazon’s e-book reader Kindle. Makers of many e-readers like Amazon’s Kindle and Barnes & Noble’s Nook face an uphill struggle to change the pricing model, Rabinowitz says. “Those higher prices are getting passed onto consumers,” he says. “They are looking to the government to lend a helping hand.”
To be sure, more e-books are now free books. As SmartMoney.com reported last month, Amazon, Barnes & Noble, Google Books and other sites also have thousands of out-of-copyright titles available for free. Project Gutenberg, a site devoted to free e-books, offers 36,000 free titles. Plus, there are ways to get books for next-to-nothing or nothing – particularly if consumers wait until they are re-sold on sites like eBay. “The Corrections” by Jonathan Franzen can be bought for as little as $5 on eBay, a price that includes shipping, while the Kindle edition costs double that price, or just over $10.