By Quentin Fottrell
E-books generally cost less than their print counterparts, but government regulators say they may need to be cheaper still.
- Getty Images
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.
I’m all for some sort of reasonable hash-out at this point. When there’s only a 53 cent difference in hardback and ebook prices, there’s something wrong.
I understand the business model, and the attempt to balance out profit and loss – but all it’s done in my instance, and I’m sure others, is to drive me away from buying outright completely. I now put myself on the waiting list at the library for my kindle editions of current authors, and pick up others at the used book store at half price for paperbacks. Instead of getting extra to push into advertising and hardback losses, there’s zero revenue from myself and others who expect to see some sort of give and take for the lack of materials and storage required for electronic editions.
Yes, Carolyn, you’re right… these people don’t get it. I’m fully for the free market, but the free market is not free when there’s a monopoly, or an effective monopoly due to collusion and price fixing.
@sassinak: you do realize that’s what they want? Like the movie industry that fought tooth-and-nail against the video tape, but then found a new revenue stream that gained them more money they could possibly have imagined; like the recording industry railing against cassette tapes for the same reasons, and yet with the same results; the publishing industry is fighting tooth and nail against change; when they can no longer cite printing, type-setting, limited print runs and shipping costs as a reason for the bloated prices then their profit margins shrink.
I actually believe they are pricing themselves out of business. Over time new authors will not even try to get a “real” publisher, they can publish directly to the e-retailers and set the prices themselves, eliminating the publisher as the middle man that takes the lion’s share of the profits.
They still have a place – editing and promotion; but if the want to keep it,they’d better get with the program. I bought my whole family tablets for e-book reading, and yet we’re hitting used books stores and libraries, and downloading free e-books more often than buying overpriced e-books. It’s nuts, and the only explanation IS collusion = price fixing. I’m all for the free market, but collusion isn’t it.
as long as ebook publishers continue to charge MORE for ebooks than their paper equivalent (often more than a dollar extra) i will continue to not pay for books i get off the internet and i will keep buying the books i want to keep at the store (original, NOT used) but i will NOT pay extra for the privilege of using my own device and my own internet to buy a book no one had to print or store.
i spend the same amount as before, just don’t inter friend loan as much
Merry Christmas ,Christmas top gift
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