You’d think that big music labels would have taught other olde tyme “entertainment” avenues that their business models were dead and buried. I guess greed never goes out of style.
The new Apple iPad was all over the news the past few weeks. Some claimed that it would kill laptops, netbooks, and all other e-readers. Others claim that it is nothing more than a giant iPod Touch. They’re correct. But that is for another article. More interesting is the fallout from ebook price wars.
Until now, Amazon had a stranglehold on ebooks. Their Kindle is Grand Poobah of e-readers and Amazon had the power to set the standard price of ebooks at $9.99. Publishers were not happy with this, as they thought this devalued books. This amazes me because Amazon was actually losing money on ebooks, as they would pay a publisher $15 for an ebook that they then sold for $10.
With Apple now in the market for ebooks (and a proven heavy hitter), they were able to promise publishers they would charge higher amounts for ebooks. Now publishers can sell their ebooks via Apple for $15 (or they will when the full Apple bookstore goes live). Apple will then take a cut of each ebook sold. So, if Apple is taking a cut of every $15, and Amazon was giving publishers a full $15, why is the Apple option more attractive?
Greed, arrogance, and ignorance. Book publishers, like music labels before them, refuse to live in 2010. Consumers are in the driver’s seat these days and that isn’t going to change. No longer can big business strangle markets and dictate what consumers will pay. These days, the consumer will set their own price… or they will just steal. Illegal? Yes. Immoral? Well, worse than charging $30 for a book or $20 for a CD? Not likely. So book publishers are now willing to actually take less money per book just so they can make a futile attempt at controlling the market. Amazing.
Book and music publishers loved to crow about how much physical overhead marked up the prices of the media sold. With book publishers, this may be true. Printing to paper is not cheap. With CD sales, this is absurd. Professionally pressed CDs now cost around $1 each, and that’s if you are ordering a short run (i.e. 1,000 or less). But what is the excuse when the physical product is absent?
