What will happen if publishers insist on higher ebook prices?

There are some in the book industry (mostly publishers, a few authors, etc) that do not like Amazon’s $9.99 average price for most Kindle ebooks. They say it will ‘cannibalize’ sales of more profitable hardcovers which sell at a much higher price. While this worry is not new, it has taken on a new sense of urgency since Sony recently announced that they too will sell many of their ebooks for their own ereader at $9.99.

With publishers getting worried about profits, what will happen if they start forcing sites like Amazon and Sony to jack the prices up on their ebooks? Nothing good can come from this.

The problem, however, is not that companies like Amazon are setting their ebook prices too low. The problem is that publishers continue with the mindset that ebooks should be priced equally with print books. They can justify this anyway they want, but it’s not going to fly with the reading public.

According to this article from Slate (from July 15), publishers do not like having a hardcover retail for over $25 while the ebook is selling for $9.99:

The publishers dislike the rigidity of the e-book price, however, when the hardcover lists for $27.95 and Amazon sells it at a loss for $9.99. Why? For one thing, the publishers worry that the e-book vendors are robbing them of their ability to set prices by encouraging customers to think that every book should be priced at $9.99 and that further down the line this will take a bite out of their profit margins.

And even the idea that lower-priced ebooks cannibalize print book sales in the first place is up for debate. Some say that the sales of ebooks at lower price compliment print books. In my own personal experience, and by talking with both ebook fans and print book traditionalists, those who are diehard print fans are going to pay the higher prices no matter what – buying the ebook, even at a lower price, will not even cross their mind.

What if publishers force higher ebook prices?

This is where the book industry as a whole needs to tread carefully. If they start forcing higher prices for digital books, than people might just say “screw it” and start searching out illegal pirated copies of books. The same thing happened to the music industry when they resisted and even fought against music being distributed in digital format.

It doesn’t make me a defender of illegal file-sharing to say that the music industry goofed by waiting until 2003 to agree to sell individual tracks for the reasonable price of 99 cents. Its absence from the electronic-music market in those early years allowed illegal file-sharing to take root and spread, and it helped shape the perception, especially among younger consumers, that music “should” be free.

The article continues:

If publishers insist on pushing prices too high and curbing availability, consumers could rebel—as they did with the sharing of MP3s—and normalize the trafficking of infringing e-books.

One ‘remedy’ publishers have come up with is to withhold the release of the ebook version of a book until the hardcover version has run its course, allowing for maximum profitability. This is something the movie industry already does by limiting the release of new movies onto DVD until after their theater run.

For now, publishers need to view ebooks for what they are: A new way of consuming literature that offers portability and convenience. Publishers need to stop trying to compare ebooks to print books in terms of price, ’cause like I said before, readers just aren’t buying it.

Publishers should study what happened to the music industry carefully. If they don’t, then lower priced ebooks won’t be their only problem – they’ll also be dealing with an explosion of pirated ebooks as well. And like the Slate article mentions, once the technology improves and we get some cool ebook reading devices on the market, ebooks will really start taking off.

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