June 19, 2008

eBook suicide


According to the New York Times, Amazon is paying the wholesale (paper) price to publishers for its Kindle-compatible ebooks.

Publishers say that they generally sell electronic books to Amazon for the same price as physical books, or about 45 percent to 50 percent of the cover price.

Brilliant! Obviously because this business model worked out so well for the music business!

Seth Godin wonders what's in it for the publishers (other than obscene profit margins), pointing out that book publishers aren't in the tree-growing or papermaking or offset printing or shipping businesses. He concludes,

Many businesses act as if they have a stake in their suppliers and other vendors. Instead of scaling the part of their business that can move quickly and well, they defend the part they don't even own.

This is somewhat out of left field, but Bill Steigerwald comes to the same conclusion about mass transit:

For most transit agencies in the United States, if they were to write a mission statement that is reflective of what they do, they would indicate that they exist for the purpose of serving their employees and vendors.

You could say the same thing about public education. Steigerwald's article also contains a fascinating short history of the Tokyo subway system (profitable, largely privately-owned, answering to supply and demand).

UPDATE: Seth Godin adds in a subsequent post, "The pricing of [Kindle] books is whacked. $9.95 is a publisher-friendly price, not an author-friendly or reader-friendly price."

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Comments:

# posted by Anonymous MoJo
According to the New York Times, Amazon is paying the wholesale (paper) price to publishers for its Kindle-compatible ebooks.

I would say that's more Kindle suicide, not ebook suicide.

The issue of standard formatting and a universal ebook reader (a la mp3 and any mp3 player) isn't close to having evolved enough to make an impact, but, as you rightly point out, the proprietary format is going to kill it like it killed music.

This is where I think the small press that doesn't encrypt but still offers the proprietary formats will lead the industry. fictionwise.com sells a lot of un-DRM'd ebooks.
6/19/2008 10:46 AM
 

# posted by Blogger Eugene
The irony is that Amazon broke the iTunes monopoly by offering DRM-free MP3 downloads. But I suspect that, as Jobs had to when launching iTunes, Bezos was forced to push a DRM format to get the big boys on board.
6/19/2008 12:41 PM
 

# posted by Anonymous MoJo
I fully expect Apple to return the favor re ebooks.

Let the catfight begin.
6/19/2008 1:50 PM