digital books on kindle, nook or kobo are much more expensive now than ever. the big publishers that control the vast majority of the market, control prices and users end up paying more than pocket books and, in some cases, ebooks are more expensive than hardcover ones. why are e-books so expensive now?
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agency model keeps prices high
E-books used to be very affordable and this helped the e-reader industry grow. Amazon pioneered the concept of paying $9.99 for a new e-book, from a major publisher on the day of its release. this made e-books much cheaper than paperbacks and significantly more affordable than hardcovers. Amazon was losing money on every eBook sale, but it did so to grow its eBook business and spur Kindle adoption. this created a price war between amazon, b&n, kobo, google and other players.
all good things come to an end. When Apple launched its iBooks store, Steve Jobs met with the directors of major publishers. he wanted them to gain more control over the digital publishing business and create a uniform pricing structure. this was known as a cartel, which is illegal. This created a multi-year saga with the US Department of Justice against Apple and all publishers. In that case, the five publishers settled for $166 million (£120 million), while Apple lost in court and was ordered to pay $450 million in 2016, after a lengthy legal process that It ended when the US Supreme Court refused to hear the company’s challenge. .
Demand couldn’t stop the agency prices that publishers created. each e-book would have its own price, and bookstores had to charge that price and couldn’t change it. That’s why when you visit Amazon’s product listing, it always says that the price is determined by the publisher. the idea behind the agency model is that all bookstores would charge the same amount for a particular ebook, so no one would have the advantage. The problem is that Amazon had such a huge head start that it completely controlled the e-book market.
The only control over pricing that amazon and other retailers have is when independent authors self-publish. Kindle Direct Publishing, for example, is the most popular way authors can submit their eBooks to Amazon and have them listed along with all the other books in the store. some of them sell very well, but most of them never sell. Kobo has a similar program with Kobo Writing Life and Barnes and Noble has Nook Press.
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How much money do publishers and retailers make selling e-books? typically the publisher gets 70% of each sale and a company like amazon gets the remaining 30%.
what about printed books?
Physical books are sold to retailers for about half the list price. the retailer can sell them for whatever they want. When Amazon sells books for less than the recommended retail price, that discount comes directly from Amazon’s markup. Amazon is betting that the lower price will equate to more sales, making up for the lost profit margin. retail bookstores are in the same boat, keeping hardcovers high when a book is just out, then slashing the price by 25% a couple of weeks later to help clear inventory.
do e-book prices ever go down?
It is very rare for publishers to reduce the price of an e-book. When a new ebook is released and the price is set by the publisher, they almost never discount it at a future date. this is because they would have to go back and manually edit all the prices and this creates more work, to reduce revenue per title. That’s why the current price of a new e-book is the price you’ll pay a year from now, ten years from now, and so on. paperbacks and hardcovers are frequently for sale, when you visit a bookstore you can often get them well below market prices. This is often why the price of an e-book is higher than that of a paperback, which doesn’t sit well with people who read a lot of e-books.
Are people willing to pay more for comfort?
When you pre-order a new digital book, it’s automatically sent to your kindle at midnight and you can read it all night. You can buy eBooks right on your Kindle or shop Amazon’s website in your pajamas or boxer shorts. amazon basically pioneered the concept of the “one click buy” button, and this makes buying books a breeze.
Does this convenience mean that customers really don’t care that prices have risen dramatically in the last ten years? don’t forget, e-books used to be $9.99 and now you can easily pay $20.00 for the same book. Do people care how cheap they used to be and how expensive they are now, or has it been enough time where the price is what it is and nobody can really do anything about it?
does the high price of coexistence drive users to subscribe to kindle unlimited, access main reading or use a service like scribd, or even switch to the public library?
digital books don’t wear out like printed ones
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Digital books never get damaged, while with printed books, many things can go wrong. they can become dusty, moldy or infested with insects. If you’ve ever spilled tea, coffee, or water on a book, it can double in size and become extremely unwieldy. When you buy an eBook, it remains in perfect condition, but sometimes there are spelling or grammatical errors. when this is reported to authors, they can make corrections and submit an update and users will automatically download a revised copy. most of the time this is good, but sometimes the cover can also change, which is not good. For example, when a book gets a Netflix adoption or a movie, the publisher will change the cover of the book, so it advertises the movie. In other cases, like Harry Potter, they will constantly release revised editions with all the new covers and images inside the book, but since they are limited, you have to buy the entire collection. the cover of the printed book also changes, but you can keep the one you have if you don’t like the revised one.
ebook revenue keeps falling, but publishers don’t care
Sales of digital books in the US have declined throughout the year. this is probably because the pandemic is a thing of the past and the bookstores have been open all year. ebook revenue fell 6.3% in June compared to June 2021 for a total of $83.0 million. Year-to-date e-book revenue was down 8.5% compared to the first six months of 2021, totaling $500.4 million.
in terms of revenues in physical paper format during the month of June, in the commercial category (consumer books), hardcover revenues fell 10.9%, reaching $181.3 million; paperbacks rose 9.0% to $253.9 million in revenue; mass market rose 16.9% to $21.4 million; while special bindings fell 23.8%, with 11.0 million dollars in income. Year-to-date trading revenue fell 0.8% to $4.2 billion for the first six months of the year. hardcover revenue fell 7.9% to $1.4 billion; paperbacks rose 9.0% to $1.5 billion in revenue; mass market was down 20.9% to $95.5 million; and specialty bindings fell 1.0% to $79.8 million in revenue.
You can really see from these statistics that eBook revenue is a drop in the bucket. from January to June 2022, the format generated $500 million, while hardcover sales were $1.4 billion and paperback sales were $1.5 billion, so you can see what the priorities are editors. impression is king.
perhaps e-book prices will change for the better?
what can people do with high prices? well, the recent lawsuit, filed in new york district court thursday by seattle firm hagens berman, on behalf of consumers in several us states, names the retail giant as the sole defendant, but labels the publishers as “co-conspirators”. alleges that amazon and publishers use a clause known as “most favored nations” (mfn) to keep ebook prices artificially high, by agreeing to price restrictions that force consumers to pay more for ebooks purchased on platforms non-amazon.com retailers.
The lawsuit claims that nearly 90% of all e-books sold in the US. uu. They are sold on Amazon, in addition to more than 50% of all printed books. The lawsuit alleges that e-book prices fell in 2013 and 2014 after Apple and major publishers were successfully sued for conspiring to fix e-book prices, but rose again after Amazon renegotiated their contracts in 2015. This case is still ongoing and whoever wins will probably get appealed to several higher courts.
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