Footnote: keep prices high

Suds McSoapdish
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The recent troubles between and publishers like Macmillan bring back tender memories of the halcyon days of the late 1990’s. Recall the predicament back then, when people like Napster and Audio Galaxy were pioneering peer to peer file sharing. At first it seemed alright, a trailblazing use of new technology, but then the old industry woke up to it, and realized digital could mean loss of control.

Of course, Napster and its ilk did enable a rampant loss of music sales in the end, and so the music industry did (and still does) have a point when expressing concern over digital distribution.

Enter the book publishing business, now faced with a steadily growing e-book segment. For these guys it’s been much easier than for the music industry, as piracy isn’t an issue so much and fortunately online distribution has been spearheaded by capable vendors like

But over the last couple of weeks, there’s been quite a problem between the two camps, namely established publishers and online retailers. It seems this rift has revealed the reluctance of publishers to really commit to digital distribution, the main logic behind their reservations being that e-books hurt hardcover sales. The argument has revolved around price points, with Amazon and other retailers trying to keep e-titles at a certain price (the figure most often quoted has been USD9.99). Publishers, sometimes referred to as “the big six”, began leaning on retailers to raise prices, claiming sales of hardcovers were suffering, since e-books cost much less.

Doesn’t this mean publishers aren’t really into e-reading, then? If their assumption is that hardcovers are still the baseline, the starting point, then by default this means e-books are a secondary priority. A balanced business model would mean publishers could transition away from hardcovers, sell e-books left and right, and still make a nice profit regardless of the price point. But that’s not the case, as Macmillan CEO John Sargent  confirmed that removed titles by his outfit from their store in protest. Protest of what? The fact that Macmillan and other publishers want to sell e-books at USD12.99 or more.

Later, Amazon came out and publicly admitted caving in to these demands, rather bluntly using the word “monopoly” to describe the control held by publishers over their titles. It’s not a bad thing that publishers can control the distribution of literature owned by them, though, after all that’s what intellectual property means.

What’s bad is that we’re not seeing the commitment we want from these people to electronic distribution. If they’re still using paper books as a measurement, then we can’t be certain they’re really keen on offering e-books as an alternative. We’re also hearing what Amazon has to say, that is e-books artificially raised in price to a needlessly high point just to buoy the sales of hardcover versions. Amazon is basically telling us they can sell e-titles cheaply and still make a good buck. They’re telling us there’s more to the prices we’re going to pay from now than simple business sense.

Whether you agree with the publishers or not is very subjective. We love paper books and don’t want them to go away any time soon, but for e-books to evolve to the best of their potential, they need to be given a fair shot by the industry responsible for them, and keeping prices high like some inverse subsidy just so people stick with paper forms isn’t what’s needed.

Drop us a line and tell us what you think – this is a turning point for e-books, and with new tablets/slates coming onto the market, it makes sense for this topic to gain momentum. So, what shall it be, open format or agency model subject to the wills of publishers who’ve been around for ages? Not time will tell, but the reader.

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