Things break

At the 2008 BookExpo America, held in Los Angeles, a significant audience gathered to hear editor and author Chris Anderson interview Amazon CEO Jeff Bezos.

Bezos preceded the interview with a Kindle-centric presentation that culminated in an announcement by Simon and Schuster CEO Carolyn Reidy that her imprints were preparing an additional 5,000 files to offer as Kindle e-books by the end of 2008 (doubling the number of S&S titles reportedly available as Kindle e-books).

Only 18 months later, times have changed.

Last week, fearing that relatively low e-book prices would erode their ability to sell hardcover titles at historically higher prices, S&S joined Hachette Book Group and HarperCollins, among others, in delaying the release of e-books. The decision followed appeals by some to “save the trade publishing model”, and it was followed in turn by a reactions that ranged from disbelief and incredulity to a reasoned defense of current practice.

After publishers made public their decision to delay the release of (some) e-books, Amazon responded by lowering the price of some e-books even more and (somewhat surprisingly) taking on S&S directly:

Reacting to that move, Drew Herdener, an Amazon spokesman, directly criticized Simon & Schuster and its chief executive, Carolyn Reidy.

“Simon & Schuster is backward-leaning,” Mr. Herdener said. “Carolyn wants to corral readers, force them to buy what they wouldn’t buy if they had a choice. It won’t work. The better approach is to embrace the evolution of the book and give customers what they want. Forward-leaning publishers are going to clean up.”

… A far cry from the tone of the June 2008 announcement.

There is little doubt that e-book prices are lower than their p-book brethren. Two common explanations: Amazon is discounting to promote purchase and use of the Kindle; and consumers are reluctant to pay higher prices for DRM-restricted titles they can’t share.

As well, some publishers have said that consumers don’t understand how much money it takes to produce a book, independent of form. I call this the “business model” defense: soon, we’ll hear calls for public-awareness campaigns that explain the publishing value chain so that we can understand that hardcover book pricing underpins democracy.

This debate could have been predicted. In fact, it was, starting with Stewart Brand’s 1984 assessment of the ongoing tension between the price and availability of information. Some start-ups, like Richard Nash’s Cursor, are built on assumptions that include persistently lower prices for content.

The emerging models are sobering but not hopeless. The current skirmish may be a battle with Amazon, but digital content is unlikely to be held at bay for long.

About Brian O'Leary

Founder and principal of Magellan Media Consulting, Brian O’Leary helps enterprises with media and publishing components capitalize on the power of content. A veteran of more than 30 years in the publishing industry and a prolific content producer himself, Brian leverages the breadth and depth of his experience to deliver innovative content solutions.

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