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Friday, December 16, 2011

The Digital Reader, Digital Book Price Switch Strategy :)

From left,the Kindle Touch, Kindle Fire tablet and new Kindle displayed…
My theory on the strategy of e-reader and e-book pricing is that it was mapped out prior to public knowledge or acceptance of either.

You know ... sell a new well marketed hardware product (e-readers) at a premium at first (to recover initial research & manufacturing cost) ... but stuff it with a large assortment of low-cost content (cheap e-books consisting of backlists, old titles with expired rights, works by hungry new authors etc.) to sweeten and increase sales ...

THEN, when the consuming public gets hooked on the new reading media device, DROP the e-reader price and UP the e-book price (content price).

I like it because it will give writers more value for their work ... and properly align reward for creativity.

Just thoughts running through my crooked mind. I love being an armchair quarterback :) It's not as if this strategy is a new concept.

This from The Wall Street Journal via Chicago Tribune:

Readers getting cheaper, but rising e-book prices causing sticker shock

Cheap new e-readers are expected to be one of the hottest gifts this holiday season. But new owners of Kindles and Nooks may be in for sticker shock on Christmas morning: The price gap between the print and e-versions of some top sellers has now narrowed to within a few dollars -- and in some cases, e-books are more expensive than their printed equivalents.

When Amazon.com Inc. introduced its first Kindle e-reader back in November 2007, the $9.99 digital best seller was a key selling point. Today, the price of a Kindle has plummeted to under $100 -- from $399 back then. But e-book prices for some popular titles have soared.

Take Ken Follett's massive novel "Fall of Giants," for example, which costs $18.99 as an e-book. On Wednesday it was selling for $16.50 as a paperback on Amazon.

The digital price increases are the result of a decision by the six biggest publishers to set their own consumer e-book prices, a move that effectively bars retailers from discounting their e-books without permission. No such agreement exists for printed books -- where retailers are free to set their own prices. So while a best-selling e-book price is often less than half of the hardcover price, heavy discounting of the print version closes the gap.

Industry executives say this new state of affairs may already be hurting e-book sales, which have skyrocketed over the past three years and are today 15 percent to 20 percent or more of major publishers' revenue.

"Some people who see $12.99 and $14.99 for e-books may find those prices a little expensive," says Scott Waxman, a literary agent and digital-books publisher.

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