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Amazon Kindle drops price -- are e-books next?

Amazon's decision to drop the Kindle's price to $259 from the original $399 in 2007, is the latest sign of the dynamic market for digital books. The price of the Sony Reader has also been falling, and it will be interesting to see how that company responds to Amazon. And everyone's waiting for an entry from Apple, whose design genius and functionality could blow the competition away.

Meanwhile, publishers are grappling with the pricing of e-books. In a survey from the Frankfurt Book Fair, an overwhelming majority of publishers said e-books should be less expensive than the printed version, but few supported Amazon's flat-rate of $9.99 on front-list titles. Overall, book fair organizers said the industry remains "completely divided about appropriate e-book pricing." The most popular view was charging 20 percent less than the print edition. About a third recommended charging more than 30 percent less. The one-price-fits-all pricing was less popular.

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According to the report on Bookseller.com fair organizers said, "It is still completely unclear whether or not e-books will be used merely as a 'second book' for a quick glimpse, or whether portions will, in fact, ultimately be sold as mobile content for a price many times higher than the printed work." A quarter of publishers said a flat rate subscription model would be the most prevalent format for future digital purchases; another possibility was micropayments for snippets of content.

Not suprisingly, the subscription and micropayment models are also being debated among newspaper publishers, who are scrambling for opportunities to boost revenue from digital content. Those might work. But I'd be amazed if selling portions of a book could generate more revenue than the printed work, as some publishers suggest. Buying a chapter of "The Lost Symbol" isn't as satisfying as downloading a track off a Dave Matthews album. (Maybe Dan Brown's fevered prose is more suitable as ringtones: I can't breathe. I've got to get out of this box! )

For another view on the topic, here's Mark Coker, founder of Smashwords, writing on HuffPo about the need for $4 books.

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