Are Publishers going to withhold books from Kindle?

Yes. It certainly seems so.

Here’s the transcript from a mini-interview of Steve Jobs by Walt Mossberg -

Mossberg: Why should she buy a book for $14.99 on your device when she can buy that for $9.99 on the Amazon Kindle?

Jobs: Well, that won’t be the case.

Mossberg: Meaning you won’t be $14.99 or they won’t be $9.99.

Jobs: Aah … the prices will be the same. (Laughing by the audience and then by Jobs) Publishers are actually withholding books from Amazon. They’re not happy really.

Check out the Walt Mossberg and Steve Jobs video at All Things Digital.

Why Publishers are withholding books from Amazon

We’ve had Hachette and Simon & Schuster and a few more of the big Publishers delay ebook releases by 1-4 months.

There are lots of reasons Publishers are wary of Amazon -

  1. Amazon already has a lot of power due to its physical book sales. 
  2. Amazon’s $9.99 pricing for eBooks scares Publishers – They feel that $9.99 is an unsustainable price. 
  3. Amazon’s lead in the eReader market scares Publishers. 
  4. Amazon’s alleged 90% share in eBook sales threatens Publishers.
  5. Amazon getting into Publishing with Encore also worries Publishers.

Thomas Brookside comments at GalleyCat and points out one reason that hasn’t been discussed before (he also points out the $9.99 factor) -

The publishers are angry at Amazon because Amazon takes a loss on some titles to be able to sell them at $9.99, and the publishers don’t want people to get used to paying $9.99 for ebooks.

The publishers are also angry at Amazon because Amazon allows authors to self-publish directly to the Kindle and price however they want, and this had led to a lot of indie authors selling books for $2.99 or less outselling midlist authors from traditional publishers.

Why Apple seems a better option to Publishers than Amazon

The Big Money blog points out that Publishers, despite the higher prices, will make less from eBook sales on Apple iPad than they do from sales on Kindle.

Why then are Publishers going to withhold from Amazon and give to Apple?

  1. Publishers don’t want users to get used to $9.99. They think Amazon are going to start paying them less eventually so they want to push $14.99 as the new price.
  2. Amazon has too much power – Publishers want to weaken Amazon and play off Amazon against Apple against B&N and so on.
  3. Publishers want their status as gatekeepers upheld. If the iPad Books Store doesn’t allow indie authors then we have a third reason Publishers love iPad.

Thomas Brookside’s comment above is spot-on. Publishers are desperate to find a weapon against Amazon and the iPad is just that.

What exactly are Publishers going to do?

They’ll try to create an artificial distinction -

  1. eBook Hardcovers that are released at $14.99 and only sold on platforms that agree to that price.
  2. eBook Paperbacks that can be sold for $12.99 and $9.99 a few months after release of the eBook Hardcovers.

Why? Because they know eBooks are taking off and they want to keep their iron grip on book profits and what books get published.

Since Apple is willing to play along with eBooks at $14.99 they get those at the same time as the hardcover is released (via Big Money) -

The Wall Street Journal has Hachette Group CEO David Young announcing that nearly all of his firm’s titles will now be released simultaneously in electronic format with the print editions.

The implication in the story is that Apple is offering trading terms attractive enough to motivate the company to do so.

The one unknown is how customers are going to respond.

Customers are going to pick the eReader and the Authors/Publishers that are pro-customer

We’ve had over 2 years of $9.99 eBooks. Publishers can’t just reset prices to $14.99.

Here’s what’s going to happen -

  1. Readers start boycotting Publishers who push $14.99 and delay the release of $9.99 versions.  
  2. Readers will start pirating more.
  3. Independent Authors and Smaller Publishers will start getting read more.
  4. Amazon’s Encore program will start seeing more success.

Publishers and Apple will, inadvertently, rally readers around the Kindle and $9.99 prices.

If Nook being late seems like a Christmas Present – imposing $14.99 prices and locking out the Kindle and readers (thereby driving them into each other’s arms) will be the gift of the decade.

Are customers really going to pick the company that gives them lower prices?

That is a stupid question. Except to Publishers.

You have to wonder what Publishers are thinking. It’s exactly what Walt Mossberg asked Steve Jobs -

Why pay $14.99 on the iPad when you can get books for $9.99 on Kindle?

Well, Publishers are saying they’re not going to let Amazon sell $9.99 books – even if it is Amazon subsidizing prices.

That’s pretty ridiculous and a stand like that paints Publishers as evil and Amazon (and the Kindle) as good. As long as Amazon keep improving the Kindle rapidly they’re set to dominate eBooks for a long time.

6 Responses

  1. I am not sure if publishers just don’t understand basic economics or what is going on. For the most part books are replaceable items. There are very few books that I just have to have. I had dozens of books that I haven’t gotten to yet and many more that I would buy if the price was right or I had more time. Even with those few authors that I buy everything, I don’t care whether I buy paper, ebook or audiobook. For the most part, I buy whichever format is cheaper. So there are a few Harry Potter books, I am going to buy no matter what the price on whatever format they are available. But there are only three or four of those books a year. I buy 75 to 100 books a year. If publishers start not selling books in formats that I want, I just won’t buy their books. If they start selling ebooks at higher prices than paper, I will start reading more classics and ebooks at reasonable prices. Even publishers have to know some of this.

  2. The real issue that I don’t hear anyone talking about is that Publishers seem to be trying to price fix. It may not be coordinated, (and it may be either legal or illegal depending on the level or coordination) but what always happens with the attempts at consortium is that someone realizes that if they break away from the pack and sell at a slightly lower price (as low as the marginal cost) they will make a killing. Publishers will be able to band together for a while, but it just won’t work for the long term.

  3. I agree with what you have written here.

    It’s too late for publishers to have it the way it was.
    They need to accept it , move on, and get more customer friendly or they are going to lose a lot of (Amazon ) customers.

    E-readers are here to stay. It’s changed the way people who read view books, newspapers, and magazines, and how we expect to purchase them.

    Publishers keep trying, but I don’t think they will win this battle of wills.
    The authors will win, because there are more ways for them to get their books published now, and make good money.

    The readers will win, because we are able to read more books that might not have been published, because of the big business of books’ antiquated publishing policies.

    Publishing was king for a long time, but it has been dethroned by kingdom of dedicated readers.

    Readers like me, who read many books a week, aren’t going to pay big bucks for e-books. I used to take books with me everywhere, now it’s my Kindle 1that I take along wherever I go.
    When I bought paper books, I bought my share of hardback books, but most times I waited for the book to be released in paperback…even books by my favorite authors, that ended up on my keeper shelf. Hardbacks were bought used.

    I can’t buy used e-books. Free books are nice, but modern reading isn’t free, unless an author is offering a first book for free so we can see what their writing style is like. Then, if we like it, we can buy their other books ! I love that !

    So, I wait for the price to drop as low as a paperback…that’s just my personal way of keeping my reading-habit spending under control. I buy at the cheapest price I can find or I wait for prices to drop…just like when I bought paper books. I am a very patient person.

    I have been reading e-books for as long as there have been e-books published. I started out reading on my computer. (Couldn’t take the e-books with me.)
    Now, along with my Knidle 1, I have the Kindle app on my desk computer, my used laptop and on my iPod Touch (Christmas gift from husband.)

    I admit, I have the Stanza app and the Barnes and Noble app, also. I wanted to try them out with out purchasing the e-readers.
    But, I find myself reading with the Kindle 1 more, simply because I am used to it and the majority of my library is there.
    (Note: I love the E-Ink on my Kindle 1. If someone hasn’t tried it by reading for a few hours on it, they don’t understand the difference it makes. )

    I do think Amazon needs to address all the concerns we Kindle owners have mentioned over and over, again, and “fix” the Kindles. Upgrade all of them to be more competitive to other e-readers and less awkward to use.
    I have great hopes for the apps helping with some of that. (We need folders and better organization !)
    Keep the E-Ink in the future generations of Kindles. Love it !

    It’s 14-months old and going strong ,but when my Kindle 1 breathes it’s last, I am hoping there would be a more efficient version of the Kindle than what is available to us now, and at an affordable price. I look forward to seeing what improvements are made and will decide from that.

    Publishers, whatever happened to the customer is right ?

  4. Adam , it’s so true that one or more Publishers will break away from the price-fixing attempts and make a killing.

    There are already a few signs of this happening. There’s no way a $14.99 price restriction can last.
    Plus you have indie authors and smaller publishers.

  5. I think the big pubs are going to be a little surprised when they find out the vast majority of iPadders don’t read much. Sales of ebooks will be low as the iPad is designed to get you to do other things instead of reading. Kindle owners read a LOT and buy a LOT of books

  6. Doctorwinters, I think you’re spot on in differentiating readers of ebooks and owners of iPads. Readers do not necessarily want to check email, read tweets, or play games while reading, and if the pricing of books is going to be so much higher on the iPad, this might outweigh any appeal the colour touch screen might have had for the reading crowd.

    If indie authors and micropresses will not have access to the iPad publishing platform, then the platform not only loses selection, but also loses those potential purchasers – many indie authors are also consumers, and if they cannot post, they may not purchase.

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