Kindle 3, Kindle WiFi and the $9.99 boycott

The potential impact of the Kindle 3 and Kindle WiFi on the Agency Model isn’t really being discussed.

It’s worth wondering -

Will Kindle 3, Kindle WiFi owners cause a strengthening of the $9.99 boycott? Could they cause the downfall of the Agency Model?

Are people paying $139 for Kindle WiFi and $189 for Kindle 3 going to pay $14.99 for books?

Probably Not.

If you’ve waited for the price to get to $139 to buy a Kindle WiFi you’re likely to be willing to wait for an ebook to drop below $10. That or pirate the book or get it from the library.

New Kindle owners will probably stick to buying books that are reasonably priced.

$14.99 and $12.99 will frustrate new Kindle 3 owners and strengthen the $9.99 boycott

We’re now getting a lot of people who simply couldn’t afford to pay $259 for an eReader or didn’t think an eReader was worth that much. In either case they are likely to feel that an ebook isn’t worth $14.99 or even $12.99.

Such ridiculous ebook prices (especially since hardcovers are just a few dollars more and paperbacks are cheaper) will cause a lot of anguish and force new Kindle owners to choose from amongst the few available options -

  1. Pirate eBooks. Most people aren’t particularly inclined to do this – It’s too much of a bother and it isn’t exactly ethical.  
  2. Stick to books priced below $9.99.  
  3. Give in once in a while if you really want a book.
  4. Wait for the book price to drop.
  5. Get it from a library or buy it used for a few dollars.  

The Kindle Store might have 510,000 out of 630,000 books priced at $9.99 or below – However, most new releases are priced at $14.99 and $12.99. It forces new Kindle 3, Kindle WiFi owners to delay gratification and a lot will probably join the $9.99 boycott. 

Where do we currently stand with the $9.99 boycott?

We are in an interesting stalemate where the Agency Model has failed to establish $14.99 but has managed to get $12.99 working -

  1. In the top 25 – 8 books priced at $12.99. Rest below or at $9.99.
  2. In the top 50 – 13 books priced at $12.99, 1 at $11.99, and 1 at $10.99. Rest below or at $9.99.
  3. In the top 100 – 18 books priced at $12.99, 1 at $13.65, 1 at $11.99, and 2 at $10.99. Rest below or at $9.99.                              

22 books out of the Top 100 priced above $9.99 might not seem very bad. However, before the Agency Model the number used to be 4 to 8. 

On the other hand, 22 is an improvement from about a month back when there were 28 books at $12.99, 4 books at $14.99, and several at $11.99 in the Top 100.

$12.99 is the current new book price-point and new Kindle owners will hate it

What the last section does show is that the Agency Model has managed to establish a new $12.99 price point – most new ebooks arrive at this $12.99 price.

The new wave of Kindle owners will attack this as they expected $9.99. They didn’t get the benefit of the ‘Try for $14.99, Settle for $12.99′ trickery Publishers played on all of us and will fight hard against $12.99.

There’s little doubt new Kindle owners will strongly resist the $12.99 and $14.99 prices of the Agency Model.

Will their resistance make a difference?

Can the Agency Model withstand Kindle 3, Kindle WiFi owners?

We do know a few things from the first Publishers vs Kindle Owners battle -

  1. $9.99 books sell better than $12.99 and $14.99 books.
  2. $14.99 failed as an experiment.
  3. Kindle owners (the ones who bought Kindles when they were $399, $299, and $259) fought hard against the Agency Model.
  4. Lots of Kindle owners participated in the $9.99 boycott. Lots of them still do.
  5. There’s a general perception that $9.99 is a fair price for new ebooks.

With new Kindle 3, Kindle WiFi owners we are going to see the same things and a few additional factors -

  1. New Kindle owners are probably more price-sensitive. They are going to come in expecting $9.99 prices.
  2. They are likelier to boycott prices above $9.99. They are likelier to buy books priced below $9.99.
  3. New Kindle 3, Kindle WiFi owners are going to help increase Kindle ebook sales. We may hit 15% to 20% market share by end of the year.
  4. They will strengthen the ranks of current Kindle owners – most of whom have resisted the Agency Model.
  5. Their arrival will revitalize current Kindle owners. Suddenly we all feel we have more say and Publishers seem weaker.

Publishers get a new group of Kindle owners who come in with the exact opposite mind-set of what Publishers would like. New Kindle owners are probably going to fight for $9.99 far more vigorously than current Kindle owners do.

As the number of Kindle owners increases Publishers can’t afford to play games

While ebooks made up 5% of the market Publishers could afford to price ebooks at $14.99 and $12.99 and let rivals like smaller publishers and independent authors get more ebook sales. As the number of Kindle and Nook owners goes up and ebooks’ share of the market increases Publishers can no longer afford to lose ebook sales.

It’s all fun and games to fight against a small group of customers – overprice your books, flex your muscles, dare customers to boycott higher prices. As the number of eReader owners increases and the market share of ebooks goes up to 20% Publishers will have to get serious.

Would they be willing to lose 20% of their sales? Perhaps. 

However, as the market share of ebooks increases it becomes tougher and tougher to mistreat/exploit Kindle and Nook owners.

Perhaps the best way to kill the Agency Model is to simply sit back and watch the new Kindle 3 and Kindle WiFi owners join the $9.99 boycott. New kindle owners who are even less willing to pay prices over $9.99 than we are. New Kindle owners who will probably strengthen the $9.99 boycott enough to kill off the Agency Model.

5 Responses

  1. I, for one, will NOT pay $14.99 for ANY eBook — probably will not pay $12.99 for an eBook. I’ll just wait until the price drops BELOW $9.99, which is my absolute upper limit. With so many books available that I have not read and want to read, I can certainly wait out the publishers and their Agency Model. My comfort level is in the $5-$7 range.

    I paid $259 for a K2 and have just ordered the $189 K3, and could afford to pay those higher eBook prices, but since I cannot do anything with the eBook once I read it to recoup some of my investment, I think the Agency Model pricing is a joke.

  2. Here is an example of a publisher doing everything wrong:
    I was looking around the Kindle store yesterday and came across “A Pattern Language” by Christopher Alexander. It’s a great book, one I own, one I was even considering buy AGAIN just to have it in an electronic form. Until I looked at the price: $36.86! OK, granted it’s 1171 pages, but it’s also a 33 year old book. The high price for the physical book ($41) is justified because 1) it is pretty big and 2) it is a specialty book, not a lot of copies are made. Neither of these justify such a high digital price. Instead of getting $10 or $15 from me they get nothing.

  3. The danger for publishers, and Amazon, is that I have mainly bought a kindle to avoid the laptop/phone/desktop for reading books that are already in the public domain.

    I especially aim to buy books direct from publishers who avoid the entire DRM route (e.g. Baen who sell new titles at $6.00) – no Amazon cut.

    I will buy new DRMed books on the platform but never at hardback equivalent pricing. The DRM makes them much less valuable than that!

    I am certain that in this I am like many of the new Kindle buyers. I am after the Kindle device because it solves a technical problem for me not because I am fodder for overpriced, over-restricted content.

  4. I’m with Ginnia — my comfort level is below $9.99. I’ll think twice about paying $7, anything more than that is something I need or really want, or the author is a friend of mine. :) Of the 20 books on my Kindle right now, I bought 4 of them; the others were free from various (legal) sites.

  5. I think Kindle owners that don’t want to buy high priced eBooks should start checking out the inde (independent) books available or those e-books released by smaller publishers. I’ve come across some good books that were below $6.00 and they were not released by the big well known publishing houses. As a matter of fact I wouldn’t be surprised if we started seeing a rise in inde eBook sales as readers either turn away from or are adamant about waiting out these publishers who are trying to set such high prices for eBooks.

    There are just so many books out there that are even cheaper than the $9.99 price that there is just no way in H. E. double hockey sticks that I’m going to be paying anything over 10 dollars. (I don’t even believe I’d payed $10 for an eBook unless there were some special circumstances justifying the price).

    I’m truly happy to see customers gathering together to fight against these high prices. If the top 5 publishers (Macmillan, Penguin, Hachette, HarperCollins, and Simon & Schuster) can basically close ranks to perpetuate this agency model than customers can close ranks to insist on a $9.99 pricing standard for newly released fiction books.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 9,805 other followers