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.

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