Apple’s “iPad has already started to change the landscape of digital publishing: After a few days of a public battle, Amazon was forced to capitulate to a new deal with Macmillan, one of the six largest publishers; on Friday, Hachette started to make noise too,” Andrea Belz reports for E-Commerce Times.
“An excellent summary on The New York Times describes how previously, Amazon set the prices — typically a default of US$9.99 for new releases and best sellers,” Belz reports. “Because the cost to Amazon is typically $12.50-$17.50, this scheme lost money for the e-tailer but promoted the sales of the Kindle reader.”
“In the new world order, the publisher will set the consumer price and the online retailer will simply be the agent, taking a 30 percent commission; online book sellers will move to acting as an intellectual’s eBay Books sold electronically will generally cost $12.99-$14.99,” Belz reports. “
“Unfortunately for Amazon, management discovered that you cannot simply take a page (so to speak) from the Apple playbook and apply it to any industry,” Belz reports. “Amazon basically copied the Apple iTunes model — a fixed, low item price for the content that promotes the sales of the hardware — and then discovered that Apple changed the rules. How did this happen?”
Unlike the musicians, “writers and their agents/publishers do not have an opportunity equivalent to the high-margin live performances; the entire margin has to be generated with the content sales,” Belz reports. “Since Apple’s deal lets publishers attempt to preserve content, it may be as simple as my grandmother’s saying: ‘To make money, you have to let other people make money.'”
Belz writes, “This is where the strategy gets interesting. Apple starts to exploit the ‘iEcosystem’ that it has already created to promote hardware and software. Then it takes out Amazon and other competitors to dominate e-book distribution. At that point, Apple can return to the publishers with a new deal.”
Full article here.
MacDailyNews Take: “Amazon’s Kindle hardware, which wasn’t much to speak of in the first place, is dead… If Jeff Bezos isn’t sweating…” MacDailyNews Take, during live coverage of Jobs’ iPad unveiling, January 26, 2010
book ’em Jobso
@ M.X.N.T.4.1.,
Hate to piss in your cornflakes but I will anyway. Ever heard of copy and paste?
You copy the pertinent info from the digital textbook. You paste it in your piece/paper, just above where you are working. You rewrite it in your own words or extract a quote. Then you delete the unused info from the piece/paper.
It works better than a split screen or a second computer/monitor. Try it.
Publishers fill the void between authors, would be authors and the reading public. They tend to filter out the crap. They also foist copycat crap upon us that tends to ride on the latest bestseller’s coattails. But they do edit manuscripts and change good ideas, poorly written, into best sellers.
If publishers die off, so will books, both real and digital.
@ron
And to think you come from the country that instituted free libraries. Before they kicked you out for being such a peon.
Just sayin’
“Unfortunately for Amazon, management discovered that you cannot simply take a page (so to speak) from the Apple playbook and apply it to any industry,” Belz reports. “Amazon basically copied the Apple iTunes model — a fixed, low item price for the content that promotes the sales of the hardware — and then discovered that Apple changed the rules. How did this happen?”
That’s what happens when you decide to become the music cartel’s stooge, Amazon. Seems like a bit of tit-for-tat by Apple to me–and good for them. Watch whose toes your step on, Mr Bezos…
@Ron
“Have we missed a period?”
No need to panic till you check the home pregnancy test.
Comment from: Davidlow
“… by ceding pricing control to the publishers, Apple has set in motion a very competitive structure for the ebook marketplace. Over time this will bring the prices down closer to the publishers costs, which are much lower than for physical books.
“And bringing the consumer prices down as low as possible is of course Apple’s goal, to sell more iPads.”
Wheels within wheels! (It actually makes sense. But most of the “feint” I suspect is going on is to temporarily placate bookstores who are howling to publishers about being undercut by e–books.)