“E-books are booming. Although they account for only an estimated three to five per cent of the market, their sales increased a hundred and seventy-seven per cent in 2009, and it was projected that they would eventually account for between twenty-five and fifty per cent of all books sold. But publishers were concerned that lower prices would decimate their profits. Amazon had been buying many e-books from publishers for about thirteen dollars and selling them for $9.99, taking a loss on each book in order to gain market share and encourage sales of its electronic reading device, the Kindle. By the end of last year, Amazon accounted for an estimated eighty per cent of all electronic-book sales, and $9.99 seemed to be established as the price of an e-book,” Ken Auletta reports for The New Yorker. “Publishers were panicked. David Young, the chairman and C.E.O. of Hachette Book Group USA, said, ‘The big concern—and it’s a massive concern—is the $9.99 pricing point. If it’s allowed to take hold in the consumer’s mind that a book is worth ten bucks, to my mind it’s game over for this business.'”
“At the Yerba Buena Center, it took a while for Jobs to mention books, and when he did he said that ‘Amazon has done a great job’ with its Kindle,” Auletta reports. “‘We’re going to stand on their shoulders and go a little bit farther.’ It would probably have been more accurate to say that Jobs planned to stand on Amazon’s neck and press down hard, with publishers applauding.”
Auletta reports, “An Apple insider said, ‘He thinks Amazon is stupid, and made a terrible mistake insisting that books should be priced at $9.99.’ …A close associate of Bezos puts it more starkly: ‘What Amazon really wanted to do was make the price of e-books so low that people would no longer buy hardcover books. Then the next shoe to drop would be to cut publishers out and go right to authors.’ …For the time being, Apple’s entrance into the book market has given publishers a reprieve. A close associate of Bezos said, ‘Amazon was thinking of direct publishing—until the Apple thing happened. For now, it was enough of a threat that Amazon was forced to negotiate with publishers.'”
“Most publishers mistrust Amazon and think it is unnecessarily secretive. It won’t tell them details about customer habits, or the number of Kindles sold, or what it costs to make a Kindle,” Auletta reports. “It won’t even disclose the percentage of revenues its book sales represent, saying only that “media”—movies, music, and books—accounted for fifty-two per cent of sales in 2009.”
“Publishers say that the negotiations with Apple were less contentious. There were arguments over the price of e-books, with publishers wanting the top price set at seventeen dollars and Apple insisting on fifteen,” Auletta reports. “‘Once Apple had determined that they were going to accept the agency model,’ a publisher said, ‘they were very tough: Take it or leave it.’ But the Apple people ‘had a much more agreeable feel than Amazon did. They said they would share some consumer data about buying e-books. We have no such data from Amazon.'”
Auletta reports, “‘Ultimately, Apple is in the device—not the content—business,’ the Apple insider said. ‘Steve Jobs wants to make sure content people are his partner. Steve is in the I win/you win school. Jeff Bezos is in the I win/you lose school.’ …Apple agreed to the agency model for just one year, and, as publishers are acutely aware, Jobs has a history, with music and television companies, of fighting to reduce prices. One publisher said, ‘Maybe Apple will want to come back in a year and bite our heads off.'”
Full, extensive article – highly recommended – here.
Clarification: not “Scholastic” e-books.
Clarification: not “Scholastic” e-books.
Clarification: not “Scholastic” e-books.
Clarification: not “Scholastic” e-books.
When will the Texas Board of Education start censoring iPad apps?
@Ampar
Why should they when Apple already is doing the censor job?
I used to read about 9 books per year. I’m working on my third iBook since I got my iPad on 4/3. It has definitely changed my reading habits.
“Why should they when Apple already is doing the censor job?”
Why are you asking me a double in rhetorical question or are you going for the self-referential contradiction?
“Why should they when Apple already is doing the censor job?“
What? Can you please cite your sources for this wild comment? I’d be interested to know how Apple is censoring book content… that would be a neat trick.
I know… perhaps Apple will insist that all books are going to be no longer than 100 pages, thereby they will cut out the boring contentious parts of Grapes of Wrath, or The Brothers Karamazov.
Yeh, that’ll work, right?
Q-“When will the Texas Board of Education start censoring iPad apps?”
A- The Texas Board of Education cannot spell iPad or app.
I’m waiting for the Texas BoE approved Home-School science app for the iPad complete with high quality graphics of Dinosaurs, Adam, Eve & Gawd frolicking in the Garden of Eden.
to “Progressive Agent Provocateur”
What a doofus you are.
Why don’t we just close Texas and move everyone to California?
They have done a way better job of raising, bangers, thieves and arrogant fools like you.
Stick to the topic and keep your crappy political opinions out of it.
Does Apple’s iPad need to supersede the Kindle as an “e-book” in order to “save” the publishing world? I don’t think so. All the publishing world needs is sufficient sales – platform matters not. I’m not saying the Kindle and/or Nook will beat the iPad as a reader, just that the question does not require that. Heck, the iPad can be a roaring success as a product and a total flop as a reader’s device and all could be happy.
Managed to maneuver my wife in front of an iPad while I was doing other shopping … she is sold. Except. There are none to be had. Now. That’s OK. I won’t be abused for bringing one home.
What is this garbage about it still costs a lot to “make a book” even if there’s no physical book in the process? It’s true the author still deserves a cut. And the publishing house deserves something for the risk they took. That’s less than half the cost of the printed version. Publishers … lay off a few executives and cut the pay of a few more. Being CEO is not a license to print money!
I love my Kindle software on my iPhone. At first I thought this will be too small, but it was free so why not try it. I love it, it is the perfect size for me since I read a lot while eating or waiting at doctor’s office and etc. I don’t think I would use an iPad as much too big for me as an book reader the pocket size iPhone is perfection. Plus now I have Kindle on my Mac so have my books in large format when I need them.
As usual, the uninformed complain about book prices and laud Bezos’ artificial standard of $9.99 irrespective of the true cost of developing and selling a book. It’s one thing to produce a 350 page bodice-buster, and a completely different thing to produce a well-researched, substantive text. As for textbooks, only 1% of the cost goes to shipping. About 33% goes to the complete production cycle that includes paper, printing, distribution, and storage, but also includes accounting, offices, salaries, etc. So that roughly 33% cost is only about 9% for the physical product. All in all, that means it’s reasonable to expect about a 10% (+1 or 2% for the seller’s cost savings) reduction in the book price of an e-book relative to paper. Look at the textbook prices on CengageBrain for real examples.
I’m glad of the new MND iPad app but I can get this article to load in it. :-{
Can a tsunami topple a sand castle?
>…OR you can have iTunes allow uploads of indie music for free, set their own prices (like apps), and share the cost 30/70 or 40/60. That would eliminate the recording industry overnight,
That has been in place for years. I number of artists that have recorded at my studio have their music on iTunes and/or Amazon, typically they do it through CDBaby (CDBaby will get your music on all the online music stores for a 10% cut).
So if all these independent artists have been putting their music on iTunes and Amazon, why are the labels still around?
It’s because not enough people are buying these artists CDs, because not enough people know about them, because their isn’t enough marketing for them, because the artist simply doesn’t have the financial resources nor the business skills to get the kind of marketing that would hopefully get them noticed, because they are trying to do it with their own money or money from friends and family as oppose to having a label foot the bill and handle the business side of things. Damn, there’s the labels again.
So cold reality — indie can get their music on iTune and Amazon and get 60-some percent, and that has not eliminated the labels. We all hate them, but they supply funding and business skills that the vast majority of artists simply don’t have. Oh well….
The Kindle was dead the instant that the iPad saw the light of day, but the book business doesn’t need saving. It just needs to adapt to the realities of the times. Greed, blindness and stupidity have prevented book publishers from seeing “the handwriting on the wall”, but they’ll catch on eventually. The medium is part of the message, but not the whole message. Books in one form or another aren’t going away anytime soon. Without meaningful content, electronic publishing becomes meaningless.