Thu Feb 2, 2012
I love Apple. Especially Apple hardware. And I’m glad they’re doing so well. But one area where they really messed up is in e-book pricing.
Steve Jobs wasn’t an avid reader. According to Isaacson’s biography, he just read the same Zen Buddhist book over and over. That kind of explains what happened. You may have heard the sordid tale, or read about it in the biography:
Amazon was first in the e-book market and established a wholesale model where no e-book sold for more than $9.99 (Perfect. I remember those halcyon days). Then Apple came along and realized they couldn’t compete using the wholesale model (which they had successfully used for music with their 99c tracks). So they told the book publishers they could set their own price. All the publishers had to do was give Apple 30 percent.
Oh, and one more thing. If they sold a book through Apple, they couldn’t sell the same book for less money on Amazon.
So, the publishers went to Amazon and demanded the same deal, or they would pull all their e-books out. Amazon had no choice.
And that brings us to today, where you either pay $28 for an e-book, or buy the same book - except a real, physical book - at a bookstore for $9.99. Obviously the physical version costs far more to produce and distribute, which is why consumers are ticked off.
The resulting anti-trust lawsuits are going to stretch on for years. In the meantime, armed with Calibre and BitTorrent, ordinary book worms are discovering the enticing world of piracy. Text files are really small and quick to download, unlike those 7-gigabyte HD movies that take all week. You can literally download thousands of stolen books onto your kindle in one shot - more than enough reading material for several lifetimes. Sure, it’s almost impossible right now to find that obscure title you’re looking for - but with enough momentum, that’s going to change.
Unless the major players get their act together and start looking at the situation from a consumer’s point of view, rather than an accountant’s one, publishers are quickly going to be mired in the same rampant piracy that almost decimated the music industry.
No serious reader wants to steal from the authors they love. But they don’t like being ripped off either. Let’s fix this before it’s too late.