Ebook pricing gets even more interesting: Apple’s model vs. Amazon’s subsidy

Tablets and devices will get all the coverage, but I believe ebook pricing is going to be 2010’s biggest issue for publishers. To illustrate … this New York Times piece explains how Apple’s $12.99-$14.99 range represents the outer limit…

iPad and Kindle

Tablets and devices will get all the coverage, but I believe ebook pricing is going to be 2010’s biggest issue for publishers.

To illustrate … this New York Times piece explains how Apple’s $12.99-$14.99 range represents the outer limit for iBooks pricing. Those price points aren’t set in stone. From the Times:

<blockquote

… Apple inserted provisions requiring publishers to discount e-book prices on best sellers — so that $12.99-to-$14.99 range was merely a ceiling; prices for some titles could be lower, even as low as Amazon’s $9.99. Essentially, Apple wants the flexibility to offer lower prices for the hottest books, those on one of the New York Times best-seller lists, which are heavily discounted in bookstores and on rival retail sites. So, for example, a book that started at $14.99 would drop to $12.99 or less once it hit the best-seller lists.

Sounds like Apple and Amazon are closer than we initially thought, right?

Nope. Not at all.

The single most important sentence in that Times article is buried at the very end:

Under the agreements with Apple, both the publishers and Apple should make money on each book sale. [Emphasis added.]

Ahh, there we go! Whether the price is $14.99, $12.99, $9.99 or $1.99, Apple will take its 30 percent. Set the price lower and sell more books? You betcha! Jack the price up and sell fewer? Absolutely!

What Apple won’t do is subsidize a price point.

The Kindle is a big, shiny, distracting object

Hey book people: don’t be fooled by the Kindle. Amazon has no interest in hardware. That’s the conclusion Joe Wikert reaches in an excellent bit of analysis. I couldn’t agree more. The Kindle is a big, shiny object that’s distracting…

Hey book people: don’t be fooled by the Kindle. Amazon has no interest in hardware.

That’s the conclusion Joe Wikert reaches in an excellent bit of analysis. I couldn’t agree more. The Kindle is a big, shiny object that’s distracting everyone from Amazon’s more subversive (and smart) move: It’s trying to become the source of ebooks. It doesn’t want to own that market. It wants to rule it.

It’s entirely possible that Jeff Bezos and Co. originally sought to duplicate Apple’s iPod-iTunes model. But take a look at the evidence Joe presents: At some point in the last two years, Amazon realized it’s not Apple. The hardware gambit only works if you create something miraculous. The iPod and iPhone certainly qualify as technical marvels. Spend 30 seconds with an Apple product and you’ll come away deeply impressed. Spend 30 seconds with a Kindle and you’ll want your 30 seconds back.

Amazon just can’t cut it in the hardware game. I bet the higher-ups don’t particular care, either. This is a company that redefined retail efficiency. It’s masterful at satisfying consumer demand, more so than Apple or even the big daddy of the retail chain, Wal-Mart. Publishers need to realize — and the smart ones already do — that the Amazon threat doesn’t lie in a device. It’s in the distribution.

Amazon’s Kindle Kill Switch Now Fully Operational

Update, 7/17, 9:36PM: Ars Technica gets to the bottom of the Orwell deletions. The ebooks weren’t legitimate and Amazon’s system automatically deleted the copies, which is even more unsettling than a manual kill command. According to Ars, Amazon is changing…

Update, 7/17, 9:36PM: Ars Technica gets to the bottom of the Orwell deletions. The ebooks weren’t legitimate and Amazon’s system automatically deleted the copies, which is even more unsettling than a manual kill command. According to Ars, Amazon is changing the system to prevent future auto-deletion.


We already knew Amazon could reach into Kindles and disable text-to-speech functionality, but now comes word that Amazon invoked the kill switch on copies of “1984” and “Animal Farm” (irony unintended, but appreciated):

… apparently the publisher changed its mind about offering an electronic edition, and apparently Amazon, whose business lives and dies by publisher happiness, caved. It electronically deleted all books by this author from people’s Kindles and credited their accounts for the price.

Remote wipes / kill switches are fine if they’re controlled by the consumer (e.g. MobileMe’s remote iPhone wipe is an excellent feature), but this manufacturer overlord business is foolishness. If I buy a product — digital or otherwise — you do not have the right to dispatch your deletion ninjas on my file on my device.