Cost of eBooks vs dead-tree books

[pdurrant]

Publishers sold ebooks to Amazon at 50% of retail price. Whether Amazon chose to charge more or less to the public than they paid was (IMO) Amazon's business.

[rhadin]

Worth reading is this short article from The New Republic: "Billion-Dollar Book Companies Are Ripping Off Public Schools" with ebook pricing.

[darryl]

Originally Posted by pwalker8

Or hope the guy who guts your business model doesn't write the brief for the prosecutor and isn't as good at judge shopping as Amazon.

The publishers eventually got their way because there is absolutely nothing illegal about agency pricing. Once Amazon got Apple out of the way and the Kindle store was firmly established, they really didn't care about agency pricing. Yes, they did try to play hardball with the first publisher whose contract came up, but they got a lot of bad press by their bullying tactics and Cote wouldn't ride to their rescue a second time, so why bother? The publishers got what they wanted and Amazon got what they wanted (a deep pocketed competitor shuffled off to the sideline). That is why you don't get all eBooks dirt cheap, not because Apple and the publishers = bad.

As has been pointed out by other posters, agency pricing was not the issue. Conspiracy theories about judge shopping and misrepresenting a well written professional complaint as "writing the brief for the prosecutor" are neither helpful nor accurate. The breaches of anti-trust law by the Publishers and Apple were flagrant and the decision totally unremarkable. The Publishers eventually got their way because the benefits to Amazon in letting them were just too great.

[leebase]

Originally Posted by darryl

The Publishers eventually got their way because the benefits to Amazon in letting them were just too great.

The work by Amazon to get people to buy a $500 reader in order to get $9.99 brand new NYT best sellers had finished. The price was able to come down.

Amazon would never accept windowing for ebooks, so Agency was their choice.

[John F]

Originally Posted by leebase

The work by Amazon to get people to buy a $500 reader in order to get $9.99 brand new NYT best sellers had finished. The price was able to come down.

Amazon would never accept windowing for ebooks, so Agency was their choice.

Was there ever a Kindle priced at $500? Wiki says the first Kindle was $399 (2007), the Kindle DX was $399.

[binaryhermit]

I believe you are correct, but when adjusted for inflation that $399 is almost exactly $500 today.

[JSWolf]

Originally Posted by John F

Was there ever a Kindle priced at $500? Wiki says the first Kindle was $399 (2007), the Kindle DX was $399.

Kindle's were priced too much even back then. The Sony Reader PRS-500 was priced at $300. Today Kobos are cheaper then Kindles.

[ownedbycats]

I wonder if Amazon and Kobo make more profits off their readers or the books.

[DNSB]

Originally Posted by ownedbycats

I wonder if Amazon and Kobo make more profits off their readers or the books.

Going by my spending habits, they make much more off the ebooks than off the readers. I will admit that I probably purchase many more books in a year than most people but even for those who purchase fewer ebooks per year, I suspect the books are the profit area for most vendors that sell both.

[binaryhermit]

I'm pretty sure at this point, for Amazon it's the books, that the HW is sold near cost.

[JSWolf]

Originally Posted by binaryhermit

I'm pretty sure at this point, for Amazon it's the books, that the HW is sold near cost.

Um.. Given that the Kobo Libra H2O is is similar to the Kindle Oasis and the Oaasis is a bit more expensive, I would say that Amazon is selling for more then near cost. The Kobo Forma is not much more expensive then the Kindle Oasis. So no, Amazon is not selling near cost. They are selling for a profit for sure.

[Uncle Robin]

Originally Posted by DNSB

Going by my spending habits, they make much more off the ebooks than off the readers. I will admit that I probably purchase many more books in a year than most people but even for those who purchase fewer ebooks per year, I suspect the books are the profit area for most vendors that sell both.

I think this is likely to be true, but it does make me wonder why Kobo doesn't do sales of its hardware more often. Amazon often offers discounts on the Kindle range, but in the nearly 2.5 years since I switched to Kobo the number of times the Kobo Store I have access to has offered any discount at all on any device at all is exactly zero.

[darryl]

I doubt selling more Kindles was the primary or even a significant motivation for Amazon discounting of new releases. Amazon tends to plan long term. The more readers in its walled garden, the more money it makes from books. And of course many of those readers became Amazon customers generally, buying Prime, Music and the many different products Amazon offers. So far as books are concerned, once in the Amazon walled garden readers were seeing not only Big 5 new releases but also KDP and later Amazon imprint books. Competing directly without obvious differentiation. And securing for Amazon an increasingly important source of books independent of the large traditional publishers. Amazon's discounting of new releases not only drew attention to the lack of price competition in tradpub but brought many new readers to Amazon at a time when it was needed. By the time the tradpub cartel had lost or settled with the DOJ and their contracts for Amazon came up for negotiation, Amazon saw no need to continue this practice. It continues this day to distance itself from the prices of e-book new releases by making clear that the price is set by the publisher. Self-published, Indie published and Amazon imprint sales continue to boom and at least anecdotally grow. And for those who continue to buy print books, many now buy from Amazon.

Posts which talk about Amazon seeking to gut Tradpub's business model imply that there is something wrong with this. But that model depended on the lack of price competition in a tradpub market best described as a shared monopoly or an oligopoly. And the tool which Amazon used? Price competition. The very heart and soul of a capitalist system. And the holy grail so far as the prevailing Chicago School of anti-trust law in the US is concerned, which puts the consumer above all else.

[ownedbycats]

Originally Posted by Uncle Robin

I think this is likely to be true, but it does make me wonder why Kobo doesn't do sales of its hardware more often. Amazon often offers discounts on the Kindle range, but in the nearly 2.5 years since I switched to Kobo the number of times the Kobo Store I have access to has offered any discount at all on any device at all is exactly zero.

I got my Kobo on sale, but that was through a retailer (Chapters Indigo) rather than directly from Kobo. This was also in 2012/2013 or thereabouts.

[DNSB]

Originally Posted by Uncle Robin

I think this is likely to be true, but it does make me wonder why Kobo doesn't do sales of its hardware more often. Amazon often offers discounts on the Kindle range, but in the nearly 2.5 years since I switched to Kobo the number of times the Kobo Store I have access to has offered any discount at all on any device at all is exactly zero.

In the last 2.5 years, I've seen Kobo hardware on sale on several occasions though mostly on the low end devices. Heck, I've even received emails from Kobo and Chapters/Indigo about sales on Kobo devices.