updated 04:55 pm EDT, Thu July 9, 2009
Amazon may up e-book price
Amazon's price cut of its Kindle 2 e-book reader have prompted some in the publishing industry to worry that the online retailer, which is far and away the leading provider of e-books, may put pressure on them to drop the prices for electronic versions of their books for the device, according to a Bloomberg report. Amazon reportedly pays between $12 and $13 to publishers for Kindle editions of books that are on the New York Times bestseller list and sells them for about $10 to customers. Many publishing houses are concerned the giant online vendor will put price pressure on them in order to bump its own profit margins.
Publishers earn about $2.15 per digital book versus 26 cents for a print copy.
The $10 price cannot be maintained indefinitely from a financial standpoint by Amazon nor publishers, according to analyst Claudio Aspesi. He believes Amazon is likely to raise prices to $12.50 while at the same time asking publishers to drop their price points. This strategy could help the company reach its projected $1 billion in profits for the Kindle by 2010.
Publishers are hoping for added competition to the Kindle, that will reduce their reliance on Amazon as a client for e-books, and to avoid what Apple managed to accomplish with iTunes in becoming a near-monopoly or at least the top place to go to when looking to purchase digital music online.
This may come from Sony with its Reader, although Sony is hoping to tap into a different revenue stream by selling third-party ads on the device., News Corp. is to be developing its own device as well. Google has plans to sell e-books via the web as well, though it is not yet tied to any related hardware. Plastic Logic and FirstPaper are expected to introduce e-readers in the future.