News Corp head favors iPad pricing over Kindle's
updated 10:10 pm EST, Tue February 2, 2010
Murdoch says Apple more flexible than Amazon
News Corp. chief Rupert Murdoch today openly dismissed Amazon's e-book store in favor of Apple's in his company's fiscal results call on Tuesday. The executive, who also owns publisher HarperCollins, argued that the Kindle store's $10 or less pricing "devalues books" and punishes those selling hard copies. He instead favored Apple's deal with HarperCollins for iBooks and the iPad, which he hinted would allow a "variety of slightly higher prices" that could bend to reflect demands.
"We don’t like the Amazon model of selling everything at $9.99," Murdoch said. "They don’t pay us that. They pay us the full wholesale price of $14 or whatever we charge... we want some room to maneuver in it. There will be prices very much less than the printed copies of books but still will not be fixed in a way that Amazon has been doing it. [...] There will be prices very much less than the printed copies of books but still will not be fixed in a way that Amazon has been doing it."
He added that Amazon appeared willing to discuss new terms, though he didn't say if this was the direct result of the retailer's truce with Macmillan or part of a broader willingness to adjust its terms.
Apple is believed to be in an ongoing battle with Amazon to attract publishers to the iPad and in some cases away from the Kindle. Rumors suggest that Apple will charge between $13 and $15 for bestsellers and will take only a 30 percent cut, which while not ideal would provide more revenue to publishers and give them room to go lower for older books and promos.
Fresh-Faced Recruit
Joined: Dec 2005
You've Got to Wonder...
With the iPad, the book publishers may have a real tool to make eBooks sell in large volume. That assumes iPad becomes the rage people are hoping for. Does anyone think they'll ever go for the more sales at large volume and lower price point if the iPad becomes a hit?
So far, even with the plethora of overhead costs lopped out of the loop, publishers still want to charge near-hardcover rates for digital copies of books AND overload them with DRM. Something would have to change their mind.
With music labels, Apple took a hard stance from the get-go on a single-line price for everything that the iTMS carried. This along with the store's success became a bargaining chip for Apple to keep the content at that price. Apple is obviously not taking that tact here, so it probably won't have the ability to lower prices or get rid of DRM on its own unless it changes the terms of future contracts.
This leaves it up to a publisher with a wildly popular product to go for the large volume/low price business model and win out over the opposing model to change minds in the publishing industry.
In terms of DRM, publishers don't yet have to deal with piracy of alternative products; it takes a investment of a little money and a fair amount of time to get a paper book to a digital copy as you would a CD into your computer's music library. However, as we have seen repeatedly with digital music, and already with some eBooks, prohibitive DRM is always eventually broken.
I think it'll be interesting to see if its the artificial controller- Apple, or the market that drives popular business models in this industry in the future.