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eBook Price War

Posted on 2012-Dec-15

by Paul Salvette

Price-fixing Controversy

Price Tag

Price-fixing lawsuits have contaminated the eBook industry for some time as it elaborately created tension and confusion to innocent readers whose passion is betrayed by covetous economic rationalization. Apple along with several publishers raised eyebrows about their consensual agreement to set the book’s price through collusive tactics. This was widely despised by consumers and seen as the legacy publishing industry unfairly trying to maintain their control of power.

Department of Justice’s Judgment


With the Department of Justice presiding over the case, there were certain solutions ruled and those can benefit the readers in general. Consequently, several publishers have been busying themselves with signing new deals to lower the price of their books. Amazon and Barnes and Noble have flown the flags for the publishers’ eBooks. $9.06 seems like a cool figure to retain popularity on its price-dropping record. The writer is optimistic about the diverse price tactics when retailers are competing against themselves.

eBook Pricing Prediction


Based on the writer’s prediction, three focal points might be worth your attention. Since the settlement states clearly that retailers cannot lose money from the publisher, Amazon might have to restructure their discount model. If Amazon decides to discount one book from a publisher, other books might be exempted from such a downfall since decreasing the price for every book from one publisher means loss. Other bookstores might just seize this opportunity to directly compete with Amazon to offer the better deal. Moving on to the next point, discounts might not benefit unit sales. Having quoted the discounts of HarperCollins books at B&N, the decreased prices hardly affect the sales ranking. The third point stresses the importance of a niche audience that is willing to pay whatever price to their beloved authors. James Patterson and John Grisham are perfect examples where discounts of their books are only seen as reader’s experimenting tool to see how their price strategy works for certain bestselling titles. The writer also points out the eReader’s platform ecosystem that encourages reader’s preference to shop within their trusted channel without worrying too much about the price differences.

Amazon’s Victory

The Telegraph coincides with the Forbes article to report on Amazon’s victory. Apple loses its ground when the EU Competition law prevents it from making an exclusive deal with the publishers. The said deal prevents other retailers from competing with Apple in terms of monopolizing the discount offer. Publishers like Penguin are expected to resolve this matter as soon as possible because violation will lead to the fine up to 10% of global sales. Although HarperCollins, Simon & Schuster, and Hachette have reached a settlement with the Department of Justice, Apple, Penguin Group, and Macmillan have not.

Projected Sales Calculation

To answer why we brought price discounts to your attention. Please consider this eBooks sales prediction and see why publishers and retailers want the biggest share of their pie. The steady growth as partially known as Sigmoid Curve accentuates the sales increase to reach its peak over time. One of the significant findings from Matt Blind’s Projected Sales notes is that the slight increase in sales excludes the success stories from self-publishers. Imagine what the lovely curve would look like if those numbers are combined into his calculative prediction.

Amazon’s Lack of Kindle in China


Last but not least, Amazon’s extending its digital footprint into China although no Kindle hardware has officially reached the hands of avid Chinese readers. Boasting of 22,000 titles, Amazon might pose a threat to the local sellers: Shanda, Hanvon, and Dangdang. Hardware-wise, Amazon China might not have to worry too much about the lack of Kindle when smartphones have become the essential eReader in their own right. Being the content provider seems to give the newly launched Kindle Store the upper hand to offer the multitudes of their available collection. The writer predicts that Amazon’s support of popular operating systems like iOS and Android will propel the giant online retailer to lead the competition without hassles.

What Price is Right?

According to one of the early prediction in Projected Sales of calculated eBook sales that its price will be lowered, the reason that online retailers want to decrease the price tag undoubtedly confirms Blind’s prediction. Throughout our discussion how the price of eBooks has played a significant role in determining the solution for online retailers and publishers, we would like to draw your attention to readers, the receiving end, who will enjoy the diversified catalogue of literature limitlessly. With Amazon’s expansion to China, we might be able to see new potential customers stepping in the market to experiment various products offered by the providers. My question is what prices are right for your future readers given the speculation that the niche market circumstance that certain groups of people are willing to pay for the quality materials?

Label: Marketing

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