Publishers Get Aggressive in eBook Price War Against Amazon.com

The heated fight between Amazon and Macmillan has turned to be a full fledged war with Amazon.com on one side and the publishing industry on the other. Following Macmillan’s suite  of increasing e-book prices to $12-$14 Hachette, another big publisher also wants to see most of their bestselling e-book title in the $15 range. Harper Collins has also moved in the similar direction.

Meanwhile Apple made a strategic (rather highly intelligent) move agreeing to let publsihers set the price of e-Books for its soon to be launched iPad – thereby becoming a quick ally for the publishing industry.

No doubt publishers would want to get the best margin out of their top selling ebook titles but such an aggressive move against Amazon’s consumer-friendly pricing is not a very positive sign for the ebook indstry which is at its nascent stage right now.

But, what I am not sure of is why would publishers force a price hike to such an extent. I mean from a cost perspective ther is no printing or distribution costs associate with an e-book. Furthermore, no brick-and-mortar storefronts or retail space/costs. There isn’t any “shelf space” argument also – So why wouldn’t publisers want these cost savings to be transferred to the price of the e-books which ultimately would keep users happy. Something that publishers seem to take a bit too long to understand

What’s ironic for Apple and its Kindle customers is that Apple’s entrance to the e-reader market will likely lead to higher e-book prices. This may be one of the few cases in the history of capitalism where increased competition has actually hurt the consumer.

I think, for publishers the longer term (and better) strategy should be to lure the new readers(who don’t buy much of physical books) into more e-book purchases.

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