The continuing story of e-books

According to the latest information released by online book retailer Amazon, this Christmas, for the first time, e-books out-sold hard copy (i.e. paper) books. The company’s e-book reader, the Kindle, is now more likely to contain a customer’s book collection than a bookcase or a set of shelves on the wall. This raises a number of questions, but perhaps some of the more interesting ones include what this will do to book prices, how writers and publishers will be affected, and what kind of ‘market’ this will turn into.

Take this example. If you would like to buy Colm Toibin’s latest book, Brooklyn, then on Amazon you can get the paper edition for $16.50. But if you go for the e-book (Kindle) version, you will have to pay $13.79. So you’ll get the electronic version at a lower price, but low enough? If you’ve just got the Kindle, and you are full of admiration for your new toy, maybe you won’t think that price too bad. But let us say you’ve had the device for six months, and you start wondering about what this money is paying for, and in particular that neither the publisher nor Amazon have to create and then ship anything of material value to you, then you may start thinking that the price is too high.

In fact, it appears that many customers regard $9.99 as the top price that would be acceptable for an e-book – and I’ll bet my first edition of Dickens’ Bleak House that in another two years or so that price elasticity will have slipped further and the limit will be $4.99. And between now and then you’ll have publishers and agents and Amazon itself arguing about copyright and older titles and heaven knows what else, and before you know it the whole publishing industry will be plagued by piracy and other such stuff.

There is also a rumour that Apple is about to enter this market – wait for an updated version of iTunes with book content for your iPodReader or whatever.

There will be interesting times ahead. E-book readers are here to stay. And e-books provide opportunities for publishing and distribution that could rattle the cages of the large publishing houses and open up some real competition. Let us hope that this is how it will develop.

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8 Comments on “The continuing story of e-books”

  1. Donal_C Says:

    The Amazon data apply only to December 25 so it’s difficult to judge the strength of the trend. Many people probably received a Kindle for Christmas and then needed reading material for it. In contrast, fewer people than normal probably shop for paperbacks on that day. I suspect that the format wars are going to be crucial to future pricing and the success of these products.
    Once a technology is introduced, the price elasticity of the average customer *increases*. The main reason is not that customers become tired of the product (though I find your hypothesis quite interesting and it is probably a contributing factor), but that the customer base expands and encompasses more people who have less inherent interest in the technology, perceive lower utility from the device and are hence more price sensitive.
    However, most pressure to pricing might come from the format war between Amazon (with its proprietary system) and Sony and other manufacturers (with open standards). The e-book market is a classical two-sided market. That is, the larger the number of potential readers, the greater incentive publishers have to make reading material available. Likewise, the greater the availability of reading material in the particular format, the greater incentive book readers have to purchase the system. These so-called network effects are especially important to later adopters of the product – whereas early adopters who are interested in the technology might be satisfied with a restricted range of e-books.
    Lastly, publishers have strong incentives to push open standards. Amazon is trying successfully to capture most value in the chain from author to reader. It already offers a self-publishing service. Open standards might allow the publishing houses some respite.

  2. Vincent Says:

    Will, do you think, the e-book and their cousins become as part of the personal world as say the mobile phone.
    Years ago I used one of those CD book readers and beyond the weight the visual was not good.
    However, having said that, I find reading a smallish document on this thing a torture and eventually just Print the thing.
    Therefore if I require a Government Document it is far cheaper to ring up and order it from the SO.
    Anyhooos, I hope the things work and you would have to say they should, but I have this sort of feeling that there will be more costs involved to the reader and any savings from not printing a Book going to the publisher and the seller.

    • I suspect you are right, Vincent – and I suspect also that the author will not see much more money…

      • Vincent Says:

        If anything, if the Authors do not watch themselves they will continue to get the percent they are getting now, meaning a dramatic drop in real Cash.
        Mind you, I expect something like wiki, firefox or linux to develop, where a community of authors come together and god help me, edit each others work. I’m thinking here about those art galleries where the artists themselves are the Gallery owners getting the 50/60%, or a legal partnership.

  3. Ros Says:

    You have a first edition of Dickens’ ‘Bleak House’! I’m green with envy!!

  4. kevin denny Says:

    I know this makes me sound like a dinosaur but I just like books. I can scribble on them, turn the pages over, use them as coasters, throw them across the room when I dislike them etc. The only problem arises is when moving office or home: they are so bulky.
    So for the moment, Gutenberg rocks (& no, not Project Gutenberg).

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