Amazon on e-book pricing

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This Slate article reports on the publishing industry's attempt to jack up e-book prices on Amazon. Executive summary: Amazon charges a more-or-less fixed $9.99 for Kindle books regardless of the selling price (books which go for less than $9.99 get discounted more). The publishers want more pricing flexibility. Jack Shafer argues that the publishers are likely to price themselves out of the legitimate market and create a black market for bootleg e-books:

Right now, the electronic-book market finds itself roughly in the same place the market for MP3s was in 1999, the year after the release of the first portable MP3 player. First adopters of e-books, who are filling their devices with content and proselytizing to their friends, have it better than the early MP3 users. The iTunes store, which was established in early 2003, was among the first online sites where music fans could easily buy music files, a la carte, from a huge selection. The other commercial sites, wrote the New York Times, were "complex, expensive and limiting" and "failing because they were created to serve the interests of the record companies, not their customers." Basically, before iTunes arrived, if you wanted portable tracks, you had to rip your own, borrow collections from friends, or grab "free" tunes from the "pirates" at Napster or other file-sharing sites.

It doesn't make me a defender of illegal file-sharing to say that the music industry goofed by waiting until 2003 to agree to sell individual tracks for the reasonable price of 99 cents. Its absence from the electronic-music market in those early years allowed illegal file-sharing to take root and spread, and it helped shape the perception, especially among younger consumers, that music "should" be free.

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No title is safe from file-sharing. As the Instructables Web site detailed a couple of months ago, a do-it-yourself, high-speed book scanner can be made for about $300. The file for a hefty book like Gödel, Escher, Bach: An Eternal Golden Braid is about the size of a five-minute MP3 and can be downloaded in a couple of minutes. Does the book industry want to join the digital flow, the way the TV industry has with Hulu and TV.com? Or by its obstruction does it intend to encourage the establishment of a Bookster?

I'm not a huge fan of Amazon's pricing strategy; you get a pretty big discount (~60%) on hardcover books, but the discount on paperbacks is pretty marginal (~20%). E-books certainly are nice in some respects, but given that they're not infinitely portable between devices and that Amazon has restrictions on the number of devices you can download to, I think there's an at least an argument that e-books are less valuable than paper books. Of course, I don't download MP3s either, so maybe I'm not the target audience here, but it seems to me that people aren't going to be excited to pay $19.99 for an electronic version of the next Dan Brown book.

However, I'm not sure I find Shafer's argument about the imminent Napsterization of the publishing industry that convincing. First, it's a lot less convenient to rip books than it is CDs. Pretty much every computer comes with a CD reader, which more or less makes it a convenient ripping platform. If you want to scan books, you're going to need to lay your hands on a book scanner. Even if we stipulate that you're going to build a $300 scanner for yourself (and it doesn't look incredibly simple), that's pretty different from having it bundled with your PC. In addition, this kind of scan is a pretty inferior alternative to a professionally produced e-book: you get scanning/OCR artifacts, page layout issues, etc., which need to be corrected semi-manually. By contrast, a ripped CD is effectively a perfect copy (it's the popular compression schemes which are lossy), and if you want you can make a more or less identical copy of the CD any time you want.

More importantly, a redistributable copy of your music is a natural side effect of something you probably want anyway: your music on your computer or iPod. Most people listen to a lot of their collection semi-regularly and having your music all in one compact form is so much more convenient that I suspect that people who have CDs would be happy to copy everything onto their computer/iPod. The consequence is that as soon as you turn on sharing, it's natural to share all your stuff. But people read books differently than they listen to music; even if you're a very active reader you probably are only working on a few books at a time, so the value of having all your books ripped is a lot lower, which means that there's less raw material for broad scale sharing of people's naturally acquired collections, as opposed to people who deliberately set out to develop a large corpus for the purpose of sharing it.

That said, I do actually want to have an electronic copy of a single book which isn't available from Amazon. If anyone out there has a book scanner they'd let me use, it wouldn't be unappreciated.

3 Comments

My experience with OCR'd books (that I actually own but haven't bothered to lug down from WA) has been fairly mixed. Some seem to be faithful reproductions while others contain all sorts of bizarre spellings and typographical mistakes. Any deviation from an upright font causes all hell to break loose. I guess italics is hard.

I've had other friends skeptical of the availability of scanned titles, and I've been forced to show them the hard way (i.e. by sending them the torrent URL) that virtually all important technical titles are now scanned and online. Most popular comics are also available, as are most bestsellers.

I understand that you believe the "napsterization" of books isn't imminent, but you're simply factually incorrect. The people who are doing this the most are the kids in colleges, who are also the ones that started the music trading culture. They often cannot afford textbooks and will turn to scanning and sharing to save cash. Once they get familiar because of textbooks, however, they start to learn to do it routinely.

It is only a matter of time, I think, until publishing faces a crisis just like everyone else.

I have, several times, been looking for e-books of certain titles.

However, all seems to be sold with various forms of draconian DRM, for a considerably higher price than the paperbacks in the normal stores here.

I happily buy e-books from Baen, as I know I will get files in normal formats, with no chains. Plain TXT and RTF works just fine everywhere.

If I make the mistake of buying e-books from Amazon I have to deal weird rules that make sure I only read on a genuine windows xp sp 1 computer with adobe 6.0 (unpatched) installed, don't copy the file to my mac, don't read it on my OpenBSD laptop, don't re-size the text and only read them on odd Thursdays after midnight when the moon is full.

As long as they treat me like a pirate if I try to buy their products I might as well spend my money elsewhere. I buy my e-books from those that do not.

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