The question of who should be setting ebook prices has been on my mind a lot lately, in no small part because of Amazon’s disputes with Hachette and Bonnier. One of the leaks suggests lower ebook prices are part of the terms Amazon is demanding in the negotiations, with $9.99 being the maximum price for most ebooks. I’m torn over whether I like this method or not.
On one hand, lower ebook prices means readers can buy more books and the price of ebooks will become more reasonable. I don’t hide the fact I’ve backed off buying a lot of traditionally-published ebooks I really want to read because the prices are simply too high and I refuse to pay them.
If lower prices result in more sales, as some have suggested, the lost revenue on the sale price might be made up in a greater volume of sales. It’s hard to say without data, but logically it would make sense. It should also be noted that the revenue of the publisher may remain structurally lower if another of Amazon’s demands (this one has been confirmed in the Bonnier dispute) is accepted, which is that their cut from the sale of an ebook increases from the current 30% to the print standard of 50%. Then the publisher not only has lower prices (with a potentially greater sales volume), but also a lower cut of each of those sales. If those are the new terms, I can understand why publishers would fight.
However, this also means the retailer, not the publisher, gets control over the price of ebooks. Traditionally, retailers set the sale price of books after buying them at a wholesale price from publishers, but I’m not sure the same model should apply to digital books because the products are instantly available, and there’s no need to warehouse or ship them. The other option is that publishers be given the agency model, where they get to choose their own prices and give a cut of the sale price to the retailer. The big publishers and Apple were sued by the US government for using this model and colluding on prices, so if this is the right model to go with, it will be a while before it can be reestablished.
By extension, this also leads me to wonder if publishers aren’t given the ability to set their own prices, should indie publishers also lose that ability, and have to abide by some pricing metric set by Amazon and other retailers? I don’t see how we can reasonably argue publishers should get one model and indie publishers another, and I definitely favour indie publishers being able to set their own prices.
Obviously this is a tough question to answer, as there are implications with either choice. The outspokenness of authors, continuation of contract disputes, and attention from the media proves as much. The ongoing and upcoming contract negotiations between Amazon and publishers will bring about new relationships between the actors in the publishing space, but it’s still hard to say what those relationships will be, and when the dust settles, who will be setting prices and whether they’ll go up or down.