This one comes to me somewhat circuitously, from my José Afonso Furtado Twitter feed. José is amazing. He Twitters about book news every day, practically all day, and I'm beginning to wonder when the man sleeps. His feed is like a stock market ticker, only for book mavens.
So apparently, Amazon.com's electronic reading device, Kindle, which I blogged about back in November, caused something of a stir at this year's BookExpo America. The event, which wrapped up this past weekend in New York City, is the major annual book industry trade gathering in the United States.
At the Expo, publishers expressed concern with the price of Amazon's Kindle editions. In almost all cases, they're lower than those of the corresponding bound, physical volumes, and in many instances, Amazon has been selling the e-editions at a loss.
This pricing strategy is consistent with the company's prevailing business model, which has tended to forgo short- to medium-term profit in favor of building longterm customer loyalty. With Kindle, Amazon's reasoning seems to be: a major economic incentive is the only way to encourage sufficient numbers of people to switch over to electronic books and thus to make the technology viable on a mass scale.
This scares the heck out of publishers, many of whom, as today's New York Times notes, want to charge the same amount of money for e- and p-books. (That's what I'm calling paper-based editions these days.) Their reasoning seems to go something like this: the book industry's hurting (isn't it always?), and the only way to increase profit is to eliminate as many fixed capital costs as possible.
What's intriguing to me about this latest ebook kerfuffle is the book industry's apparent short-sightedness. It seems to be assuming that there's an absolute price threshold below which it cannot sell enough books to maintain profitability. To put it differently, the industry seems disinclined toward Chris Anderson's notion of the long tail, which stresses sustained, aggregate sales of digital goods over the long term.
The BEA controversy therefore makes me wonder how much the book industry's professed economic woes, and indeed broader laments about the "decline of reading," have to do with publishers' unwillingness to get more creative with their pricing. It seems intuitive to raise prices to increase profits; this has been the book industry's fallback position for decades. But Amazon seems to be saying the opposite: lower your prices, and you'll gain readers and increase sales. Could there be a more apt illustration of 20th vs. 21st century business models?
With that said, I still have serious misgivings about Kindle, which I expressed back in November. I'm also planning to say more about Kindle here in the coming months and at this October's American Studies Association conference. Stay tuned.