April 16, 2012
If you're like me and like to read books in an electronic format, it's a little complicated to understand why they cost what they do.
However, I think CNet has done a great job in explaining everything with this article.
I started to take a look at electronic books a few months before the iPad was released. I really wanted to try out a Kindle, but at the time they were way more expensive than the $79 they start at now. However, Amazon had an app for iPhones letting you read Kindle books on them.
I know what you're thinking. "Books on a phone? Isn't that tiny?" Well, yes. I was able to read through a few books on my iPhone despite the very tiny 3.5-inch screen. You can adjust the font size easily, and that just meant having to turn the page more. It's much better than the tiny little Bibles given out on college campuses, although I don't think many people actually read the entire Bible on one so small.
If you joined the party back then, Apple kind of ruined your day. Amazon sold most e-books back then for $9.99. The company took a loss on some book prices to entice people to buy Kindles. But once Apple created the iBookstore with the release of the iPad, it used the same 70/30 model that it uses for app developers.
Once the publishers got control back of prices, they pretty much told Amazon, "we're gonna make you an offer you can't refuse." That's why the Department of Justice is looking into this issue now. Another good explanation article from CNet is available here.
When Apple came into the e-book market, the prices went up. I'm a huge Apple fan, but I was in no way a fan of that little move. Immediately the prices for Kindle books went up for the best-sellers, now often at $14.99.
The ironic part of all this is the issue of publishers doing this to protect the printed version of books, which are still extremely popular. Apple and later Amazon were thorns in the music industry as more and more people started buying music through iTunes and competitors. It's a little bit different since one of the huge benefits of digital music is the ability to buy single tracks. People aren't buying chapter 10 of "The Hunger Games" and not buying the rest.
Music industry people seem to have finally figured out that they must embrace the digital side. People still buy plenty of CDs, but Apple is the top seller of music in the U.S. Amazon is in the top 10. You can buy music from both stores free of digital rights management (DRM), which originally kept iTunes-purchased music tied to iTunes and iPods.
The movie and TV industries are fighting Apple, Amazon and other competitors in the digital realm. But in that case, the movie and TV industries are keeping their old products alive pretty well. All major titles sold through iTunes and Amazon have DRM. You can't easily rip movies and TV shows to your computer as you could CDs, mainly because CDs have no copy protection while DVDs and Blu-ray Discs do.
I'm really hoping that the agency model created by Apple dies a horrible death. These moves toward digital products should be freeing up our options, not creating the same exact price wherever you go. Can you imagine if all goods were sold this way? Think of the craziness of every 20-ounce bottle of Coke or Pepsi costing $1.39, every gallon of milk at $3.99, every loaf of bread at $1.99.
As more people start reading books digitally, I think what you will see is more self-publishing or independent publishing. Many people are doing this already, and you're seeing the result with plenty of $2.99 e-books on Amazon. J.K. Rowling had enough clout to call her own shots, and she is selling the Harry Potter series through the Pottermore website for $7.99 and $9.99.
She's also doing it without DRM. That means you can download the book files and, yes, share them easily with your friends. Rowling even encourages sharing them with younger people and then asks that they buy their own copies when they turn 18.
It's a little bit of sanity for us customers in the digital media world. Maybe one day we consumers will actually be trusted instead of treated like criminals in waiting. We'll see how this DOJ ruling goes toward that.
Michael Buckelew is a member of the digital team for SCNI, parent company of the Gwinnett Daily Post.