There has recently been a great deal of speculation and study as to what is happening – and what will happen – to eBook prices in a post DOJ settlement world. I must admit up front that I, like many, don’t know, though I am following along and am as curious as the next publishing geek to see what will happen next.
I’ve been pondering the consumer price angle – as opposed to the list price angle – and recently had the opportunity to discuss it with some peers. Like much of the commentary about the future of pricing, I am venturing into the land of speculation but here goes…
In the eBook universe, devices rule. Specifically, the Kindle line, the Nook line, and the iPad. Others matter, but for this piece, I’m going to stick to those three. With each device comes tremendous consumer value beyond the prices of the eBooks purchased – immediate download, syncing across devices, lending, etc. As a consumer it is all very convenient and has a feeling of openness. However, it is all driven by the platform one has chosen and those platforms are closed. In other words, a Kindle eBook will sync across Kindle apps for various devices, but not with a Nook app. The platforms enable the conveniences for consumers but are only so open (and may change at any moment).
Platforms also do another thing – they enable virtual lock-in for the retailer who has been chosen by a given consumer. Yes, a consumer may download all eBook reading apps to, say, an iPad and then choose which edition of a given eBook to buy based on price (provided of course that Apple continues to allow Amazon and Nook apps on their devices). But I doubt this will be a common use case. My suspicion is that most consumers will choose a platform and populate their libraries with that flavor of eBook. It is, after all, the easiest and works best, especially with the reading-specific devices that dominate the market currently.
What does this have to with pricing? Well, in a bricks and mortar world pricing was most often used to attract a consumer to one store as opposed to another store. B&N, for example, would advertise the latest Harry Potter at a steeper discount than, say, Borders (remember Borders) in the hopes that the consumer would choose to go to B&N for that book and, they hoped, other books. In other words, it was a consumer-acquisition mechanism. It is hard for me to imagine eBook consumers who have chosen a given platform jumping platforms because of incremental differences in individual title pricing.
My thinking is that consumers will make their choices based on the purpose, quality, and price of the devices and the usefulness of the overall platforms (bringing into account other media such as movies and music). The $1 – $3 price difference of a given book, and maintaining the “perceived value” of books in general is key for publishers. And maintaining competitive pricing is important for retailers. No doubt on either front. However, unless something seismic happens, consumer eBook pricing will play a bit part, not the lead, with consumers, and this will affect what we ultimately see in terms of discounting at retail.
That’s my guess anyway. What do you think?