Amazon says cheaper e-books are better for everyone in latest Hachette war salvo
Amazon is trying to cast itself as a champion of lower e-book prices as its messy dispute with publisher Hachette drags on.
In a post on its website, Amazon said that most e-books should cost $9.99 or less, not the "unjustifiably high" prices of $14.99 or $19.99 that many books sell for now. Lower prices, Amazon said, would benefit readers, publishers and Amazon alike, because people would buy a lot more books.
Amazon cites its own research, which found that at $10, an e-book sells 1.74 more copies on average than at $15. That means total overall revenue would be 16 percent higher at the lower price.
"At $9.99, even though the customer is paying less, the total pie is bigger and there is more to share amongst the parties," Amazon said.
It's harder to sell books at higher prices now, Amazon argued, because people have so many other ways to be entertained, including mobile games, Facebook, blogs, and free news sites. "If we want a healthy reading culture, we have to work hard to be sure books actually are competitive against these other media types, and a big part of that is working hard to make books less expensive."
Besides, publishers would benefit from selling more e-books because there are no printing costs, no need to forecast inventory, no returns and no secondary market, Amazon said.
Amazon wants to take 30 percent of revenues for e-books sold through its virtual stores, and while it would have no control over the remaining 70 percent, it believes authors should get half.
Of course, the argument isn't quite as cut-and-dry as Amazon presents it. One thing the retailer doesn't mention is hard cover books, which are expensive to produce regardless of how many copies are sold. As publishers have noted in the past, hard cover books could become less viable if they are cannibalized by cheap e-books. And the upfront costs of creating books—getting them written, edited, marketed, typeset, et cetera—can be substantial, regardless of the formats the book is being sold in.
Regardless of who's right or wrong, authors are feeling the pain as Amazon has stopped selling some Hachette books and refused to take pre-orders on others. Amazon's latest update is a sign that the retailer isn't backing down anytime soon. In the meantime, Amazon has encouraged readers to take their business elsewhere.