Electronic Books May Get More Expensive

Publishers Want E-Books to Get More Expensive

by Anton Shilov
02/02/2010 | 10:59 PM

The market of electronic books is still very small and, to some extent, fragile, but publishers want e-books to become more expensive so that to make paper books more competitive when compared to electronic versions. However, higher prices will also mean that there will be fewer books and fewer devices sold.

 

Rupert Murdoch, chairman and chief executive officer of News Corp., which controls HarperCollins publisher, said during a conference call with financial analysts that he was not satisfied with the current agreement between HarperCollins and Amazon, which sells all electronic books at $9.99. Mr. Murdoch insisted that the price of electronic books should differ. The comment comes days after MacMillan publisher managed to persuade Amazon to sell its books for $12.99 - $14.99 price-points.

“We do not like the Amazon model of selling everything at $9.99. They do not pay us that. They pay us the full wholesale price of $14 or whatever we charge. We think it really devalues books and it hurts all the retailers of the hard cover books. We are not against electronic books. On the contrary we like them very much indeed. It is low cost to us and so on. But we want some room to maneuver in it,” Rupert Murdoch told the financial analysts.

According to the chairman and chief executive officer of News Corp., the deal between the publisher and Apple, which plans to start selling electronic books later this year, makes provisions for variable pricing on books.

“Apple in its agreement with us which has not been disclosed in detail does allow for a variety of slightly higher prices. There will be prices very much less than the printed copies of books but still will not be fixed in a way that Amazon has been doing it. It appears that Amazon is now ready to sit down with us again and renegotiate pricing,” added Mr. Murdoch.

It is logical for Mr. Murdoch to worry about sales of expensive hardback books and try to ensure that the publisher still gets its profit margins. However, it should be kept in mind that people may acquire more inexpensive copies rather than expensive editions. Moreover, in case of Apple readers will not only have to pay more for the iPad reader itself ($499 - $829), but also more for e-books when compared to Amazon Kindle ($249), which may result in lower sales of books on the Apple platform.