Book Publishers Circulating 'Talking Points' To Counter Arguments That Ebook Prices Need To Go Lower
from the fighting basic economics is never a good idea dept
For a while now, we’ve been discussing how the pricing on ebooks doesn’t make much sense, and almost certainly needs to fall. Like many industries, the book business could learn a lot from other businesses that have realized that drastically lowering the price on digital goods can massively increase sales, and better maximize profits. But, instead, book publishers seem to be pushing in the opposite direction, and trying to push the price of digital books up. We recently wrote about a NY Times article that suggested consumers might revolt if the publishers keep moving in this direction, which is actually supported by reports of how consumers are reacting to publishers’ anti-consumer activities with regards to ebooks.
Given all that, I was amused when a friend “in the business” forwarded me an email message sent to a mailing list of book publishers in response to that NY Times article about consumers’ potential revolt, that encourages publishers to get out there and fight back against such perceptions. The email contains a list of “myths and potential talking points.” Some of which are amusing. It starts out by saying $9.99 doesn’t need to be the price for ebooks, which is true, but they don’t even seem to consider the notion that the price could be less (or even free), focusing only on examples of people paying more for ebooks. It then suggests that publishers start blaming the ebook device makers for “the implicit, false promise” that ebooks can be cheap. That’s ridiculous. The idea isn’t “false,” it’s just basic economics, and we’ve already seen it playing out in music. Why wouldn’t the same economics play in the ebook space as well?
The talking points also tries to attack the claim that Amazon is losing money on every ebook sold by not actually responding to that (mostly accurate) claim, but instead directing your attention elsewhere, by pointing out that Amazon has a $50 billion market cap and can sell products like ebooks at a loss and still make massive profits. Yes, this is true. And it’s true because Amazon seems to understand the basic economics of where the money is made: which is in scarce goods, not in infinite ones.
Among the other talking points is the claim that people who buy ebook readers for hundreds of dollars shouldn’t bitch about ebook prices, because they’re obviously rich enough to afford whatever publishers think the books should be priced at (again, ignoring basic economics). Also there’s a claim that publishers are really lowering the prices on ebooks even as consumers see higher prices. While this is technically true in cases like Macmillan, where the company is lowering its wholesale price in order to get Amazon to raise its retail price, it misses the fact that this doesn’t matter to consumers. Consumers don’t care about the wholesale price. The talking points also included one about how publishers’ deals with Apple might actually price books lower anyways — and it seems like that particular talking point has been “anonymously” pushed into a NY Times article already.
The list goes on in this nature, but it’s worrisome that publishers are thinking this way. Just as we were recently discussing, they’re acting like the recording industry ten years ago: hunkering down for a “war” of words, rather than actually focusing on new business models or figuring out what consumers actually want. Instead, they’re trying to dictate what consumers want and hoping for some sort of magic bullet in the form of ebook readers. This is a dangerous move by publishers that can only come back to haunt them. Instead of focusing on “countering” what consumers are saying, why not actually listen to them, and look for ways to provide what they want?