eBook Prices.

With the fantastic Kindle leading the charge for the eBook reader. Eyes are now falling on price for the eBooks themselves.

In an mind numbingly stupid re-enactment of the music industries baffling reaction to the growth in mp3 players. They have gone for the "fingers in there ears" use the exact same model as you use for the physical version business model. Shortly to be followed by the shock realisation that, given the choice between paying £10 for a book you can source for free illegally just as easily, a lot of their market choose the later. Ending in the realisation (several years down the line) that reduced prices will deter piracy, increase sales and incur no further cost.

The Agency Model

Recently most publishers have adopted an agency model for eBooks. The agency model means that you are actually buying the eBook straight from the publisher, the shop you use are simply the agent, they receive a commission for each purchase. This means that the publisher sets the price and shops get no option to discount etc. While this could mean that smaller shops can get a march on the big boys (amazon and iBooks), in reality each publisher has a preferred agent in each territory.

Tantamount to Monopoly?

Competition brakes down here, from a far you might say the different stores and publishing houses constitute a market. However due to the agency model and the plain fact that books like music are art not products. One publishing house has total control over the price of a particulair book. Leaving customers who want that particulair book with little to no consumer choice. This means the usual market forces that would prevent extortionate prices are effectively absent.

For that reason the EU have recently raided publishers officers to investigate if they are price fixing or if the agency model is an effective monopoly. The answer is yes.

Are the current prices fair.

I'd definitely argue not. The price of eBooks seems to be aligned with the book prices, if only the Hard Back is available it will be about that price, if the paperback is available its around that price. Generally though they will fail to be available at discounted prices, meaning you can normally buy the physical book for less than the eBook. For a product that has no/little overhead per unit, compared to the paper, printing , transport, storage etc costs of real books this seems to defy logic. Next take into account both the problem of piracy (which as i have stated would be reduced by reduced cost.) and the threat of self-published Authors under cutting published authors and it doesn't seem a good time to own shares in the publishing houses. It is worth taking into account the fact that a lot of work goes into editing/promoting/publishing a book and this needs to be compensated but the current model just doesn't work.

All this is a real shame because the Amazon Kindle is an amazing product.