Publishers, after winning a struggle to raise ebook prices to $13-$15 in preparation for Apple’s iPad, are now defending the move, blaming consumers for ‘unrealistic expectations.’ In a report, publishers say they will still pay fixed costs along with fighting for a piece of a smaller pie.
A number of publishers have sided with Apple’s “agency pricing” model that could increase the retail price for ebooks from $9.99 which Amazon once required to between $13-$15. However, publishers will get just $9.09 of that after Apple takes its 30 percent cut. Then author royalties will cost $2.27 to $3.25, marketing cost about $0.78 and preparing the manuscript another $0.50, according to The New York Times.
Couple that with the e-book market being only 3 to 5 percent of sales of printed books and you have publishers concerned with playing the ‘how low can you go’ retail game, the report says.
Another factor limiting how cheaply ebooks can sell is worry if electronic versions of printed titles fall too low, the arteries of the publishing industry – giant booksellers, such as Barnes & Noble – could die due to shrinking profit.
Although a number of book publishers quickly sided with Apple’s iPad, the story is not as clear for magazine and newspaper publishers. Some are considering a strategy that would involve both Amazon and Apple. Publishers would renew their Amazon contracts, thus retaining Kindle subscribers, while also offering a free, more-limited version for the iPad, according to a recent New York Times report.