August 5, 2009

From the Digital Book Front [11:00 am]

Puzzling over the the tactics of digitization in another industry: Sony Cuts Prices on E-Books and Unveils Readers

Regarding the price cut for digital books, Mr. Haber said: “We have to offer value. It’s clear e-books should be less expensive than regular books, with the savings on printing and logistics getting passed on to the consumer.”

Book publishers will still retain their traditional cut of every e-book sale — about half the hardcover retail list price. But they are concerned that as online retailers like Amazon and Sony gain market power, they will eventually tire of losing money on e-book sales and ask publishers for lower wholesale prices, a move that would cut into their profit margins.

“We all know that these companies are taking a loss and that’s not going to continue forever,” said Jonathan Karp, publisher and editor in chief at Twelve, an imprint of the Hachette Book Group. But he added that “$9.99 has now become the effective price for e-books in August of 2009. Let’s just take a breath and see how long this lasts.”

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