Thoughts On Amazon, Apple and E-Books

If you had been a e-book reader, didn’t it really rub you the wrong way when you saw the price of e-books rise to the same cost as hardcovers? It sure as hell grated me. Wasn’t it cheaper to produce a digital book than its paper counterpart? And wasn’t distribution, catalog availabililty and storage issues now less expensive?

Well apparently this happened because Apple got serious about digital book distribution and was giving the publishers a more comfortable payment model than the competition, Amazon. Learning about the Department of Justice lawsuit against Apple and the major publishers was a surprise to me and then again, it wasn’t.

I remember quickly learning back in the early days of movie and music compact discs, that the plastic compact disc (CD) was cheaper to make (and distribute) than vinyl records, yet were sold to the consumer at a significantly higher cost. At the time, Sony was one of the major compact disc manufacturers and I also recall learning that once additional factories were constructed, manufacturing costs would reduce and the savings would be passed to the consumer.

Well, it never happened and somewhere along the line instead of more factories being built, Sony closed one of theirs. The prices of CD’s would never came down. In fact as the years went by, we saw “new” versions of our favorite discs released with additional songs, new mixes, liner notes and photos, all in the name of “ultimate versions”! Some consumers relented and as “new” versions were released, ended up buying 2-3 versions of their favorites. The big brother music industry was screwing us. They wouldn’t get their retribution until MP3’s, iPods and iTunes returned the favor.

It’s no surprise that today’s entertainment media monolith (you know who) is involved in the book publishing subterfuge. They created a business model for digital music distribution which greatly increased profits and now wanted to do the same with books. Digital distribution be damned, the publishers would maintain a satisfactory profit level (and who knows, maybe even more). Once again, it was the consumer who was getting screwed.

It’s interesting to look at this from a business standpoint (and I will in a later post). Amazon once again has the power to set the prices for ebooks. But this entertainment media monolith wants to offer a lower price to the consumer. For the time being, the consumer may have won, but it’s the distributors of digital content creating their own business models and it’s the traditional suppliers of entertaiment content who need to adapt.

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