In order to gain market for its Kindle e-book reader, Amazon has been buying books from publishers for $13 each and selling the Kindle-formatted version for $9.99 each. At a loss of three bucks a book, how long can this continue?

Donald B. Marron, visiting professor at the Georgetown Public Policy Institute and president of Marron Economics LLC., writing on April 22, 2010, in the Christian Science Monitor said, “By the end of last year, Amazon accounted for an estimated eighty per cent of all electronic-book sales, and $9.99 seemed to be established as the price of an e-book. Publishers were panicked. David Young, the chairman and C.E.O. of Hachette Book Group USA, said, ‘The big concern—and it’s a massive concern—is the $9.99 pricing point. If it’s allowed to take hold in the consumer’s mind that a book is worth ten bucks, to my mind it’s game over for this business.’ ”

How long can this go on? JK

JK :: May.23.2010 :: book publishing :: 1 Comment »