(2010-10-22) Shatzkin Ebook Hybrid Pricing Apple Amazon

Mike Shatzkin on the current hybrid pricing models for EBook-s, its near-term effect on Apple's I Bookstore, and its long-term unsustainability. Amazon’s objective here is to discourage publishers from putting their books into the Apple store. In this, they appear to be having success. The iBooks store has become the mall store of ebook retailing: they have most of the bestsellers (not all, because they don’t have Random House) and not much else... Apple has not devoted nearly the resources that its competitors have to publisher contact to get more books. They have fewer people and less interaction with publishers. It’s as if they don’t really care if iBooks lives or dies. And maybe they don’t, since anybody who has one of their devices can read books to their heart’s content from Amazon, B&N, or Kobo on their Apple hardware.

But if Amazon likes to ridicule publishers for price-setting without expertise (which they’re doing in an attempt to keep ebook prices up and restrain the movement from print to digital), they also don’t talk about their core strategy: converting as many readers as possible to the Kindle device. While you can buy from anybody if you read on an iPad, as a practical matter if you read on a Kindle you can only buy from Amazon. Every Kindle convert is a lost customer to every other retailer and etailer. In other words, while some have argued that the Kindle hardware business is no longer really necessary, Mike thinks it makes sense for Amazon to keep as much defensible Lock-In as possible. An interesting argument.

Maybe Amazon should be thinking about cross-book features that would make a (Tablet-owning) buyer think "well, I already have a bunch of Kindle books, so I should buy my next EBook in Kindle format so that it integrates into my library system...".