Expensive E-Books Keeping Standard Tomes in Print

September 12, 2011  |  

(Wall Street Journal) — Even as readers grow more comfortable with digital books, some continue to question why so many of the most popular new e-books are priced so high.  Michael Connelly’s recent legal thriller, “The Fifth Witness,” has more one-star reviews on Amazon than five-star reviews in part because some angry reviewers focused on the e-book’s $14.99 price.  As physical book sales fall, publishers’ fixed costs are becoming more cumbersome. One area major publishers can cushion the blow is by keeping e-book prices higher. “If e-book prices land at 99 cents in the future we’re not going to be in good shape,” said one New York publishing executive, who asked not to be identified.  Indeed, e-book prices on many new national best sellers are higher today than they were at the start of last year. That’s because the six major publishers have adopted a new pricing model, known as “agency pricing,” championed by Apple Inc. Publishers, worried about the deeply discounted $9.99 digital best-sellers promoted by Amazon.com Inc., agreed to set the consumer prices of their digital titles. Under this model, retailers act as the agent for each sale and take 30%, returning 70% to the publisher.

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