Did the DOJ Settlement Greatly Benefit Publishers and Keep E-Book Prices High?
The settlement recently approved by the Southern District Court in Manhattan between the Department of Justice and HarperCollins, Hachette and Simon & Schuster may have served to benefit the publishers and to keep e-book prices relatively high for consumers, speculates industry consultant (and DBW partner) Mike Shatzkin.
When new prices for HarperCollins e-books started showing up on Amazon and at other retailers, Michael Cader (another DBW partner) of Publishers Lunch noticed that the prices consumers were seeing ranged from the somewhat-discounted $9.99 to prices more in line with the $14.99s and $12.99s consumers were used to seeing for agency-priced books. And that the HarperCollins list prices were higher than they had been.
The net result? More money for publishers, some discounts for consumers — but this was not universal — and slimmer margins for retailers. Still, it’s early days and it remains to be seen what the other publishers will do and how the retailers will react.
Some more takeaways from Shatzkin’s piece:
– Retailers have just begun to jockey for position and have resorted to some very formulaic discounting, going to $9.99 and manual price-matching. Likely soon, retailers will get exotic with their discounting to eke out gains against competitors.
– The new regime, with its fatter profits, favors the publishers that settled over those that did not — for now.
– Apple, thought to not want to compete with Amazon on price, is competing just fine — for now.
There are several more good insights in the original post. Read it in its entirety at The Shatzkin Files.