Amazon’s Kindle MatchBook Is a Win-Win For Everyone Involved

Expert publishing blog opinions are solely those of the blogger and not necessarily endorsed by DBW.

My first thought when I heard about Amazon’s plan to let owners of physical books buy digital copies of those same titles for $0.99-$2.99 was, “what took so long?” It’s a fantastic idea and I’m completely sure it will be a success.

While there’s no simple name for the practice of letting customers buy one form of media and giving them the same exact content in another form cheaply, it’s been going on for years. Movie studios have long offered Blu-ray copies of movies that come with a DVD version in the same box at little to no extra charge. They’ve also given away digital copies of their Blu-ray movies to load onto iPads and laptops when you’re on the go. Amazon’s even done this themselves in their music store, as Jeremy Greenfield notes, giving folks access to MP3 versions of an album once they purchase the CD version.

Why are books the slowest to get on this trend? It’s partly because digitization became popular in music in the late 90s and movies in the 2000s, and ebooks are only, in the last few years, getting to a point where they account for enough of publishers’ bottom lines for people to care. Digital music players and DVD/Blu-ray players matured way before Kindles, iPads and smartphones made it super convenient to read books on a screen, so the customer base wasn’t there.

With the “why now” question answered, we turn to why this is a smart move for everyone involved. This is great for Amazon, since there’s undoubtedly an audience who buys lots of physical books that wants to dabble in ebooks for convenience. Piggybacking $1-$3 per book on their physical sales will quickly add up to a huge profit. Not only is this a quick short term boost in revenue, in the long term, by getting more of their audience accustomed to digital books, Amazon is poised to transition a huge customer base to ebooks, where margins are higher since the shipping, warehousing and production cost of ebooks is essentially zero. This is where Amazon wants to end up–a world where they only have to stock physical books for the small amount of people who still love the feel of paper.

HarperCollins is the only large publisher participating in Amazon’s MatchBook program at launch, but it’s better than no publishers at all. Publishers are notoriously afraid of trying new programs like this, even when there’s really no downside for the publisher in the program. Do their figures show that there’s some huge contingent of people buying both the physical and digital versions of the same book? That’s doubtful. Why not capitalize on convenient and earn a couple extra bucks per book sale through Amazon? (The unspoken answer, of course, is that publishers don’t want to lower the perceived value of their ebooks to $2.99, because they want to continue charging $9.99 to $14.99 for digital books.)

The MatchBook program has obvious benefits for the consumer as well. If you’re a purely digital buyer–which many readers who read more than a couple books per year are–you can gift the physical copy of books you buy to friends or family. It also allows you the ability to have a physical copy for the one or two books per year you love and want to keep on your bookshelf. Folks who aren’t quite as ready to go digital can use this as a cheap transition method, swapping back and forth between paper and screen until they find an electronic reading solution that they’re comfortable with.

Since I run StoryBundle, a site that bundles together books and offers them at a pay-what-you-want price, I can definitely appreciate it when a company like Amazon tries something new. They just debuted a program where you can get nine Kindle ebooks for $1 each after you purchased a qualifying book. Just like with the MatchBook program, Amazon’s taking authors signed up through their own Amazon Publishing imprints and doing something creative and customer-friendly with it.

2 thoughts on “Amazon’s Kindle MatchBook Is a Win-Win For Everyone Involved

  1. Michael W. Perry

    Jason, perhaps you should get into book publishing for a while. If you did, you’d be less inclined to gush so. You’d be more realistic. You write: \Piggybacking $1-$3 per book on their physical sales will quickly add up to a huge profit.\

    That’s utter nonsense.

    I’ve actually done what you suggest. When some buys my latest book, My Nights with Leukemia: Caring for Children\ after the scheme activates in October, they’ll have a MatchBook offer, but there’s no way it will \add up to a huge profit.\ Amazon has made sure of that.

    Do the numbers. The book is for parents of kids with cancer, nursing students, and those working in hospitals and clinics caring for kids with cancer. That’s a large but not huge audience. It’s based on when I worked night shift with such kids at one of the nation’s top children’s hospitals. I want to make sure the book sells, so the digital version is just $2.99, a decision made just before MatchBook was announced. Amazon has a ridiculous rule that, no matter what the retail price, all Matchbook titles need to discounted at least 50%. That means I couldn’t offer it at $1.99 like I would like. I have to sell it for $0.99. Amazon likes to play the dictator. It thinks it knows better than a book’s author.

    It gets worse. Each of the book’s 49 short chapters opens with a color photo, typically of a hospitalized child. I wanted my readers to realize I was writing about real kids. But all those photos increase the download size, which Amazon demands that I pay for. That Matchbook sale doesn’t even earn me the 70 cents in royalties. After deducting the download fees, I earn about 30 cents.

    Again, do the numbers. If by \huge profit\ you mean $60,000, I’d need to sell 200,000 ebook copies through MatchBook. Somehow I don’t think that’s going to happen. I typically make about $2-3 on my print versions, so this little 30 cent add-on is nothing. At best, MatchBook is justified because it may sell a few more paper versions.

    Amazon could do better. They could let authors and publishers set their own discount from 20% and up. And they could drop that ridiculous download fee, a hangover from the era when Kindles cost about $500 and used cell-phone data links.

    Worst of all, those ebooks are unlikely give readers who’ve yet to adopt digital reading a good impression of ebooks. On iBooks on my iPad, those pictures look absolute marvelous. On both the Kindle app on my iPad and the Kindle reader on my Mac, those pictures look shrunken, hardly bigger than a commemorative postage stamp.

    That’s no accident. Apple allows me to include photos up to 3 Meg in size. Amazon’s specs say that all images in ebooks must be under 127K. For some of my book’s pictures that meant a lot of cropping and cranking the compression up to the limit. In addition, Apple doesn’t charge me a download fee for their much larger file. Amazon almost wrecks the purpose of those pictures and yet charges me for downloading them. That ticks me off.

    Oddly, the same is not true with CreateSpace, Amazon’s print publishing arm. When I uploaded the print equivalent with B&W pictures, they warned me that some didn’t have an effective DPI of 300 and might look poor. I redid those photos and the results look great, about as good as a picture can be printed on non-glossy paper.

    Sadly, Amazon may claim to be pioneering the digital revolution, but it’s doing a poor job of making ebooks appealing and its complicated and meddlesome royalty rules, varying by price, country and other factors, make pricing and selling ebooks through them a pain. In contrast, its once maligned print arm does excellent work, offers good prices, and doesn’t try to meddle with pricing. Perhaps that’s because they have in Ingram/Lightning Source, a powerful competitor.

    Jason, I realize that many writers get discouraged and need an occasional pep-up talk. But you’re not doing them a favor by claiming that MatchBook will make them rich. At best, it may marginally increase the sales of the print version. But thanks to Amazon’s pricing rules, it creates a nasty incentive to raise the retail price of ebooks so the MatchBook price doesn’t get ridiculously low.

    One final note, like almost everyone in tech news, you seem to have written this article from Amazon’s not-so-accurate press release. Read Amazon’s FAQ and you’ll discover that MatchBook prices will be all over the place, not just \for $0.99-$2.99.\ The rule–and this scheme is filled with pages of rules–is that the MatchBook price has to be at least half the retail ebook price. A $20 ebook might sell for $10. There is one bit of good news. If the ebook is in the $2.99-$9.99 range that earns 70% royalty, it will still do so at a lesser price outside the \Amazon-approved\ range.

    Dealing with Amazon is a mess. Rules basing royalty on price then begat still more rules about when a discount changes that price. If you actually published books, you’d find it hard to get excited about anything Amazon does. It’s always fraught with unnecessary, ‘do as we say’ complications. That’s also true of MatchBook.

    Reply
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