Could Apple Actually KILL eBooks?
Once again we can’t turn on a news reader on the internet without be reminded of the Great Steve (not me–Jobs) and how he always has the “right sense” for business. Â In addition to his design sense, and ability to time the introduction of products perfectly, many often credit him with “saving” the music industry by making music affordable at just 99 cents per song.
But could he have lost his touch? Could Steve Jobs and Apple not only missed it this time, but could they be responsible for bringing down a whole nascent industry with them?
On the heels of the introduction of the Apple iPad (and their announcement that books would cost between $13 and $15) we saw an emboldened Macmillan publishing house pressing their case against Amazon. Â For a brief moment Amazon seemed to be fighting the good fight for consumers, and went so far as to ban direct sales of Macmillan books.
Macmillan was simply “acting out” what Steve Jobs told to Walt Mossberg when he said that the prices would end up being the same (between Apple and Amazon), because the publishers are not happy (with Amazon) and are going to pull their books from there. Â It appears that Steve Jobs is doing the work of the Publishers, pushing the price points up, rather than down. Â Rather than being a champion of the individual, does this make Steve Jobs simply a big business “hack?”
The bottom line here really is that Amazon knew 2 years ago what Steve Jobs should know now. Verso Direct has conducted a book buyers behavioral study/survey, in which they discover that the magic price-point for digital books seems to be right at $9.99.  According to the article “Amazon Flanks…” when Verso presented their study and broke down their findings, they reported that 3 out of 5 people will consider buying an ebook at or below $9.99.  Raise the price, and that drops to 1 out of 5.
The article then goes on to identify the real “winners” as pirates.
Is it possible that, in his rush to kill Amazon, Steve Jobs may have instead spell the death of eBooks?[1. Â There are many other thoughts here, including the differences between music and books. Â I will discuss these over the next few weeks.]
Steve may have gotten it wrong, we will see. But, the good thing is that if the pricing is wrong, I don’t think Steve has killed eBooks. The reason: pricing can be changed almost instantly. If it proves out that they need to goto $9.99, then they’ll end up there eventually. I’d love to have my book available on the iPad for $9.99! We’re already working on it. 🙂
I do not think e-books die – the usage and demand is and will be there. I DO have a hard time justifying the purchase a Kindle or iPad or any kind of e-book reader when I can simply use my laptop or my cell phone to do that. I am also big on audio books instead.
In episode 22 of Real Tech, when the education community in mentioned, I got to thinking. Imagine how much money could be made if Penn State said – o.k. No more books. Each student pays for the E-books for each class. The student downloads them straight from the school’s website that is integrated with the publisher’s online delivery service, many ways this could be done – i.e. each school can brand it’s own interface to the publisher’s. Then Penn State also requires the purchase of a proprietary, in-house-programmed application that allows for the sharing of notations and course work, which is integrated into an eBook reader that can use PDF, LIT, and HTML eBooks. You can prevent a significant amount of plagiarism, make sharing information a lot faster and easier, and allow for an easy way for the university to make money without the cumbersome need for actually storing and selling a TANGIBLE product.
The iPad, for me, is simply a useless tool, whose abilities are already being fulfilled by the technology I already have.
The short answer is “no.” For the reasons Tony already stated, if books don’t sell at the higher price point the companies (publishers, online retailers) aren’t going to stick with that price point until they fail or say, “Ok, I guess ebooks are dead.” They are going to find the price point that works.
As for Steve Jobs being a big business “hack” (not sure what you mean by that term), yes, Jobs is out to make money. Anyone who thinks he has any other fundamental motives here is delusional. And he is very good at making money, as you have pointed out many times. So it is not surprising that he should try and expand the market here.
Now a slightly different question is this, in the build up to the iPad launch people were saying that Jobs was going to save publishing with this new, as yet unannounced device. Will the iPad save publishing? Again, I would say no. It may contribute to the industry moving towards a new model that will survive into the future, but there is much that has to happen to kill/save an industry than just this one device.
And Nick, the iPad may be a useless tool for you and lots of other people. For many the Kindle is as well (and it sounds like you have no use for that either), but different folks have different uses and work habits. As you know from Real Tech 22 I believe it will fit in well with my work patterns, at least on the various business trips I take, but not my research trips. My mantra: judge the tool for what it is, not for what it is not.