Connecticut Looks at eBook Pricing Collusion

The state of Connecticut is wanting to know if users of eReader devices are spending more for eBooks than they should. In a recent article in the Wall Street Journal, writer Jeffrey Trachtenburg discussed the inquiry by the state’s Attorney General.

In simple terms, the state is asking if major publishers colluded in their agreements with the highest sellers of eBooks; Amazon and Apple, to increase the prices of their eBook products. Many eBooks are now selling in the $13 to $14 dollar range and the concern of the AG’s office is that competitive pricing is being hindered.

If you’ve read my blog any length of time, you’ll know I’ve written about these ongoing developments for a long time. I’m a happy user of a Sony Reader for over two years now and I’ve become a convert to the format for a couple of reasons. The first being that I no longer have to worry about storage of my books since I can carry tens of thousands on my reader (which is equipped with additional memory storage slots), and the second being portability. I like being able to take the reader with me anywhere I go and read when I have time. Books are easy to read with the adjustable sizing option so my eyes aren’t strained and I’ve read more books than I would have lugging them around with me in my messenger bags.

Notice I didn’t highlight price as one of my main reasons for buying an eReader. Price SHOULD be a highlight for this format but until the book publishers get their heads out of 1995 and begin looking at the future of the market, we are going to have many problems. First off IS price. There is no solid reason for publishers to charge roughly 30% less for an eBook offering than their paper alternatives. There are no printing, collating, and storage fees for eBooks. Once a file is set up, it need only be stored on a server where it can be purchased. There’s never a need for reprinting and special shipping of orders. You need scant personnel to manage an online bookstore and tech support is minimal as well. eBooks shouldn’t sell for more than $5-$8 dollars in the current market. The markup on eBooks is simply lining the pockets of the publisher and distributor and it’s not necessary. Is this new format going to cause a HUGE restructuring of the publisher’s various operating systems within it’s offices? Certainly. Now is the time to begin that process. If collusion is proven, it will be a huge blow to these publishers and many new authors will find publishers with better integrity and the intelligence to market to this new format more effectively.

The second problem is “Digital Rights Management” or DRM issues with eBooks. One of the things keeping avid readers from buying an eBook device is the fact that once a book is purchased, you are locked in with the device you use. The ePub standard format is a big advance for eBook publishing (and only Amazon’s Kindle WILL NOT support it) but it matters little what format you use if the publishers attach DRM protection to each file. All this does is make things difficult for novice users who only want to read books and not learn code to take the DRM protection off the file. Those who want to do such things already have how-to manuals online for users who want to go to the trouble of learning how to remove DRM protection of their eBook files so why do it? If I purchase eBooks in the standard ePub format I should be able to load and read them on any reading device I choose much as I can audio books that I purchase online. I have no problems listening to them on my computer, MP3 player, or MP3 Disc players. The silliness of such logic is like trying to argue that if I purchase a book at Barnes and Noble, I’m not allowed to read it at Borders, Books a Million, or even Wal-Mart. The reader device in the picture above is the “Bookeen” by Opus which is not well known but a great little device that’s simple to use, doesn’t have a lot of bells and whistles, and is priced competitively. It’s a great little reader but I cannot take my library of purchased titles from Sony and migrate them to the Bookeen because of DRM protection and that’s wrong. Once I buy the file (book), it’s mine and I should be able to do with it as I please provided I don’t pirate it for others.

The purchase of eBooks should be totally separate from reading devices. The devices need to adopt a standard (like MP3 for audio) and allow users to load files onto any device and have them ready to use. This would bring down prices, improve innovation, and make the market more competitive for smaller publishers who want to give the big boys a run for their money. The change is coming whether or not publishers want to deal with it. They WILL HAVE TO. Either that, or they will be downloaded into irrelevance.

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Connecticut Looks at eBook Pricing Collusion

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