Sony, Amazon and the pricing of “regular” books

Strategy 1 Minute

Sony Electronics announced that it was lowering prices for new and best-selling books in its e-book store, to $9.99 from $11.99.

Book publishers have worried about the $9.99 flat price ever since Amazon.com introduced it for its Kindle reader in 2007, fearing that it could cannibalize sales of higher-priced hardcover books. -via NYTimes.com.

Considerations:

  • “We have to offer value. It’s clear e-books should be less expensive than regular books, with the savings on printing and logistics getting passed on to the consumer.”
  • “We all know that these companies are taking a loss and that’s not going to continue forever.”  “$9.99 has now become the effective price for e-books in August of 2009. Let’s just take a breath and see how long this lasts.”
  • In response to the $9.99 list price, some publishers are thinking about postponing the release of the digital versions of their most popular books, lengthening the period in which only the higher-priced hardcover versions are available. This is similar to the approach taken by Hollywood studios, which allow DVD sales and rentals only after a film has left theaters.
  • Sony’s price cut on digital books and the new devices may not be enough to help it catch up to Amazon.
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Published by Richard Brisebois

I help companies develop their leaders. I help managers develop themselves and their teams. I have worked with 7,000+ managers, leaders, and business owners in 40+ countries, from Fortune50 executives to SME business owners and tribal leaders. I specialize in designing and facilitating leadership development programs as well as executive coaching.

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