Tuesday, June 16, 2009

Simon & Schuster Doomed to Failure in eBook Venture

By Anthony S. Policastro

Simon & Schuster will now sell its most popular titles as eBooks on Scribd.com. Great news! A major publishing house is going digital.

But they are doomed to failure.

They think readers will pay 20% off the list price of a book's most recent printed version, according to an article in The New York Times on June. 11.

So a printed Simon & Schuster title that lists for $26 will sell for $20.80 as an eBook and a $15 paperback's eBook version will sell for $12.00. Lots of luck Simon & Schuster. You would have better luck selling ice cubes on the North Pole.

Most people won't even pay $10 for an eBook. The reason is that they do not perceive the value the same as the printed version.

With a hardcover or paperback, you can feel and smell the value in the design of the cover, the layout of the type, the feel of the paper, and its ubquitious portability. You don't have to worry about a battery going dead or the sun being too bright to read the book.

An eBook has none of those characteristics and publishers will never convince the public, and they have tried, that eBooks cost as much to produce as their printed cousins.

In my last post, I asked the question, Would you pay $26 for an eBook? about Google competing with Amazon in the eBook market.

What stuck out in my mind was that publishers were embracing the move because they could charge what they wanted for eBooks on Google since they could not set prices on Amazon's Kindle. The article was updated a few days later with new information that Google will also set the price of eBooks similar to Amazon.

So Simon & Schuster, if the two largest forces on the Internet know that eBooks have to be priced much lower than their printed versions, why do you think a 20% discount will work?

Your new venture is doomed to fail unless you lower the price of your eBooks.

Here's my suggestion:

Price your major titles at $8.88 for the eBook version. The price is lower than Kindle's major titles and readers don't have to shell out $359 for the Kindle. In addition, three eights is traditionally lucky and fortunate and that luck and good fortune may come your way.

As long a major best sellers are priced on the Kindle at $9.99 and free and lower-priced eBook sites are popping up like weeds, why would anyone pay $20 for an eBook?

What do you think?

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Anonymous said...

I couldn't agree more. Great post. Unfortunately the powers that be at most publishing companies don't "get" that consumers are smart. There is no way anyway will pay more for an ebook than the $9.99 Amazon charged. And in fact, once the publisher discounts manufacturing costs and returns, they should find a way to make more money on ebooks even at a larger price.
Unfortunately the execs at these companies have not figured this out. As a former editor I'm not surprised at their pricing decision, but it reaffirms my belief that only outsiders (like On Demand Books) will affect any meaningful change in the industry.

Anthony S. Policastro - NOVELIST said...

Thanks Anonymous! The publishing industry may get it right when they see their efforts fail and others like Amazon and the growing number of ebook retailers soar.

It's the same scenario as the music industry, which went kicking and screaming into the downloadable music business. They failed and now iTunes owns the market.

It may go the same way again with Amazon owning the market.