Is the Digital Book Market Catching Up to the Print Market?

Three months ago Sourcebooks publisher and CEO Dominique Raccah announced a bold plan to withhold the ebook release of a major YA novel. My understanding of her rationale is that a market for $25+ new release hardcover books still exists (upon which much of the traditional publishing business model is built), and if the digital market is setting the value for content below ten dollars (a la Amazon and B&N's $9.99 ebook editions), then a digital edition deserves a place in the life cycle of a book, probably somewhere between the $15 paperback and $7 mass market edition.

Initially there was quite a bit of blow back from outraged digital book enthusiasts, while other publishers had "no comment" in the moment, refusing to say if they would follow Dominique's bold and innovative lead. Still, it touched off great discussion and debate over the pricing and release strategy of ebooks--my favorite being a fluid price for a digital edition that starts at a premium price and is available before any other editions, with prices decreasing with demand, eventually all the way down to free. (I forget where I read that suggestion so if it is yours please email me so I can give a link and proper attribution.)

Not surprising now, however, we see that the major corporate publishers are following independent Sourcebook's lead. Hachette paid a widely reported $8 million advance for the Ted Kennedy memoir True Compass that released September 14 with a $35 price tag--and they are still holding the ebook release. Publisher's Weekly reported yesterday that Simon & Schuster will hold the ebook release of Stephen King's new novel, Under the Dome, Random House will hold the ebook release of the new John Grisham book, Ford County, and Harper is holding the ebook release of Sarah Palin's book, Going Rogue.

The grand irony of course is that while publishers are holding ebooks hostage to keep from undermining hardcover sales, the mass market price war is raging between Wal-Mart, Amazon, and now Target with these same titles being sold IN HARDCOVER for $8.98. In just 3 months since the Sourcebooks announcement it appears the digital market has caught up to the hardcover market. As I listened to a price war story on NPR I heard one more death knell ring out for the traditional publishing business model, multi-million dollar advances, and overpriced hardcover books that offer almost no consumer value over less expensive formats.

The market is telling us that a good read is worth about ten bucks, while Publishers Weekly reported today that Amazon.com CEO Jeff Bezos, in a statement about their 3rd quarter earnings, said that “[the Kindle] has become the #1 bestselling item by both unit sales and dollars – not just in our electronics store but across all product categories on Amazon.com. It’s also the most wished for and the most gifted.”

What? Did I read that right? The world's largest book retailer just announced that sales from digital readers and books overtook ALL other products?

The other big announcement from Amazon is the release of a PC desktop reader for Kindle. Why is this a big deal? Earlier this year the Kindle 2 (2/24/09) and Kindle for iPhone (3/4/09) released within a week of each other. From February to March 2009 sales of B&H Kindle titles more than DOUBLED, jumping 148% in one month, and sales continue to climb. If we saw that kind of increase with the Kindle going to the universe of 30 million iPhones and iTouches, imagine the impact when the Kindle is released to the universe of more than one billion PCs.

Here come the ebooks!