It is important not to lose sight of the fact that Simon & Schuster is talking about doing this with 35 out of 2000 titles they publish in a year. This strategy is for blockbuster releases, not for most books.
Last summer I applauded Dominique Raccah (in this post) for taking a similar, bold, and (at the time) unpopular stand, and starting this conversation when the WSJ reported that Sourcebooks would delay the ebook release of one of their major Fall titles. I'm becoming less convinced of the viability of this strategy.
Did you read the quote from Hachette Book Group CEO David Young?
"We're doing this to preserve our industry," Mr. Young said. "I can't sit back and watch years of building authors sold off at bargain-basement prices. It's about the future of the business."
Preserve our industry? Years of building authors? For a company as progressive as Hachette on the digital front, it sounds to me like Young is more concerned about the past than the "future of the business." This feels more like grasping at the stream to pull the water back into the bucket, but it may be too late. Compare these actions and statements to the position Amazon took three years ago selling digital books, often at a loss, to prime their pump into the digital market. They actually encouraged publishers to set their digital list price to match highest priced available print edition to increase the value of their $9.99 price point. Publishers were happy to oblige since Amazon pays publishers a percentage of the digital list price. The higher the list price, the more the publisher makes and Amazon potentially loses. This is tempered somewhat by distribution agreement clauses stating that digital list prices will be consistent across retailers, so publishers can't drive up the list price for Amazon and lower it for Sony, B&N, eBooks.com, etc.
Unfortunately, industry leaders are now telling digital book consumers that they are not important. They are attempting to roll back the swell Amazon has been stirring up for three years. They want to band together to cling to old practices before the market grows large enough to be deemed significant. Yet, regardless of the desire to preserve our old business model, the real power is in the hands of the market--the reader, the consumer. Consumers don't care about "preserving our industry" or protecting the "years of building an author." Consumers of all goods and services today expect to get what they want, when they want it, for the best price they can get it. Period.
The strategy of delaying ebook releases may actually harm the industry more than it will help. The digital market may be small, but they are also voracious readers, active consumers of digital and print books, technically savvy, and vocal. Do we really want to piss them off? Seems to me that denying this group access to the most popular titles is simply going to promote piracy. (Note: Piracy, IMHO, is really only an issue for the blockbuster titles anyway. It is word-of-mouth marketing for the rest of us.)
Rather than denying consumers access to the most popular titles in the digital editions they want, why not take advantage of the flexibility the digital market provides? Big ticket publishers could offer prerelease digital editions before hardcover and actually charge a premium for it. Publishers can also offset high priced new release ebooks with sale priced and even free backlist. And, publishers should adjust the price of a title through its life cycle. Why should a digital edition be $9.99 if a mass market paperback is available for $6.99?
I know that publishers cannot dictate the selling price a retailer sets for its books but if retailers like Amazon and Barnes & Noble aren't willing to honor a publisher's premium list price, pull it. That is another benefit of the digital market. You can change prices, and even turn things on and off with a "flip of a switch." And, there's no reason a publisher can't sell digital editions direct from their own Web sites. If it is a premium, prerelease edition of a blockbuster title, consumers will find it.
At B&H we are actively exploring and experimenting with fluid pricing strategies. We are also embracing the real challenge of using the power of technology to enrich and connect content, readers, and authors to add value consumers are willing to pay for beyond a $9.99 read.
That's the way I see it, today anyway.