The sale of e-books has been increasing steadily ever since the introduction of the Kindle, accounting for around 30% of consumer book sales in 2013 (Papyrus). Through use of e-books, authors and publishers are able to reach many new audiences that were never previously available and offer lower prices than traditional paper copies; however, this transition still spells trouble for many publishers. Not only are the use of e-books making an already struggling industry more competitive, but Amazon, by taking over much of the market has been driving profit margins down in what appears to be a monopoly takeover. Although e-books present the option of variable prices to a previously fixed price market, many authors and bookstores are being hurt by the ruthless business practices of Amazon aiming to boost sales in other, more high-end goods than books.
The introduction of e-books has given publishers the ability to promote books and adjust their prices to fit demand which was previously not an option with paper copies. Previously, publishers printed the copies with prices on the covers and as a result, the price stayed the same until the book became old enough to be moved to the bargain section. Now, with digital copies and stores for books, publishers are able to give books a second chance at prominence by lowering prices for sales (Chace). These new marketing techniques allow books that are several years old to gain hype that had been lost years earlier. With a decreased price, the quantity demanded increases leading to increased sales. After quantity demanded has increased, the price of an e-book can be raised again with a demand that has stabilized at a higher level due to the hype from those consumers who took advantage of the sale. This variable pricing is only available to books in the electronic format and has meant that some publishing companies who have taken advantage of the new format have benefited with great increases in profit.
This however, has not been without its costs. Although the profits of a select few publishers have been increasing, the other, smaller members of the book industry such as bookstores have been in sharp decline due to the added competition from e-books and the powerhouse Amazon with major bookstore chains such as borders going under.
Amazon controls nearly half of book sales and two thirds of e-book sales in the United States (The Future of the Book). Rather than becoming a useful tool to connect publishers to consumers, Amazon has proved to be a monopoly for booksellers and publishers alike. Instead of using normal business tactics, Amazon uses books as a commodity to lead sellers to buy other products. Books are simply a means for hooking buyers on Amazon’s products by offering low prices that are sometimes even lower than cost of production in the hope that buyers will return for other higher value goods. The fact that “the average amount American consumers say they pay for books has declined 40% since 2009” gives testament to the lower revenue within the market for books (The Future of the Book) . This drop in prices is a result of Amazon and the introduction of e-books. The tactic of lowering prices to sometimes below cost, although helping to boost Amazon’s sales has become a major problem for the book industry. Why would consumers buy from their local bookstore if they can buy the same book for cheaper at Amazon and have it shipped directly to their house, or even download it in minutes? The introduction of e-books has made books more accessible to the average American, but the price that bookstores and even some authors (it is much harder to be discovered in an online setting) have taken is too much to justify continuing the trend of amazon’s takeover and installment of e-books.
Chace, Zoe. “E-Books Destroying Traditional Publishing? The Story’s Not That Simple.” NPR, 27 Dec. 2012. Web. 10 Mar. 2015.<http://www.npr.org/2012/12/27/168068655/e-books-destroying-traditional-publishing-the-storys-not-that-simple>.
“The Future of the Book.” The Economist. The Economist Newspaper, 8 Oct. 2014. Web. 10 Mar.<http://www.economist.com/news/essays/21623373-which-something-old-and-powerful-encountered-vault>.
Packer, George. “Cheap Words.” The New Yorker. The New Yorker, 17 Feb. 2014. Web. 10Mar. 2015. <http://www.newyorker.com/magazine/2014/02/17/cheap-words