Monday, 22 June 2009

Amazon – Will they - Won’t They, Is it - Isn’t It




I came across this at Book  Chase and thought I would  pass it along …

According to a survey featured on Paid - Bernstein Research Analysts Claudio Aspesi and Jeffrey Lindsay says in order for the Amazon business model to work

They write: “Should $9.99 become the universal price pint, publishers would ultimately be compelled to lower their list prices over time, which would significantly lower their margins. We think Amazon’s strategy, however, is to raise electronic book prices over time, while simultaneously influencing the book publishers to accommodate at least a partly electronic book model.” A suggested new price point that could “dramatically” increase margins for publishers and Amazon: $12.50.


The analysts argue that by raising the average price by $2.51, Amazon’s margins could increase from 6 percent to 20 percent on the sale of an e-book. That, they say, is “comparable to its physical book business” since Amazon would only have to sell 1.7 e-books to match the profits from the sale of a hardback, instead of 7:

This however is only speculative at the moment – and how much faith do we have in analyst, they are about joint favourite with economist, no-one ever agree on anything. However just the mere thought that the research was conducted gives rise for concerns as with Amazon and there ever reaching tentacles – you just never know and this really does not bode well for the eBook industry..



1 Speak To Me:

Lisa Logan on 22 June 2009 at 21:40 said...

Actually, I have to wonder whether this could bode well for those in the ebook industry who take routes around Amazon. With indies willing and able to offer titles for a few dollars or less, readers driven off by Amazon's prices may well begin seeking bargains elsewhere.