E-Book Prices Should Start Dropping Soon

Illustration for article titled E-Book Prices Should Start Dropping Soon

Book publishers have reached a settlement with the Department of Justice over the e-book price fixing ring of which Apple was allegedly kingpin. That settlement is great news, because it means we'll be able to buy cheaper e-books really soon.

Apple was accused of teaming up with HarperCollins, Simon & Schuster, and Hachette Book Group to bar Amazon from selling e-books at a discount by keeping their prices artificially high. But because of today's settlement, the shady partnership is over, and Amazon can go back to peddling e-books at $9.99 or lower.

Apple will still have to go to court next spring to answer to anti-trust allegations, as will two other publishers that didn't settle—Penguin and Macmillan. A couple of camps might not be so thrilled about the settlement, however. It could cause a bit of a pricing debacle for traditional book stores, because book books will never be as cheap as e-books. The other is Amazon competitors. In 2010, the last time Amazon was able to sell e-books for $9.99, it had a stranglehold on 90 percent of the market, and other retailers struggled to make inroads. Now they fear they're going to be in the same boat all over again.


But bookophiles rejoice, you're about to get more bang for your bookbuck. [WSJ via iJailbreak]

Image credit: Africa Studio/Shutterstock

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Sadly, the problem isn't the $9.99 price point. Most e-books are around that price point. The problem is that Amazon was and will again use e-books as loss leaders to sell other products, namely Kindles. Back before agency pricing, they were routinely selling e-books at a loss. That's how they cornered the market. People may not have liked the agency model of pricing, but it broke Amazon's stranglehold on the market and created more competition. With Amazon now allowed to charge what it wants, we'll begin seeing Publishers withholding e-books from the market or Amazon slashing e-book prices to artificially low levels to gain back the marketshare it lost.

In the short run, consumers will seem to win, but this is definitely not a win for consumers.