Reading the recent news accounts of how Amazon and the publishing industry are wrangling over what price point digital content should be sold for makes me laugh. Think of the Titanic and the crew worrying about how furniture is arranged while the iceburg has gashed a whole in the ship's side. As Jeff Bertolucci recently explained in his PC World article "Publishers Short-Sighted in E-Book Price Fight":
Another episode of As The E-Book Turns wrapped this week, with Amazon locked in a page-turning battle with the publishing industry. The plot twists are many, but here's a quick outline: Amazon wants to continue charging $10 for e-book versions of most new titles and bestsellers, but the industry's leading publishers think that price is too low. Macmillan, for instance, wants $13 to $15 for most of its e-book titles, a demand that Amazon conceded to last week. Hachette, another major publisher, also plans to drop Amazon's $9.99 price model, and would rather see many e-books in the $15 range. HarperCollins has made a similar move. Meanwhile, the industry just gained an ally in Apple, which has agreed to let publishers set the price of e-books designed for its new iPad tablet. It's no surprise that publishers would want higher e-book prices, particularly for hot new bestsellers. But their strong-arm efforts to eradicate Amazon's consumer-friendly pricing aren't a good way to grow a nascent e-book market (and e-reader) market.
The challenge for the existing publishing industry today is the same faced by many businesses and industries. So many rules have changed, yet leadership fails to see a way to avoid the pain dealing with the change would require. Hence the chest beating among publishers which amounts to digging their heels in for a fight they cannot win. Its all about economics. In a business where barriers to entry used to be up front costs in promotion, development, distribution and production, new business models have emerged to render the past value of publishers increasingly mute.
Look at Blurb for instance. Watch their CEO Eileen Gittins who founded the online book publishing service after she had an "awful, brutal" experience trying to get her own book of photography published. That generated a "personal passion" in her for the idea that anyone should be able to publish a book with high-quality photographs or other art work. Less than three years later, Blurb has become a phenomenon -- publishing more than 80,000 titles in 2007 and creating a community of book lovers that numbers 250,000. As I mention, the debate between publishers and kindle amounts to the wrong debate about the industries future.