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Where Will E-Book Prices Go After the Settlement?

September 10th, 2012 by · 3 Comments · Amazon, Apple, lawsuit, Price Fix Six

doj-buildingSay what you will about Bob Kohn, he’s certainly persistent. PaidContent reports that he’s filed a last-minute request for a stay on Judge Cote’s ruling that the Department of Justice’s Agency Pricing settlement can go into effect. He wants the imposition of the settlement suspended until the Second Circuit appeals court can rule on it. If the appeal is rejected—as it probably will be—then that will go to the Second Circuit. And if it strikes out there, too, then the fat lady will have officially sung, because by the time the appeals court gets around to ruling on the settlement itself the market will already have been changed by months of new e-book prices.

I suspect that, with Amazon starting to cut prices on settling publishers’ e-books, it’s already too late. A more interesting question is what the settlement will mean in terms of overall e-book prices. Will the publishers still using agency pending the DoJ lawsuit lower their own prices to compete with the settling publishers? Might publishers even raise prices on some of their e-books, to “use up” allotted retailer discounts more quickly?

In his most recent blog post, Mike Shatzkin gives the devil his due, noting that Amazon has done a remarkably good job of synergizing a lot of its different properties and capabilities together for new features in its new family of Kindle products. Of particular note are the abilities to synchronize or pair the e-book and audiobook versions of a book—which will not only make both more useful, but will also induce consumers to make two purchases instead of one.

He also thinks Amazon will discount aggressively, using “bots and algorithms”, those e-books covered by the settlement—and that Apple lacks the expertise to match them at that game. (This is a bit interesting given that Nate thinks that, with its newly-cheap ereader hardware, Amazon won’t be doing that sort of aggressive discounting. I wonder who’s right?)

At any rate, our times just got more interesting. I can’t wait to see what Amazon does next.

Image by cliff1066.

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3 Comments so far ↓

  • willem

    With a tsunami of content coming and barriers to entry falling fast prices are heading only one way. Combine that with the fact that the big players – Apple, Google, probably even Amazon – don’t depend on ebooks for any substantial part of their business.

    The only question here is the bottom. $4.99? 99cents? Free? Less than free?

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