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Mad About The New Upward Shift In E-Book Prices? You’re Not Alone.

Friday, February 26th, 2010

If you’re not a zealous reader of, well, anything, you may not know about the new literary revelation known as e-books. One of the appealing aspects of these “e-books” is their low prices relative to books printed on paper, but that’s about to change…

  • Various publishers of “e-books,” books that you can read on e-book readers (like the Amazon Kindle or new Apple iPad), have won the ongoing battle for pricing—newly published e-books and bestsellers will go from a flat price of $9.99 to as much as $14.99 each.
  • Unfortunately for the publishers, many avid e-book readers aren’t too keen on this—even going as far as to organize “impromptu” protests, accomplished by going on different e-book websites (e.g., Barnes and Nobles and Amazon) and leaving low ratings and negative reviews for particular books.
  • The central disagreement seems to be over the costs of production; e-book consumers argue that since publishers no longer have to pay for printing, storing and distributing paper-based books, they have no grounds to charge higher prices. Publishers allege that e-book readers are myopic and, frankly, old and cranky, and don’t take into account all the overlooked costs of e-book publishing, like the actual writing, editing and thinking on the part of the author, editors and all the other employees at each publishing house.

Facts & Figures

  • Up until now, e-book prices have hovered around $9.99, a price most e-book readers find quite agreeable.
  • Sometimes publishers will hold off on offering an e-book for a few months so that they can protect sales of the paperback and hardcover versions of the book, prompting hordes of indignant geriatrics to post one-star reviews online.
  • According to a number of online consumer testimonials, iPods, video games and films are good alternatives to books.

Best Quote

“The sense of entitlement of the American consumer is absolutely astonishing. It’s the Wal-Mart mentality, which in my view is very unhealthy for our country. It’s this notion of not wanting to pay the real price of something.” – Douglas Preston, Bestselling Author

iTunes Invades the Internet

Thursday, December 10th, 2009

iTunes became the mp3 champion of the world by curbing illegal downloads while still allowing customers to “own” their purchased music files, but now the company is considering an entirely different model based on paid access, not ownership.

  • Apple is planning to extend its mp3-selling business beyond its popular iTunes music store, which keeps purchased music files saved on a single computer.
  • Having just absorbed lala.com, which allows users to purchase music that is stored remotely and accessible anywhere there’s Internet, Apple is considering a web-based mp3 storage model that will have a significant impact on the industry.
  • Making music purchases available outside of the iTunes program will allow the company to reach more customers through search engines and websites.

Facts & Figures

  • Apple paid $85 million to acquire LaLa Media Inc.
  • Wal-Mart Stores Inc. was the biggest supplier of music until last year, when Apple usurped it.
  • iTunes forecasts revenues of $2 billion this year.

Pay More For Peace Of Mind?

Monday, October 19th, 2009

Seems like you can buy an extended warranty on anything these days, but is it really worth the investment?

  • Extended warranties are a big source of profit for both the retailers selling the product, but also for third party warranty dealers that operate outside of the retailers’ awareness.
  • Car dealers in particular try to sell extended warranties to increase their bottom line because the average car purchase today results in a net loss for the dealer.
  • In most cases, springing for the extended warranty probably isn’t worth it. But if you’re famous for breaking your cell phone, or the item you’re buying is known to break down a lot, it may save you a lot of repair and replacement money in the end.

Facts & Figures

  • 34.4% of new car buyers bought extended warranties in the first half of 2009.
  • 65% of Consumer Reports survey respondents reported that they spent more on their car warranties than they recouped in repair savings.
  • To extend the coverage on a Toyota Highlander to 8 years or 100,000 miles, an extended warranty will cost between $1,325 and $1,600.

Best Quote

“It’s insurance. It depends on the customer’s views about risk.” – Paul Taylor, Chief Economist for the National Automobile Dealers Association

Will Cheaper iPhones Create Converts?

Friday, September 25th, 2009

Even a company as glitzy and popular as Apple needs to cut prices to compete in this economy – nobody can escape basic economic relationships between price and demand.

  • Hoping to sustain the momentum for its trendy smart phone in the middle of the recession and among increasingly prominent competitors, Apple decreased the price of its entry-level iPhone 3G from $199 to $99.
  • Main competitors include Palm Inc. and Research in Motion Ltd. (creator of the BlackBerry line of devices).
  • Apple also decreased the price of some of its other products, including the MacBook Pro, the MacBook Air, and the Mac OS X Snow Leopard operating system.

Facts & Figures

  • Apple has sold more than 20 million iPhones so far.
  • The new $99 iPhone 3G could increase iPhone demand by as much as 50%.

Best Quote

“These are very aggressive prices.” — Richard Doherty, Analyst with Envisioneering Group (a technology consultancy)

The Wall Street Journal Finds A Subscription In Your Pocket

Wednesday, September 23rd, 2009

Now that everyone’s addicted to their CrackBerry, it’s time to pay the suppliers.

  • Rupert Murdoch, Chairman and CEO of NewsCorp., announced on Tuesday that the company would start charging a fee for users of its Wall Street Journal mobile application.
  • The move was in response to a continued industry-wide struggle to raise money by selling advertising and subscriptions to the newspaper’s website.
  • The new weekly access fees will affect most users of the mobile application, which is available for BlackBerry, iPhone, and iPod Touch.

Facts & Figures

  • Mobile application access will be free for users who subscribe to both print and web editions of the Journal; non-subscribers will pay $2/week for access; print-only subscribers will pay $1/week.
  • In a similar move, The New York Times recently asked its subscribers if they would pay a $2.50 monthly fee for Web access.
  • In terms of circulation, USA Today is the largest newspaper with 2.11 million subscribers; The Wall Street Journal is second with 2.08 million subscribers; the New York Times is third largest with 1.04 million.

Your Music’s Gone Digital. Your Photos Went Digital. Ready For Your Books?

Monday, May 4th, 2009

New technology could really affect the way you learn, get your news, and relax.

  • In late 2007, Amazon’s Kindle redefined electronic books. Not only did it have an E-ink screen (which doesn’t strain your eyes like LCD screens), but it also included high-speed wireless connection so you could download new books directly from anywhere in the U.S., at no extra cost.
  • Now, Amazon has released the Kindle 2. There’s no major redesign, but it is faster and a bit more polished than the original.
  • If you’re already a Kindle owner, no dire need to upgrade just yet. But if you’re buying your first ebook, this is a good place to start.

Facts & Figures

  • The Kindle’s Eink screen uses small shape-shifting ink-like capsules to form print-quality text that doesn’t strain your eyes at all.
  • The Kindle 2 features accident-proof buttons, a thinner body (.36 inch), more built-in memory (2 gigabytes), a joystick navigation button, 4x higher screen quality, better battery life, and a robotic voice for the option to listen as an audiobook.
  • The Sony Reader is Kindle’s only real competition, though it’s $30 more and doesn’t have Kindle’s favorite feature, wireless connection.

Best Quote

“The new Kindle 2 is less of a revolution, and more of a refinement.” – Seth Porges, bloomberg.com

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