E-books price war not here yet

Lawsuit spurs no huge change

NEW YORK — About now, as millions of e-readers and tablets are being slipped under Christmas trees, there was supposed to be a ferocious price war over e-books.

Last spring, the Justice Department sued five publishers and Apple Inc. on e-book­ price-fixing charges. The case was a major victory for Amazon, and there were widespread expectations — fueled by Amazon — e-book prices would plunge.

The most extreme scenario went like this: Digital versions of big books selling for $9.99 or less would give Amazon domination over the e-book market. As sales zoomed, even greater numbers of consumers would abandon physical books. Major publishers and traditional bookstores were contemplating a future that had passed them by.


But doomsday has not arrived. Four of the publishers have settled with regulators and revised the way they sell e-books, and prices have selectively fallen, but not as broadly or drastically as anticipated. The $10 floor publishers fought to maintain for popular new novels is largely intact.

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One big reason for the lack of fireworks: The triumph of e-books over their physical brethren is not happening as fast as forecast.

‘‘The e-book market isn’t growing at the caffeinated level it was,’’ said Michael Norris, a Simba Information analyst. ‘‘Even retailers like Amazon have to be wondering how far can we go — or should we go — to make our prices lower than the other guys if it’s not helping us with market share.’’

Norris said Simba has been noticing “commitment to content’’ issues.

‘‘A lot of these e-book consumers aren’t behaving like lab rats at a feeder bar,’’ the analyst said. ‘‘We have found that at any given time about a third of e-book users haven’t bought a single title in the last 12 months. I have a feeling it is the digital equivalent of the ‘overloaded night stand’ effect; someone isn’t going to buy any more books until they make a dent in reading the ones they have already acquired.’’


Another, more counterintuitive possibility is the 2011 demise of Borders, the second-biggest chain, dealt a blow to the e-book industry. Readers could no longer see what they wanted to go home and order.

“The print industry has been aiding and assisting the e-book industry since the beginning,’’ Norris said.

It is possible Amazon, which controls about 60 percent of the e-book market, is merely holding back with price cuts for the right moment. The next few weeks are when e-book sales traditionally jump, as new devices are loaded with content.

The question of what is the proper price for e-books has shadowed the industry since Amazon introduced the Kindle in l2007. Amazon had a natural impulse to build a market and was an aggressive retailer in any case, so it took bestsellers that cost $25 in independent bookstores and sold them for $9.99 as e-books. Consumers liked that. E-book adoption soared.

‘‘The pricing war hasn’t happened because Amazon can’t afford it,’’ said Nate Hoffelder, of Digital Reader. “Now that the Kindle is being sold so cheap, Amazon no longer has the hardware income to act as a cushion.’’


Debatable — but the cost of e-readers has plunged more than for e-books.