The publishing industry has been buzzing lately about Amazon's latest announcement, Kindle MatchBook. MatchBook, which launches in October, offers consumers extremely low-priced ebook version of print books they've already bought (or will buy).
My first reaction to the announcement was, "great for consumers, not so much for publishers and authors." MatchBook is consistent with Amazon's overarching goal of offering the world's lowest prices. So as a reader I'm thrilled about MatchBook, but I have to admit it's yet another reason why I'm kind of happy to no longer be in the book publishing business.
MatchBook will only help erode the perceived value of ebooks. When the original Kindle launched in 2007 Amazon convinced us that ebooks should be $9.99 or less. MatchBook will now cause consumers to look at ebooks as a $2.99 (or less) throw-in or afterthought when you buy the print book. Publishers are already struggling to grow their ebook revenue fast enough to make up for their ongoing print revenue decline. What happens when there's even more downward price pressure like this, even as a bundle?
Publishers have had plenty of opportunities to take more control over their destiny up to now though. What I'm talking about is the need to create direct channels to their customers. Since most don't bother with that, they've simply handed the keys to the kingdom over to Amazon and they have no one to blame but themselves if they're unhappy with a program like MatchBook.
Btw, reports I've read indicate publishers need to opt in to MatchBook. So if a publisher doesn't like the concept, they can sit on the sidelines. But even if they don't participate, there's no stopping the perceived value Amazon is creating around ebooks with this program.
The MatchBox offer doesn't surprise me and neither does a lack of broad publisher participation. What I am surprised about though is that Amazon is actually giving publishers the option to participate in MatchBook.
Publishers never had the option to stop Amazon from selling ebooks at a loss for $9.99. (The agency model was supposed to address that, but the DOJ believes Apple's tiny ebook market share has penalized consumers, so the agency model has officially been neutered.) Since Amazon is free to assign whatever price they deem appropriate on an ebook, why can't they do the same for the price on ebooks that are bundled with print books?
Is Jeff Bezos turning soft? I'm stunned that Amazon didn't just march forward and say, "MatchBook lets you buy the ebook version of any print book you've bought from Amazon, all for $2.99 or less." They'd pay the publisher their portion of the full digital list price, which means every bundle sale would be made at a loss.
Here's what I think will happen: Amazon initially gave publishers the option to participate in MatchBook. Most didn't. Amazon moves forward with the MatchBook launch next month and they'll closely monitor the numbers. If the results shows Amazon could open this up to all ebooks without adding significantly to the company's overall quarterly financial loss, they'll announce a much broader version of MatchBook down the road, with our without publisher approval.