NYT: Apple’s iBookstore Prices May Be Lower Than Expected
Posted 02/18/2010 at 6:58am
| by J.R. Bookwalter

Seemingly contradicting recent reports that iBookstore pricing on the iPad will fall between $12.99 and $14.99 for new releases,
The New York Times has a new report which indicates the $9.99 price point may not be dead after all.
Amazon’s Kindle established the price of electronic new best sellers selling for $9.99 -- even though the company was purchasing them from the publishers at a higher price and selling them at a loss. Since the introduction of the iPad, a trio of the big five publishers have pressured Amazon to drop that model and go with the more traditional agency model -- at a higher sale price -- which gives them 70 percent of the loot and leaves Amazon with the remaining 30 percent.
Apple has been expected to follow the same model, which has been successful for them with the App Store via iTunes. But
The New York Times is now reporting that Cupertino may have left themselves some wiggle room in their negotiations with publishers, which allows them to sell the most popular books at a discount.
“According to at least three people with knowledge of the discussions, who spoke anonymously because of the confidentiality of the talks,” the report claims, “Apple inserted provisions requiring publishers to discount e-book prices on best sellers -- so that $12.99-to-$14.99 range was merely a ceiling; prices for some titles could be lower, even as low as Amazon’s $9.99. Essentially, Apple wants the flexibility to offer lower prices for the hottest books, those on one of the
New York Times best-seller lists, which are heavily discounted in bookstores and on rival retail sites.
“Moreover, for books where publishers offer comparable hardcover editions at a price below the typical $26, Apple wanted e-book prices to reflect the cheaper hardcover prices,” the report concludes. “These books might be priced much lower than $12.99, even if they did not hit the best-seller list.”
Of course, Apple had no comment as usual on the report, but it makes sense to us -- it’s not hard to imagine there will be a lot more iPads than Kindles in the world after its late March debut and the publishers can afford to lose a few bucks per book and make it up in volume.