From  The New York Times

February 11, 2010

by MOTOKO RICH and BRAD STONE

In the battle over the pricing of electronic books, publishers appear to have won the first round. The price of many new releases and best sellers is about to go up, to as much as $14.99 from $9.99.

But there may be an insurgency waiting to pounce: e-book buyers.Over the last year, the most voracious readers of e-books have shown a reflexive hostility to prices higher than the $9.99 set by Amazon.com and other online retailers for popular titles.

When digital editions have cost more, or have been delayed until after the release of hardcover versions, these raucous readers have organized impromptu boycotts and gone to the Web sites of Amazon and Barnes & Noble to leave one-star ratings and negative comments for those books and their authors.

“This book has been on the shelves for three weeks and is already in the remainder bins,” wrote Wayne Fogel of The Villages, Fla., when he left a one-star review of Catherine Coulter’s book “KnockOut” on Amazon. “$14.82 for the Kindle version is unbelievable. Some listings Amazon should refuse when the authors are trying to rip off Amazon’s customers.”

The angry commenters on Amazon and online message boards could just be a vocal minority. But now, with e-books scheduled to cost $12.99 to $14.99 under new deals that publishers negotiated with Apple and Amazon, a broader swath of customers may resist the new pricing. The higher prices will go into effect within the next few months.

Predicting the behavior of consumers is always tricky. In the case of e-books, publishers are hoping that a vast majority of people who have not yet tried e-reading devices will not have any expectation of the low pricing now available from Amazon and others, including Barnes & Noble and Sony. They argue that new e-book shoppers will welcome the chance to buy digital editions at a level significantly lower than the typical price tag on a hardcover book.

“With the iPad, the whole notion of e-book reading is probably going to become way more mainstream than it ever has,” said Harvey Chute, who runs KindleBoards, a popular discussion forum for readers of electronic books. “And a majority of people may be coming to it new, and may only see that they are getting $7 off the price they would see at a bookstore.”

But some e-book buyers say that since publishers do not have to pay to print, store or distribute e-books, they should be much cheaper than print books.

“I just don’t want to be extorted,” said Joshua Levitsky, a computer technician and Kindle owner in New York. “I want to pay what it’s worth. If it costs them nothing to print the paper book, which I can’t believe, then they should be the same price. But I just don’t see how it can be the same price.”

Just what e-books are worth is a matter of debate. Publishers argue that printing and distribution represents a small proportion of the total cost of making a book.

“There are people who don’t always understand what goes into an author writing and an editor editing and a publishing house with hundreds of men and women working on these books,” said Mark Gompertz, executive vice president of digital publishing at Simon & Schuster. “If you want something that has no quality to it, fine, but we’re out to bring out things of quality, regardless of what type of book it is.”

To consumers who do not pay much attention to the economics of publishing, though, such arguments are trumped by the fact that e-books have been available for $9.99 for more than a year.

“As far as I’m concerned, Amazon has committed to the $9.99 price,” said Wilma Sanders, a 70-year-old retiree who has homes in Plymouth, Mass., and Marco Island, Fla. She said that if e-book prices rose, she would stop buying. “I’m still a library-goer. There are enough good books out there that I don’t need to pay more than I want to. I already can’t keep up with what I have.”

Authors have been taken aback by some of the vehemence of the reader protests.

“The sense of entitlement of the American consumer is absolutely astonishing,” said Douglas Preston, whose novel “Impact” reached as high as No. 4 on The New York Times’s hardcover fiction best-seller list earlier this month. “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.”

Read more:   http://www.nytimes.com/2010/02/11/technology/11reader.html?emc=eta1