How Should Publishers Price Digital Books?

Seth Godin has some intriguing and radical reactions to the Kindle. Hear his conclusion:

A lot has been written about how cool the screen is. It is cool. A lot has been written about the offbeat interface (not so good) and the seamless downloading (a wonder.) This is all irrelevant to me. What's worth commenting on is how close the Kindle comes to revolutionizing the way ideas are sold and spread, and how short it comes out in the end (for now.) My bet is that this is just round one. Round five could be/should be powerful indeed. (Random thoughts about the Kindle)

There are many other ideas in the piece. I was struck by Seth's suggestion that the pricing of books is whacked (ie too high). This despite the fact that many of the books available for the Kindle have a $9.95 price (ie a lot less than the corresponding trade hardback). Seth got on the phone and tried to persuade Amazon that they should ship every Kindle with some free books including several that Seth was prepared to offer them. That is not such a bad idea, though one understands why Amazon passed on the offer.

We wonder whether Amazon might not shift to a 'book club' model of distribution (did I somewhere see Mike Shatzkin suggest that Amazon might do this?) and the Kindle book-club would certainly be jump started if each Kindle came with 100 titles that the user could select from the 'premium offer shelf'. Publishers would collectively hate the still greater pricing power that such an approach would bring to Amazon, but authors and publishers individually would leap to see some of their titles included in the 'premium offer shelf'. Competition is tough.

There is a lot of resistance amongst publishers to the idea that the prices of books will come down as they go digital. A publisher (academic books, high level, limited markets) with whom I was discussing the Exact Editions platform said that our proposition for the end-user (a one year subscription tied to an individual account) was really more like a long-term library loan than anything else. Not a book purchase. Of course, we are not used to the idea of book libraries charging for loans (video libraries are a different matter) and publishers are not used to thinking of their role being 'library-like'. But roles are changing. My academic publisher friend decided that a one-year loan of one of his typical titles would probably be fairly priced at 60% of the full volume price. I suspect that he may be being a bit cautious and might gradually move to 40% if he finds that there is little substitution between book purchases and long-loans. But who knows? Pricing is mostly guesswork.