Overall I like it. As a book buyer I would like cheaper books and as an author I'd like to sell more books.
But I wonder about this part:
As ebook prices drop, unit velocity will increase. If Andrew Ross Sorkin's Too Big To Fail were priced at, say, $3.99, Sorkin would sell hundreds of thousands more copies than he will at today's prices ($29.99?).
I guess we'll see. I know that it's unlikely I can read any more books in a year than I do now unless I find a way to free up a lot more time. I suppose more books could be bought and not read. Maybe if the books are $3.99 people will buy more often and discard sooner, that would be okay.
It's possible the "unit velocity" won't change much at all.
I think you have to hope that non-buyers will begin to buy. If the Kindle really catches on (and I have fans writing me that they will never buy another print book), you can see all sorts of non-book readers getting books again: for example the whole gadget-crazy younger crowd and the folks who have only been reading magazines and how-to books.
What I don't understand is how authors will get 70 % of a deal that's struck between publisher and Amazon. The contract usually spells out the author's share from electronic rights.
I also don't see how that will affect bargain print book prices. At bargain price, one of mine sells at 5.60. Does that mean the title is not eligible for the new deal (the Kindle price is 9.99)?
On the whole, I like the 70% idea, but one wonders what the future will bring.
The Toronto Public library already lends out e-books. They buy a certain number of copies and lend them for two weeks like regular books. They do the same with downloadable audiobooks which I can access from my house.
Is there any reason to think that because books are now available on a new device there will suddenly be lots more buyers? I hope so, but I think we'll be lucky to hold onto the number of readers there are now.
There might be a bump if the e-reader becomes the new hip, cool, and groovy thing, like the iPod. Whether that will get those folks to actually read after the initial display of cool hipness (or hop coolness) is the big question.
I think e-readers will remain a niche market because the tablet PC is gaining ground. Why pay $300 for an e-reader when you can pay $500 (or whatever; maybe tablet PCs will be too expensive to compete with e-readers at first, but over time, the price will come down) for a tablet PC where you can read e-books as well as other things a computer can do. E-ink will probably keep the e-reader alive, but what happens when e-ink is integrated into tablet PCs?
A drop in price is going to lead to an increase in demand. That's a basic principle of economics. How much of an increase in demand is the question. But a huge drop in price usually leads to a huge increase in demand. Joe Konrath has tested this out over the past year using the 12 or so independently published ebooks he's selling, with Kindle readers reacting strongly to price changes of less than a dollar. Some of his analysis includes this:
"Ebooks priced at $4 sell an average of 1100 ebooks per year.
Ebooks priced at $8 sell an average of 342 ebooks per year.
Ebooks priced at $2 sell an average of 4900 ebooks per year."
I am actually contemplating experimenting with this by taking five or six of my published short stories (i have the rights) and a couple of unpublished ones (maybe a novella?), and putting together a mini-e-book to offer for maybe 99 cents.