What should come as no surprise to 99.99% of the people out there, Warner Brothers music group has seen their online music sales plummet since they forced Apple’s hand and made them start selling tracks up to $1.29 (up from the standard 99 cents). Warner brothers saw their online sales fall 10 percent in the 3rd quarter, and another 11 percent in the 4th quarter, which is typically their strongest quarter due to the holiday season. Warner Brothers CEO came out and said maybe raising our prices during a recession wasn’t the greatest idea out there. How many people could have told him that? How much is this guy getting paid?
Well, it seems like book publishers are following the fool. Ever since the iPad was announced, the publishers have been pushing Amazon (and succeeding) to raise their standard e-book price from $9.99 to $14.99 and up. Their reasoning is that an e-book is going to cannibalize their hard back sales and the price needs to be higher. What these older crudgedy CEOs fail to see is that if you price your product right, your sales will go higher because you are reaching a larger audience that won’t pay 20 bucks for a book, but would pay 10 bucks. The e-book market is in its infancy. If it picks up, you most likely will see the same type of piracy that you see with music and movies. So why start down the same path that the music companies have? I guess they just want to deal with the same pain and suffering that the music companies dealt with.
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Made me think of this blog by Seth Godin: http://sethgodin.typepad.com/seths_blog/2009/12/the-magic-of-dynamic-pricing.html
This isn’t a bad read either to think about how companies could do it ’smarter’….. http://sethgodin.typepad.com/seths_blog/2009/02/reinventing-the-kindle-part-ii.html