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Have Kindle store customers and agency model publishers arrived at an unspoken compromise that could make $12.99 a viable new price point for bestsellers and new releases in the Kindle Store?

Although I want to resist drawing firm conclusions until we've seen more of the effects of coming changes in the Kindle royalty structure, there are some interesting patterns in our latest breakdown of prices in Amazon's (NASDAQ:AMZN) Kindle Store and on its paid bestseller list. It's deadline day for the weekly Kindle Nation email newsletter digest, so I'm going to try to keep the commentary brief, but here's what I am seeing:

  • There have been slight increases during the past three weeks in the overall percentage of titles in all but one ($5 to 9.98) of the price ranges that we track from $.01 up to $9.99.

  • There have been slight decreases during the past three weeks in the overall percentage of titles in the price ranges from $10 to $12.99, $13 to $14.99, and $15 and up.

  • There are increasing signs that suggest authors and publishers may be able to make promotional prices in the $0.79 to $2.99 range work as "the new free" in the Kindle Store, now that such prices tend to stand out in the overall terrain of the relatively new "paid" bestseller list. 13 of the top 100 paid bestsellers are $2.99 or less, compared with just 7 on May 22.

But most significantly, here's the buried lead: At the other end of the price spectrum, the number of titles priced between $10 and $12.99 among the Kindle Store's top 100 paid bestsellers has jumped from 17 to 26 since May 22. Despite a strong current of commentary against $10-and-up pricing on this and other blogs and in various online forums, it is beginning to appear that many Kindle store customers are willing to pay up to $12.99 for newly released titles.

  • Nine of those 26 titles are among the top 23 bestsellers, and the prices for all 26 have been set directly by agency model publishers.

  • It may be that trying to organize the world's most motivated readers into boycotting books priced over $9.99 is a lot like herding cats, and there should be no surprise in that. On the other hand, readers continue to stay away from most of the 14,105 titles whose Kindle prices range from $13 to $14.99. The number of those titles appearing in the top paid 100 fell from 5 to 4 since May 22, and none of those are among the top 30.

  • Of all 30 titles priced over $9.99 among the Kindle Store's top 100 paid bestsellers, all are agency model titles save one. The one exception is Aimee Bender's The Particular Sadness of Lemon Cake: A Novel, a Doubleday/Random House release currently priced by Amazon at $13.65 in the Kindle Store, while Amazon has discounted the hardcover from $25.95 to $14.27.

It's too early to say with any certainty that Kindle owners have accepted a $12.99 price point, but my anecdotal reading of reader comments around the web suggests to me that some readers might be willing to pay for an occasional bestseller at $9.99 to $12.99 -- still a measurable savings compared to most discounted hardcover prices -- if they could be assured that publishers would back off the $14.99 price point.

Over time, many of us believe that the default new release price will return to the $9.99 level, and it is clear if you look at the books that get the prime real estate in the Kindle Store that Amazon remains committed to that price point. It's also good to see that publishers themselves are getting the benefit of sound thinking from advisors like Mike Shatzkin, an industry consultant who wrote on his idea Logical blog this weekend.

I posit that the price of content must go down because of the laws of supply and demand. Even though digital delivery does actually increase “demand” (because people can consume more media if they have the means to do so always at hand), it increases supply much more. You used to need a publisher to spend some money and to commit an organization to get content into “supply”. Now you just need an internet connection. So I see downward pressure on the selling price of content going far into the future. This does not mean that eventually all content will be free, but it does mean that everybody will consume more and more free content and, therefore, be generally less willing to pay money for content to augment what is free.

I've been a bit critical of Mike and some of his colleagues in the past, probably even unfairly in some instances, when I have felt they were telling publishers what they wanted to hear rather than what they needed to hear. But it is clear from this post that he is not guilty of that kind of pandering.

Even Steve Jobs and Apple (NASDAQ:AAPL), who can be held largely responsible for the increases in ebook prices this year, has been getting that other side of his mouth working lately with "price aggressively and go for volume" remarks that could support an inference that Apple may ultimately move to push ebook prices lower. Jobs may be the target of a price-fixing investigation, but he's not in any trouble with iBooks customers. Many of them apparently wear an "i Paid" badge of honor judging from a quick analysis of the iBooks "Top Charts" list, where 58 of the top 100 paid bestsellers are priced over $10.

Here's a price breakdown of the 609,975 book titles in the Kindle Store as of 5 p.m. EDT on June 14, 2010:

Here's where we stood with the 587,104 book titles in the Kindle Store as of 5 p.m. EDT on May 22, 2010:

  • 20,584 Kindle Books Priced "Free" (3.51%)

  • 4,830 Titles Priced from a Penny to 98 Cents (0.82%)

  • 55,901 Kindle Books Priced at 99 Cents (9.52%)

  • 76,054 Kindle Books Priced from $1 to $2.99 (12.95%)

  • 109,706 Kindle Books Priced from $3 to $4.99 (18.69%)

  • 151,509 Titles Priced from $5 to $9.98 (25.81%)

  • 56,059 Titles Priced at $9.99 (9.55%)

  • 7,700 Titles Priced from $10 to $12.99 (1.31%)

  • 13,803 Titles Priced from $13 to $14.99 (2.35%)

  • 90,958 Titles Priced at $15 and Up (15.49%)


Here's where we stood with the 511,759 book titles in the Kindle Store as of 9 a.m. EDT on May 7, 2010:

  • 20,601 Kindle Books Priced "Free" (4.03%)

  • 4,857 Titles Priced from a Penny to 98 Cents (0.94%)

  • 53,936 Kindle Books Priced at 99 Cents (10.54%)

  • 73,987 Kindle Books Priced from $1 to $2.99 (14.46%)

  • 101,014 Kindle Books Priced from $3 to $4.99 (19.74%)

  • 91,871 Titles Priced from $5 to $9.98 (17.95%)

  • 54,342 Titles Priced at $9.99 (10.62%)

  • 7,434 Titles Priced from $10 to $12.99 (1.45%)

  • 13,489 Titles Priced from $13 to $14.99 (2.64%)

  • 90,257 Titles Priced at $15 and Up (17.64%)


Here's where we stood with the 487,715 book titles in the Kindle Store as of 9 a.m. EDT on April 7, 2010:

  • 20,620 Kindle Books Priced "Free" (4.23%)

  • 4,709 Titles Priced from a Penny to 98 Cents (0.97%)

  • 46,360 Kindle Books Priced at 99 Cents (9.51%)

  • 69,846 Kindle Books Priced from $1 to $2.99 (14.32%)

  • 94,891 Kindle Books Priced from $3 to $4.99 (19.46%)

  • 86,924 Titles Priced from $5 to $9.98 (17.82%)

  • 53,705 Titles Priced at $9.99 (11.01%)

  • 7,537 Titles Priced from $10 to $12.99 (1.51%)

  • 13,124 Titles Priced from $13 to $14.99 (2.69%)

  • 90,011 Titles Priced at $15 and Up (18.46%)

Here's where we stood with the 480,238 book titles in the Kindle Store on April 1:

  • 20,620 Kindle Books Priced "Free" (4.29%)

  • 4,706 Titles Priced from a Penny to 98 Cents (0.98%)

  • 43,993 Kindle Books Priced at 99 Cents (9.16%)

  • 68,807 Kindle Books Priced from $1 to $2.99 (14.33%)

  • 93,706 Kindle Books Priced from $3 to $4.99 (19.51%)

  • 85,612 Titles Priced from $5 to $9.98 (17.83%)

  • 53,124 Titles Priced at $9.99 (11.06%)

  • 5,952 Titles Priced from $10 to $12.99 (1.24%)

  • 14,158 Titles Priced from $13 to $14.99 (2.95%)

  • 89,525 Titles Priced at $15 and Up (18.64%)

Here's where we stood with about 463,000 Kindle Store titles on March 10:

  • 20,125 Kindle Books Priced "Free" (4.34%)

  • 2,588 Titles Priced from a Penny to 98 Cents (0.56%)

  • 39,095 Kindle Books Priced at 99 Cents (8.44%)

  • 64,105 Kindle Books Priced from $1 to $2.99 (13.84%)

  • 90,580 Kindle Books Priced from $3 to $4.99 (19.55%)

  • 84,055 Titles Priced from $5 to $9.98 (18.15%)

  • 53,697 Titles Priced at $9.99 (11.56%)

  • 5,793 Titles Priced from $10 to $12.99 (1.25%)

  • 13,731 Titles Priced from $13 to $14.99 (2.96%)

  • 89,448 Titles Priced at $15 and Up (19.31%)

And here's where we stood with about 447,000 Kindle Store titles on February 25:

  • 19,795 Kindle Books Priced "Free" (4.42%)

  • 3,023 Titles Priced from a Penny to 98 Cents (0.67%)

  • 36,370 Kindle Books Priced at 99 Cents (8.12%)

  • 62,275 Kindle Books Priced from $1 to $2.99 (13.9%)

  • 87,722 Kindle Books Priced from $3 to $4.99 (19.58%)

  • 81,230 Titles Priced from $5 to $9.98 (18.13%)

  • 55,269 Titles Priced at $9.99 (12.34%)

  • 5,139 Titles Priced from $10 to $12.99 (1.15%)

  • 9,331 Titles Priced from $13 to $14.99 (2.08%)

  • 87,771 Titles Priced at $15 and Up (19.59%)


Click here to see underlying statistical analysis (Based on U.S. Kindle Store book catalog as of 5 p.m. ET 6.14.2010)

Disclosure: Long AAPL, Long AMZN

Source: Has the Amazon / Book Publishers Price Spat Been Settled Quietly?