Every ebook would have its own price, and bookstores had to charge that price and could not change it. The lawsuit could not stop agency pricing that the publishers created. In that case, the five publishers settled for $166m (£120m), while Apple lost at trial and was order to pay out $450m in 2016, after a lengthy legal process that ended when the US supreme court declined to hear the company’s challenge. This created a multi-year saga with the US Justice Department vs Apple and all of the publishers.
This was known as a cartel, which is illegal. He wanted them to gain more control over the digital publishing business and create a uniform pricing structure. When Apple launched their iBooks Store, Steve jobs met with the heads of all of major publishers. This created a price war between Amazon, B&N, Kobo, Google and other players.Īll good things come to an end. Amazon was losing money on every ebook sale, but they did this to grow their ebook business and spur Kindle adoption. This made ebooks way cheaper than paperbacks and significently more affordable than the hardcover. Amazon pioneered the concept of paying $9.99 for a new ebook, from a major publisher the day it was released. Why are ebooks so expensive now? Agency Model Keeps the Prices Highĭigital books used to be really affordable and this helped the e-reader industry grow. Major publishers who control the vast majority of the market, control the prices and users end up paying more than the paperback and in some cases, the ebooks are more expensive than the hardcover. Digital books on the Kindle, Nook or Kobo are way more expensive now, than ever before.
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