Tag Archives: pricing

Online storage prices come down slowly — Apple still the max

Drastic price cutting has hit the online storage space, or so you may read. But, unfortunately, most of the price cutting is for big time corporate users not us little guys. Well, that’s not completely true. There have been some serious price cuts on online storage for us ordinary users since I last wrote about this back in May.

That was when Google switched from super cheap prices to only sort of cheap prices — and you had to sign up to pay monthly instead of paying once a year. Big drag. Google’s prices remain unchanged, starting at $1.20 per GB per year (excluding the free space you get).

But, the competition is heating up some. In July, Dropbox effectively halved its prices by giving you 100 GB, not just 50, for $99 a year. Excluding the 2 GB they give you free, that’s 99 cents per GB per year. And ahead of the updated Kindle Fire tablets, Amazon made a similar move, halving the price of its Cloud storage to around 56 cents per GB (excluding the 5 GB you get free).

Sugarsync has not reduced its prices since May and still sits at $2 per GB per year for starters, falling to $1.02 if you buy the maximum 250 GB plan $1.58 if you buy the maximum 100 GB plan. Apple, too, remains stuck at the high end, charging $2 per GB for additional space on iCloud (excluding the 5 GB free) — and up to a maximum of only 50 GB.

So, slight improvements — I’m not complaining — but not the all-out-war that’s taking place in the enterprise online storage market.

Finally, I’ll add that I have sampled services from Dropbox, Google Drive and Amazon Cloud on Mac and Windows computers as well as on iOS and Android devices. And I’ve used iCloud on Macs and iOS. I like Dropbox best because it just works so reliably and in the manner you expect. But there are benefits from the more integrated services. Dumping photos into my Amazon Cloud drive as a back up and seeing them sync automagically into my Kindle Fire’s photo gallery app is pretty cool. And you retain more control, or a finer level of control, over the process than with iCloud’s photostream and other Apple syncing practices.

UPDATE: Here’s a table comparing the major services

Service Free (GB) Added data (GB) Prices per year Price/Gb/year
Apple 5 10/20/50 20/40/100 $2/$2/$2
Amazon 5 15/45/95/195 10/25/50/100 $0.67/$0.56/$0.53/$0.51
Dropbox 2 98/198/498 99/199/499 $1/$1/$1
Google 5 20/95/195 30/60/120 $1.49/$0.63/$0.61
Microsoft 7 20/50/100 10/20/50 $0.50/$0.50/$0.50
SugarSync 5 25/55/95/245 50/100/150/250 $2/$1.82/$1.58/$1.02

Notes: “Added data” and “Price/GB/year” exclude free space. Prices have been rounded in some cases. Amazon and Google offer even higher data plans up into the terabytes.

Instapaper isn’t Instaworth it anymore – switching to Pocket

I think I was one of the earliest fans of Marco Arment’s ingenious Instapaper service. I even wrote up a rave review back in March, 2009. This is the original thing that let you save long web articles to read later in your browser or on your phone or ereader. The amazing feature that first hooked me was Instapaper’s ability to compile a bunch of saved articles into a personalized newsletter and email it once a day to my Kindle. Genius. Just think how many trees have been spared by the reduced volume of printing out long web pages.

But times change, competition grows and it’s now time to move on from Instapaper and its $12/year subscription fee (not to mention the bucks spent on separate iPad and iPhone apps as well as unofficial and finally official Android apps).

The main reason to leave is that competing products are more than good enough and cost less. Pocket, for example, has entirely free apps and a free service. It does almost everything Instapaper does that I need and it looks good, too. Adding the oddly named crofflr service to do the Kindle emailing trick costs a one-time fee of $5.

I’ve switched over to Pocket for the past two weeks and have had no problems at all on my iPad, iPod Touch, Galaxy Nexus Phone and Nexus tablet. Everything syncs nicely. The apps look really good and have enough font sizes to let me read in all conditions. Instapaper has a greater range of font choices but that’s not a critical issue. Pocket’s single serif and sans serif fonts are “good enough.”

To ensure that my reading material is downloaded to each app for offline use, I did need to tweak a setting. Under the “Offline Downloading” section of each Pocket app’s options, turn OFF “Download Best View” and then turn ON “Always Fetch Article.” Otherwise, Pocket sometimes wants to download an article from the web when you go to read it instead of keeping a cached copy available all the time.

Pocket also has those little snippets of code known as bookmarklets that you can slap on your browser’s bookmarks bar to instantly send the current web page over to your Pocket queue. And it has an array of other helper bits, like an extension for Chrome, to do the same. I’ll insert the usual Android brag here: just by installing the Pocket app on an Android device, you can send web pages from any other app directly to Pocket via the sharing menu.

The site’s extensive FAQs and discussion forums offer tips for connecting to other services. I wanted to have Pocket show up on the “send to” menu of Google’s online Reader, for example. A quick Google search found the instructions here.

There are, of course, times when we all pay more than we absolutely must for a product or service because of other benefits we receive or maybe just because we want to support a place we like. I often shop at local stores like Wellesley Books and Lower Falls Wine Co. in Newton, even though there are places to buy books and liquor cheaper, because I value their selection and service and I want to support local businesses and local jobs.

With Instapaper, though, it’s just the opposite. Marco Arment, who I once dubbed “the Mouth of Brooklyn” back in the day, is a one man mis-truth squad when it comes to too many of Apple’s competitors. His wacky theories and misstatements about Android are legion and he’s over-the-top on Amazon’s Kindle products, too. Personal favorite? When he whined about the build quality of a Kindle USB cable because, you know, Apple never has build quality issues or ships new hardware with imperfections or whatnot.

So — much credit to Marco for his beautiful and innovative reading service but time to move on. Sayonara and happy trails.

The real agenda of Apple’s ebook partners: death to ebooks

The head of one of the big book publishers, MacMillan CEO John Sargent Jr., is out with an “open” letter about his dispute with Amazon over the pricing and timing of electronic books. It’s telling that this “open” ebook letter wasn’t released publicly and isn’t directed towards readers, book lovers and customers. It was placed as an ad in a small publishing industry trade rag and the message is for publishing industry insiders. Sargent’s message, despite a bunch of misleading surrounding verbiage, is simple: let’s strangle the growth of ebooks.

If you want to understand where Sargent and other major book publishers are coming from, I strongly recommend watching this online footage from a conference New York University hosted last September. Here you can see Sargent and a couple of fellow old media dinosaurs whine and complain about the digital world, dismiss Facebook, Craig’s List and Twitter as irrelevant non-businesses that will never make money and generally explain their plans to charge everyone for everything at every opportunity.

The real critical portions come towards the very end, in part three, as Sargent grows more animated about his opposition to giving away ebooks for free, even for promotional purposes. Despite being in charge of one of the largest publishing conglomerates in the world, he’s pretty pessimistic about the future of books. Challenged by Wired editor Chris Anderson to use digital distribution and new business models to attract new readers and expand the book market, Sargent is in full rejection mode:

“As the Internet grows, as all the other types of entertainment grow, it’s hard to imagine sitting here how we are going to convince everybody in this room to spend an extra six hours every week to consume another book. So in a way, if you look at the overall demand for books, it’s pretty hard to make that grow. We’ve tried. A whole bunch of people worked very hard to try and grow that. It’s pretty hard if you look at the demographics, how people read, to actually convince yourself that we have a growth business in books.”

In other words, what we have in books is a dying audience, a shrinking audience. And the way you extract the most revenue and profit from a shrinking audience isn’t with creative promotions and new ideas. It’s with ever higher prices. As Sargent says at a another point, in a barely veiled swipe at Amazon’s $9.99 ebook price:

“What we need is variable pricing. I think you guys would agree with this, variable pricing for content. You want a range of price points. You want to find a place — what you don’t want to do is give the consumer something for less than what they’re willing to pay for it in the rush to a new business model. Because once you get it out there it’s dangerous and hard to go back.”

Again, challenged to charge less because producing ebooks cost less, Sargent obfuscates, fixating on just one bit of savings, the printing costs of books (ignoring distribution, returns, overage, lost sales from out of print etc):

“Guys I can walk you through this. How much do you think a hardcover book costs us? A buck sixty. What are we saving? Not enough for the price point to drop from $22.50 down to $8.”

Amazon has been saying that its Kindle customers buy more total books – electronic and print – than they bought previously. It’s certainly been true in our household. I don’t have the figures at my finger tips, but I’d imagine that the whole creation and growth of Amazon.com has enlarged the book market, as well. But that’s not really happening in John Sargent’s world of mega-best sellers.

So keep in mind what Sargent was saying a few months ago when you read passages like this in his letter:

“In the ink-on-paper world we sell books to retailers far and wide on a business model that provides a level playing field, and allows all retailers the possibility of selling books profitably. Looking to the future and to a growing digital business, we need to establish the same sort of business model, one that encourages new devices and new stores. One that encourages healthy competition. One that is stable and rational. It also needs to insure that intellectual property can be widely available digitally at a price that is both fair to the consumer and allows those who create it and publish it to be fairly compensated.”

Leave aside for a moment the completely dishonest portrait Sargent paints of the old print book-selling world, and remember that he doesn’t believe the there will be any growth in book sales in the future. He’s not interested in a fair price for anybody — he’s interested in making sure that he never gives the consumer something for less than what they’re willing to pay for it.
He wants to extract the big bucks from the big sellers and move on.

The great danger to MacMillan is that it’s the authors of those big best-sellers who are becoming increasingly able to cut him out. If ebooks really take off, an author like Stephen King or Nora Roberts can sell a lot more of their books direct to their audience with no publisher at all. And that’s why Sargent’s real goal here is not to increase competition or create a level playing field. It’s to squeeze as much profit out of a dying industry as quickly as he can and hold off the digital future for as long as possible.

UPDATE: Henry Blodget also really gets it in his post today called “Hey, John Sargent, CEO of Macmillan Books, Screw You!” An excerpt:

Did Steve Jobs seduce you with that temporary “charge-whatever-you-want” speech?  Well, Steve has been known to seduce people from time to time.  Just imagine what will happen once Steve has put the Kindle out of business and Steve owns the ebook platform instead of Jeff Bezos.  That’s right: You’ll get held up even worse than Jeff’s holding you up today.  Just ask the music industry.  Careful what you wish for. So, bottom line, John, take your $15 ebooks and shove them.  We’re with Amazon on this one.

Good work.

Steve Jobs’ ebook logic: I win, All of you lose

Soon we’ll know just what Apple’s new tablet will really do, how much it will cost and whether it can save the world from global warming. Okay, just joking about that last bit — I think. In any event, many believe the tablet will shake things up in ebook world where Amazon’s Kindle is the leader followed by improving entries from Sony, Barnes & Noble and others.

Today, The Wall Street Journal has yet another story about Apple’s ebook strategy and efforts to woo book publishers. There’s something kind of wacky about the situation, however. The only party that comes out better under Apple’s apparent strategy is…Apple.

Start with readers, aka consumers, aka you and me. We get to read ebooks on cool Apple mobile devices. Oh wait, we can already do that on the iPhone and iPod Touch. What we do get is higher prices. $9.99 is out and the new normal is $12.99 or $14.99. Sounds kind of like last year when Apple caved to the record labels and hiked music prices across the board. I’m still waiting for all those 69 cent songs I was promised.

Okay, so we lose but what about publishers. They’re bitterly complaining about Amazon and it’s terrible prices that devalue books. So they must make out? Well, actually, no. As the article points out, Amazon pays them half the cover price of a digital book, which in most cases is more than the $9.99 retail price Amazon charges its customers. Say the hardcover price is $24 — Amazon pays the publisher $12. Amazon is subsidizing the ebooks, losing money on most of those sales. But Apple is only to pay publishers 70% of the two price points I mentioned, which means they get $9.09 0r $10.49.

So why would they do that? The Journal coimes up with this nonsensical rationale:

But there is nevertheless a strong draw: In adopting the Apple model, the balance of power would shift at least partly back to publishers, which regain control of pricing. In setting higher prices, they could provide a level playing field for all e-book retailers. The potential for publishers is that the device may generate greater volume for e-book sales.

Now, publishers could generate a greater volume of sales to tablet users through the existing crop of ereader apps, if they wanted to. They don’t need Apple for that. But how would the “balance of power” shift to them on pricing? As the article already noted, Jobs is pushing two retail price points and a fixed 70% payout. It’s also very unclear how this results in a “level playing field” for ebook sellers. In fact, publishers would be charging Apple less than they get from Amazon, Sony and Barnes & Noble. It’s a sweet heart deal that benefits…you guess it, Apple.

If I had to put a stake in the ground, I’d predict that this poorly thought-out pricing model ignores what customers want and does little to help the publishing industry. It will get vast amounts of attention and hype but will end up a dud in the marketplace.

Yes, Virginia, the Barnes & Noble ebookstore is a Good Thing

Yesterday, I took a whack at explaining why Barnes & Nobles new online ebook store would turn up the competitive pressure on Amazon’s Kindle world and, more than likely, benefit consumers. But now at least two prominent ebook bloggers are disputing the notion that the new Barnes & Noble ebook store provides important competition for the Amazon Kindle store.

“Jane” at the DearAuthor blog complains that B&N’s effort lacks a dedicated hardware reader (at least until the Plastic Logic reader arrives next year), includes far fewer books people actually want to read and is using a proprietary format that excludes existing Kindle owners. Kassia Krozser, on her Booksquare blog, makes of some of the same points, concluding:

It’s great that Barnes & Noble is offering its customers an ebook option. But to pretend they’re creating serious competition to the Kindle ecosystem is madness. Let’s talk when they have a device and experience that makes the buying and reading of ebooks the best experience technologically possible.

While I certainly agree that B&N’s early ebook effort is somewhat half-baked and rather over-hyped, I find the conclusion that it won’t have any impact on the market puzzling, perhaps even madness. Like I said yesterday, this is a big deal for the ebook market and a net positive for people who buy and read ebooks.

It’s true that B&N does not offer an alternative to people who already own a Kindle (or a Sony eReader for that matter). But it does offer immediate competition for people who buy ebooks to read on mobile devices, like an iPhone — a significant and growing population. And, hopefully, B&N will provide competition in 2010 for people buying a dedicated ereader device for the first time — another significant segment of the market at this early stage. Remember, Kindle store ebook prices are the same for iPhone or Kindle device, so even the limited B&N effort now can have a positive impact on all Kindle users.

It’s also true that the B&N ebook store has far fewer of the most desired books and limits its discounting policy to far fewer titles than Amazon. But Amazon now has to factor in to its Kindle strategy and tactics the current and future existence of a well-heeled, highly-publicized competitor with a top brand name and web site among book-buying consumers. Say Amazon has an undisclosed plan to move typical ebook prices up from $9.99 to $12.50 over the next year (as a recent Wall Street report suggested). Now it has to rethink. Or say Amazon’s ereader app for Blackberry was a very low priority but now B&N is suddenly offering an ereader for that platform. Again, it should prompt some positive movement.

A competitive threat doesn’t have to be perfect or massive to have an impact on the market leader. Netscape was a blip in the market but caused Microsoft to do all sorts of things, good and bad. I would argue Apple, despite its small market share, also has a large impact on Microsoft. And Amazon’s MP3 store, small but fast-growing, put pressure on Apple to cave to the music labels’ demands on pricing.

Finally, there’s some confusion about the competitive landscape and the best strategy for book publishers. If they want to avoid getting pushed around by Amazon in the ebook market, they should do what music publishers did and abandon Digital Rights Management, or DRM, software. That would make their digital products far more valuable and break the proprietary stranglehold of a popular device maker like Apple (in the iPod case) or Amazon (with the Kindle).

[This post started out as comments I made on the two above-mentioned blogs. I thank the two ladies for their stimulating posts.]

Barnes & Noble eBook Store Great News For Consumers

Book retailing titan Barnes & Noble has been building its electronic book sales effort this year with some haste, likely hoping to slow the growing momentum of Amazon’s Kindle before it becomes unstoppable. In March, Barnes & Noble bought Fictionwise, maker of a popular ebook reader app for the iPhone and proprietor of several popular ebook stores online including eReader.com. Then, earlier this month, B&N slashed prices at the newly acquired ebook vendor. Now comes word in the Wall Street Journal that B&N has opened its own branded major online ebook store:
bnjpg

This is a fantastic development for people like me who like to read ebooks. I’m a big fan of my Kindle, as you may have heard. But I’ve also been alarmed by some of Amazon’s ham-handed moves in the ebook space, like the recent decision to reach onto customers’ devices and delete a validly purchased book (even if the book was posted improperly in the Kindle store). And I’ve expressed my concerns about ebook prices creeping higher in the Kindle store.

All this has gone on under the nose of Sony, which seems to present little real competition. It still has no wireless mobile play and prices in its ebook store are rarely competitive.

A strong move into the market by Barnes & Noble should force Amazon to do more to wow and delight its customers. And it may hasten the day when book publishers wake up and realize just how damaging it’s been for them to lock down all ebooks with cumbersome Digital Rights Management (or DRM) software.

I do think that the Barnes & Nobles ebook store starts out with a few important weaknesses. The company has no hardware reader and apparently won’t have one compatible with its format until the Plastic Logic ereader hits the market hopefully in early 2010. So for starters, its ebooks can be read only on mobile devices like the iPhone and Blackberry plus Mac and Windows computers. While there’s an argument to be made over whether dedicated ebook readers and their high-contrast, low-eyestrain screens will remain popular (as I think they will), there’s little doubt that people who own one are hardcore, frequent ebook buyers. Not reaching that group of shoppers will hurt.

Finally, initial selection and pricing may lag well behind Amazon’s Kindle store. Barnes & Noble says it will have 700,000 ebooks for sale but that includes 500,000 public domain books from Google and only 200,000 recent editions. And while it will copy Amazon’s $9.99 price point, that will only cover “hundreds of new release and bestsellers”  — a far cry from the thousands of ebooks priced under $10 at Amazon.

As a sidenote, the chatter among publishing industry types about ebook pricing continues to grow more frantic. I recently found myself asking skeptical questions in the comments of posts by publishing consultant Mike Shatzkin’s ruminations and Evan Schnittman, who works for Oxford University Press. I wonder what impact Barnes & Noble’s $9.99 pricing will have on the industry’s views?

Amazon Kindle competitor EReader slashes ebook prices

I’ve been pretty tough in the past on the high prices at Amazon Kindle competitors eReader.com and Fictionwise.com, the twin pillars of Steve and Scott Pendergrast’s ebook empire. The Pendergrasts sold the company to Barnes & Noble back in March and now things seem to be changing in a hurry. The other day they announced new, cheaper prices across the board at their eReader.com site:

# All new titles are $9.95 or less for the first week after release at eReader.com.
# After one week, all new titles are set to the publisher list price but will not exceed $12.95.
# No title is priced over $12.95.
# All titles on the New York Times best seller list at eReader are $9.95. The New York Times best seller list at eReader is updated every week.
# All titles receive 15% eReader Rewards.

This actually could be better than Amazon’s previously unmatched Kindle ebook pricing. I had hoped eReader’s move would generate some pressure on Amazon to reverse the trend of prices creeping higher for Kindle books. But on a closer examination, it looks like the competition might not be generating any pressure on Amazon at all. Well, at least no more pressure than a 4 cent discount creates.

That’s because I had trouble finding any of the best-seller type books Amazon is currently selling for more than $9.99 in the EReader store. Brad Thor’s Apostle: A Thriller costs $14.57 as a Kindle book but it’s not among the seven Brad Thor ebooks offered by eReader.com. Breaking Dawn, the most recent volume of Stephanie Meyer’s Twilight series, is $11.38 as a Kindle book and $12.95 at eReader.com. Finger Lickin’ Fifteen by Janet Evanovich, which came out on June 23, is $15.37 in the Kindle store but not available from eReader.com.

And amongst the back catalog books, my admitedly cursory survey found Kindle still offering much better prices. Twilight, the first book in Meyers’ vampire series and available as  a paperback for $6.59 from Amazon, is $6.59 at the Kindle store but a whopping $10.99 from eReader.com. And, p.s., can I just say again how it is really annoying and customer unfriendly that Amazon has stopped showing the prices of other editions and formats on Kindle book pages.

Of course, there’s no way to compare comprehensively the selection and pricing policies across the two sites. Please feel free to post counter-examples in the comments. I also dropped a line to the Pendergrasts to see if they wanted to respond.

Prior coverage:

As feared, Kindle prices appear to be rising (6/22/2009)

Apple gives stage to overpriced ebook developer Scrollmotion (6/9/2009)

Fictionwise improving its e-reader and web site for iPhones and iPods (8/27/2008)