It seems that Amazon's dream of the $9.99 ebook for the Kindle is dead. First it was MacMillan who strong-armed the book giant, then HarperCollins, and now Hatchette. Where does this leave the Kindle?
As it stood, with ebooks for the Kindle costing $9.99, Amazon had an advantage over Apple's iBooks store for the iPad. That made the iPad a poor buy compared to the Kindle for book lovers. Now that publishers are pulling out of the flat-fee deal with Amazon and setting their own prices (which will, of course, be higher no doubt), that advantage will likely disappear.
What's happened here is pretty obvious. Initially Amazon had the publishers over a barrel when it came to pricing. If publishers wanted in on the Kindle wave, they had to play ball. Barnes & Noble's Nook wasn't enough of a game changer to change things.
But the iPad is different.
My guess is that Apple's behind this change of heart by the publishers. While the Kindle has enjoyed some success, it's a fair bet that if the iPad takes off, it'll be far bigger that the Kindle could ever have been, so now is a good time to shake up the pricing.
But there's another side of the coin, and that is that the $9.99 price was likely unsustainable for publishers, especially given that printing costs of hardback books is something in the region of $2.50. While $9.99 was attractive to both Amazon and consumers, it's likely to have been painful for publishers.
But the question is, will the Kindle suffer because of the new pricing? It's easy to think no, given that pricing will be consistent from different outlets. However, the problem is that people get used to pricing at one level, and raising prices is likely to annoy those who have been faithful to the Kindle. But that effect is likely to be short-lived (remember when iTunes raised the prices of tracks ... it quickly blew over). What's going to be more damaging is that the Kindle is a one-trick pony compared to the iPad. Sure, the Kindle is a good ebook reader, but that's it. Compared to the Kindle, the iPad is a digital Swiss Army Knife. It's that fact, and not the price of ebooks, that's going to harm the Kindle in the long run.
The Kindle is a single-purpose device in a convergent world.
Late last year I gave the Kindle three years. Now, that could be as little as 18 months.