The Crook in the Nook: Barnes & Noble ebooks are overpriced compared to Amazon

By Joe Wilcox | Published October 21, 2009, 8:53 PM

Yesterday, I excitedly preordered Barnes & Noble's "Nook" ebook reader. Today, I cancelled the order -- and I'm none to happy about it. Why can't Barnes & Noble learn from its past mistakes? The bookseller's digital titles are way overpriced -- at least compared to Amazon (Sony charges even more than both booksellers for many titles).

Quick examples -- and more will come later in this post: Twilight by Stephanie Meyer: $6.59 from Amazon; $8.79 from B&N. Philip K Dick's Do Androids Dream of Electric Sleep?: $8.38 from Amazon; $11.20 from B&N. (Sony charges $9.89 for the first and $9 for the second.)

Barnes & Noble has been down this sordid path before. Ten years ago, B&N was an early ebook pioneer, opening a store using Microsoft Reader technology. But the bookseller had the pricing all wrong, asking the same price for digital -- for which there was no printing or distribution costs -- as hardcover books. That's right, and the ebooks came with onerous DRM that made sharing titles nearly impossible.

For years, I criticized B&N and other ebook sellers for overpricing that stalled adoption. Eventually, Barnes & Noble closed its ebook store. Here's the epitaph I wrote in September 2003 on the now defunct Microsoft Monitor Weblog once run by JupiterResearch (Forrester Research has absorbed the analyst firm):

This morning I received a notice from Barnes & Noble.com informing that as of today, the company would no longer offer ebooks online. Customers like me have 90 days to retrieve titles from their online Microsoft Library; 90 days from purchase for Adobe ebook customers.

I purchased my first Microsoft Reader ebook about four years ago, and, unless I am mistaken, from Barnes & Noble.com. The company offered an excellent ebook library and facilities for downloading titles. I will sorely miss the service. The larger question is what Barnes & Noble.com's exit means for the larger ebook market. Maybe I'm a nut, but I find reading an ebook on my HP iPaq handheld to be quite enjoyable.

Still, publishers could have done more to make the price of titles more appealing. Who wants to pay 25 bucks for a new ebook, the same as the hardcover price? That hardcover book has associated printing and distribution costs that shouldn't affect ebook pricing. The hardcover can be passed around among family members or borrowed by the neighbor across the street. The ebook version is much less portable, so why charge so much?

I don't see the ebook market as dead, but Barnes & Noble.com's bowing out of the market isn't a good sign. I remember when the bookseller championed for good writers without big-name publishers or offered print-on-demand services that could revive out-of-print editions. Maybe we're just not a nation of leisure readers anymore, which would be the sadest commentary on this development yet.

Four years would pass before Amazon showed enough cunning and courage to release the Kindle reader and reasonably priced ebooks. Kindle has got to be the ugliest ebook reader on the planet. It's styling matches what I imagine an Amazon warehouse to look like. But the ebooks are priced to sell, and that's the appeal. Price matters -- a principle Amazon has long and successfully practiced. Apple applied the principle to iTunes Music Store in 2003, by offering 99-cent singles. Kindle reader isn't the revolution so much as Kindle book pricing. Why doesn't Barnes & Noble get that?

Pricing turned me away from an ebook reader that is really exciting (more on the device in a few paragraphs). Some more comparisons:

In my searches, I only found a few a newer or popular titles were Amazon and B&N matched prices, such as Dan Brown's The Lost Symbol or The Sisterhood of the Traveling Pants by Ann Brashares. But the for majority of my searches, Amazon titles cost considerably less than those from Barnes & Noble. My searches were random, and some I abandoned because Amazon had many ebook titles not available from Barnes & Noble.

I'm not quibbling pennies here. Barnes & Noble pricing is as much as 50 percent more than Amazon. I found few instances where the difference was less than 10 percent. Barnes & Noble may not be asking as much as it did during its 1999-2003 foray into ebooks, but pricing is way too high -- particularly for a bookseller playing catchup. Amazon has got an early mass-market ebook lead. Competitive ebook pricing would be crucial to winning over people to Nook.

Barnes & Noble appears to be betting on the device as the bigger draw. No question, Nook is cool. It's well designed, competitively priced and likely more extensible because of the Android operating system. From the broadest strategy perspective, Barnes & Noble is preparing an ebook and content publishing platform as much as a simple digital book reader. That's impressive.

But can the device be enough when ebook pricing is so much higher? For me, the answer is no. I suspect that many other potential buyers will balk at higher pricing, too. I ask you, Betanews readers, to offer your opinions in comments. Is Barnes & Noble asking too much? Are you even interested in ebooks (I ask mainly because of DRM)?

In fairness, Barnes & Noble learned a few lessons from its past ebook selling mistakes, and these are worth observing. The first effort came from the Barnes & Noble.com Website, at a time when fewer people were online. The new strategy looks to leverage the physical stores, which makes sense. For example, Nook will be sold at Barnes & Noble stores. Something else: The bookseller is addressing longstanding criticisms of onerous DRM by allowing customers to lend their ebooks for as long as 14 days.

The difference between Kindle and Nook is the difference between the approach of a real bookseller versus a warehouser. Barnes & Noble is trying to anticipate the needs of the reading customer. Use of physical stores and ebook lending are great examples of Barnes & Noble leveraging its strengths and anticipating what its customers want. But do those needs include paying as much as 50 percent more for ebooks than Amazon? You tell me. That's what comments are for.

Comments

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You can tell a lot about people's biases by the assumptions they make.

What does the current price and availability of e-books at Barnes & Noble have to do with the price and availability on the launch date of the nook? Did it ever occur to anyone that adding content and reconfiguring the store might be the biggest reason for the delay?

I'm not saying it is; it might not. I'm saying: "What's with all the assumptions?"

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No- it's around for a while. But since it's used more by consumers than business users, I think opening it up will allow for some interesting consumer level products. In the enterprise, it's all about eliminating .pst files because of all of the technical and legal hurdles they present.

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I just posted on B&N forum and then read what you wrote. I agree one hundred percent.

Stephen King's The Stand is 7.19 at Amazon. The Stand at Barnes&Noble is 40.00. Perhaps B&N is offering the complete and uncut version as an ebook. And Amazon is not. But 40 dollars?

I pre-ordered Nook the first day it came out. I have a Kindle 2 and a Kindle DX and I still ordered Nook. I love the way it let's you see the book covers, which is a big deal to me.

But when I started reading about the B&N prices for ebooks plus tax, I am going to cancel my order, unless there is an immediate response to this outlandish antiquated pricing. B&N seems to be approaching the digital era from an old paradigm--the old brick and mortar hardcovers from the 20th Century.

Those days are officially over. This is the beginning of the new century. And no matter how glamorous or sweet the hardware is, the prices of the software will determine the success or failure of the Nook. Remember when Steve Jobs absolutely refused to budge about the 99 cent songs on iTunes? The record companies tried to strong-arm him but he stood his ground.

Apparently, B&N has no such visionary. Not even close.

If B&N does not immediately dramatically change their high pricing policy I predict, as someone in another thread proclaimed, and what you seem to be saying-- EPIC FAIL for the Nook.

I want this project to succeed so badly. I want a Nook. It will really be hard for me to cancel my pre-order. So I am waiting until the end of November. If I do not see a major change, back to Amazon I will go.

I cannot imagine any thinking person who will buy a Nook if the prices are way way way higher than Amazon consistently like they are now. Why would anyone do that?

We are in times when we all have to really watch our money. It seems foolish to spend so much more for ebooks on B&N. Taxes? Plus, a dollar here and a dollar there add up very quickly.

Their launch was spectacular. And the Nook hooked me completely. But now that the dust has settled and we are all coming to our senses, how can they possibly ask us to spend so much more money for the exact same downloads as Amazon?

Plastic Logic and Nook look so promising and exciting. I want them both. And am enough of a ebook fan to buy both. But, mark my words, you seem way too hung up on the great hardware you are offering. And it is great. You absolutely nailed it. But if the prices stay the way they are, forget about it. You are done. Wait and see if you do not believe me.

People are smart. And this pricing is ruining something so many of us want. Please reconsider your pricing and address it NOW. I want you to be as major a player in the ebook world as possible. We all do. We are routing for you.

I have read this entire thread so far, and many across the internet. And this is what seems to be emerging as a consensus about Nook and B&N.

We will have to wait and see if B&N step up to the pricing plate. I am keeping my fingers crossed. But I am not holding my breath. :)

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I venture to agree that while a pretty look and some touch features are nice, they don't override price of books. That's the ultimate point anyway - reading books. Not the appearance of the plastic border and book selection tool. I was going to purchase the Nook just for the sake of getting the most recent and what would be "up-to-date" e-reader. But book price is key. And we can't ever rule out web browsing - not only for checking your email virtually anywhere, but for getting other books from sources aside from Amazon. Nook has no browsing capabilities.

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I am a current owner of the Kindle 2 - I love it but the look and specs of the Nook had me looking at a change..then I looked at Barnes and Nobles site for E-Books. Prices are higher and half the books I bought at Amazon weren't available..I thought Barnes was supposed to have the better selection?

Also, the site design for Barnes is really horrible if you are on a large screen - they confine your shopping to a tiny strip in the center of your screen real estate. I want to see a bunch of books at once not have to scroll down after 3 books ( I can see like 30 on Amazon).

So here is how I see it:

hardware: Barnes
prices: Amazon
website: Amazon
shopping: Amazon
device management: too soon to tell but I'm betting on Amazon

So - sorry Barnes I'm not paying $2 to $3 more per book and doing without some of the titles I want nor am I willing to shop on a sub-par website of archaic design.

Barnes and Nobles FAIL!

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I agree with your assessement entirely. I'm very intrigued by the Nook but had no immediate plans to purchase yet. This reinforces my decision. I'll probably give Google time to entire the fray and see what they are going to do.

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I think you're missing the point of B&N having created an "open" ebook reader. The advantage of readers like the nook and the Sony Reader are that they read ePub and Adobe's DRM for ePub. This is big because a lot of ebook retailers are now selling ePub in an attempt to create an industry standard like MP3 did for music. The Kindle is limited to purchasing from Amazon or finding DRM free files elsewhere online. The nook will be able to purchase files from a wide variety of stores that sell ePub and PDF. There's usually at least a PDF available for most ebooks even though the format doesn't come out looking the best on ebook readers. I'm a Kindle owner and I love it, so I'm not biased towards the nook or the Sony Reader. I'm a fan of stripping DRM off files so the issue doesn't really affect me as much as it will the average, non-techie consumer. Amazon does consistently have the lowest prices but other stores are starting to develop pricing plans that do a better job of competing with Amazon. Fictionwise and Books On Board are two of the larger ebook retailers that have decent pricing on a large selection of books. If you're going to criticize the nook for the price of its ebooks, you should look at the pricing from all retailers that will be able to sell compatible formats. Better still, the nook will be able to read ebooks checked out of public libraries. You can't do that (legally) with the Kindle.

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I have a Kindle2. It reads mobi, prc, and 'amazon format' (azw). I ALSO read epub, pdf, .doc, text, and several other formats via an external PC software converter, available for free. Format is not the issue and likely never will be the issue (.prc/.mobi is a common format for almost all converters). Convenience, may be an issue as a converter requires an additional step on a PC, but never the format. As long as I can purchase a file and get it on the PC, I can usually read it (sans DRM issues). In fact I buy about half of my SciFi from Baen books, not Amazon. Books from Baen books come in non DRM mobipocket format.

So while open (free as in freedom) is good, free (free as in beer) will be a larger driving factor in the market, IMO. And if I can't get free (as in beer), I'll settle for cheap. Amazon is not stupid, they understand that.

Before B&N released their reader at about $250, Amazon cut the price of the Kindle to .... you guessed it, $250. They are built to compete on price and selection and I expect they intend to do just that. It is not formats but titles/authors and price that drive sales. So the reader is now 'same price' and the books are less, good price positioning. Depending on how the market shakes out, Amazon might be bright enough to 'upgrade' the Kindle look and feel in a future generation. They did it via user feedback from the Kindle 1 to the Kindle 2, seems reasonable they might do it based on competitive market feed back.

'Hot device' sales are usually transient, the blackberry is hot, no it's the iPhone, wait the Palm PRE is coming, oh no it's the invasion of the Android based phones, ... If the phone wars have taught development and marketing anything it's don't bet the company on a specific 'hot' device, there will be a new one next year or even next month.

If B&N is too stubborn to learn from that (and their) history, they will be doomed to repeat it.

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I spent 30 minutes on the phone with B&N trying to get answers comparing my Kindle1 to nook. They weren't very helpful. Additionally, B&N use IP detection to prevent the sale of some titles form outside the U.S. Their response is that the publishers won't allow it, which is garbage, because I can download the same titles on Amazon. If B&N wants to play on the world stage that is The Internet, they need to figure out that this is the 21st century and people actually a) live in countries other than the United States, B) actually travel around the world, and C) che fact that Kindle uses the SAME network as nook, will in itself kill the nook for the lack of international wireless coverage. (The wi-fi doesn't make up for that.)

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The Kindle and the Nook don't use the same wireless network. The Kindle uses Sprint and the Nook is going to use AT&T. Since Sprint has better 3G data coverage then AT&T that would be anohter disadvantage for the Nook.

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But the Kindle is now "International" and uses AT&T, right? So is there any difference going forward?

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I always read ebooks, that is everyday. I have stopped buying paper books. I have never paid more than $3.99 and will do without if I ever have to pay more. I can buy a paperback book for $5.99-$6.99 at most bookstores. Not worth it to pay more.

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I cancelled my order for the Nook as soon as I saw this article!!

My perception of B&N in general has been that they have a poor business sense. I never understand their business models.
How lame- how easy it is to find and compare prices! Did they think people wouldn't notice???

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I am a reader, rather than a techy. And, I am getting older, so I have been looking at ereaders since Kinle came out [reading on a Sony reader, or an Iphone, or a computer does not appeal - What I want is something that is light, easy to use, and resembles reading a book, rather than a portable computer. The Kindle was looking good - Then, Amazon confiscated 1984, without even a 'beg your pardon'. That alerted me to the problems of any device that stored your info on a server rather than on your device. I'd also like people to need a warrant if they want to check what I am downloading and reading.

I just ordered a BeBook, made in Holland. Another option was the Cooler-E, from Britain. The Bebook lets you use an SD card for storage. You can share with whomever you want, because the books are yours, not theirs. It stores any documents etc, if you are a workaholic, and it can download all the material that the Nook can. It also lets you play music while you read. Same price. I ordered it Monday, and its been shipped. Maybe I'll review it for you in a couple of weeks.

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if you become BN's member, you'll get 10%-40% off which will put their prices to be the same and sometimes better than Amazon's.

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Unfortunately, that is not true. If you look at their Nook Q&A site, their marketing group clearly states that the B&N Member discounts will not apply to the nook nor to eBook. Crazy, but true. Single-handely will drive me to also cancel my pre-order and go Kindle

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B&N membership doesn't apply to digital products.

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That's the one thing that keeps me away from buying ebooks from B&N. I'm a longtime B&N Member - going back to the days when it was called "Readers Advantage" - and I cannot believe you can't use your membership on digital products. Heck, you can't even use it to save on the nook itself or accessories! That's just stupid. You would think they would want everything to be seamless with the brick and mortar stores.

I'm not sure why they do this (or don't do it, so to speak). The only conclusion I can come to is that, given the featureset of the nook (touchscreen, subsidized AT&T wireless, etc.) they're simply not going to be turning a profit on the nook, so they have to keep ebook prices high. That and the fact they don't want to run the risk of cannibalizing in-store sales. All of which leads me to believe they're still not sure what their sales strategy is when it comes to ebooks - which in turn leads me to believe that they are not yet ready to compete with Amazon.

Don't get me wrong; I've always been a big fan of B&N. Love their stores and their customer service. I want them to succeed, and the nook is an attractive piece of hardware. But it's the ebook store that's going to make or break it, and the pricing they have right now will likely prove a big turnoff to folks once they get past the initial attractiveness of the hardware.

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I'm also a longtime member - guess they didn't want to factor in loyalty to this new product :)

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my suggestion is to email BN and complain about this. I'm sure it'll change if enough members complain. as for eBook prices, you've all got to realize that BN has brick and mortar stores to support and a hell of a lot more staff than online-only retailers like Amazon.

ps - not even employees get a discount on the Nook, so dont take it personally.

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I like the B&N reader. I haven't seriously started shopping for an ereader, but if I had friends with the Nook, I think the sharing feature is worth a couple bucks higher per book. The unbelievable thing for me is the lack of computer related ebooks on B&N. Who do they think are going to be the first ones to buy these things?

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give it time! its only just coming out. more titles will be added as time goes on.

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$9 are still too high. I can't wait for Apple to offer their < $5 per book on itunes

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I think that pricing may turn out to be a critical issue in more ways than the obvious one of people simply not buying! If the book that someone wants is too often not available at what they feel is a reasonable price I think they will start looking for it as a p2p download, which could lead to a fairly dire situation.

And then there are all the other potential frustration factors such as geographical restrictions and DRM which will probably have much the same effect...

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I've been reading ebooks for years, and am still a fan of the iPAQ/uBook combination, having moved from a 1915 to an e210.

Epaper is nice, but my screen is color & backlit. And the device is a multi-tasker, not a one trick pony like the kindle.

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I purchased my first ebook back in 1998 or 99, either through ebooks.com, Powell's, or amazon. Like Joe I enjoyed the convenience of having several dozen books on my iPAQ with me. But also like Joe I purchased far fewer books than I would have liked because of the relatively high costs for them.

I purchased my Sony Reader soon after they came to the US, and many months before the Kindle was announced. The books in the Sony Store are generally more expensive than on Amazon, but not radically so, and sometimes they are even cheaper. So my experiences with Sony vs Amazon are not as pronounced as Joe claims here. I guess I'm willing to foot the moderately higher costs to be with Sony because the Sony Reader is so much more convenient than the Kindle: I actually purchase and manage my books on my computer--as opposed to Amazon's servers (cf George Orwell), and there's much more of a "This-is-my-library" experience than with the Kindle.

I fully agree that B&N has to be very careful with its pricing: if a general perception develops that their books are more expensive than on Amazon, the Nook will be doomed.

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The Nook is just too cool to pass up but I agree about the pricing. However, since the Nook will support the epub and pdf formats there are plenty of choices for finding e-books without going to B&N.com. If they want to be stupid about it then that's ok with me.

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Yep. Although since I'll be looking at other options other than BN might as well wait and see what Apple and its tablet offer before ponying up for something. IMO

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