Forrester confirms eBook reader price must drop substantially

Forrester research released a report [1], last week, that confirmed something I've been saying for some time: In order for eBooks to reach a wide audience, the reader price has to drop below a $100. This is significant, and not just because a high-profile Forrester analyst has confirmed my personal theory, but because it proves that the price point needs to come down substantially to attract a mass market. eBook readers are important to content producers because they have the potential to distribute much more than just books, and people who produce and manage content need to be paying attention to these devices.

How come we all carry cell phones?

Do you think there would be a cell phone in everyone's pocket if they cost between $300 and $600? Would anybody, but the most high-powered executives be carrying a BlackBerry or an iPhone? Of course not. Cell phone makers and the wireless providers recognized early on that if they got together and lowered the price significantly, they could build a mass market. Even the third generation iPhone has a $99 offering. If Apple gets this, you would think Amazon and Sony might too.

The cell phone service providers subsidize the cost of the phones and they make it back over time, an approach I've encouraged eBook makers to mimic. In a recent post on DaniWeb, "Sony tries new tactics to gain eBook market share [2],"  I wrote:

"Sell the unit for $99 or less with a two year agreement to buy X number of books. It will be like the Book of the Month club, except eBook owners will have to purchase a certain number of eBooks over the two year period. To ensure they do, they could even charge users a fixed monthly fee, which consumers could put towards a certain number of books."

How much do most folks spend on books

The lowest priced Kindle costs $299. Sony has a low-end model with no wireless connectivity (a must-have feature in my view) for $199. Unless you really like gadgets, and you are an avid reader, you probably don't want to pay pay $300 for an eBook Reader. Heck, I love to read and I love gadgets. I love to shop for and buy books, but I don't come close to spending $300 every year for books, even though my house is full of them.

If someone like me who realistically should fall right in the eBook marketer's sweet spot is still balking at buying one of these devices at the current price to feature ratio, it's completely unrealistic to think that any eBook manufacturer can build a mass market with the current pricing structure. And, if you doubted it, the Forrester research proves this.

Here comes Asus

Just this week, Asus announced [3] that it would be getting into the eBook game, a significant development for certain, but the projected price of $150 still doesn't hit Forrester's mass market sweet spot of under $100. I'm sure it will make more people curious, and probably snare a few buyers who have been on the fence, but it's probably not going to move the needle substantially.

Forrester report author Sarah Rotman Epps points out that even in the best case, it's not likely that eBook reading devices will ever be as ubiquitous as MP3 players (or even cell phones), but there is definitely a big market out there waiting for someone to come along with a plan to deliver a great device at a great price. And you should be paying attention, because like cell phones and net books before it, eBook readers are going to have an impact on content producers and content managers, and you want to be ready when they do. - Ron [4]