Why Aren't E-Readers Cheaper?

So you’ve decided to delve into the world of e-books. The idea of being able to carry around a thin device that contains all of the books you could ever want to have access to is quite appealing. You’ve picked the e-reader you want and … then you start doing the math.

E-readers have become one of the most talked about gadgets of the past few years, and every company under the sun seems to be ready to jump into the marketplace with its own device.  With Apple adding the iBook application to the iPad, things are probably going to heat up even more in this space, but you have to wonder why the devices are just so darn expensive.

At first the price tag of $259 for the Amazon Kindle and Barnes & Noble Nook don’t seem that bad, but then you begin to realize that is almost like a cover charge to get into a club.  You can go out and buy a physical copy of the book for nearly the same price as the e-book edition if you’re a smart shopper, and there is no special device you need to read that version.  In the realm of e-books though, you are paying a price just to be able to read the copy.

Things get even stranger when you think about the fact that both Amazon and Barnes & Noble have both released free desktop and mobile apps for third-party devices that will let you purchase their e-books.  Sure the desktop isn’t mobile, and an iPhone screen isn’t as large as an e-reader’s, but you still get access to the books you want without shelling out an extra money for a devices that essentially are meant just to show you a book.

There is a theory in sales that goes “sell them the razor for cheap, and make up the price on the blades.”  If you use a reusable razor for shaving, you know exactly what this means, and it is a simple concept: You lure the consumer in with a low initial cost so there is virtually no barrier to adoption, and then you get them on the refills that can be used only with that particular device.  Which is why you have to wonder why the companies aren’t selling their e-readers at cost.  Wouldn’t it make sense to get them into the hands of as many consumers as possible and make up the profit when they purchase the books from you?

The argument could easily be made that there are too many free e-books out there, and that it would be difficult for the manufacturers to make up this price.  But then you wonder why they don’t go the route the cell phone companies have with subsidies.  Agree to purchase one e-book a month and get a certain amount knocked off the cost of the reader.  Agree to two books a month and get a bit more off and so on.  It’s worked in numerous other industries, so why not with e-readers?

You could probably come up with a million different scenarios as  to how companies could lure you into buying their e-reader, but the simple fact is that they aren’t doing it.  Perhaps they will when sales begin to slow, but asking consumers to shell out $259 for an e-reader, and then purchase the e-books for an additional fee is going to make the more budget minded consumers balk.

While I have only focused on the Kindle and Nook in this piece of speculation, it is only because they are the two most recognizable devices at this time.  These same thoughts apply to all of the current e-readers with the possible exception of the iPad as reading books isn’t its sole purpose.  Do I really think that any of the companies currently manufacturing e-readers are suddenly shift their strategies?  Doubtful until such time as sales begin to lag, but I know I’m sure not buying one yet.

What about you, readers?  Have you stayed away from buying an e-reader yet?  If so, why?