Friday, September 10, 2010

The Magic of Differential Pricing

It's really odd to watch the Amazon store at work for Kindle books, even free ones. As I'd previously noted, there basically aren't any free Kindle books. Except, there are, but just not for me.

An odd quirk of the Amazon storefront is that the first time I load it up on a machine after a couple of days, I get to see Kindle books based on what I last viewed or in various other sections of the page, all with alluring prices - and in one notable case, it did this for an item I remembered the price of - USD$6.95 (now USD$5.95 when I checked it again for this article) for the otherwise freely downloadable Romance of the Three Kingdoms.

Except, this time it was showing me the price as USD$3.95 ... so I clicked on the item, and hey presto! the price suddenly jumps by USD$2.00 - and if I refresh the Amazon landing page, suddenly the prices of half the Kindle books (most notably the "free" ones) change to reflect this.

It's very repeatable, and very frustrating, since it seems to only happen for Kindle books and not for anything else I've ever looked at on the Amazon store; Kindle books are "special" in several ways to the Amazon storefront, partly because of the bizarre regional availability (so the store tries very hard to pretend books I can't buy don't exist), but also because they seem to be the only thing to which Amazon are applying regionally differentiated pricing.

Basically, there seems to be a bug in the storefront which isn't picking up on my geographical location at first visit, so I'm given a tantalizing glimpse of the pricing US customers see, just as I sometimes get a glimpse of Kindle editions I can't buy. However, then it adds the "regional surcharge" to the browser session if I click on an item and thereafter the storefront only shows me the regionally adjusted prices.

The really interesting thing is that when this happens I can use "open in a new tab" to check all kinds of things, and it appears thus far that this hidden regional surcharge doesn't exist for full-priced Kindle e-texts. Presumably, for e-texts over a certain publisher price Amazon are happy just getting their cut; it's only for ones that fall under some mysterious threshold price to which a crude surcharge is applied.

Ultimately, I could live with a small regional surcharge, because I'm aware of what Amazon have sunk into their incredible infrastructure where small regional price differentials do exist. But what really bites is the scale of the discrepancy; it's 4 cents per Gigabyte difference in S3 pricing for AsiaPac, but being charged two dollars for a megabyte is just wrong, given that even the dastardly local telcos don't charge that for 3G data (and even the NZ$1/Mb rate is just to soak the unwary, it's easy to avoid).

So, I've almost finished Accelerando and the Kindle has really proven itself (barring some odd formatting in the book, which may be an artifact of the preparation - 1023 was rendered without superscripts as 1023, the kind of thing that makes a difference in a book using Big Numbers). It's really a great device, and the notion that in 5-10 years something like it could be almost ubiquitous is pretty exciting, although I imagine the textbook publishers will have a much harder time adapting their business models to e-text than mass-market fiction/non-fiction publishers are managing now (where although it's a bumpy ride, it's at least slightly less disruptive).

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