How much should e-books cost if they don’t require facilities like the one in the photo?
An interesting thread over at MobileRead has generated a lot of thoughtful comment from the e-book reading Internet community.
People keep saying that e-books, with their lack of physical medium, need for shipping and need for warehouse storage, should be priced appropriately cheaper than their print counterparts.
And as well, since they have no second-hand market (and if they did, it could only be enabled to the publisher’s satisfaction using cumbersome DRM!) the price should reflect this loss of privilege.
The math of E vs. P at the consumer level
Too bad the publishers are not yet on board with this and persist in charging hard-cover prices! I could go over (again) some of the logic-and-common-sense arguments the publishers, in their whacky e-phobia, aren’t thinking about. But that’s preaching to the converted here. So instead, I am going to do what I always do and offer some solid math.
Publishers, take note. This is how your customers look at things. These are the thoughts which cross their minds.
If you want them to spend their dollars with you, you need to understand their reality. So, let’s pick a book for our case study: ‘The Memory Keeper’s Daughter’ by Kim Edwards, which is one of my recent e-purchases.
Why I rarely buy new books at full price
I almost never buy a book new at full retail price because I have a wonderful used bookstore in my neighborhood which gets many new releases at wholesale cost and sells them at half off the list price. So, let’s start with the amazon.ca list price and divide that in half:
Amazon.ca price is $11.52, so half of that is $5.76
Then assume I read it, sell it back to them because I haven’t got the space to keep it, and get back about half of what I paid: so, $2-3 depending on how popular they think this will be to re-sell.
My net cost: $3 for the book, and all I have to show for it is my personal memory of the experience.
Now, some e-comparing:
Again, I never pay full price. Fictionwise, which is my preferred on-line bookstore, has many wonderful sales. Either I buy the book during a 100% micropay offer (in which case I do pay full price, but I get it back in store credit to spend on other titles, which amortizes the cost of the book down to a few dollars) or I buy it during a sale. I am also a member of their ‘Buywise club’ which gets me a further automatic discount.
So, the Fictionwise club price for this title is $11.90
Assume there is no 100% micropay and I have to wait for a regular sale. Assume the same gives me at least 25% either in discount or in rebate. If one is patient, one can usually get a steeper discount, but let’s be conservative and say 25%.
Net cost
My net cost is going to be the same $6-8 I would pay for the half-off print edition. I don’t get the $3 back from selling it. But I get to keep the book.
So, what would be a fair e-price? That depends. Can one reasonably expect that Fictionwise will continue to offer the same types of sales they do, and at the same frequency? Maybe. I mean, most bricks and mortar stores typically discount the NYT best-sellers, and our local chain has similar discounts on a ‘book club’ of titles hand-picked by the owner. But I’m sure they take a loss on some of these sales since the publishers can be so inflexible. And, bottom line, once you have the infrastructure in place, e-books are way cheap to produce, and publishers need to get on board with that.
Fair price defined
So for me, a fair price would be one that allows me to keep my current cost equilibrium without needing to rely on Fictionwise sales. To get the e-book down to the same cost as its cheapest “‘print” counterpart, it would need to list for 30-50% cheaper than the print edition.
I can hear the publishers gasping now, but remember that nobody profits from my second-hand purchase except the used bookstore guy. By setting a fairer e-book price, everyone is buying their own copy “new” and they get more profit. Remember, too, that there are publishers like Baen and e-publishers like Books for a Buck that do “‘get it” as far as pricing goes.
So, if the current utopia of Buywise club/micropay rebate/Fictionwise sales ever does end, the sensible reader will know which books get put on a library list and which books they buy—and that won’t be to hardback-priced best-sellers infested with DRM.
Image credit: CC-licensed photo from Wrestling Entrophy.
Publishers need to realize that their customers see charging full hardback price for an ebook as price gouging. This is not good either for the publishers or the customers.
Like DRM, excessive prices are a barrier that encourage ebook readers to look for alternate sources of their ebooks. This is particularly true when DRM is combined with high prices. Its bad enough when the high prices are charged for books that are just being published (And therefore have initial costs like editing and advances that need to be made up), it is even worse when the costs are high for books that have been published for 40-60 years! Ernest Hemingway’s novels cost about $10 each in ebook form, despite the fact that I can get an omnibus paper edition of his 4 most famous novels for $20.
Frankly publishers are hurting themselves. They are discouraging not just ebook reading, but book reading in general. They are encouraging readers to go to the darknet to get their books (just as the record industry did when it resisted selling individual songs).
Frankly, I can find little justification other than short sighted greed to charge more than $4-$5 for an ebook. Sure charge $10 until the paperback comes out, but once a book has been out for a year, the prices should reflect the fact that the costs associated with ebooks are much less than they are with paper books.
—
Bill
And what does it say about paying the actual author whose royalties are tied to the full cover price, whether print or digital? It appears that you want to stiff the author of the royalty as well as punish the publisher. As a consumer, I’m not thrilled with the idea of charging as much for a e-book as for the print, but I hesitate to say to authors that the future of publishing is that they need to sell “X” more copies of a book in digital form in order to make the same living they made in a print environment. Publishers need to look at the equation, I agree, particularly when it’s a case of licensing rather than ownership. Let’s just be careful who gets shaved when you send the publishers to a barber.
Jill—the authors get ‘shaved’ anyway when nobody buys the book. If the authors want a better deal from the publishers, then they need to band together and collective bargain for it to create the need, just as Baen, Books for a Buck and others have recognized a need which they are now catering to. Bottom line is, if you read the thread I mentioned, not a single reader there has said they would pay hardback prices for an e-book. They simply won’t pay it. And then? The author gets zero. As to what I would tell authors about the ‘future’ of publishing, I would tell them they cannot rely on their publisher to promote their book for them, and if they really are serious about selling and doing this for money, they need to think outside the box and be prepared to do some legwork. I don’t think ANY professional should exist in this world today with any sort of sense of entitlement that the way things have been is the way they should always be, or shall continue to be. Times change, and if you don’t develop new strategies and evolve with them, you’ll lose out. And I say this as a former published (for pay) author myself. Believe me, authors have my sympathy. But that sympathy does not extend to letting their industry continue to believe that people like me are willing to pay hard-back prices for digital files.
As interesting as I find many comments both here and elsewhere on the perceptions of publishers from the consumer’s side of the fence. the one thing we’re often really lacking is the thoughts of those actually in the publishing houses. Although I agree some ebooks are priced too highly, that doesn’t mean we should therefore greatly cut the cost of ebooks. Shipping and printing constitute a tiny part of the cost of the book in your hands and on your ebook device. That’s because they’re mass produced in large enough numbers that the cost of shipping and printing are relatively negligible for each individual copy. Most retailers take easily half of the cover price of any book, if not more. Indeed, the publishers often to my knowledge don’t make much more on each book than the author does.
There’s an enormous amount of work that goes into a book before it ever gets printed – even after it’s been handed in. It gets edited several times, proofread – a skilled job if there ever was one – laid out and typeset, and an artist is commissioned to do the artwork. An editor sits on top of all this, trying to hold it all together.
Let’s be clear on something: most publishers are staffed by people who aren’t there to make a fortune. Most editors and editorial staff happen to really like books. But they, and we the writers, need to eat. So in fact there is some justification for books finding a sensible price level, but let’s be realistic here. Further, if a writer goes out and ‘promotes their book’ then that means they’re not busy doing the thing they’re actually good at, which is writing.
So fine; be upset about DRM, be annoyed some books are priced too high. But please don’t assume that because ebooks aren’t virtual that the cost of buying them should suddenly plummet. We need realistic dialogue on both sides of the fence, and a greater awareness of the true costs of publishing outside of the physical or non-physical artefacts themselves.
Amazon has demonstrated that $9.99 is a price many of us are willing to pay for ebooks that are otherwise only available in hardback. Given retail discounts, I guess the equivalent list price would be $12-15.
I don’t personally mind paying the same for paperback and ebook, but Baen seems to have similarly demonstrated that many readers will pay $6 for an ebook even if it is in paperback. Baen charges this immediately (no hardback vs paperback price change), but single tier pricing may be too much for the industry as a whole. Baen also has the advantage of selling direct.
Having witnessed the process up close, it’s hard for me to see how the actual costs of editing and typesetting a book (priced on the open market) could constitute such a significant hit to the bottom line, especially for titles not printed in short runs.
Publishers would rather complain about piracy than address a lousy business model. For example, despite Japan’s inefficient retail sector and higher fixed costs, paperbacks printed and sold in Japan are often cheaper than in the U.S., with better binding quality.
Long before ebooks, something was seriously out of whack with the U.S. book business.
Take the problem of returns. In Japan, the author doesn’t get an advance but is paid a royalty on the number of books printed. Think about how that one difference would affect the whole economic thinking of authors, agents and publishers.
The digital revolution forces publishers to come to terms with the actual value of the written word (or recorded note). The music industry made a ton of money thanks to a flurry of format shifts–not new ideas–and now Hollywood is doing the same thing.
Book publishers likewise still think they’re in the paper products business, not in the storytelling and information business. Until they realize otherwise, the situation isn’t likely to change.
Ficbot, great analysis.
What you point out is that there really is no ‘fair’ price for books, e or p. Considering the book as a product offered for sale in a market, it is ‘worth’ exactly as much as any prospective buyer is willing to pay to get it — for each buyer individually — and not a penny more. The seller (publisher) of course wants to sell for the highest price. The buyer (us readers) wants to buy for the lowest price.
When we consider ‘what is the lowest price’ we have to think about all the possible ways to get the book (including reading it for free if our local library carries it, and waiting for softcover to come out, or buying used, as well as comparing prices at different retail outlets) — and we also have to think about all the possible ways to get the equivalent ‘entertainment’ or ‘informational’ value from some other source. (Should I pay US$26 for the latest mystery from a popular author, or pay US$4 for a classic from Nero Wolfe I haven’t yet read? Is this latest diet book really better than the 68 diet books on the shelves of my library?)
Putting the case in terms of a specific book and a specific reader (yourself) you point up the price a ebook publisher would have to set for this book in order for you to buy it. You might be willing to pay a lot more for another ebook (say one you could not buy at that local discounter, or amazon.ca, or any second-hand bookstore). You might not be willing to pay even so much for a third ebook.
Myself, I can see this whole system developing in one of two ways:
1. ebook publishers will take a hint for the music industry, and move to a universal, unencrypted, low-priced (monopriced, even) model, and try to make it up on volume.
2. publishers will create a universal for-profit lending e-library, and readers will subscribe on various plans, which will allow us to ‘borrow’ access to a certain number of books on our bookshelf. The texts will never be downloaded (properly speaking) and we will need to be connected to the web to gain access to the texts.
I’m going to assume the book you get to keep has no DRM.
If it has some sort of DRM, that book is still not yours to keep once it can’t be accessed.
With respect, I think that production and distribution paper books makes up a much larger percentage of the cost of a book than Mr. Gibson suggests. At the very least, a large fraction of the books that are printed every year are never sold. They are either returned to the publisher and remaindered (i.e., end up on the bargain rack where you pay $5 for a $25 hardback) or they are destroyed.
It is true, that the publishers only get 50% of the MSRP for the book. It is also true that a large part of the cost to brick and mortar books sellers is taken up with salaries of sales people and with the rent and upkeep of the actual physical store.
Ultimately, there are many, many areas where costs can be trimmed or do not exist in an e-book model. Since any 21st century company is going to have to maintain a computerized infrastructure, distribution to retailers is going to essentially be zero. Likewise, in an e-book model, there are no printing costs, no costs associated with returned books, no warehousing, etc.
The simple fact of the matter is that it is relatively simple to set up an online store, and as a number of authors have shown by providing e-books versions of their own works, it is not that hard to get a book into ebook format. Likewise, Manybooks.net and Feedbooks.net can provide libraries of tens of thousands of books at little or no cost to the reader.
Ultimately, I feel the current role of the publisher is in fact defunct in an ebook world. Currently there are three valuable services that they provide to authors; the first is helping with editing and finalizing the manuscript. The second is printing and distributing the book and the third is marketing the book (getting reviews and getting the books placed on the shelves of bookstores.
Of the three, only the role editing truly remains relevant with respect to the novel. Layout might be useful for non-fiction books, but is pretty standard for fiction. The need to market books remains, but it appears that authors have more success doing that themselves. The main marketing function left is producing a cover and frankly that, as well as editing a book can be done by freelancers. After all, no online bookstore has a reason not to include a book since the average e-book will take just a few megabytes of data in a world where a server with several terabytes of storage will cost just a few thousand a year to run and maintain.
> the one thing we’re often really lacking is the
> thoughts of those actually in the publishing houses
Judging from what they do they don’t seem to be thinking much at all. At least not those with DRM-supporting knee-jerk-reactions.
> Shipping and printing constitute a tiny part of the
> cost of the book in your hands and on your ebook
> device. That’s because they’re mass produced in
> large enough numbers that the cost of shipping and
> printing are relatively negligible for each
> individual copy.
Speaking of mass producing; doing it for p-books includes a risk that someone will have to pay for (or gamble on). If some p-books aren’t sold the cost/book increases AFTER the fact. Also, if there seems to be only a little demand for a book then there probably won’t be a new edition, and unless there is exactly no demand at all there will be lost sales. These are problems that don’t exist with e-books, and thus the cost/book is further reduced.
> Most retailers take easily half of the cover price
> of any book, if not more.
Since a webshop is so more efficient than physical stores I’m sure the publishers will sell the books directly. Thus they should, according to you, easily be able to sell the books for half the price, if not less.
> There’s an enormous amount of work that goes into a
> book before it ever gets printed – even after it’s
> been handed in. It gets edited several times,
> proofread – a skilled job if there ever was one –
> laid out and typeset, and an artist is commissioned
> to do the artwork. An editor sits on top of all
> this, trying to hold it all together.
Since new editions can be produced at no additional cost, even daily if there is a need for it, much of what you named above can actually be done while the book is being sold, some even by the actual customers themselves. This will further reduce costs.
I’m not sure I’m happy about seeing book-upgrades, patch-sets, new versions etc., but I’m sure they will come. I’m also sure we’ll see third party add-ons. On the ebook-warez “scene” this has been happening for many, many years. When someone reads “version 1.2” of some particular book and notices errors in it he often fixes the errors and the re-uploads the book as “version 1.3”, perhaps with a small comment of what was changed. Such free, distributed proof-reading, much like beta-versions of software, will probably become quite common sooner or later in official circles as well.
And as for the actual prices of e-books I would prefer a completely different scheme, a flexible pricing-system that I’ve outlined here: http://newteleread.com/wordpress/blog/2007/03/24/living-on-the-long-tail-intellectual-property-and-the-e-publishers-world/#comment-279405
I completely agree with the above comment that there is no such a thing as fair price and chasing one is a mirage.
I do not think that direct differential/flexible or however you want to call it pricing system based on author will work, but there are ways around it as A. Wheeler former SFBC editor commented in talking about huge unearnable advances being just an indirect way of increasing the effective royalty rate for select authors, rather than bearing any expectations for a volume of sells to justify them.
The main question is if the ebook market can get off being a comma in the publishing world, to at least a high single digit percent, and an Amazon like price scheme may do that, but it ain’t going to get adopted by major publishers until they bleed dry and cry mercy.
> The main question is if the ebook market can get
> off being a comma in the publishing world
No, that will happen for sure (assuming the world doesn’t end within a few years). P-books have no intrinsic advantage over e-books, whereas e-books (even ones with our current technologies) have lots of advantages. We’re seeing the same pattern with music, still- and video-cameras, TVs, basically all media is going digital. Every step of the way there are lots of people claiming that “this will never go further, it won’t catch on”, mostly because they’re too unimaginative to realize potential or have some knee-jerk reaction to things having to be like they always have been or somesuch. So far they’ve always been wrong, and they are wrong this time, too.
No, the real questions are:
– What will text-related publishing look like in the not-too-distant future?
– How will texts be integrated with other media and what more or less dynamic structures will become popular and for which kinds of works?
– What structures for interaction will there be, and how much and on which levels?
– What will become the most popular forms of compensation, in this “new” world in which anything and everything can be copied and stored almost for free?
– How fast will it all happen? (I.e., how much will the stupid, stubborn, backwardspedaling, selfdefeating antiprogress-people fight before getting hit in the head with the clue-stick enough to either see the reality or get knocked out of the game?)
I love the discussion we’re having. Another question, I suppose, needs to be what role the author has in this, and I guess that depends on whether the author views him or herself as an artiste in the classic sense, i.e. creating their art up in the tower, or whether they view this as a business and actually aim to make money. I hear ALL the time authors whining about how they want to write, not publicize, and their job is as writers not publicists etc. To that, I say nonsense. If this is your ‘job’ then it’s going to have parts to it you might enjoy less than others. That’s life in the working world. You either suck it up, carve out the time and do it, or you lose some of your market share to people who will. For example, I am a teacher and I love the teaching part of my job. I excel at it. I do *not* particularly excel at playground duty, running the curtains during the Christmas play, stacking the chairs in a way that will not annoy the cleaners etc. But that’s part of the job too, and I think writers who really do want to make money need to start looking as a certain amount of PR-type work as part of the ‘job’ in the same way.
Now, perhaps with that said, they can use organizations like the RWA to collective-bargain better deals for themselves from the publishers. Perhaps more of them will just go indie and do it themselves through self-publishing. I don’t know. But I do know that it is a new world out there, and if you don’t adapt, you’ll be SOL 🙂
I checked the amazon.com list price just for fun of the book in my case study, and it’s a dollar cheaper. Region-blocking is a whole other issue I won’t get into here 🙂 But why on earth would anyone think people would rather pay MORE for an e-book than they would for a print copy they can hold in their hands? It just defies common-sense logic.
I loathe the idea of a rent-only library where one is tied to their PC. I think we have the tools now to create a fair system (e.g. eReader DRM is for the most part fair to everyone). What needs to happen is either
– A visionary gets themselves appointed head of a major publishing house and forces everyone else to fall into line, or else
– Jobs gets the e-book bug and integrates something or other into the iTunes store, thus creating an industry standard
– Amazon gets their heads out of their America-only you know whats and makes the Kindle available world-wide, thus creating an industry standard
– Amazon goes bust, Sony swoops in and dominates with their very nice reader, thus creating an industry standard
– The authors band together and collective-bargain to create a new digital economy, thus creating a new industry standard
Cheap ebooks are a lovely thought, but if a publisher wants to sell their books through the major book venues like Fictionwise and Amazon/Kindle, they must price the book with that in mind.
The vast majority of buyers only buy through the big venues instead of through the publisher website so most publishers can’t break even if they don’t have their books at places like Fictionwise.
I know that for every book I sell through one of my publishers’ sites, I sell 50 or more at the big venues. Most authors tell me the majority their sales are from the big venues.
Here’s why books have to be priced more expensively if they are to be sold through the big venues.
Fictionwise makes 50% on each ebook sold so even if the publisher prices the book near cost, he would have to increase the price by 50% just to break even. Amazon/Kindle takes 66% of the cover price. The same problem.
What’s left is usually divided evenly between the publisher and the writer if it’s an epublisher, 15% for the author for major publishers.
And if the publisher doesn’t put the book’s price high enough, the middleman venues where a majority of ebooks are sold aren’t interested in the product because they can’t come out even after they do their usual price markdown.
If the publisher wishes to keep his books at the big venues, he can’t undersell the books at his own site so he can’t lower the price there either.
In the best of all possible worlds, the reader would pay a few bucks, but readers want the simplicity of buying at one site, not many, so the prices go up. Sad, but true.
Print attributes of fixity, navigational and haptic refinement, materiality, and reliable re-access across time, all pair nicely with screen attributes of immediacy, automated search, electronic delivery, and live content.
Another crucial pair of print and screen attributes is revealed by the self-authenticating nature of the print book contrasted with the self-indexing nature of the screen book. The print book carries with it layers of physical evidence, overt content and bibliographic codes that persistently reveal the source and intent of its production. Such features of self-authentication, confirmed with ease of re-readings across time and cultures, give the material book its special role in transmission. But print books resist indexing and have been compiled into libraries only with great effort or with the help of on-line cataloging and finding aids.
By contrast the screen book is self-indexing because the encoding or production process that renders books to the screen also enables their keyword search routines. This attribute is really amazing. It is as if printing ink on paper inherently tabulated the letters and remembered them. However, the effervescent screen books resist authentication. Screen books, like touch screen voting, remain vulnerable and un-trusted with ease of unmonitored deletions or revisions and uncertain provenance. And expectations are very different with screen based research. The content is served quickly while the reader is induced to consume quickly as well.
If we got up tomorrow and all the publishers were gone and all DRM control extinguished and all the screen-books were free, nothing about the transmission ecology that I just described would be changed.
Fascinating discussion, thanks to @billtrippe for tweeting about this.
Being unable to “borrow” e-titles from the local (or distant for that matter) library is a deal killer for me. The un-even pricing, same.
Solution? I know a lot of authors who have been published by “real publishing houses” who have since abandoned the old model, and gone to self-publishing via Lulu.com or similar.
I have a growing contingency of music and fine art friends who have also jettisoned the traditional middle-men to self-publish. Heck, part of the reason I left the music industry was because the deck was stacked against you.
The old model isn’t entirely broken, but it’s certainly teetering on the fault line. Many issues remain however, and the pricing model is just one of the bits.
Gary Frost’s comment on being able to SEARCH on an e-book is the only real feature that ALMOST has me laying down cash for a Kindle. As an enterprise search guy, I certainly appreciate the beauty of being able to search – and that’s quite difficult to do in the paper-bound world. Particularly when the abilities of indexers (or lack of care by publishers) make the back of book indexing nearly useless.
We’re getting close, but not quite there yet.
Cheers,
Dan
It appears that some publishers think they have just discovered a small goldmine. They are busy releasing all of their backlists as ebooks, and are charging close to hardcover prices for books that have been available in paperback for years.
In the past couple of weeks, three mysteries by Laura Durham, published by Harper Collins, have appeared on Fictionwise for 14.99 each. Even with all possible rebates/discounts, the cost is still higher than Amazon’s paperback price of 6.99 each.
As for the authors, I would think it would benefit them to give more thought to the issue. Some of them apparently refuse to have anything to do with ebooks, for fear of piracy. This makes no sense to me; if their books are popular they have probably been scanned and are available for free. If they are not popular, they quickly go out of print and are not even available to purchase. In either case, if the books were available as legal ebooks, there is at least some chance to sell them and actually make money, for both publisher and author.
I’ve emailed several authors to request that they release their books as ebooks. Most of them have been kind enough to reply, but they generally seem pretty uninformed about ebooks and say that it’s all up to their publisher.
> readers want the simplicity of buying at one site,
> not many
So the publishers agree on an xml-rpc api and co-produce an umrella-webstore that uses that api. That’d cost the publishers close to nothing (in fact, it would be much cheaper than if each publisher had its own webstore), and then the user can get all the books from that one place. Everybody wins.
So, once more there are no real problems standing in the way, just stupidity and selfdefeating greed.
Authors have little to no say in the matter.
That’s absolutely true.
This is from a very informed author who was an ebook pioneer over ten years ago as well as a publishing world news junkie of over twenty-five years.
In response to some of the comments.
RWA can’t bargain. It’s not that kind of union. No authors’ union of that sort exists, and from what I know of authors, it will never exist because of the nature of writing and publishing.
Most authors of the big conglomerate publishers have no say in ebook formats, etc. Ebook rights are boiler plate these days, and few authors have the kind of clout to change that.
Publisher and author ebook sites don’t make much money because readers prefer the simplicity of one-stop shopping. This has been proven over and over again in the last ten years.
Publishers are needed because the self-published can’t get their books into most venues where people buy ebooks. Kindle is the only exception I can think of. Even then, a self-published book rarely sells unless the author does the electronic equivalent of hand-selling that book to each buyer. Otherwise, the book gets lost in all that backlist from the big publishers.
Ebook sites aren’t cheap to operate, and with the complexities of security and the costs of credit cards, etc., they are increasingly hard to operate. The standard argument “it costs nothing to sell ebooks” is totally wrong.
Ebook publishers have the same expenses any publisher has, and the only cost they don’t have is printing the book, storing it, and shipping it. One of my publishers, a smaller epublisher, has told me her costs are around $50,000 a year, and she takes no salary.
Ebook libraries exist. My local library subscribes to one so I can download books for free for the short term. Talk to your local library.
I must admit I get annoyed at all these discussions. A book is worth what people will pay for it. If the book is too expensive, don’t buy it. If you don’t like the DRM, don’t buy it.
Meanwhile, smaller publishers offer cheap books with no DRM, and their books aren’t being bought. Sure, some are garbage, but so is a lot of the product of the NY conglomerates.
Read some reviews. Ask around for new authors. Join online reader groups and ask for suggestions.
Put your money where your mouth is and buy from the indie epublishers.
$50,000 a year in fact is a pretty cheap business. Particularly when you consider the fact this is a business with potentially a global scope.
The costs for an ebook retailer are the server, the internet connection, the credit card service. If you compare it to a store that sells physical books, you have to add costs for shipping (say $2 a book), costs for warehousing, costs for staff to handle the shipping and stocking the warehouse. Up front costs to stock the books, inventory taxes, etc. Futher, all of these costs increases far more rapidly for the paper book seller than they do for the e-book seller. If we assume for the moment that you need to have at least 50,000 titles available to make you a viable stopping point on the internet, it is easy to see that while 50,000 ebooks will take up one hard drive (plus a second for backup), the 50,000 physical books (plus multiple copies of more popular ones probably means stocking 100,000 plus titles) will probably take up at least a small warehouse.
To me it seems simple, even if the savings are not as much as I think they are (And I would really like to see someone provide concrete numbers… not that the publishers would ever provide them…), there are certainly vast savings at both the retail and the publishing side of things (does anyone want to claim that Hemingway novels have any significant costs other than royalty, printing and distribution at this point in time?).
It comes down to this, every business has to recognize a basic fact, and that is that the internet forces a change in the standard business model. This is particularly true when it not only impacts the way a product is sold, but the product itself.
Publishers love to tell us why they can’t lower prices; well the music industry loved to tell us they couldn’t sell individual songs. My advice to the publishers is, start figuring out a new model that works before you drive your readers to the darknet.
BTW, Baen sells DRM free work and they seem to be doing quite well… in fact, if I remember correctly, they are amongst the most successful publishers right now.
> A book is worth what people will pay for it.
This doesn’t work today. When I read a book I think is worth much I’d like to pay much for it, but I can’t. When I read a book that I think is garbage I’d like to pay less for it, but I can’t. There are no such options.
> If the book is too expensive, don’t buy it. If you
> don’t like the DRM, don’t buy it.
OK, I won’t, I’ll just download it for free then.
The “put your money where your mouth is”-argument only works when at least one option is at all acceptable.
Today I spent several hours trying to find songs from a particular music album (which was released half a year ago), but I could only find some DRM’ed garbage that I’m pretty sure wouldn’t even work in any of my 5 computers. Then it took about 30 seconds to find the whole album not-quite-legally (and in good quality and without DRM or watermarks or any such anti-customer crap). So, while I would pay for stuff, and I would gladly pay sometimes even up to 10 times the listed price if the thing is good, the damn book publishers, record labels, etc. just refuse to let me pay anything at all.
[QUOTE]smaller publishers offer cheap books with no DRM, and their books aren’t being bought. Sure, some are garbage, but so is a lot of the product of the NY conglomerates.
Read some reviews. Ask around for new authors. Join online reader groups and ask for suggestions.
[…]buy from the indie epublishers.
[/QUOTE]
Do you have any pointers to decent reviews about books from “indie epublishers”? I have never seen any, but sure would like to.
Argh! How do I quote properly with this thing??
Substituting ( and ) for arrows like < ... (blockquote)This is a test, nothing more.(/blockquote) David
Quoting and my browser don’t work together so I’ll comment generally.
I can’t really recommend particular sites because I don’t know what you like to read. Most sites and review magazines with reviews online are genre specific rather than ebook specific so you get a mixture of both traditional and indie books.
Fictionwise has a search feature where you can see a list of books available by publisher. That’s a good way to see what the indies have available, and many have review blurbs attached to the book description.
On the $50,000 figure. It might be a cheap figure for most business, but when it’s a mom and pop publisher, that isn’t cheap, that’s lose your house territory, and the profit margin for ebooks as with all books is appallingly small.
The people who are making the profit on ebooks are the distributors, not the publishers and the writers, and the distributors also do more to up the price because of their mark ups to give the illusion that they give you a price cut.
Amazon’s Kindle which takes 66% of the profit off the top of the book’s price is the worst offender, and I refuse to spend a penny on their site because of that and other publisher/author unfriendly tactics which are bleeding the business dry.
I’m sure this site doesn’t allow the kind of language I’d use about free downloads of pirated books. I’m as amused by that as most of you would be if someone ripped off your paycheck.
A vast majority of writers make very little money, most of us, even those from traditional publishers with good distribution, have trouble breaking even. The way to thank us for the pleasure we give you is to buy the book, not steal it.
Baen isn’t an indie publisher. It was a major publisher with a stable of famous writers long before ebooks were around. It is also owned by one of the conglomerate publishers.
If anyone is interested in an overview of the current state of publishing, please read my article on the subject on my website. Click on the articles and short stories navigation icon at the bottom of the index page to find it.
I’m also open to quesions.
I am not sure, Marilynn, if the small publishing house you are speaking of has a print arm as well. But major publishers sure do, and when they are simultaneously releasing in print and e, the editorial costs of producing the actual texts would amortize among the two. So from that standpoint, the cost to produce, say, a Stephen King e-book, would be almost zero because the work is already done for the print edition.
As for the non-printers, you need to look at costs over time. If I want to start a coffee business and I buy a really expensive coffee pot, my upfront cost is pretty high—but every cup I make lowers the cost. In the same way, my upfront costs for the eBookwise or iPod Touch were fairly high, but every book I read brings that cost down for me, because I *have* been buying the cheaper e-books (or else getting the expensive ones on sale) and I also read a fair amount of stuff in the public domain, which is available at no cost but whatever I spend to get on the internet (which is currently zero as I get it for free in my current living arrangement). So the free ones subsidize the cost of the rest of them. It’s the same in any business.
“It comes down to this, every business has to recognize a basic fact, and that is that the internet forces a change in the standard business model.”
This, exactly. To me, this is the bottom line.
Ficbot, a few epublishers do paper, usually POD, but most of them don’t because the upfront expense to work with one of the POD presses for Ingram (the biggest book distributor to bookstores) and Amazon is so hefty they can’t afford to do POD. Each book has a set up cost.
Most of the expense for an epublisher is in people — editors, copy editors, artists for book covers, and staff. That’s a day to day cost that won’t go away. The publisher I mentioned had been in business for some time so that wasn’t a start up cost.
I agree that the big publishers have minimal cost for ebooks. These day, a digital copy of the book which they already have can be dragged and dropped into a translation program, and a minimal wage worker can skim for mistakes.
That’s one reason I think 15% royalty on ebooks to authors is such an insult.
One of the reasons for the high cost of some ebooks from some publishers is because they don’t understand ebooks, they are afraid cheaper ebooks will suck the profit out of their paper books, and they don’t want to offend their publishing partners — distributors, booksellers, etc.
Right now is the a major turning point in conglomerate publishing. The economy is hurting them, the business models are changing, and their partners (distributors, bookstores, etc.) are either dying or are so predatory they are dangerous.
We can hope the publishers and authors who survive these changes will appreciate the value of ebooks and find a price everyone can live with.
Ms. Byerly,
A couple of thoughts.
1. I agree that $50,000 is a lot for a mom and pop operation… but when it comes down to it, it is a small annual expense for almost any full time business. And it is a good deal smaller than a comparable operation that is selling Paper Books. Further of course, there is no way of knowing if the business you site as an example is an efficiently run business.
2. If the “distributors” are the ones making the money, then one has to ask why? Their costs, like the costs of just about everyone in the production chain save the author’s are reduced compared to running a traditional Paper Book business.
The basic problem here is that most of the publishing houses, authors and distributors are trying to apply the exact same business model to ebooks that they have applied to paper books! No offense but Gutenberg is dead! The auto industry has adapted better to the internet than most book publishers (or news paper publishers for that matter). There will always be a market for paper books, but publishers need to remember that the public knows that paper books and electronic books are not the same thing.
Lets consider for a moment that many of the best selling books are published first as a hardback and then later as a paperback (or maybe trade paperback then mass market). The paperback is usually about a third of the price as the hardback. How successful do you think the paperback would be if it was sold at the hardback price? The public naturally knows that the paperback is cheaper to produce and likewise lacks some of the qualities that make the Hardback desirable.
Yet, now you have many publishers selling the ebook versions of books for more than the paperback prices despite the fact that it is even cheaper to produce and distribute.
BTW, I agree about pirated books, that being said, having read your blog on the “state of the publishing”, I have to say that you are probably far too concerned about getting people to buy books new. Ultimately used books, either through book stores or borrowed from friends or the library, are still probably a major way in which readers become acquainted with a new author. Indeed, some authors have found that giving ebooks away has helped, not hurt the sales of their books. David Weber and Eric Flint essentially make all of their Baen Titles available for free (though the CDs included in the hard back versions of their books), and yet both authors are selling well. Cory Doctrow has also found success in giving books away.
Bill, I’m not saying that ebook publishing costs more than any other small business. My figures on epublishing costs were in reference to those who say that ebook publishing costs nothing so the books should cost next to nothing.
The epublisher I was talking about, at that time, was a very successful epublisher both financially and critically, and I was impressed by its businesslike behavior.
Big publishing is a tradition-bound business that makes little sense to other businesses, and change comes very hard. The book distribution system was created during the Great Depression and has changed very little since although the returns system bleeds money and is wasteful in many ways.
The distribution costs are a constant frustration for many of us in publishing, but the big guys won’t change things, and Amazon, Walmart, and some of the chains seem to hold most of the power about price.
The book conglomerates’ sheer ignorance about ebooks and their belief that paper books will always be the major distribution method has allowed Amazon/Kindle to take a 66% profit off the top for little more than providing storage space on their system.
Things like this makes me want to bang my head against a wall and howl because none of this is good news for publishers, authors, or readers.
And, yes, I think new books are best, but I’m a writer. We make our money on new books, and our new book sales determine whether we can sell our next book.
All those new readers we are supposed to get with a used book do dang little good if the publisher won’t buy that next book, and our sales figures are so poor no other publisher will touch us.
These days, most big publishers aren’t willing to allow an author to develop an audience through a series of books. It’s one book, and you’re out of there.
Some of my friends have been successful with giving away free ebooks, but that’s only if it’s the first book in a well-established series from one publisher.
In my case, this wouldn’t work since I write single titles in a number of genre, and I have a number of different publishers.
At best, I can only offer free short stories which I do.
Sci-fi, but I’m very picky when it comes to books… er.. well, I’m picky about pretty much everything (except about chocolates, of course). 🙂
Hmm.. for some reason I thought it was, so I just went there to look for e-books. Unfortunately many baen books are not available in a digital format. I looked through all e-books of authors K-Z, and I found exactly one interesting book that I’ll probably read after I finish reading Ender in Exile.
If you’re referring to what I wrote about searching for music today then what are you smoking if you think searching the net for hours is pleasure? I’d rather have been coding that time and used the money from that to pay 10 times the list price of the whole album. And don’t even start with the dishonest “copyright infringement is theft”-rhetoric. (If you feel the need to discuss/debate the issue you can contact me at [my surname]@iki.fi, but let’s keep it off this thread.)
Now isn’t that the understatement of the year? However, to their defense (well, sort of) we should admit that most readers don’t understand e-books either. People in general are very unimaginative when it comes to new things. First they are outright hostile to any change and claim that they’ll never need or even want X, but once they get used to X they realize they wouldn’t want to live without it.
While I often have no problems seeing these Xs years and years before they become mainstream (and I’m sure there are many people who see them years before I do) I’m really bad at understanding how to transfer this knowledge to others. I’ve realized a long time ago that just telling about these Xs works with only an extremely small percentage of all people, and the rest would have to be convinced somehow and I don’t have a clue how. (I find it all quite frustrating. I.e., that the world is lagging behind, that so many people are causing this without even knowing it, and that I’m quite incapable of doing anything about it.)
As a tangent to this I’d like to point out that I really, really hate having to wait needlessly for something. I find it very annoying when the author says that “the book has been ready in its final form for 2 months already” and it still isn’t available anywhere, and when it becomes available somewhere it’ll still take weeks before my local book store gets a copy to give/send to me, even though I placed my order half a year ago. With e-books one could have shorter time-to-market delays and once it’s available it’s available immediately worldwide.
I understand that the “hardcovers first” is a milking strategy, so some publishers/stores will probably try to do the same thing with e-books (perhaps treating them as paperbacks). How common is this now? Anyone following the e-book vs. p-book release schedules?
Anyway, I’m sure an opposite milking strategy, like with movies (i.e., first comes a plain version, then some extended version(s) and perhaps a directory’s cut or with additional “extras”), would work much better with e-books, too.
You say you want people to buy it new, but why would they do that when the price is so inflated? If you want people to buy it new, in printed form or otherwise you have to price it at what they would reasonably be willing to pay. What possible inventive would there be for me to pay $15 when I could pay $6 and get the same thing? And what incentive would there be for me to pay $15 when I could pay $6 and get MORE? That’s what they are asking people to do with e-book prices right now. And don’t give me some nonsense that I should pay the higher price to ‘support’ the author—you’ve already told me that Amazon/the distributor/the book cover artist/everyone and their brother is getting the money instead 🙂
Hmm.. I’m operating a website for a chain of hotels (you can make reservations and pay for them, and edit reservations you’ve made, and it actually does lots more that I won’t go into here). The system was neither easy nor free to build, but it’s quite cheap to operate. A simple webstore is much, much simpler and cheaper to operate and virtually free to create.
Marcus, I’m not certain of a review site that is specific to ebook science fiction. Perhaps, someone else can suggest one.
The premier indie epublisher for sf is Double Dragon. Their books are available in all the usual venues.
Baen has some ebooks at Fictionwise, but they aren’t free.
You took hours to find music on the Web? Wow. I’ve never done a music search, but it has to be something pretty darn obscure for me not to find it with Google within five minutes.
Hard covers aren’t about milking. Hard covers are more prestigious for the publisher and author, they go into libraries, and they are reviewed by the newspapers and magazines which won’t look at trades or massmarkets. They also get a bit more shelf space and visibility in bookstores, and they remain on the shelves longer. The average paperback is lucky to have a month of time on bookstore shelf before its cover is ripped off, and it goes into the garbage. A hard cover will be there for many months.
I’ve read that one of the shifts coming in publishing will be a return to trade and massmarket for most newer writers instead of going to hard cover. This will be particularly true for literary fiction.
Believe me, lots of folks know about ebooks these days. No one had even heard of an ebook when I started ten years ago before Stephen King “invented” ebooks by putting one of his novels online. Very few people I talk to have never heard of them.
Not everyone is buying them, though. But we have so few readers today that’s not surprising.
Sure prices are high, but new is better for the writers and what you like to read.
If you can’t afford new, you can review books. Lots of review sites will give you all the books you want if you are willing to review them. Heck, putting an occasional review on your blog will have publishers tossing books at you like panties at a Tom Jones concert.
I mentioned Webster’s word of the year on my writing blog, and they offered me my choice of their catalog if I’d review them.
Marilynn, I still think (respectfully) that you are missing the point a lot of us are trying to make here. Hardcover books may be philosophically a good idea for the writers, but for the readers, they are too expensive. People simply don’t want to pay it, and they have options so they don’t have to, so they are not. If publishers want to sell to them, they need to understand that. Let me put it to you another way, I could tell you everything I know about how healthy and beneficial brussels sprouts might be for you, but I guarantee you that every year, they sell more chocolate than they sell brussels sprouts, because that’s what people want to buy 🙂
I hadn’t even heard about Double Dragon, so thanks, I’ll check it out. (I have never bought any indie stuff before, but I guess I’ll have to try it now.)
It took me less than half a minute to find the album as good quality mp3s on google, but that wasn’t a very legal download. After a few hours of searching for some place to buy it legally I gave up. (I also asked the artists and their record label, but haven’t gotten any response yet.)
OK, I’ll take your word for it, but why aren’t paperbacks released at the same time in that case?
Yes, people know that there are “some kind of ebooks” (at least among the people I know, since I’ve been talking about it so much since ~1990), but that doesn’t mean they understand ebooks. Heck, one could even say that some makers of ebook devices don’t understand ebooks, e.g. when they use non-hyperlinked indices or artificial/dynamic page numbers.
E.g., if an older reader with one of those big magnifying glasses meant for reading thinks of using the magnifier with an ebook he/she clearly hasn’t understood the concept, whereas if he/she independently figures out that the font size must be adjustable then he/she “gets it”. (And if the font size can’t be adjusted to humongous then the ebook device maker clearly doesn’t get it.)
And although many know of ebooks I still get lots of poorly hidden curious glances when I read a book on my phone in public.
Did I ever say you should buy a hard cover? No, Instead, I explained why publishers like hard covers. I explained why new book sales are good for authors. I explained the problems with the pricing of ebooks. I told how you, too, can get free books from publishers by writing reviews.
I know most of these books are too expensive, and so are some ebooks. I agree with that point.
I can’t afford hard covers, either, so I read them at the library, or I wait until I can get them as an ebook or a massmarket.
People were complaining that they weren’t hearing from the people in publishing so I thought I’d take some time to answer some questions you were asking because I’m a publishing news junkie of many years with a fascination for the business and a strong background in epublishing. That does not mean I agree with most of what the publishing business is doing.
Now, how about some Brussels sprouts dipped in chocolate?
Many years ago, the same publisher didn’t print the hard cover and the massmarket paperback of the same book. Instead, the author or his agent would sell the paperback rights to a massmarket publisher after the hard cover was out to good reviews and decent sales.
Then the conglomerates bought almost every publisher in existence so that they had a publisher who specialized in hard covers and one in paperback so they bought the rights to both at the same time. Many of these publishers then merged and merged again.
Since massmarkets followed hard covers back then, the pattern remained because publishing is hopelessly traditional.
Having both formats at the same time would also probably annoy the bookstores which make more on hard covers, and publishers never want to annoy bookstores.
Also the two formats have a nice synergy. Dick Francis publishes a hard cover. Months later, a massmarket of his last book shows up followed by yet another new hard cover followed by a reprint massmarket paperback. Every bit of publicity each book gets feeds into the next book’s sales, and new readers are pulled in by the cheaper version.
This sells books.
As to the timing of ebook editions, there is no real pattern established industrywide.
As to understanding ebooks, all most people want to know is what they are, how to read them, and where to buy them. The technical stuff isn’t that important.
With so many people texting, etc., ebooks aren’t that big a stretch.
What people want is orthogonal to whether they understand something or not.
From the quote above I sense that you might think that e-books are “electronic versions of p-books”. That’d be quite incorrect. The current state of e-books is like when TVs came out and pretty much the only thing on was people sitting and reading stuff as if the TV was inherently videofeeds from radio shows. And many people said TVs wouldn’t become popular since the non-audio part was more or less pointless, and therefore radios would do just fine.
I fear we won’t se as much public experimenting with e-books as with TV in its youth (mostly because the former isn’t broadcast like the latter), but you’d better believe that e-books are by their nature more or less completely different from p-books. (And note that I’m talking about the generic formats here, not about any particular books.)
There are interactive and experimental ebooks, but most are poor versions of “Choose Your Adventure” and media mixes like video games and YouTube style videos. These poorer versions have never really captured much of a market or a readership because they lack on both sides of the fiction and media equation.
Fiction as words, be it on paper or on the computer screen, satisfies a very human need that most of us don’t get with a movie, video, or whatever, so I don’t fear it will disappear entirely.
With the current state of business and the smaller number of readers, I do expect that fiction’s market niche is too small for brick-and-mortar bookstores to remain viable, and the conglomerates will pull out of publishing leaving it to small companies.
Having read this excellent thread this is my two cents:
I am the new owner of an iPhone and have been searching for ebooks over the last two weeks to read on it. I am completely flummoxed at the pricing of ebooks and to add to that I am repeatedly coming across current newly published books where the ebook is significantly MORE EXPENSIVE than the paperback version !
What on earth is going on ? I am a capitalist and a commercial director of a hitec business. I believe in profit and as a wanna-be writer I also believe that writers must earn a fair shake.
Let’s get real guys. The retail price of a book includes a significant percentage that goes to the shop owner, to cover his profits, his staff wages, his light and heat and his rent, and also to the distributor(s) in the chain between publisher and seller. This percentage is usually in excess of 60%.
I see parallels here with the ‘head in the sand’ music industry that has been and will, deservedly, continue to bleed income to copiers. I see the same blind effort to screw as much money out of the readers before the inevitable explosion of e-reading occurs and before the parallel explosion of hackers who will start distributing these books free on torrent sites happens.
Is there no one in the publishing industry who can lift their head up and see the big picture ? High prices are suppressing the whole development of market. One might almost think that the publishers are PURPOSELY trying to suppress the ebook market because they feel they are making bigger profits from paper books – and it is supporting the millions of corners books shops. This would be fine – if it were not for the fact that there is an inevitable momentum in the progression from paper to ebooks. It is as strong a momentum as from Vinyl to CDs to MP3s. It cannot be stopped. It CANNOT be stopped.
Whether is be reading on the Kindle, the Sony ebook reader or on mobile phones such as my iPhone. This is the future (no not 100%, there will always be a market for paper books, but I see an 80:20 mix 20 years down the road). So the sooner the publishers get their head around this future marketing model the better.
Average decent people do not want to waste their precious and valuable time searching for illegal copies of books any more than they want to do it for their music. They have a natural tendency to want to pay a fair price. The music industry are still driving ordinary people in their millions to illegal download sites because of their crazy prices and complete lack of awareness of the ‘added value’ principle.
If the publishing business goes the same route then they will find that the same thing will happen to them. Ordinary people are not stupid and if the publishers fail to wake up in time they discover a huge portion of their readers will be subscribing to torrent sites, and they will be fighting a rear guard action they will inevitably lose.
Publishers need to start now – drop prices to a sensible level, promote their writers and their own names. If they do this and pay attention to the principles of added value – they will develop a solid readership base that is happy and willing to pay reasonable prices. If they do this they will keep the torrent sites and the hackers in the shallows and will generate the maximum earnings for themselves and their writers.
I don’t mind one bit paying a FAIR price. But I am not a complete fool and willing to pay 20 dollars for a book that is available on the high street for 10 dollars.
Most ebooks of leading ‘quality’ writers should in my view be priced at between 5 to 7 dollars, with recent publishings of best sellers at 10 dollars. That is my absolutely upper limit and I believe it is MORE than fair considering there is NO PRINTING, NO DISTRIBUTING ! and very limited web based distribution. Only marketing remains and that is quite small spread over a decent readership. Non best sellers should be prices at approx. 5 dollars. Of course this is only my broad-brush view. Specialty sectors must be priced differently.
Am I holding my breath ? nope . . .
Howard
Ireland
Hi Howard,
I actually agree with you about the pricing (which is one reason I price my books affordably). However, I think several people on this loop have already correctly pointed out that the eBook world isn’t that much different from paper. We publishers pay distributors about 50% for their efforts in selling our books, and we’re not allowed to price them lower on our own shops (otherwise the distributors drop us).
Again, I’m not saying $20 isn’t too much. I’ve pointed out before that many traditional publishers price eBooks high because they don’t want to offend Barnes and Noble or Borders (or the big box stores) by undercutting their paper sales. As long as paper remains the dog, eBooks will remain the tail that gets wagged–at least for the traditional publishers.
Rob Preece
Publisher, http://www.BooksForABuck.com
Are you saying that the ebook market is so small that it can be slapped around? But if the ebook market is so small then why would the “big bosses” care how ebooks are priced? Or are they just very selectively shortsighted? (Any way I try to look at it they just seem very, very stupid.)
Thank you for your reply Rob.
As you say the whip hand is with the traditional publishers/distributors, not to mention the big stores. This is a triangular vice that has a grip on the market that is unhealthy and monopolistic. And, as I mentioned in my post, is seriously short sighted and frustrating for the first explorers of this new ebook adventure that will soon become a global market.
I appreciate your point of view and understand completely where you are coming from.
Until this vice can be loosened, I would like to see if there any any innovative sellers finding a work-around for this through the use of something like purchase credits that can be earned by buying books. These credits could then be used as the equivalent of real currency when buying other books – resulting in far cheaper books while the cover price appears to remain high. Or other similar back end methods rather than the front end discounts that get the ire of the power triumvirate.
Regrettably all of the participants in the distribution chain will suffer from this shortsightedness when the reading public turn to illegal methods in frustration.
Howard
Dublin
Ireland
Okay, you aren’t happy paying p book prices and you think eBook prices should be lower. We agree!
You don’t like DRM. We agree!
Are you tired of the same old names on the jacket? We agree!
AKW Books was created to address these problems, but we also didn’t want to get stuck in the “we’ll print ANYTHING” model. We wanted to feature new, highly talented authors who are writing books that rival and sometimes exceed the quality coming out of New York after we got done editing them.
And we want to make a living income while we’re doing it.
So, we’ve been offering eBooks, DRM free, in the $5 range (depending upon the size and value of each book).
We’ve only been in business for a little over a year, so our selection is small (17 books as of today). It takes time to find and turn out the very best.
Now, we’re experimenting with price vs return. You know, do we charge high and sell a few books or charge low and sell a LOT of books. Which will make enough money to live off of?
I personally don’t think most people want to pay $9.99 for an eBook (unless money is no object and they actually sprang $350 for a Kindle — WOW). That’s why we compromised at $4.95 for a book the size of the average large paperback book.
But we want to find out if that’s the “magic” number. Soooo, we’ve priced our latest offering at $2 (after Book Club discount) to see if people will be more interested. It’s called “The Fighter King” and it’s the latest in John Bower’s “The Fighter Queen” saga (actually the first book in the science fiction series chronologically. It’s his best work so far. And it’s a whopper so it will take some time to read (1/3 larger than the average “big” book.
You can find it here: http://www.akwbooks.com/BookStore/product.php?productid=21
Is this what you want?
Feedback on the experiment.
The $2 book actually sold FEWER copies than other, smaller, higher priced books in the series. It is the best book in the series and the largest in shear word count, but people snubbed it.
Too cheap? “People only value what they have to pay for” is an old mantra. Perhaps that’s true.
I hear a lot of bitching and moaning about the price of eBooks, but when someone does something about it, most people are afraid that it’s a scam. So, as much as we at AKW Books would like to help cure the problem, human nature and economics won’t allow it.
Anyway, tomorrow (Thursday) the book will be going up in price to where it SHOULD have been priced, $6.95. Maybe people will value it more.
There is no justification for high e-book prices…everybook sold is already in an electronic format, there’s no paper, there’s no shipping and the great thing about electronic info products…you sell it and you’ve still got it.
Chris, I agree with you, but until the buying public is willing to get over the “if the price is cheap, then the product must be shoddy” attitude, the higher priced books will sell better.
You and I can bitch all we want about what “should be”, but good ol’ human nature will kill you every time. It’s kinda like the law of gravity. You can fight against it, but you ain’t gonna win. You either live with it or die while trying to fly after you’ve launched yourself off the skyscraper.
eBooks still have costs in them. The author generally spent upwards of a year writing the book (no matter what the format) and wants to be paid for his time, effort, and risk. The publisher still has to edit the manuscript (labor intensive) and do all the other things necessary to create a paper book EXCEPT the actual printing and physical distribution. And the people who do this work want to be paid for their time for some strange reason. None of these people are in the business for charity’s sake. Like you, they have to put Rice Krispies on the table and pay the rent.
Amazon has artificially capped prices at $9.99 by taking a larger percentage of the sales price of those that sell over that price. Some publishers are going along with it, some aren’t. I’ve actually seen some Kindle books priced higher than the mass market paperback versions (new).
At AKW books, our prices are generally below Amazon’s normal range, but probably higher than many people would like to see because of that human “cussedness” problem. Still a good deal, especially if you are a Book Club member (no strings, no charge, just discounts and a monthly e-mail newsletter).
Now, if you can figure out how to re-educate the buying public, maybe prices CAN come down from publishers who would really like to sell more at a lower price. This would put a lot of pressure on the rest to do likewise if their sales slip while the lower priced books are “raking it in”.
Wow, you really think that this whole mess is the customers fault because they *want* to pay higher prices for books? Have you even SEEN the complaining on the Kindle Boards, Mobile Read, Kobo Blog and elsewhere? Have you done any market research at all? If this is about your production costs, just say so. But this whole ‘customers want to pay more’ argument is just nonsense.
Well, yes, Al did do some market research. The results are mentioned in his post fo 17 February. And perhaps you’d like to explain that the best book of the series listed at $2 sold fewer copies than a book with a higher price. I think Al’s conclusion is right, the $2 price cheapened the content in the minds of the buyers.
The more I look into the ebook pricing thing, the more I’m convinced that Jeff Bezos got it right.
Of course we did the market research.
Look now, if we could sell 3 times as many copies of a book at $2 than we do at $4.95, we’d be fools not to lower the price. But it just doesn’t work out that way. We actually sell fewer!
Same author, same series.
A fairly popular and prolific mid-list mystery author conducted his own experiment. Now, he has a very good established following in paper and digital formats and he managed to hang onto his digital rights. He tried prices from $2 to $7 for comparable books and made significantly more money from the higher-priced books.
Ficbot, we WANT to sell books at a lower price. We want more readers and we certainly want to make more money. But so far, it’s been a losing proposition rather than the winner it SHOULD BE.
Now, who/what would YOU blame for this?
Thanks, Bruce. I spouted off before I noticed your post.
I made my first fortune in writing and publishing a technical work + software. I was amazed at the profit margin for the printed book, but there was no way it even came close to the profit on the software. This is because once the software was written, it was (at that time) distributed on floppy disks at a cost to us of about 50 cents per unit. We still had production, warehousing, & retailing costs. My point is that in its current form, electronic media is so inexpensive to distribute that many folks are now making a (huge) profit on free material supported by advertising. Having been in the business, no one can suggest to me that huge fortunes cannot be had by pricing electronic media at a few dollars a copy. Consider that in my family we are library fanatics, we purchase less than 5 books a year, but check out for free perhaps 5 to 10 books per month! For a cost of $1-$5, I (and millions of people worldwide) would consider purchasing an e- book. The rate of purchase drop off when a book exceeds the few dollar mark is exponential. So publishers, it is high time to learn what print purveyors worldwide are now or soon to discover, if it is not cheap and electronic it will not be pervasive! You may cry and wrangle all you want, but the consumer will win this battle, and the first publishers/retailers to join the “book for cheap” business model will become the Yahoo’s and Google’s of publishing.
Thom, everything you said is true; and in a perfect world, customers would act in a rational manner so that everyone would win.
But people are not the automatons that behavioral psychologists think they are. It just doesn’t work out that way in real life.
Example, in “The Fighter Queen” eBook series by John Bowers (THE NUMBERS ARE FAKE, but the ratio is correct):
A Vow to Sophia 511 pages (equivalent to a mass market paperback book) eBook price $8. Total sales “400”.
Star Marine 853 pages “super special promotion” $2.12. Total sales 0 (zero, zip, nadda). We raised the price to $9.50 and it’s sold “100” copies so far.
Add to that the fact that Star Marine was a much better book than “Vow” and should have sold well over the rate of “Vow” when it was on sale — if your argument were correct. And yes, we left it at that price for quite a while and advertised it even more heavily that we had “Vow” just to see if we could start a new trend towards less expensive books (the idea being to sell so many more copies at the lower price that total income would be higher — everybody wins).
People aren’t always logical. If we were, we’d all vote for the same political candidate (“none of the above”). There’s always that little devil in the back of your head asking “if the book is so great, why do they have to price it so low?” AND WE TOLD THEM WHY!!!!
We’ve bundled all 4 eBooks in the series together for a meager $24 if you want a good deal. That’s a lousy $6/book. I’ll bet it doesn’t sell as well as if we’d priced them at $30 for the set.
We keep trying to get the price down so we can sell thousands instead of hundreds, but we have to face the reality of human nature. In spite of everything, we’re still lower on average than the prices on Amazon for their Kindle line of eBooks. I’d hate to think we have to raise our prices to that level just for the books to be taken seriously.
If you want cheap books, go to Project Gutenberg for free classics and Scribd for self-published freebees. That’s about as cheap as you can get; and the old classics feature some really great names and stories everyone who wants to compete on Jeopardy should know.
“Under the most careful conditions of temperature, pressure, and humidity, the organism will do as it damned well pleases.” -Robert Heinlein
Time changes, Publishers will learn to move with the times and reinvent itself of they to will dissappear.
With the advance in technology, more things of this will happen across the board.
personally, I was thinking about getting the nook, but after reading more about the cost, I am going to switch to the KindleII. I will have to download about 50-100 books in 3 weeks or so. Since I am an expat, that lives in Africa. baggage weight its import to me. its easier to transpot a Kindle, rather than 50-100 books.
p.s. sorry for misspellings, I am a lousy typist.
@VMR:
Remember, your Kindle will handle several formats. You don’t have to do all your shopping at Amazon.
You can download compatible formats to your computer and then upload them to the Kindle via the USB interface. However, pay attention to DRM requirements that the Kindle might have problems with. For instance, Mobi formatted stuff will read just fine on the Kindle (Amazon owns MobiPocket), but not if it has DRM (Digital Rights Management) in place.
@VMR: Since you live in Africa, there’s no reason to even consider a NOOK. The NOOK is only sold in the US, and Barnes & Noble only obtains rights to sell e-books in the US and sometimes Canada. They won’t sell e-books to you when you’re in Africa.
I love my NOOK, but it is not international. It’s an American gizmo for people living in the US, and I don’t expect that to change anytime soon.
Here’s where the publishing industry is losing out. I buy a hardcover, or an e-book and read it. Everyone in the business gets their cut out of the sale of either. Now, I yardsale the hardcover and the publisher gets nothing. I finish the ebook and unless I give my e-reader to a friend, that book is at the end of the line. Here’s an idea, every single book sold gets a unique number or code. When you’re done reading it, u can sell it for what ever price you can get for it, but here’s the catch, the sale moves through an online clearing house that sees the code in the transfer and a cut of the sale goes back to the author or the system. We get cheap books and the industry has the opportunity to continually recoup on the sale of the book. I would be interested in the research as to if this would pull readers away from buying the book new. Hey, they could even set up a date at which you could retail your ebook back through the system so they don’t lose out on new book sales.
@Marilynn – “buy from the indie publishers”
I do, but not directly from their websites because those copies are not lendable. Kindle versions are, at least from most of the publishers in the genres I read. If a publisher doesn’t allow their books to be loaned on Kindle I don’t buy it from them anywhere (I’m looking at you, Carina Press). Being able to share a favorite book is one of my great joys in reading, and ebooks should be no different. I have gotten my best friend to stop pirating by loaning her ebooks, and now she BUYS a ton because she still gets the fun of sharing, in a legal way.
If indie publishers could figure out some kind of DRM that let their website-sold versions be shared, even if only one time, I’d happily purchase directly from them.
josefbh – bless your innocence ….