On Monday I wrote in a post that I think prices for ebooks have gone down since 2004. Over on Teleread, a couple of readers called bullshit on that statement and argued that actually prices have been creeping up thanks to greedy publishers.

Okay, it’s true I was basing my statement on my own experiences starting around 2006, when I began to take a strong interest in ebooks and found, to my shock, that lots of publishers were pegging digital editions to the hardcover price. Now in 2011 there are thousands of $10 new releases on the big ebook stores, and I can’t open Google Reader without seeing another story about an author making money off of $3-or-less ebooks.

So I concluded that prices in general have gone down. But after seeing the Teleread comments, I thought it might be fun to find an actual price list from 2004 and compare it to today’s prices.

This simple spreadsheet comparing ebook prices in 2004 and 2011 combines a 2004 bestseller list created by the Open eBook Forum, and current prices for those same titles on the Amazon Kindle Store as of March 8th, 2011.

First, I want to point out that I’m fully aware my crude spreadsheet doesn’t provide a big picture overview; I’m not trying to prove the Teleread commenters wrong, in other words. This comparison merely shows how a specific ebook collection has changed in price over the past seven years.

The simple conclusion is that if you were to buy all the books on that list in Kindle format today, you’d pay about $67 less than in 2004. That savings is somewhat misleading, however, because of the relationship between price and release dates.

If you look at just the 26 titles which are still for sale today, only the 11 most expensive ones dropped in price. This subgroup includes two dictionaries, a bible, and 8 new releases in fiction, and in all they account for a drop of $93.

Unfortunately, since the 2011 savings is about $67, it’s clear that the remaining 13 titles crept up in price over the years. A slightly more accurate observation, then, is that the overall cost only dropped because there are no new releases on the list.

But there’s a bright spot in this subgroup, too. The average price of those 8 fiction new releases in 2004 was $17.21, which is a little higher than the $12-15 range of most Big Six new releases on the Kindle Store today. (I left the dictionaries and bible out of this calculation, but if you add them in, the 2004 average price jumps up by 50 cents.)

Is this good news?

So is this worth cheering? On the minus side, the majority of titles on the list went up in price; but on the plus side, at least they remain pegged to mass market paperback prices, which also rose during this period. These ebook editions haven’t gotten any cheaper relative to paperback, but they haven’t crept higher relative to paperback either, which I think counts as a mild win-by-default for consumers. *

Although I didn’t count them in my comparison above, I also found that two of the books on the list are available for free in 2011. The ebook freebie, whether as a marketing strategy or because of volunteer efforts in the public domain, is much more common today than in 2004. I’m not sure how to place a dollar value on this category, but I think it has a real effect on total annual cost for many ebook consumers, and counts as another improvement from 2004.

But the most positive change, I think, is that the average price of a mainstream fiction new release has gone down — perhaps not from Amazon’s unilateral (and subsequently unsustainable) pricing strategy in 2008, but certainly from where we were in 2004 when publishers called all the shots. I consider this a clear win, and I think it probably wouldn’t have happened if Amazon hadn’t come along.

As everyone who follows the industry knows, Amazon tried to force a $10 ceiling on new releases back when it first introduced the Kindle, and although big publishers successfully fought back last year and raised the ceiling to the $12-15 range, that’s still far below today’s average hardcover price. Amazon pushed for a very low price point, publishers pushed back, and the result in 2011 is somewhere between the two extremes.

The future looks cheap

Big publishers will probably want to keep pushing for higher prices in the coming years, or at least keep raising ebook prices to match mass market prices, but there’s a new twist now that might undermine that strategy: indie publishing.

The last couple of years have been all about Amazon, but 2011 is shaping up to be all about indie publishers and authors — and they’re even worse than Amazon when it comes to discount pricing. They’re aggressively pushing prices in the other direction, and getting lots of favorable media coverage in the process, which I suspect will speed the normalization of the $0.99-2.99 price range in consumers’ minds.

In another year or so — depending on whether the current discount authors are exceptions — $9.99 may be considered a premium price point, and $14.99 an impossible sell. (It already is to people like me who tend to shop for ebooks a lot.)

Whether you think that’s the right direction prices should move probably depends on whether or not you earn your living from publishing. Consumers, however, have reason to cheer.

* To keep this focused on publisher prices, I’m not including retailer discounts in my comparisons. Although you can frequently find a print edition at a lower discounted price than a Kindle edition because of agency pricing, technically the two editions often have the same list price. Return to post.

(Image: Hanan Cohen)

Via Chris Walters’ Book Sprung blog

10 COMMENTS

  1. Ugh. Amazon did not, did not, did not try to force a $9.99 price ceiling on ebooks in 2008 or 2007 or any other time. This is one of the primary misleading talking points of the agency pricing crowd. the major publishers set list prices at whatever they wanted and Amazon paid them 1/2 of that price per sale. Amazon offered a lot of the most popular new ebooks at $9.99 but prices were really all over the map and it was not unusual to pay $11 or $12.

    The trend was down then up, at least since 2006, when Sony unveiled its ereader. Sony ebook prices in its store were equal to the full, undiscounted hardcover price for new issues. Amazon changed all that with discounted ebooks priced below the equivalent paper edition. Prices of many hardcover-equivalent ebooks were more than $9.99. Agency pricing has raised prices.

  2. What stands out in your chart is the number of older books that now have higher prices than they did several years ago. If that’s not greed, what is it?

    I’d like to see a chart comparing the price of e-books on the NYTimes Bestseller list from 2007 and the price of e-books CURRENTLY on the NYTimes List.

    Yes, I know the titles will be different, but average prices should be the same.

    Add the e-book prices of the 25 books on that list from 2007 and compare it to the total of the 25 current bestsellers. I will be very surprised if you don’t see a big uptick in average price.

    That’s where iI believe you’ll see the publisher greed in all its ugly glory.

  3. fascinating analysis. What I’d like to see, however, is the same level of analysis but rather than comparing specific books, look at the top 25 best sellers in 2004, then the top 25 bestsellers at some date just before Agency pricing went into e,ffect,, and then the top 25 best sellers now.

    my biggest problem with indy publishers is finding the books I want. There are no review sites that I know of that specifically review indy books, and even for $2.99 or less, I hate buying blindly based just on a description and a sample. For example, I never would have bought Girl With The Dragon Tattoo based just on a brief 50 page sample, because things don’t really start moving on that book until a third of the way into it.

  4. For me Chris the comparison is interesting, but not meaningful on it’s own. What really matters is what it really says, and what conclusion can be drawn from the comparison.
    I suggest very little. What matters is not whether prices are lower now than before, after all it was 2004, another era in eBooks when there were few buyers and few producers. What matters is the value. There are many millions of eBooks sold and many many produced now compared with a few thousand back then. Are they better value now ? Are the costs of production lower or higher ? are they spread over higher sales ?
    It seems to me that the truth of overpricing now is self evident irrespective of what price they were in 2004. That is what matters in the end.

  5. “As everyone who follows the industry knows, Amazon tried to force a $10 ceiling on new releases back when it first introduced the Kindle,.”

    Amazon had plenty of books that cost more than $9.99 before Agency pricing. It was generally only bestseller hardcover equivalents that got the deepest discounting and a lot of the $9.99 books were trade pb equivalent books with $15 list prices.

    “and although big publishers successfully fought back last year and raised the ceiling to the $12-15 range, that’s still far below today’s average hardcover price.”

    The average hardcovers list price yes, but there are consistently hardcovers with a street price within a dollar + or – of the ebook price.

    “Amazon pushed for a very low price point, publishers pushed back, and the result in 2011 is somewhere between the two extremes”
    Rather than looking at pricing now .vs years ago when stuff was all over the place look at now .vs 2009 when at both points there was a good sized ebook market.

    Heck look at last month .vs this month and compare prices on Random House books, you’ll be hard pressed to find a book where the price didn’t go up do to the Agency prices they set. Anything I’ve looked at is now $1.50 to $3 more per title.

  6. One of the things this does not take into account is sales. I purchased nearly 2000 ebooks from Fictionwise over the last 4-5 years, and nearly every single one of them was either purchased at a discount (up to 60%), using Micropay rebates from other books or the book price was not reduced but the book had an increased Micropay rebate. I bought a lot of books at list price with a 100% Micropay rebate, which I figure cut the effective price at least in half. I’d guess that my average was probably at least 30% off list price. For the Agency 6, there are no sales, so for me, the price has gone up by more than the change in the price of a mass market paperback during that timeframe

  7. I was going to do a comparison of the prices for my purchases in 2004 with the same books now. But, of course, I didn’t buy any ebooks from the major publishers in 2004, because they all had DRM. I didn’t start buying from them until mid-2008. Coincidentally, the first DRM removal scripts became available in the first half of 2008….

    I do second what Bruce says. My average purchase price of novel-length fiction from Fictionwise is well under $4, thanks to the various rebates and sales they’ve held over the years.

  8. I also don’t think it’s fair to compare ebook price with hardback price. I know Steven disagrees with me, but to me the value is less in an ebook than it is for a paper book, and even less when compared with hardbacks. Of course an ebook will be less than a hardback, but it should never, ever be more than a paperback.

  9. Taking inflation as about 3% per annum cumulative, one would have expected a price rise of roughly 23% — from $280.33 to $344.77. On this basis the overall price drop for the matched books in real dollars is about 38%.

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