Another look at the ebook pricing question

ebook pricingA blurb on The Passive Voice links to an article at where author Tracy Hickman of Dragonlance fame offers ‘sobering news’ for aspiring authors.

The news is that being a full-time fiction author is really hard work, and doesn’t earn as much money as people think it does, which I suppose has to some degree always been true. And, to be fair to Mr. Hickman, he did contribute to the comments and clarify that his quote was taken out of context and he was not complaining so much as explicating on a reality.

But, as I am increasingly finding in stories like this, it’s in the comments that the true story lies. Halfway down the page, an astute commenter named Kara makes the clincher observation:

“I remember listening to a podcast interview years ago with Hickman where he talked about a new ebook subscription system he had developed where you could read each chapter as it was written and get a print book at the end. I had never read his work, but listening to him talk – his enthusiasm was contagious and I went to the site to check it out. The $50 cost wiped out all that built up interest I had from the interview. From looking at his site now, it seems like pricing may be part of the problem.”

A few comments later, Mr. Hickman himself weighs in:

“I’m not TRYING to charge $48.00 a piece … I’ve succeeded in charging $48.00 for each collectible book AND I’ve sold the mass-market rights to a publisher on top of that. So I think I’ll skip the remedial economics, thank you all the same.”

I’m sorry, but I just don’t understand why this guy thought this was the road to take. This is an ebook-based model. The goal should be getting more people to read, not creating artificial scarcity via a ‘limited edition’ sort of deal. There may be many things he is doing right as an entrepreneur, but this isn’t one of them. He may be selling some at this price point, but he could probably sell more—-and build more of an audience for future sales—if he focused on many copies at a lower price point, not fewer copies at a high one.

Image Credit: Tracy Hickman under a Creative Commons license

6 Comments on Another look at the ebook pricing question

  1. This is the second Teleread article I’ve seen lately that seems to be just pile-on journalism. “Hey, this guy over here is stupid. Hey, this guy over here is ALSO stupid. Look at us point at these stupid people.”

    If the OP had wanted your opinion about his pricing policies, he would have asked. Instead, he offered his original detractors an “I DID this, and it worked,” and I’m sure he’d say the same to you.

    If I wanted your opinion about his pricing policies, I would have read this article with interest. Instead, what I wanted might have been more along the lines of “He DID do this, and he sold this many copies plus this many copies in this other format and this many in his rights deal, and another comparable author did THIS and sold this many copies in these formats and this much in rights deals.” Since I didn’t get that or anything resembling it, you’re getting an annoyed comment, probably the only one this sort of thing will generate.

    Get back to news, please, preferably the stuff with facts and elucidation. Leave this sort of stuff to blog comments where it belongs.

  2. I worry little about pricing my ebooks per se. After all, I’m in control. It’s easy enough to shift to price up and down to experiment with what sells best.

    What ticks me off is what I can’t control. My Nights with Leukemia: Caring for Children with Cancer sells for $2.95 and earns me $2.10 per sale from Apple and about $1.60 from Amazon (it has lots of pictures of cute kids). The latter deficit is certainly bad. Amazon’s download fee, which Apple doesn’t charge, is grossly unfair, but it’s hardly the most unfair thing about Amazon’s royalties.

    * What if I dropped the price to $0.99 as part of a promotion? My Apple royalty would stay at 70%, so I’d get a reasonable 70 cents on each sale. If I more that triple my sales, I come out ahead with that price cut. But my Amazon royalty would plummet to 35% and I’d only get a measly 35 cents per sale. I’d have to make six times more sales to justify that 3-fold price reduction.

    * Or suppose that book becomes a popular textbook for nursing students (its intended audience) and sells well. Suppose I develop medical problems and need to raise my income to pay the bills. If I raise the digital prices to $14.95, it’s still probably the cheapest textbook those nursing students would buy. My per-sale income from Apple would jump to $10.50, which might make a life or death difference for me. But Amazon would only be paying me $5.25, while pocketing almost $10 for doing almost nothing. I’d be dying, nursing students would be getting ripped off, and Jeff Bezos would be becoming an even bigger billionaire. Somehow, that doesn’t sound fair. It also grossly distorts ebook pricing.

    It’s those price-dependent and far below-market royalty payments from Amazon that are the chief problem authors face when they wrestle with what to price their books–those awful cliffs below $2.99 and above $9.99. Reduce the price 300% as in my case above, and their per sale income from Amazon drops 600%. Raise it 500%, and their income goes up less than 250%. That complicates matters immensely, particularly with Amazon threatening to sue if ebooks are priced to get the same return for authors from Amazon as from Apple.

    All that also illustrates Amazon using its 70% market share to fix prices (often upwards) and fatten its profits at the expense of authors (always) and readers (often). If we had an honest Department of Justice–yes, a very big if–it’d be Amazon that’d be facing court troubles in the Second Circuit and not Apple.

    Keep in mind that it is author income per sale that matters when making pricing decisions. And it makes no sense to debate ebook pricing while the largest retailer of ebooks has such a grossly distorted royalty payment scheme.

    First and foremost, authors need to encourage their reading fans to: ‘Buy anywhere but from Amazon. That way, I get more, while you don’t have to pay any more.’

    Change Amazon’s policies, and then we can talk in more sensible terms about how to price ebooks.

  3. Personally, not currently depending upon writing for income, I’m more curious about what the picture of Hickman with Felicia Day, at a con 4 years ago, has to do with this article about an interview he gave this year.

  4. @Andy, blame the editor for that one. I needed an image that was Creative Commons licensed, and that was the most recent one I could find.

  5. To put it simply: who owns the DragonLance brand for which Mr. Hickman is famous for? Sure there are other non-DragonLance novels like the DeathGate Cycle but I bet the bulk of his 6 mil.+ followers are there for DragonLance.

    Unfortunately it’s not owned by Tracy himself but the publisher. Mr. Hickman himself mentioned about this on his website: and even called this “the original bad deal.”

    If Mr. Hickman owns the copyright I’m sure he will be in a very different situation now.

    Anyway, I enjoyed DragonLance throughout the years and have only the best wishes for Tracy and Margaret! I hope he gets out of this problem soon!

  6. Michael, there are ways to sell ebooks from your own site… perhaps you should look into them. I was using a combination of Paypal and a third-party software company to allow visitors to buy the book and have it automatically uploaded to them, no third-party booksellers involved. It’s currently not in use, but only because I couldn’t drive business to my site. If you already have a regular source of visitor traffic, it could work fine for you.

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