price-tag-hiWe know how much e-books cost. But what is their actual value? This is a question pondered in this post by writer and blogger Max Florschutz.

Florschutz is puzzled by the way e-books alone among digital media catch flak for being “too expensive.” He points out that no one complains that MP3s cost too much at 99 cents each, or that video games sold via Steam should be cheaper than the version that comes in a cardboard box. Why, then, are e-books so different?

Florschutz considers several possible reasons. Perhaps people value the material the book is printed on more than they do the actual content of the book. Perhaps the difficulty of obtaining a physical book compared to an e-book makes it more valuable in the eyes of people who do. Perhaps the “race to the bottom” in loss leader or low-cost self-published e-book pricing is affecting readers’ value perception. Or maybe some readers just feel entitled to get stuff cheap or even free.

In the end, he admits he can’t be sure of the real reason or reasons, and he doesn’t have any solutions to offer—but he feels this perception of lower value is harming books, and possibly the arts in general, so something should be done about it.

I do find a couple of faults with some of Florschutz’s contentions. For starters, he seems to forget that digital music is the price it is largely because people thought music should be cheaper. It all started with CDs costing $15 or $20 each, and college students getting so frustrated with it all that they invented Napster. Not too much later, Apple came out with iTunes and started selling songs for 99 cents each or most albums for $9.99 no matter how many songs they had on them. And that gradually became the accepted price for music.

As for Steam games, they frequently are cheaper than their physical counterpart, just because Steam runs considerably more sales than physical retailers ever do.

The funny thing is, Schutz himself might agree that a lot of e-books are too expensive. In one of the comments, he writes:

Oh, I’m still for keeping an ebook around paperback price—I honestly think that they’re going to mostly eat into the paperback market over the next decade or two. It’s more that so many people want an ebook to be $3, $2, $1, or even free that’s really out there.

But he doesn’t address the way publishers price new-release e-books at sky-high rates—or that, since Amazon is permitted to discount the paper books, new-release e-books often end up costing more than the paper version. The publishers outright broke the law in order to be able to price them that way.

For myself, I think paperback price for an e-book would probably be about right—or even a little less. Thanks to publishers’ insistence on DRM, you simply can’t do as much with an e-book as you can with a paper book, and there’s always the risk that the format itself could become defunct. (Unless you crack the DRM, at least.) But even then, I’m willing to shell out $15 to get access ahead of time to the Baen EARC of a book I absolutely have to read as soon as I can. (Though given that Baen doesn’t use DRM, it’s an easier decision that way.)

In the end, e-books are going to cost whatever the market will bear. If publishers want to charge too much, sooner or later it will come around to bite them and they’ll have to lower their prices. If self-publishers want to charge too little, that might end up biting them, too. I just have to trust that eventually, there will be some kind of equilibrium.

4 COMMENTS

  1. How much do you value the books at your library? The truth is, you actually have no more ownership of the e-books you “buy” than you do of the ones you borrow from the library. If DRM didn’t exist, and we actually “owned” our e-books, I would buy far more. As it is I borrow all that are available from my library and only buy those that I really want to read and can’t borrow. I donate to the library for the great service they’re providing.

  2. One argument for ebooks being priced less than paper books is that I can resell or give away my paper book, that’s a tangible value I give up by buying an ebook. Likewise, as a long time buyer of used books, the paper book market has a couple of price points (typically half mmpb price or about a buck, depending on venue) that are missing from the ebook pricing scheme. On the other hand, some publishers do put some of their ebooks on sale, usually at 1-5 dollars (minus a penny), which they don’t do for their print books. When authors self publish their backlist after the rights revert, they tend to price them around the used book prices.

  3. […] How Do We Value Ebooks? (Teleread) We know how much ebooks cost. But what is their actual value? This is a question pondered in this post by writer and blogger Max Florschutz. Florschutz is puzzled by the way ebooks alone among digital media catch flak for being “too expensive.” He points out that no one complains that MP3s cost too much at 99 cents each, or that video games sold via Steam should be cheaper than the version that comes in a cardboard box. Why, then, are ebooks so different? […]

  4. Quote: “If publishers want to charge too much, sooner or later it will come around to bite them and they’ll have to lower their prices.”

    Not so. With those so-called high ebook prices, the major publishers are biting not being bitten.

    Amazon’s market dominance is the primary reason why the major publishers price their ebooks so high at times they sell for more than the print version. Contrary to those who sneer at their company executives as behind the times and not savvy with technology, they know precisely what they’re doing. They’re very smart. It’s their critics who’re clueless.

    If the major publishers made their ebooks more competitive with their print editions, the main winner would be Amazon. Amazon overwhelmingly dominates ebook sales. It has a huge economy of scale and, at least with small publishers and independent authors, it makes inflated profits by paying, at most retail prices, half what companies such as Apple pay. Helping the ebook market invariably means helping Amazon.

    Amazon’s dominance of print sales isn’t as great and, to counter the hassles of waiting for a print book to arrive in the mail, it has to discount print book prices greatly. The result is less profit for Amazon and thus an Amazon less able to crush competitors and bully publishers.

    In short, the major publishers are in this for the long run and that means keeping Amazon down and bookstores up by encouraging the sale of print over digital. In a market without a domineering Amazon, they wouldn’t need to do that. So blame Amazon for those high ebook prices and praise publishers who forgo profits to keep that 800-pound gorilla at least slightly restrained.

    Keep in mind something that matters more to major publishers with their bestsellers. Selling hundreds of thousands of copies gets the per-copy print price down, so it’s to their advantage to encourage print sales. It’s also to their advantage to not discount ebooks to the point where they get stuck with a large print inventory that they can’t sell. With ebooks, inventory isn’t an issue, so a high price and limited sales matter little. I suspect they’re playing a game. While their print inventory is large, they keep the ebook price high. If their print inventory is almost exhausted and they are dubious of making another major print run, they’ll discount their ebooks to stretch out that print inventory.

    —-

    In my case, I’ve actually gone more casual recently with my print and ebook pricing, going for mindshare rather than income with the later. That’s why this book about nursing is free on the iBookstore and would be free on the Kindle store if Amazon’s bean counters let me. I want to get its message out:

    https://itunes.apple.com/us/book/senior-nurse-mentor/id1005818421

    When I get more calculating, I generally use my print versions as a guide to pricing. For print, about half the retail price needs to go to retailers, so I split the remaining 50% between 25% for the print costs and 25% for the huge, international publishing conglomerate of which I am the CEO (and everything else). For the digital versions, I tend to price them so my income is similar to that for the print versions, typically $3-$5. After all, the labor I put into both is the same. Because I use print on demand (POD) for my print copies, there’s no inventory, so I don’t care which people buy.

    –Mike

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