Some thoughts on e-book pricing

I know, I know.  We’ve discussed this before.  Unfortunately — or fortunately, depending on your point of view — this is a topic that isn’t going away any time soon.

What started me back down this road is a link I received via email yesterday from Charlie Martin.  Basically, author John Locke discusses his road to self-publishing via the kindle with Joe Konrath.  It’s an interesting read.  I don’t agree with everything he says and my mind boggles at the prices charged authors by some services to prepare their e-books, but that’s the author’s choice and not mine.

Along this same line, unless you’ve been living under a rock or sleeping in a very deep, dark cave recently, you’ve read the buzz about Amanda Hocking.  She is the poster child right now — and rightfully so — for how an author (and hopefully a small publisher) can take the e-market by storm.  Check out this blog post for more on her thoughts about publishing.  I have to applaud her for knowing that she won’t be the only person to be able to take advantage — successfully so — of the e-book wave.  But what really impressed me is the fact that she warns that not everyone, in fact that very few realistically, will.  Ms. Hocking seems like a young woman with her head on her shoulders and her shoulder to the proverbial grindstone because she knows it takes hard work to succeed — hard work and a bit of luck.

For more on this, check out this post and this one from Nathan Bransford.  While I agree with most of what he says, I’m not sure he’s right about the cost differential between hard covers and e-books.  For one thing, he is only looking at the cost of paper and ink, not necessarily the costs of printing, binding, storage, shipping, returns, etc.

And this all comes down to how much should an e-book cost and how much are readers willing to pay.  This morning, I pulled up the list of the top 100 best sellers in mystery for the kindle.  Looking at the first 20, ten are priced at 99 cents.  One is $2.99.  There are three at $7.99, two at $9.99, two at $11.99 and another two at $12.99.

But it is looking at the comparison prices between e-books and physical books that is really interesting.  At least one of the e-books is actually more expensive than the mmpb.  Another costs the same as the mmpb — that has been out for 7 years.  With others, there is less than a dollar difference between the price of the hard cover and the e-book.  Why?  Because the e-books are subject to agency model pricing and the physical books are not.

Don’t get me wrong.  I love physical books.  I’m surrounded by them by choice.  But I also love my e-books.  I know what it takes to prepare a book for digital publishing.  Monetarily it is nothing compared to printing a book, especially one without a huge print run planned.

So, my questions to you are:  what do you see as a fair price for an e-book and should an e-book cost the same as the latest edition of the physical book?

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7 Comments

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7 responses to “Some thoughts on e-book pricing

  1. My gut reaction is that I’m unlikely to pay more than £5 for an ebook (about $7-8), but I’m very wary of anything priced below a couple of dollars unless I already know of the author.

    If an ebook is priced at the same level as a physical copy I feel cheated because I know the production costs are far lower: the publisher is taking more profit from the ebook to subsidise the physical copies. But then I think: is that such a bad thing? Anything that makes publishing viable without harming the readers or authors has to be good, doesn’t it?

    At infinity plus we set our default price to $2.99: it seems reasonable for the readers, but still gets a fair sum to our authors. I don’t know how things will be long-term, but that seems reasonable as things stand now.

    • Keith, I tend to think a lot like you, especially when it comes to the pricing of e-books by new or indie authors. Whether that will change remains to be seen.

      As for paying more for an e-book because it helps the industry, that’s a yes and no for me. Yes, because I do see the need to support traditional publishers — up to a point. And that point is when it comes to how the divvy up the royalties for ebooks. Authors aren’t getting more of the pie. Not really. So those higher prices aren’t helping them.

      I looked at an ebook contract the other day that offered no advance and 25% royalty on the first 9,999 ebooks sold. Only after that ten-thousandth ebook was sold would the royalty go up to 50%. How many of us believe the average author is going to sell that many ebooks?

      Price points have been a major consideration for us at NRP. That’s why we do our best to keep things between 99 cents and $4.99. It’s also why we don’t add DRM to our titles. We look at it as you are buying the book, not just licensing it.

  2. Taylor

    There was a discussion about this on Twitter recently and an excellent point was made. We (as a culture) will spend $2-3 on a cup of coffee, something that lasts maybe an hour at best. We should at least be willing to pay $5-6 for a book, a much more permanent purchase, in whatever form we buy it.

    • Taylor, I agree. The problem comes with the fact that the traditional publishers, those who have adopted the agency model, don’t think they are selling us the “book” when they sell an e-book. They look at it as selling us a license and that is what ticks off a lot of readers. Especially when they can’t read the e-book they’ve just spent ten bucks or more for on whatever device they want to.

    • Despite what I said above about my gut feeling on ebook pricing, I’ve always made the argument that we’re hypocritical, in that we’ll spend far more on a movie, or a cup of coffee, or whatever, than we will on a book, yet the book delivers far more. I guess we’re all inconsistent, including me!

  3. CKelsey

    I find the $2.99 to $3.99 price point for ebooks. It’s less than the dead tree version costs, but it’s more than 99 cents, which means you’re treating your book like an iPhone app that is going to be looked at once and than ignored. However, if it means more sales, then clearly 99 cents is better than nothing. Personally I think that if a comic book costs $2.99, then a full novel at that price is a heck of a deal for everyone involved.

    • Chris, you’ve made an excellent point. I like the 99 cent price point as an introductory offer, something to help drive sales. It is going to be interesting over the next few months/years to see where all this goes.

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