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What should the price of an ebook be?
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There is another issue you have to consider: an author getting his/her name out there. Frankly, people will fork out $9.99 for a known name over an unknown almost every time.
Mod
I agree, Alain, but for a known name $9.99 is already a bargain. This article looks at the pricing question from the trad publisher's viewpoint. $9.99 may be a killer price. It may kill the midlist yet again, or it may kill such competition as there is from indies. Either way, looking at it from a writer's perspective, Amazon will be to blame, not the publishers, not Apple who all along tried to protect the income of writers.
9.99 for an ebook is not a bargain, in my mind. It's average. It's the kind of price I would pay for the next book in a series I want to finish. And I am unusual, I think, in the attitude I generally take toward products. I am always willing to spend money on getting what I want the first time. Not everyone is like this. Therefore, there will always be a market for the full range of book prices.
I used to work for a company that sold to WalMart and through that experience, if you have the distribution channels (like Amazon, let's say), $0.99 always wins out. Its makes one start to sadly dwell on writers' works like commodities.I also once knew a bookbinder specializing in restoring original colonial American manuscripts and English libertine pamphlets. He always had a surprising mosaic of specimens on hand. I recall holding a letter from Napoleon to his son...a medieval Ethiopian Coptic Bible...This bookbinder obviously had a much different clientele willing to part with the extra price that their profound love of books demands.
Mod
What price should an ebook be? What price will it be?
St Augustine wrote a thick tome — he wrote only thick tomes — discoursing on the question “What is a just price before God?” At the end of all this thickness, he conclude that God knows. A whole lotta help that is!
Let’s see if we can bring a little economics and a lot of psychology to bear on the question of what price an ebook should be.
Of the selling price of a hardcover, very roughly 60% stuck in the distribution chain of wholesalers and booksellers and the cost of returns. That left 40% divided roughly equally between the writer, the publisher and the printer.
The physical setting/paper/printing cost of the book might have been 10% of the recommended retail price, or a quarter of what came to the writer/publisher/printer combine, but the total production cost of the book was higher if you add in editorial services, and bought-in services like cover illustration.
On paperbacks writers traditionally took a lower royalty, usually in the 5-7.5% bracket because paperbacks were supposed to spread the reading habit and the price kept low, a desirable end for which writers were required to take vows of poverty. In theory, a mass market paperback should sell for just under half of the hardcover price. But this is arrived at because the editorial costs were covered by the hardback production process.
So-called trade paperbacks (the bigger paperbacks, better produced, often with a fold on the cardboard cover) were substantially more expensive, but were often used to launch original books, not published in hardcover.
In ebooks, whether they are new or reissues, there are substantial new editorial costs. Let us, for the sake of simplicity, say these settle down after an initial upset and not too many expensive errors, at the same level as for printed books.
Essentially 30% of the hardback selling price remains as a standing cost for the ebook (instead of 40% for the hardback). If the publisher goes directly to ebooks, some of the overhead costs previously assumed by the physical distribution chain will have to be carried, particularly the very substantial part of the advertising budget paid by the bookstores (don’t forget to add in rent — that’s visibility i.e. advertising in desirable downtown locations). However, we don’t need to calculate an amount because this is taken care of out of the upscaling, the multiple to allow for overheads, return to capital and suchlike.
So, if the same upscaling of 2.5 (from 40 to 100) to allow for distribution costs is applied to 30%, the selling price of an ebook might reasonably be 75% (30×2.5) of the price of a hardback.
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So much for an objective analysis. St Augustine, eat your heart out. But is that what will happen, or was the old sourpuss right, only God knows?
My subjective feeling in the midst of a process clearly still some way from settling (mid-2011), is that the interference of Amazon, who haven’t the faintest idea or care for the traditions painfully established in books over centuries (cf Amazon’s arrogant unilateral reassignment of the traditional export markets, at some cost to their own shareholders), will result in an outcome perhaps 25% sub-optimal, that is, ebook prices not at around $12.99, which on this analysis will offer everyone a living, but at trade paperback level of say $9.99.
Since the big conglomerate publishers have already been on a cost cutting binge lasting two decades, it seems likely the only people left to squeeze will be the writers, very few of whom earn a living from their books.
It is ironic that Amazon, who greedily caused these damaging upheavals in order to corner a market in ebooks, is now said to be contemplating announcing defeat for its proprietary AZW/Kindle standard by starting to distribute the open-standard EPUB format ebooks already marketed by Apple, Sony, Barnes & Noble and everyone else.
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Andre Jute was trained as an economist and a psychologist at various universities of erstwhile sound reputation. He’s been in and out of publishing all his life as a writer, typographer, editor, publisher and management advisor.
Copyright © Andre Jute 2011