Price of Kindle books lopsided?

[Keith]

I remember when I first bought my kindle prices were the same or slightly lower than a paperback. Now in some cases the price is even higher than a hard back. A perfect example is Dance with Dragons. The Kindle version is $15, and the New Hard cover price is $13, while Game of Thrones is only $9 against it's $20 hardcover counterpart.

I'm finding more and more that I can order a few books and get free shipping to my house or spend the same amount and just have a digital copy. Are publishers gouging kindle prices or have they not realized that they can save money on paper and printing of they lower the digital copies a bit in price while still having strong sales?

I'd love to hear some opinions.

[aldenoneil]

In my case, I hate it, but I'll spend the extra money on a digital copy because I don't want paper books anymore. I'd do that with videogames, too, but the resale value there is higher. I've sold a book through Amazon before for such a cheap price that it ended up costing me.

What I end up doing if I don't need a book right away is putting it towards the end of my queue, in case the price drops. In other cases, I'll use an Audible credit to get the audiobook.

[Nick]

Some of the publishers are fighting Amazon's attempted stiff arm to keep prices for kindle books at 10$ or just above it. If you see books above 10$ its almost always specific publishers. MacMillian I believe is one that does this. This seems to be more about who has the power to set the prices than about the consumer. I feel as more publishers transition to eBooks and further away from the dead tree editions the prices will drop.

This also goes into a whole side topic of Amazon also acting as the publisher for eBooks for those authors who don't have the bigger companies behind them. Problem there is you don't have the advantage ( or disadvantage in some cases ) of having a editor help with the final edition which in the case of some authors is very much needed.

[Peter]

Amazon lets publishers set their own prices, where as Barnes and Nobles sets their own prices.

[Skip]

Pricing with ebooks is a work in progress. Part of it is that the relationship of Amazon as a book seller and Amazon as a ebook seller is fundamentally different. Amazon gets a much larger piece of the pie in physical sales, but they have to deal with shipping and inventory, and they discount all of the books from list.

Some of it is also related to the way that the author deals with the publisher were structured. Most publishers were late to the game in including electronic works in the deal, or they may have treated them in ways different than the paper versions. So it may not be in the publisher or author's best interest to have the ebook sell well.

That said, I am not surprised that popular authors and their publishers would want a premium on their books at issue. Paying $15 for an ebook that will go down to $10 in six months to a year is not much different than waiting for the paperback.

Ideally, once the publishers manager to get thier back catalog online (or the authors self issue the ebook versions of their work), we'll see a lot more variation in pricing. Like anything dealing with IP rights and pricing, time and the market will figure it out if left to their own devices. The pain is having to deal with the transition.

[Elie]

I believe I just read somewhere that Apple is going to be taken to court for price collusion with the book publishers to raise shook prices. As I recall, the books were all fine and dandy at $10 or less, then Steve Jobs hinted in an interview with the Wall St. Journal that publishers weren't happy with those prices. So iBooks came out with $12 and up prices and Amazon was being forced to follow.

I generally love Apple, but I really hate what they helped reign in with iBooks.

[Tamahome]

Hardcovers only cost $1.50 to print. If publishers charge $10 for an ebook, they will make less money than with a hardcover.

http://blog.nathanbransford.com/2011/...

[Skip]

Elie wrote: "I believe I just read somewhere that Apple is going to be taken to court for price collusion with the book publishers to raise shook prices. As I recall, the books were all fine and dandy at $10 o..."

Ars Technica has an article on it here.

A couple of things to note; Amazon is not bringing the suit, it is a class action suit alleging price fixing. Secondly, the publishers were not required to sell to Amazon at the price and under the terms they were demanding. Amazon's ability to force a price and terms on the publishers isn't helpful in this case, though not dispositive. Finally, Apple really can't set the price for anyone, they were willing to accept the publisher terms because they probably got the rights to sell the books by accepting them, and as they said, they weren't interested in selling books if Amazon could under-price them every time.

Just my two cents.

[Andy]

I really like the discussion that I have read so far. I agree with a lot of you, the publishers are really trying to preserve an older business model that will eventually go away. $9.99 for a book is expensive if the book is older. I thought about buying a book I read years ago on my kindle, but ended up deciding against it because the book was still $9.99 even 20 years after it was published. I can get that book for maybe $7 in a store or $2 second hand.

My question to everyone is this: What should the pricing model for e-books be? Popular books are more expensive? Lower prices as the book gets older or less popular? What would be a reasonable price for a non-best seller?

[Skip]

Personally I would be fine with $15 for a best seller new release, and $10 for a "new" book. I would like a step down around the time a book normally goes to paperback or trade to $7 or so, with a drop to $5 eventually.

I am a big fan of sales too though. I think Steam has proven that a massive after Christmas sale can result in a slew of transactions. Can you picture all the people getting Amazon, iTunes, or B&N gift cards spending, spending spending? I can. Maybe the publishers will to one day.

[Andrew]

Tamahome wrote: "Hardcovers only cost $1.50 to print. If publishers charge $10 for an ebook, they will make less money than with a hardcover.

http://blog.nathanbransford.com/2011/......"

Where is Nathan Bradford’s source? I don't doubt that this (physical production) isn't a large proportion of the final cost, but I hate posts that present facts with no clarity of source. Even HarperStudio which he links to with it's $2 verse his $1.50 cost has no source for their claim.


James wrote: "The explanation I hear often is that publishers are trying to protect sales of dead tree books by keeping Kindle prices higher than I'd expect. The publishers set the price for Kindle books while ..."

I hear this speculation a lot too, but really we don't know unless you happen to work in the publishing industry, and even then motives may be all over the map (we're talking about many people and businesses in various markets, not some coordinated entity). Selling a product for as much as the market will bear isn't always about the effects on your other product lines (protectionism of sorts) but just the simple fact that you feel that you will make the most profit selling a certain amount of said product at a certain price. Whilst a eBook and a Hardback are comparitable they arn't the same product and thus don't have the same markets (though you would expect a high degree of overlap). A smart publisher will be attempting to set all their prices as high as possible that will capture the most buyers for all varients of their product.


Elie wrote: "I generally love Apple, but I really hate what they helped reign in with iBooks. "

I find statements like this interesting in light of recent research findings. People do realise these are amoral corporations whose only mandate is profit and accountability to shareholders (though even that is tenuous with a company like Apple)


Anyway at the moment price isn't so much an issue for me personally as is just general availability due to regional publishing agreements which means that I can't even access the entire Kindle catalogue where I live, nor access stores like B&N as they only have agreements for the US market (& Canada?). Some books I just can't get via any means except via VPN's and other shenanigans. Add often higher prices which are doubly insulting when my country’s exchange rate is observed and you can see why all me friends and family aren’t sporting eReaders. It is starting to change though, and the lower costs of these eReaders (approaching $100) + more people having Smartphones and Tablets (iPad) is accelerating things.

[Andrew]

.. oh, and just to add, I found it interesting that this post was 'Kindle' prices, not 'eBook' prices. What a mindshare Amazon must have. Ok Andrew out :)

[Keith]

I only have experience with the Kindle, so I do not know what other ebook readers prices are like. I've only purchased from Amazon.

In reference to the hardcover returning more money than an ebook, that might be true for a 1:1 ratio but if you can lower teh price so you sell 3 ebooks for every hardback then that number quickly flops. its much easier to sell more at a lower price then a few at a high price.

I'd like to see sales numbers for a few books showing the number of ebooks sold vs hardcover for a particular title.

[Amy]

Can I ask where people are getting the $15 ADWD kindle price? I paid $9.99 for my Kindle preorder, and when I go to the page, it still says $9.99. It's just odd because I've seen the $15 price mentioned multiple times and I don't see that anywhere on Amazon.com. I wonder if Amazon has regional pricing based on IP, as I'm Canadian. I've found before that a book will not come up in the Amazon search as having a Kindle edition for me, but if I specifically find a link and go to it, I'll get the "Not Available" info.

As for the question in general, as an aspiring author, I'm torn on the whole issue. I absolutely do not agree with the fools who say that because there's no physical copy, digital editions (of any medium) should be free. The mode of delivery is only part of the work that goes into a work, and the authors, editors, etc still need to be paid. Not to mention any marketing budget.

That said, I refuse to pay more than $12 for an ebook, as trying to charge more than the paper edition of a book in order to not "devalue the hardcover" is just silly. I'm happy paying the equivalent of a paperback book (which in Canada tends to be about $12 for pocket paperback--except when we're at par with the American dollar and stores charge us the American price). I feel like Skip's idea is fine with me, in that bestsellers could be a little bit more for a short period of time.

The tactic I use right now is that if I really want to read something and it's more than $12 for the Kindle, I drop it into my watch list over at http://www.ereaderiq.com/ and they'll send me an e-mail whenever the price drops my specified amount (I also use the site to watch for books with no Kindle edition yet.) and then buy the book when it's come down a bit in price.

[Andrew]

@Keith: Most people seemd to have a Kindle (out of the eBook readers), so I'm not surprised. Just found it interesting as a lot of the posts talking about eReaders are titled 'Kindle' something revealing it's marketshare.

As to returning a profit, what I was saying in essence is that the notion that lower price = proportionally higher sales = more profit doesn't always hold true, and even if it does it may still not make you the most money over your whole market where you may be able to sell high at first, and then lower to capture more customers. Also you need to remember eBook and Hardback markets arn't the same. The former requires a eBook reader of some sort, which believe it or not, not everyone owns, or even prefers. Anyway what I'm ultimately saying is often these issues are more complex than the simple notions we like to present them as.


As to what I will pay for an eBook, well it really depends on how much I want to read said book and how easy I can get access to alternate versions (print/library etc).

@Amy: I get regional pricing. Some of those eBook Price search engines will show availability and pricing at certain stores (eg. Kindle), but when I visit it is either not available to me, or more oft listed at a higher price.

[[deleted user]]

I agree with Amy, why the hell should an author, having spent months if not years writing a book give the thing away? I spent a huge sum producing a trilogy sampler to attract publishers, then got into POD (print on demand) and taken on by a micro-publisher - promotion is the hardest part of writing! Nick has a point that Kindle, Smashwords et al provide an amazing platform for indie writers - you can continuously improve and update a book via feedback which is something you can't do in hard copies! Kindle also sets a top rate of 70% royalty but a buffer with a lower limit of $2.99 - anything below that they only award 35% royalty whereas Smashwords and others are a little more forgiving and more flexible!

The reality is that PODs (Print on Demands) like Lightning Source are good because you don't have stock to keep and they can print 1-1000 without a problem. The customer pays you - you pay them to print and post your tome. But, in practice, the profit on a $12.99 book, even through a POD, is less than 75% of a $2.99 e-book. There is no reason IMHO for an e-book to be at $10.99 or more unless it is specialised - it's just greed on the part of the publisher or the author.

There is a downside to e-pub. The amount of sheer unedited crap escaping the slush-piles and flooding the e-pub sphere is incredible. Smashwords hit TWO BILLION words in June and will hit THREE in september.

I publish thru Kindle AND Smashwords - the latter have deals with Sony, iPad and even Barnes and Noble and I've sold books thru these chains. I set the prices at $2.99 - what I would pay for an e-book and the lowest edge of the Kindle 70% royalty spectrum.

A final point for Keith et al - the 'sell more by selling cheaply' scenario may work as a promo if the author is well known for a short period but in the nether regions I inhabit of a book or two a day not so much. I tried promoting my series by offering the first book free for a month and got six takers on Smashwords because the slush-pile simply buries you alive. People have the gall to publish 680 words as a freaking book! This is a debate that is going to run and run I think!

Regards to all, Mitch

http://www.amazon.com/dp/B004QOAWOK
http://www.amazon.com/dp/B004R9Q67Q
http://www.amazon.com/dp/B004RR1MGS
http://www.amazon.com/dp/B004XDAFDM
http://www.amazon.com/dp/B0052DNHYQ
http://www.amazon.com/dp/B0058KS7H0
http://www.smashwords.com/books/view/...
http://www.smashwords.com/books/view/...
http://www.smashwords.com/books/view/...
http://www.smashwords.com/books/view/...
http://www.smashwords.com/books/view/...
http://www.smashwords.com/books/view/...

[Don]

I am a slow reader so I'm picky with purchases.
-If it's 300+ pages, I buy Kindle. It's great for reducing size.
-If a book is by an author I treasure, I buy the hardback. I want a well edited, beautiful book. I'm into formatting, covers, fonts, and paper choices.
-If it's a book I know I'll only read once, I buy the cheapest version. That used to be Kindle but no more. I prefer Kindle for reading this category, where most books fit.

[Andrew]

@Paul D. E. (aka Mitch): Thanks for the insight. It was interesting to hear your firsthand experience. Btw I know the idiom 'Don't judge a book by its cover", but it’s nice to see your books don't have covers that look like they were produced in MS Paint like some of the Indie/Lessor known author stuff out there. For better or worst it really is part of the marketing for your book.

As I said in my last post, this topic is more complex than the simplistic views people like to paint.

[Keith]

Paul D.E. wrote: "I agree with Amy, why the hell should an author, having spent months if not years writing a book give the thing away? I spent a huge sum producing a trilogy sampler to attract publishers, then got ..."

No one is talking about the author giving anything away. As the price to publish goes down so should the cost. If the cost stayed the same and it was a known fact that it meant the difference in publishing costs were being given to the author then I'm fine with that. I haven not seen anything that says that is the case.

[[deleted user]]

Andrew wrote: "@Paul D. E. (aka Mitch): Thanks for the insight. It was interesting to hear your firsthand experience. Btw I know the idiom 'Don't judge a book by its cover", but it’s nice to see your books don't ..."

Thanks Andrew - designing covers that look good in thumbnail is essential. Many co-authors produce some terrible covers that put potential customers off. But my covers WERE produced in MS Paint! Here's the tip: use the print screen key to paste into MS Paint NOT the cut and paste option that degrades the picture elements. The quality of the output improves emormously when you do that. Build the page up in Word - PrintScreen the largest version you can - Ctrl-V into Paint then tidy up the borders and save as a JPEG file - it could not be simpler! Cheers mitch

[Andrew]

Paul D.E. wrote: "Andrew wrote: "@Paul D. E. (aka Mitch): Thanks for the insight. It was interesting to hear your firsthand experience. Btw I know the idiom 'Don't judge a book by its cover", but it’s nice to see yo..."

Surely the original art/painting component wasn't produced in MS Paint though? Do you use creative commons art or source from an artist?

Since it sounds like your a Windows guy, you should give Paint.NET a go (http://www.paint.net/). Free image editor that is a nice step up from MS Paint. It comes from a MS sponsored Graduate project I believe and as I said is free to use.

[Kate]

I think publishers shot themselves in the foot here (though they couldn't have known it at the time). The cost of producing a run of hardbacks was only ever marginally higher than producing a run of paperbacks. The purpose of producing the hardback first was to extract the maximum price from those willing to pay (hardcore fans and price insensitive shoppers), then you release the paperback to make money off those who are only willing to pay $10 (or whatever a paperback goes for these days)

This is a fairly typical economic model, I forget the name for it, but basically, people are willing to pay different prices for things but there's no easy way to charge more to those willing to pay more without making them feel ripped off, so you offer them a range or 'add ons' that look like they drive up the price, but actually don't. So with hardbacks you get early access and a bigger, heavier book.

The Undercover Economist explains this really well with the example of coffee shops, the raw ingredients in a double-whip-mocha-frou-frou coffee are mere pennies more expensive than those in a black coffee, but the price to the customer is often over a $1 more. This allows the coffee shop to maximize profits from the people willing to shell out for fancy coffee while keeping the custom of those who are unwilling to pay stupid prices for coffee.

It suited publishers to have us believe that the hardback book cost more to produce and therefore justified the mark up but we were only ever paying a premium for early access, and that early access only came with a high mark up because we were customers willing to pay a premium. In other words there was a mark up because there were people willing to pay a mark up.

I can't see a capitalist market without this sort of variable pricing model. If they release $9 ebooks at the same time as $25 hardbacks some people who would have bought the hardback if it was the only option will instead by the ebook. It's not as simple as saying that a lower price ebook will attract more buyers because those price sensitive buyers would already have been scooped up later with the paperback release so they can't necessarily be considered an added market.

The other thing to consider it that ebook buyers are just the sort of people that the high priced hardbacks were targeted at. Generally to be able to afford an ereader they must have a high disposable income, and if they think it's worth buying they must buy a lot of books. So the publishers are seeing the key consumers of their premium product transitioning to buying what they, the book buyer, consider should be at the lowest end of the pricing scheme. That's an absolute nightmare for publishers.



What the publishers are trying to figure out now is how to provide a justification that consumers will swallow for why an ebook released concurrently with the hardback should cost more than the eventual paperback release. (I suspect this is why we're starting to hear about 'enhanced' editions loaded down with stuff most readers have no real interest in).

tl;dr: I am so glad that I decided not to go into publishing when I got out of college.
(Disclaimer: I'm not an economist, nor have I studied economics, this is just what I've gathered from reading pop-economics books, following the publishing industry, and quizzing a friend who just completed a masters in digital publishing.)

[Tamahome]

*Like*

[Andrew]

@Kate: Some loaded assumptions, and generalisations that might not be universal but it does show that you are thinking about it. For example I think it would be unfair to say those buying a Hardback were just paying a premium for early access as you are also receiving a different product that some people may have a preference for (aesthetics: looks good on shelf, status: what a hardback says about their love of the author - check out those Tolkien books on my shelf, and all the other elements it may embody.)

You are correct that a lower price ebook does not necessarily = proportionally more buyers. There are as you point out the price sensitivity of the consumers, the degree of substitution between the products (hardback/paperback/ebook etc..), the fact that you need an ereader to start with, and many other variables that you would need to consider.

Where I do differ with your general sentiment is that the publishers have shot themselves in the foot. I (personally) don't think so, but as businesses whose fiduciary responsibility to shareholders is profit maximisation I think they are still trying to address existing markets (with the infrastructure to support them) while still feeling out the evolving digital market (as you point out). What they need to be careful not to do is price their product too low, too early, or let markets such as Amazon dictate price or they will end up in a situation like with iTunes where songs are now not worth more than $1ea in the consumers mind - hence why they have wrestled back control from Amazon on pricing. Meanwhile they are juggling the issues of how easy it is to make a perfect copy of a digital product, and the fact that their relevance may evaporate somewhat in a world where self-publishing, or alternate models become real options.

Maybe ironically, I personally think publishing would be a great industry to enter atm. Industries in flux from change are always more interesting (to me anyway) than those that have ridged existing models. There is often an opportunity for those at the bottom to rise quickly in such environments, so I really do with your friend the best of luck.

[Tassie Dave, S&L Historian]

It depends where you live.
I find the price of Kindle books to be significantly cheaper than the print version.

I live in a remote mining town in Tasmania Australia.

Before I started buying Kindle books (on my iPad) I would have to buy books by mail or drive 3 hours to my nearest book store.

Plus Australians are charged more for books than the US or European markets.

So for me, books bought via the Kindle store are usually on average $10-$15 cheaper than buying the print version and I get them instantly.

A Dance with Dragons cost me $9.99 on Kindle (pre-ordered and received on day of release)
Currently on my preferred mail order book store it is "discounted" at $31.95

[Jeff]

Nick wrote: "Some of the publishers are fighting Amazon's attempted stiff arm to keep prices for kindle books at 10$ or just above it. If you see books above 10$ its almost always specific publishers. MacMill..."

Rubbish. The publishers were getting the same amount from Amazon whether the consumer was being charged $9.99 or $14.99. Amazon was actually cutting in to their profits to keep prices low in order to get adoption of e-books on the fast track. Amazon fought against the price increases forced on them my the publishers at the behest of... wait for it... Steve Jobs.

Why are e-book prices higher now that they used to be? Steve Jobs colluded with the publishers to force Amazon to accept a different model so Amazon would not have a huge advantage over Apple books.

[Kate]

Andrew wrote: "@Kate: Some loaded assumptions, and generalisations that might not be universal but it does show that you are thinking about it. For example I think it would be unfair to say those buying a Hardback were just paying a premium for early access as you are also receiving a different product that some people may have a preference for (aesthetics: looks good on shelf, status: what a hardback says about their love of the author - check out those Tolkien books on my shelf, and all the other elements it may embody.)"

You're right, there are more reasons than early access that motivate people to buy the hardback. I tend to overlook these things because I'm a 'throw it in my handbag' reader and I resent having to lug hardbacks around with me.

What I was trying to get at, and what I was unclear about was that those tangible things about the hardback (binding, glossy cover, etc) that make it valuable to some consumers (by increasing its durability, fanciness, etc) are not increasing the production cost in a significant way, but does provide a justificaton in the buyers mind for the higher price tag.

The advantage that ebooks share with hardbacks (as opposed to the paperback) early availability. I would hazzard that most hardback buyers buy them because they're out first, but even if I'm wrong that they are not the majority they are still a sizable part of the 'premium' market that publishers risk loosing to cheeper concurrent ebook releases.



One way to sell the ebook for a lower price *without* taking the revenue hit would be to save money by taking advantage of the one thing that digital distribution is really good at, taking out the middle man.

It baffels me that publishers are working with Amazon and B&N and Apple instead of focusing on building up their own brands and selling direct from their website.

There are areas of publishing that do thing, *shameful admission* I buy a ton of small press romance ebooks direct from publishers, the price is usually between $3 and $7. The ebooks are all drm free and I can usually choose my preferred format from a drop down menu. On the publishers end they get me onto their site, where they can advertise all their other books to me, they get all the money, and they get my brand loyalty directly, rather than intermediated between authors.

Of course there are be costs associated with selling ebooks direct, building their own online sites, managing payments, servers, etc. But the long term benefits would be amazing.

I would love for someone to explain to me why this would not work for mainstram publishers, if only so that I can stop scratching my head over why they're not doing this.

[Andrew]

@David: Nice to see another Aussie, though you need a better source for your physical books because that price for aDwD is silly $ (try http://booko.com.au/). Btw, I agree the instant gratification of book delivery is great for those who are fans of authors or even for a book club such that one doesn't have to either wait for delivery or search stores for a book.

@Jeff: Allegedly. We will have to wait for this to play out in court. I can understand why the publishers wouldn't want to lose control of pricing for ebooks (obviously doesn't serve me as a consumer, but then I'm more screwed by regional pricing anyway).

@Kate: With regards to your Hardback thoughts the cost of production for many products doesn't have a direct correlation with the sticker price. You don't think all those designer clothes cost exponentially more than the no name alternatives? :) So as you asked what becomes the new justification for a higher premium to replace the hardback -> paperback model. I can think of many options, from just plan higher pricing for early access, to options like the value add that you mentioned. Who knows what will pan out; guess we will have to wait and see.

Also with regards to publishers selling direct there are many reasons why they may choose not to. Selling your product in competition with your customer (which really isn't you and me, but the bookstores - both physical and virtual) isn't always the best move. Further I wouldn't be surprised if a majority of ebook readers purchase their ebooks from the market their eReader supports, so if you say wished to sell to Kindle owners that is Amazon.

[Nick]

Jeff wrote: "Rubbish. The publishers were getting the same amount from Amazon whether the consumer was being charged $9.99 or $14.99. Amazon was actually cutting in to their profits to keep prices low in order to get adoption of e-books on the fast track. Amazon fought against the price increases forced on them my the publishers at the behest of... wait for it... Steve Jobs."

Not rubbish. I didn't say they were taking more or less because of the price I was just saying that I know because of relatives in the business that Amazon and the publishers have been fighting for a very long time about the 10$ price point. I did make a statement that was a guess but I believed I phrased it as such that the publishers that were giving Amazon the most problems probably had the higher prices for their kindle books. I don't see where what you've said contradicts that or proves anything I've said incorrect.

[AndrewP]

Just my 2 cents on the Publishers pricing model. The publishers may set the price for a hardback at $29.95 or more, but since when did anyone pay that actual cover price? Take A Dance with Dragons for example, it's discounted in all the big online stores and its in the 'new releases' discount section in the brick and mortar stores.

[terpkristin]

Reported spam, in case anybody sees the post in question.

[Micah]

terpkristin wrote: "Reported spam, in case anybody sees the post in question."

you know this seems to be happening more now that S&L is getting more exposure with the youtube show. We must stay vigilant!

[Napoez3]

(Aren't Amazon, Apple and 3 more companies having legal problems with the eBooks precises?)

In an interview in a videogame podcast, a game dev said that publishers haven't cut the price in the digital games in the Vita, because game stores couldn't compete with thous prices and they might stop selling normal games, and for now "normal" sales move more money than digital. I think that it might be the same situation with books. If you sale your eBook cheaper than the book in the store, stores won't have your book on shelf.


Kate asked what we think it's a good price for ebooks... I would pay a bit less than a paperback (+/-10$) edition for best sellers, and with other non indie books a 25-30% less.

I HATE STEAM SALES!!! How much money I spend in videogames this holidays, I don't know, and I don't want to know. ;)