The Grand Illusion
A reader recently complained about the $10.99 price on the electronic version of The One-Eyed Man being too high, but the retail hardcover price is $25.99, and the discounted on-line hardcover price is $16.85 [as I write this]. So why do some readers consider a price of $10.99 so expensive for a just-released book? Buying a currently published book should be about the story, not about the format. Rare books are another question, I fully grant. But, in fact, the amount that a reader pays for the story put forth in electronic format is about the same as what another reader pays for that story in a hardcover. The price differential is the difference in cost of how it’s presented. Those people who insist that ebooks should be hugely cheaper because the electronic costs of production are so much cheaper are confusing the cost of physical production with the costs of creating the story itself, including… ahem… paying the author, and getting that story to the point of physical production.
I’ve read enough self-published “stuff,” as well as enough manuscripts from writers and would-be writers, to say that all the work that’s done by publishers between the writer’s turning in what he or she thinks is a finished novel and when a final product is delivered does greatly improve the work, and at times turns something nearly unreadable into a gem. Even those writers who could handle all those details benefit, because they take time, and they also take contacts and skill. I’ll grant that there are some writers who can produce finished work and who also have the technical skills, or can muster others with those skills, to self-publish a credible product. But such authors are very, very far and few between, and many of them have learned to do so through their experience with the publishing industry… and the time spent doing such tasks is time not spent creating the next book, and that’s another cost that’s often overlooked.
The demands for lower ebook prices don’t consider another valuable service provided by publishers. They greatly reduce the time and energy required to find a readable book. Now… I’ve heard some writers and readers claim that there are sites on the internet that will or could do that as well. So far, I haven’t seen a single one that does. I’ve seen many sites that comment on what the publishers do, but second-guessing what someone else has done is easy. Plowing through thousands of self-published books and analyzing and reporting on them is anything but… and I suspect the economics of doing that will limit those who can do that, especially those who could do it well. As for reader reviews… forget it. Most reader reviews are either by fans or by those who hate a book, and few of either are that valuable to a reader unfamiliar with an author… and how can a reader unfamiliar with a self-published author tell which is which?
There’s another side to ebooks as well. They save on storage space for apartment dwellers or others with space issues for storing hardback or paperback books. For some people, this is a great advantage. So why do readers who seek the latest IPhone ap complain about a format that provides advantages and is actually cheaper than the hardback format that doesn’t? And a novel in e-format is cheaper than the latest movie, or close to it, and offers the advantage of being able to read it again… and again. And costs the same, or less, than the paperback format once the paperback is released?
Just a few thoughts…
I have no issue whatsoever with publishers pricing ebooks the same as physical copies. The thing that irks me most is when publishers keep the ebook price higher than the paperback. I have no problem waiting for the paperback edition to be released. I don’t particularly care for hardback books at all. I don’t even like reading them when the local bookstore prices them below the paperback version. However, in some cases, the publishers keep the price of the ebook at, say, $14.99 when the paperback version is in stores for $9.99 or possibly less. They do eventually reduce the ebooks prices, most of the time, but the greater delay is annoying. I think that the ebook prices should match the retail prices of the least expensive physical copy available. If that’s a trade paperback, or a mass market paperback, that’s what I think the ebook should cost.
I agree with you in general although, since the DOJ court case against the publishers, the publisher can only set the list price, and the sale price is set by the retailer. So far, Tor has generally followed the pattern you suggest, at least with my books, with the exception that they won’t lower an ebook price to “remainder sales” levels for hardcovers.
Having traveled, worked in remote locations and lived out of what I could carry on my back for many years I’ve always loved eBooks. I don’t think anyone who is capable of a bit of critical thinking would argue that an eBook should be sold for less than the cost.
There was an interesting post discussing this on Techdirt a little over a year ago.
http://www.techdirt.com/articles/20120503/14160618768/nobody-cares-about-fixed-costs-your-book-movie-whatever.shtml
I’d be interested in hearing your thoughts on that post
There’s a flaw in the article based on a failure to recognize the difference in cost structure. In classical economic theory, the optimum pricing level is that at which marginal cost equals marginal revenue, but in the classical case, there is a worker and production component for each additional unit, that is, each additional car or toaster or whatever requires additional assembly-line and labor time. In publishing, you can’t assign costs that way. In fact, the only variable component that directly changes by numbers of copies sold is the author’s royalty pay in excess of the advance [if there is any excess]. You have to acquire the book, i.e., pay the author, the cover artists, and agree to print a fixed number of books before you ever know [although you may estimate, sometimes accurately] exactly how many copies you’ll sell, and that means that your fixed costs are a far higher percentage of total costs than in traditional manufacturing. What that means is that the publisher makes a far larger profit on a runaway best-seller, and loses money on a far greater range of products [i.e., books] than would be acceptable in almost any other field, because readers, if you followed the classical model, wouldn’t pay $30 for a hardcover by an unknown author when they’d gotten used to paying only $25 for a hardcover by a bestselling author… although that is exactly the result you’d get if you followed the classical theory. In addition, the article writers seem to think that the only “marginal” cost, even in their system, is that of producing an ebook, and that cost doesn’t include any author royalty or retailer mark-up/profit.
I am in the camp with those who believe E-books should be cheaper. I would submit the following caveat: The price difference should be mirrored to the current format. I.e. a new hardback at $30 should be found in E-book format for ~$25. When it drops down to paperback, or mass market, the cost of the E-book should follow suit.
No matter how you slice it, no one can deny that certain costs should not be considered a part of the purchase of an E-book. There is no material distribution, no shipping and handling, no paper to purchase or ink which was used. I understand that such considerations are described as a minimal part of the cost of a book. But they are a cost.
There are, at present, a number of organizations which I can send a document to which will then provide a bound format. The price varies, naturally, but many of the same companies are a part of the self-publishing groups. They provide clear cost estimates. Page count, shipping and handling play heavily into those costs. Of course a large publishing group, such as Tor, will have a much better and efficient network for doing these things. I am still left feeling that as much as publishers and authors downplay the cost of paper, ink and distribution, that E-book prices should be at least a few dollars cheaper then the hardcover release. Too often I see E-books at the same price as the brand new hardback release.
Barnes and Noble, for instance, sells their Nook E-books for new releases ~$5 cheaper. But that number varies. All the way up to being just a few cents cheaper than the hard copy. It depends on the book and author involved.
I won’t get into why I don’t buy ebooks (basically, it’s just not the same), but I will offer an example of ebooks done right.
You know that crazy publisher with many terrible covers – Baen? Well, they’ve been the best at ebooks for years, before the Kindle was even a twinkle in Amazon’s eye. Great pricing, a Free Library with a wide range of choice, no content protection and so forth. Everything that publishers like Tor are doing now (DRM-free ebooks), Baen did first, and by a number of years, too.
Their pricing – before the Amazon deal, at least – was excellent. It still is, actually. Some books have, upto about six months before release, an eARC (uncorrected) at about $15. If a book comes out in hardcover it’s ~$10, trade ~$9. Mass market paperbacks are now ~$7. I believe before the Amazon deal, the mass-market ones were anywhere between $4 and $6, and that still goes for some books if my memory is correct. That means, roughly, the ebooks are 20-25% cheaper than the list price of the paperbacks, in some cases quite a lot cheaper (especially with hardbacks).
I think this is an excellent system. The ebooks are cheaper than the paper copies, but not considerably so. They also don’t devalue them by putting them on (frequent) sale, as Amazon do with their numerous $1-3 sales, and since the Amazon deal Baen have increased author royalties from ebooks by 25%.
Just an interesting note.
The price of an ebook should be less because the value of an ebook is less. I can’t legally resell it, trade it in, or even lend it to my brother. I honestly love reading on my Kindle, mostly because of how accessible and immediate the built-in dictionary is. However, for books I know I’m going to love, and likely share with my brother, I buy physical copies.
The only time I feel the Consumer should be treated differently with ebooks is in pre-orders. Price reduction on pre-ordered Hardcovers makes since because it helps the publisher know how many to run and cuts down on costs. The publisher has to produce enough books so all retailers are on equal grounds for the release date and this helps with that as well. Ebooks costs are less so influenced. Sure for some it may prove fixed cost of making it into ebook format is worth it but generally the publisher already knows that or pre-orders are practically nonexistent for the book. Once a format is ready though their is virtually no reason for the consumer to wait so the consumer should get the ebook as soon as it is ready. But once it is ready the rest of those that sign up should just have to wait for the release date especially for popular series(not Authors but series in my opinion).
So this doesn’t really touch on the general discussion. Well my thoughts on price is simple. Ebooks are all extreme!!!! Mass-Market. That alone means the price needs to be low enough to encourage sales more so then make profit off of individual book sales them self. Their just aren’t going to be as many authors who can squeak by with small sales numbers for years until they hit a large enough of a hit to cause their old books to start to sale well. It’s going to take early large sales numbers so they can then raise their prices enough and still see significant numbers. Other then that I say what ever makes the most money is fine with me. Of course i won’t be buying many ebooks over $11 dollars but if an author makes more at a high price then good for them. If I like an Author his job is to make money so he can keep writing the series I like. Oh and eat and live a happy life blah blah blah etc…… Last time I checked libraries still existed.
I still wonder if a model is possible that makes publishing a service rather than putting it in charge. Of course, that would preclude advances, and would indeed move the fixed costs to the author unless they could use something like kickstart to get help with them. And for paper, it would require not quite printing on-demand, but agile switching between small runs, with less inventory.
On the plus side, kickstart-like financing would tie support to reputation; most people could do something very small with friends and family’s support, but to expand past that would require something more than vanity works.
Brian raises a valid point. When I die, my paper books become the property of my estate. What of eBooks? I would not be surprised to find there is some small print somewhere which implies that the agreement is limited and between the provider and the stated purchaser, and is essentially non-transferrable. So if one of my children pick up my iPad or Kindle and start using it, I am unclear whether they will be legally allowed to do so. Any enlightenment would be welcome.
I agree with Brian. eBooks should be cheaper for the reasons he stated – ie the loss of the ability to share.
Of all the eBooks I have, only Baen (@Kathryn) seem to offer the facility to stream the book multiple times to any device. In fact I have done this to two devices with separate technologies without any hassle.
On one final point, I have found that people who are active on Twitter prefer paper-based books. People like myself who dislike Twitter, Facebook – and especially LinkedIn – tend to prefer eBooks. I suppose they need a rest from being glued to a mobile device 🙂
@Tim I have been able to stream the same eBooks from my Nook account to my phone, my laptop, my desktop, and my iPad without any difficulty. And you can lend most Nook books.
My take is a little different: I primarily use eBooks for research purposes–I buy a lot of nonfiction. In that sense the eBooks are more valuable than the paper books to me because of the utilities that allow me to make notes and do highlights in the book as I read it, and to have those notes easily displayed and searchable. It also gives me the portability I need when I’m going to a library or document collection, because I can easily carry in books I need to cross-reference, which I usually can’t do with hard copies due to weight or library rules.
I don’t consider myself as purchasing books but rather the right to enjoy the inspriation of an author who came up with a vision that I want to share. The format of delivery is irrelevant on the scale that we’re discussing ($5.00 – $40.00). Either end of that scale is perfectly reasonable for a pastime that will entertain me for 8 or more hourse with the option to enjoy that entertainment again as often as I’d like at no additional charge.
Much as I prefer to keep my pennies (pundits keep telling me I live below the poverty line, but I disagree) I’d have to say that $40.00 for a story barely approaches value for services received in comparison to other activities (Movie @ $13.00 for 3, Amusement park @ $65.00 for < 8 hours, Symphony or Live Theatre @ $50.00 for 2 -3 hours).
So if we enjoy an author so much, why aren't we willing to support them on the same level that we support our other entertainers?
I think part of it is watching prices go up (and up). For example, I just went back through my order receipts for e-books I bought a couple of years ago. The price for a mass-market-equivalent title has gone from $6 and change to $8.99 on average, at least with Kobo. Thing is, one of the reasons I bought the e-reader was that at the time, they were marketing it as e-books are cheaper than physical books. But, I’ve seen the prices make the climb over the last couple of years to the point where it’s almost cheaper to simply wait for paperback and then buy the physical book than it is to buy the e-book right away.
I am curious to hear thoughts about the new (ish) publishing service that is going to run like Netflix: pay a flat fee per month and read what you want (as long as it is in the library): Scribd, Oyster, et al.
Personally, I’d rather own the paperbook/e-pub/nookbook/etc. and have it all for my own.
Personally, I just wish that I could buy bundled ebooks with physical books (with a slight uptick in cost), so I can read the ebook while travelling and the physical when at home. Similar to how the movie industry is doing this now: although I’d prefer DRM-free ebooks, rather than the Ultraviolet format that, say, movies are finding popular.
I frequently buy multiple copies of books for those authors I collect (limited edition, first edition HC, etc), and have no objection to doing so, as long as I’m buying something different enough to me to make it worthwhile.
I tend to object to paying for ebooks separately in most cases, as I’m not getting anything new or different with the ebook. The pure electronic format isn’t enough bang for my buck to rebuy in most cases. If I need a pure reading copy, I tend to go with a mass market PB first.
New art, additional short stories, true first; these are some of the reasons I would pick up an ebook separately.
Largely, though, I prefer physical. I can’t get an author to inscribe or draw in an ebook (yes, I know about Autography, but it’s not the same….)
I think e-books should more or less mirror the price of a regular book.
Most of the cost of production is in editing, proofing, cover design, etc.
I dont know how much TOR spends on printing costs, but I cant imagine it is much more than $1 per paperback.
I like Arin’s idea: paperbooks WITH an e-book. Like buying the Blue-Ray and getting the DVD with it.
Though, now that my storage space is getting more and more limited, the space that an e-book takes up has a real benefit all on its own!
The pricing in the OP seems fair for a new release, so long as it comes down within a few months. Yes, ebooks are convenient, but unlike physical artifacts which can be collected, lent, and resold, ebooks have no value beyond personal access to the text.
Pricing aside, artists and publishers should keep in mind the role that an audience’s goodwill plays in their livelihood. As some commenters have illustrated, a fan well disposed toward an author might buy the same work three or four times, whereas those who feel they’re being treated as an adversary or mark but still enjoy the work are more likely to seek less savory outlets to obtain it.