Keep E-book Prices Affordable

[rowenacherry]

Given what I understand to be true however, to pay hundreds of dollars for a reader, and then buy ebooks at almost the same price as print on top of that, but with far more risk of losing them all, and limited ability to share with my sisters is... not appealing as a value.

There seems to be a widespread belief that if someone purchases an e-reader, they should be entitled to cheaper e-books.
Why is that?

Seriously. If you purchase an electric car, you are not entitled to a cheaper domestic electric rate from the utility company. If you buy a Juicing Machine, you are not entitled to cheaper fresh fruit from your greengrocer. If you buy a SmartCar, you don't pay less at the pump per gallon for petroleum.

Amazon does not pay authors a commission every time it sells a Kindle (machine). However, there is an expectation that authors will provide a discount (not to mention a "buy-one-get-up-to-six-free" promotion) to reward folks who purchase Kindle machines.

You should buy an e-reader for the convenience and myriad advantages of owning an e-reader.

The cost of the books to read on the device should not be part of the expectation. If e-books are cheaper, that should be the authors' own, freely made business decision. It might well be a very wise business decision (to sell e-books more cheaply than printed books). However, that decision should be made by the content owners, not by the people selling a product that would have no value at all if the content were not available.

Take the juice/fruit analogy further (although it is not perfect!). Juicedfruit = e-books. Fruit = print. Amazon makes juiceboxes.

I'm the farmer. I produce fruit. I charge $6.99 per fruit, and that earns enough income within a reasonable period of time to pay for all my production costs and give me a fair (but not excessive) profit.

It doesn't take less fruit to make juicedfruit... so what happens to my business model if the juicebox maker demands that I sell juicedfruit at the equivalent of $2.99 per fruit, moreover, I am to sell the juicedfruit equivalent ($2.99) at the same time that I sell my $6.99 fruit?

Now, the customer not only expects cheaper fruit if it comes in the form of juicedfruit. They want to drink the juicedfruit and pay me --after they've consumed it-- according to how much they enjoyed it. You cannot unread a book, once you've read it, any more than you can return juice for a refund once you have swallowed it.

[aburt]

There seems to be a widespread belief that if someone purchases an e-reader, they should be entitled to cheaper e-books.
Why is that?

Because with ebooks the publisher doesn't have many of the costs they do with physical objects: No printing cost, no shipping cost, no copies stripped or returned (more shipping cost, plus yet a third shipping cost to send that copy to another bookstore), no inventory/warehouse cost, etc. Also, because of the "Thor Power Tool" tax law decision that makes it unattractive to keep books in warehouse inventory, there's now a need to recover costs from books quickly (i.e. not keep them on hand; and doing more print runs are expensive): So ebooks have the potential to allow cost recovery over a longer time period (they never need go out of print and cost virtually nothing to warehouse), meaning the profit per book can be lower.

Of course there are fixed costs: Cover art, copyediting, marketing, etc. But nobody is saying the price should go to zero, just that it should be less for ebooks since the costs are less.

Also, a major issue I've heard raised is that since you're only licensing a copy, you can't sell it, and probably can't even transfer it from one reader device to another. (If I switched from a Kindle to a Nook, I couldn't necessarily move my library over.) So what you're "buying" in an ebook is less than what you're buying in a physical book. That makes them worth less, meaning people aren't willing to pay as much, so supply and demand should cause them to cost less.

So, I'm a big fan of ebooks, but yes, they should cost less than paper.

[aburt]

I should add that, all logic aside, what really matters is what consumers are willing to pay for ebooks, and what the elasticity of demand is (which determines your maximum profit and thus optimal price point). I've got a couple surveys going on these questions - http://critique.org/surv and http://critique.org/edsurv - which are suggesting that ebook prices around $9.99 for book-length works is not unreasonable, and around $2.99-3.99 for shorter works might be the sweet spot.

[crit24486]

I should add that, all logic aside, what really matters is what consumers are willing to pay for ebooks, and what the elasticity of demand is (which determines your maximum profit and thus optimal price point).

This is the unfortunate truth.

I'd add that 'what customers are willing to pay' is partly a function of 'what everyone else is charging'. And I'd imagine that ebook self-publishing attracts a lot of people who are just happy to get their work out there, and therefore likely to charge less than they could.

On the other hand, self-publishing isn't like running a bookshop, in that my book isn't the same as your book. If bookshop A charges $50 for Harry Potter and bookshop B charges $40, there's little or no reason to go to bookshop A. However your book might be $50 and mine might be $40, but that's not relevant for someone who wants your book but not mine.

[aburt]

Another followup thought @rowenacherry - I initially misread your "if/then", and I think what you're asking for -- author/publisher control of pricing, not Amazon-control -- is now generally the case. Amazon and the publishers duked it out last year, and the publishers won the right to set ebook prices on Amazon. Amazon used to set prices like a bookstore: Buy the item at wholesale price, sell it at any retail price the retailer (Amazon) desired. But Amazon was selling ebooks at a loss (i.e. paying the publishers the full wholesale price but selling to the public below that). Publishers weren't happy, so forced Amazon to let the publishers set the prices.

I know that with my own ebooks up on Amazon, I set the price. Amazon doesn't discount them. (I think they still have the other option, but I confess I didn't pay much attention to it, since the money into my pocket was far under the so-called "Agency" pricing model.)

So there's no direct link between buying a Kindle and what price the ebooks are.

[crit29590]

On the price of ebooks. They should be priced on word count, same as print publishers, but with the option for reduced price when the books have been around a while. Short stories and as a single buy item, maybe 1.99 or .99 for shorter ficiton,say Novellas at 3.99, but let me ask a question. What would you have paid for the latest in the Game of Thrones saga? I bought Dance of Dragons as hardcover because I didn't want to wait for the ebook. You pay or rather charge, what the market will bear. Bestsellling authors have the advantage if they take it, and NY print publishers always direct NYT best selling authors to reap the rewards, with the initial reward going to the print pub. Of course, I keep in mind the print pub takes a risk on every author, not just the newbies.

[crit30681]

I got here following a link about an experiment on pay-after-reading pricing. Last post here was 3 years ago. Are there results on the experiment?

A note in the experiment page said that "if this fails, the publishers are right" in charging high prices. I disagree. There are many possible pitfalls, and the biggest one I foresee is getting the reader to come back and complete the purchase after reading. If I were modern wired it would be easier, but I still use an original edition Nook. For me to pay for a book, I'd have to go back to my computer, and that's something I can do tomorrow--which inevitably is the Cheshire Cat's tomorrow, the one that never comes. But I am nonetheless intrigued.

The Museum of Natural History (NYC) has for years used a "pay what you wish, but you must pay something." The "suggested payment" is now quite high, like $24/person. But it must work, because they've been doing it over 40 years. I went once in college and paid a nickle. I went this April and paid the suggested price. Adopting such a thing for ebooks has a challenge, because many readers are first-time readers and won't really know what it's worth, but I'd pay good money for certain authors. Ironically, I'd pay more for a Tee Morris/Pip Ballantine book than I would for a best-selling author. After all, a $12 sale is going to matter to M&B more than a $100 sale will matter to J. K. Rowling. IMHO.
$12 x 5,000 sales = $60,000
$3 x 500,000 sales = $1.5 million.

--Brian W. (Eugene F.)

[crit32719]

I love the ebook idea , but yes I have seen some that are way too high , like the newest Harry Potter book, its on high demand @ the library and on amazon it's a lot for an ebaook $14.99...so I am going to wait until I can read it from library am in that Que of like 500 folks or if the price should drop on amazon. I use the kindle for reading now a days & don't want my books on all kinds of different platforms lol.

So yes ebooks should be lower than printed books ! I do tend to look for the cheaper ones like deals, cause I can't just spend a lot on a book.

those are my thoughts on it !