Ebook pricing
Feb. 21st, 2010 11:43 pm![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png){kind=small}
ecreeganI've been following the Amazon vs. Macmillan dispute and contemplating the question "So, how much should ebooks cost?"
Well ... there area several different "shoulds" -- reader, publisher, author, distributor, moral, and practical.
How much should ebooks cost from a reader's perspective? That one's easy -- as little as possible without causing future books I want to read to not exist. The question of how little would cause future books not to exist is complicated, but -- usually more than zero.
How much should ebooks cost from the distributor and publisher's perspective is whatever maximizes profit -- they can take lower profits on each sale if it results in in making more sales. Publishers want to maximize sales through the publisher (i.e. you might do a bulk sale of several books from the same publisher but you wouldn't bundle with another publisher), distributors want to maximize profits through the distributor (i.e. you can't bundle some Amazon sales together with a Webscription or Fictionwise sale.)
Authors have the same logic, plus in some cases a desire to have their work read.
From a moral perspective? Well ... people have different senses of morality, and my moral instinct about ebooks more pertains to DRM than to costs. I do have a moral/aesthetic objection to ebooks which cost as much or more than as the cheapest available new printed copy, e.g. charging $9.99 for the ebook when the paperback is $7.99 (discounted on amazon.) (Oh, come on, you're trying to make me pay more for a product that costs you less to produce. I don't think so.)
From a practical perspective? Variable pricing has to be the way to go. Not that I trust Macmillan to do it right, but -- $9.99 the day the hardback comes out has to be leaving some money on the ground. Charging close to cover price for even a week after the book's released will still get you some sales, and as long as the price does come down, relatively promptly, you probably don't lose significant total sales. Or, do it the way Baen does and charge people a premium in order to obtain an electronic copy before the book's released.
Profit-wise, I think that around $5 is the sweet spot for ebooks. (More when they've just come out, less when they're part of a bundle, of course.) Enough cheaper than a new paperback to feel like you're saving money, but probably nets more profit per copy. Note that used paperback cost less than this, so you are losing sales to people who have a computer but don't have much of an entertainment budget to spend on reading material. But well -- you're competing with a vast sea of free classics for those customers. (Interestingly, the analysis from the distributor at smashwords suggested that both $5 and $9 were sweet spots. I'm curious if they were the same sorts of books, or if the $9 books were longer/more nonfiction/more recent/something.)
My perceptions may be shaped by the fact that I love Baen's model and they charge around $6 each, or $15 for a monthly bundle of 4 new books and ~3 reissues. Note that smashwords is automated, whereas Baen has quality control, so the two aren't comparable; the sweet spot(s) for Baen may well be higher. Baen also has a free library with the first book or two in a longer series, and creates CDs with dozens of books in them, distributes them in the hardcovers, and permits third parties to copy and redistribute the CDs as long as it isn't for pay. The former is an obvious thing to try and something I see on amazon's Kindle library; the latter is an interesting approach and it probably does hook people on some serieses which have grown so long that people wouldn't try them otherwise, but would surprise me if it made money.
Personal preference? Well, I'm a reader, but I want the ebooks written, selected, edited, copy-edited, put into appropriate e-formats, formats checked, and distributed. Electronic books are vastly cheaper copy-by-copy than paper books, but there are significant up-front costs ... and much of those savings comes to the distributor, not the publisher; none of it comes to the author. So, I'm cool with profit maximization so long as the price point is sane, and $5 to $6 dollars strikes me as perfectly sane. The $14.99 that Macmillan was talking -- well, I'll pay that for a book I'm eagerly waiting for (I keep checking Webscriptions hoping that an early copy of Mouse and Dragon has come out and I can pay $15 for an unproofread version that I can start now.) I won't pay it for anything else -- I have a large library of free and already-paid ebooks just waiting to be read.
Well ... there area several different "shoulds" -- reader, publisher, author, distributor, moral, and practical.
How much should ebooks cost from a reader's perspective? That one's easy -- as little as possible without causing future books I want to read to not exist. The question of how little would cause future books not to exist is complicated, but -- usually more than zero.
How much should ebooks cost from the distributor and publisher's perspective is whatever maximizes profit -- they can take lower profits on each sale if it results in in making more sales. Publishers want to maximize sales through the publisher (i.e. you might do a bulk sale of several books from the same publisher but you wouldn't bundle with another publisher), distributors want to maximize profits through the distributor (i.e. you can't bundle some Amazon sales together with a Webscription or Fictionwise sale.)
Authors have the same logic, plus in some cases a desire to have their work read.
From a moral perspective? Well ... people have different senses of morality, and my moral instinct about ebooks more pertains to DRM than to costs. I do have a moral/aesthetic objection to ebooks which cost as much or more than as the cheapest available new printed copy, e.g. charging $9.99 for the ebook when the paperback is $7.99 (discounted on amazon.) (Oh, come on, you're trying to make me pay more for a product that costs you less to produce. I don't think so.)
From a practical perspective? Variable pricing has to be the way to go. Not that I trust Macmillan to do it right, but -- $9.99 the day the hardback comes out has to be leaving some money on the ground. Charging close to cover price for even a week after the book's released will still get you some sales, and as long as the price does come down, relatively promptly, you probably don't lose significant total sales. Or, do it the way Baen does and charge people a premium in order to obtain an electronic copy before the book's released.
Profit-wise, I think that around $5 is the sweet spot for ebooks. (More when they've just come out, less when they're part of a bundle, of course.) Enough cheaper than a new paperback to feel like you're saving money, but probably nets more profit per copy. Note that used paperback cost less than this, so you are losing sales to people who have a computer but don't have much of an entertainment budget to spend on reading material. But well -- you're competing with a vast sea of free classics for those customers. (Interestingly, the analysis from the distributor at smashwords suggested that both $5 and $9 were sweet spots. I'm curious if they were the same sorts of books, or if the $9 books were longer/more nonfiction/more recent/something.)
My perceptions may be shaped by the fact that I love Baen's model and they charge around $6 each, or $15 for a monthly bundle of 4 new books and ~3 reissues. Note that smashwords is automated, whereas Baen has quality control, so the two aren't comparable; the sweet spot(s) for Baen may well be higher. Baen also has a free library with the first book or two in a longer series, and creates CDs with dozens of books in them, distributes them in the hardcovers, and permits third parties to copy and redistribute the CDs as long as it isn't for pay. The former is an obvious thing to try and something I see on amazon's Kindle library; the latter is an interesting approach and it probably does hook people on some serieses which have grown so long that people wouldn't try them otherwise, but would surprise me if it made money.
Personal preference? Well, I'm a reader, but I want the ebooks written, selected, edited, copy-edited, put into appropriate e-formats, formats checked, and distributed. Electronic books are vastly cheaper copy-by-copy than paper books, but there are significant up-front costs ... and much of those savings comes to the distributor, not the publisher; none of it comes to the author. So, I'm cool with profit maximization so long as the price point is sane, and $5 to $6 dollars strikes me as perfectly sane. The $14.99 that Macmillan was talking -- well, I'll pay that for a book I'm eagerly waiting for (I keep checking Webscriptions hoping that an early copy of Mouse and Dragon has come out and I can pay $15 for an unproofread version that I can start now.) I won't pay it for anything else -- I have a large library of free and already-paid ebooks just waiting to be read.
