Reading and Writing Miscellany

Pricing: eBooks vs Paperbacks

Most of the time when I finish a book, I'm ready to buy the next one on my wish list right away. Since I own a Kindle, my preferred reading format is digital. The problem of late is that too many of the eBooks on my list are, in my opinion, over-priced.

Amazon ignited widespread interest in eBooks with the introduction of their first Kindle eReader. As prices for the device came down, and the device itself got better (smaller, faster, crisper display, smaller form factor, etc.) , more and more people joined the eBook revolution. Unfortunately, with the success of the Kindle came increased scrutiny from the Big 6. In particular, publishers were not pleased with Amazon's practice of slashing eBook prices to the point where the price of the eBook was actually lower than the wholesale price Amazon paid for the book in the first place. It made sense from Amazon's perspective: they wanted to sell Kindles. In order for people to buy into a hardware purchase amounting to several hundred dollars (at that time), there had to be some perceived value. That perceived value was being able to purchase an eBook version of a bestseller or other book for $10-15 less than the print edition price. From the publisher's perspective, this was not good. Amazon was lowering the price threshold to the point where they were creating a "new normal", and undermining a pricing infrastructure the Big 6 had gotten quite comfortable with. The end result of their confrontation was Amazon's capitulation.

This has left us with the pricing structure we have today, with many eBooks costing the same (or more, in some cases) as their print equivalent. Regardless of the costs involved in producing a book (and irrespective of its final format), the perception is that an eBook should cost less.

I subscribe to this perception, and so I expect that when I find a print book that the eBook version should cost me less money. If only this were the case.

I decided to do a little analysis to see how many of the books on my Amazon wish list have eBooks priced the same or higher than the print equivalent. The list spans multiple genres: fantasy, thriller/suspense, steampunk, alternate history, and historical/informational.

Here's the list:

Title eBook
$		 Paperback
$		 $
Diff		 % Diff
A Princess of Landover $7.99 $7.99 $0.00 0.00%
Among Thieves: A Tale of the Kin $7.99 $7.99 $0.00 0.00%
City of Dreams & Nightmare $4.79 $7.99 ($3.20) -40.05%
Daily Life in the Middle Ages $14.74 $36.42 ($21.68) -59.53%
The Roman War Against the Zombies of Armorica $4.99 $9.95 ($4.96) -49.85%
Empire in Black and Gold (Shadows of the Apt 1) $9.59 $12.00 ($2.41) -20.08%
Infernal Devices $4.79 $7.99 ($3.20) -40.05%
Into the Storm: Destroyermen, Book I $7.99 $7.99 $0.00 0.00%
Leviathan  $8.99 $11.16 ($2.17) -19.44%
Life in a Medieval City $9.99 $11.19 ($1.20) -10.72%
Life in a Medieval Village $9.99 $8.92 $1.07 12.00%
The Age of Wonder $13.99 $10.31 $3.68 35.69%
The Blade Itself: A Novel $6.99 $6.99 $0.00 0.00%
The Bookman $4.69 $7.99 ($3.30) -41.30%
The Breach $7.99 $7.99 $0.00 0.00%
The Broken Kingdoms $9.99 $10.60 ($0.61) -5.75%
The Buntline Special: A Weird West Tale $9.59 $10.88 ($1.29) -11.86%
The Crooked Letter: Books of the Cataclysm $9.59 $12.46 ($2.87) -23.03%
The Doomsday Book $7.99 $7.99 $0.00 0.00%
The Hammer $9.99 $10.19 ($0.20) -1.96%
The Last Days of Krypton $7.99 $7.99 $0.00 0.00%
The Road to Vengeance (The Strongbow Saga)* $9.99 $12.23 ($2.24) -18.32%
The Strange Affair of Spring Heeled Jack $9.59 $10.88 ($1.29) -11.86%
Wolf of the Steppes $9.99 $14.96 ($4.97) -33.22%

* title available in hardcover but not paperback

I've listed the title of the book along with it's eBook and paperback prices followed by the difference in price between formats in both dollars and as a percentage. In all, there are 25 titles listed.

The first thing that struck me about this list is how many titles have both eBook and print editions priced exactly the same. 7 titles! Out of 25, that's 28% of the sample. 15 titles have eBooks priced lower than the print editions. Only 2 have eBook versions priced higher than the print edition.

I don't know how publishers rationalize charging the same for both eBook and print formats. It's analogous to charging the same for the paperback and hardcover editions. That would be ludicrous, right? The cost to produce a hardcover is higher than that of a paperback; you'd expect to pay less for the latter. I don't think it's unreasonable to pay less for the eBook than the paperback. You've gone from something physical to electrons. While there are (minimal) data storage as well as distribution (transmission) costs with an eBook, I can't see how that equates to the costs associated with printing, boxing, storing (whether shelf or warehouse), and shipping a print book.

At least 15 of the eBooks listed come in at prices lower than the print editions. Even still, the differences are minimal, averaging to just $3.01.

One bright spot is that at least most of the eBook editions come in at $9.99 or less. $9.99 is still too much for an eBook, in my opinion, but it's better than $14.99.

Which kind of leads into another observation… A while back I had just finished the second book in Robin Hobb's Rain Wilds Chronicles and was all ready to buy the next book in the series, Dragon Haven, until I saw the eBook price: $14.99!

The Big 6 had been pushing for higher eBook prices on new releases. As evidenced by the price of Dragon Haven, they got it. Over time, then, and especially once the paperback came out, the eBook price fell. In the case of Dragon Haven, and many of the titles I listed, the eBook price fell no further than the paperback.

Which made me wonder: How long does it take for the eBook price to fall to a reasonable level?

Here's the data once more, this time with Kindle pub date added.

Title eBook
$		 Paperback
$		 $
Diff		 % Diff Pub
Date
A Princess of Landover $7.99 $7.99 $0.00 0.00% 2009
Among Thieves: A Tale of the Kin $7.99 $7.99 $0.00 0.00% 2011
City of Dreams & Nightmare $4.79 $7.99 ($3.20) -40.05% 2010
Daily Life in the Middle Ages $14.74 $36.42 ($21.68) -59.53% 2001
The Roman War Against the Zombies of Armorica $4.99 $9.95 ($4.96) -49.85% 2010
Empire in Black and Gold (Shadows of the Apt 1) $9.59 $12.00 ($2.41) -20.08% 2008
Infernal Devices $4.79 $7.99 ($3.20) -40.05% 2011
Into the Storm: Destroyermen, Book I $7.99 $7.99 $0.00 0.00% 2008
Leviathan  $8.99 $11.16 ($2.17) -19.44% 2009
Life in a Medieval City $9.99 $11.19 ($1.20) -10.72% 2010
Life in a Medieval Village $9.99 $8.92 $1.07 12.00% 2010
The Age of Wonder $13.99 $10.31 $3.68 35.69% 2009
The Blade Itself: A Novel $6.99 $6.99 $0.00 0.00% 2010
The Bookman $4.69 $7.99 ($3.30) -41.30% 2010
The Breach $7.99 $7.99 $0.00 0.00% 2009
The Broken Kingdoms $9.99 $10.60 ($0.61) -5.75% 2010
The Buntline Special: A Weird West Tale $9.59 $10.88 ($1.29) -11.86% 2010
The Crooked Letter: Books of the Cataclysm $9.59 $12.46 ($2.87) -23.03% 2006
The Doomsday Book $7.99 $7.99 $0.00 0.00% 2011
The Hammer $9.99 $10.19 ($0.20) -1.96% 2011
The Last Days of Krypton $7.99 $7.99 $0.00 0.00% 2009
The Road to Vengeance (The Strongbow Saga)* $9.99 $12.23 ($2.24) -18.32% 2009
The Strange Affair of Spring Heeled Jack $9.59 $10.88 ($1.29) -11.86% 2010
Wolf of the Steppes $9.99 $14.96 ($4.97) -33.22% 2006

Unfortunately, I don't know what the eBook prices started at; that information would make this metric more meaningful. But it's pretty clear that while an eBook may come down in price, it isn't going much below the cost of the paperback. Are the Big 6 publishers creating their own new normal here? By setting eBook prices at $7.99 – $9.99, they may be attempting to create a perception of value on eBook prices simply by maintaining higher paperback prices. You can see that on 15 of the titles listed. Prices rise over time naturally due to inflation and other factors; it's sad to think publishers may use the digital medium to create an artificial spike.

One of the many benefits of eBooks, other than being cheaper than paper books, is that they're highly accessible to many readers worldwide. This is why many writers have been looking into eBook publishing options for their work.

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Comments (10) -

  • Ben
    22 May 2011 | Reply
    Book publishers have history and the laws of economics against them. The incremental cost of producing an ebook is almost non-existent, while there is significant capital and costs required to publish on paper.  Ebooks may provide some advantages over paper books; portability, ease of purchase, etc, but they still lack the real ability to be loaned. I would guess that every paperback book I own has been read on average by three individuals, yet I am the only one who has read any of my ebooks.  For me an ebook has a value under $10 and should always be priced lower than a price of getting a paperback.

    What publishers are not taking into account is substitutions.  Like most readers I have a very long list of books I want to read, I will never get to all of them in my lifetime and I will pass over a title that is overpriced no matter what form it is sold.
  • Douglas Hulick
    24 May 2011 | Reply
    Not arguing for or against here, but there is a bit of an explanation re. the current pricing difference and lag of paper vs. e-book pricing over here: http://www.patriciabriggs.com/ Scroll down a bit.

    Basically, e-book pricing is still shaking out. At present, the cost of producing a book in either format (e- or paper) for the Big 6 is still largely the same when it comes to new books. It may seem like an e-book should be cheaper, but at present, a lot of the cost is the same no matter what (editing, staff costs, rent, copy editing, layout, legal, etc., not to mention format conversion, DRM, etc.--which doesn't happen at the push of a button, I fear).

    Likewise, there is a lag in price adjustment after initial release, which I agree needs to be fixed. Some of this is due to old (or new, untested) models, and some is due to...well, I don't know what. I don't pretend to understand all of the pricing models here. I do know that publishing is working from an old system of not only figuring profit, but also distribution and accounting/reporting in general. Believe me, as an author, I have a vested interest in them coming to terms not only with e-book pricing, but also with e-sales reporting, etc. (But that's a different topic...)

    In one sense, I think the e-book revolution will help streamline publishing and publishers in the long run. Eventually, we will find a price point that balances between actual cost of production and perceived value of the product. I expect it will happen sooner than we think, and that the final settlement won't be quite where either side of the divide wants; it's just going to take a bit to get there.

    Thanks for the quick break-down of the pricing difference, btw. It's a very interesting read.
  • Jeremy Shane
    24 May 2011 | Reply
    For me I do think e-books should be slightly cheaper than paperbacks. I'm ok with paying around $7, but often find deals for much cheaper in e-book form that I usually don't see in print (a new book is coming out so they offer the first volume in series for $2-$3 for example). Most if the savings cones vs. hardcovers: I usually get them for about $15 instead of having to pay around $30 for a HC print.

    My hope is that publishers don't get worse on pricing at this point. It should be a bit better than it is now, but I can live with it. If a book is too much I just don't get it. If they only offer print versions and I wanted digital- I don't get it. If practices were to get worse it would only cost them sales.
  • scottmarlowe
    26 May 2011 | Reply
    Good comments, all. A lot of this is still being figured out, but while publishers work through this process, they're leaving the door open for other opportunities (like Kindle self-publishing).

    For me, I can handle $7.99 for an eBook, but only if it's by an author whose work I trust/know. If I were to try a new author, the price would have to be more like $4.99 or less. There's many series that start with a cheap price for book 1, then progressively go up in price with other books in the series. The Strongbow Saga (book 3 is listed above) is one of those. It's a strategy that can work, or backfire. I bought books 1 and 2, but can't bring myself to spend $9.99 on book 3. Books 1 and 2 were cheaper.

    Thanks for the link above. Here's another that has some relevancy to this discussion:

    www.idealog.com/.../ebook-sales-comparisons-to-print-arent-always-what-they-seem
  • Steven Till
    15 Jul 2011 | Reply
    I agree with you Scott. E-books should cost less b/c it costs less to produce them. That seems like fine logic to me.
  • Amarand Agasi
    09 Nov 2011 | Reply
    I know I'm late to the party, but I just want to say this: Big Business is in direct competition with the artists and consumers of all artistic products.  As has been seen on Apple's App Store, individual people can become stinking rich by going direct. Publishers were needed, and were useful, back when paper books were relevant. They are becoming less so by the day. I've seen so many typos in books - almost every book I've read recently - that it appears editors aren't really doing their jobs.  I've seen artists write huge novels, only to have them broken up into smaller books, to sell more books. When the artists realize that they don't have to submit to the old system, that they can create the books they want to create, and sell them directly to the public, this will be the truly democratic sales environment.  Yes, some people can't edit their own work, and that means that these people may need to hire someone to look over their work - not a big deal.  Otherwise, we don't need the gas-guzzling book creation and distribution systems.  We have the Internet, and it is a great marketplace.  I'm not sure I will mourn the eventual passing and/or decimation of the Big Six.  I just hope that "their" writers continue to write great books.
  • Danny Lovecraft
    16 Aug 2012 | Reply
    Obviously your viewpoints that I have read above are fine to have, and I appreciate your having the right to spout them. However, the comment that " E-books should cost less b/c it costs less to produce them" is extraordinarily short-sighted. As an extremely struggling small press publisher of quality formalist genre poetry I can tell you that one of the considerations for retaining an ebook price only perhaps 20 percent cheaper than a paperback is the cost of producing the whole TITLE and nothing but the title. Nothing is guaranteed in publishing. It is all a struggle and a pitched battle against forces beyond your control, and yet you people who complain and say that an ebook should not be more than 5 or 7 dollars when it costs at least $12 or more per copy to produce a book are not comprehending how difficult and expensive it is to be a publisher and are not factoring in a) global economic conditions of despair (where exist people, perhaps such as you, which don't like to buy a book above 5 dollars), b) the whole gross costs and overheads of producing ANY book at all, c) the fact that people are not really interested in being fair and buying books (at least on appearances) either in paperback or ebook, and/or d) everyone wants everything given to them on a plate, a free plate. Example, I am preparing a book for publication. My production costs and all payments to authors and artists and book designer come to $1268. At a paperback price of $14 I have to sell 91 books before I break even. But alas there is extortion afoot. Most retail booksellers and distributors want damn 45 or 50 percent discount for distribution, and some provide further insult in not buying the books but taking them on commission (to be returned if not sold). That means I would have to sell approximately 170 books to break even. Well, people don't buy my books, so when will I ever get a break and expect to break even? Even with the superb reviews my books have received, it has not translated into sales because people appear to want everything for virtually nothing. Internet downloading may indeed have poisoned people's perceptions about fairness and they instead want to download as much as they can glut for sweet fa nothing in this cheap and nasty throwaway society. Since I started publishing I am 15 thou in the red. Lately I was working out costs and percentages to offer for ebooks sales of an upcoming title. The cost of these percentages to the authors and artists etc had to be scaled down because I already know there will be few sales of my books, and my first 50 to 60 paperback copies are freebies to the contributors and to reviewers and to contests that never win and to places of legal deposit. The only way to claw some deserved bread back is to have ebook prices only 20 or 25 percent lower than the paperback prices because a) it is all part of the same Title and costs accumulate, and b) if they find ebooks are too cheap in comparison to the paperbacks then no one would buy the paperbacks anyhow, and then c) hope to hell that people might actually buy the damn things. So please let's have a little consideration of fairness when making your complaints. It smacks quite insulting to our hole in the pocket intelligences. When you have holes in your pockets, the money drains out like water in a sieve. Some consideration of comprehensive fairness and not this style of overbearing whining would be much more preferred and appreciated in such a complex debate. Thank you.
  • scottmarlowe
    17 Aug 2012 | Reply
    Given the financials you cite, it sounds to me like you need to cut your losses and run before your liability gets so high it's untenable (it sounds like it may have already reached that point). Your own whining aside, you're in a tough business which has only gotten tougher in the past few years as indies glut the market with cheap/free books on one side and the Big 6 hammer away at the other. This can only be more difficult given you are in a niche market. You can spout away all you like on the unfairness of it all, but the market doesn't care. Find a way to reduce operating costs and turn a profit, or die. That's all the market cares about. The perception that eBooks should cost less than their physical equivalents isn't going away any time soon. If anything it's about to get worse given the settlement between Amazon, Apple, and the Big 6 as Amazon regains the ability to sell eBooks at a reduced price.
  • Amarand Agasi
    17 Aug 2012 | Reply
    As a consumer, I look at the value of actually owning a physical book ($20 for hardcover, $10 for paperback) that I can then immediately - and legally - turn around and loan, gift, sell to another person.  With today's limited terms and conditions for digital formats, in addition to DRM (Digital Rights Management) keeping folks from easily copying/sharing in the same way as with the physical medium, there's absolutely no excuse for a digital book to cost the same as a physical book. The only reason why the books' prices are (currently) held at this artificially high level is because the Big 6 fought major distributors like Amazon and "won."

    I put won in quotes because what IS going to happen eventually is what you see on places like the App Store: books will be sold at reasonable prices to millions of people, directly from the author to the reader.  If I can choose an entertaining book on the eBookStore for $0.99, and Big 6 is selling something marginally more entertaining for $20, there's no way - as a consumer - I'm going to continue to hold the value for that other book at the $20 level.

    Back when books needed to be physically produced, and a whole slew of middlemen needed to be paid, a $20 book "made sense."  But now?  No, not really.

    If you're writing a book yourself, that's awesome.  If you're pulling other people in (designers, artists, copywriters, ghostwriters, administrative assistants), and your business model can't afford to support this, perhaps you need to scale back a little?

    Eventually, it will get to the point where a GOOD independent book author will be able to write a book, design a cover quickly and easily, and post it on-line at $0.99, or $1.99 (possibly even $2.99 for established authors) and pay a mere 10% or so per copy (perhaps less of a cut for higher volume); turning at 90% profit.  Try getting 90% with the traditional model: you will fail.  I say "good" author because it's easy to see how good product at a reasonable price will sell like wildfire, making the best authors rich (millionaires at the least) almost overnight.  True, it will take time to establish that brand, but it's like that with anything.  Marketing and social media don't really cost anything but your time - and you don't need to hire other people to do that for you; that's old-school/old-model thinking.

    Write a good book, find an on-line digital book seller that has reasonable terms (I have quite a few author friends and they assure me on-line publishing is fair and reasonable when you do the research), and self-market the heck out of it.  If you set the price of your book at a level that brings folks in, and the product (i.e. what you write) is good and draws in customers, you will make a profit.

    Having said all that, it's great to see differing viewpoints in this thread.  To those who think they can continue to tow the line with the old-school model, just remember how hard the RIAA fights to keep piracy under control, while over in iTunes land, people are happily paying $0.99 per song, or $1.99 per app.

    The model IS changing for all media - it's only a matter of time - and the real question is: will you shift with it?
  • Danny Lovecraft
    17 Aug 2012 | Reply
    Yes, you're thoroughly right. I was whining. My wife said exactly the same thing to me today when she read what I wrote. Alas I haven't become that sophisticated and stoical enough as yet to rise above the miserable sloth of occasional bouts of self pity. At other times I'm perfectly fine. Honest. Leaving out histrionics this time, perhaps what I wanted to say last night was, that overheads are the critical factor and that overheads were not being discussed in your group blog in relation to prices of a particular title. You see the labour and costs are in all stages of book production. But people don't see all that effort and finance and time and labour when they look at a mere finished product. It's the same with electrical jobs: an electrician replaces the wiring in your house, for instance, but afterwards the power installation is exactly as it was; externally to the untrained eye nothing has actually changed and the power is the “same as it ever was.” The same with a book—all the effort and costs go into it, but the book may be purchased in five minutes in a bookshop. How easy, and, equally, how deceptive. That is why I suggest that ebook prices should remain equitable, so as to offset all the dire other expenses and physical labour that go into a book and give publishers some chance of an income, or even mere turnover. Your comments about the carelessness and indifference of the market place notwithstanding, when you give wholly into the market, then you have lost all personal integrity: they can then sell you anything, and you vill buy it. One needs to make a stand, one also needs to appreciate when it is a fair price and pay accordingly. Thanks again.

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