The Price of Pleasure
Image via Sony
The eBook explosion in the past couple of years has set the cat among the pigeons when it comes to the cost of an eBook. Rather than squabble over the cost how about we consider what price we put pleasure?
Paul and I went through the dilemma of what price to set our anthology, Chinese Whisperings: The Red Book in its electronic form. As it was the first edition of the anthology to come out (the paperback will be released mid-March). I started my search with Kindle, using ‘anthology’ and ‘short stories’ as search criteria. There seemed to be few anthologies listed and none in the vague ball park of ours. There didn’t seem to be a template for us to compare and contrast price-wise, so I looked at several other publishers creating anthologies similar to ours but they were not offering their books in an electronic form.
What I did readily identify, as I got lost in the Amazon/Kindle electronic miasma was the number of books listed at $3.99 and the fact that my time and effort, along with Paul’s and the other eight writers we’d worked with, was worth more than $3.99. It seemed like highway robbery.
There was a certain amount of debate on the price of eBooks last April when a group of Kindle users began to tag books priced over $10 in an effort to try and cap eBooks at US$9.99. It is well known though, that Amazon’s electronic sales are heavily subsidised by the sale of physical books – thus they can keep the prices low on eBooks. But are they creating an atmosphere of expectation that an eBook should cost considerably less than a physical book? Are they forcing self published authors to lower themselves to this benchmark to even get a shot at sales?
Maybe it is time for readers to have an expectation adjustment.
The same amount of time and effort goes into writing and editing an eBook, as it does a physical book, that’s before you take into consideration typesetting, design and layout. With an eBook you have the added task of creating the final files – in our case we will be offering three different file formats to cater to a growing market of eReaders. Few readers realise most of the cost of a commercially produced book is attributed to sales, marketing, product development and editorial aspects. Then the retailer gets their 40% markup. Sadly little goes to the actual creator – the author.
I love a bargain as much as the next person, but I’m not deluded to the fact that there is an accepted price for most things. A cup of tea or a latte costs a certain amount as does a ticket to the movies, an icecream, a plane fare, dance classes, music CDs, dinner out or computer games. In the most case we’re happy with the purchase price because we derive some manner of pleasure from it.
In Australia coffee lovers are willing to pay up to $5.00 for a fancy coffee – gone in less than fifteen minutes or less – an hourly pleasure rate of $20.00. A movie ticket here ranges in cost from $8.50 through to $20.00 – an hourly pleasure rate of between $4 and $10 for your standard two hour film.
As for books they range in price. The new books I buy are usually between $17.99 and $35.00. I’m yet to clock the time it takes me to read a book, so I have not definitive hourly break down, but I know I’m getting my money’s worth when I choose to spend my leisure and pleasure time between the pages.
In the end Paul and I chose $12.00 as the base sale price of our anthology – the cost of three regular cups of coffee here in Australia (rounded to the nearest whole dollar). Unless you are a speed reader – you’d need more than three cups of coffee to get through The Red Book. It seems like an acceptable compare and contrast for any reader who is willing to argue with about price. It also gives us a sensible pricing gap to work with when it comes to pricing the paperback.
If we set aside debates about the pros and cons of eReaders and electronic books, and the cost of production –a book is a book at the end of the day regardless of whether it appears in pixels or ink. A book, regardless of form, shares characters and stories, a book captures our imagination and our hearts, speeding us to new and exciting places, through the best and worst of human nature. A book at the end of the day is about the pleasure of reading. One could ask – are we paying too little for our books – both physical and electronic?
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There does seem to be an expectation that ebooks will be cheaper than physical books. I think Two Ravens Press have a sensible strategy, marketing their ebooks a couple of UK pounds cheaper than their printed copies. In their case the ebook is a side product of their physical publishing business and so this makes sense. I don’t expect to have to pay pennies for new books just because they are in a digital format. That said, I don’t expect to pay more for a digital copy than a physical one as some stores insist (I’m looking at you Waterstones UK).
I was happy to pay the purchase price for The Red Book as the value I perceived it had, judging from the excellent blog posts on the website told me enough to know I would enjoy reading the collection. I think the price you settled on is fair.
I can’t imagine how any one could possibly consider charging MORE for a digital version – unless perhaps it was a text book or technical manual which came with indefinite updates – which theoretically would surpass the ‘relevance’ longevity of such a publication.
Looking at a couple of the e-Retailers here in Australia – the books are considerably more expensive and I’m wondering, even with the advantages of eReaders who would pay that. With Kindles pricing regieme here in Australia, given the currency conversion, many of the books are more expensive than their physical cousins.
In a very telling move – both the major news providers in Australia have refused to enter into partnerships with Amazon/Kindle to supply news. If they – big media moghuls – can’t see any money in it, we tiny emerging authors should be very wary of who we’re handing our work to and how much for.
I imagine Paul and I will do something similar as Two Ravens Press. We had no intention in the beginning of ever producing a physical copy but the demand is still there for paperbacks and the customers is always right!
I wonder how much we can base ebook pricing on what Amazon charges. I would think they would be willing to simply break even (or even lose a little) if it means bolstering the Kindle sales.
I think what will come out in the wash is consumers willing to pay for quality. You may also see publishers including ebook only bonus materials a la DVDs.
What I’m surprised isn’t more popular is selling them as a set. I don’t own an eReader, but often read books on my blackberry or computer for convenience. However, I balk at buying only a eBook, because I don’t always want to HAVE to read something on a digital screen. For many of the books I buy I would be happy to pay a few additional dollars to get an eBook along with my physical book, so I could use the eBook version when commuting (or etc.)
DALE: That makes perfect sense. Something to add to our CW business model when we get the paperbacks up and running. We’re all in agreeance that it isn’t one or the other – so why not make them complimentary to each other.
CHRIS: I don’t think we can trust the Kindle pricing as a genuine base price. Their physical book sales to prop up their eBook sales – as you mention… it is all about selling Kindles at this stage. What I fear, is they are setting consumer expectations of what to spend for an eBook far below what they should realistically be – thus you get the $9.99 backlash and other consumers agro and wanting to pay less than $9.99 for new release books.
Then there’s the added issue of publishers such as Paul and myself look like we’re being ‘greedy’ by pitching our price above the hallowed $9.99. At least you don’t get stung by currency conversion when you buy from us 🙂
With all due respect, Jodi, and speaking as an adopted Frenchman (and I’ll deny ever writing this, if ever you try to hold it against me), you’ve got your pricing policy all wrong. Books are not luxuries like coffee, they are necessities like a good glass of wine. So how about charging the price of three regular glasses of wine (Australian, not French prices, of course). That really would give us something to cheer about.
Some of the pricing policies out there come down to a simple volume issue. If I’m going to sell a million copies of something, I can sell it cheaper and still get the “right” profit margin, while if I expect to sell only a few hundred copies it will cost more per unit to make back the invested money. I can’t speak to whether Amazon makes money or breaks even on its physical or electronic books or on the Kindle device. I do know that for a long time Microsoft lost money on the xBox game device and didn’t mind taking that loss because they made it back on game sales. It was considered a cost of growing that business.
I wonder if the market for eBooks/printed books is similar to that of digital music/CDs. The cost of a 10-to-12 song CD here is typically about $15 to $20; the cost of downloading a 10-song digital version of the CD is usually around $10 (about 99 cents per song with an occasional discount for buying “the album”.) We all know that the CD media is cheap and the junky plastic boxes they come in is cheap, so where does the 30 to 50% price difference come from? Surely it’s not the liner notes alone. Some of it is shipping costs, some of it is marketing costs. Some of it is the lack of warehouse storage expense. I’d guess that some of it is retailer-related stocking costs. The amount of money going to the artists creating that music is nothing compared to that going to the publishers in either format (so that’s pretty similar to authors and books!).
Personally, I think the price of any digital media should be reduced by the costs that are unique to the physical media (shelf space, packaging, shipping, storage, liners or jackets, etc.) because we, as consumers, are not getting that “merchandise” or service. The cost to develop, edit and market the product should be no different whether it is electronic or physical, so I’d expect those costs to be the same.
I have not understood the idea that electronic music consumers have which says that if they “lose” their download due to computer failure or accidental deletion they should be entitled to another (unlimited) download of the title. If one were to lose a CD or a book, would it be right to go demand a new copy at the retailer? I don’t know that anyone would even consider that! So, personally, I think that should not be a “feature” of electronic media either. Or, if it is, bundle a markup into the price for it. Is this even an issue that is faced in eBooks or is that assumed re-download right not there yet?
I would not be opposed to paying additional for electronic versions of books if I received additional features. Perhaps “behind the scenes” information about the book or author(s), for example. Otherwise my opinion is that e-books should be cheaper than paper books because at least some of the expenses are not there.
Paul: I so agree with you – though I am sure that there are people who would say that coffee was a necessity rather than a luxury…. perhaps we can settle on saying its based on chocolate?
I don’t have all the answers to the pricing question, per se, but maybe my experience will give some perspective about how the current digital pricing ideas compare to hardcopy. But first, let me make an observation about pricing digital books higher than printed ones: Bear in mind that you can imbed video and audio in an ebook. (I’m talking PDFs here; I’m not sure how much you can imbed in a Kindle book yet.) Being able to see an expert perform a complex task, as opposed to looking at a few pictures, and hearing him or her explain the whys and wherefores as they do it, could certainly be worth more than a paperback version. Of course, not all books lend themselves to this kind of treatment.
I self-published a book called Ruthless Putting using POD. I know most people think POD is too expensive, but I do all the production work myself and they only charge me for printing and distribution, as opposed to the POD publishers who make all their money as book packagers. This probably cuts my costs compared to them. Anyway, the paperback retails at $13.99; golf books typically cost more, but I chose this price because of how I wanted to position myself in the market. I offer a 50% discount to retailers — less than the 55-60% normally offered, but there’s no inventory cost to the retailer, so I think it’s a fair trade.
On a typical royalty of 10% (which works out to 4% of retail, the way many publishers do it), I’d make a little over $.50 a book, and about $1.40 if it was 10% of retail. As it is, I make a little over $4 per book, which isn’t bad.
How does this compare to the Kindle version? It’s is priced at $8.99, and Amazon pays a royalty of 35% of retail (yes, they’re taking the lion’s share), but that still gives me a little over $3 per ebook. Not as good as the paperback, but still much better than a standard royalty agreement. The Kindle edition has made up a much larger share of sales than I originally expected, so these are possibly sales I wouldn’t have gotten otherwise. Plus, the Kindle provides an unexpected bonus for the readers — I was able to make the putting sequences into a “flip book,” so readers can see how the movements flow together.
I also have a PDF version which I sell myself through a website. It’s just an electronic version of the paperback with no extra frills, but it’s laid out so it can be printed out and put in a notebook for making notes. It also sells for $8.99, and after paying for my delivery system, I make about $8 a copy — double the paperback profit.
My point is that the retail price isn’t necessarily the issue here; the production and “outlet” costs are. The ebooks both retail for $5 less than the paperback. If I could figure out a way to sell the Kindle version myself, I could conceivably sell it for only $5 and still make more than the paperback does. By comparision, the PDF makes me twice as much as the paperback, yet it’s much cheaper for my readers to buy — a real win/win situation, I think.
So I think you have to look at all sides of this thing when deciding on a price for an ebook. Personally, I’m ok the way my relatively low prices have panned out; and considering the positive feedback I’ve gotten, my readers seem happy as well.