Ebook pricing from someone who knows

[starrigger]

Literary agent and ereads.com founder Richard Curtis blogged recently on the mysteries of ebook pricing.

He confirms some of what people suspect here, and offers a few further insights, such as the way sales work in the publishing industry. As an ebook publisher himself and an agent, he pretty much knows what he's talking about.

[Penforhire]

I like how he ended, the razor pricing model, but I doubt Amazon will subsidize that strongly unless their DRM is very strong and they disallow you to load your own, making it literally just an Amazon.com tool.

[lilac_jive]

Interesting article. I did note the other day that almost all of Sony's bestsellers are 11.99, but that's a good 50% off of the hardback. Actually, that was one of the things about the Sony I liked. I could buy a book in "hardcover" without sweating the price (or space on my bookshelf as much). Once you get over the $15 mark though, I'm not game. But that has little to do with ebooks, I rarely bought anything over that amount in the bookstore.

My only question though is why are there no commission based reps with ebooks? He mentions it but doesn't elaborate.

[starrigger]

Originally Posted by lilac_jive

My only question though is why are there no commission based reps with ebooks? He mentions it but doesn't elaborate.

I think I can probably answer that myself:

1) Ebooks are still a tiny share of the market, and
2) How could you make it a commission-based thing? The publishers produce the ebooks (or don't, but never mind that) and put them out through the distribution system. You wouldn't say to fictionwise (as you would to Barnes & Noble), "How many copies do you want for your initial order?"

[pilotbob]

Intersting article. I have also said many times that I really don't have a problem paying the current lowest priced paperbook price for an ebook. But they certainly shouldn't cost more than that.

Also, the article states the often wrong information that Amazon "caps" ebooks at $9.99. This is flat out wrong. Amazon never said this. I should go add that to the myths and partial truths thread.

BOb

[lilac_jive]

Originally Posted by starrigger

I think I can probably answer that myself:

1) Ebooks are still a tiny share of the market, and
2) How could you make it a commission-based thing? The publishers produce the ebooks (or don't, but never mind that) and put them out through the distribution system. You wouldn't say to fictionwise (as you would to Barnes & Noble), "How many copies do you want for your initial order?"

Ahh gotcha.

[JSWolf]

We understand why HC cost more then the MMPB. But that model fails when applied to eBooks. And eBook in a given format is still the same regardless of what versions are printed in paper. So why not just price it at the final end price and be done with it? The eBook is not going to change it's container.

Another peeve on the pricing of eBooks is that when an eBook is priced to fllow the HC price and the HC then becomes a MMPB a lot of eBooks don't reflect this change and then become more expensive then the current MMPB edition which makes it too expensive.

[pilotbob]

Originally Posted by JSWolf

So why not just price it at the final end price and be done with it? The eBook is not going to change it's container.

Prices are not based on how much is cost to create something. They are based on supply and demand. No eBook blows out the supply issue because there is no cost to produce a copy. As many as are wanted can be made/sold.

That leaves demand. Most people that want to buy it will buy it soon after it comes out. After that less and less people will want it.

So, when the book is first released, have a HC like price. $19.99 maybe. Then after a while, maybe 6 months, drop the price. As the demand goes down drop the price. So, maybe after it has been out for 1 year it's $4.99... it will keep going down if need to keep sales going. What good is a $5 price if no one buys it. If people will buy it at $3 that's better. Remember, this is an ebook... there is no duplication cost (other than basic infrascture). Heck a 1TB hard drive will have hundreds of thousands of titles.

BOb

[kazbates]

Originally Posted by starrigger

I think I can probably answer that myself:

1) Ebooks are still a tiny share of the market, and
2) How could you make it a commission-based thing? The publishers produce the ebooks (or don't, but never mind that) and put them out through the distribution system. You wouldn't say to fictionwise (as you would to Barnes & Noble), "How many copies do you want for your initial order?"

Not to mention the opinion of many that DRMed ebooks are actually "rented" from eretailers as opposed to actually being "purchased". How do you pay out a "sales" commission on a "rented" product?

Kaz

[zelda_pinwheel]

i am just dreaming of the day some publisher finally decides to adopt the "give the razor away for free to sell the blades" model with ebooks.

in the meantime, their experimentations with prices are driving me crazy. seems like their working idea is "how much can we gouge them for ?" most of the time (with a few notable exceptions)...

[pilotbob]

Originally Posted by zelda_pinwheel

i am just dreaming of the day some publisher finally decides to adopt the "give the razor away for free to sell the blades" model with ebooks.

There are razors in ebooks?

BOb

[kazbates]

Originally Posted by JSWolf

We understand why HC cost more then the MMPB. But that model fails when applied to eBooks. And eBook in a given format is still the same regardless of what versions are printed in paper. So why not just price it at the final end price and be done with it? The eBook is not going to change it's container.

It almost seems as if they are taking their pricing model from technology companies where the initial costs of a new type of technology reflect the R&D costs. A new book hits the market - price it high. Once the market has been saturated and publishing costs are recouped - price it low.

Kaz

[zelda_pinwheel]

Originally Posted by pilotbob

There are razors in ebooks?

BOb

yes : be very careful how you manipulate them.

Originally Posted by kazbates

It almost seems as if they are taking their pricing model from technology companies where the initial costs of a new type of technology reflect the R&D costs. A new book hits the market - price it high. Once the market has been saturated and publishing costs are recouped - price it low.

Kaz

it does seem that way, and to some extent i think you may be right (it's a new media more than a new technology, but still, they're just feeling their way trying to figure out how to set it up) the problem is the same costs don't really apply, and the fabrication costs are virtually nil after the initial creation cost (which is fixed) so it's pretty abusive of them to charge such high prices. they're not engraved on gold chips, criminy !

[Moejoe]

Originally Posted by zelda_pinwheel

i am just dreaming of the day some publisher finally decides to adopt the "give the razor away for free to sell the blades" model with ebooks.

in the meantime, their experimentations with prices are driving me crazy. seems like their working idea is "how much can we gouge them for ?" most of the time (with a few notable exceptions)...

Couldn't agree more, the prices on Haruki Murakami novels available at BooksonBoard are schizophrenic. $18 for Blind Willow, Sleeping Woman. $10 for Vintage Murakami. I can't see how that makes any sense at all.

[DaleDe]

Originally Posted by kazbates

It almost seems as if they are taking their pricing model from technology companies where the initial costs of a new type of technology reflect the R&D costs. A new book hits the market - price it high. Once the market has been saturated and publishing costs are recouped - price it low.

Kaz

Actually, perhaps the Technology companies took their pricing model from publishers. Publishers have been doing this for a lot longer than most technology companies have existed. Publishers advance authors, pay editors, pay for promotion, initial set up and generally reap this back in the higher price of initial release. Printing a book is really a small part of the costs once the setup is paid for.

Dale