It's IMPOSSIBLE to price ebooks too high

[abookreader]

I posted because I'm curious as to the answer. I didn't say I didn't want to participate. Obviously I wanted to participate since I took the time to post a message.

You feel that pricing discussions on this board have no purpose and no effect, yet you more than once have started threads which invite discussion in regards to pricing. So I'm wondering why?

I never meant to imply that your opinions aren't worthy and I certainly never meant to imply I wish you'd stop posting. If I gave that impression my apologies.

[leebase]

I write because I find the topic interesting. Both the issue of pricing and people's emotional reactions to the issue -- and the complete misunderstanding of how markets work.

Lee

[queentess]

Originally Posted by leebase

We agree. Perhaps you misunderstood. A publisher could put out an ebook at a $1,000,000 price. But no one has to buy said ebook.

Without saying a word, said publisher would find out rather quickly that no one is buying his million dollar ebook.

What about $14.99? No one need say a thing. Either the ebook will sell at that price, or it won't. It does not matter the cost to produce the ebook. It does not matter what effecencies ebook distribution brings. DRM does not change anything.

What I'm afraid will happen is that the publishers won't conclude "Oh, we priced that book too high for the market" and will instead infer "Oh, ebooks aren't desired" or "Oh, people aren't buying, so it must be piracy".

You go on and on in many threads about how publishers should be able to price how they want, and how we consumers shouldn't ever criticize that because The Market will decide what works. But if consumers don't make it clear that they're not buying due to price, rather than format (or drm or geo-restrictions), then the publisher can still make decisions that are bad for both parties.

Applied economics is not as black and white as you think.

[Maggie Leung]

Not that anyone needs my permission, lol, but I think consumers can criticize all they want. Publishers will look at the bottom line, though. If those who criticize aren't representative of book buyers, publishers still won't be motivated to cut prices. There are plenty of people who are spending on e-books at current prices.

E-book sales are still a small part of overall book sales, but the sales increases have been huge quarter over quarter. 2010 e-book sales neared $1 billion USD. Steig Larsson's "Millennium" series has surpassed 1 million in Kindle sales.

I doubt publishers aren't cutting prices because they can't figure out that some readers want cheaper prices. They're probably not cutting them because the market (in the form of buyers who are willing to spend) makes it unnecessary to do so.

[leebase]

Originally Posted by queentess

What I'm afraid will happen is that the publishers won't conclude "Oh, we priced that book too high for the market" and will instead infer "Oh, ebooks aren't desired" or "Oh, people aren't buying, so it must be piracy".

Piracy is just one of the many competing factors that result in "folks aren't buying our product". It's no different than "they choose to go to the movies instead" or "they choose to borrow the book from a friend".

The publishers HAVE to compete with the myriad of options to entice folks to BUY their product. Their new ability to set the price themselves does not and CAN NOT equate to the ability to get people to BUY their product. Ergo, it is impossible for them to set the price too high.

Originally Posted by queentess

You go on and on in many threads about how publishers should be able to price how they want, and how we consumers shouldn't ever criticize that because The Market will decide what works.

No more so than then non-stop beating of the drums (or dead horses) on <insert usual rant here>

Originally Posted by queentess

But if consumers don't make it clear that they're not buying due to price, rather than format (or drm or geo-restrictions), then the publisher can still make decisions that are bad for both parties.

Applied economics is not as black and white as you think.

Economics is economics. No one can make you buy a product that you do not like, or is priced higher than you wish to pay. You do not have to buy an ebook at all -- you have VAST choices of what you can use your money for. The consumers have ALL the power. The publishers have to ENTICE you to buy their product and they have vast competition.

Even with the publishers wresting pricing control from Amazon -- and all the other online stores -- they are powerless to get you to buy a product they price too high.

There is no difference between folks thinking $14.99 is to high for an ebook and folks thinking $25 is too high for a hard back book. How were publishers able to get away with such pricing? Because there were enough people who WOULD pay that price.

The same will be true for ebooks. It's demand pricing. When demand wanes, the prices will be lowered. If not, it's either because there is more demand that folks think, or that the price elasticity is such that lowering the price won't result in more revenue.

Lee

[leebase]

Originally Posted by Maggie Leung

I doubt publishers aren't cutting prices because they can't figure out that some readers want cheaper prices. They're probably not cutting them because the market (in the form of buyers who are willing to spend) makes it unnecessary to do so.

Ta Da! Bingo. People should be angry at the READERS who pay high prices. Well, except for those are the readers who ensure that authors continue to write for us.

Lee

[Maggie Leung]

Originally Posted by leebase

Ta Da! Bingo. People should be angry at the READERS who pay high prices. Well, except for those are the readers who ensure that authors continue to write for us.

Lee

Lol. As a consumer, I pay what I think a product is worth. I have no obligation to not buy any product because other people can't afford it (or want to pay less).

[bgalbrecht]

Originally Posted by leebase

We don't need to lecture the publishers because the publishers have all the incentive they need to "price right". They also have all the information that the rest of us guess over.

You're assuming that the publishers are rational, and
1) want to maximize the profits for each individual title
2) have the resources to do so.

There are plenty of reasons why the publishers have no interest in maximizing the sales and profits of individual books, especially if it means adjusting the price up/down for an individual book based on sales. Adjusting the price on some books will affect the perception of what should be the price of other books, and publishers really dislike the idea that books with high volume sales should have their prices lowered because other books have a price drop.

[Andrew H.]

The OP's premise makes no sense because he has not defined his terms adequately.

Saying that something can't be priced "too high" only makes sense if you define in which context something is or isn't "too high." This same ambiguity is why readers who complain about ebook pricing been too high are just as correct as the OP.

E-books can be priced too high *for many people* and yet not be priced to high *for the market* (or *to be profitable*). But these are two different points that are not mutually exclusive. And shouldn't be treated as such.

A profitable price for e-books may be too high for many people. Likewise, the fact that an e-book may be too expensive for me is not evidence that the publisher will go out of business by asking that price.

[Illinifan]

The whole premise for your argument reminds me of an old Saturday Night Live skit from the 80s. William Shatner is a shift supervisor for a nuclear power plant who leaves work early one day. Before he departs, he tells his people, "Remember, you can't put too much water in a nuclear reactor."

The rest of the skit consists of the plant workers debating whether or not to add water to the reactor after they get a warning light. Hilarity ensues as does a nuclear blast.

Three pages and dozens of posts later, no one is any smarter nor has anything been accomplished here because of what Andrew H. pointed out. The argument is spurious due to a lack of definition of terms.

Thank God we aren't in a nuclear power plant.

[leebase]

Originally Posted by bgalbrecht

You're assuming that the publishers are rational, and
1) want to maximize the profits for each individual title
2) have the resources to do so.

Nope, I assume no such thing. I only point out the obvious -- no one has to buy an ebook. There is a LOT of competition. Heck, in no time at all a book will have to compete with itself in the form of the secondary/used book market.

We've seen publisher put out ebooks at significantly higher prices than the paper back version that's already out on the shelves -- not to mention plenty of used versions.

Outrageous!

Well, what will most sane people do? They'll buy the paper back. It doesn't matter WHY the publisher decides to price an ebook high. Maybe they know a particular ebook would sell more, but they don't want to harm the sale of the hard back or the marketability of their entire line. Who cares why?

Either you are willing to buy the ebook at the price the publisher puts on it, or you are not.

Publishers may indeed be evil. They may be stupid. They may be evil AND stupid. But they have NO POWER to sell an ebook for more than people are willing to pay for it.

Lee

[leebase]

Originally Posted by Andrew H.

Saying that something can't be priced "too high" only makes sense if you define in which context something is or isn't "too high."

Yes and no. Each person has their own concept of what is "too high". But WHATEVER one's concept of "too high" is, they should recognize that it's impossible for a publisher to make them pay more money for an ebook than they are willing to pay.

If OTHER people are willing to pay what the publisher asks, in the numbers that the publisher is seeking -- then, by definition, it can't have been "too high".

If a publisher sets a high price and no one buys the ebook -- or not enough as defined by the publisher -- they will lower the price. Or they'll advertise. Or they'll put their efforts behind finding authors who's works can command that price.

We can trust the publishers to be self interested. We can trust the book buying public to be self interested. A level will be found where enough people are willing to pay a price the publisher is willing to sell for. There are simply way too many options for people's money for publishers to succeed in price gouging.

Lee

[Worldwalker]

Originally Posted by leebase

Because you can replace "ebook" for "hard back" and EVERYTHING will still be true.

Except that you can't buy a used ebook.

And you can't buy a remaindered ebook.

And you can't borrow an ebook from your friend.

And you can't wait for an ebook to come out in "paperback".

And you can't use a discount coupon on an ebook.

And you can't buy an ebook on sale.

And there's no cost to a publisher for keeping an ebook around at any given price forever, unlike hardbacks, which eat. (or at least cost taxes, warehouse space, etc., which works out to the same thing)

But other than, y'know, being subjected to any of the same pressures that affect hardcover books, I guess "everything" is still true, for values of "everything" approaching zero.

[Worldwalker]

Originally Posted by leebase

There is so much anger and passion on this forum due to ebook pricing -- and it's so out of disproportion to the situation. If an ebook is priced higher than you want to pay, then don't buy it. There is no reason for all the huffing and puffing.

You're absolutely right. There's way too much discussion of ebook pricing going on here on an ebook forum. I think you'd better leave now, while you still can. Find a place where everyone is in total agreement with each other -- and especially with you -- on all things. You'll be very happy there.

[abookreader]

There are simply way too many options for people's money for publishers to succeed in price gouging.

Then I don't think your thread should be titled "It's IMPOSSIBLE ...."

because that doesn't seem to be in line with your regurgitation of the MacroEcon 101 Optimal Pricing Supply/Demand line of thought which you have explained so well.

Perhaps

"Successful Publishers will price eBooks correctly" is more what you are trying to say.