Future Ebook Price Point

[Dimwit]

Originally Posted by allinhi/

I think you have it about right. What is hard to anticipate the role promotional discounting and possibly increased ability to share ebooks will have. I still am convinced that the proper comparison for ebooks is paperback books.

I agree totally with that though an interesting variable might be the authors themselves. Would you pay more for a King? Or a new Martin over an unknown? How about genre variables? Is Romance less of a draw versus Mysteries? Horror? Thrillers?

There's nothing stopping any of the houses from fracturing the pricing.

[kennyc]

Romance is the biggest selling ebook category!

[speakingtohe]

A book these days can be created with three basic elements. The author, the editor and the distribution channel (be it kindle or whatever else). Those are the required elements. On top of that you might want to add an artist for the cover and a marketing campaign, but going back to the $0.99 game scenario you can be entirely certain that 90% of the games released have little to no marketing done in advance. Yet they do just fine. I'm not sure what the publishers actually bring to the table anymore that justifies raising the price that much.

http://blog.nathanbransford.com/2010...s-provide.html

http://blog.nathanbransford.com/2009...ublishers.html

A couple of short articles on the subject that put it much better than I ever could.

In short authors provide services to authors which the author is unable or unwilling to perform for themselves.

Kind of like the many other businesses or individuals that exits. Bankers, stockbrokers, accountants, lawyers, cleaners, decorators, restaurants, retailers, construction companies and dare I say governments?

Many people can and do exist without any of these services even in developed countries, but most of us would be hard pressed without some of them.

Today it is the author's choice (barring contracts already signed) whether they use a publisher. The author makes the decision based on the advantages and disadvantages of the service provided.

Helen

[TFeldt]

Originally Posted by speakingtohe

In short authors provide services to authors which the author is unable or unwilling to perform for themselves.

Those were some well written articles, many thanks for posting them. I found it especially interesting to see how the author described the transformation of publishers from what they are today to service providers. This is exactly along the lines of what I expect will happen. Other parts of the articles are vague, however. There are references to "a whole lot of tasks that Author of the Future may not care to deal with" but then only four or five items are listed. Two of which are the ones I named as essential; an editor and an artist for the cover.

When this transformation of publishers transpires, and it will eventually as it has in every other content industry, it will be interesting to see what the final price point comes to. If the reborn publishers ask for a price up front then the initial cost of an ebook might very well be $10 as it is now, but once the publisher's fees has been paid off the book could drop to sub $3 as the author is making all the money at that point (minus the e-shop's percentage). If the publisher takes a percentage the price point will be hazier, who decides the final price? Author or service provider?

The most noteworthy thing, that must be mentioned, is that freelance editors and artists already exists. As does freelance agents who could deal with various e-retailers. If an author used different people for each area then none of them could reasonably ask for a percentage, but the author would need more fiscal means up front. Ah, we've got interesting times ahead.

[jennb]

Hopefully, never. Most authors struggle as is, but this would really put the little guy out.

Originally Posted by Rob Lister

How long before ebooks hit the $1 price point that music has? Will it ever?

With new ebooks hitting the internet torrents as fast as they're published, how long can the majors get away with charging full pulp price for an ebook?

Surely they've done their math and think the current prices yield the best return but they must know that it can't last. As more and more folks switch to e-readers (1 in 6 now?), and demand for ebooks increases, so too will the availability of the torrents.

Will it be a gradual decline or a sudden dump to a buck?

Or are avid readers just so morally superior to teenagers and their ipods that pirating will never be a real concern for ebooks.

[kennyc]

Originally Posted by jennb

Hopefully, never. Most authors struggle as is, but this would really put the little guy out.

Well except that if an author can sell directly at $1.00 they make a hell of a lot more than if the publisher gets 99 cents of that dollar!

[howyoudoin]

I think publishers have reached the conclusion that they would rather make $14 off one sale than drop the price down to $1 and depend on 14 sales.

I think they base this decision on the experience gained from the 'efforts' of the music industry. They seem to have decided that they cannot eradicate piracy, and so have adopted a two pronged approach to making money (*ka ching*) :

(1) DRM - a counter-productive, ineffective and irrational policy that affects the very people who pay for their products.

(2) Jacking up the prices - One might disagree with the economics of it, but unlike DRM, this has some legitimacy in that it brings good old market forces into play. Unless of course, there's cartelisation.

[HarryT]

Originally Posted by howyoudoin

(2) Jacking up the prices - One might disagree with the economics of it, but unlike DRM, this has some legitimacy in that it brings good old market forces into play. Unless of course, there's cartelisation.

I really don't think that prices ARE "jacked up". I don't know what eBook prices are like in the US, but in the UK they are typically significantly below paperback prices.

Eg, to pick an example completely at random, the most recent eBook I've bought is "Tooth and Nail" by Ian Rankin. The list price for the paperback edition of this book is £7.99. The e-Book cost me £4.99. e-Books are subject to 20% VAT, unlike e-Books, so excluding VAT the price is £4.16, which is 52% of the paperback price. I don't personally consider an e-Book at half the price of the paperback to be a "jacked up" price. £4-5 is the typical price of a "back catalog" e-Book in the UK.

[Andrew H.]

Originally Posted by Pinecone

It depends on your circumstances at the time.

You may be out of work, and have plenty of time, but no money.

You may be in a high pressure job that pays a lot, but leaves you with no free time.

And it can even be different for different aspects in your life. My job has a good bit of international travel (this is being written from Windhoek, Namibia), so I have a lot more time for reading than I do some of my other hobbies (which require my physical presence at home).

Be sure to try some Windhoek Lager!

[Rob Lister]

Originally Posted by HarrtT

An interesting theory. Did car theft prompt motor manufacturers to reduce the price of cars, or to make them harder to steal?

Perhaps it would have thus prompted them if you could freely download a perfectly drivable new car from the internet more quickly than you could buy one from a dealer. I'm old enough to remember when Japan first broke into the American auto market. Those (then) cheap foreign substitutes crashed the U.S. car market --a crash from which it never fully recovered. But I digress...

Originally Posted by HarryT

I really don't think that prices ARE "jacked up". I don't know what eBook prices are like in the US, but in the UK they are typically significantly below paperback prices.

"Jacked Up" is a loaded term. "What the market will bear" is a useful legitimate substitute, as in "I really don't think that prices ARE what the market will bare." For you, it bears perfectly. For me, it is much too steep...

...and I would likely buy three times the books at half the current price.

I not suggesting that either of us is typical. I'll looking for the optimum.

[TFeldt]

Originally Posted by HarryT

The list price for the paperback edition of this book is £7.99. The e-Book cost me £4.99. e-Books are subject to 20% VAT, unlike e-Books, so excluding VAT the price is £4.16, which is 52% of the paperback price.

If this was the case market wide then I'd agree entirely with you, on all accounts. Unfortunately, as has been brought up many times before in previous threads, the market is far more fractured than just p versus e prices. Let me give you an example that underlines the problems of geo and currency ignorant pricing.

Black library publishes a series of sci-fi books that is an guilty pleasure of mine. The series is gritty and the protagonists usually die heroically, which is something I enjoy for some morbid reason.

The ebook is €8.99, the pbook is €8.99. Neither of those numbers really bother me, I -am- willing to pay the same price for an ebook as long as I'll enjoy the content. I just refuse to pay -more- for an ebook than a pbook. But here comes the amusing bit. Let's look at international pricing of the ebook.

€8.99 vs $7.99 vs £6.50

When we factor in the currency values the final tally comes to:
Europe $12.5, USA $8, Europe-GB $10.29

Even including 25% vat that US and GB customers won't have to pay that's still just a broken calculation. They've got worldwide rights, there's no bizarre contractual obligations to force them to jack up the price for euro customers. They just do. As do most publishers in almost every industry. I'm really not trying to whine about a 20% (after having added 25% vat) increase in cost for europeans (23% for Europe-GB which is even more bizarre considering black library is based in GB and customers don't pay eu-vat), just keep those numbers in mind.

What I see as the largest danger going forward isn't that publishers will attempt to charge more for their ebooks, as HarryT said it doesn't happen that often (although I seldom if ever find a popular ebook for 50% of its pbook price). The danger is that they will continue to rely upon outdated and ultimately harmful views on capitalization.

I get it, english books probably sell better in usa and uk. When you have to pay for shipping, storage, customs, difference in taxation and whatnot for products that don't sell as well you need to compensate by raising the price. That's totally valid for physical products. And it's entirely bloody invalid for digital ones.

Not like black library is operating out of every european country and thus suffer the cost of unsold merchandise. They're just raising the price because that's what everyone has always done. This, in my humble opinion, signals a reverting to outdated business methods which will ultimately harm the industry more than it will ever help it. It also explains why so many parts of the ebook industry seems to be going backwards instead of forwards.

[Pinecone]

Originally Posted by Andrew H.

Be sure to try some Windhoek Lager!

Almost every night.

Except the night I had some Namibian schnappes and South African wine.

[Pinecone]

HarryT,

Not in the US. In the US, e-book and p-book prices are almost the same price. Thanks to the Agency model of pricing.

[Pinecone]

The fallacy is twofold:

1) DRM doesn't stop piracy. As the music industry found.

2) If you jack up the prices, you encourage piracy. At $1 per book, why pirate? If I want a 10 book series, it costs $10. At $14, that same series costs $140. At a $140, piracy becomes tempting.

[HarryT]

Originally Posted by Pinecone

The fallacy is twofold:

1) DRM doesn't stop piracy. As the music industry found.

2) If you jack up the prices, you encourage piracy. At $1 per book, why pirate? If I want a 10 book series, it costs $10. At $14, that same series costs $140. At a $140, piracy becomes tempting.

It's a question of whether it's commercially viable to produce a book at $1 per copy. If your costs are $2 a copy, it clearly isn't.