E-Book Prices, Getting Less Than What You Paid For
I read a lot (well over 100 books a year), and I don’t have a strong preference for medium one way or the other. If it has an awesome cover, or something I might want to have on my shelf, I’ll buy the paperback. If I just want to read the story then I’ll get it on ebook.
It’s really that simple. Except for when it’s not. See, the other deciding factor, and admittedly, it’s a huge one, is price. Ebooks in general are significantly cheaper than paperbacks, or atleast they should be. This shouldn’t even be remotely surprising when you consider how much cheaper the production of an electronic file is by comparison to a paperback book which is to say nothing of the cost of distribution.
But, this concept seems to be missing the mark with a lot of popular books out there these days. Books that I happen to want to read, but am unnwilling to pay $10 for the equivalent of a digital file when I could splurge an extra two dollars and get the paperback.
See, big publishing houses have a hierarchy in what format they would prefer to sell.
First, they want to sell a butt-load (which is a scientific metric equivalent to “alot”) of hardcover books. They have the highest mark-up on these books and therefore make the most profit on the back-end. The problem is, I can’t tell you the last time I bought a hardcover, which is for a multitude of reasons not the least of which is they are inconvenient as hell (again, a scientific measure of comfort equivalent to “a bed of nails”) to read.
I like to read on my back, in bed, with my book or electronic device held over my head. I run the very real risk of crushage if I attempt to do that with a hardcover which dropped from any height, onto my head, has the destructive force of a brick. I’ll pass.
Second, the publishers want to sell paperbacks, again ’cause they have the highest mark-up.
Third, they want to sell E-Books, which is weird, ’cause you would think since ebooks are the cheapest option to produce they’d want to sell more, but remember that a publisher has a lot of mouths to feed, mouths that have a hard time getting fed if they are selling an ebook for $2. In the long run, they are betting on the paperback/hardback sales to carry the day.
So what do they do? They mark the ebook prices waaaay up to create an incentive to buy the paperback. Problem is if I pay $15 for every book I read in a year, I’m paying well over $1500 a year, just in books! Eek!
For instance, here are some books that I have on my list, but which I flat out refuse to buy on account of their abusive price points:
Amazon list the Kindle Price for Kaku’s Physics of the Future at a stiff, but manageable upper end price of $8.57. The paperback? $9.02. That’s right, for $.50 more you can get the actual physical copy. Now, I love Kaku and I’ve read all his stuff, but this is ridiculous case in point. Also, if you want to see something real amusing, check out Kaku’s Hyperspace listing on Amazon where the kindle price is around $38. Which I truly hope is a joke, or a mistake, or something.
Golden Son is a good example of an industry standard practice. For the first few months of a big release they only offer it in hardcover and Kindle. No paperback option. The reason? Because they gouge have the most revenue off hardcover prices. How do they drive sales towards the hardcovers? They don’t give a paperback alternative until the hardcover sales start showing decline, and they jack the kindle price way up so that the cost/benefit analysis is skewed in favor of spending a few extra dollars to get the hardcover. Don’t believe me? Then ask yourself how they justify selling the kindle version for $10.99 and the hardcover for $16.92. If you figure the paperback would be priced somewhere between the two, then that means you’d be spending somewhere between $1-3 for the paperback as opposed to the kindle, which again, at the moment, isn’t even an option.
Other quick examples?
The Windup Girl by Paolo Bacigalupi: Kindle Price: $8.58 Paperback Price: $9.03
Defender by Will Mcintosh: Kindle Price: $8.89 Paperback Price: $12.18
Embassytown by China Mieville: Kindle Price: $9.99 Paperback Price: $12.87
Now, in these examples the point is that the Paperback prices are actually pretty good. About $10 is what I expect to pay for a paperback, but the ebooks, by comparison, are way OVERpriced for what you get.
I don’t want to seem that all publishers are being jerks with their ebook prices, because they aren’t. I think big publishers are starting to realize they can’t compete in the digital market with those sorts of prices. A quick example would be Kim Stanley Robinson’s 2312 which was a Nebula winner a few years back. Kindle Price: $6.99 Paperback Price: $8.60. These are good prices for a 500+ page book with award winning credentials.
What’s a reader to do? *shrug* Good question. I tend to buy books used ’cause they are significantly cheaper or wait for some sort of deal and snag the ebook for cheap. But it bums me out ’cause there are certainly a lot of authors I’d love to read, but who’s work is simply overpriced. Perhaps that’s my expectation of what a book should cost and I’m being spoiled, or maybe the big publishing houses need to hurry up and get competitive with their ebook prices. Who can say for certain?
Oh, wait.. this is my blog, I get to say for certain! muahaha. Don’t like it? Well, fine. Go start your own blog!
What’re your thoughts on the current pricing structure of books? Overpriced? Underpriced? perfectly priced? Do you prefer to read electronically? Paperback? Hardcover?
Okay, so it’s only fair since I spent this whole big blog post ranting about prices that I put my money where my mouth is. If you head over to Amazon, for the rest of the week you can pick up Time Heist for FREE. Currently it’s sitting #1 in Science Fiction Adventure and Cyberpunk and Genetic Engineering and blah blah blah. It’s doing well, I’m excited, but I’ll be even happier if you go and grab yourself a copy!
FREE until the end of the week… ’cause I like ya.
Couldn’t agree more. My preferred medium is paperback (like you, I much prefer them to the cumbersome hardcover), but I buy digital a fair amount to save money. If it isn’t significantly cheaper there is no point to me. I rarely pay more than 4 or 5 dollars for an e-book. I can’t bring myself to pay more for something that can be copied and distributed for about zero dollars.
I agree entirely. 4 or 5 dollars for an ebook is my “no brainer” purchase. I start balking at $7, and wont go over $8 to save my life.
First off, I’m so jealous that you read 100 books a year. I so need to set aside more time to read.
I love a good hard back book. If it’s a favorite author or if I have been reading the series I always try to get them in hard back. It looks better on my bookshelf. I read in bed as well, but have found creative ways to prop up my books so I don’t drop them on my face. lol
I agree completely that the price of an ebook is ridiculous. I usually only buy ebooks from self-published authors. But I will pay full price for a hard back book in a heartbeat.
I might need to take a class or something on the proper way to hold a hardcover. My current method is fatally flawed.
You are correct about hardcovers looking great on a shelf. There is no denying that!
I’m in the UK, and I have to say e-book prices over here seem much cheaper here (in the main – new releases are the exception). The Wind-Up Girl is 40% cheaper on Kindle (though I found my copy in a charity shop, its a cracking book). I like nice fat paperbacks that I can read in the bath (no, my tablet is NOT going to be put at risk of a bubble dunking). I’m a member of a book group and tend to read about 60 books a year, so I’m not averse to e-books when they are the cheapest option. There are some authors who’s books are EVENTS and those I buy on first release, in hard back and they live happily ever after on my special shelves.
But there’s a sting in our e-book tail here. Books are zero rated for value added tax in the UK – at least print ones are. E-books are now being slapped with a 20% surcharge – for no discernible reason. This will likely drive up prices this year and is getting bibliophiles and authors jointly riled. Self publishers now have to faff on with tax returns and automatically lose a proportion of their income to the tax man. Given the majority of UK based authors earn in the region of £5k per year this is likely to have quite an impact. It also makes it much more complex for first time self publishers to take the plunge and sell that novel for a pound.
There is one alternative I am happy to exploit on a regular basis for what I term my ‘fast food fiction’ – the library! Probably 30% of my reading comes from there, and it costs me nothing.
Thanks for the excellent UK perspective. The library is a fantastic alternative, but for some reason I have this compulsion with owning the books so I can line them up and look at them all. I’m weird like that, and it costs me alot of money. 🙁
Oh, I get that compulsion! I borrowed The Wind-Up Girl from the library and then had a burning need to own it. Thankfully there was a pristine copy on the shelves of the charity book shop next door but I’d happily have shelled out larger sums of cash for it.
And I’m looking at a shelf that has a set of 4 books by William Horwood on it, 1 soft back and 3 hardbacks and I know, oh I just know, that soft back is so wrong and needs replacing!
Strangely enough, the royalty on an e-book is way higher than a hard or soft-cover, so they should be significantly cheaper. I tend to buy hard-covers second-hand of books I always wanted to read or own, but didn’t get round to buying. Am I robbing the author of their royalties?
Nah, I don’t think so. I think buying second-hand is a great way to make sure books aren’t just going to the compost pile.
What a great post!
I am a fan of the ebook, it has made it far easier for writers to be published, anyone can publish a book on Amazon, Publishers are no longer the gatekeepers, writing is going the same way as the music industry a few years ago when bands could put up their music on Youtube.
We only had access to books that were big sellers, it became impossible for writers to publish their work, especially if it did not fit into their selling ‘categories’ Even JK Rowling was rejected by 7 publishers – good job she was persistent otherwise it might have remained in a drawer
It is cheaper here in the UK, but things are priced purely by what they can get away with rather than the costs so that is why you pay a premium for recently published – we like to be able to talk about the latest book, or have it on our shelves – we start out in an exclusive club, those who have read the book until eventually when everyone has – it becomes passé . We have moved on seeking out the next ‘thrill’ I hold my hands up, I read three quarters of ‘Shades of Grey’ just to see what all the fuss was. (three quarters because it was absolutely awful).
I live in a small flat and have 6 bookcases, I love books, but there comes a limit, I only keep mostly non-fiction as often I find I don’t want to re-read fiction. I don’t need to find room for an ebook.
There are downsides, I can leave a paperback beside the swimming pool on holiday, and I can’t lend a brilliant read to my friends anymore, they have to buy it themselves. (Perhaps that too is a good thing, it means that writers will be paid each time someone reads their book – and they get paid more because the publisher isn’t raking off all the costs first before they get a single penny).
Like you I stopped reading hardbacks because they were too heavy! I like ebooks, mostly because I am at that age where I spend more time looking for my glasses than wearing them, at least I can just up the font size and carry on!
Like you BreakingAngel, I am eager for them to develop a waterproof iPad, my sanity was saved by long baths and good books when my children were younger, but I can’t risk it now.
You bring up a good point about not being able to lend an ebook which means your friend will have to buy their own which is money in the hands of the author which I am all for! But I’m greedy.
It’d be interesting to study the reading habits of the UK versus America. You bring a really awesome perspective on the topic, one I wouldn’t have necessarily considered on my own.
Waterproofing the Ipad would be good, but I’m looking forward to them being impact proof. I’d really like to use mine as a frisbee. There’s an app for that, but it’s just not the same.
Well, considering that a used copy of a book I’ve been trying to find/purchase is running $149 used….LOL
Whaaa…. Does this book cure cancer? ‘Cause… if not, then you aren’t getting your money’s worth.
Grabbed myself a copy of Time Heist, just read the first chapter, and I am drawn in! Can’t wait to read all of it. 🙂
Thanks, Candice! I hope it continues to please!
Rant alert! It would be interesting to discuss differences between US readers and UK readers.
For example I think American publishers are lazy! we have to put up with books published for an American audience, whereas when UK books cross the pond, they have to be changed because American readers can’t adapt to UK spelling or our differences eg. nappies/diapers, as an example!
It strikes me as laziness, (oh dear now I am not just ranting but repeating myself!) our spelling is different and it irks me that they don’t respect our culture, just expect us to work round it where as US insist things are altered…
oops… I am quite grumpy today! lol
I can attest to American laziness and self-entitlement. I apologize for both, but it’s a big country and only a little apology. I’m afraid it won’t amount to much.
I read a lot of UK authors where the text haven’t been *translated to Americanese* and honestly barely notice the differences. It seems going through and changing them would be more work than its worth. People just need to suck it up and learn a few new words and spellings! 🙂
Whilst I think that e-books could and should be cheaper than printed books, I also think that sometimes we do not realise that the main costs lie in unexpected places. Most of the costs of publishing a book come from layout, design, content origination, marketing, author ‘management’ etc. Ironically the cost of distribution (as distinct from delivery, note these are different functions and publishers often do not handle distribution or delivery directly themselves) is the same or sometimes even more for e-books than print books (Amazon, Apple etc can take more percentage than some book stores and distributors, depending on the market you are in). So the only real cost saving is on print costs which, depending on the print run can actually be negligible on a cost per unit basis. Thus niche, new and therefore small print run books will have the biggest savings on a unit cost basis when comparing digital to print publishing. And this is (often) reflected in the pricing. The big print runs will see little difference between print and digital because there is VERY little difference in cost to the publisher. It is also worth noting that many publishers only make money on the bigger print run books, smaller print runs, first time authors etc are often published at a loss as publishers seek to test markets, ‘find’ talents etc. The economics are often less obvious than you may think… Disclaimer NOT a book publisher… 🙂
Hey, Danielle, thanks for chiming in!
You’re correct in saying that the majority of publishing costs originate from things such as layout, design, content origination, marketing (eh, maybe… depending on the type of contract you sign and your previous track record. Marketing costs for a new author are practically negligible), author management (I’m not sure what this means, actually?).
But regardless, we can assume that the production costs of an ebook and paperback are identical with the difference being distribution (while delivery is a distinct entity from distribution, for the purposes of this conversation, and the manner in which they’re handled in the publishing industry, we’ll assume they’re the same.
You claim that in some cases the cost of distributing an e-book is more than that of a paperback (which if true I would love to see the details of how this can be) because to my knowledge there is no platform, currently in existence, where the cost of distributing an ebook is more than a paperback. You cited Amazon and Apple, but in both instances the royalties and cost of distribution are vastly cheaper than that of a paperback. The same can be said of Kobo, Sony, Smashwords, and Barnes and Nobles. And this makes sense when we consider the fact that beyond bandwidth there is no cost to the distributor. Digital shelf-space is, and will always be, cheaper than physical storage space for paperbacks. Creative print-on demand services have circumvented this, but publishing houses have not adopted this production model which means they are still tied to the old system of printing, storing, and distributing large quantities of physical books if they hope to turn a profit.
Which brings me to the second point: you claim that publishers can price lower, offer bigger savings, and ultimately make more by smaller print runs, whereas they can’t do the same on large print runs, hence the approximate price similarities between paperback and ebook. This doesn’t make sense within the current framework of the publishing industry.
Sure, it’s correct to assume that a smaller print run will turn a profit more easily because the initial investment is smaller, and therefore a smaller risk. But the ultimate earning potential of a book comes down to what it can turn in the long run over the course of its life. You say that the price difference between ebook and paperback is small in large print runs because the cost to the publisher is pretty much the same. But how can that be when both ebook and paperback share the same upfront publication costs. The only difference between the cost of one versus the other is the production and distribution of the paperback?
The economics of the situation isn’t murky or subtle in this instance. Producing and distributing paperbacks costs more than ebooks, by a considerable margin. Even if we wanted to magically make the two equivalent, there would still be the question of royalty rates which are, across the board, higher for digital platforms, than for paperbacks.
We’ll use Amazon and Createspace to give quick examples. A $2.99 ebook nets $2 worth of royalty after Amazon takes it’s %30 cut. To make that equivalent amount for the paperback, you’d have to charge $12.99. The lowest you can charge for a 400 page Createspace book and still make a sliver of profit, is in the $8 or $9 range, which means the actual cost to produce each book is in the $6 or $7 range. That’s a fixed cost across the lifespan of that book which you will always have to pay, whereas the ebook has no additional charges towards production after that initial investment.
In the instances of those books I listed earlier where the paperback costs $10 and the ebook $8, the publisher is making $5.5 off each ebook, whereas they are making under $2 on each paperback. So, they are making nearly twice as much on an ebook that is intrinsically less valuable than a paperback.
This is price gouging and it’s wrong (and ultimately ineffective as we’ve seen with the indie publishing revolution where self-publishers were able to make a significant dent in the market share by undercutting big publishers with their more competitive price-points.
Anyways, sorry for the long reply. I enjoy these types of conversations, they get me excited. It’s great to consider all the different perspectives and think critically about the situation from different angles. Thanks again Danielle for taking the time to share your thoughts!
Sorry for the late reply, been busy…
So first off, distribution and delivery are NOT the same. distribution is the means by which you get books to market that is getting them listed with retailers, listed on e-commerce sights, listed at book clubs etc. This requires a sales process, orders, negotiations regarding discounts, trade marketing etc. Whether electronic or physical the process is similar and involves costs (meetings, travel etc) and the discount given is a real direct cost that accrues whether electronic or physical.
Delivering copies is entirely different. Sure physical books need to be shipped from printers to wholesalers and from wholesalers to retailers and this is not cheap. With e-books the book is transferred electronically from a server to the users device, usually at the users expense.
So the publisher saves delivery costs but not distribution costs with e-books. Given that publishers can pass on discounts of 20% to 40% to retailers (both virtual and real) this is a far bigger portion of costs than the physical delivery of books.
Thus my point that the real savings generated on e-books are not as great as many people think is valid. The cost of printing and delivering physical books is only a relatively small portion of the costs in the total ‘basket’.
Wrt relative costs of distribution, it all depends on distribution channels. Some physical books may be sold direct to educational institutions at low or no discount, whereas an e-book may be sold through Amazon at say 30% discount to Amazon. This would be a case of real world distribution being cheaper than electronic. But you are right in saying that this is not the norm.
You are right that print on demand has not been adopted again this is largely due to economics. It is cheaper to print a large run and keep unit costs down than print short runs at high unit costs. Also the machinery ends up costing more to run and thus is not an attractive option for many publishers. This technology still needs some work for it to be cost competitive.
I think you have misunderstood me re print runs. A small run title will have a very high unit cost to print and print costs will therefore be a higher proportion of the unit cost of the book. This means that the relative cost of printing is higher and that therefore a higher percentage discount can be passed to the reader of an e-book of the same title. Large print runs mean smaller unit cost of printing and thus any savings on printing for e-books make up a smaller proportion of the cost and the percentage saving passed on to the reader is thus smaller. I believe that a review of prices of a wide range of e-books vs print books on most retailers (Amazon etc) will support this argument, although it is of course not universally true.
I don’t think small runs increase profits, quite the opposite. But a small run does act as a stop loss mechanism for the publisher, reducing risk.
I agree that the publishing industry is facing massive disruption and I suspect that part of the ‘problem’ is that the publishers old world systems and processes are at odds with new technologies and ways of publishing content. In this new world are publishers even needed? Will we see a sea change in the way this industry operates? I suspect so, whether the independent publishing phenomenon is sustainable or not, only time will tell.
Whilst I think you are right that e-books can (and should?) be cheaper, the realities of the publishing model mean that big real world publishers are not able to make them as cheap as readers would like. This opens the door for smaller, leaner and more agile competitors to exploit these gaps and that is a very good thing. I don’t blame the publishers, I don’t think they are gouging the market, but I do think if they can’t change their models, they may soon become extinct.
Great response, Danielle!
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Hardcover books are the best, sure they can hurt if you drop them on certain body parts. However, they hold up much better than paperbacks after you drag them places and when you drum on your pencil on the cover, that sound. Haha. For some reason when I think of e-books I think “cheaper than,” I am not too crazy about an e-book, especially if it is a novel, having the same price as a paperback or hardcover. Yes, I do love a descent used book store, hmmm :D.