EBook pricing and other myths

Lynne Patrick

I wasn’t really in publishing long enough to become fluent in the language; I just picked up a smattering here and there, enough to kid myself, and occasionally other people, that I knew what I was talking about.

So when I read about the current developments and disputes in the trade, I have, at best, an imperfect understanding of what’s going on.

Agency pricing, for instance. What’s that all about?

What I have managed to pick up on the subject is that a lot of people think eBooks are far too expensive. And the favourite excuse that’s thrown out for this somewhat disingenuous view is there are no printing costs.

Pardon me for a moment while I indulge in wry laughter.

Whenever I read a press article or newsletter item around this subject I’m reminded of a meeting I went to long ago, at which a hundred or so authors harangued a panel of people from publishing houses about the paucity of their royalties – because, of course, since they were only getting ten percent of cover price, the publishers had to be pocketing the other ninety percent and living the life of Riley.

Yeah, right. And eBooks cost nothing to produce.

The fact – and it really is a fact, not an excuse – is that publishers pocket a very small percentage of the cover price of most books; and printing accounts for twelve percent at most of the total costs of turning manuscripts into those books – and eBooks generate other costs which go some way towards making up the difference. Some time ago I posted a breakdown of my own costs; if memory serves, those costs added up to something between 40p less and 40p more than the cover price. Reduce the cost of an eBook by more than 50p or so, and the publisher is working for nothing. And few publishers operate as charities.

So to anyone who actually works in publishing and knows how things really are, setting the price of an eBook at about the same as a paperback makes perfect sense – and since that’s the case, if hardback is the only print version available there’s no real reason an eBook shouldn’t match the hardback price too. Every book needs to sell a certain minimum number of copies in order to cover its production costs, and since people will buy either the print version or the eBook – rarely both – offering three versions instead of two isn’t going to affect that minimum number at all.

The real problem, of course, is the huge numbers of eBooks which have become available free of charge or for a derisory price either because they’re self-published or as a marketing incentive. This leaves book-buyers’ perspective distorted, and generates tetchy questions about the real cost of producing a book which nobody seems to be addressing. At the moment eBooks still have a novelty value, and the eReader market is still some way from saturation point; a time will come when prices will settle at a sensible level because selling eBooks for peanuts will have become counterproductive.

But that’s still some way in the future. Meanwhile, can I make a plea for some common sense? I may not be completely conversant with the language of publishing, but I can do basic arithmetic – and all the grumbles about eBook prices simply don’t add up.

Comments

[Greg Daniel]

"... setting the price of an eBook at about the same as a paperback makes perfect sense – and since that’s the case, if hardback is the only print version available there’s no real reason an eBook shouldn’t match the hardback price too."

Did I miss something here? If the appropriate price of an eBook is equivalent to the cost of a paperback, how does the lack of a paperback version justify pricing the eBook the same as a hardback?

By that logic, a paperback original should carry the same price as hardback.

What is always missing in this discussion is the fact that a large portion of the book's cover price (35-50+%) actually went to the retailer. This was a brick-and-mortar retailer who has(had) a significantly larger overhead than e-retailers. So the suggested retail is not the real number a publisher needs to be profitable.

As far as appropriate eBook pricing goes, I will cede the floor to Dean Wesley Smith in that regard, as he is one of the few who has been publisher, editor, writer, and self publisher.

[twitter.com/trow125]

As I argued in this space a few weeks ago, the reason ebooks should be cheaper (I'd say 1/2 the cover price of a regular book) is because you don't actually "buy" them -- you license them. You download a file and the seller determines what you can do with it. I purchased an ebook copy of "Gone Girl," and when someone asked to borrow it, I had to say, "Sorry -- I can't do that, I'd have to let you borrow my e-reader" (I'm obviously not that good a friend!). If I buy a hardcover, I can turn it into a coaster, use it to build a fort, regift it, donate it to Friends of the Library, etc. If I buy an ebook, it sits in my e-reader, and that's it.

[Lynne Patrick]

How did I know I was going to get some flak for this post?
Greg, I'll just make one point. What makes you think those e-retailers are demanding smaller discounts from publishers just because their overheads are smaller than bricks-and-mortar shops - something which I'm sure they would dispute hotly in any case? And the discounts can rise as high as 65%, as I know from bitter experience of trying to make a small publishing company work.

[Lynne Patrick]

There are some people I'm never going to convince, aren't there? They're probably the reason I got out of publishing while I still had a bank account, albeit a pretty empty one.

[Greg Daniel]

Lynn, I'm not saying that e-tailers don't want nor deserve the same profit margins as brick & mortar stores. What I am saying is the investments costs, whether it be publisher or retailer are lower when it come to ebooks than for print books. Just as the same costs are lower for paperback versus hardback.

[Lynne Patrick]

Oh Greg. If only that were true.