6 ms·

How Much Should an E-Book Cost?

15 points by raju 17y ago

Tichy 17y ago
Doesn't the NYT have the silliest approach of them all? I mean the random selection of "login required" or "login not required". What happened to that plugin for sharing logins, would it work on the NYT?
tialys 17y ago
Once again, a dying industry cries "The internet will destroy us!" Why not embrace the internet, change your model and MAKE IT WORK. Have we learned nothing from the music industry? If the customer demands that the books be $9.99, you don't tell the customer to shove off, you make it work at $9.99.
- teej 17y ago
  I appreciate the sentiment, but I disagree with your example. Responding to customer "demand" at a lower price point isn't necessarily a good move. If you're not competing on price, starting to is a bad way to go.
- electromagnetic 17y ago
  Are you truly so uninformed that you think everything offline is dying? It's been consistently shown that there has been no decline in the sale of 'paper' books, and the e-book sales are currently an entirely independent market with no effect on sales in the traditional market. [Ed: Sorry the last statement was a little incorrect, it's actually been shown through companies like Tor that the release of some of their free e-books has actually boosted paper book sales; those e-books are really killing that old system!] If anything, book publishers have been seeing record sales of some books due to increased fan awareness and the ease of access to purchasing, like Amazon, thanks to the internet.
  - tialys 17y ago
    Ok, admittedly the "dying industry" bit was hyperbole, but it irks me to no end that "old media" can't simply adapt. If it doesn't work like it's been working for the past 100 years, it must the end of the world. That kind of thinking is slowing progress, and causing all kinds of headaches for consumers more than anyone else. I would feel ripped off paying the same price for an E-book as I would for a paper book, and this is what customers are trying to tell publishers. The problem is, just like the music industry, change is scaring them away from making rational decisions to support the 'new' consumer model.
  - moe 17y ago
    It's been consistently shown that there has been no decline in the sale of 'paper' books, and the e-book sales are currently an entirely independent market with no effect on sales in the traditional market. While I agree that his hyperbole was a bit over the top I also think that you're playing it down a bit too much. The e-ink technology is making its first babysteps just now but it's already clear that we'll have true e-paper (bendable, rollable displays) in the near future. Ten years from now you may still be able to buy dead-tree books. But I'm pretty sure they and especially newspapers and magazines will be on a sharp decline, in favor to just downloading the content to your personal reader device. Twenty years from now our kids will shake their heads about that past era of dead-tree books, just like today they wonder how we could ever exist without cellphones. A common, parental dialogue in 2029: "No search-function, no hyperlinks, no updates, no dictionary lookup? Are you kidding me, daddy?"
- mattmcknight 17y ago
  Interestingly here, it's not the authors complaining, it's the publishers. Much like the record labels, it is the publishers that are becoming less relevant in the slow move to electronic books. Without the barrier to entry of having huge printing presses, Amazon effectively cuts them out. Longer term though, with open formats, Amazon risks being disintermediated themselves, as authors can sell directly to readers.
pchristensen 17y ago
As much as people are willing to pay for it? The price sends a signal, and a higher price signals "THIS IS WORTH SOMETHING." Nearly all the internet is free so people assume it's worth $0.00. My advice to Kindle writers and App Store devs, don't fall for the $9.99 or $4.99 "caps". Charge what it's worth, charge where you make the profit and sales you're comfortable with, and don't worry about the whiners.
- ashleyw 17y ago
  It's easy to price too high though. Would you rather sell 10 at £4.99, or 100 at 99p? Though of course I'm not saying you should price at 99p just because everyone else does, just remember that generally, the higher price your app, the less people will buy it. Find the optimal price point for your app, to make the most profit. eBooks do kind of have an upper hand though — people have been buying paper books for years, at least it has a proven base price for the market (plus a very low piracy rate). While on the other hand, as you said, the majority of people still don't put a value on software…
  - Retric 17y ago
    I think the publisher needs to compare their cost, risk, and proffit in the old system vs the new system. It's not just the average price that droped but also the risk of printing copy's that they don't sell. A reduction in risk often results in a cost reduction. However, hardbacks have a significant price primium because softcopy's are still their for the price consious. A policy of charging 15$ for everything less than a year (or 6 months) old and 8$ for everthing older than that would provide the same benifit.
- Confusion 17y ago
  I sure hope people aren't willing to pay $30 for a Kindle version of a book that sells for $35. They don't don't need storage space or stocks, they don't have to print it or take a loss on shipping. All those advantages and that is supposed to save only $5? We're being ripped off here. I wouldn't consider that a proper prize if they gave me the Kindle for free. Cut it to $10 and I'll start considering whether it's worth buying the Kindle.
patrickg-zill 17y ago
I would say about $2 provided that the piracy issue is solved in one way or another. Essentially 75 cents to author, 25 cents to overhead and editing, 25 cents to distribution/billing costs, plus 75 cents profit.
sdfx 17y ago
So Amazon is paying publishers 3$ more than they make on each book, yet the best deal they are willing to offer to newspapers is 30% of their revenue? http://www.washingtonpost.com/wp-dyn/content/article/2009/05/06/AR2009050603754.html http://www.washingtonpost.com/wp-dyn/content/article/2009/05...
- smanek 17y ago
  Considering that Newspapers lose money on each sale, it sounds good. For example, a $1 newspaper costs the paper $1.50 to print and distribute. In theory, they are supposed to make back that 50 cent loss (plus cover all their other operating expenses) on advertising. So, for a newspaper, my options are: 1) Sell a hardcopy at a $.50 loss and make $1 in profit on advertising, netting a $.50 profit 2) Make $.30 on a Kindle sale, $.50 in advertising, netting a $.50 profit, netting $.80 profit (as of now, advertisers usually won't pay as much for electronic ads).
  - sdfx 17y ago
    are there ads in the electronic (kindle) version of the newspaper?
4ensic 17y ago
Quite an interesting way to frame the discussion. The question addressed is actually "How much will people pay to read a file on a Kindle?". If I buy a real book, I have a physical object I can lend or give away. If I "buy" an e-book that's encumbered with DRM, I'm buying a license to view a work on a specific device. Amazon can remotely disable various features I've already paid for. Make the ebooks portable (e.g. PDF) and DRM-free and you can directly compare them to paper, but not until then.
TweedHeads 17y ago
99cts
kingkawn 17y ago
I would pay more for the work of writers and artists whose overall careers I want to support. I will buy Saramago's books and Outkast's albums.
ChrisXYZ 17y ago
What's funny is that many online only e-books are sold for much higher prices. I'm talking about the ones with those long infomercial-style sales letters that target niche audiences and promise to solve all their problems. $40 for a .pdf with large font and only 90 pages of content is not unusual at all. Neither is stuff in the $70 range. The high price is due to the supposed "value" of the information. I've actually always thought those e-books were totally overpriced, but I guess a lot of people had no problem buying them. It's weird though how the set point for price is expected to be much lower for more traditional books that have been ported over, even though in many, many cases the real life books offer tons more value than a cheaply thrown together e-guide to parrots or dating or something.
- pchristensen 17y ago
  The physical books ported over have the lower price because they're comparable to the physical book. People have expectations about what physical books cost, but people buying the parrot e-books are looking for specific information that's not available in a bookstore. At that point they're buying specific knowledge, not a commoditized product. For instance, if I want to enter the import/export business, am I better off paying $99 to International Living or spending hours scrounging the internet, trying to sift what's real from what's fake, what's trustworthy from the scams, etc? If you value your time, informational e-books can be a lifesaver, even if their delivery medium (poorly formatted pdf files) is cheap.
hernan7 17y ago
Maybe there is room here for some alternative e-book-only business model (that doesn't involve parrots)? Get some unknown authors, outsource the slush reading, concentrate on some niche genres, don't put ads on the NYT. Make sure the books are fun to read and price the Kindle version at $2.00.
frossie 17y ago
But publishers argue that those costs, which generally run about 12.5 percent of the average hardcover retail list price, do not entirely disappear with e-books. Am I stupid or does that make no sense? If the cost of the physical materials of a hardcover is only 12% ($2-3 on a $20-30 book), why isn't the paperback only $2-3 cheaper than the hardback? I don't object to paying as much as the paperback for an ebook; I object to paying as much as the hardback. If they can make money on the paperback, they should be able to make money on an e-book that sells about as much as the paperback.
- pg 17y ago
  Publishers that publish books in both formats usually use them for price discrimination. Hardcover editions are sold to people who aren't price sensitive. And they usually come out first, so if you want a new book right away, you have to buy the expensive edition.
  - frossie 17y ago
    ... but you also get a better book for your money (good binding, acid-free paper, larger print). Whereas the current e-book pricing model seems to be to charge the hardback price while the book is in hardback and above the paperback price (so 9.99 Kindle download while the paperback is 7.99) when the paperback comes out. It is no wonder that people find that unfair. Moreover publishers gain from e-books in other ways (eg. by killing the second-hand market). No matter what is or is not "fair", the reality is that I, a generally early adopter with a comically bad shelving problem, would like to get into e-books but hesitate to do so due to pricing and DRM concerns. If people like me are not jumping into the water, I think it shows that there is a large untapped market that would respond to better pricing. If volume goes up, price can go down. Right now my wishful thinking involves a Netflix for books; basically pay a subscription be able to have 1-3 books "out" on a Kindle (for the sake of argument) at a time. If I like them, I would probably go and buy the hardback to keep/lend/re-read/get-signed but most times I probably wouldn't. Edit: I think that O'Reilly's Safari is close to that model, but a captive device like Kindle and Amazon's huge catalogue would take that to a whole different level.

15 points by raju 17y ago

Tichy 17y ago

Doesn't the NYT have the silliest approach of them all? I mean the random selection of "login required" or "login not required". What happened to that plugin for sharing logins, would it work on the NYT?

tialys 17y ago

Once again, a dying industry cries "The internet will destroy us!" Why not embrace the internet, change your model and MAKE IT WORK. Have we learned nothing from the music industry? If the customer demands that the books be $9.99, you don't tell the customer to shove off, you make it work at $9.99.

teej 17y ago
I appreciate the sentiment, but I disagree with your example. Responding to customer "demand" at a lower price point isn't necessarily a good move. If you're not competing on price, starting to is a bad way to go.
electromagnetic 17y ago
Are you truly so uninformed that you think everything offline is dying? It's been consistently shown that there has been no decline in the sale of 'paper' books, and the e-book sales are currently an entirely independent market with no effect on sales in the traditional market. [Ed: Sorry the last statement was a little incorrect, it's actually been shown through companies like Tor that the release of some of their free e-books has actually boosted paper book sales; those e-books are really killing that old system!] If anything, book publishers have been seeing record sales of some books due to increased fan awareness and the ease of access to purchasing, like Amazon, thanks to the internet.
- tialys 17y ago
  Ok, admittedly the "dying industry" bit was hyperbole, but it irks me to no end that "old media" can't simply adapt. If it doesn't work like it's been working for the past 100 years, it must the end of the world. That kind of thinking is slowing progress, and causing all kinds of headaches for consumers more than anyone else. I would feel ripped off paying the same price for an E-book as I would for a paper book, and this is what customers are trying to tell publishers. The problem is, just like the music industry, change is scaring them away from making rational decisions to support the 'new' consumer model.
- moe 17y ago
  It's been consistently shown that there has been no decline in the sale of 'paper' books, and the e-book sales are currently an entirely independent market with no effect on sales in the traditional market. While I agree that his hyperbole was a bit over the top I also think that you're playing it down a bit too much. The e-ink technology is making its first babysteps just now but it's already clear that we'll have true e-paper (bendable, rollable displays) in the near future. Ten years from now you may still be able to buy dead-tree books. But I'm pretty sure they and especially newspapers and magazines will be on a sharp decline, in favor to just downloading the content to your personal reader device. Twenty years from now our kids will shake their heads about that past era of dead-tree books, just like today they wonder how we could ever exist without cellphones. A common, parental dialogue in 2029: "No search-function, no hyperlinks, no updates, no dictionary lookup? Are you kidding me, daddy?"
mattmcknight 17y ago
Interestingly here, it's not the authors complaining, it's the publishers. Much like the record labels, it is the publishers that are becoming less relevant in the slow move to electronic books. Without the barrier to entry of having huge printing presses, Amazon effectively cuts them out. Longer term though, with open formats, Amazon risks being disintermediated themselves, as authors can sell directly to readers.

pchristensen 17y ago

As much as people are willing to pay for it? The price sends a signal, and a higher price signals "THIS IS WORTH SOMETHING." Nearly all the internet is free so people assume it's worth $0.00. My advice to Kindle writers and App Store devs, don't fall for the $9.99 or $4.99 "caps". Charge what it's worth, charge where you make the profit and sales you're comfortable with, and don't worry about the whiners.

ashleyw 17y ago
It's easy to price too high though. Would you rather sell 10 at £4.99, or 100 at 99p? Though of course I'm not saying you should price at 99p just because everyone else does, just remember that generally, the higher price your app, the less people will buy it. Find the optimal price point for your app, to make the most profit. eBooks do kind of have an upper hand though — people have been buying paper books for years, at least it has a proven base price for the market (plus a very low piracy rate). While on the other hand, as you said, the majority of people still don't put a value on software…
- Retric 17y ago
  I think the publisher needs to compare their cost, risk, and proffit in the old system vs the new system. It's not just the average price that droped but also the risk of printing copy's that they don't sell. A reduction in risk often results in a cost reduction. However, hardbacks have a significant price primium because softcopy's are still their for the price consious. A policy of charging 15$ for everything less than a year (or 6 months) old and 8$ for everthing older than that would provide the same benifit.
Confusion 17y ago
I sure hope people aren't willing to pay $30 for a Kindle version of a book that sells for $35. They don't don't need storage space or stocks, they don't have to print it or take a loss on shipping. All those advantages and that is supposed to save only $5? We're being ripped off here. I wouldn't consider that a proper prize if they gave me the Kindle for free. Cut it to $10 and I'll start considering whether it's worth buying the Kindle.

patrickg-zill 17y ago

I would say about $2 provided that the piracy issue is solved in one way or another. Essentially 75 cents to author, 25 cents to overhead and editing, 25 cents to distribution/billing costs, plus 75 cents profit.

sdfx 17y ago

So Amazon is paying publishers 3$ more than they make on each book, yet the best deal they are willing to offer to newspapers is 30% of their revenue? http://www.washingtonpost.com/wp-dyn/content/article/2009/05/06/AR2009050603754.html http://www.washingtonpost.com/wp-dyn/content/article/2009/05...

smanek 17y ago
Considering that Newspapers lose money on each sale, it sounds good. For example, a $1 newspaper costs the paper $1.50 to print and distribute. In theory, they are supposed to make back that 50 cent loss (plus cover all their other operating expenses) on advertising. So, for a newspaper, my options are: 1) Sell a hardcopy at a $.50 loss and make $1 in profit on advertising, netting a $.50 profit 2) Make $.30 on a Kindle sale, $.50 in advertising, netting a $.50 profit, netting $.80 profit (as of now, advertisers usually won't pay as much for electronic ads).
- sdfx 17y ago
  are there ads in the electronic (kindle) version of the newspaper?

4ensic 17y ago

Quite an interesting way to frame the discussion. The question addressed is actually "How much will people pay to read a file on a Kindle?". If I buy a real book, I have a physical object I can lend or give away. If I "buy" an e-book that's encumbered with DRM, I'm buying a license to view a work on a specific device. Amazon can remotely disable various features I've already paid for. Make the ebooks portable (e.g. PDF) and DRM-free and you can directly compare them to paper, but not until then.

TweedHeads 17y ago

99cts

kingkawn 17y ago

I would pay more for the work of writers and artists whose overall careers I want to support. I will buy Saramago's books and Outkast's albums.

ChrisXYZ 17y ago

What's funny is that many online only e-books are sold for much higher prices. I'm talking about the ones with those long infomercial-style sales letters that target niche audiences and promise to solve all their problems. $40 for a .pdf with large font and only 90 pages of content is not unusual at all. Neither is stuff in the $70 range. The high price is due to the supposed "value" of the information. I've actually always thought those e-books were totally overpriced, but I guess a lot of people had no problem buying them. It's weird though how the set point for price is expected to be much lower for more traditional books that have been ported over, even though in many, many cases the real life books offer tons more value than a cheaply thrown together e-guide to parrots or dating or something.

pchristensen 17y ago
The physical books ported over have the lower price because they're comparable to the physical book. People have expectations about what physical books cost, but people buying the parrot e-books are looking for specific information that's not available in a bookstore. At that point they're buying specific knowledge, not a commoditized product. For instance, if I want to enter the import/export business, am I better off paying $99 to International Living or spending hours scrounging the internet, trying to sift what's real from what's fake, what's trustworthy from the scams, etc? If you value your time, informational e-books can be a lifesaver, even if their delivery medium (poorly formatted pdf files) is cheap.

hernan7 17y ago

Maybe there is room here for some alternative e-book-only business model (that doesn't involve parrots)? Get some unknown authors, outsource the slush reading, concentrate on some niche genres, don't put ads on the NYT. Make sure the books are fun to read and price the Kindle version at $2.00.

frossie 17y ago

But publishers argue that those costs, which generally run about 12.5 percent of the average hardcover retail list price, do not entirely disappear with e-books. Am I stupid or does that make no sense? If the cost of the physical materials of a hardcover is only 12% ($2-3 on a $20-30 book), why isn't the paperback only $2-3 cheaper than the hardback? I don't object to paying as much as the paperback for an ebook; I object to paying as much as the hardback. If they can make money on the paperback, they should be able to make money on an e-book that sells about as much as the paperback.

pg 17y ago
Publishers that publish books in both formats usually use them for price discrimination. Hardcover editions are sold to people who aren't price sensitive. And they usually come out first, so if you want a new book right away, you have to buy the expensive edition.
- frossie 17y ago
  ... but you also get a better book for your money (good binding, acid-free paper, larger print). Whereas the current e-book pricing model seems to be to charge the hardback price while the book is in hardback and above the paperback price (so 9.99 Kindle download while the paperback is 7.99) when the paperback comes out. It is no wonder that people find that unfair. Moreover publishers gain from e-books in other ways (eg. by killing the second-hand market). No matter what is or is not "fair", the reality is that I, a generally early adopter with a comically bad shelving problem, would like to get into e-books but hesitate to do so due to pricing and DRM concerns. If people like me are not jumping into the water, I think it shows that there is a large untapped market that would respond to better pricing. If volume goes up, price can go down. Right now my wishful thinking involves a Netflix for books; basically pay a subscription be able to have 1-3 books "out" on a Kindle (for the sake of argument) at a time. If I like them, I would probably go and buy the hardback to keep/lend/re-read/get-signed but most times I probably wouldn't. Edit: I think that O'Reilly's Safari is close to that model, but a captive device like Kindle and Amazon's huge catalogue would take that to a whole different level.