Friday, February 12, 2010

Cutting Through Some of the Nonsense about E-Book Prices

I’ve been trying not to let e-books monopolize this page, but it’s a subject that’s hard to avoid with so much happening. This week we had a New York Times article about the ever-contentious topic of e-book prices, on which vast quantities of hot air are expended.
The Times notes that many readers are complaining, not to say outraged, about the idea of paying more than $9.99 for e-books—the price that Amazon has aggressively promoted in its effort to sell Kindles. 

At Publishers Lunch, his indispensable blog/newsletter, Michael Cader had a terrific piece yesterday debunking some notions implicit in the NYT article, and urging publishing people do to a better job of explaining to the public the widely held fallacies about e-book prices. I’ll write more about this myself, but his points are so cogent that I might as well start by quoting some of them:  

* $9.99 never was the top e-book price; people pay more than that every day
[When there was no Kindle, many e-books, including those for Sony Reader cost well above $9.99. And from the beginning of the Kindle store, plenty of titles were above that price. As Cader notes elsewhere, three recent surveys, two presented at Digital Book World, one this week by Goldman Sachs, strongly suggest that while price is important to e-book buyers, there are—as you’d expect--more important elements to a buying decision, such as author reputation.]

* The implicit, false promise of cheap e-books was made by the people who profit, at very nice margins, from selling the devices, not by publishers. Please blame them if you feel deceived.  [Right. Amazon has sold “millions” of Kindles by Jeff Bezos’s account. Which means, at the prices they charge, they are raking in hundreds of millions on Kindle hardware. Was it a coincidence that Amazon had its biggest profits ever last year?]

* Publishers are lowering their ebook prices
Most stories say publishers are raising prices. We in the trade know that publishers are preparing to lower their ebook prices by 50 percent or more, and reduce their own profit margins. But customers don't; they hear that publishers are raising prices. [Another key point. Publishers are actually looking to take less per book than they have been getting from Amazon. And in general e-book list prices are coming down.]

* The new "top price" is going to be $12.99 more often than not
[Cader notes that this will depend on what deals publishers arrive at with Apple, but in general we’re talking about a rise of a couple of dollars.]

Cader’s piece also makes one other important point:

Publishers are hoping to protect smaller and local retailers and ensure that customers have a wide range of real bookstores and online e-bookstores to choose from.

Right again. Low prices are a weapon used by big, deep-pocketed merchants, typically chains, to crush their small, local competitors. Publishers don’t want to see a marketplace that consists of nothing but Amazon and Barnes & Noble. This is, to be honest, partly because most of us in the business have a sentimental attachment to old-fashioned bookstores, the kinds of places where most book-lovers love to hang out.  It is partly because we know that it’s in those independent stores that surprise, hand-sold hits can catch fire and turn into bestsellers. But it’s also because we don’t want to find ourselves with nothing but 600-pound gorillas for customers.


Brian said...

1) While it's true that there have always been ebooks priced higher than $9.99, it's also true that the vast majority of ebooks on the market are priced far lower than that, and that the expensive ones don't sell.
2) $9.99 is Amazon's ceiling, but the median price for ebooks is much less than that, so your claim that the promise of cheap ebooks (which is self-evidently NOT false) was made by retailers is untrue. It was made by small publishers outside the Big 6, and by self-publishers.
3) Your claim that publishers are actually lowering "their" ebook prices is completely disingenuous and you should be ashamed. You know perfectly well that while the price the big publishers will be paid for ebooks is indeed coming down (which is what you technically meant), the price the consumer pays for their books is definitely going up (and the opposite is what you meant to convey, and it's not true). Go to detention and write "I will not tell lies" 50 times.
As for independent bookstores, their survival in the futrue will not depend on the big publishers. There is a niche for small bookstores as conveyers of used books, and of specialty books. POD technology may also help them here. But publishing's dinosaurs are in no position to help them survive.

Peter Ginna said...

Brian--I have to disagree with almost every statement you make. I should note, first of all, that the "claims" you attribute to me are quoted from Michael Cader, but I'm happy to stand by Cader's statements.

1) It's probably true that most e-books are priced lower than $9.99 (I never said otherwise). The market is full of free or very cheap e-book versions of books that are in the public domain or already available for less than $10 in other cheap versions. Obviously it's not that big a deal to get a $4.39 e-book of a title that's $6.99 in a paperback version. (That's the case of the top-selling novel in the Kindle store as I write.)

It's not at all true that "expensive e-books don't sell." One of the most successful publishers around is O'Reilly Media. I just looked at their website. For their five bestselling titles, all available in either print or e-book, the prices range from $19.99 to $27.99. NONE of the titles in their top 25 are less than $15.99.

2) The claim of cheap e-books was most certainly made by retailers, particularly Amazon. I bought a first-generation Kindle, and I well remember that Amazon advertised the wide selection of titles available at $9.99 or less. Amazon, or self- publishers, are certainly entitled to advertise cheap e-books if they are going to deliver them. But other publishers are not obliged to buy into their strategy.

3) I don't know what Michael Cader "technically meant," but what he said is accurate. Most big publishers' e-book list prices have been the same as, or close to, the prices of print books. To pick two titles from the current Kindle bestseller list: THE HELP, digital list price $25.95. THE LIGHTNING THIEF, digital list price $7.99--both same as the print versions.
The consumer's price MAY go up for THE HELP--a current, bestselling hardcover--but probably won't go up for THE LIGHTNING THIEF.

I agree that the independent bookstores that thrive will use a mix of strategies that may include used books and POD. But imagine a local bookstore without books from Knopf, FSG, Penguin, Harper, or Houghton Mifflin--or Berkley, Tor, or Touchstone--and I think it becomes a less alluring place.