Ebook Prices and Greed

So I’ve been thinking about ebook prices and greed lately. There are a few good arguments for lowering ebook prices, mostly to do with the win-win situation when cheaper books mean more sales and more profits (i.e. it doesn’t always work). What annoys me, though, is that a big proportion of blog chatter about ebook pricing seems to be based solely on a sense of entitlement. Do people deserve to be able to buy books at low prices? And how low is low? As always, The Smell of Books does not provide an answer, but I’ll do my darndest to run in ever tighter circles around the question.

But either way, yes, I think publishers are losing the hearts and minds of readers. After all, readers don’t have to know about the ins and outs of the publishing business—they just have to know how it affects their own pocketbooks …

So said Chris Meadows in a recent post he made responding to my post on publishers losing the hearts and minds of readers. And I find it hard to disagree with him. Despite eloquent arguments to the contrary, I find it difficult to even argue with my friends who want to buy cheap books overseas or cheat territorial restrictions to get cheaper ebook prices.

There are many ebooks that seem to me to be very expensive. And yet working as I do for a large publishing company, I know that margins are tight, that people are tense and that the future of publishing is by no means assured. This is the rub. People want cheaper books, but cheaper books will cripple the industry. The reason for this incongruity, I suspect, is that the people who love books (and are demanding lower prices) don’t fund their production. Books are an 80/20 endeavour. In other words, twenty per cent of the books (or less) make eighty per cent (or more) of the profits. The massive amount of irregular book buyers buying one or two overpriced books a year fund all the other books that more dedicated, passionate (and proportionately fewer) readers buy regularly and enjoy.

So what’s the solution to this conundrum? Publishers have used book windowing to try to address this issue – retaining profits while still (eventually) making books affordable. Book windowing, for those who don’t know the term, describes the practice of selling hardbacks or trade paperbacks (the bigger paperbacks) at a higher price on a book’s release, then selling smaller paperbacks at a lower price later. However, windowing is under serious threat from ebooks, and, it can be argued, doesn’t seem to make much sense in a digital world.

Some would argue that publishers simply don’t have a place in the book world any longer. I disagree vehemently (as you’d expect). There is still a valid role for gatekeepers in the chaotic world of indie and self-publishing (follow the link if you want a good argument for it – Rich Adin does it admirably well). The fact that traditional publishers successfully act as curators of book content is part of why they can charge more for their ebooks and still sell more copies than most self-published titles – yet still people complain.

So what is the solution to this problem? Or is it even a problem? Is the customer always right? Should book prices be lower than they are? Is windowing a fair way of distributing the cost of producing books? What do you think? Sound off in the comments and let me know what you think.

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Joel Naoum

Joel Naoum is a Sydney-based book editor, publisher, blogger and writer. He is passionate about the possibilities of social media and digital publishing opens up for authors, publishers, booksellers and the whole book industry.

22 thoughts on “Ebook Prices and Greed”

  1. Book prices can be lowered in Australia in one easy step without impacting in any way on production costs – remove GST on books. If Meg Lees hadn’t done the dirty on everyone, including her then-own party by doing a private deal with John Howard, books and knowledge would be free of GST.

    Of course no government, regardless of position on the political spectrum, is going to give up tax revenue.

  2. Book prices can be lowered in Australia in one easy step without impacting in any way on production costs – remove GST on books. If Meg Lees hadn’t done the dirty on everyone, including her then-own party by doing a private deal with John Howard, books and knowledge would be free of GST.

    Of course no government, regardless of position on the political spectrum, is going to give up tax revenue.

  3. I don’t think there is a solution. This argument is very similar to that of the digital music stores when they first launched. People expect to get the same for cheaper (or free) because in their heads the digital version costs nothing to mass produce.

    I think, unfortunately, the greater public don’t value anything distributed in the digital realm as they do with their physical counterparts. Through the prevalence of music and film piracy there is a real sense of entitlement with anything digital and people don’t want to pay for it. Ebooks have a slightly different take on the whole thing because you can’t recreate the original with ebooks like you can by burning a DVD or CD but I still think it’s the attitude towards digital media which explains people getting all grumpy about ebooks.

    How many times have we already heard the argument of “I don’t pay for it because the money goes to The Man” to justify stealing someone’s work online? People will blame the suits and big corporations but it doesn’t change the fact they want to get the item for free.

    I think irrespective of how much ebooks are, people will complain. Digital products are worthless in the eyes of your average consumer. It sucks but it’s how it is. And where there is a cheaper option (or free one) people will go for it. Irrespective of the long term consequences.

  4. I don’t think there is a solution. This argument is very similar to that of the digital music stores when they first launched. People expect to get the same for cheaper (or free) because in their heads the digital version costs nothing to mass produce.

    I think, unfortunately, the greater public don’t value anything distributed in the digital realm as they do with their physical counterparts. Through the prevalence of music and film piracy there is a real sense of entitlement with anything digital and people don’t want to pay for it. Ebooks have a slightly different take on the whole thing because you can’t recreate the original with ebooks like you can by burning a DVD or CD but I still think it’s the attitude towards digital media which explains people getting all grumpy about ebooks.

    How many times have we already heard the argument of “I don’t pay for it because the money goes to The Man” to justify stealing someone’s work online? People will blame the suits and big corporations but it doesn’t change the fact they want to get the item for free.

    I think irrespective of how much ebooks are, people will complain. Digital products are worthless in the eyes of your average consumer. It sucks but it’s how it is. And where there is a cheaper option (or free one) people will go for it. Irrespective of the long term consequences.

  5. I think when you have a mixture of digital and ‘physical’ media most people still have the belief deep down that a digital version is somehow lesser than the physical version, which is why there is an outcry from people wanting cheaper ebooks. I think ebooks should be cheap, and then there should be a variety of more expensive packages for the collector that come with the printed book, ebook download, merchandise etc.

  6. I think when you have a mixture of digital and ‘physical’ media most people still have the belief deep down that a digital version is somehow lesser than the physical version, which is why there is an outcry from people wanting cheaper ebooks. I think ebooks should be cheap, and then there should be a variety of more expensive packages for the collector that come with the printed book, ebook download, merchandise etc.

  7. It does seem that people believe digital product should be cheaper. But should it? Consumers are certainly accustomed to paying less for things online, but does that mean they should get it for less? Is the product inherently less valuable?

  8. It does seem that people believe digital product should be cheaper. But should it? Consumers are certainly accustomed to paying less for things online, but does that mean they should get it for less? Is the product inherently less valuable?

  9. I’m being convinced to change my book buying habits – buying more in local shops or from local eBook sellers – and I’ve just about come to grips with paying twice (or more) what it would cost to import the same thing from overseas retailers. I won’t pay $33 for a new release eBook but that’s no different to what I would do for a physical book – I rarely buy them at new release prices unless it’s an author I’m really really keen on (I read 150+ books a year – there’s no way I could afford to buy them all at $33each) but the price will come down eventually and now I’ll almost happily pay around $20 for my eBooks or small paperbacks even though I know it’s double the standard Amazon price for an eBook.

    I do think that two things would help – one is to make the windows shorter now. It seems that in Oz the window between trade paperback and whatever you call the other kind of paperback is still a year – that’s a bit daft in this day and age. An author I know released a debut novel in July last year and she just sent me the cover art for the small paperback version, due out in about 6 weeks – nearly a year after the original version. I’d be prepared to eat my oldest smelliest pair of joggers if the original version has been selling gangbusters in its large format in the past 6 months – all the people who wanted it straight away bought it within the first few months surely.

    The other thing that drives me nuts is when the Australian release schedule for a book is way off kilter with the rest of the english-reading world. Often by the time a book is released here at new release prices it’s already in its second window price bracket in the US or UK – at that point you’ve lost me I’m afraid. When all the book blogs and my friends in the UK are reading a book I want to be able to read it too. Some books seem to get universal publishing dates – why not all?

  10. I’m being convinced to change my book buying habits – buying more in local shops or from local eBook sellers – and I’ve just about come to grips with paying twice (or more) what it would cost to import the same thing from overseas retailers. I won’t pay $33 for a new release eBook but that’s no different to what I would do for a physical book – I rarely buy them at new release prices unless it’s an author I’m really really keen on (I read 150+ books a year – there’s no way I could afford to buy them all at $33each) but the price will come down eventually and now I’ll almost happily pay around $20 for my eBooks or small paperbacks even though I know it’s double the standard Amazon price for an eBook.

    I do think that two things would help – one is to make the windows shorter now. It seems that in Oz the window between trade paperback and whatever you call the other kind of paperback is still a year – that’s a bit daft in this day and age. An author I know released a debut novel in July last year and she just sent me the cover art for the small paperback version, due out in about 6 weeks – nearly a year after the original version. I’d be prepared to eat my oldest smelliest pair of joggers if the original version has been selling gangbusters in its large format in the past 6 months – all the people who wanted it straight away bought it within the first few months surely.

    The other thing that drives me nuts is when the Australian release schedule for a book is way off kilter with the rest of the english-reading world. Often by the time a book is released here at new release prices it’s already in its second window price bracket in the US or UK – at that point you’ve lost me I’m afraid. When all the book blogs and my friends in the UK are reading a book I want to be able to read it too. Some books seem to get universal publishing dates – why not all?

  11. Oh and as for eBooks being cheaper – I don’t think they need to be a lot cheaper (unlike some people) but I do think they should be a little bit cheaper because we don’t own them – we only have a license to use it in a fairly restricted manner (unlike the equivalent print book). I generally pass on my print books to friends or family so I don’t mind paying $25 because several people will probably read it and then it goes to the Salvos for them to sell. I don’t see why I should pay the exact same price for an eBook that only I can read.

  12. Oh and as for eBooks being cheaper – I don’t think they need to be a lot cheaper (unlike some people) but I do think they should be a little bit cheaper because we don’t own them – we only have a license to use it in a fairly restricted manner (unlike the equivalent print book). I generally pass on my print books to friends or family so I don’t mind paying $25 because several people will probably read it and then it goes to the Salvos for them to sell. I don’t see why I should pay the exact same price for an eBook that only I can read.

  13. I think you’ve hit the nail on the head, Bernadette. Windows definitely need to get tighter – especially for ebooks. Most trade paperback books sell the vast majority of what they will ever sell in the first three months of release: it makes sense to drop the ebook price after that point.

    As for universal release, that’s an international problem that publishers are working to solve right now. It’s complicated, but I think everyone wants to make it better. (If it makes you feel any better, there are quite a few books, especially British authors, who are released in Australia *before* the UK).

  14. I think you’ve hit the nail on the head, Bernadette. Windows definitely need to get tighter – especially for ebooks. Most trade paperback books sell the vast majority of what they will ever sell in the first three months of release: it makes sense to drop the ebook price after that point.

    As for universal release, that’s an international problem that publishers are working to solve right now. It’s complicated, but I think everyone wants to make it better. (If it makes you feel any better, there are quite a few books, especially British authors, who are released in Australia *before* the UK).

  15. I’m in total agreement about DRM-locked content, B. It’s a crock that any producer of digital content expects similar pricing for digital content as physical content when it’s DRM-crippled. (Though I’d argue most ebooks are already cheaper than their physical counterparts).

    What about when books *don’t* have DRM on them? Would you be willing to start paying more for them at that point? Just out of curiosity…

  16. I’m in total agreement about DRM-locked content, B. It’s a crock that any producer of digital content expects similar pricing for digital content as physical content when it’s DRM-crippled. (Though I’d argue most ebooks are already cheaper than their physical counterparts).

    What about when books *don’t* have DRM on them? Would you be willing to start paying more for them at that point? Just out of curiosity…

  17. If an eBook wasn’t locked and I could easily pass it on to someone else (i.e. not make a copy but transfer it from my device to a friend’s device – along with my notes and highlighting because that’s the best bit of reading someone else’s copy of a book) then it seems fair to pay the same as for the print version.

    I think I might even be OK with some kind of limit on the number of times it could be transfered (libraries excluded) though not sure. I know print books aren’t limited but their condition does deteriorate which doesn’t happen with eBooks. Not sure about this bit though – have to ponder it some more.

  18. If an eBook wasn’t locked and I could easily pass it on to someone else (i.e. not make a copy but transfer it from my device to a friend’s device – along with my notes and highlighting because that’s the best bit of reading someone else’s copy of a book) then it seems fair to pay the same as for the print version.

    I think I might even be OK with some kind of limit on the number of times it could be transfered (libraries excluded) though not sure. I know print books aren’t limited but their condition does deteriorate which doesn’t happen with eBooks. Not sure about this bit though – have to ponder it some more.

  19. I don’t see what the big fuss is about…

    The only problem is publishers haven’t figured out the pricing model.

    Penguin, for instance, charges (at least I think it still does it this way) the same price for an e-book as the cheapest print-version of the title available.

    It seems fairly ridiculous. But they don’t want to bend on that for fear it will hurt traditional sales, which will destroy traditional book shops, printers, transporters, hurt the publishing industry and bring the whole archaic system crashing down.

    One of the main problems with the Australian publishing industry is that no one wants to collaborate with retailers.

    Big mistake.

    Because those ‘feet-on-the-street’ sellers could help the big book houses figure out how to evolve the existing model into something that works out fairly similarly to the traditional model, as far as profits go.

    (Although it would require a total restructuring of the pricing model – which, let’s face it, is just a ‘best guess’ approach. As well as a restructuring of royalties and other contractual considerations.)

    For the record, I work for an online information publisher. And we have a very successful model. There’s a slight (very slight) problem with people forwarding material to one another. But we can track it and stamp it out.

    And Australian journal publishers (like Taylor and Francis) also make obscene amounts of money following very similar practices.

    I love books. We all love books. And I don’t think print books will ever be truly dead – I think print-on-demand technology could play an integral part in keeping it alive.

    But Australian publishing houses – especially the big, greedy ones that like to buy up competitors like a kid in the 1990s collecting basketball cards… you know who you are Pearson – are in very real danger of leaving it too long.

    And if they fail to evolve, they will become extinct.

  20. I don’t see what the big fuss is about…

    The only problem is publishers haven’t figured out the pricing model.

    Penguin, for instance, charges (at least I think it still does it this way) the same price for an e-book as the cheapest print-version of the title available.

    It seems fairly ridiculous. But they don’t want to bend on that for fear it will hurt traditional sales, which will destroy traditional book shops, printers, transporters, hurt the publishing industry and bring the whole archaic system crashing down.

    One of the main problems with the Australian publishing industry is that no one wants to collaborate with retailers.

    Big mistake.

    Because those ‘feet-on-the-street’ sellers could help the big book houses figure out how to evolve the existing model into something that works out fairly similarly to the traditional model, as far as profits go.

    (Although it would require a total restructuring of the pricing model – which, let’s face it, is just a ‘best guess’ approach. As well as a restructuring of royalties and other contractual considerations.)

    For the record, I work for an online information publisher. And we have a very successful model. There’s a slight (very slight) problem with people forwarding material to one another. But we can track it and stamp it out.

    And Australian journal publishers (like Taylor and Francis) also make obscene amounts of money following very similar practices.

    I love books. We all love books. And I don’t think print books will ever be truly dead – I think print-on-demand technology could play an integral part in keeping it alive.

    But Australian publishing houses – especially the big, greedy ones that like to buy up competitors like a kid in the 1990s collecting basketball cards… you know who you are Pearson – are in very real danger of leaving it too long.

    And if they fail to evolve, they will become extinct.

  21. As a reader, I assume that ebooks should be (please note the Moral High Tone here 🙂 cheaper because I assume they cost a bit less at production end – no paper, print and much cheaper transport costs. I’m willing to be educated here, but I would be loath to buy at close to hardcopy price if the production quality isn’t equal. I have resented the windowing time frame for a while now. I don’t like trade editions, they’re tall (short reader syndrome) and I dislike having to wait up to 18 months in some cases for the copy size that matches my other books.
    Good points in the other article, but my experience with a couple of those OS suppliers (NOT Amazon), is that they write me chirpy, entertaining emails and when I have a question, it feels like I’m emailing with a person – friendly, knowledgeable service. I can’t feel too guilty supporting that some of the time.

  22. As a reader, I assume that ebooks should be (please note the Moral High Tone here 🙂 cheaper because I assume they cost a bit less at production end – no paper, print and much cheaper transport costs. I’m willing to be educated here, but I would be loath to buy at close to hardcopy price if the production quality isn’t equal. I have resented the windowing time frame for a while now. I don’t like trade editions, they’re tall (short reader syndrome) and I dislike having to wait up to 18 months in some cases for the copy size that matches my other books.
    Good points in the other article, but my experience with a couple of those OS suppliers (NOT Amazon), is that they write me chirpy, entertaining emails and when I have a question, it feels like I’m emailing with a person – friendly, knowledgeable service. I can’t feel too guilty supporting that some of the time.

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