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.

A Pirate’s Life For Me

The NYT’s The Ethicist created some controversy this week with an article considering the ethics of downloading pirated copies of ebooks. Specifically it responded to the question of whether it is ethical to download a pirated version of an ebook (when it is not available legally) if you purchase the hardcover edition of a book first.

Snip:

An illegal download is — to use an ugly word — illegal. But in this case, it is not unethical. Author and publisher are entitled to be paid for their work, and by purchasing the hardcover, you did so. Your subsequent downloading is akin to buying a CD, then copying it to your iPod.

Under the Dome: A bloody heavy book

Needless to say, this has caused a stir in some publishing circles, and a number of other blogs and opinion pieces have responded to the question and explored many of the flaws in the argument. There’s no clear answer to this conundrum. The central premise seems compelling – people are used to only having to buy one format – you don’t have to worry about illegal downloading when you buy a CD or a DVD, you can easily rip music and movies to your computer yourself. Why should books be any different?

From personal experience, I think the reason this is even an issue is to do with the failure of the book publishing industry to understand the market and to respond to technological (and the resulting cultural) change. I don’t buy an ebook because it’s cheaper than the dead tree version. I buy it for all the other benefits an ebook gives me – I can start reading instantly, it can be searched, I can look up words in the dictionary or Wikipedia, I can carry multiple books around without hefting a load of paper, I can even read it on multiple platforms (PC, iPhone and Kindle) depending on when and where I feel like reading. The $9.99 price point that Amazon tried to set for ebooks is very nice, but more expensive ebooks are not going to turn me towards paper books, they’re just going to turn me towards other, better-priced ebooks.

The publishing industry needs to do more than re-educate consumers about the value of books. They need to respond to consumer need. Since the advent of digital piracy, consumers have a way of getting what they want, when they want it – bugger the ethics or the legality. To combat this, publishers need to make it easier to buy an ebook legitimately than it is to get it illegally. Practices like windowing and DRM are destined for failure for this reason; they punish the ethical. Publishers cannot just expect to change behaviour without meeting their readers halfway.

What do you think? Would you feel bad about downloading a pirated book if you couldn’t find the ebook anywhere else? Do you think owning the physical copy entitles you to a digital one? What can publishers do to lure you away from illegally downloading ebooks?