Thinking The Wrong Things About E-Book Pricing

I yammered about this on Twitter the other day, and it felt like the subject needed some more oxygen, and thus I’m staplegunning it to the blog post. *kachunk kachunk*

Feel free to comment. And agree. Or object. Or send me doodles of your pets as characters from various science-fiction and fantasy novels. Whatever makes your grapefruit squirt.

Okay.

E-books.

I’ve seen some pushback — generally very smart pushback — about why publisher e-books cost so much. The answer, in short, is that producing e-books costs more than you think. You’re paying for editors and cover design and, of course, for the book itself, and the mechanics of putting those things into a container are not the bulk of a book’s cost. Hence, e-books are always going to be close to their physical counterparts in cost. After all, you’re buying a story, and the container is largely incidental. The experience is slightly different from format to format, but over all my Kindle version of THE STAND is no different from the hardback version, except I can use the hardback to bludgeon a hippo to death should I so choose.

It’s a good point.

And probably true.

And it really doesn’t matter.

Here’s the thing: the “what should e-books cost?” question often takes into cost the actual cost of producing the e-book when, in reality, it needs to look at perceived value, instead.

Now, caution — I’m not an ecomonom… economonist… mathemeconom… whatever. I’m not great with money or numbers, so bear with me. (I’m also not great with elevators, escalators, tiny rodents, sporks, chopsticks, ferrets, or fingerless gloves. Just in case you’re making a list.)

An e-book is a digital good. Ephemeral and intangible. Sometimes we don’t even have access to the e-book itself in the form of a file — in the case of Amazon, we’re just “renting” the e-book the same way you rent Taco Bell food. You bought it. It’s inside your device. But if Amazon decides you don’t need it anymore, one snap of the wizard’s fingers and the e-books are poof, gone, siphoned from your reader like gas from a gas-tank. E-books have no supply — if I buy one, it doesn’t reduce how many remain, because theoretically infinite copies remain. No cost to reprint. No cost to remake. It just… sits out there, attempting to be the very embodiment of the Long Tail.

This is what the audience sees and believes.

It matters little what the e-book actually costs.

It only matters what the audience thinks they should cost.

Now, the audience won’t agree on an actual number (they’re cagey, those fuckers), but what they do seem to roughly agree on is, e-books should be cheaper than their print counterparts. What the e-book actually costs is irrelevant. What matters is the expected value loss by going with an ephemeral digital item — and, further, added into that is the expectation of, “I bought a device to read this, which cost me money already.”

Further cognitive dissonance is born of the fact that smaller producers (smaller publishers or individual authors) can produce a digital version of a book far more cheaply and easily than they can a hardcopy.

Publishers have themselves helped to confuse this issue by creating the expected release structure of books — from hardback to a trade paperback and then maybe to a mass market paperback. The e-book interrupts this chain because you can’t put out a book without an e-book counterpart, and so e-books don’t fit into that progression. The others are tiered and timed, but e-books don’t really fit into a tier or a timeframe.

To price e-books, there then exists a fight against some rational concerns and some very irrational behavior on the part of this active audience. But that’s normal — the freaknomics of the audience is always irrational. You can’t fight the flood; you can only try to swim in it. Certainly if enough big-ass epic motherfucker authors (think Stephen King-sized) made it a point to focus this meme or if Amazon enforced a higher price on e-books, the perception might shift. But neither’s likely to happen anytime soon.

One hopes and assumes that as publishers get better at making e-books, their costs will go down. Further, we must remember that e-books are in the “formative technology” phase right now. They’re VCRs and tape-decks. We won’t see CDs and DVDs for a little while down the line, and when we do, price will need to change (up or down, I can’t say). Also: infinite supply is a key component, here.

So. What to do, what to do? What’s the appropriate range of e-book prices you hope to see? Throw some thoughts into the ring, let ’em fight it out all scrappy-like.

(Related reading: e-book data, viral catalysts, and spurring word-of-mouth.)