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.



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.)

119 responses to “Thinking The Wrong Things About E-Book Pricing”

  1. Cool blog! Is your theme custom made or did you download it from somewhere? A design like yours with a few simple adjustements would really make my blog jump out. Please let me know where you got your design. Kudos

  2. As a long time publishing professional I can tell you that the difference in cost to a publisher for an ebook vs. the print version is less than 5%. Meaning the paper print and binding for a book costing $20.00 is about $1.00. Then there are hosting fees that the platform where you store and transmit ebooks from charge you to do so. None of this is for free. 95% of the cost of books is everything else, author fees, picture fees, royalties, sales rep commission, overhead of all type, taxes, you name it. Publishing is one of the least profitable businesses there is.

    If the price of ebooks is substantially below the cost of print books the result will be that publishing like the music industry will be crippled and there won’t be much in the way of new publishing.

  3. I’m not sure how old this article is, but as a consumer of a metric-butt-ton of e-books, I’m going to chime in anyway. 🙂

    I read about half the comments here and found one by an author that stated something along the lines of “I charge per entertainment hour”. This is PRECISELY how I make decisions on if I’m going to pay the asking price for a book.

    I love David Weber for instance, and some of his works are great reads. I will pay slightly more for his work that I will an unknown author because I know for a fact they will entertain me. But I refuse to pay more than 8 dollars for an e-book that I will read cover-to-cover in less than 3-6 hours.

    For an unknown author, my limit is 5 dollars. I read the samples, and I read the “page count”. If it’s less than 300 pages, I’m not going to pay 5 bucks for it unless it’s part of a series that I’ve already read the first parts of and again, I know I will enjoy the remainder of.

    I will buy anything that strikes my interest that is under 3 dollars. Sometimes without even reading the samples. If I read the first book in a series and I like it, I will buy every one of the rest of the series if they are under the five dollar mark. If they are more, I do my research first.

    There are to many BAD authors out there… With a paper-book, I can pick it up and read the first 10 pages, then skip to the middle and read 2-3 pages and then skip to the end and read 2-3 pages and know if that book will hold my interest and be enjoyable for the time it will take me to read it.

    I cannot do that with an ebook. That and I don’t even own the stupid e-book I’m paying for.

    My personal wish for e-book pricing…? If you’re going to make us rent the books anyway, charge me by the day. I’ll gladly pay 1.00 per day that I have “possession” of said book. Long books would have me paying 5-8 dollars for them, depending on my available time to read. Short books (under 300 pages) would have me paying 1-3 dollars.

  4. I didn’t bother reading all the comments but it is very frustrating when I can buy a traditional paper book for half the price of exact same ebook from amazon:(

  5. Since the some of the Big 6 got spanked, e-book prices have been going down although more on Amazon than Sony or B & N. I agree that since I’m merely renting a purchased e-book, it should be LOTS cheaper than purchasing a print version; like the difference between renting and owning a video (which are also digital now).

    Personally, my first choice is to borrow my e-books from the library. Second choice is purchasing when not available from a library. I pay 99 cents up to $4 for e-books that are available in used bookstores (online and storefronts). I absolutely refuse to pay hardcover price for an e-book. Why should I? Publishers have conditioned me to believe I can wait 6 months for the cheaper paperback version or a used hardcover. Even though I HIGHLY value the small storage space of e-books (I own 9 large bookcases filled to overflowing) I won’t pay more for the e-book than for the paper version.

    Another issue with e-book format and pricing is converting my current paper collection to e-books. I’ve already bought the paper version, why should I have to pay another $10 (worst case scenario) for the e-version? I really wish I could turn in my paper books for the e-book, kind of like stripping DRM from purchased e-books once a year or purchasing DRM-free e-books.

    There were lots of great comments above including more information on the costs of e-publishing and the economics of creating and selling a product. I found they really add interest and information to the original article.

  6. A fair price for an e-book is whatever people will pay. To me e-books aren’t worth their code. Add a dollar cost to a physical copy to include e-version rights and I’ll bite, but otherwise… meh.

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