Why should the price of ebooks . . . be on the floor?

Tue, Feb 21, 2012, 00:00

WAY BACK in the early days of epublishing, one of the purported benefits of ereaders was that digital books would bring writers and readers closer together. Essentially, those pesky middle-men, the literary agents and publishers, would be bypassed by the new technology, resulting in a more direct and frill-free relationship between creator and consumer.

Lately, however, the fact that one of those “frills” includes the cost of ebooks is beginning to cause friction.

“I’ve noticed people tagging the US Kindle edition of Stolen Soulswith ‘$9.99 boycott’ and similar at Amazon.com,” says Stuart Neville, the bestselling author of The Twelve,about reader-led demands for lower prices. “I’m amazed that people are that cheap. Do they think a year of my life is worth less than $9.99? Do they really believe that 10 to 12 hours of entertainment isn’t worth the equivalent cost of two or three coffees, or less than two beers?

“I think it’s the sense of entitlement that bothers me,” he adds. “It’s particularly common with those who believe they have some sort of right to download music and movies for free.”

One of the problems with attitudes to ebook prices is that many early adopters of ereaders such as the Kindle and the Sony Reader were already acquainted with the internet, and particularly comfortable with the idea that, on the web, most of your content is delivered for free.

But isn’t it reasonable for readers to expect “deep discounts” on ebooks, given that a publisher’s costs are comparatively lower than for a print edition of exactly the same book?

“I think they are entitled to expect a lower price,” says Eoin Purcell, commissioning editor with New Island. “For one thing there’s no printing cost, no delivery cost and, in some cases, a much lower retailer discount. On the other hand, design costs still exist, and marketing costs may be higher. In Europe, VAT is an issue and the authors demand a higher royalty. If a publisher is to retain the same margin they have come to expect, then a modest discount is to be expected. Something in the region of 30 to 40 per cent discount on print seems reasonable.”

Previously published by Hachette Ireland, best-selling author Arlene Hunt took the unusual move of rejecting her publisher’s most recent offer in favour of setting up her own publishing company, Portnoy Publishing, with her husband, Andrew Mangan. One of her reasons was the freedom to explore the burgeoning epublishing market.

“Readers are absolutely right to expect an ebook to be cheaper than a physical book,” she says, “because of lower production costs, warehousing and distribution for publishers.” Hunt’s current novel, The Chosen, retails on Amazon.co.ukfor £10.99 as a book (before discount), and £5.14 for its e-equivalent. “But the buyer still needs to take the work behind the creation of the ebook into account. A reasonable discount depends how the publisher or author values the work.”

“It depends on the book, the subject and author,” cautions John Mooney, publisher at Maverick House. “Some titles published by Maverick House are selling very well, with e-sales accounting for almost 33 per cent of total sales, but these titles are not discounted. If a book is an enjoyable and good read, people will buy it.

“Ebooks written by authors who are not so popular or well known can be discounted to boost sales, but it’s my experience that such discounting doesn’t generate a spike in sales.”

Ebook pricing is complicated, particularly for smaller publishers if they’re not to get trapped in a race to the bottom. Allan Guthrie is co-owner of Blasted Heath, an ebook-only publisher established in Edinburgh late last year.

“Publishing books has been unsustainable for a long time before ebooks became a serious consideration,” he says. “Deep discounting of new titles has been standard for years and years.

We had a decade of 3-for-2 promos as standard, and the front-of-store area in the chain stores become Discount City. Not to mention all those supermarket loss leaders. I’ve seen authors sell tens of thousands of books and make chump change.

“I’m not sure there’s a ‘race to the bottom’ with ebook pricing,” he continues. “Smart publishers and indie authors use dynamic pricing, and they know that if you adopt the lowest possible price, then you can’t use price as a promotional tool.

“Price pulsing , for example, is very popular, as are cheap introductory price points to reward early buyers, as well as time-bound discount offers. Price is certainly a very effective way to tempt new readers to take a punt on a book they might not buy otherwise – something by a new author or in a genre they don’t normally read.”

John Mooney is in broad agreement. “The traditional publishing model is long dead,” he says. “Maverick House does offer some ebooks at low prices if we feel the author needs support, but this does not guarantee sales. We have digitised our backlist, and the books that sell in large quantities on Kindle and in other digital formats are those offered at full price. People will not purchase books which they do not wish to read just because they are cheap.

“People who use ereaders tend to be avid readers, they are people who are selective about what they read.”

“Readers still want quality,” says Arlene Hunt, “both in terms of story and product. Books for 99 cent might be a novelty now, but there’s an element of you-get-what-you-pay-for there.

“Publishing has to adapt though, certainly. Back catalogues should be cheaper and I don’t think there’s anything wrong with, say, a once-a-year sale. It’s a vast market and if you want to operate in it you’ve got to be competitive, at least to a degree where you’re not selling yourself short.”

Stuart Neville suggests that readers need to meet writers and publishers halfway on pricing. “Using bargain prices as a promotional tool is perfectly valid,” he says, “but the customer should know that they’re getting a bargain. The hardcover of Stolen Souls costs $16 on Amazon. It likely costs more in a bookstore. Pricing the ebook at $9.99 seems more than fair to me. When the paperback is available between $9.99 and $16, then the ebook price should and will be reduced accordingly.”

Eoin Purcell, meanwhile, reckons that it’s time to look to the future and de-couple the pricing of ebooks and the artefact book. “I think it is better to think of ebooks as a completely different kind of product from print books,” he says. “When you think of them this way, you begin to see that ebooks will develop their own price points, which are largely unrelated to print prices.”

Allan Guthrie also takes the long-range approach. “The outcry against cheap books has been around for a long time,” he says.

“Ebooks are just the latest to be targeted. If you look back to the 1950s, for instance, the advent of the mass market paperback original caused panic and outrage in the rest of the publishing world. They believed it wasn’t possible to make any money from cheap paperback originals as the profit margins were too slim. And yet, somehow, here we all are.”