So, why are your e-books so expensive?

I’ve heard that one a few times lately, often in a tone that suggests it’s all down to me.

When I hear it I want to say two things:

(i) Actually, they’re not (not quite as expensive as they might first seem, anyway) and

(ii) Turns out I’m not King of the World, or even Comptroller-General of e-Book Pricing

But (i) tells only a fraction of that aspect of the story and (ii) might seem a bit dismissive. Or just rude.

Let’s knock (ii) on the head first up. When books are priced, the author is never in the room, usually not in the city and sometimes not in the hemisphere. It’s one of those many things that publishers think is beyond the scope of the pretty author brain (along with meeting deadlines, understanding contracts, long division and not getting lost when out in public – I’m not saying publishers are entirely wrong in these assessments, by the way).

I don’t know authors who want their books to be more expensive. I do know authors who want their books to be cheaper. That’s why they don’t let us set the price. Publishers also don’t let us set the price because they’re the ones putting up the cash to get the book out there in the first place.

Here’s what I think we’re dealing with at the moment, in Australia at least

The e-book supply chain in still in its formative months, and pricing still works on ye olde 20th-century model for p-books, that is, a publisher decides on a recommended retail price and sells the book to retailers at a discount to that price (eg, 35-40%). The retailer then sells it at whatever price they choose. That may be above, below or exactly the RRP.

At the moment, Australian publishers seem to be sticking with the same RRP for both p- and e-books, so a casual glance might suggest that The Fix, for instance, is AUD32.95, against a major online retailer’s typical price for (other people’s) e-books of USD9.99. Trust me, no one is more alarmed by that apparent discrepancy than the author. No one wants to be priced at more than triple the market.

When I looked, though, that $32.95 was only two clicks away from a site where it was $17.00, which is at least appreciably closer to USD9.99.

So, my first point is, disregard the Australian publishers RRP when you’re thinking about buying Australian e-books. Shop in whatever way you choose to, and you may well find a significantly more appealing price.

My second point is about those USD9.99 prices at the major online retailer. This is business at work, and the threat of competition. I’m told that many of those titles are loss-leaders, and it’s about retaining market share at a time when new etailers are attempting muscle in. There’s nothing new about loss leaders – discount department stores have been doing it with p-books here for a while.

So don’t go thinking, when you see those USD9.99 books, that publishers are handing them over for USD6 every time and it’s just a question of the same old percentages being applied to smaller numbers. They might be charging USD12 or USD15, and the retailer is making a loss to keep your eyeballs on their site alone, and keep your future business.

At the same time, that retailer may be less inclined to use some other books as loss leaders, and might buy them for $15 and sell them for $17. Or $20-something. If that makes you feel inclined to kick something, try not to make it the author

Here’s two things I don’t know: what price e-books should actually be, and how they should be priced and sold.

Intuitively, I think we generally expect that they should cost less than a p-book because they don’t require trees, trucks, ink, warehousing, etc. They still require editing, design and layout, promotion and some kind of supply chain. And writing. They require that too.

I’m expecting the marketplace to make more sense in a couple of years. These are crazy times. As the market tries to find its level, some people are pushing their new e-novels out there unedited and selling them for 99c.

While we’re waiting for the dust to settle, I’m expecting to bleed sales to cheaper books, and there’s nothing much I can do about it (until I can get at least some of my material to operate according to a different business model – and don’t think I’m not working on it).

But let’s take a step back. Separate to what price e-books should be, what’s a book worth? Maybe sometimes we could ask ourselves that instead. I’m not fabulously wealthy, but I think every good book I’ve read has been worth what I’ve paid for it and the great ones have been bargains at 100% of RRP. I’ll gladly pay $30 or so for 10 hours or more of engrossing entertainment.

Maybe that’s what we should be weighing up, each in our own way and with each book we’re thinking of buying. Is this particular 99c novel likely to give us our 99c cents worth, or more, or less? Is this particular $30 novel?

PS – If I was King of the World, books would all be keenly priced all the time in all formats, and scientists directed to devise metabolic processes to make 70% cocoa dark chocolate the ultimate health food.

PPS – I will never be King of the World, because it would be a nightmarish and thankless job, I would be crap at it and I need approval far too much. My only action before abdicating would be to appoint an electoral college of wise old heads who would, through unanimity or at least supermajority, choose my KoW successors in perpetuity.

PPPS – In this particular world, ‘king’ is gender-neutral and non-hereditary. If interested, please make application to the abovementioned wise old heads, who will summarily ignore applications, since anyone who seeks the role will surely not be right for it. On the other hand, if you have a sensible scheme for operating a global market for e-books, you’re a real shot at it, and possibly a Nobel Prize in Economics.

PPPPS – As of Dec 2011, things are looking up. My books published by Random House Australia – Zigzag Street, The True Story of Butterfish and The Fix – are now a much more competitive $9.99 in Amazon’s Kindle Store. Not sure how that came about, but I’m glad it did. (Also, as more recent blogs show, I’ve started e-publishing material outside Australia, at prices I CAN infuence – 99c/story, $2.99/novella and $4.99/novel).

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6 Responses to So, why are your e-books so expensive?

  1. Josh says:

    Two questions – does where we buy (e.g. Barnes and Noble vs Kobo Books) affect the royalties you make? More importantly, where can we get Perfect Skin as an ebook? My paperback copy has seen better days.

    • nickearls says:

      That’s a good question re royalties. That answer is very likely to be yes, though no mere mortal could know to what extent at point of sale. Australian publishers seem to be paying authors a % of net receipts, ie, a % of the amount the publisher receives from the retailer, so that figure’s dependent on what discount on RRP the retailer got in the first place. And that’s not on any publisher’s ‘author needs to know’ list. That’s a slight departure from the p-book model, where the author in most cases receives a % of RRP.

      That’s with mainstream publishers in Australia, and that’s for now, with a modified version of the 20th century business model being applied. The % and/or model may change over the next couple of years. I’d like it to end up somewhere that saw books at a reasonable price and authors getting a reasonable share. The definition of ‘reasonable’ in that sentence is probably slippery as an eel.

      There are other models operating outside the big publishers which can see authors taking a higher % of a smaller price. Some writers are making inroads there now with new works – often small new works – or backlist.

      It’ll be interesting to see what big publishers are offering a few years from now for their sizeable % of net receipts. There’s brand power and credibility, the value-add of editing, promotion, a role in the supply chain. That’s a lot more than nothing, in my assessment, but it’ll be interesting to see how they play it.

      As far as Perfect Skin goes, there are plans afoot. My newer books that are all in print are already e-books with their mainstream Australian publishers, with The Fix the first to appear as one on day one, but the older books should give me the chance to do things a different way, and soon (by which I mean within a couple of months or so). The wheels are spinning frankly, and I want to get going with this. I have a few ideas I’m keen to try out.

  2. Kym Andrews says:

    If you did that thing with chocolate you would not be a crap king of the world. If you were in the Labour party, however, even chocolate wouldn’t stop rumours about faith in your leadership.

  3. Kate says:

    My insight from time spent in said major publishing sphere…

    A lot of people out there forget that your average bookstore is a work of love and in Australia, an good profit margin for a small bookstore is about 2% per annum. Sixty percent of the book market in Australia is non-fiction (we mock the sports bios but they’re keeping everything afloat). Fiction is 17% and about 2% out of that is literary fiction (rather than the genre, pulp, mass market kind.

    So you should pay money and in large amounts for books like Nick’s because they are the best writing out there and among the most difficult to justify on a profit margin basis in the bean counting department.

    I used to spend my days asking the guys at the printer to make the production cost cheaper and believe me that to do that, those guys would be living on tinned spaghetti. So unless anyone is keen to ditch the marketing department (which seems unlikely) it might be time that we assign some kind of monetary value to the quality of writing we would like to read.

    That’s all.

    *gets down off soap box*

  4. Kate says:

    Close bracket, end of second paragraph.

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