Thursday, May 10, 2012

E-book Prices

A fellow writer commented that it seemed odd many mainstream book publishers are pricing their ebooks the same as they'd price their regular paper books.  It does seem odd, doesn't it?  After all, there's less overhead in the production of ebooks than there would be in a paper book.  Certainly, the cost of materials would be less.

I think the market is in the testing phase, and there is more in the cost of production that goes into pricing.

The natural thing to assume about ebooks is that because they are rather...non-physical compared to paper books, and of course the reproduction costs are minimal compared to printing books,the books should therefore be priced at a lower cost than paper books.

I won't get into the fact that the electrons and molecules that make up data are as real as those in our bodies, and without those electrons, both ebooks and our bodies would burst into nothingness, because that would not only be irrelevant to this post, but would start me down the road to science fiction, which I don't want to get into at this point. :-)

But where pricing is concerned there are a few factors to consider.

1. Cost of production

All books, regardless of type, have a certain cost of production. You ever hear about the fact that "time is money"? Exactly. You go to work, you type up a report, fix a car, or code some software, and your boss pays you for that time. Same thing happens with a book, whether it's an ebook or a paper book. Regardless of whether the book is electronic or paper, someone puts in the time thinking up the story and hours upon hours of writing it. Then that person goes through and edits the book (I hope!). Someone creates a cover for it, whether it's painted or whether it's created on Photoshop. All these people need to be paid so that they can have a roof over their heads and food on the table. For paper books, editors go over the book in various stages to see if there are any errors that need to be fixed, anything from punctuation and grammar errors to story continuity. Trust me, an author can be as meticulous as all get-out and go over her story five times and still miss something, so having an editor or a very good critique group is essential. Editors, of course, need to be paid.

Of course, the production similarities diverge when it comes to the physical production.  For paper books, there is the cost of getting paper, printing them, puting physical book covers on them, and all the costs involved in putting the books on trucks and driving them to various bookstores and grocery stores. Oh, and yes, those running the stores have to be paid, too. All of that goes into the price of a book. About 94% of the price of a paper book pays everyone except the author. The author generally gets 6% of the cover price. So, a paper book costs $5, the author gets 30 cents of that.

Even with an ebook, the retailer--Amazon, Barnes and Noble, Apple, etc.--get their cut.

2. Quality

Let's say you had a choice between two outfits. One is designed by Armani, is a perfect fit, makes you look 10 lbs thinner, and is made of silk so soft it's to die for. The other one is made of polyester that could sand the glaze off pottery and makes you look like your mother on drugs. Which would you choose? The dynamite silk outfit of course. The silk outfit is quality, the polyester is not. Most people are willing to pay a bit more for well-made silk than for poorly-made polyester.

3. Perception of value

Which brings me to the perception of value.  In the example of quality above, all other things being equal, you'll probably want to get the Armani rather than the polyester-looks-like-your-mother-on-drugs outfit.  Let's say you didn't even see a picture of the outfits, but you know that they're in your size and in a color you like.  Again, which one would you go for?  I bet the Armani.  Why?  Because chances are really good that the Armani would be better made and look good.  In fact, if the polyester outfit cost $75, and the Armani cost $150--$75 more!--you'd still go for the Armani because at that price, it's worth it, even though it costs more than the polyester no-name suit, because a good Armani suit goes for around $200 on sale if you're lucky.

In other words, to most people, the name "Armani" has value.  The company has a good reputation for well-made clothes.

But what if there's another company that makes to-die-for clothes--one you haven't heard of?  How do you hear about it?  Maybe a friend decided to take a chance, and ended up loving that company's clothes.  He or she tells you about it.  That previously no-name company now has a little bit more value to you--enough so that you're willing to give it a try--because your friend liked it, and you trust your friend.

The same thing goes for books.

In this exploding ebook publishing world, you get every kind of pricing from free to $10.00.  You have every kind of person's work--from a teenager's fan fic homage to Twilight to J.K. Rowling--out there for sale.  There are probably hundreds of thousands of books out there that you could download.  How do you choose?

It basically comes down to cost of production, quality, and perception of value.

Even with ebooks, the cost of production will vary.  There are more than a few ebooks out there by writers who couldn't spell their way out of a paper bag, whose stories are boring, or simply don't make any sense.  The production costs are really low because the writer just wrote whatever and the uploaded it, and maybe slapped a bland cover on it that they Photoshopped in about a minute.  That's low production cost, right there, and hand in hand with that is low quality.

These books may be free or cost 99 cents, but even at free you're going to wonder why you spent the time you did even trying to get through it.  Your opinion of the book may be a matter of taste, but there are some real, objective, quality issues that are important to a production of a book that make even a free one torture to spend your time on.  And your time is limited, right? Why even spend 5 minutes with a low-quality book, even if it's free?  Because, you see, it's not really free.  You have to spend time reading it.  And your time isn't free.  It's time you could have spent elsewhere.  Do you really want to spend hundreds of hours online searching through hundreds of thousands of books for a good one?  I bet not.

You have a few time-saving choices.  You can ask friends.  You can go by an author's reputation.  You can also go by a publisher's reputation.

When an indie author has a book for sale--and let's say you don't know this author from Adam--you don't have a guarantee that this author has put in the extra effort to create a quality book.  I'm sure there are plenty of indie authors who are great.  I know some who are.  But if you buy from an established publisher, you at least can count on the fact that it's been edited by a professional, so you probably won't find many spelling or grammar errors.  The story will probably be understandable, and there will probably be a decent plot.  You can at least have that bottom-line guarantee.  You can especially have that guarantee if that book has been published by a mainstream traditional publisher that has more than a few bestsellers under its belt.  You're going by publisher reputation.

If the indie author is J.K. Rowling, you probably won't care how she's being published, you're going to buy her book or know the quality is going to be better than most.  You're going by author name recognition.

Buying a book by a well-known publisher or author saves you what precious time you have in hunting through hundreds, nay, thousands of books trying to find that pinpoint balance between an affordable price and quality.

Right now, mainstream publishers are banking on the idea that you might be willing to pay the same for their ebooks as you would for a paper book because there is a better guarantee of quality.  They're especially betting on it if the author is well-known, even a bestselling author.  Hence, the price they're putting on it is the same as for a paper book.  In other words, they're offering a service:  you pay extra for the name brand, because they have just given you some information regarding a better chance at quality and saving you some time in looking for a good book...

...for now.

Because if you find an indie author whose books are fabulous, and she's offering the book for $2.99, are you really going to go to the mainstream publisher to buy an equally fabulous book for $6?  Probably not, unless you are deeply craving that particular mainstream-published author's books.

Will mainstream publishers have to bring their prices down a bit to compete after a while?  Probably so.  The reason is because readers will eventually find indie authors who are just as good as those who are traditionally published, and the prices are between $4.99 and $2.99--99 cents if it's on sale.  This is already happening.  In fact, there are more than a few indie authors who have been traditionally published authors, and who have decided to epublish that novel they've wanted to publish for ages, but which has been turned down by traditional publishers. 

The market is in flux right now.  This is a great time to find new authors, and for authors to find new readers, and for authors to actually make a living instead of having to find a day job to support the writing (and trust me, working 60 hours a week doesn't make for great storytelling, it makes for a really, really tired person).

I don't know how long this will last.  Authors are already wishing that they had more time to write because they're spending a lot of time on things like editing, finding covers, coding their manuscripts into the appropriate format, and so on, instead of creating a novel.  And I don't know how long it'll be before Amazon, Apple, Barnes and Noble, etc., will decide that they, too, can take the lion's share of the profits and leave the author with a smaller and smaller percentage.

I have some hope, though.  This new ebook venue means each author or group of authors can become their own small business, and that means they'll need to hire people to help them with the production of books.  It means there will be job creation, and that's good for all of us, right? 

As long as the authors get paid, that is.  :-)