In the last few days have run into a lot of books priced at $1 and $3 that are worth $10 in my eyes.
It’s quite puzzling as we seem to be diverging to two extremes in Publishing – The independent authors and self-publishing established authors who sell their books too cheap and Publishers who price their books too high.
Independent authors are giddy at the prospect of getting to readers and price their books at the lowest price possible i.e. $1. Established authors are happy to sell their back-list at $2.99 and earn $2 per book. Established authors are also willing to offer up one book for free to entice/hook readers.
At the other end we have Publishers trying to promote $12.99 and $14.99 for new releases and claiming $9.99 isn’t sustainable. It’s in fashion to mock Publishers and by doing things like wildly varying price and availability of a book across different countries they certainly earn themselves a lot of the mockery.
However, they do know far more about publishing books than anyone else – What if they are right about ebook prices?
What if $9.99 really isn’t sustainable?
As a reader it’s easy for me to empathize with the perspective that moving from physical books to ebooks creates a lot of savings and books should therefore be $9.99 instead of $14.99 and higher (the prices we see with hardcover books).
This perspective misses out on two things – the financing and risk taking aspect of Publishing, all the different experts (editors, copyeditors, illustrators, agents, etc.) that work together to polish a book.
In pretty much any discipline the difference between 75/100 and 95/100 is not 20 extra units of effort and time and money. It usually takes double to triple the amount of work to go from decent to exceptional. So there’s one aspect that we definitely can’t get rid of – the endless polishing of a book to make it excellent.
What if the risk aspect can never be removed?
The risk aspect of Publishing includes two huge costs related to failed books - the physical cost of shipping and the cost of returns, the effort put into polishing a book and making sure it has a high chance of success (you have to do this because you never know which book is going to be the big one).
With ebooks there’s no guarantee the second aspect will go away. We might be able to find ways (crowd intelligence, algorithms, evolutionary algorithms, analyzing successful authors) to identify successes accurately or it might be a completely intractable problem.
eBooks eliminate the cost of returns and let us manufacture exactly as many copies as there is demand for. However, they don’t help us figure out which books will have demand and they definitely don’t help us identify the most promising authors. You could argue the latter is more of an art than a science and that it involves a huge amount of luck.
We also wouldn’t have any way of funding promising authors – We’d reduce every author to the same level where the author has to do everything by herself/himself. An author would have to first find success and only then would she/he be able to focus 100% on writing.
Perhaps after ebooks hit 40% of the market $9.99 ebooks just won’t work
Now that we’ve established that it’s not a given that the ‘identifying the successes’ part and the ‘funding the authors’ part is magically solved by ebooks we have to ask ourselves -
Could $9.99 ebooks cover the financial risk and the cost of funding authors?
It’s not a given. You have to make assumptions – that ebooks will sell more numbers than physical books, that authors will be able to get by on less money, that books will be able to succeed and sell with less polish. All of those sound like wishful thinking.
Whatever we might think of ebooks there’s little doubt that per book sold they bring in less money than hardcovers. Which means that if Publishers are right about there being certain minimum sustainable book prices then $9.99 ebooks might not be enough once ebooks are at 40% or more market share.
If $9.99 is a sustainable price we still aren’t home safe – $9.99 is not guaranteed to survive.
What if $9.99 is sustainable but unstable?
Look at the Kindle Store – Indie authors at $1, smaller Publishers and mid-list authors publishing at $3, smaller Publishers and back list books between $3 and $7, lots of free offers, lots of free public domain books.
There are far more books below $9.99 than there are at $9.99.
The minute we set $9.99 as the price for new books we do two things – We guarantee that the average book sale price goes down, we guarantee that $9.99 will become the new $12.99 and be universally reviled.
If Pat Conroy is coming in at $7.99 and Andrew Wylie’s treasure chest of books are at $9.99 each then how dare an author assume her first book is worth $9.99. For that matter how could any except the top 0.1% of authors try for $9.99. The remaining 99.9% of authors should sell for $4.99 and $5.99 since they aren’t as good (or as famous or as well recognized).
$9.99 won’t last for long if it’s established – There’s always downward pressure
The minute you establish $9.99 as the entry point readers figure out reasons it should be less.
The minute you establish $9.99 some authors find excuses to pander to readers’ perceptions. Other authors feel they can gain a competitive advantage by pricing below $9.99 – Theirs will be the only new book at $4.99 and they’ll get money and a spot in the bestsellers charts and more reviews and more favorable reviews.
It’s a very painful truth that it’s in the individual interest of every author to undermine established book prices – even if by doing so he/she destroys whatever sustainable ebook price we’ve reached.
The Tragedy of the Commons
Authors will find excuses and rationalizations to lower prices. When that happens other authors will find ways to justify even lower prices.
Yet other authors will start claiming books should be free. They’ll do this to curry favor with the masses and yet they’ll do it in a way that makes it seem the noble and right thing to do. Because what author in his right mind would say -
You’re a bunch of greedy pigs and you want something that takes money and blood and sweat and tears to make for free. At the same time you don’t want to feel guilty about it. So let me conjure up a justification that lets you steal and still feel good about it.
So the smartest (and simultaneously dumbest) authors will start claiming information wants to be free and that readers are bestowing the pleasure of being read upon authors. These authors will out-compete everyone else. They might even, for a while, profit since readers will be so glad to be freed of the guilt they feel deep inside.
It won’t last though. If you train people your work is worthless they’ll reward you at first for your generosity and benevolence and then stop paying and wonder why the vastness of your ideals doesn’t fill your distended belly.
Surely, great Guru of Free, the happiness of being read is putting food on the table. Spiritual food that sustains your soul for the body is but a vessel and can do without nourishment.
Authors will outwit each other until we get the smartest authors who will outwit not only all the other authors but also themselves.
Training users to not value its product is how nearly every Internet company manages to kill its profitability - it convinces its users that they don’t have to pay in any way other than by using its product.
That’s exactly what authors are in the process of doing.
Is there anything that could stop the race to the bottom?
We are in a pretty bad situation -
- We’re not sure $9.99 is a sustainable price for ebooks. Put aside your distaste for Publishers and your natural inclination (a very justified one) to think that they’re trying to steal from you - We really don’t know if $9.99 is a sustainable price.
- It’s pretty evident that $9.99 isn’t going to last for long. If the best indie authors are pricing their ebooks at $1 and some of the best authors are placing their back list books at $2.99 then new books can’t keep coming out at $9.99.
- Not only is $9.99 not a floor for new book prices it’s quite likely there is no floor. Authors are always competing with other authors and now that price is fully flexible it will go to zero. We can pretend all we like that it’s a brotherhood and it still doesn’t change the fact that every author is competing for the same readers and will keep undercutting other authors.
We suddenly go from a pitched battle for fairness -
- The Fight for $9.99 and fair prices and justice for all.
To the completely opposite concern -
- Avoiding the race to the bottom and establishing some viable range of prices.
In typical Amazon fashion the Kindle Team is already trying out a solution.
Could Amazon’s ‘$2.99 to $9.99 prices for a 70% share’ gambit work?
Actually, it has zero chance of working.
We see it already with independent authors who refuse to budge from $1. Instead of creating ‘indie books at $2.99 and backlist books at $4.99 and new releases at $9.99′ all it’s done is set the stage for ‘Indie Books at $1, most other books at $2.99, some books struggling to maintain $9.99′.
Getting $2 per book is hugely appealing to mid-list authors and other established authors. It’s probably more than they get from paperbacks. However, these are authors who were successful. All the money spent to make them successful and all the money spent on failures is not accounted. The author seeing $2 per book doesn’t realize that this figure might be enough for him but is guaranteed to not be enough to finance taking risks on future authors.
Is there any way to stop the race to the bottom?
It’s a free market and the brutal competition between authors in itself would have been enough to take prices to zero. We also get some other very interesting factors that accelerate the race to zero -
- Authors’ desire to have their books read is often far stronger than readers’ desire to read books. Which means lots and lots of authors will gladly share their books for free.
- eReader makers will eventually use free books as a ruse. If they can sell eReaders what do they care about the long term?
- A few companies adept at destroying profits are entering the market.
- Some of the players are in dire financial straits and are likely to encourage unsustainable scenarios.
- Readers are in control and readers are as capable of self-delusion as Publishers. Power definitely corrupts - you see it when readers who paid $15 for hardcovers are turning around and asking for $1 and $2 ebooks.
There is absolutely no solution that comes to mind for stopping the the race to the bottom. The question will keep changing -
Is $9.99 sustainable?
Is $5.99 sustainable? Can we stall prices at $5.99?
Is $2.99 sustainable? Can we stop here?
Is $0 sustainable? Can we sell t-shirts with authors’ faces on it? Can we have a bail-out? Can we use tax payer money to fund authors?
Users have shown with the Internet and with news and with piracy and in numerous ways that when they get total freedom and total power they abuse it just as much as Publishers and Movie Companies and Music Labels do. The real question everyone should be asking is -
Why would books be different?
When faced with a choice between paying $1 or looking to the future and paying a sustainable price like $9.99 what will readers choose? What will readers choose when ruthless companies and desperate companies are trying to gain an edge and selling readers on the idea that $1 really is a sustainable price?