With the Kindle and the Nook continuing to do well, and going well past the ‘40,000 total eReaders sold’ prediction experts had made in 2007, we are running into a completely different issue.
What price should books be? Is the Agency Model justified? Is it winning?
There are so many differing opinions on this that it seems like a possibility sword – everyone seems to believe and see a different possibility.
- A few people firmly believe the Agency Model has won out. That’s hard to agree with when the #1 book in the Kindle Store is an indie book at $1.
- A few people feel the Agency Model is a failure. That too is questionable since the #2 book in the Kindle Store is an Agency Model book at $13.
- Some people seem to feel that prices between $5 and $10 are reasonable. It sounds perfect and very reasonable – except there are lots of books below $5 and lots of books above $10.
- Other people feel that everyone should stop complaining about prices and not buy books they think are too expensive. It’s an interesting perspective – However, protesting is a way of bringing down prices and also a way of banding together. It is unrealistic to assume people will ever stop protesting about prices they don’t like.
- A few people feel ebooks should be $1 or $2. That seems unsustainable but indie authors are pulling it off.
You could take absolutely any possible outcome of the eBook Pricing Wars and piece together enough evidence to make that particular outcome seem the one and only true outcome. Take the Top 100 Bestsellers list for example –
- 4 $1 books in the Top 10. That’s proof ebook prices are going to zero.
- 3 books above $10 in the Top 10. That’s proof the Agency Model has worked.
- 25 indie books in the Top 100. That must mean indie authors are taking over.
- 10 Publisher published books over $10, and another 13 between $3 and $10, in the Top 40. Publishers must be growing stronger than ever.
Which is it? What’s going on with ebook prices? Who’s winning?
At the moment no one knows.
The Ideal Price for eBooks might not exist
People assume there is a rational price for ebooks – one which makes sense to all involved parties. That once we arrive at this price, ebook prices will stabilize.
There is no such ‘magic price’.
Prices for ebooks can never stabilize because we have some very emotional factors and some very unexpected things coming into play –
- Readers’ inability to wait for prices to drop. Why are $15 books still selling? Because some readers just can’t wait a few months.
- Readers’ refusal to pay more than what paper books cost. Lots of readers absolutely refuse to pay more for an ebook than what the paperback costs. This makes it very difficult to settle on any price that lies between the paperback price and the hardcover price.
- Publishers’ need to prop up their physical book business. Publishers’ attachment to their existing book business, and the fact that it’s 9 times bigger than ebooks, means that for the next few years ebooks will continue to pay for the sins of physical book publishing.
- Publishers are trying to maximize profits. That means they are constantly trying to tweak prices. If we arrive at a stable price, Publishers will soon try to get 10% more. Of course, it cuts both ways – as soon as a stable price is arrived at, readers will ask for 10% less.
- Readers have rationalized away any possible floor for ebook prices. We have begun to feel that there’s no reason ebooks couldn’t keep going lower and lower.
- Authors are competing ruthlessly against each other. You arrive at a balanced, sustainable price on Monday, and on Tuesday some author is going to try to get an advantage by going 10% cheaper.
- For new Authors it’s all upside. They have nothing to lose. Whether they sell a book for $10 or for $1, it doesn’t make much of a difference since their sales are so low.
There is no ideal price for ebooks. You could argue that the ideal price for Publishers is $100 per book, for readers is $0 per book, and for indie authors its any price that gets readers to read their books. However, all of these are competing against and coexisting with each other.
Boycotts do work – but not quite in the way people expect them to
The $9.99 boycott did some interesting things – it led to the rise of indie authors, it made Random House very successful in ebooks, it helped spread eReaders, it showed the power of readers.
There are some things it didn’t do –
- It didn’t get Publishers to lower prices to $10. This is because a segment of readers aren’t willing to wait months or even weeks for the books they want. Nothing wrong with that. It just means that Agency Model Publishers were weakened but not killed when it came to ebook sales.
- The actual impact of the $9.99 boycott is partially hidden. This is because ‘new releases’ always sell more in the first few weeks. So new releases at $13 still make it to the Top 10 and the Top 100. We don’t get to see all the $13 books that miss out because of the higher price – We do get to see the $13 books that make it to the Top 100 despite the higher price.
- It didn’t get Publishers to kill the Agency Model. This is because 90% of their sales are still physical books. Their aim with the Agency Model is mostly to slow down and kill eBooks and eReaders. If they don’t manage to do that, and so far they haven’t, they will pretend that all along their aim was to preserve prices.
We can look at the 20% of books in the Top 100 that are at $1, and the 40% that are below $5, and call the $9.99 boycott a victory. We can look at the 25% of books in the Top 100 that are over $10 and call the $9.99 boycott a failure. It’s whatever you want it to be.
One thing we do know, is that prices are lower than they were two years ago.
Group Buying is certainly worth trying
What if we set up a site where 10 million Kindle and Nook owners got together and said –
- Mr. King, set your next book at $5, and 1 million of us will sign up for a preorder.
- Harper Collins, release Book X from your backlist and 200,000 of us will sign up for a $3 preorder.
- Bundle the Harry Potter Series at $40, and 2 million of us will pledge the money up-front.
No publisher or author in their right mind would refuse. At some level, this ‘power of the group’ is what’s really needed – readers have to get every single reader of ebooks on the same team. It’s pointless to discuss Kindle vs Nook when owners of both devices are looking for the same thing – a much better range of ebooks at much better prices.
The only way for eReader owners to make their 10% share of the market more impactful is to get better organized. This applies to the boycotts too – more important than whether $3 over $10 is stealing or not, is whether eReader owners can band together or not. There are a variety of benefits that will accrue if eReader owners work together – more range, better editing, better graphics and covers, lower prices, earlier availability.
If, on the other hand, eReader owners start arguing with each other, over things like which devices they use or what they think the ideal price for ebooks should be, then it’ll slow down the rise of eReaders and readers.