It's Hard To Figure Out Pricing For Ebooks From Anecdotal Evidence

This post, by Mike Shatzkin, originally appeared on his The Shatzkin Files blog on the Idea Logical Company site on 4/25/11.

The Wall Street Journal wrote last week about what we have been concerned about for some time: how hard it will be for publishers to sustain book prices as supply (of books) rises faster than demand because of all the self-publishing being done.

WSJ built their story around John Locke, whose thrillers are 99 cents and who earned well over $100,000 in March selling them on Kindle. Locke himself put the pricing in perspective. If his books are 99 cents and most ebooks from big publishers are $9.99 and up, he doesn’t have to prove he’s as good as they are; they have to prove they’re 10 times better than he is!

I can tell you this. I’ve read one of John Locke’s books. Nobody I can think of is ten times better than he is. By his own criterion, he could readily sell for $2.99 (and be earning a higher percentage royalty) because nobody is three times better than he is, either.

Meanwhile, on a much less signficant level commercially, the ebook of The Shatzkin Files is now out from Kobo for $3.99. How did the price get set? Kobo said, “let’s put it there.” Their first thought was that it should be $4.99 but then they suggested scaling it back because, after all, the entire body of content in the ebook is on this blog, which is available free. (This establishes that anybody who buys the book is paying for the convenience afforded by the container, not for the content itself.)

I don’t know what the dilutive impact on “real” ebook sales is of The Shatzkin Files, but it is, like John Locke’s material, additional competition for books that are issued by legitimate publishing houses. It is more supply competing for the same demand.

Trying to understand the actual impact of price is very difficult. Amazon tells us that books on which they control the prices are seeing share growth over books on which the publishers control the price. That is shorthand for “99 cent and $2.99 books by self-published authors are growing share over $9.99 to $14.99 books published by the big agency publishers.” That would tend (and is certainly meant) to suggest that pricing high (and ignorantly) is hurting the big publishers’ and big authors’ revenues, but we can’t actually draw that conclusion from the data.

Read the rest of the post on Mike Shatzkin‘s The Shatzkin Files.

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