You Tell Me: eBook Pricing

You Tell Me: eBook Pricing

Posted by on Nov 27, 2012 in Publishing, You Tell Me | 38 comments

So I spent the weekend reading some interesting articles, a million comments, and having conversations about eBook pricing with people. I even took to my Facebook Fan Page, where we engaged in some wonderful discussion, where people brought up some great points from every angle about what they’re willing to pay for an eBook, and why. Now I want to go bigger. I want to take to the blog and see what you have to say about it.

Before we get started, let’s assume the eBook is cheaper than the paperback by at least $5. I really want to focus solely on eBook pricing here and avoid comparing them to paperbacks. I think it’s a safe assumption to make that we all believe eBooks should cost less than paperbacks. That being said, I realize paperbacks are part of the discussion and they will be brought up, both by me and you, but I just would like it to be as much about eBooks as possible.

And lastly, this is a very hot topic. So as with all discussion posts, lets keep things polite. Feel free to disagree with me, or anyone else, but do so in a civil manner. And with that, lets get going.

I believe eBook are valuable. Sure, production costs is cheaper than paperbacks, but since we’re avoiding discussing paperbacks here, lets get straight to the nitty gritty. I’m willing to pay $9-$12 comfortably for an eBook. More if it’s a book I really want. I might not be happy about paying more, but if I love the series or the author, I’ll pay it. Now based on previous discussions I’ve had, people probably think this is ridiculously high. But the thing is, when I buy an eBook, I’m paying for an adventure. I’m buying a piece of someone else’s imagination and demanding it take me places. That just so happens to be the same thing I’m buying with a physical book. When I buy a story, I’m not interested in holding a dead tree, I’m interesting in a journey of some kind or the lessons it has to teach. That’s the most important part to me.

That’s the reason we read, isn’t it? To venture into unknown worlds with unknown characters? Not to mention, someone spends hundreds or more hours putting this together, and although that worth may be unseen, it’s there and it has value. I want more from those authors.: more books, more imagination, more adventure. It’s easier for me to get that from them when I’m paying more than a dollar or two, and I accept and welcome that. Now when it’s a debut author or someone I’ve never read before, I may be a little more leery, but that’s what recommendations and reviews are for, so for the most part, I’m okay with that price point.

My point is – and I’m breaking my own rule and mentioning paperbacks here – paper and ink is cheap. Less than $5 per book. So if I pay $20 for a physical book, theoretically  I should be prepared to pay $15 for the eBook. After all, whether you agree with me on this or not, the cost of a book is not based on manufacturing, it’s the price you  pay to experience a story.

Now I have a lot of points and counter arguments to make based on previous discussions, but rather than do that in the main post, I want to open it up to you, because I’m sure those points will get brought up in one form or another, and we can all discuss it there.

So that’s what I think, now it’s your turn.

You tell me: What are you willing to pay for an eBook, and why is that your limit?

    38 Comments

  1. I like your points and in an ideal world I would definitely agree.

    I live in the UK so I would like to say that I would happily pay about £10 for a decent ebook but the truth is, realistically I don’t think I would. I mean if it was the kind of book I was dying to read and had been anticipating its release for months (say, when the final Harry potter book released) then yes, I would be willing to pay a ridiculous amount for that feeling, the adventure the whole immensity of being absorbed into their world.

    You say you would pay $9-$12 dollars for an ebook. That would be £5.60-£7.48 for me (thank you google for currency conversion!) I don’t think I would pay that much. Probably around £4-5. I realise that some authors make very little but we all have our own finances to consider and for me, at this point in time would be a reasonable price to pay.

    But I would like to say I don’t understand how the ‘free ebooks’ work. How can an author earn if their books are given on amazon for nothing? Isn’t that demeaning the entire ‘buying the book’ experience?

    • Let me start by saying thanks for sharing your thoughts, Zed!

      I completely understand your points. Especially for some avid readers who are reading multiple books per week. That adds up very quickly. And we all definitely have to watch our wallets. Because writing consumes so much of my time, I don’t read very much. If I read as often as I wrote, I think I would probably be more in the $7-$9 rage for comfort. Since yes, we all have bills to pay. I’m not against paying lower of course, I’m strictly saying that that is kind of my maximum range for comfort.

      As far as the Free eBooks work, the author makes nothing from the free downloads. What it’s “supposed” to do, is give a book a chance to get exposure. It’s a loss leader tactic. One where the author hopes they’re loss of income from either being temporarily free, or always free, on that book, will result in future sales of other works.

      Whether or not that demeans the entire buying the book experience, well, that’s an entire different argument. One that you can actually expect to see on here. The thing is, the ability to go free is sometimes the best source of marketing for an author. Or at least one that reaches the most people. It’s always one that takes away from the value of an eBook in many people’s opinions. But that topic is for another day, (at least my opinions on it) and you can look forward to more on that in a future You Tell Me post.

    • Thank you for your reply. I can understand that being a writer you get little time to read and so are willing to pay a higher price. To be honest, I get very little time to read too due to work but I try to make the most of every moment where I can!

      Aha, so free ebooks are a promotional tool…The reason why I said it is demeaning is because when I see an ebook priced very cheap, I tend not to go for it because I assume the low price reflects the quality, which is not a fair assumption to make…

    • I think that’s the mindset for a lot of readers. And I can understand it. I hear from people all the time that are just tired of getting “burned” and so they don’t buy the lower priced books any more, and many refuse to buy indie books unless they come highly recommended from trusted sources.

    • Precisely. Only when a book is recommended by several blogs will I consider to buy it.

  2. As a eBook buyer, I buy eBooks without much thought if they are priced under $5. That’s a more than reasonable price, especially if they have excellent reviews and an attractive cover. If it’s an author that I love, and he/she has an upcoming release, I would pay up to $10. After $10, I would probably just go find the physical book–but only if it’s the first in a series (I like keeping series together: they must be all eBooks, or all paperback, if possible).

    As a book seller, I price my eBooks under $5, for now. I’ve got 2 out, one is $2.99 and the other is $3.99. I think, in the current mindset that’s been created around eBooks, this is high enough to tell my readers that I have a high quality product, but low enough to entice an impulse buy for book buyers like myself.

    • Hey Clare!

      That’s a solid approach. And quality is becoming more and more apparent to readers as self-publishing develops, so that’s a good outlook to have.

      I’m the same way. I like all my books one way or the other. Because I prefer eBooks over physical copies, I tend to lean towards them. Which is probably one of the reasons my threshold is a little higher.

      I think as any author develops an audience, maybe that gives them more leeway for higher priced eBooks? I know I’m more willing to break away from my threshold for authors I know and love.

  3. I think everyone above raises very valid points. As a lover and devourer of both paperback and ebooks I can honestly say that the highest I am willing to pay for any book, paper or ebook is $15. But I really love it when books are under $10.

    I will pay anything under that $15 for an author or story I love! Like yours for instance. If I am already vested in a series I am certainly willing to pay more. If I don’t know the author or the series is unknown to me I am a little more leery. But hey that’s what the local library is for, right? I know you can’t get a lot of indie authors that way, but you would be surprised what you can borrow. Also that is why I have amazon prime.

    • Absolutely! And you know enough people in the community that I think you’ve found readers with similar tastes. Since word of mouth is a huge advocate for books everywhere, having those trusted opinions around you can save you a few dollars perhaps?

    • It is really nice when you can find those that share your reading interests. It does usually help in making decisions to buy books. That is why I love the book blogging community. There is a book blogger out there with interests to yours, you just have to find them!

      I love the topic!

  4. I’m not a big fan of ebooks just because I enjoy a book more when I can hold a physical copy in my hand. But with all the self published titles out there I kind of need to read ebooks. But its hard for me to buy them. I’m not sure why that is though. Its like I feel like I don’t have anything to show for what I buy. But that kind of seems ridiculous because I have a story… I don’t know, I guess I’m weird. But when its an author I already love (like you) I will pay $5 for a book (and I did for Shift). I feel YOU deserve more than that, but I know my pocket book can’t handle it. Though if your book was $10 as an ebook and $15 in paperback I would buy it in paperback.
    For authors I haven’t read before I prefer to pay less. If I see a RAVE review from someone I trust I will pay 2.99 but otherwise I prefer .99 cents. I guess I have maybe been burned too many times but quality tends to be an issue I’m still running into.
    Another reason I will pay more to get paperbacks is I can share them. I have a personal library that I share with 15+ people regularly. Buying books to add to it feels worth it.
    This is a great discussion! I will definitely check back to read comments!

    • Great point, Candace, and I don’t think your alone. I think a lot of people have been burned by it, and naturally that would make anyone hesitant. I don’t read nearly as much as most people, so I’m very cautious with what I purchase. That, and very specific stories appeal to me, so I usually have a good idea on whether or not I will enjoy something before I purchase it. I personally prefer eBooks, and even though I can “lend” my eBooks out, I don’t share with many others, so it’s not generally an issue.

      The pocket book is a valid point too, which I responded to in a different comment. For someone who reads as much as you do, you can’t afford to be blowing money on sub-par stories either. That’s not fair to you as a consumer.

      On a side note, you have a personal library? You can color me green for that one! I want to see pictures.

    • Matt,
      I will need to take some new pictures as we just rearranged our house. It’s still being organized but once it’s all pretty again I will work on getting some pics up. 🙂

      Another thing I wanted to mention is that people that aren’t really ‘in the book scene’ often get started on new authors by grabbing free books. My mom, brother and sister in law all have kindles now and they go through and grab the free books that sound good. If they like the authors writing they don’t hesitate to go through and buy the other books by the author. I think once an author has several books out in a series offering the first for free may bring in a ton more sales just through those that only find authors by grabbing the free books. I get so many books for review that I rarely even look through the free ones, but if I see a rave review and the book is free I don’t hesitate to grab it while if it’s not I might just file it in my memory (which it quickly disappears from). Just a thing I was thinking about today while washing dishes… (Best time to think!)

    • Please do! I would love to see it.

      My mother and sister are both very avid readers, but they are both Kobo readers and apparently prices are much higher on Kobo. Even though I’m ‘in the industry’ they don’t know anything about the publishing world and they don’t even consider eBook prices. They just purchase them. They’re perfectly fine paying anywhere from $10 – $18 for eBooks. Mostly because they prefer reading on their eReaders now since it saves them so much space not having to find places for books. My sister said she tried a few free eBooks and a few $2.99 or less ones, but they were so bad she doesn’t even bother anymore. I tried to tell her she could find some really good stuff in there, but her response was “I’d rather pay $15 for a decent book, or one that is edited, than $3 for something I can’t even get through.” I spoke to a few other readers who aren’t involved in the industry in any way, and they said the same thing. Maybe we’re more sensitive to the subject because we’re a part of the community? All I can say for certain, is that perspectives differ so much, sometimes it makes my head spin.

    • Yeah I guess it just depends on the person. My mom never spent money on books in the past (other then garage sale books) and always got them from the library. She seems pretty happy with the books she’s grabbed for free but I’m sure she’s had some duds too. I do know she doesn’t know anything about self published vs. traditionally published though and holds nothing against self published free books (she doesn’t even have a clue that it IS self published). So yeah, I agree that its going to be different for everyone.

  5. Matthew:
    $10 is what I would consider a great value… Like you said, there are a million point/counter-point arguments. I view this as a ‘movie’ in my mind. That’s the experience I get when I read a book. The current price point around here is $9-$12 for a movie, so, really, $10 for an ebook is fine with me. I’m kind of ebook converted anyway, and some books can be cumbersome to take with you when travelling. Ten bucks, yeah, that’s a pretty good price point in my opinion. What ebooks have going for them, after sales start to stabilize post release, the ability to lower the purchase price is easier because a physical book isn’t produced.

    • I’m a big fan of the movie analogy myself. Up here you pay $14 just to get in, and you get 2 hours of movie and that’s it. So to me, $9-$12 for a book you can read again and again (and in my case, lend to others) is just fine. Plus, I much prefer eBooks myself as I don’t have a ton of shelf space, and I read more books now with an eReader than I did before.

  6. It’s difficult to tell you what price I’m comfortable paying for an ebook without comparing it to the price of its print counterpart. That’s a big factor for me. I will say that I am very comfortable paying $0.99-$2.99 for an ebook, especially if it’s a book by a new-to-me-author. Sure, I’ll spend more for a book by an author I know and love. But will I pay $9.99+ for an ebook? Not likely. I’ve have an ereader for 3+ years now and I can tell you exactly the number of ebooks I bought that were $9.99+: TWO. One was Shadowfever, because I wanted that sucker on my Kindle at midnight. And the other was a gift for a friend, who was totally worth the $11.99 price tag. Other than that, most of the ebooks I buy are in the $0.99-$5.99 range.

    The biggest disadvantage ebooks have is that you are technically acquiring a license to read the book when you purchase one; you do not ‘own’ it. Therefore, you cannot sell it, swap it, loan it, or trade it like you could with a print copy of the book. And because of this, I firmly believe that ebooks should always be sold for less than their print edition counterparts. I find it absurd and ridiculous when I see Kindle books priced more than the print version. I would really like to know the reasoning behind that decision. I feel like publishers are trying to get people to shy away from ebooks but that’s not going to happen. They need to adapt and accept the technology.

    Sorry I went a little off there.

    • Totally agree w/ you about the lending out or swapping dealio… hence one of the million arguments for/against.. still view it as a ‘mind/movie’ when you hit the movie theater, it’s that 2hr time frame you get to ‘watch’ the movie once, then it’s over. At least w/ and ebook, you still have that…. Still you have many valid price point arguments… good post…. Mark.

    • This was brought up in a previous conversation I had on Facebook. Can you not lend books on Nook and Kindle? I’m in Canada, and Kindle’s and Nooks are hard to find. If you can find one, it’s a really low end one, nothing like the new ones. That being said, Kobo is the big thing up here because it’s supported by Chapters, which is our big book chain. With the Kobo we can lend all the books we buy on it to other Kobos. Since I don’t have a Kindle, I can’t argue that point, but I thought maybe you would know?

      The ability to sell the ebooks would be kind of a neat idea. Just like you can sell back used copies of print books to Amazon. And eBooks priced higher than paperbacks is outrageous. It makes me angry to even think about it.

    • Sadly, the number of Kindle/Nook books that are lendable is low. Most of the Big 6, err 5, publishers do not enable lending for Kindle/Nook books. And even if a book is lendable, it can only be loaned out once, ever, and only for a period of 14 days.

      (I have a Kindle.)

    • Again I agree about the swapping and borrowing. When it comes to big time publishers and big time authors, their ebooks are often the same price as their paperback and sometimes hardback when the book is first released. If I cam going to pay $15 or more for a book whether it is a ebook or paper book I want to be able to lend it out. This is one reason I don’t buy new releases of my favorite big time authors in e-format. I want to be able to lend it out.

      This is one area the kindle is severely lacking. Yes they have a lending library, but not all books are available. And as the person who purchased the book I cannot opt to have a book I purchased added to the library. As an Amazon Prime member I get to borrow 1 book a month and keep it for 30 days, but again my choices are decided by the publishers.

      It is this reason alone I prefer to buy new releases in paper. But I have found so many authors and books that I would never have found if it wasn’t for e-format. I am now willing to pay more for ebooks than most paperbacks. Now only really only buy those used.

  7. See, the thing about ebooks is this: you’re not buying them, you’re granted a license that can be taken away. And before you go poo-pooing that, it has already happened for entire services as well as Amazon deciding that someone buying out of market could never read any of their Amazon purchased books again or even start another Amazon account.

    Given that, no way will I ever pay over $5 (inflation aside) for an ebook. If it’s not mine, I’ll pay rental price but I absolutely will not pay purchase price. Drop the DRM, the ability to revoke my ability to read what I paid for, and let me move/convert it however I like and we’ll talk again.

    That said, you’re asking the wrong question. It doesn’t matter what anyone thinks an ebook should be worth; not the author, not the publisher, and not the customer. What matters is what price point will make you the most money. Currently, that appears to be $2-2.99 for most books, though I expect the especially popular ones would have a higher optimal price point.

    • I can understand where you’re coming from on that front. The problem with your solution is it amplifies the amount of piracy. That’s why when you “buy” an eBook now, you don’t get a physical file. That being said, there is no proof that says piracy hurts digital sales. Others will disagree, but there are many people who think it actually helps in the long run. But piracy is an argument for another time.

      I will disagree with you that $2-$2.99 is where authors make the most money. You have to gauge amount of copies sold with royalties, and having spoken with dozens of authors in different genres, I’ve recently discovered that the majority of them actually started selling more copies (often three times more) per month when they moved to the $5.99-$7.99 threshold. And there were a few authors (three I think) that sold the most at $7.99-$9.99 price point. There is a huge portion of readers out there that have no knowledge of the publishing industry, they simply like to read (I’d take a total uneducated guess to say the majority of readers in the world are not educated in how the publishing industry works). A lot of those readers believe lower price represents lower quality, and they have certain price points they look to for their next book. Of course that is not a fact, it’s a totally unchecked idea I’m suggesting based off only a few opinions.

      All that said, I can see $5 being a solid price point for a good portion of readers. Especially with the fact that you don’t own the digital file.

    • Not a number I just pulled out of thin air. There was a study done sometime in the past year or two showing that for most books that was the sweet spot where volume and price got the most revenue. There was another volume/price spike around $5.99 too but it was something like 10-20% lower in revenue.

      As with any study though, it’s plenty easy to argue with since you can’t rewind time and check the same book with a different price using the same customers.

      I’ll see if I can find a link but I need either a nap or more coffee before my brain starts working well enough to spit out the proper google-fu.

    • I could see that being true, although a study from two years ago, or even one year ago, wouldn’t be much good now anyways. The industry is changing so rapidly, and that’s part of the issue.

      Nobody can figure it out because it keeps changing. Not to mention there is no “one way,” about it…at least in my experience. Different books do different things at different price points, with no rhyme or reason. Why does a book sell just okay at $2.99, but then sell 150x’s as many copies at $5.99? There’s nothing to explain that. Not yet. But I’ve seen it happen time and time again with authors who do price experiments. It could be just the time frame, it could be a change in the Amazon algorithms (this happens constantly), it could be a promotion they ran, it could be plain old lady luck. What works for one author doesn’t always work for others. It’s a the constant change that makes it impossible to predict.

    • “The problem with your solution is it amplifies the amount of piracy.”/i>

      I personally believe that DRM amplifies the amount of piracy.

    • So you are suggesting that having DRM makes people want to break down the DRM and upload books for free on websites? Just out of spite?

      I’m not assuming, I’m just asking because I’m not exactly sure why you think that. I’m not saying I’m in favor of DRM, but I do acknowledge it has some value in some aspects.

    • Hold on a second while I remove from my mouth the words you just inserted.

      Okay, I’m ready 🙂

      First of all, DRM doesn’t prevent piracy. (And let me just say right now that I am against piracy, in case you make an assumption otherwise.)

      I see DRM as a restriction, not a protection.

      There are ebooks that are only available in certain formats and have DRM. What do people do then, if the formats available aren’t compatible with their ereader? Some of them will get a pirated copy. Do I do this? No. Do I know people who have done this for this reason? Yes.

      I am not saying that that is right (it’s not) nor do I justify the reasoning but it happens.

    • Okay, let me start by saying I wasn’t putting words in your mouth. That’s why I formed what I said as a question, as in to ask if that’s what you were saying. I didn’t mean to offend you. That was not my intention at all.

      I will admit however, even after doing research on DRM when I first published, I had drawn the conclusion that DRM prevented (even if it was by some minuscule amount) piracy. I realize it is a restriction, but it does protect the author in some way. Again, even if it’s only minor. But I can also acknowledge the fact that DRM doesn’t stop piracy. If someone wants to break it down and upload it, they will. There’s nothing in place to stop them. So although I think DRM does prevent the average consumer from doing things like that with the file, I think you’re right, it’s more of a hinderence than anything. Which I suppose only furthers the point that you are “renting” the eBook indefinitely and not buying it, since if you wanted to convert yourself from a Kindle reader to a Nook reader, you’d have to give up all the files you purchased through Amazon.

    • I should add that this was just one group of authors from different genres I’ve spoken to. But I’ve personally experienced this in some way as well. I assume there are many factors at work with the selling more copies at a higher price than just the idea that higher price = higher quality, and I don’t think it has to do with just popularity either. Although bigger name authors will definitely have the option to list their prices higher and still sell many copies, I’m not sure what all factors in to it helping the self-published authors I’ve spoken with whose monthly sales far exceed their following.

    • “If it’s not mine, I’ll pay rental price but I absolutely will not pay purchase price. Drop the DRM, the ability to revoke my ability to read what I paid for, and let me move/convert it however I like and we’ll talk again.”

      THIS!

      And that’s how it feels; like the publishers still have a few of their fingers on the ebook, even though you have ‘purchased’ it, and can easily snatch it back should they chose to do so.

      Like with what Amazon did with 1984.

    • Yes, and that isn’t right on any level. No matter how you look at it.

      You’re paying x amount of dollars to buy a product, not rent it. I never totally looked at it like that. I mean, I never entirely saw it as a rental. I assumed since you have receipts of your purchase, you could always defend your stance if an eBook was removed from your reader. But being realistic, Amazon can just take it and there will be little you can do. That’s a valid point and you have me a little more convinced on the price point issue now.

  8. As for why the prices are what they are, three main reasons.

    First, the big publishers are both established industries and monopolies. Neither of those lend themselves to rapid changes in thinking. Yeah, monopolies. If I specifically want to read the next book of a series, I have exactly one option (differing regional publishers aside, that’s an entire other discussion).

    Second, the big publishers are scared. If they start offering an ebook at $2.99, are they still going to be able to sell enough hardcovers at $20~ to justify the print run? Nobody has really tried. Thus uncertainty, thus fear.

    Third, authors aren’t economists, by in large. Try to explain price elasticity of demand to them and you’re going to get a lot of furrowed brows and glazed looks. Making more money selling for less is counter-intuitive, even if it is often true.

  9. I’m not offended. I should have clarified more.

    I hate that readers can’t easily switch from a Nook to a Kindle (or vice versa) without having to worry about losing their library. It’s an evil ploy to lock in a customer.

    • Absolutely it is. I wonder how long it will take the publishing world to go the way of Blu-ray. Where as you buy the paperback, and you get the digital copy a well?

  10. That has been my wish for a while now – to get a digital copy of the book when you buy the print version. (I have been known to actually get rid of some print copies of books that my library has in ebook format.) I’m not holding my breath but it would be nice.

    I never thought I’d see the day, but I mainly buy ebooks now. They’re generally cheaper and I don’t have to worry about getting anymore bookcases to store them in.

  11. My comfort zone for an eBook maxes out somewhere around $8. For specific author’s, I may be willing to go a bit higher. If the overhead involved in producing a book is reduced, why shouldn’t that savings be passed along to the consumer? I read plenty of indie books, priced at $4 and below. Some are good, some are so-so, some are outright bad. In general, most of them suffer from lack of editing, but hey, I know what I am getting. I’d be willing to pay a bit more for proper formatting and editing.

    In the end though, paying historical level prices for something that clearly costs less to produce is nothing less than gouging the end user. I just looked at a new release eBook by an author that I just found- the length of the book is 268 pages. The cost (set by the publisher) was $8.99. For what amounts to about 45 minutes of my time.

    I think that people, since the advent of the Internet, are much more savvy shoppers- they know (and can easily research) what goes into the production of a book and how much is reasonable given the author (known quality or not) and the length of the book (150 pages or 900 pages? How much distraction am I buying?). You can manage your risk much easier now that you could previously. The only previous method of managing that risk was to use the library, which is not a great option (hold times) when instant gratification is your goal.

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