Back to school: Pricing ebooks

Another post I made to the discussion forum for the Whitireia Diploma in Publishing.

On Pricing ebooks

This seems like one of the trickiest bits of the emerging publishing reality, how to price ebooks, and what effect it has on the entire chain of marketing and distribution. And what effect on the print books? That may be one of the keys to the discussion – does the ebook only exist in relation to a printed equivalent and how many print equivalents are there? For publishers today, it seems the ebook doesn’t exist without a printed book, and for many there’s both a hard cover and paperback to consider.

Amazon’s dominance has confused the issue, so the emergence of an agency model is encouraging if it hands some control back to publishers. That control would allow publishers to set the price across all channels, or even only a few channels if the percentages worked out in such a way that they could ignore some. If Apple can help push an agency model, good on them; my only worry with Apple is the gate-keeper role they tend to play – various complaints about getting iPhone apps released through their approval system suggest at least a little concern is warranted.

The problem as publishers see it remains one of estimating the knock-on effect to print of selling ebooks and how to price them in comparison to the print. I miss the point on this every time so please set me straight, but why not just set the ebook price the same as the cheapest print price? While the only version out is the hardback, the ebook is that price. When the paperback’s released, the ebook becomes that price. There must be a flaw here, but I’m not seeing it.

But the concern of the effect of ebooks on print is in a sense an invented one: if you’re still selling x number of ‘books’ then where’s the issue? The real problem is the uncertainty of how many people want a print copy and how many would rather have the electronic copy. Do you print fewer at a higher unit cost but with lower warehousing costs, or should you include the number of e-copies you hope to sell in working out the unit cost over the combined print+ebook run? Again, the theory doesn’t seem complicated, just we’re dealing with a new set of variables that haven’t settled down yet.

So another thought I had was to think about something a friend said recently: she’s no longer buying a book without first reading a library copy. She’s only going to buy once she’s decided something is worth reading again and therefore worth owning. There could be something in that for publishers – a cheap or free ebook that whets the collector’s appetite for the ‘real’ thing, or the sampler that tempts people to buy the enhanced ebook, whatever that is.

Which brings us back to the first question for publishers to consider: is the ebook just another variant of a print title or is it something with no print equivalent? If the latter then pricing becomes relatively straightforward – editorial and production costs, royalties, distribution (i.e., data management) costs, etc, plus a profit on top. And publishers will need to do like the Harvard post says – make insanely great things that people want to buy and then there’s no harm in charging what it costs to produce. Make something that’s dull (like a poorly imitated book experience) and price-setting is far more at the whim of the purchaser.