Why does this e-book cost $14?!
Amazon inexplicably charges nearly as much for the e-book edition as for the hardcover.
(Credit: Amazon)Dear e-book publishers: stop gouging us.
Look, I'm your biggest fan. I've been reading digitally distributed fiction and non-fiction since the early days of the PalmPilot.
The most frequently used apps on my iPhone, bar none, are Kindle, eReader, and Stanza.
But I'm getting increasingly frustrated with e-book prices, which rarely represent a savings over their print (aka dead-tree) counterparts.
Case in point: I just read a glowing review of Jonathan Tropper's "This is Where I Leave You." I'm sold; I want it. But something's amiss here: Amazon's hardcover price is $15.57, while the Kindle edition sells for $14.01.
Now, I understand books cost money. There's editing, publishing, and distribution. Paper, ink, trucks, gasoline. Storage, shipping, shelf space, sales staff. And the countless people involved in all those transactions.
E-books, on the other hand, consume zero trees. They weigh nothing, occupy no physical space, and don't get shipped in the traditional sense. Middlemen are few and far between. So you're left with, what, editing costs and the pittance you pay the authors?
Explain to me, then, why the e-book edition of "This is Where I Leave You" sells for $14.01. The $.01 suggests there must be some calculation at work, some formula you use to determine that Kindle and iPhone owners get to save all of a buck-fifty-six when they read green.
(By the way, bargain hunters, eReader.com sells "This is Where I Leave You" for $9.95--still disproportionately high, but more reasonable at least.)
This isn't a new phenomenon. For as long as I've been reading them, e-books have cost nearly as much as their print siblings.
It's time for that to change.
I'm no businessman (English major, natch), but even I understand the economics of volume. Want to sell more e-books? Lower the prices. Forget how things work in the physical world, where selling more books means more production, more shipping, more consumables. E-books require none of that. The only real "consumable" is bandwidth, and there's no shortage of that.
I also understand the concept of perceived value. If you make e-books cheap, that cheapens the value of books in general, right? No. Wrong. Hogwash. That's 20th century thinking.
Let's get some perspective. Publishers have vast libraries of old, forgotten books that are generating zero income, or close to it. Why can't I buy e-book editions for 99 cents? Last I checked, some revenue was better than no revenue.
Why aren't best sellers priced at, say, $2.99? That's an impulse-buy price, one that would encourage readers to pony up instead of waiting weeks or months to check out the one print copy the library bought.
Apple figured out that 99 cents was the magic price point for songs and managed to strong-arm record labels into letting it sell at that point. Amazon, Barnes & Noble, Sony--it's time for you step up and convince book publishers to do likewise.
Readers, it's time for you to step up and letter-bomb both booksellers and publishers, to let them know you've got money to spend on books, but want fair prices.
I will not buy "This is Where I Leave You" for $14.01. At $9.95, I have to think about it. For $2.99, publisher Dutton Adult, by way of Amazon or eReader or whoever, would already have my money. And probably a lot more, as I'd be snapping up books left and right.
One final thought: at the same time you're raking in newfound profits, publishers, you'll be creating a more literate, well-read society. Not a bad perk, eh?
That's the end of my diatribe. Over to you, readers. Would you buy more e-books if they cost just a buck or two? Would you be more likely to buy, say, a Kindle if cheap books were part of the deal? I eagerly await your thoughts on the subject.
Rick Broida, a technology writer for nearly 20 years, is the author of more than a dozen books. In addition to writing CNET's The Cheapskate blog, he oversees BNET's Business Hacks. Rick is a member of the CNET Blog Network and is not an employee of CBS Interactive. Disclosure. Deals found on The Cheapskate are subject to availability, expiration, and other terms determined by sellers. Follow Rick on Twitter at cheapskateblog. 
There are no mathematical algorithms to fix the initial and final price, it is mainly based on verbal and some ideal logic. They guess what they think people are willing to pay for that, then they do market studies and they revise.
Kindle being an expensive gadget, they can already aim at people who can afford the luxury. Plus you don't have to drive, so you save time and money (i.e. more luxury). Also, like similar industries (Music, Movie, Gaming), these guys are dinosaurs who are struggling to adjust to the internet and the vast market that an updated strategy would open.
E-books use to be cheap before Kindle...
Many people think that the reason why hardcovers are more expensive than softcovers is because they're more expensive to make, and "nicer." This couldn't be further from the truth. In reality, it costs just as much to a printer to produce a hardcover as it does to produce a softcover -- the differences are basically negligible in terms of technology and manufacturing.
By producing a hardcover, and having it be the "first release" for a new book, however, publishers are able to capture those consumers who have the lowest price-elasticity of demand. That is to say, they're able to identify the people who are willing to pay more, and then charge them for it. Months (or years) after the hardcover release, the publisher will then sell the reduced price softcover edition, to capture the consumers who weren't willing to pay the higher price. It's known as first-degree price discrimination: sell at a higher price to the people who are willing to pay the higher price, then sell at a lower price to the people who aren't part of the first group. The hardcover binding is just a way of making it seem more valuable -- after all, the people who would enjoy a hardcover more than a softcover on the basis of materials alone are the people who would be more likely to pay a premium for a new release.
When it comes to eBooks, however, it's hard to translate this first-degree price discrimination model to digital distribution. Are eBook readers the premium customers, because they own eBook readers? No; many people who read eBooks are doing so on a computer or PDA, or some other device, and eBooks are secondary. Are eBook readers the non-premium customers? Not exactly; you have to have been willing to make a tech purchase of some sort in order to be able to read eBooks in the first place. Moreover, how do you differentiate between the high-paying customers and low-paying customers in the digital bookstore? Basically, all you can do is start the price high, and then gradually lower it -- the people who care the most will bite soonest, then after the price drop you'll get more consumers, etc.
To jjolsen's point, we'll be able to see soon enough if this method of setting eBook prices will be successful. To gescores' point, we'll need a big change in the structure of the publishing business before popular books can *start* at the low price. For more on the Amazon vs. Apple side of the argument, check out this article in Fast Company:
http://www.fastcompany.com/magazine/137/the-evolution-of-amazon.html
The publishers need to read a few books such as _The Long Tail_. In the long term prices will fall and books will no longer go out of 'print' due to production costs. But that won?t solve the problem for readers, Copyright needs to be set at author?s death plus 50 years. This will allow books to go into public domain while still giving authors the rewards they deserve.
Good summary. There is one other part of the puzzle. Price is a marketing decision. They use hardbacks to capture a higher price, but they do that out of a fear that the mass sales won't all be Harry Potter's or Twilights. Thus they choose to charge more for the Hardback edition when they don't in fact actuall have to do so. On most books it's probably a good model since it's the rare book that hits the mainstream like some recent notables.
So why higher for digital? Perhaps marketing in that they know they won't get the same kind of numbers as they will in paperback and so want a higher return on what they think will be lower sales. Or perhaps in fear that piracywill cost them half their potential e-sales and so they price twice what they need if they had no such fear.
Still it's a marketing decision and they could charge lower prices if they so choose. Or it could be that even if they want to go lower the DRM, and Amazon/Sony/etc fee's keep it higher since they own the markets
by samuraijenn August 14, 2009 6:10 AM PDT
Oh please...no offense because I am a librarian, too, but I've had to buy many times because a) tech processing can be slow and I don't want to wait for months (or even weeks), and b) sometimes the library won't buy every book I want. So the whole library argument isn't always valid. <quote>
Librarians and Teachers are the fundamental treasures of our Civilisation. I owe both groups a lot.
I *buy* books from Libraries, sometimes. I also read books there and borrow some for reading off-site, but I am a book collector, that's a guy with the worst aspects of a junky, a miser and a packrat. I hate giving books back to Libraries. I do it, because it's The Right Thing To Do, but I miss them when they are gone.
I'd like an ereader, but I can't justify the cost, the price of ebooks or the lack of any way of getting the books I have in deadtree format into the things. I'm not going to buy a couple of thousand books I already have, at far more than I paid for them (counting inflation) just to keep a publisher happier.
I would be willing to do a straight swap. My deadtree copy for an ebook.
Anyone know of anyone offering such a deal?
:)H
I am suprised that there isn't a site/service (at least that I am aware of) that provides basic editing and distribution for up and coming authors so they can sell directly to the public.
They routinely compare the prices of the ebook to the hard back versions of a book (that I'm sure stopped being published as a hard back once the mass market paperback version became available) and hope you're dumb enough to think it's a good deal. It's one thing to compare to the hardcover price for new books that are only available in that format, but give me a break when the paperbacks come out.
One good deal Sony offers each month is a sponsored download for $1. I don't buy all of them, but I buy them frequently enough if they sound interesting. In some cases they open me up to a new author that I end up liking, and in some cases they are garbage that just gets deleted. Either way, I only spent $1. The best deal is all the free classics I download off Google books, though!
The owning of paper books is overrated. Takes too much space and wastes paper. If the cost is low enough, then you won't even think about "owning" a book. How many books aside from the "classics" are worth reading over and over again? Are paper magazines worth reading over and over? I haven't tried a kindle magazine but I understand some are stripped down version of the original. That's a problem and limits the value of emagazines or enewspapaers. (Particularly newspapers- I'd rather read them on a laptop any day). Lending your paper books is fine if you have friends with similar tastes but frankly I don't see that with the youngish crowd.
The reason ebooks aren't cheaper with amazon is that old school publishers are terrified of losing control of their old school product. Publishers are looking to other partners so amazon doesn't dominate them as Apple dominated the music industry's work and reduce their product to a commodity.
That unfortunately won't happen due to the nature of computer data being easily copyable and distributable.
Rather than trust your customers won't copy and distribute, or trust such distribution would lead to a massive loss in sales, it's probably better for them (in their own minds) to prevent any of that from ever happening by keeping ebooks on various ebook readers.
Ebooks would never be able to be "sold" (or at least sold back) since there is no physical product being given back to Amazon. To sell back would basically mean to delete from your reader/account. To sell to another person would mean they would transfer a reduced price to your account, get a download of that book, and delete it from your reader/account. If you exclude the DRM-filled Amazon-overseen trading system here, and switch to something as simple as PDF files, there is no selling, since you can just give a copy away, there is no trading, since you can both keep the original copy.
In the end, there's no benefit to Amazon.
I see "reselling" or "trading" most relevant in the textbook crowd. However, text books are incredibly expensive, and the whole concept of having them digitally would only appeal to me an a DRM-free format.
Now the author of this article does miss marketing costs and other overhead costs of publishing a book, but you are grossly mistaken about the cost of printing, binding, doing quality control, shipping to distributors, having them take their cut, having the distributors ship to the retail store that takes their cut. There's a LOT of salary in there, and gas consumption. Not to mention the overhead of shrinkage. The shrinkage happens at multiple levels. Books that misprint, then books that are stolen, etc. etc. You can't tell me that distribution overhead accounts for $1.56 of a $15+ book. I just don't buy it.
Who, outside of the 'privileged classes' is going to spend a hundred dollars or more on an e-reader in the first place and have the means to access new books via the internet, etc?
Hardcopy books require very little infrastructure after they are made and can last a long time.
And digital content lasts even longer. 'Sides, all the college kids have laptops. Not that it's representative of the whole world.
This looks a lot like the electric vs gasoline car industry fighting. Stopping evolution for the sake of making money or nostalgia. It's somewhat sad that it's not being adopted simply because of a few quirks.
Choo choo, steam engine called.
For those of us who prefer to buy albums you're right, there's not much savings.
I guess its a matter of demand & supply, if these is high demand on this book then the price will be high. Also it does not make sense to lower the price when you have low demand elasticity.
Thank you,
http://www.OnlyJust.NET
This is just corporate greed. It's not supply and demand. If they lowered the price, they would make more sales and more profit. You see the thing is that with a PDF all it takes is a single file and it can be replicated indefinitely. It's not hard. With bandwidth consumption it goes down more. Companies don't want to lower prices to reflect the efficiency. That's a part of supply and demand. Cheaper production and distrobution is supposed to mean direct savings to the consumer. That's how Wal-Mart originally got built decades ago.
Companies are just ******* greedy, sometimes stupid, and just want to make money. Some corporate jackass is sitting there going "There will be enough people to buy it at that outrageous price.
The reason why the prices aren't going down is because of a special tax we get hit with. Corporations call this tax the "Convenience Tax" and it basically means "You're saving on gas money and tax so shut it and take it up your arse MUAHAHAHAHAHA!"
And to the guy who said "I used to work for a technical publisher. It is very difficult for e-books to be profitable at the moment because of the low demand. It still takes the same amount of editing and creative work"..
These books are being edited and published as hardcover books anyway. So the cost is nothing. I'm sure if 10 people wanted to buy it online this would be enough demand.
Yes and no. Supply is unlimited, but demand is low at any reasonable price. Hence it pays to keep the prices higher for the moment.
Once millions of people start using eReaders, the price of books should start to drop considerably.
http://www.baen.com/library/
http://www.webscription.net/
This is how ebooks should be done.
I love real books. Am a fanatic. Love the smell, the feel. My wife just got me a kindle for my birthday and i have at least 20 books on there as well. there are too many reasons to get one. i am completely in agreement on the price issue. I have paid more than one dollar for only 3 of my 30 or so books. If most of the books were $5 I would have bought many more. I have 20 books on my amazon wish list that i would be all over if they were $5.
I do NOT understand the HIGH prices that are being charged by the major resellers. We have 5 DVD titles for sale and have looked into allowing Amazon to sell download copies. BUT we are told, ?You may suggest a list price for downloads that customers buy (not rent). However, Amazon.com determines the price for both rental and purchased titles. Royalties are based on the price Amazon sets.?
As the author, NO WAY am I going to buy into that!
There is a site Lulu.com that I have seen where an author can sell direct to the public. But the problem is lack of major advertising and/or major authors there. It's also not an easy site to find or browse e-book titles. But the prices are better. I just looked at a new book, Paperback book $19.95, Download is $9.95. Not great, but not all that bad. I see other books for paperback $8.46 and download for $2.00. Now that's a good price and what I would expect. I also see a number of downloads for $0.50. NOW THAT IS A GOOD PRICE!
Maybe if we all started looking at (and spreading the word about) and purchasing from other sites that do sell at a good price, the big guys would get the idea.
I think they charge what they do, because they think they are the only game in town.
His point was that Amazon and other companies are taking a much larger cut of profit than they would with a physical book.
Did you even read the article before you started spouting about hypocrisy?