The paradox of ebook pricing

An interesting discussion on ebook pricing has cropped up in the last month on a couple of blogs I enjoy reading. Despite the fact they’ve been around for awhile, it’s only due to the relatively recent boom in ebook popularity that much attention has been paid to the matter of pricing.

If you walk into your friendly neighborhood bookstore (assuming, that is, that you are still one of the neighborhoods luck enough to still have such a thing), you can pretty much count on paying at least $7-10 for a mass-market paperback and $30+ on a hardbound book, unless you shop exclusively in the bargain or clearance bins.

So why are readers willing to shell out that much? There are a couple of likely reasons. For one thing, a lot of print books available in stores come from best-selling authors, and include their backlist. For publishers, these are pretty much guaranteed sales, and for readers who are fans of these authors, a guaranteed purchase.

I used to be that way with Stephen King. Like clockwork, he’d put a new book out in hardcover in time for my birthday, so I’d ask for it for a gift, or spend my birthday money getting a copy for myself. I was willing to pay the money, even if I wasn’t sure what the book was about or if it would be any good—because Stephen King’s name was on it.

Another reason readers are willing to pay more for print books is because of the tangibility. They can hold the book in their hands. As Jane Litte from Dear Author put it, the reader can do “anything she wants with the copy she bought. She can sell it. She can lend it. She can put it up for trade on paperback swap. She could paper her bathroom with it or use it as the base for her daughter’s piñata… The paper product has utility beyond the content and thus the price we pay includes that a valuation of the extra utility.”

This lack of tangibility puts many ebooks at the marketing disadvantage, from a reader’s perspective. Although many publishers produce ebooks, they price them in the same range as paperbacks, if not higher. But what this cost gives the reader is the right to license the electronic version of the book, to read it, but little else. With DRM technology, readers can’t share the book with others or resell it. More often than not, they can’t return ebooks for a refund, or exchange them if dissatisfied for another title. All of this proves beneficial to authors and publishers, but makes ebooks less appealing for readers.

And while they might yet be willing to pay $7-10 or more for a copy of Nora Roberts’s latest title in electronic format, or Stephen King’s or James Patterson’s, the question is—will they pay that much for an unknown author, on an untried product they can’t return, exchange or give away if they don’t enjoy?

When I decided to relaunch The Brethren Series with Dark Passages: Tristan & Karen, released in February of this year, I wanted to price the ebook at a point where it would be appealing to both those readers who were familiar with the series, and new ones being introduced to the world of the Brethren for the first time.

I did my homework. I researched best-selling titles on Amazon.com, BN.com and Smashwords, and got a feel for price ranges that readers seemed to prefer. I debated between pricing the book at 99-cents or $1.99, and eventually settled on $1.99 for novellas and $2.99 for novels, at least for this, my first year in business for myself. The primary reason I decided this was, frankly, money.

As author Zoe Winters aptly put it in a recent blog post: “I’m running a business… Even selling 6,500 ebooks in a month, I couldn’t make a living at 99 cent ebooks.”

I ran the numbers and felt that readers would be amenable to paying $1.99 for Dark Passages, and still find value in it for the price—and that the return on my investment at this price point would be worth my while.

Winters caught some flack when she said she said she will no longer price her titles at 99-cents, “because it devalues it and attracts the wrong type of people.” She argued that although this price may be a “loss leader” that attracts new readers to an author’s work, it also attracts a large number of readers who will not be repeat customers, who are “so price sensitive you don’t even want to deal with them, hoarders, complainers, etc.”

I agree with her. I’ve long said that part of the reason Dark Thirst, the first book in The Brethren Series, sold so well for me was because of the pricing on it; at $3.99, it was such a steal in comparison to other paperbacks, readers were willing to take a chance on an unfamiliar author and buy it. If it had been priced in the $7-10 range, I’m 99.97876 percent sure it wouldn’t have sold anywhere near the number of copies it has to date.

The second book in the series, Dark Hunger, was priced at only $4.99, but I can tell you from my royalty statements that readership dropped off significantly between the first book and that one. Does this mean I’m a shitty writer and that’s why readership didn’t stick with my series? Not to sound arrogant, but I don’t think so. Or at least, I hope not. I think what it boils down to is what Zoe was talking about: some people will buy things just because they’re cheap. It doesn’t mean they’ll stick with you.

Am I grateful for all of the readers who bought Dark Thirst, even if they never came back around for Dark Hunger, Dark Passion or Dark Passages? You bet your ass I am. But in many ways, I’m even more grateful for those who went on to buy subsequent installments in the series—at higher price points—and who have stuck by me through the ups, downs and moments of persona non grata that have highlighted my writing career to date.

Jane at Dear Author warned that although “this is not to say all books should be priced at $.99…using a paper price scale for digital books is wrongheaded because it totally goes against consumer expectation. It’s swimming upstream. Eventually the current will carry you under.”

I can appreciate this concern from a reader’s perspective. (And from the perspective that I’m personally pretty thrifty and am one of those shop-in-the-bargain-book-bin people, lol)

But from an author’s perspective, however, I must again agree with Zoe’s observation from this recent interview:

“When I sold 6,500 ebooks in June 2010, that was around $2,300… You only have to sell 677 ebooks in a month to make that same $2,300 if you are selling at $4.95.”

Seriously – If you’re not going to retain the other 5,823 readers anyway, have you really lost anything? (And don’t let anyone tell you authors aren’t in this for the money. It may not be for the money alone, but it sure as hell doesn’t hurt. Otherwise, we’d be giving our titles away for free and not fooling with a price scale at all.)

Edited to add: I’d be remiss if I didn’t mention that the 99-cent price works really well for many authors. Amanda Hocking prices some of her titles at 99-cents and, well, I think we can all agree that it worked out in her case. Shiloh Walker has also started independently releasing electronic short stories and novellas, pricing some at 99-cents, and from her sales stats online, it looks like she does well. But it’s worth mentioning that Shiloh has worked her ass off for years, building a strong readership base, and her indie e-sales help to “bridge the gap” for her readers in between paperback titles. She retains most of those 5,823 stragglers the rest of us stand to lose, lol.

Further edited to add: I should clarify – I am planning on releasing short stories (25,000 words or less) in electronic format in the near future, and these will be priced at 99-cents. I think that’s a fair price for the length of the material, and in keeping with the current price structure I’ve established for longer works.

So how much is too much? What are you willing to pay for an ebook?