How Much Should an E-Book Cost? | Hacker News Reader

How Much Should an E-Book Cost?

nytimes.com

15 pointsraju32 comments

As much as people are willing to pay for it? The price sends a signal, and a higher price signals "THIS IS WORTH SOMETHING." Nearly all the internet is free so people assume it's worth $0.00.

My advice to Kindle writers and App Store devs, don't fall for the $9.99 or $4.99 "caps". Charge what it's worth, charge where you make the profit and sales you're comfortable with, and don't worry about the whiners.

It's easy to price too high though. Would you rather sell 10 at £4.99, or 100 at 99p? Though of course I'm not saying you should price at 99p just because everyone else does, just remember that generally, the higher price your app, the less people will buy it. Find the optimal price point for your app, to make the most profit.

eBooks do kind of have an upper hand though — people have been buying paper books for years, at least it has a proven base price for the market (plus a very low piracy rate). While on the other hand, as you said, the majority of people still don't put a value on software…

I think the publisher needs to compare their cost, risk, and proffit in the old system vs the new system. It's not just the average price that droped but also the risk of printing copy's that they don't sell. A reduction in risk often results in a cost reduction.

However, hardbacks have a significant price primium because softcopy's are still their for the price consious. A policy of charging 15$ for everything less than a year (or 6 months) old and 8$ for everthing older than that would provide the same benifit.

I sure hope people aren't willing to pay $30 for a Kindle version of a book that sells for $35. They don't don't need storage space or stocks, they don't have to print it or take a loss on shipping. All those advantages and that is supposed to save only $5? We're being ripped off here. I wouldn't consider that a proper prize if they gave me the Kindle for free. Cut it to $10 and I'll start considering whether it's worth buying the Kindle.

You shouldn't be making your decision on how much money they are saving, but on how much value you are getting.

Oh yes you should. They (publishers) set the price of things, so if they're not having to pay for any of the things that they always said makes printing books so expensive, then it's reasonable to ask where the money is going. 'Formatting for e-book'? don't make me laugh, that's trivial in the case of something like a novel which is just a long stream of text with occasional chapter headers.

The fact is that publisher want to obscure what a small proportion of the cover price usually goes to the author, because with the advent of E-Books it's a valid question whether authors need publishers the way way they used to any more.

Edit: this isn't the whole story of course - naturally, a book does have value to the reader (though it's not always obvious until after you've read it!). Also, having been screwed by a publisher in the past I'm a little cynical about the breed :)

I agree with your point that the money belongs to the authors, not to a middleman.

You have to take into account however that production/handling costs don't play a role in ebook pricing. Publishers make ebooks expensive for a single reason: to slow ebook adoption as much as they can.

They have long realized that once the cat is out the bag their business model inevitably ends (cf. the music industry). And since they can't do anything to prevent it, they at least do their best to slow it...

Of course; I mixed two arguments and a bit of annoyance :) The arguments are: 1) How much value I am getting depends on how much money I am saving (given equal price, I prefer a real book) 2) They could easily make E-books cheaper and still make money. Somehow I doubt they have hit the sweet spot currently: it's new and they can make money of of it.

And I'm annoyed at the fact that I would really like a good E-book reader, but it's just not worth it yet.

The physical costs associated with books run maybe 2-10 dollars.

If you have a small living space or just don't like clutter, the e-book + Kindle is more attractive than the physical book. Not to mention convenience of purchasing. The people that value those things probably doesn't overlap much with the people trying to squeeze every penny out of every purchase.

The selling point of the Kindle is "reading made easy", not "saving money through electronics".

Quite an interesting way to frame the discussion. The question addressed is actually "How much will people pay to read a file on a Kindle?".

If I buy a real book, I have a physical object I can lend or give away. If I "buy" an e-book that's encumbered with DRM, I'm buying a license to view a work on a specific device. Amazon can remotely disable various features I've already paid for.

Make the ebooks portable (e.g. PDF) and DRM-free and you can directly compare them to paper, but not until then.

Once again, a dying industry cries "The internet will destroy us!"

Why not embrace the internet, change your model and MAKE IT WORK. Have we learned nothing from the music industry? If the customer demands that the books be $9.99, you don't tell the customer to shove off, you make it work at $9.99.

I appreciate the sentiment, but I disagree with your example. Responding to customer "demand" at a lower price point isn't necessarily a good move. If you're not competing on price, starting to is a bad way to go.

Are you truly so uninformed that you think everything offline is dying? It's been consistently shown that there has been no decline in the sale of 'paper' books, and the e-book sales are currently an entirely independent market with no effect on sales in the traditional market. [Ed: Sorry the last statement was a little incorrect, it's actually been shown through companies like Tor that the release of some of their free e-books has actually boosted paper book sales; those e-books are really killing that old system!]

If anything, book publishers have been seeing record sales of some books due to increased fan awareness and the ease of access to purchasing, like Amazon, thanks to the internet.

Ok, admittedly the "dying industry" bit was hyperbole, but it irks me to no end that "old media" can't simply adapt. If it doesn't work like it's been working for the past 100 years, it must the end of the world. That kind of thinking is slowing progress, and causing all kinds of headaches for consumers more than anyone else. I would feel ripped off paying the same price for an E-book as I would for a paper book, and this is what customers are trying to tell publishers. The problem is, just like the music industry, change is scaring them away from making rational decisions to support the 'new' consumer model.

It's been consistently shown that there has been no decline in the sale of 'paper' books, and the e-book sales are currently an entirely independent market with no effect on sales in the traditional market.

While I agree that his hyperbole was a bit over the top I also think that you're playing it down a bit too much.

The e-ink technology is making its first babysteps just now but it's already clear that we'll have true e-paper (bendable, rollable displays) in the near future.

Ten years from now you may still be able to buy dead-tree books. But I'm pretty sure they and especially newspapers and magazines will be on a sharp decline, in favor to just downloading the content to your personal reader device. Twenty years from now our kids will shake their heads about that past era of dead-tree books, just like today they wonder how we could ever exist without cellphones. A common, parental dialogue in 2029: "No search-function, no hyperlinks, no updates, no dictionary lookup? Are you kidding me, daddy?"

Interestingly here, it's not the authors complaining, it's the publishers. Much like the record labels, it is the publishers that are becoming less relevant in the slow move to electronic books. Without the barrier to entry of having huge printing presses, Amazon effectively cuts them out. Longer term though, with open formats, Amazon risks being disintermediated themselves, as authors can sell directly to readers.

What's funny is that many online only e-books are sold for much higher prices. I'm talking about the ones with those long infomercial-style sales letters that target niche audiences and promise to solve all their problems.

$40 for a .pdf with large font and only 90 pages of content is not unusual at all. Neither is stuff in the $70 range. The high price is due to the supposed "value" of the information.

I've actually always thought those e-books were totally overpriced, but I guess a lot of people had no problem buying them.

It's weird though how the set point for price is expected to be much lower for more traditional books that have been ported over, even though in many, many cases the real life books offer tons more value than a cheaply thrown together e-guide to parrots or dating or something.

The physical books ported over have the lower price because they're comparable to the physical book. People have expectations about what physical books cost, but people buying the parrot e-books are looking for specific information that's not available in a bookstore. At that point they're buying specific knowledge, not a commoditized product.

For instance, if I want to enter the import/export business, am I better off paying $99 to International Living or spending hours scrounging the internet, trying to sift what's real from what's fake, what's trustworthy from the scams, etc? If you value your time, informational e-books can be a lifesaver, even if their delivery medium (poorly formatted pdf files) is cheap.

But publishers argue that those costs, which generally run about 12.5 percent of the average hardcover retail list price, do not entirely disappear with e-books.

Am I stupid or does that make no sense? If the cost of the physical materials of a hardcover is only 12% ($2-3 on a $20-30 book), why isn't the paperback only $2-3 cheaper than the hardback?

I don't object to paying as much as the paperback for an ebook; I object to paying as much as the hardback. If they can make money on the paperback, they should be able to make money on an e-book that sells about as much as the paperback.

Publishers that publish books in both formats usually use them for price discrimination. Hardcover editions are sold to people who aren't price sensitive. And they usually come out first, so if you want a new book right away, you have to buy the expensive edition.

... but you also get a better book for your money (good binding, acid-free paper, larger print). Whereas the current e-book pricing model seems to be to charge the hardback price while the book is in hardback and above the paperback price (so 9.99 Kindle download while the paperback is 7.99) when the paperback comes out. It is no wonder that people find that unfair.

Moreover publishers gain from e-books in other ways (eg. by killing the second-hand market).

No matter what is or is not "fair", the reality is that I, a generally early adopter with a comically bad shelving problem, would like to get into e-books but hesitate to do so due to pricing and DRM concerns. If people like me are not jumping into the water, I think it shows that there is a large untapped market that would respond to better pricing. If volume goes up, price can go down.

Right now my wishful thinking involves a Netflix for books; basically pay a subscription be able to have 1-3 books "out" on a Kindle (for the sake of argument) at a time. If I like them, I would probably go and buy the hardback to keep/lend/re-read/get-signed but most times I probably wouldn't.

Edit: I think that O'Reilly's Safari is close to that model, but a captive device like Kindle and Amazon's huge catalogue would take that to a whole different level.

You don't usually get a better book for the money, actually. That was true up till about 1970. Nowadays hardcover editions are no better made than paperbacks; merely bulkier. They're now almost pure price discrimination.

I am... surprised. I live in a very high humidity location (cue ukuleles) and mass market paperbacks just disintegrate (literally in some cases; the glue denatures and they fall apart) and the pages yellow very quickly.

Trade paperbacks - it depends on the book, clearly the quality varies a lot.

Hardbacks, on the other hand, do quite well if you can keep the mold and the termites away.

So Amazon is paying publishers 3$ more than they make on each book, yet the best deal they are willing to offer to newspapers is 30% of their revenue?

http://www.washingtonpost.com/wp-dyn/content/article/2009/05...

Considering that Newspapers lose money on each sale, it sounds good.

For example, a $1 newspaper costs the paper $1.50 to print and distribute. In theory, they are supposed to make back that 50 cent loss (plus cover all their other operating expenses) on advertising.

So, for a newspaper, my options are: 1) Sell a hardcopy at a $.50 loss and make $1 in profit on advertising, netting a $.50 profit 2) Make $.30 on a Kindle sale, $.50 in advertising, netting a $.50 profit, netting $.80 profit (as of now, advertisers usually won't pay as much for electronic ads).

are there ads in the electronic (kindle) version of the newspaper?

Maybe there is room here for some alternative e-book-only business model (that doesn't involve parrots)?

Get some unknown authors, outsource the slush reading, concentrate on some niche genres, don't put ads on the NYT. Make sure the books are fun to read and price the Kindle version at $2.00.

I would pay more for the work of writers and artists whose overall careers I want to support. I will buy Saramago's books and Outkast's albums.

I would say about $2 provided that the piracy issue is solved in one way or another. Essentially 75 cents to author, 25 cents to overhead and editing, 25 cents to distribution/billing costs, plus 75 cents profit.

Doesn't the NYT have the silliest approach of them all? I mean the random selection of "login required" or "login not required".

What happened to that plugin for sharing logins, would it work on the NYT?

99cts

Reply on news.ycombinator.com