More on Ebook Pricing

10 Mar, 2011 | Written WordTdp

I’ve written before about the pricing of ebooks, but it doesn’t look like much has changed in the last 12 months judging by this article on  ReadWriteWeb.  What I found more interesting is The Guardian article it links to about how the EU is investigating the pricing set by publishers of ebooks.  There seems to have been a change in how the industry sells ebooks, compared to hardcopy versions.

The ‘agency model’ seems to allow publishers to set the prices retailers need to sell them at.  At least, that’s how I read it.  You can see why there is an investigation.  As a book is only ever published by one company (there are exceptions, I know) they can set whatever price they want and there can’t be any competition (except upwards).  Normally, publishers sell books to a retailer, they decide how much profit they wish to make (margin) and that determines the price.  If they want to sell it at a loss or make a larger margin than other retailers it’s up to them.  It creates competition and gives consumers a choice.

The argument seems to be that retailers have been heavily discounting the electronic versions and publishers (and therefore authors) get a percentage of the selling price.  Not to mention it devalues all books because people start to expect to pay 99p for a novel, not £6.99 and up.

Surely there’s a middle ground, where the publishers can set a (realistic) minimum payment for each copy sold and a percentage of anything made over that?  That figure needs to be low enough for the retailer to make a profit while keeping the whole cost lower than the hardcopy versions (because, let’s face it, an electronic copy doesn’t cost as much to produce, fact).  So how about Hardcover less 30% on initial release and paperback less 30% once the paperback is out?

Retailers can still make money, even if they charge less than the hardcopy version and they get plenty of flexibility in pricing.

Of course, what the clever publishers and authors are doing, is using the cheaper production costs of the electronic copy to drive sales, create exposure and widen their market (selling them at 99p for example, or giving away a book in a different genre to encourage crossover reading/purchasing).

What has been seen is that consumers don’t think they should be paying the same price (or more in many cases) for the electronic version, and publishers need to heed that warning or, as people have already done, they’ll either buy the hardcopy and pirate the electronic one, or simply pirate the electronic copy and not buy anything, so the publisher loses out completely.  And we know trying to stop piracy is a futile effort, so the best thing you can do is make your copies available in as many places as possible at a price consumers are prepared to pay.