Wednesday, March 10, 2010

The Value of Ebooks

Let's define the term "value" as "a fair equivalent in money for something sold."

Let's define "devalue" as "to lessen the worth off something sold."

So does a $1.99 price point for ebooks constitute their value? Or does that price devalue the work?

In a capitalist economy, under the rules of supply and demand, things cost money to produce, and their price is dictated by how many things are produced and how many people want to buy them.

An item usually costs a determined amount to create (which tends to go down as more items are produced), and then wholesalers and retailers sell this item for what the market will bear, trying to make a profit.

A few years ago, when the Nintendo Wii was a hot item and hard to find, people who were able to get Wiis sold them on eBay for more than double the $199 list price. The Wii's value was higher, because demand was higher.

Now you can buy used Wii's for less than $100. There is a big enough supply for everyone, so the price comes down.

So how do ebooks fit into this?

For the moment, let's ignore the hard work the author has put into writing the book.

To bring an ebook to market, a book needs to be edited, proofread, put into a proper layout and format, and given cover art and a product description.

These costs can fluctuate. But they are one-time costs.

Once an ebook is created, it can be reproduced indefinitely for free. There are no printing costs or shipping costs. Distributing ebooks to readers costs about 5 cents per download.

The retailer selling the ebook (Amazon, Sony, B&N, Apple) takes a percentage of the cost of an ebook. It looks like all of the retailers are adopting the agency model, which means they no longer can set the price of the books they sell, and they keep 30% of whatever that price is.

That leaves 70% of an ebook's price to be split between the publisher and the author. This split depends on what the contract says, but currently the going rate is 25% of the wholesale price to the author, 75% to the publisher.

Publishers seem pretty sure that the value of an ebook is $9.99 or above. It makes no difference that they no longer have to pay for shipping or printing or warehousing, or that their huge advertising and marketing departments won't be needed nearly as much for ebooks, and the sales department won't be needed at all. They want ebooks to be priced comparable to trade paperbacks, at least during their initial release.

One of the things I've heard several publishers mention is that they want to be able to establish the value of their ebooks. And that low-priced ebooks are devaluing their true worth.

When I hear this, my bullshit meter peaks.

Aside from some minimal set-up costs, ebooks cost next to nothing to produce or distribute. They have no inherent value, except in the entertainment value of the words.

In the past, publishers have determined the value of those words at around $25 for a hardcover new release. They determined this because of all the people who needed to get paid in order to bring the book to the consumer. Besides the printer and the shipper, the distributor got a cut, the bookstore got a cut, the author got a cut, and there were other costs like corrugation, advertising, and marketing to go along with the cover art, layout, and editing. So the author made $3.00 on a hardcover, and everyone else got a piece of the pie, and customers who wanted the book had to pay that $25.

But a lot of these costs get eliminated with ebooks. Yet publishers continue to insist that consumers are willing to pay print prices for intangible objects loaded with DRM and linked to a proprietary format.

Well, yeah, because publishers need to meet the same overhead that they're currently struggling to meet with print. They look at what they need to survive, and they have determined they can't sell ebooks for less than $9.99, even though common sense says they could downsize, reorganize, and probably do so.

What publishers aren't taking into account here are the consumers.

Naturally, people would rather pay less for something than more. And in a digital world, like we're rapidly becoming, consumers have shown consistently in other forms of media that they place less value on downloads than on physical products.

When companies price digital content too high, consumers respond by pirating that content. That's the ultimate in "devaluing."

So what is truly the value of ebooks? Is it free? Or is it the publisher's price, which seems inflated, and which in the agency model gives them 52.5% of the list price of an ebook for doing nothing more than providing a cover, editing, and putting it up on Amazon?

If an ebook is free, the author gets screwed.

If an ebook is priced high, it won't sell a lot of copies, and the author gets screwed.

If an ebook sells for a small amount of money, the author makes 17.5% of the list price. That also seems like the author is getting screwed.

Publishers are currently talking about going 50/50 with authors, so an author will make 35% of the list price. But it's still the price the publisher sets, which is inflated, which will lead to piracy.

By setting the price, the publisher is pricing ebooks so they won't sell well, and then taking 35% of what little money will come in.

I can write a novel pretty fast. But I'm betting I spend more time writing the book than my publisher spends making cover art, editing it, and uploading it. This is a fair 50/50 split?

In the past, authors needed publishers in order to get their books to readers. Authors needed the publisher's connections with bookstores and distributors. They needed the publisher to print and ship the books. They needed the publisher's marketing and advertising departments to make sure those books sold.

In an ebook future, authors don't need all of that. They need editors, cover artists, and someone to upload the book. And they shouldn't have to give up half of their money for those simple services.

But let's get back to value, and what ebooks are truly worth.

Supply and demand doesn't apply in a system where the supply is infinite. But consumers still vote with their dollars. And they prefer to spend less rather than more.

How does this work out for the author?

As of right now, my ebook The List has sold 10970 copies on Amazon at $1.99 each. I currently make 70 cents per download. That means this book has earned me $7679.

Compare that to my ebook Fuzzy Navel, controlled by my publisher, Hyperion. This book currently sells for $7.19 on Amazon (they're losing money on each book sold) and I earn $2.25 per book. As of my last royalty statement, Fuzzy Navel has sold 273 copies, earning me $613.

According to publishers, the $7.19 is still devaluing the ebook, which should be higher. $1.99 is certainly devaluing the book, and publishers believe they'll go out of business selling for so low.

And yet, I made $7000 more, and sold 40 times as many copies, selling for the lower price.

So what is the true value of ebooks?

Recently, publishers have forced Amazon to adopt the agency model. That means the above numbers will change dramatically once this new model kicks in.

How dramatically?

I'll be forced to change the price on The List, going from $1.99 to $2.99, to get the 70% royalty rate. I don't know if it will sell as well at the higher price, but let's say it does. That means 10970 ebooks sold will earn me $21,172.

Since publishers are now controlling the price, let's say Hyperion raises the price of Fuzzy Navel to $9.99. I don't know if it will sell as well at the higher price, but let's say it does. That means 273 ebooks sold will earn me $477.75.

Hey! Wait a second! The price went up, and I'm earning less?

It gets worse. I fear that if they raise the price to $9.99, fewer people will buy it. $2.99 is still an impulse purchase. $9.99 is a lot of money for a download.

But maybe Hyperion will get smart, and actually drop the price to something reasonable. Say $2.99.

Let's say at $2.99 I sell 40 times the copies I'm currently selling, as with The List. That means I'd make $5740.

That seems better. Not as much as the $21k I'd make if I self-published it using the agency model, but a helluva jump up from the $613 I made selling for $7.19.

So I ask you. What is the true value of ebooks? Is it $9.99 and up? Or is it $2.99 and down?

Seems obvious to me. But I'm not in charge of a large publishing company trying to sell paper, which is apparently more important to them than embracing the future by figuring out what I already have:

The value of an ebook is determined by the overall amount of money it earns, not the list price.

Let's see if publishers can figure that out.

81 comments:

M. M. Justus said...

I thought that what publishing companies could do for ebooks is -- publicity is not the right word. Neither is distribution, given that that's a physical object sort of term, but if a completely unknown writer epublishes a book, will anyone buy it?

If you're startingout as an author via ebooks, and don't have a conventional publishing background, I'm not sure anyone's going to hear that tree fall in the forest.

I've only been reading your blog for a few weeks, so I may be asking something you've already covered, but it seems to me that self-publishing ebooks would only work well for someone who's already made a name for hirself. Even giving away books doesn't do much good if the review sources, etc. (sorry, former librarian here) don't review them.

I'd love to be wrong on this one...

Anton Gully said...

MMJ - the hope would be that peer review, like on iTunes etc, will eventually be a big factor with e-books, so worthy books by new authors will bubble up to the collective consciousness.

The situation isn't THAT different now. There are thousands of authors out there at least supplementing their income by writing books, but ask the typical man in the street to name an author and you'll probably get the same couple of dozen examples, most of them long dead.

Pick your genre, find one of the alpha blogs that serve it and you'll uncover a community of people fighting to be the first to discover the next big thing.


Anyway, I'm all for cheaper prices, but like I said last time - there's a finite demand for reading material.

If there were no e-books - the novel economy is equal to 1 POG (a POG = pot of gold. That's the unit of currency in the novel economy.)

No e-books remember! Meyer and Rowlings and similar have the vast share of the POG.

In the future there are no paper books. Selling prices are a fifth of what they once were. The novel economy is equal to one fifth of a POG, and Meyer and Rowling, or whoever came along and replaced them, still have the majority of that.

Out of that one fifth of a POG, you're still paying for editors (or maybe in this economy you trade services if you're low rung on the ladder), and possibly cover art (almost definitely, since we now know how important it can be), and distribution's cut.

Lowering prices can't magically increase sales when EVERYONE is doing it.

Publishers are looking ahead and glancing nervously at a spreadsheet. It's understandable they're trying to prop up prices.

Me, I like cheap e-books!

LurkerMonkey said...

I sort of follow, but I have one quibble ... your success with e-books is predicated on your previous success in print publishing, because you're capitalizing on the intangible value of your name. You've mentioned this before in other contexts, but you devalue it here ... So your success with ebooks owes something to the dollars already invested in your name by your print publisher. Without the print publisher, do you think you'd be selling as many ebooks at $2.99?

You're basically selling remainders (i.e., books that didn't get bought at NY) at a discount and benefitting from the reputational assets that your publisher helped create by spending actual dollars years ago. This model works for you—a print author who happens to have remainders sitting around—but I'm not sure it's exportable to other situations, especially authors who will still need the investment of those marketing dollars in the first place.

D. Robert Pease said...

I've been following your posts for quite a while, and agree wholeheartedly with nearly everything. I could use one point of clarification though. Why do you need to raise the price of your ebooks under the new pricing model with Amazon?

EchelonPress said...

Um, Joe, could you maybe in the future use the phrase "some publishers." I am guessing you are talking about those publishers up in NY and not ALL publishers because there are publishers out there who actually do consider the consumer.

And while I agree with your $2.99 strategy it is GREAT for the self published author, but some things DO change for SOME publishers. Like the amount that the distributor/retailer takes.

When I upload an eBook to Kindle I only get 45% of that back from Kindle, then I pay the author 50% of that.

Taking into consideration the editing, cover, and marketing costs to let people know it is there. $2.99 is a very small amount of money to split so many ways.

Having said all that, we make a point not to go over $7.00 for an eBook and I do feel guilty about that. But that is for a very long book that and it cost more to have it edited.

I think those publisher who are trying to keep their pricing low on eBooks would be much better served if the authors they are publishing were more proactive in actually telling people to go buy the download. No matter how much you say it, authors don't seem to accept that they MUST promote ther eBooks. Just because they are not physical items does not mean that people get some kind of brain signal saying "ooh, new Kindle download just went up by brand new author, I must go and search the millions of books to find it, and I'll know it when I click on it." Yet, this is obviously how so many authors think.

Damn, my soapbox is starting to teeter, time to climb down..

Karen Syed
http://echelonpress.com

EchelonPress said...

LurkerMonkey said: You're basically selling remainders (i.e., books that didn't get bought at NY) at a discount and benefitting from the reputational assets that your publisher helped create by spending actual dollars years ago.

I say...I am not sure this is true, at least not entirely. Yes, I agree that joe is selling because he has already established a reputation, but I can tell you honestly (I don't know that Joe considers me a friend, but I am a fan and have been since book one of JD.)

I can tell you that I have NEVER seen anything done by his publ;isher outside of putting the books in print. No ads, not trailers, no bookmarks, nothing.

What I have seen is Joe making the rounds of conferences, driving himself across the country (and not staying at my house...twice...) and hawking his books and stories.

I've seen Joe standing on blazing hot streets at festivals making certain that damn near every person who got with spitting distance was wetted with some kind of exposure to his work.

I've seen JOE do this, not his publisher, and every single thing Joe has done he has graciously hsared on this Blog and a variety of other places, so to say that he is riding on the coattails of his publishers efforts, is pretty much Monkey POO.

He has done it, pretty much by himself, with a little help form those of us who really respect him for his savvy and talent and spread the word of mouth ourselves.

What Joe has done can EASILY be done by every other human being out there who has the TRUE desire to do it.

Karen Syed
http://echelonpress.com

Joe Konrath said...

but it seems to me that self-publishing ebooks would only work well for someone who's already made a name for hirself.

I'd think the same. But I've seen unknown authors sell a lot of ebooks, and known authors do so-so. Name recognition is a feather in your cap, but apparently not the biggest feather.

Selling prices are a fifth of what they once were. The novel economy is equal to one fifth of a POG, and Meyer and Rowling, or whoever came along and replaced them, still have the majority of that.

Classically, yes. But I don't know if this applies to new tech becoming widely adopted. And I'm pretty sure it doesn't apply to a market this big.

New tech can snag new fans who weren't fans of the prior tech. In other words, we can find a whole younger generation of readers who love their iPad and read books on it when they've never bought a paper book in their life.

Also, I've seen it quoted that there will be 5 million Kindle owners or more by the end of the year, and the number will continue to grow. That might as well be an infinite fanbase.

Finally, authors aren't in competition. I don't lose a sale to Rowling. Someone can buy both of our books.

Why do you need to raise the price of your ebooks under the new pricing model with Amazon?

In order for a self-pubbed author to join the new model with Amazon in June, their book must be priced between $2.99 and $9.99.

your success with e-books is predicated on your previous success in print publishing, because you're capitalizing on the intangible value of your name

That's part of it, but not all of it. There are too many authors selling well with no prior success, and a growing number of authors bigger than I am who aren't having my success. So, yes, I could be selling just as many without a print publisher. Others are.

And it doesn't take into account a very peculiar and obvious fact: if these buyers were people who knew me, they could go to my website and download my ebooks for free. The same ebooks I have on Amazon are free on my website. If the sales were based on name-recognition, wouldn't my website downloads outnumber my Amazon sales? But my Amazon sales are higher at about 20 to 1.

Taking into consideration the editing, cover, and marketing costs to let people know it is there. $2.99 is a very small amount of money to split so many ways.

Karen, you're falling into the same publishing mentality as every other publisher. Reread my blog post with an open mind. I'm showing a lower price means more profit, not less profit.

No matter how much you say it, authors don't seem to accept that they MUST promote their eBooks.

It might be worth figuring out if some self publishing success stories have common ground when it comes to what they did to succeed. Because the only promotion I do for my self-pubbed novels is blog about them and occasionally post on Kindle boards.

He has done it, pretty much by himself, with a little help form those of us who really respect him for his savvy and talent and spread the word of mouth ourselves.

That's kind of you, Karen. But I think luck plays a factor. I'm not denied I've worked hard, and I think it has has some impact, but there's still that "luck" thing that comes into play.

My books are all still in print, when many of my peers published at the same time have gone out of print. My ebooks are selling disproportionately well to my previous print sales. I've been in the right place at the right time a lot, and have been able to capitalize on opportunities.

LurkerMonkey said...

Karen,

I kind of anticipated this point would come up, because I've read Joe's blog for a while and I know that he just might be the hardest working man in publishing ...

That said, I still stand by my point. Joe is essentially a subsidized e-book author. There's nothing wrong with it, I'm not insulting his efforts or his success, but his e-book career is basically subsidized by his print career.

When companies do mergers and acquisitions, they sit down and actually argue about the real dollar value of reputational assets. It's not just nothing. In public companies, this affects share price and overall company valuation.

In Joe's case, an honest evaluation of costs and value would include the huge value of his reputation (e.g., his name), and the costs associated with created this name were SHARED by him and his publisher—him for doing all those things you said, and his publisher for actually printing the books and distributing them. My only piont (and it's not anti-Joe) is that he's undervaluing the cost of producing his own e-books from a strict accounting point of view because he doesn't include the costs borne by either himself or his publisher. He's treating them as "found money," when they are in fact anything but.

Which brings me to my actual point: I'm a little ... what's the word? ... disturbed because I think it might be dangerous to take his personal case and generalize across an industry. You said it yourself: your own publishing company can't afford to sell e-books at the price he's using because, as a business, you must include all the costs I'm talking about.

Please don't think I'm bashing Joe. I'm not. I'm just thinking that his example (himself) is leaving out some crucial information that renders it useless for the vast majority of writers who read it and think, "You tell 'em! I'm gonna sell my e-books for a buck a piece and get rich, baby!"

The Daring Novelist said...

I have always considered $2.00 to be about the right price for a book.

What publishers are forgetting is the one thing that allowed them to price paper copies so high: Multiple readers for every book.

Books were always expensive to produce, they were never priced as to the actual value to the reader. They had to be. So the economy of libraries and used book stores and trading developed to support it.

With ebooks, we can't share the cost any more. Libraries may be able to negotiate some kind of deal, but the consumer will need an affordable price point.

The ironic thing is that I wonder if publishers will find themselves going back into the paper business in the end, as the numbers you describe push authors away from them.

I can see a day where small ebook publishers (or self-publishing authors) do well by pricing low, and then the paper publishers sign deals with their best sellers for the "collectable" hardback editions.

Natasha Fondren said...

My highest-priced ebook (and best) is being pirated. *sigh* They might offer it for free or $1.99, though, when the second in the series is released.

My cheapest book (and worst) is selling the best. Needless to say, this is driving me nuts.

*runs off to nudge publisher to change prices again*

Joe Konrath said...

@ Lurkermonkey. Looks like we cross posted, so you missed my rebuttal.

But here are a few names of authors who are selling well, but don't have as big (or any) name recognition.

John Rector, Stacey Cochran, Eric Christopherson, Gary Hansen, Debbi Mack, K.A. Thompson, Brandon Massey, Keith Knapp, Dave Dykema, David R Williams, Marshall Thornton, Boyd Morrison, Rebecca Lerwill, and on and on.

Now some of these authors may have had been previously published, or have current print books, but I'm pretty sure name recognition isn't the reason for their decent sales. PRICE is the reason for their decent sales.

There are dozens of other examples. Just browse Kindle for low priced ebooks and check their rankings.

Moses said...

One of the big marketing questions here is how much it helps you in a store like Kindle's to be an already-known author.

Michael Stackpole, as Zoe mentioned the other day, is of the opinion that previous name recognition is overrated.

Here's a paragraph from one of his recent blogs:

START STACKPOLE QUOTE:

"Two points: First, as a test, I did a story and made it available for the Kindle under a pseudonym. I have not mentioned it to anyone. I just chucked it out there with no support whatsoever. And it sells. Moreover, the sales are even with the sales of some of my other short stories, the ones that come out under my name. So being established, at least nearly as I can tell from this hideously unscientific experiment, doesn’t count for much. A blind squirrel finds an acorn now and then, likewise a reader doing a general search will find your unheralded story and buy."

END STACKPOLE QUOTE

That quote comes from:

http://www.michaelastackpole.com/?p=1157

Here's his blog post called, "The Myth of Established Authors:"

http://www.michaelastackpole.com/?p=391

I agree with him to a point. On the one hand, if JK Rowling uploaded a short story to Kindle, I'm gonna guess that she'd sell a few more copies than I would. On the other hand, I think name recognition for mere mortal authors is probably overrated. As Joe said, price probably plays a big role on Kindle, as well as promotion by the author, book covers, book description, blurbs, and reviews.

I have no doubt that Joe's name recognition helps him to some degree when it comes to selling ebooks on Amazon, but all of these other points are probably much more significant than his name. Joe's an incredible publishing success story, but he's not a household name. I think it's his smart and determined efforts to position his titles just right and promote them that mainly explain his good ebook sales. I could be wrong, of course.

Jude Hardin said...

For new releases from legitimate publishers, I would favor a model similar to hardcover/paperback one in place now. The ebook edition could be released a year after the hardcover, with a price tag equal to or perhaps a little less than the paperback edition. For paperback originals, the ebook edition could be released simultaneously and priced about the same.

Intellectual property has no inherent value. You can't eat it. It's all about perceived value, and if that falls below a certain point then publishers won't be able to stay in business.

I'm pretty sure that's not what we want.

LurkerMonkey said...

Joe,

Thanks. I checked a few out and it's interesting food for thought ... A few appear to even be POD published, then uploaded to Kindle and selling at an extremely low price point (lower than yours). But for most writers, 5000 downloads a month at $.70/each still means good money.

My thinking on this issue is constantly evolving (as it should be) because the industry is obviously in a state of flux. Creative destruction abounds.

Nevertheless, I still have to distinguish between the self-pubbed and those authors published by actual publishing companies when it comes to figuring cost, which naturally affects e-book pricing. Is the publishing world of the future one in which there are no publishing companies and everyone just uploads books, with a reader-ranking system elevating the books worth reading? Are books the YouTube of the future?

Perhaps. But like you said, in that case, there is no publishing "industry." There are only freelance editors (more work for guys like me—woo hoo!) and editorial/marketing networks (will Hyperion someday be a branded marketing collective, not a "publisher"?). I think plenty of people think they know they answer to this already and can't wait for it to happen, if only out of pique.

So ... I think what I'm working my way around to is that these scenarios are possible, with the total abolition of all publishers and nearly free books distributed by paid-for collectives or individuals ... BUT that's not the case now. Publishers, who still rule the market, are trying to rationalize a price that includes a valuation of their efforts. Even in my future scenario, a Hyperion e-book would be more expensive than a self-pubbed e-book because it would have to support the Hyperion marketing/editing infrastructure. Is it possible to do this for $2.99? We'll see.

Of course, it's possible the perceived added value of a professionally edited book will be so low that readers simply won't care ...

Joe Konrath said...

The ebook edition could be released a year after the hardcover, with a price tag equal to or perhaps a little less than the paperback edition

And during that year, it will piss off ebook fans who are willing to pay for it, and the pirates will have copies the day of the print release.

The Daring Novelist said...

Another thought about what we're competing for....

Somebody up thread seemed to be saying we have a zero sum game here in terms of money and price. That there is a fixed amount of cash out there to be spent on ebooks.

But that's not actually the thing that we're competing for. We're competing for TIME. If people had nothing else to do with their lives and were dead bored, then, yes, maybe they would spend more on ebooks if there weren't so many of them.

But people aren't dead bored with nothing to do. There's TONS of things to do, and lots of it is free.

Hardbacks are priced to be an artifact as well as a book, so yeah, people might be paying for something other than diversion. But we've got to compete not only with each other and television and movies, and dinner out at a nice restaurant, but also with free blogs and videos of cats riding roombas.

Price and convenience.

Jeff said...

LurkerMonkey makes some good points. However, I still don't understand why publishers can't get their heads around a low-cost, high volume business model.

I'm paraphrasing here, but Sam Walton said, I'd rather make a nickel off a $1 pair of socks than a dollar off a $10 pair of socks. Ultimately, you're going to sale more $1 socks, and those nickels will pile up.

I mentioned Sam Walton on another ebook blog discussing this issue, and people were aghast and said, "Do we want to Wal-Mart book publishing?" Regardless of what issues you might have with Wal-Mart, I think it's impossible to argue that they've been a very successful business with a low-cost, high volume business model.

Also, EchelonPress mentioned the example of a publisher splitting the 45% of a $2.99 book. I totally understand where he/she is coming from. But, again, high volume. Yes, it's difficult to split $2.99 from that 1 book, but why not target a bunch of niches and publish 10 $2.99 books.

I think you're going to see some publishers (either NYC or independent) start experimenting heavily with serials. They worked years and years ago with movies, and more recently with Stephen King's Green Mile. Why not take a novel, cut into three parts, build in a cliff hanger, and publish it over 3-6 weeks?

To Joe's larger point, I think publishers pulled the $9.99 price point out of the air (or some orifice), because they don't want to cannibalize massmarket and trade paperback sales.

Ultimately, publishers may notice Joe's success and his repeated blog posts stating specific numbers that show you can be successful by selling at a low price-high volume.

Jude Hardin said...

And during that year, it will piss off ebook fans who are willing to pay for it, and the pirates will have copies the day of the print release.

Paperback fans have always had to wait.

As for the pirates, I'll know I've made it when people start going to the trouble to steal my work. If I'm popular enough to be stolen, then I'm probably not going to worry about it much. Dan Brown was probably pirated more than anyone in history, and he (and his publisher!) seemed to have done all right.

Joe Konrath said...

Paperback fans have always had to wait.

That's supply and demand. Doesn't apply to ebooks.

Dan Brown was probably pirated more than anyone in history, and he (and his publisher!) seemed to have done all right.

Nope. That distinction goes to JK Rowling, who has refused to allow Harry Potter to be sold as ebooks. As a result there are millions of pirated copies.

What she hurt by this? No. She's richer than the queen. But she did lose several million bucks in sales...

Moses said...

But that's not actually the thing that we're competing for. We're competing for TIME. If people had nothing else to do with their lives and were dead bored, then, yes, maybe they would spend more on ebooks if there weren't so many of them.

But people aren't dead bored with nothing to do. There's TONS of things to do, and lots of it is free.


True enough, but allow me to play devil's advocate. People routinely buy products without having the *time* to enjoy them. Allow me to demonstrate.

***waves his hand at the fifty books he's got stacked around his desk that he hasn't read yet, most of which he won't finish, and some of which he probably won't even read.***

My time may be taken up by free blogs and videos of cats riding roombas, but that doesn't stop me from buying more books than I should :P

rex kusler said...

Joe--You ever consider dropping the price of one or more of your books to 99 cents just to see what would happen?

Zoe Winters said...

I prefer for large publishers to remain ebook retarded for about 3-5 more years. The longer they hold out and "insist" ebooks are "worth" at least $9.99, the longer I can more easily stand out at $2.99 or for limited times, $1.00, to help build a following.

Of course, even if publishers believe that fiction ebooks should be $2.99, they'd have to downsize a lot to cut out a lot of overhead. It seems to me that is the biggest thing they'll resist. So I'm good to go for awhile here.

If all trad pubbed ebooks were $2.99 in the Kindle store, I'd have a harder time standing out because when you have the choice to make a small impulse purchase of an author you already are familiar with, and one that is totally new, it's a no brainer which you choose usually.

Then again, plenty of established authors are totally unknown to plenty of readers. Like I didn't know who you were until I stumbled across your blog, and probably never would have unless you got uber famous.

Most authors just aren't automatically on most reader's radars no matter how many years they've been in the business. So in a digital world the idea of the established author, to paraphrase Michael Stackpole, is a myth.

While $9.99 hurts anyone published by a trad publisher, since I can severely undercut that, it helps me. Unfortunately I don't think most publishers want to just buy print rights and leave an author to their own devices with e-rights.

Zoe Winters said...

@ The Daring Novelist:

OMG I LOVE cats riding roombas.

Boyd Morrison said...

I'll be very interested to see what happens once the 70% royalty rate at $2.99 goes into effect. Will readers consider $2.99 to still be an impulse purchase like $0.99 to $1.99 seems to be? I'm also wondering what self-published authors will do--how many will make the price switch?

Joe, this seems like a perfect opportunity to test your theory. Will you make more money total by selling (presumably) fewer copies at $2.99 with a 70% royalty rate, or more copies at $1.99 at a 35% royalty rate? Or is there little to no dropoff in sales between $1.99 and $2.99?

When my three books were on Amazon, my two $1.99 books far outsold my one $0.99 book. It's hard to say whether that's because people just didn't care for the premise of the $0.99 book as much or because the $0.99 price point seemed to indicate that it was a lesser book.

Moses said...

Boyd, I was just thinking about this. I was trying to judge for myself where my own resistance comes in with price.

For $0.99, I'd buy a book with good reviews, without question. Almost no resistance at all.

For $1.59, still no resistance.

For $1.99, I'd think about it a little more, but if the book looked good, I wouldn't hesitate.

For $2.99, I think I'd become considerably more cautious. I'd read the reviews more closely. At $2.99, it would feel more like flipping a coin. Maybe I would, maybe I wouldn't.

That's just one person, but I wonder what the collective reality is. I'm surprised by, but very interested in, the fact that you sold more books at $1.99 than $0.99. I can only guess that indicates that many people think a $0.99 book must not be very good, and that a lot less people feel that about a $1.99 book.

Theresa Milstein said...

"When I hear this, my bullshit meter peaks."

I'm going to try to use this line sometime.

When I read your blog, it makes me want to self-publish, but I'm too scared, cheap, overwhelmed, unknown, and still a little skeptical.

Anonymous said...

The bottom line is that whoever has the publishing rights to an ebook can set the sales price at whatever they want and it's nobody else's business.

Personally, I put a lot of effort into my books and I'm not inclined to give them away for a pittance. They're currently priced at $4.95 and are selling $7-8,000 retail per month, so readers seem to think they're worth it.

If someone doesn't want to pay that much, they can go somewhere else.

Chris said...

There are a few comments I want to make:

1) For the poster who said that "people have a finite time to read". That's true. However, most avid readers I know have a bookshelf of books that they haven't read yet.

If you suddenly lower the price, and get rid of all of the physical limitations of physical books (shelf space, mostly), people will have much larger TBR piles, all sitting in their little digital devices.

(This is actually one of the reasons I'm holding off on buying a Kindle or Nook -- I want to lower the amount of physical books I have. I'm getting there.)

2) On the Pot of Gold argument, let me say this: It's easier to have a full pot of gold and split it between more people if the pieces of gold are smaller.

The reason people will buy Rowling's book right now and not yours is because the person has a limited amount to spend (say $25) and that's how much her book costs -- they'll go with who they already enjoy, who's already safe.

Say Rowling lowered her book to $5. Suddenly, the buyer has $20 to spend on OTHER books, including yours. (Even if they only spent half of that $20 on books, that's still $10 going to read other authors).

Before about 2005, I was a reader. However, I stuck to stuff I knew, rarely going outside my comfort zone of King or Koontz. Once I started to write again (after a long hiatus), I started to venture out, making sure to always pick up an author unknown to me when I purchased other books. Those would mostly come from the remainders section (or paperbacks if nothing looked interesting there).

I assume most people are like the old me -- buying only what's "safe". But, make prices cheaper, and they'll start going outside their comfort zone.

3) On marketing.

NEVER underestimate the value of a good hook. As writers, we should understand that. In the digital world, where people accomplish most of their "browsing" by searching or quickly scanning a list of entries, a good hook is invaluable.

I used to frequent a site called X-Entertainment.com. Excellent site specializing in "comedy nostalgia" type articles.

At one point in time, the author practically made a living on eBay. He would go to thrift stores, go crazy buying stuff, and then turn around and sell it for a (sometimes huge) profit.

He learned, more often than not, that it was the idea and not the actual item that sold a product, so he got really good at doing one-paragraph marketing.

As a test, he got some twigs, rocks, and dirt from his back yard, sprinkled it with rosewater, photographed it surrounded by tarot cards and candles, and sold it as "possibly mystical earth".

He told people that they would be getting a small box filled with dirt and twigs (the tarot cards and candles were not included) that probably had no magical properties whatsoever.

And he sold it for $25.

THAT'S the power of good one-paragraph marketing. In the digital age, that's one of the most important things to remember, and likely one of the many reasons that Joe is doing so well.

Jude Hardin said...

I think $4.95 is very reasonable for a novel. I mean, what else an you get for that price? A Big Mac value meal or something? Just brown-bag it and buy a book.

Moses said...

I think $4.95 is very reasonable for a novel. I mean, what else an you get for that price?

The real question is what will make the most money. It's possible that selling at $2.99 or $1.99 makes you more money. Not only due to volume, but also because of getting higher ranking on sites like Amazon for selling more books.

There's also the value of readership. You might make about the same at $5 as at $3 or $2, possibly more, but with a smaller readership.

Would you rather make $9K with 4,300 readers ($2.99) or $10K with 2,900 readers ($4.95)? It depends on how much you want the money right now versus building up a larger readership and perhaps more buzz about your work.

But this also assumes that you'd sell more at $2.99 than you would at $4.95, which I would guess is the case--but I don't have the data, so I don't really know.

Joe Konrath said...

He told people that they would be getting a small box filled with dirt and twigs, and he sold it for $25.

That's dirt cheap.

Cunningham said...

Thoughts For those thinking that an unknown hasn't got a chance in ebooks, or that they should be priced high, etc...

http://www.thisisbrandx.com/2010/03/cell-phone-books-a-hot-new-trend-meet-japans-phoney-novelist.html

This young person has written 3 books for the cell phone market and done very well online and in print.

So let's add all this into the mix when it comes to publishing / self-publishing:

- There's POD, where the expenses are minimal (development and creative costs) until you are ready to sell the book... and then no cost to you because your printer handles those aspects. You just have to market, market, market.

- Then ebooks, where the files used to create the print version can be modified for ereading, uploaded and sold for minimal cost (time, effort, skill). What's good about the ebooks is that they tend to promote the print release. In essence they are an expense that pays for themselves by promoting the print version's sales as well as contributing to the coffers.

- Then cell phone books, which are new and probably geared to the young and those who have plenty of commuter time. Again, someone reading a cell phone book will be enticed to read the print version.

(which is part of their business plan according to the article above)

- and depending upon the book and its genre you have opportunities to perhaps sell merchandise based on the novel. Again another revenue stream based on the synergy caused by ebook and print promoting one another. And again, you need not go into debt to set up sales of that merchandise.

BUT - if the barrier to ebooks is high, priced so that impulse buying isn't considered, then the other revenue streams suffer.

EchelonPress said...

Also, EchelonPress mentioned the example of a publisher splitting the 45% of a $2.99 book. I totally understand where he/she is coming from. But, again, high volume. Yes, it's difficult to split $2.99 from that 1 book, but why not target a bunch of niches and publish 10 $2.99 books.


I'm a she, and I think I might just do that. See where the dust settles. I have a few new eBook authors who might be willing to test this theory.

Thanks for the nugdge...you too Joe.

Karen Syed
http://klsyed.com

Jude Hardin said...

LOL Joe.

The idea being, of course, that you can sell just about anything with the right hype and at the right price. For the past 35 years I've been watching them hawk junk on TV for $19.95. It must work, or they wouldn't keep doing it. Still, I wonder how many people who bought the Veg-O-Matic then went on to purchase the Pocket Fisherman or the Stud and Rhinestone Machine.

Authors depend on repeat business. We want people to buy our next book, as well as our current one. A quality food processor costs more than $19.95, and a quality book should cost more than $2.99.

Joe, aren't you worried that your under-priced ebooks might negatively affect sales of your future print releases? Isn't it at least possible you're inadvertently conveying the message that a JA Konrath title is only worth $2.99?

Joe Konrath said...

Joe, aren't you worried that your under-priced ebooks might negatively affect sales of your future print releases?

Jude, did you read my blog today? :)

My ebooks aren't under-priced. I'm making fat bank, and I'm reaching a lot of people.

Value is how much a book earns, not the list price.

Anonymous said...

"As of right now, my ebook The List has sold 10970 copies on Amazon at $1.99 each. I currently make 70 cents per download. That means this book has earned me $7679.

Compare that to my ebook Fuzzy Navel, controlled by my publisher, Hyperion. This book currently sells for $7.19 on Amazon (they're losing money on each book sold) and I earn $2.25 per book. As of my last royalty statement, Fuzzy Navel has sold 273 copies, earning me $613."

Joe, did you ever consider that maybe your self-published ebooks are canabalizing your publisher's ebooks?

I suppose if I saw the same author with books available for either $2 or $7, I'd probably go with the $2.

My guess is that your publisher's sales would be up if you weren't releasing other titles on the side.

Joe Konrath said...

Joe, did you ever consider that maybe your self-published ebooks are cannibalizing your publisher's ebooks?

It's the opposite. My six Hyperion books are among my publisher's top 50 Kindle bestsellers.

And it isn't because of anything they've done. It's because people discover my low cost ebooks, then buy the more expensive Hyperion ebooks.

This is a relatively new phenomenon. I'll know next royalty statement (in a few weeks) how many Hyperion ebooks have recently sold.

Jude Hardin said...

It's because people discover my low cost ebooks, then buy the more expensive Hyperion ebooks.

If it's really working like that, if your low-cost self-published ebooks are acting as advertisements for your traditionally-published novels (ideally print and electronic), then I'm all for it.

It seems they would be competing against each other, but maybe not.

The Daring Novelist said...

Regarding cheaper books promoting the more expensive ones:

Baen Books has been giving away electronic editions for years. Many of their authors found that any book given away for free online saw a surge in paper sales.

Most authors aren't giving away all of their books - just the first in a series, or even just a partial - but some do (or did, I haven't checked lately) because of how much it did for their sales.

Anonymous said...

Last I checked we still live in a free society where we are able to create, price and sell products - yes even books. Ultimately as a result of buying habits (not the voice of blogs), the market will affect the price of products. I'm real sick of people accusing publishers of conspiracy to commit profit. It's not a crime.........yet.

Robert Carraher said...

MMJ, Check out MJ Rose, I believe she was the first self published as well as Self Published eBook author who hit Amazons best seller list. And she had had no print publications! Fro her success with the eBook, if I remember right, she got a traditional publisher and is doing well ten years later. Now that may be the exception, but it can be done. I would think success with an eBook would follow the Print, then eBook method, laid out here by a couple fellows that would know, more often than not.

Windlegend said...

I have been e-published since 1998 and I've had over 70 of my novels released by several different publishers. I make a very comfortable living from royalties that run much higher than 25%. One publisher pays 40% and the books sells for $6.95.

What concerns me is not the price a publisher puts on my books. My concern is with the peer to peer sharing sites. I don't see a red cent off those downloads. One of my publishers found my biggest selling novel downloaded over 150k times at just one pirate site. That's a heck of a lot of missed royalties.

Joe Konrath said...

I'm real sick of people accusing publishers of conspiracy to commit profit.

I'm sick of publishers being too dim to make a profit.

Zoe Winters said...

Jude,

Even though I'm buying and reading more ebooks now, if I really love a book I'll buy it in print. I think a lot of readers are like that. Even if I had a dedicated e-reader and read ebooks all the time, I would still buy my favorites in print when I could afford to.

Zoe Winters said...

Robert,

MJ Rose also got picked up by Doubleday Book Club, WHILE she was a self-pubbed ebook author. She was the first digitally self-published erotica writer (that's not all she writes, but that's what Lip Service was), to do something like that. (She may have been the ONLY one so far, I'm not sure.) Definitely a trailblazer.

Zoe Winters said...

"I'm sick of publishers being too dim to make a profit."

I'm with you there. If their business model crashes and burns it will be their own damn fault. People have screamed at them how to fix things but they just whine and make excuses. I have no pity for that.

Anonymous said...

"I'm sick of publishers being too dim to make a profit."

Okay, play it out. Assume all NY publishers reduce all ebooks to $1.99. What do you think happens to the existing ebooks you have priced at $1.99? Do you think they'll keep selling at the same levels and maintian the same rankings?

Doubtful.

Do you really think the money you'll lose on those sales will be made up with your share of whatever increase is seen in the trad ebooks?

Doubful.

You're way ahead of the game as things stand, because you're able to price yourself below the market. If the market came down, you'd go down with it. So would a lot of other people.

The 99 cent self-published "wonders" would completely disappear the minute a reader could pick up a Patterson of King or Grisham for $1.99.

Moses said...


The 99 cent self-published "wonders" would completely disappear the minute a reader could pick up a Patterson of King or Grisham for $1.99.


However, the Amazon-Macmillan fight shows us that's very unlikely to happen anytime soon.

In a few years there will be probably tons more $2.99 Kindle books, but then again there will be lots more Kindle owners, iPad users, and other ereaders. There will be more websites and blogs devoted to reviewing those indie books, etc. There could also be a lot more people reading books, period, if younger people take to devices like iPad like they did to the iPod.

Just because ebooks are going to get bigger doesn't mean it will suddenly become much harder to do well with them. It might become much easier. I'm not seeing the sky falling on indie ebooks any time soon, unless somehow publishing houses convince Amazon to abandon their cheap ebook business strategy. Even if they do, what's to stop alternatives to Kindle from popping up in the unlikely scenario that Amazon starts pushing for more expensive ebooks.

Joe Konrath said...

Assume all NY publishers reduce all ebooks to $1.99. What do you think happens to the existing ebooks you have priced at $1.99? Do you think they'll keep selling at the same levels and maintian the same rankings?

I don't believe they'll maintain the same rankings. But I do believe they'll maintain the same sales levels, or sell in even greater numbers.

If you've got $25 to spend on ebooks this week, you can buy 1 James Patterson, 1 Stephen King, and 2 J.A. Konrath's and all of your money is gone.

But when things are inexpensive, the buffet mentality kicks in. The buffet mentality is "all this food is included, so I'll eat as much as possible."

That's why iTunes outsells Wal-Mart. For 99 cents, people can buy 15 different artists, not just one artist with one $14.99 CD.

In a low-priced ebook world, it wouldn't be me OR Stephen King. It could easily be me AND Stephen King and six others.

Do you really think the money you'll lose on those sales will be made up with your share of whatever increase is seen in the trad ebooks?

I don't think I will lose money at all. I think my traditional ebook sales--already strong--will really take off and outsell my self-pubbed ebooks. In fact, I'd love to get those rights back and drop their cost.

If the market came down, you'd go down with it. So would a lot of other people.

The 99 cent self-published "wonders" would completely disappear the minute a reader could pick up a Patterson of King or Grisham for $1.99.


My prediction is that book buyers would buy even more than they currently do, and everyone's sales would go up.

There is never any competition among authors. It's never "He's a King fan, so he can't be a Koontz fan." The only limiter has been the high cost of books. That's what has made folks choosy.

Joe Konrath said...

A basic rule of human spending behavior is that we tend to buy things we don't need or even want if the price is low.

Let's say you want to buy a lime. It's one for 59 cents, or three for a dollar. You'll buy three, even if you only needed one.

Of course, my ultimate prediciton for the future of ebooks is that they'll be free. Then the vetting systems set up by fans that Moses mentions will be essential to lead people to discover new authors.

But by that point, I hope I'll have enough fans to sustain a career without needing word of mouth anymore...

Shannon Coffey said...

Of course, my ultimate prediciton for the future of ebooks is that they'll be free. Then the vetting systems set up by fans that Moses mentions will be essential to lead people to discover new authors.

I was right with you up to here. Do you mean ebooks will be bundled with print for free? If not, what exactly are you selling if your ebooks are free? Thx.

Chris Bates said...

This is what I love about you, Joe... you actually 'get it'.

Joe Wikert, in his excellent blog, had some insight from Bob Pritchett (CEO of Logos) on offering more ebook experience for the reader:

'... that brings me to "value", the other key takeaway from Bob's session. It's important to note that this isn't just a bunch of related books that have been slapped together. Logos has taken the time to leverage the content, add value and build on the network philosophy. Most publishers are complaining about the $9.99 ebook model but Logos is doing something about it. They're offering their content in a manner where the total is far greater than the sum of the parts.'

All the power to you, Mr Konrath. I hope you cash in while everyone is asleep at the wheel.

Joe Konrath said...

Do you mean ebooks will be bundled with print for free?

Bundling is something I predicted several years ago, when I spoke at a Google conference.

But I ultimately mean ads. Ebooks will be funded by ads, just like Youtube and the New York Times.

Anonymous said...

Your whole argument is based on a faulty assumption that the collective amount of reading (and the corresponding amount of book buying) will increase if books get cheaper.

If that's true at all, it's only to a negligible extent. The reader who has time to read 4 books a month isn't going to magically start consuming 16 books simply because books become cheaper.

The amount of books a reader can consume is a function of available time, which is related to the person's lifestyle, work demands, family demands, etc. Those things don't change.

The overall collective amount of book buying will probably not go dramatically up even if the prices go dramatically down.

All that will happen if book prices are reduced overall is that sellers will collectively take home less money overall.

Aimee said...

Just found out about your blog via a blog listed on The New Yorker. I'm a struggling writer and I appreciate all this info here!

rex kusler said...

I think the idea for putting ads in books is brilliant. But I'm not sure it would create enough revenue. They have a lot of ads in magazines and newspapers, and they still have to charge. Maybe a combination of ads and 99 cents per book. You can rent a movie for a buck--why not a book?

Anonymous said...

"The amount of books a reader can consume is a function of available time, which is related to the person's lifestyle, work demands, family demands, etc. Those things don't change."

The baby boomers are retiring in large numbers, and they are reading. Lifestyles and demographics DO change, and the trend is skewing toward more reading, not less. The internet is also changing reading habits. I read more now than I did 10 years ago -- newspapers, blogs, forums -- all online, but it is reading. I wouldn't have read a JA Konrath blog 10 years ago . . . never dreamed there'd be such a thing. But here I am.

"The overall collective amount of book buying will probably not go dramatically up even if the prices go dramatically down. "

I find that I'm buying more books than ever on the Kindle store, especially from indies at the 99 cent to $2.99 prices. I can purchase a book for less than it costs to drive to the public library. In fact, the public library is getting less of my business because the $1.99 books (such as Konrath's) have become impulse buys for me. That's less than half a Starbucks coffee, and not worth my time to try to find it at the library for free.

And I don't even have to read the whole book to get my money's worth at this price. I just finished half a book (the writer has two story arcs, and the first one ended mid-book so I quit right there because I was satisfied with that story line's conclusion. I was not so interested in the rest of it). Pretty cool, huh? I got a taste of that author and I don't feel guilty about not finishing the whole enchilada.

I'm more likely to buy a short story anthology for $1.99 and just read 3 of the stories vs. the entire 10. What the heck, it was cheap! I'm also more likely to buy a 99 cent book and skim (speed read) to get the essence of the story. I wouldn't do that with a 9.99 book (at 9.99 it better be first-rate, and every word has to be golden).

"All that will happen if book prices are reduced overall is that sellers will collectively take home less money overall.".

It's not the price that matters -- it's volume (greater sales at $1.99 than $9.99) and what you keep (70% vs. the 25% from a big publisher contract). Authors can do very well with this new system if they put out a quality product. High volume at a low price (with much higher % royalty) is a winning formula for the independent authors.

Note Konrath's experience (my own experience, with fewer books, corroborates what he is showing).

Anna Murray

Joe Konrath said...

@ Anon - I own about 5000 books, and several thousand DVDs. I've read and watched at least half, but not nearly all. And I still buy more books and DVDs, even though I haven't gotten to all the ones I already have.

I believe people will buy more ebooks if the price is low. It's human nature.

But I also believe people will read more.

Someone who reads ten books per year isn't necessarily a "ten book per year for life" reader. Habits and tastes fluctuate.

As ebooks become easier to download, and more universal, I foresee people using their handheld gadgets to read more simply because it's convenient and less demanding than other gadget-related media, such as surfing the net or playing games.

I read on my iPhone all the time, and my reading has increased because of it. Most Kindlers note the same thing. Make it cheap and easy and instant, and more people will read more ebooks.

But that's not even the argument here. Neither of us can truly predict the buying and reading habits of people five years from now.

However, based on my observations, experiments, and experience, I' 100% sure I'd sell more ebooks and make more money if my Hyperion ebooks were less expensive. In fact, Amazon is bearing out this point. Within the last week, they dropped the prices on Bloody Mary and Rusty Nail. Guess what? The ranking went way up on those titles.

But $5 is still a far cry from $2.

@ Rex - I've done the math on ad funded ebooks. With fifteen ads per ebook, I'd be making more money than I am currently selling for $1.99.

rex kusler said...

Look at all the free books being downloaded at Smashwords. What if a few advertisements were downloaded with each book, and the author would get a cut; Smashwords could keep the rest as extra revenue. I've got a free book there that's averaging 35 downloads per day. It's had almost 2000 downloads in 2 months. Even if I only got 10 cents per download, that would be great. Lots of exposure and some extra money, too.

Stacey Cochran said...

Joe wrote:
But here are a few names of authors who are selling well, but don't have as big (or any) name recognition.

John Rector, Stacey Cochran, Eric Christopherson, Gary Hansen, Debbi Mack, K.A. Thompson, Brandon Massey, Keith Knapp, Dave Dykema, David R Williams, Marshall Thornton, Boyd Morrison, Rebecca Lerwill, and on and on.


If I include the freebie The Kiribati Test, I've had somewhere in the neighborhood of 25,000-30,000 eBook sales since last May.

I think I'll totally believe all of this matters, once and for all, if it translates into a book contract and/or movie deal as it has for a growing number of authors.

Jeff said...

Also, with the argument that people won't read more because of cheap books, you're underestimating the evolution of books on handheld devices like Apple's pending iPad.

You're going to see a lot of traditional books - converted to eBooks - sell. But, I also think you're going to see a new type of interactive book. It's going to happen first with cookbooks - you read the recipe on your iPad, then click an image of the recipe, and a video pops up showing you how to make the dish.

It's going to get very interesting when writers start developing novels that include audio and video. Sure, what I've just described may be repellant to many of the people reading this who have hundreds or thousands of books.

But, my 6 year old son and 2 year old son are going to grow up with these gadgets and narrative and story is going to expand beyond the text - and they'll think it's perfectly natural. Will there continue to be traditional short stories and novels - absolutely for hundreds of years to come.

But you'll also see new types of interactive narratives.

Jeff said...

Joe, I'm not entirely convinced re: ad-supported books. Why? Advertising rates online have dropped like a rock, some sites sell remnant ad inventory for mere pennies.

Why? It's pretty simple. With the Sunday New York Times as an example, the advertising department can charge a premium for those ad pages, because there's scarcity built in. They're not going to print a newspaper filled with 1,000 ads. So if you're one of 25-30 advertisers, that ad real estate has value.

However, the Internet tossed that model out the window. Now, there is no scarcity. Anyone, anywhere, can throw up a web page, and sell ads against it. Sure, if you're a newbie blogger with two readers, you won't make as much as Gizmodo or some other well-read online pub. But the barriers to entry are so low, a determined person who can write well, can go head-to-head online with the NY Times' sports columnist or technology columnist, etc.

There's a great book that discusses how the advent of the Internet changed the fundamentals of advertising and media companies forever - The Chaos Scenario by Bob Garfield - http://www.amazon.com/Chaos-Scenario-Bob-Garfield/dp/0984065105/ref=sr_1_1?ie=UTF8&s=books&qid=1268430182&sr=8-1

Joe Konrath said...

Joe, I'm not entirely convinced re: ad-supported books.

Good. I'm concerned someone will be able to figure out what I've figured out and run with it.

J.A. Marlow said...

"Your whole argument is based on a faulty assumption that the collective amount of reading (and the corresponding amount of book buying) will increase if books get cheaper.

If that's true at all, it's only to a negligible extent. The reader who has time to read 4 books a month isn't going to magically start consuming 16 books simply because books become cheaper."

A portion of your assumption is faulty and based only on time, not money. I read a lot, but I can't afford new book prices (sorry, I would prefer to eat). So, that means the library and the second-hand store. That means none of my reading time is equating money in the author's pocket. Another downside is that I have to settle for whatever the library or second-hand store has on-hand, not necessarily the type of books I would prefer to read.

I would also like to add that I like paying for books. I like owning books. I like that money going to the person creating that content. Perhaps that has something to do with being a writer myself, but I do appreciate the time and effort that goes into creating that content.

Back to the subject, though, if I can suddenly buy the books I want with the meager budget I have, money is going to the author. Money that would not have been going there before. I would say that's a big win for the author!

In cases like mine, the book buying WILL go up and in a way the author truly benefits.

$5 book budget at $8+ a book = no money to the authors. (library, here I come!)

$5 book budget at $1-3 a book = Money being spent on books.

WIN!

The Daring Novelist said...

If ebooks were cheaper, I would certainly buy and read a lot more, for several reasons.

One is that ebooks are much more convenient to read at odd moments, when standing in line, riding the bus, in the doctor's waiting room. I would read at those times a lot more if I could afford to buy the all the books I want to read at those times.

Further more, there are a lot of other things that I do with my time that I would give up to read more books, if I could conveniently and cheaply acquire those books.

And, of course, as others have pointed out, if I could afford it, I would really like to buy more books than I can easily read, just so that I have the right book at the right time when I feel like reading.

Anonymous said...

My doctor recommended three books for me to read about health and nutrition -- books that will help me deal with an ongoing condition.

I went out to Kindle to buy those books today, and the cost would be over $50 (for the three). If they were in the $5 to $6 range (each) it would have been easy to 1-click and buy all of them.

This high cost (added to my copay to see my doctor) drives me to the library. I'll order them through inter-library loan.

Esther said...

From a reader's perspective...

I've bought kindle ebooks at all price points. Everyone loves a deal, and I've acquired some great deals. Tor used to give away free kindle books, on Amazon, different ones monthly. I got a great Hugo award winner that way that I hadn't yet read, and then went on to buy the next in the series months later when it became available.

I've also bought a few books above the 'sacred' $9.99 threshold. These were books for which I just couldn't wait for them to go lower, ie, next in series but not on best-seller list, favorite author's new release etc. Savvy kindlers know that the prices will go down eventually and will wait if there is something else good to read in the meantime. At least this is the way it worked with the old Amazon sales model. I'm not sure that will happen with the new agency model.

In the last two years since I've had the kindle, I've also bought a few hardcovers and plenty of trade paperbacks. And I've bought ebook versions of books I already had in dtb versions. I refuse to buy cheap mmpbs anymore (except for my teen). The reading experience is better on the kindle and I usually just get rid of them anyway.

If anything, I've been reading more, and I like trying out new genres. Cheaper books allow for experimenting into new areas. I'm not the only kindle reader who thinks the device has helped expand and increase their reading habits, if what I've read on kindleboards is any indication. And, I've not piled up lots of unread ebooks, though I've obtained (and deleted) lots of samples of books I won't go on to buy.

I guess I don't know what the value of a typical ebook is, if there is such a thing. But, as with anything I buy, I'll only buy it if it seems like a good value at the time!

As for 1.99 or 2.99 ebooks: I'd much rather read one of them working out on a treadmill than a similarly priced typical ragazine one finds in one's gym (for free). The Kindle is great for treadmill reading.

Eugene said...

National Geographic long ago established a workable publication model for upscale, advertising-subsidized, book-length publications. Movies do it too (though running too many ads and trailers will just annoy people). Public radio and television have perfected the art of the non-ad ad. When it comes to books, I believe the right balance and implementation is out there waiting to be found.

Mary McDonald said...

I've read several of your blog entries and I've found some very helpful information. Thanks for sharing. I'm currently on the fence as far as going the e-publishing route. I'm glad to see this side of it and not just the traditional publishers side.

There's certainly a lot to consider. Like you suggest, it's not something to rush into and I'll give it a bit longer with my querying, however, it's nice to know that even if I don't meet success down that path, there is an alternative.

Joe said...

I agree e-books should be much less then hardbacks. I buy a lot of ebooks for 2.99 or less just to try authors I have never heard of. In fact, I tried Joe Konrath because of a free Kindle download that I liked (never heard of his name before)and then bought more of his e-books. I did the same for Eric Flint and John Ringo whom I first tried by a free download from Baen.com and Eric Flint writes that giving some books for free is a great advertisement plus he even views "pirating" as free advertizement.

Anton Gully said...

Not sure where the post went but... re reviews on Amazon:

"When I look at my sales on Amazon, an obvious pattern emerges. The books with the most reviews have the most sales.

So it seems it's in my best interest to get as many reviews as possible."

---

Correlation does not equal causation. I figure you're playing here, as this is an alpha meme that statistically obsessed folk like me use to confuse real people.

Imagine if you were serious! hehe. I can see the comments now...

Sir Robin said...

Hi Joe !
Just a question: and what about legal assistance ? If you are an author linked to a publisher you can profit by his lawyers, otherwise ...

Best from Camelot

Harry said...

Does anyone here read ebooks for pleasure? I don't see the attraction.

1. At 9.99, the paperback, if it exists, is probably cheaper or about the same price.

2. The physical book has no drm, is not locked into a specific reading device and is readily shared. Once read, it can be resold, traded, donated, or grace a bookshelf. A bookshelf gives insight into the reader's mind. The bookshelf is the first thing I look at when visiting someone's home. Looking at a printout of digitally stored titles just ain't the same.

3. A real book doesn't obsolete itself. I reread books I bought thirty years ago. Beta tapes, anyone? Vinyl discs? CD's? DVD's? and all too soon, BluRay?

4. When traveling, a paperback is tough and fits in anywhere. Pocket, purse, carry-on, suitcase. No amount of crushing, bumping, dropping, etc., is likely to damage it beyond readability. True, you can't carry fifty books with you. But if you're on a business trip, will you have time for more than one book? If you're on vacation, what are you doing reading, aside from killing time in a cattle car with wings? If you're computer savvy, you'll probably take a laptop with you. Do you really need to bring a special device along just to read a book?

5. It's a dark and stormy night and the power goes out. You can't access your ebooks because wifi is down and your backups aren't accessible. Or the battery drains and you can't charge or replace the battery. Candles, flashlights, and a real book win this round.

6. You buy a new digital edition of a book that soon causes controversy. The publishers surreptitiously replaces your stored book with an altered version since they've recently discovered that people won't put up with having a paid for title yanked from their digital libraries. Doesn't happen with real books.

7. You like to read in bed and fall asleep, ereader in hand. In the morning you wake up to discover you've crushed the screen of your ereader with an errant elbow. Doesn't happen with real books, though I admit you can't wipe drool away with a damp sponge.

I could go on, and on, and on. I'd like to hear the obverse.

rex kusler said...

I won't pay more than a dollar for a book anymore, unless I'm pretty sure I'll like it, then I'll pay two dollars. Most I get for free as promotional offers. I'll never buy another book made of paper--unless it's 99 cents--and I doubt that's likely. If everyone gets as cheap as me, what's that tell you? Must be a scary thought for publishers.

Zoe Winters said...

Esther,

I love that idea of reading ebooks on the treadmill at the gym! You're right, that's an IDEAL use for the Kindle. Now I have to have one!

Harry,

I think there is a time and place for ebooks and a time and place for paper books. Sometimes I like the instantaneous thrill of being able to read the book I want... RIGHT NOW, without getting in the car and driving to the bookstore or library, where they usually don't have the book I wanted anyway, or waiting for Amazon to deliver it through UPS.

Even though I don't have a Kindle yet, sometimes I buy Kindle books and read them off my computer through Kindle PC. If I LOVE a book and want it forever and ever, I'll buy it in print, but to me, I don't get bent out of shape over paying for a reasonably priced ebook and then somehow losing it. I mean when we go to the theater we can't take the movie home with us. We're paying for the one time experience.

For me, ebooks are like that. If I'm going to read a book more than once, I want it in print on my keeper shelf.

If I'm not going to read it more than once, there is no sake in "acquiring it" just to acquire it and I'm already used to spending money for perishable things I can't "keep" such as movie rentals (which often cost more than many lower priced ebooks anyway), movie theater tickets, tickets to see any show of any type, food.

Yes, I could use the library more, but I don't because the library's options are limited as well. I live in a very conservative area where most of what I'm likely to want to read isn't stocked. And I don't want my reading experience limited by what my library stocks, or inconvenienced by waiting for inter-library loan.

I also read a lot of books now that ere ONLY available in E.

You make a lot of good points, but they're all dependent on the temperament of the individual as well as the situation they find themselves in.

It's not practical for me to pack just one book while traveling because I have literally NO idea what I'm going to want to read. Being able to select from my entire library holds a strong appeal for me.

What I would like to see is publishers start bundling the ebook with the print book, or else maybe offering the option to buy both print and E at the same time for a buck more.

Though in order for this to happen beyond just the publisher's own websites, places like Amazon are going to have to allow this buying option. If/when they do, I'll be utilizing it so my readers who buy print also know they have E for situations where E is more convenient for them. I always want to be convenient for the reader. The more the reader finds convenience, the more the reader will read.

author Scott Nicholson said...

Another corollary: The value of an ebook is what the author earns from it.

Making $2 from a $2.99 ebook is better than making $1.50 from a $9.99 ebook from a major publisher. July will be interesting.

Scott Nicholson

the minx said...

Hi - I'm new. Great blog....will read more when I get a chance. But to eBooks:

I run a Small Press in Australia - eBooks aren't too popular here yet but we hope that they will be in the near future.

We use eBooks as a way to get people to try our books so we sell the for $3.50 each (and often 2 for 1) 80% of that price goes to the author and the rest to us. We take such a small cut because we don't think we do enough to warrant anymore. We hope that if they like the book they got for such a negligible price that they might try others.

Anonymous said...

Jane at DearAuthor in her latest ebook roundup mentioned an effort to increase value of an ebook by offering some stuff that was edited out and access to a video of the author writing in his office. All this for only an extra dollar. (ebook $14.99, video and extras $15.99) No word on how the extras are to be delivered, especially the video.

Hubris any one?

Zoe Winters said...

Anon,

I would NEVER let people see a video of me writing. That's just creepy and voyeuristic. And I'm sure most authors feel the same way. (Also wouldn't a video of someone writing be really boring?)

Anonymous said...

Right now, the $1.99/$2.99 price works because it IS so low, which is why it is an impulse buy. If every publisher did what you suggest and priced their books this low, then things would be the same as they are now with the $9.99price because no individual book would stand out as less expensive or a "cheap buy." We'd all be on an equal playing field. Consider the 99 cent purchase from iTunes. Almost all songs are 99 cents or $1.29 - but people still aren't just buying everything. They're buying what stands out; what's advertised and promoted; what's popular.

I think your price model is great, for now, but you should probably hope that others DON'T join your bandwagon for your windfall to continue.

Joe Konrath said...

I think your price model is great, for now, but you should probably hope that others DON'T join your bandwagon for your windfall to continue.

Maybe. Or maybe I'll accrue enough fans before that happens to be able to compete with the NYT bestsellers even when our prices are the same. :)