Monday, August 24, 2015

Zombie Publishing Memes #2 - Low Prices Devalue Books

This is the second in an ongoing series that Barry Eisler and I are writing. When we talk about zombie memes, we’re referring to arguments that just won’t die no matter how many times they’re massacred by logic and evidence. Because we’ve been shooting down so many of these memes for so long, and because they just keep reanimating (often repeatedly from the same people), we thought it would be useful to create an online source for easy (and time-saving) reference.

We’ll be tackling these memes one at a time over the course of the next few weeks and then publishing a free downloadable compendium, so if you’ve encountered a zombie meme yourself and don’t see it listed here, please mention it in the comments. And if you’re aware of articles on these or related topics, please refer us to them so we can include links. The complete list of zombie memes we’ve addressed so far appears at the end of this post.

Low Prices “Devalue” Books.

The premise behind this zombie meme is not only wrong; it’s also exceptionally strange. After all, if you love books, why would you focus on their monetary worth rather than their worth in society? Isn’t what makes books valuable how widely they’re read, absorbed, and discussed, rather than how much money they make? And if books cost less and more people can afford them, doesn’t it stand to reason (assuming everyday experience is valid and what they teach in Economics 101 is correct) that more people will buy more books (in fact, they are doing just that)? If books are indeed valuable for society and we don’t want to devalue them, shouldn’t we look for ways to make books less expensive and therefore more widely accessible?

But even if you think the sole value of a book lies in how much money it makes, it’s silly to believe higher prices automatically mean more revenues. As a thought experiment: it’s unlikely anyone would maximize revenues with a five-cent price point, but then why not charge a hundred dollars for a book instead? Wouldn’t that $100 price point value the book even more?

Of course not. So intuitively, we all know there’s a sweet-spot price -- the price at which volume x unit price maximizes revenues, and logically, this would seem to be the price that derives the greatest (financial) value from the book. If we make more money from our books at a five-dollar price point than we do at ten (not a hypothetical for us, by the way, but empirical fact), which is the price that’s “devaluing” the book?

It also stands to reason that different authors with different brands will have different sweet-spot prices. What seems clear is that only exceptionally strong brands will maximize revenues at a per-unit price of $9.99 or higher. The legacy industry’s attachment to those high prices has little to do with maximizing revenues for most of their authors, and a great deal to do with trying to retard the growth of digital and preserve the position of paper. But that’s an uncomfortable truth for the legacy industry to acknowledge, so instead they prefer the counterintuitive narrative of how lower prices, which make more books accessible to more people, are in fact “devaluing” books. It seems unfortunate that some people seem to believe books should be like diamonds -- high-priced status symbols, accessible only to the few -- rather than a vital everyday item available to everyone, like food, water, and other nourishment. But self interest produces strange arguments.

For further reading, we recommend The Value of Ebooks and Race to the Bottom.


Previously addressed zombie memes:

31 comments:

John Barlow said...

Just a note on this: Wordsworth Classics, a paperback (and now ebook) publisher in the UK, have been doing classic literature at 99p ($1.50ish) for years (about 30 years, I think). They eventually put the p/backs up to 1.50 (pounds), with ebooks often at 49p. No one, to my knoweldge, ever said that works by Tolstoy, Jane Austen, Emily Bronte etc. were shit because of these cheap editions.

wolfshades.com said...

I'm grateful to you both for writing this series. Here's some food for thought - I wonder if you would address it?

I've noticed that the sweet spot for publishing houses still stands at somewhere between $9.00 and $12.00 dollars or more. To the reader's mind (i.e. mine) I interpret that price to mean that the book has gone through all of the hoops that might make it a decent work to read. Meaning: it's had the services of at least an editor or two.

If I see that price, the next thing I'll look for is the publishing company name, just to make sure.

Conversely, if I see a book at $.99, I'll go to the trouble of reading all the reviews - particularly the one-star ones - to make sure I'm not making a mistake in buying it. (Having been burned a few too many times by low-priced, *very* low quality books before).

In addition to being a writer (who has yet to publish my first book), I'm also a high-volume reader. I'd appreciate your thoughts on this.

Thanks!

Anthony Pero said...

I find it difficult to believe that even publishers can truly believe that a book, which at MOST cost $200,000 to write, edit and produce has more inherent monetary value than Guardians of the Galaxy, which cost $200M to make and I can buy for $9.99 on Amazon Digital... yet a Kindle version from a major publisher is going to cost me $14-$16. And yes, I like books more than movies, and books are a better value per hour. I get that. Its still a staggering difference to think about.

Joe Konrath said...

books are a better value per hour

Sometimes. You can buy a whole season of TV for $15, and that's a lot more entertainment than a book. And some of my favorite movies I've watched ten times over the years, but have never read a book more than three times.

I've blogged before about hardcovers being priced as luxury items. But this is an artificial cost imposed upon books by publishers. They mimic scarcity by releasing a more expensive version--the hardcover--a year before the inexpensive paperback. Ebooks really ruined the good thing they had going.

Anonymous said...

Long Before E-books, there was the 'remainder' table at Chapters. As far as I could tell, just about every Hardcover book carried by the store ends up there for less than $5, (less than half the price of the paperback when it eventually comes out.) I caught on after a handful of $30+ purchases that were still unread by the time the same book was on the discount table.

Sadly, I'm pretty sure the Authors are practically cut out from those sales. I didn't realize that then, but I doubt it would make any difference. If I have to choose *who* gets ripped off, in most cases, I'll probably choose the other guy/girl.

Graham Powell said...

Joe, you mention positioning hardbacks as a luxury item - do you think that it makes sense to release in hardback and paperback and ebook simultaneously, all at different price points? I think that lower-priced ebooks would probably clobber paperbacks, but it might be the case that just having a book on the shelf could get some sales that would otherwise likely be missed. I also think that people who buy hardbacks would probably continue to do so even if an ebook were available. What do you think?

Broken Yogi said...

It's very strange that someone would argue that making books more expensive would also make them more culturally valuable. Higher prices mean fewer people would read them, and thus diminish their cultural influence. Whereas, lower prices increase their sales and their influence, because more people will read them. A democracy depends on books being priced affordably for all its citizens.

Jm Cornwell said...

There was a movie about this issue except the product was sent, perfume. The point was that it was better to sell a thousand bottles of perfume, good perfume, and the dollar bottle then it was to sell one single bottle for thousand dollars. The same applies for books. It's a no-brainer.

Anonymous said...

Do you ever worry that the publishing companies will read your information and realize that they could make more money by adopting some of your ideas? I think that the publishers could do very well by reducing their e-book prices, especially on deep back list titles. I know that I have looked at buying a new book in a series that I read years ago, but have decided no to do so, because I would like to re-read the beginning of the series, and buying the old books as e-books would be pretty expensive. One example of this is the latest in the "Thomas Covenant" series. I read the first chronicles in the 80's and liked it. I read the second chronicles as well, but remember not liking it as much. I haven't read the latest books in the series.

Rob Gregory Browne said...

I'm pretty sure the very same "devaluing books" argument was made against the paperback original publishers when they were selling novels for a quarter or less. Yet some of our most enduring and greatest authors came from that world...

Anonymous said...

Joe, I agree completely with what you and Barry have said here, but I think it misses the heart of the complaint when someone claims that books are being devalued.

The main thing that is being complained about when someone argues that books are being devalued is that their books look expensive in comparison. They think that their books are work $10/$15/$20, and they resent feeling pressured to lower their price to compete. Even worse, they feel like competing on price represents a "race to the bottom".

Then again, maybe I'm just pre-empting another zombie meme in that author competition is a zero-sum non-cooperative game...

David L. Shutter said...

Ooh-Ooh! Can I pick the next Zombie Meme? Here's my personal fav:

CHOOSE traditional publishing (because it's as easy as hitting SEND on and e-mail) and you'll instantly be bestowed with peerless editing collaborative from master NY editors, world class design efforts like no other and tireless, BigPub corporate promotion efforts and foreign market push in addition to insider Hollywood/TV Network consideration! The level of which are impossible to attain on your own.

Just figured I'd ask.

Jill James said...

I would rather sell a hundred books at .99 versus 1 at $100. The first gives me 100 new readers.

A.J Sendall said...

No price manipulation can change the inherent value of a book, which lays within its words, but the wider public perception of the value will change based on price. That mindset has been with us for too long to change in the near future. When we shop for a domestic item such as a coffee maker, and see an average price point of $500, and then at the end of a shelf there’s an unknown brand for $29.99, how much credence and attention do we give it? We all know that one must pay for quality… right?
I’m not arguing for higher ebook prices, I price mine at the low end, but having been in business in the past, I try to see things from the potential customer’s POV.
The change of mindset will eventually happen, just not as quickly as we'd all like.

Alan Spade said...

"Isn’t what makes books valuable how widely they’re read, absorbed, and discussed, rather than how much money they make?"

Joe, was this particular blog post written by you or Barry? Because I remember that when there was a debate about the $.99 price on that same blog, you advocated precisely that the value of ebooks was in how much money they made.

Maybe your opinion has changed since then. Or maybe you were speaking as a businessman, and now you are speaking focusing on the reader's experience. Or you were meaning "valuable to society". Still, it's difficult to reconcile the two opinions.

G. B. Miller said...

Sure it does.

Just check out the discount aisle at stores like Ocean State Job Lot here in CT where they have a slew of books in every possible genre priced at $3.99 give or take. Lots of those were probably returns that publishers simply wrote off and passed on to stores like that so that they could recoup their investments.

As for low prices hurting consumers, ummmm, yah. I don't know about everyone else, but low prices in anything, will make me as a consumer, stock up for future use. More bang for the buck, you might say. So to say that low prices hurts consumers is like saying low gas prices hurt oil companies.

Father Nature's Corner

Anthony Pero said...

Joe Said:

They mimic scarcity by releasing a more expensive version--the hardcover--a year before the inexpensive paperback. Ebooks really ruined the good thing they had going.

I actually don't have a problem with publishers windowing. It certainly doesn't make sense for self-publishers, and I'm not convinced that publishers will make more money by windowing, but I see the value in a hardcover edition of books. And if windowing is what is necessary to make a hardcover printed at scale possible, then go for it. Consumers complain, but only because they are used to ebooks getting a simultaneous release. No one complains loudly that MMPBs don't get a simultaneous release. No one complains that movies aren't released on Digital and or Blu-ray simultaneously with the theatrical release... because they are used to it.

Part of the reason that movies can be distributed widely so inexpensively is because the industry has already made a boatload of money prior to the digital release. And they deal with piracy on a much greater scale than the publishing industry does. The movie industry actually DOES lose a whole lot of money due to piracy every year, because the people pirating WOULD pay to see a number of the movies they pirate every year, unlike the publishing industry.

Anyway, that last bit is tangential and has nothing to do with your post. The point is that, because I'm used to windowing regarding other forms of media, I could get used to windowing in publishing, as a consumer. I'm not sure if in the long run that would actually make more money, however. What are your thoughts?

Anthony Pero said...

As far as Zombie memes go, how about:

The publishing industry loses $3B a year to piracy and needs DRM to keep it from being worse.

Because, yeah, THAT's not true on so many levels, and I hear it all the time.

1) There's no way to actually calculate how much is lost to online piracy. We don't know how many people would have purchased the download, and unlike a physical book that is stolen, no one else is prevented from downloading it. There's no way to calculate how many sales are actually lost, but the evidence all points to not much. People pirating ebooks weren't going to buy those books anyway, to a large degree.

2) Anyone who can get a book up on a sharing site in the first place can remove DRM from an ebook. DRM does nothing but lock users in to a particular platform.

Barry Eisler said...

Wolfshade--seems like a reasonable approach. If you know and trust the brand, you're apt to be willing to pay more. If not, you'll be more careful.

Graham asked, "Do you think that it makes sense to release in hardback and paperback and ebook simultaneously, all at different price points?"

Depends on what you're after. If your primary aim is to make readers happy, I think it makes sense to release in all formats as soon as possible. Prices will likely differ in part due to costs--paper costs more than digital, for example.

Anonymous asked, "Do you ever worry that the publishing companies will read your information and realize that they could make more money by adopting some of your ideas?"

Legacy publishers already have all this information. They know lower digital prices would make them more money. But lower digital prices would also accelerate digital adoption and undermine the legacy industry's foundational value proposition: paper distribution. I think it was Clay Shirky who said that industries become expert at maintaining the problem to which they are the solution. More money is a short-term goal. Maintaining the problem to which they are the solution is forever.

Anonymous said, "The main thing that is being complained about when someone argues that books are being devalued is that their books look expensive in comparison."

I agree this is really what's bugging a lot of authors. But not so many of them come right out and say it. Instead, they try to couch their concerns in more society-centric terms. Not an uncommon psychological reaction/propaganda technique.

David and Anthony, those are two of the memes we have on deck.

Alan said, "Joe, was this particular blog post written by you or Barry?"

All the posts in this series are by both of us. We collaborate in Google Docs.

"Because I remember that when there was a debate about the $.99 price on that same blog, you advocated precisely that the value of ebooks was in how much money they made...Maybe your opinion has changed since then. Or maybe you were speaking as a businessman, and now you are speaking focusing on the reader's experience. Or you were meaning "valuable to society". Still, it's difficult to reconcile the two opinions."

I don't want to speak for Joe, but is the distinction really that hard? If we're talking about monetary value, the correct measure is the sweet-spot price that multiplied by volume nets the most dollars overall. If we're talking about societal value, we're talking about things like impact on the culture and conversation, which will be greater if more people can afford to buy books. I think we discuss all this in the post, no?

Lou Bradshaw said...

I have been self publishing for a little over 2 and a half years at a low end price. Do I feel devalued? Not in the least. There was a time in my life when I would forego buying something I wanted because the money would be better spent on something I needed. I would hate to think that a reader would have to make such a choice to read one of my books. My readers have responded in never dreamed of numbers, and the numbers are growing each month. I have no intentions of raising my prices.

Alan Spade said...

"I think we discuss all this in the post, no?"

Yes, but I had the feeling that things like "impact on the culture and conversation" was mainly an argument, often presented in a bombastic way, by legacy published authors like Douglas Preston, whereas Joe preferred to stick to the point of view, perhaps selfish but sincere, of the self-published author seeking the sweet-spot price.

Of course, things like societal value aren't the prerogative of legacy authors, and I agree with the following sentence: "After all, if you love books, why would you focus on their monetary worth rather than their worth in society?"

But it's surprising, because it's theoretical. It's the discourse of an idealist in a blog that is really practical.

For as much as I define myself as an idealist, I'm always wary of theoretical discourses that would be too much detached from reality. But then, if you wanted to argue that even on a theoretical level, traditional publishing is wrong, I would agree with you.

Joe Konrath said...

I interpret that price to mean that the book has gone through all of the hoops that might make it a decent work to read.

It makes sense to infer quality from higher prices. But this doesn't apply to ebooks. Some $14.99 ebooks published by major publishers are poorly formatted and badly written. Some $0.99 ebooks from indies have better writing and formatting than anything released by legacy publishing.

As the line between what is professional and what is amateur becomes more blurred, I suggest relying on more than price to be an indicator of worth. Download free samples to check quality, or use the look inside the ebook feature.

Joe Konrath said...

I'm pretty sure the Authors are practically cut out from those sales.

Authors get no money for remainders.

Joe Konrath said...

We all know that one must pay for quality… right?

Perhaps with tangible goods. Not so with digital media.

There is enough quality digital media for you to consume--for free--for every minute of every day of the rest of your life. We can find a practically unlimited amount of videos, books, and games for free or cheap.

Digital media prices are going to continue to go down.

Joe Konrath said...

Do you ever worry that the publishing companies will read your information and realize that they could make more money by adopting some of your ideas?

I hope publishers become a viable alternative for midlist authors, which would allow us more venues to pursue and give Amazon more competition.

It would be great if publishers actually competed. Everyone would benefit. Instead, groups like the Auhors Guild and Authors United continue to apologize for their publishers' bad business decisions, and seem to want the government to subsidize them. That's not competing. That's handicapping, and not good for anyone. The industry doesn't need life support. It needs revamping.

Joe Konrath said...

do you think that it makes sense to release in hardback and paperback and ebook simultaneously, all at different price points?

It's worth trying.

Anonymous said...

I love it when other indie authors in my genre raise their prices to an absurd degree because "Stephen King is doing it" or because "it costs less than a cup of coffee!" (The latter is my favorite explanation why someone is raising their prices; reminds me how clueless some writers are. Hey, dummy: Starbucks can only sell you that coffee ONCE, while you can sell your .99-cent book a million times if there are a million customers willing to buy it!) These delusional numbskulls have helped me to make 6-figures a year for the last 3 years. If that's devaluing my book, then I'm gonna be devaluing them all the way to the bank!

Matt said...

As usual, I enjoyed reading a Konrath, et al post. However, this line summoned my inner snark monster:

"After all, if you love books, why would you focus on their monetary worth rather than their worth in society? Isn’t what makes books valuable how widely they’re read, absorbed, and discussed, rather than how much money they make?"

Signed,
the book-loving author who happily drinks, eats and sleeps 10 cent Ramen noodles every day, every meal for the rest of his life because he freely publishes his books on his website to be widely read for society's betterment and absorption

-----
I once told my barber, Hey Mack, why doncha give me this haircut for free? After all, it's for the greater good and you'll make my boss and my wife happy.

He stabbed me in the jugular with a shiny pair of Kasho straights.

Barry Eisler said...

Hi Matt, I think this time your inner snark monster might have been roused by a phantom. Joe and I nowhere argue (or believe) that books should cost nothing. Our point is directed at people who claim lower-prices devalue books, which is a demonstrably silly argument. Did we also need to point out that there will be a balance between authors being able earn a living so they can write books and the good of society in being able to read them (the same balance that's behind the whole notion of copyright)? If so, our bad, balance belatedly noted here.

Lynn said...

I'm an independent publisher for my husband and one other author. What we're doing as perhaps a small guarantee of quality for those considering purchasing, is employing a professional editor (she used to work for Big Publishing) and giving her visible credit. After all, cover artists get a credit, why not other professionals who contribute to readability? If you know a book has actually BEEN edited competently, isn't that what you (usually) get from the big houses?

I'm envisioning a time when freelance editors have their own followings, if other authors were to do the same. "Hey, edited by X, it might be pretty good, she doesn't do trash."

And yes, that cost will go into the ebook pricing.

Philana Crouch said...

It's very frustrating to see ebooks cost as much as print versions. People think that it's just the ideas that matter. If that's the truth we wouldn't have different prices for hardback, trade paperback, and mass market editions. If the print industry didn't want to set the expectation for the print supplies to factor in the cost then why have 3 different formats for the same content based upon how much it cost to make them.