Lately, the conflict between Amazon and Hachette has raised the issue of e-book pricing to a very public level. Amazon wants e-books to be much cheaper than print books because (in their words) “Many e-books are being released at $14.99 and even $19.99. That is unjustifiably high for an e-book. With an e-book, there’s no printing, no over-printing, no need to forecast, no returns, no lost sales due to out of stock, no warehousing costs, no transportation costs, and there is no secondary market — e-books cannot be resold as used books. E-books can and should be less expensive.”
On the side of Hachette is the argument that charging a much lower price for an e-book devalues the author’s work, that producing a book still requires a huge investment in editorial time and production (cover design etc.), not to mention promotion.
I confess, I don’t know which side of the fence I sit on. So I thought I’d break it down here and think out loud a little.
AS A READER:
I want e-books to be as cheap as possible, because I read a lot and I can’t afford to buy everything I would like to. I’m also more likely to take a chance on a new author if the price is below $5, say, and sometimes will buy both a physical book and an e-book if I really love it.
AS A WRITER:
It takes a lot. of. time. to write a book. Forget about trying to figure an hourly rate! I think mine is down around pennies or less.
However, I’d rather have someone purchase an e-book than borrow someone else’s copy of a physical book. And frankly, more readers is a good thing overall—especially since I don’t have a huge income that is at jeopardy if I lose out on price for the sake of quantity.
Plus, I get a 25% royalty fee on e-books that are published by the big publishers. So of course, the fee goes up if the price is higher. What I want to know (and what Amazon purports) is whether the quantities rise enough to more than compensate for the price differential.
Let me be revealing and break it down. Forgetting the whole advance thing, I earn 15% royalties on hardcover books, which sell for $16, so that means for every hardcover book I get about $2.50 in royalties. For a paperback, it’s less, only 7% on a $8 book, or $.56.
For a $9.99 e-book (starting price for my old S&S novels), at 25% royalties that’s $2.50 as well. Three of my Bloomsbury YA historicals are on sale for $1.99 as e-books, so I will get $.50 each for them—roughly what a paperback nets me.
Amazon claims to have statistics to back up the fact that lower prices generate more sales. Here’s what they said:
For every copy an e-book would sell at $14.99, it would sell 1.74 copies if priced at $9.99. So, for example, if customers would buy 100,000 copies of a particular e-book at $14.99, then customers would buy 174,000 copies of that same e-book at $9.99. Total revenue at $14.99 would be $1,499,000. Total revenue at $9.99 is $1,738,000. The important thing to note here is that the lower price is good for all parties involved: the customer is paying 33% less and the author is getting a royalty check 16% larger and being read by an audience that’s 74% larger. The pie is simply bigger.
Of course, I don’t sell in the hundreds of thousands, so we’re talking much smaller increments here.
And I have to say, as a low-income person myself, I’m grateful when I can purchase e-books by the authors I love at bargain prices. I will splash out up to the $9.99 amount Amazon is talking about, but much higher and I’ll just wait until the price goes down.
I guess I’ve persuaded myself that on balance, I believe Amazon’s appraisal of the situation. Perhaps the most telling paragraph in their letter was the one that recalled the outcry when paperbacks hit the market, and traditional publishers were up in arms that it would be the ruin of publishing.
Change is hard, and there is definitely a place for the hard work that publishers and editors put into the books they produce. But as a writer, most of all I want the most readers possible. And if that means less expensive e-books, then so be it.