The Mobile Gadgeteer

Matthew Miller & Joel Evans

Is this the end of the $9.99 e-book?

By Joel Evans | April 1, 2010, 1:35pm PDT

Summary: Amazon and others are now going to let publishers set the price of e-books. What will this mean for the book publishing industry?

One of the things that I really liked about the Kindle was the fact that most new releases and books in general that I had an interest in purchasing wouldn’t cost more than $9.99 for the electronic version. Now it seems that Amazon has given in to its publishers’ demands and as a result the publishers will be setting prices for new releases going forward. The latest reports put new releases at between $12.99 and $14.99, compared to the previous $9.99.

There’s no doubt that Apple’s deals for the iPad have spurred the changes. I have to say that I’m disappointed in the change, though. For starters, I would expect the $9.99 price to hold, if not going even lower since publishers don’t have to incur the cost of printing or distribution. Then again, I don’t really know too much about the traditional book publishing business, but I would bet that the average person would expect to pay far less for an electronic version of a book than they would for a paper-based version.

Perhaps the rise in prices is just what the publishing industry needs? If people have to shell out a lot of money for an electronic version, they may be more inclined to buy the paper version instead.

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You forgot one possibility

Or, if they decide they like the electronic version but don't like the price, they may just pirate.
rpmyers1
1st Apr 2010
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RE: Is this the end of the $9.99 e-book?

I fear you are correct the price of ebooks will go up. Like the music industry book publishers are very short sighted. More often the not DRM hurts the honest who pay, and does nothing to those who do not. 80% of the time someone gives me a copy of a CD, or a book they have read, I purchase music from that artist or a book from that author. Their net gain is huge. I would venture to say that 90% of pirated material would have never been purchased to begin with, so there is no real loss to the publisher. By sharing I am giving my stamp of approval,and word of mouth advertising is worth gold. They should be making it cheaper and easier for me to purchase and share materials. I think they should offer a tiered approach. For $5 give me the first one hundred pages. If I want the rest of the book I will pay an additional $5. If I really like the book I can pay an additional $2 to share the book with one other person. If they like the book they can pass it along for $2. I would think that kind of advertising and cost of obtaining a new customer is worth a good bit more than $2 a book. I am willing to bet that most people would end up purchasing another book at full price for another book by that author.
jhuddle
1st Apr 2010
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Or you could do this!

Go to http://www.baen.com and look at the catalog, schedule and webscription eBooks tabs, you can normally read quite a lot of the book for free, then when you buy the eBook you can have it in any of a number of formats, all of which are DRM free, also you can return and download the book in a different format at any time to suit the device you want to read it on! They also give away ~18 CDs loaded with their books in various formats, these can be either downloaded or gotten in the back of certain books they have published the old fashioned way, with a big note saying to copy them and give them to your friends! Now this is ePublishing done right, their prices are also very good!
leopards
2nd Apr 2010
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Except....

Baen is fine -- if you like a particular type of sci-fi, there isn't much else there that I can see. For non-fiction readers it won't be much help.
srebmob@...
2nd Apr 2010
- Flag
Just the POINT!

Jim Baen and Eric Flint (the "Free Library" founder with Jim) have been making a point: if you get someone ADDICTED to the printed (electronic or dead tree) word, they WILL come back for more!
OTOH, publishers DO NOT CARE about getting addicts; they care about selling you THIS BOOK, THIS WEEK, at THE MAXIMUM PRICE they can get.
Much of this can be attributed to authors' agents, too - because THEY DON'T TRUST THEIR CLIENTS! They think their autors are 'one shots' that will write ONE Great American Novel (or British, or French, etc.) and then crash. And that agent WANTS his/her MAXIMUM percentage, so he can get his Rolls/Caddy/whatever.
It's also known as "Madison Avenue syndrome."
Throw in the piracy paranoia, and you get the resistance to eBooks that pervades the print media today. And the reason that Baen books is the ONLY major publisher that still offers eBooks at a price that reflects the real cost of production.
jkratzer3
5th Apr 2010
- Flag
End of $9.99 e-book

Kindle lets you read the first chapter or part of first chapter and if you like it purchase complete book. Sample it first, always.
noel.a.rivera@...
2nd Apr 2010
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April Fools!

You've got to be joking if the following was a serious statement:

"Perhaps the rise in prices is just what the publishing industry needs? If people have to shell out a lot of money for an electronic version, they may be more inclined to buy the paper version instead."

Nah uh. It won't work like that. The only thing which will happen is an increase in ebook piracy, I'm sure. Or at most optimistic, maybe a library boom. Legions of existing ebook device users aren't going to start tossing their Kindles in the ocean and return en masse to paper.

Maybe this was an April Fools joke (or at least that one paragraph).
Snark Shark
1st Apr 2010
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fdHendersondf
2nd Apr 2010
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RE: Is this the end of the $9.99 e-book?

It all depends on how smart consumers are. What really seems to be a huge disconnect for me is when consumers complain about pricing. Consumers set the pricing. If 9.99 is to expensive for an e-book, don't buy any. Eventually the price will come down. It seems that as a culture, nobody can deny themselves something. If a large number of consumers just said "No" to new products until those products came down in price, you would get better pricing.

I won't read, I won't steal and I won't buy an e-book until they are about 3-5 dollars for a brand new book and free with the purchase of a hard cover copy of the book.

The little secret is that paper books cost next to nothing to bring to market as a representation of the over all percent of the actual unit price. I worked at a paper printer and an average paper back cost less than a dollar for us to make. The company charged for pretty much everything plus a 30% profit on top but even still the book ended up being about 1.50 USD to 2.00 USD and the product was ready for store shelves at that point. We had a section that could do hardcovers and they did take more money to make but the complete unit cost was under 4.00 USD. This doesn't account for storage, marketing, and development. I consider the author's compensation part of the development costs.

What you are going to see is an inflation in production, development, and marketing costs. Those should change because they are grossly over inflated already but they won't. So realistically you will see prices for movies, books, music, and games come in at close to their physical medium costs because realistically the physical media was only a small part of the original cost anyway. Consumers have always been overpaying for products but the myth of "physical production" costs tricked most consumers into accepting those inflated prices.

Another trick that most companies including media companies use is all of the ridiculous compensation packages are considered "loss" so they can report smaller "profit margins". So a company might go around and say they are operating on a 2% profit margin but you take a look at the money all of the stakeholders and upper managers are raking in and it becomes clear where most of the inflated costs are going.

A general rule of thumb I use is take a hardcover book and knock 5.00 USD off the list price. What ever is left is paying for non-tangible things and always has been paying for non-tangible things like production, development, marketing, compensation and profit. That is where mot publisher will want to sell their products or if they can get full price it is even better.
As a smart consumer, you need to just not buy at that price if you want your e-books to reflect their true value.
mr1972
2nd Apr 2010
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Shame on the Publishers

This seems like really greedy pricing to me. As you said
they have very low overhead on electronic version so why
would they want to charge the same as the do for the
printed version. This seems like another attempt at big
business to hamper the way of progress. Remember what
what happened with the music and movie industries?
tommcd64
2nd Apr 2010
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Milking that dollar

This is the same as the New York Times offering their paper in e-format for the exact same price as the paper version delivered to your door. It didn't touch a printing press, and noone had to actually drop it off at your door, but it's the same price. Scam.
NeuromancerLV
2nd Apr 2010
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More pay for top management, already at all-time highs

The price should go lower without book production costs. This is simply a matter of gouging the American consumer. Believe me, the authors won't see any increase in royalties.

Don't buy the electronic versions. Wait for paperback or check out the hardbacks from your local public library.

I did work in the publishing business, compositing customized (per university dept. chair's specs) higher education textbooks and also religious media and books. We were considering the inevitable move to digital media 20 years ago.

Amazon may have been poor mouthing the publishers to recoup R&D costs up until now. And now that a competitor, who has legions of loyal followers, has raised the bar, Amazon is free to follow suit. I don't think the publishers are completely to blame here. Amazon is spinning this. They are the ones in position to dictate terms on both ends of the transaction.

Better yet, boycott Amazon's Kindle.

One more thing. Have you read all the classics available from Project Gutenberg?
djchandler
3rd Apr 2010
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RE: Is this the end of the $9.99 e-book?

No. And I didn't buy any at 9.99 either.

I purchase only non-DRMd e-books (you lock it with DRM, you can keep it). My max price is $6.00 per book. My only exception is special release e-books where there is additional value.

Are all of you listening publishers?
PeterBoyles
2nd Apr 2010
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Short term pricing?

I simply don't believe that a $14.99 price can compete with
the dead tree versions. It's really not that hard to get 30%
to 40% off the best sellers and older books go out the door
from the Bargain book sections at around $5.

I believe the newest books may sell fairly well - for a while.
But then people will start realizing that they cannot pass
their favorite books round, turning the electronic version
into a negative.

The $9.99 price ironically is probably the price that
overcomes this negative. Then there are lower prices for
slower sellers and out of print books. Writers like James A.
Mitchner with great books that can be brought back to the
market.
Ken_z
2nd Apr 2010
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Yes, I think that the $10 e-book IS dead.

From the standpoint of the consumer, the $10 price was only a little more than a paperback (typically around $8 these days) and a lot less than a hardbound book (typically $25). This encouraged buyers who normally wait (typically a year) for a bestseller to go to paperback.

By making the e-book price $13 to $15, you are creating a third-tier price-point.

Paperbacks will be $8 (and a year or more out-of-date), e-Books will be $15 (brand new), and hardcovers will be $25 (brand new).

Fine, this all seems perfectly resonable unless the publisher really wants to sell more e-books so he can reduce his fixed costs - paper, ink, printing, storage, and distribution.

The value of the intellectual property on books continues to rise so it escapes me why publishers would not want to entice people to buy e-books at attractive prices rather than to have to sell them "dead-tree" books instead of downloaded from servers.
mwagner@...
2nd Apr 2010
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