Saturday, September 18, 2010

Ebook Price War Solution

I've got a lot of friends in the UK who were very excited to see the addition of Kindle to the UK store. Kindle, I've noticed, has separated out the UK sales from the US sales in our royalties - probably because authors are still getting 35% on their UK sales, while from the US sales, they're getting 70% (as long as the book is priced between $2.99 and $9.99).

In spite of low author royalties in the UK, Amazon is scrambling to deep-discount books before agency pricing starts to take effect in the UK, as it did in the US (much to most consumers' chagrin!) It seems that Amazon wants to brand the consumer's brain with the idea that books should be priced on average at $2.99 - and certainly no higher than $9.99. And while I certainly agree with the latter, I'm not so sure about the former $2.99 price point.

Besides, it looks like Amazon wasn't quite fast enough. Hachette, the UK's largest publisher, is taking the same route the Big Six publishers in the U.S. have taken - they are demanding agency pricing from Amazon on Kindle books sold in the UK.

And the price-wars continue...

Will the investigation into price-fixing by the Texas Attorney General come to anything? Who will win in the end? Who knows?

But we all know consumers and authors both lose if books continue to be over-priced the agency way. Some of the forums on Amazon are eye-opening, with consumers threatening boycotts of overpriced books (and their authors). Granted, I happen to think some Kindle folks are a little extreme about ebook pricing, thinking full-length books should be priced at $2.99.

Because ebooks are such an ethereal sort of thing, people are loathe to pay much for them. I get that. After all, you can't share them with a friend, and there's always the fear your hard drive may crash (or your ebook vendor will go out of business) and your e-library might disappear. Ebooks don't seem quite "real" - even if you're actually getting the same amount/time of entertainment with them that you would with a hardcover.

It's hard to wrap our heads around paying $9.99 for something that doesn't quite seem "real." But think about it - we do that now when we go to the theater to see a movie. (In fact, if you're into buying popcorn, you pay quite a bit more). And you don't get to take that movie home with you, or get to watch it again, the way you get to read an ebook.

Now, granted, if you're a bargain-hunter like me, you can go see a matinee show for $3.75, or the twilight show for $4.75 (your mileage may vary depending on your state - or country - of origin). Or you can wait to buy the DVD and have it to watch over and over (at least until it gets all scratched - am I the only one who misses VHS for that reason?)

So why should a bargain ebook be $0.99 and a full-length novel ebook be priced at $2.99? Could we be down-valuing the medium?

Personally, I think ebooks should be priced based on length. This model has been used by indie ebook publishers for over ten years. (Yes, it's true, there were thriving ebook publishers and distributors before Kindle!)

Our own eXcessica pricing is based on length:

$0.99 Short Shorts: Under 3K
$1.99 Shorts: 3-7K
$2.99 Stories: 7-15K
$3.99 Novelettes: 15-35K
$4.99 Novellas: 35-50K
$5.99 Novels 50-70K
$6.99 Super Novels: 70-140K
$7.99 Super XL Novels: 140-250K
$8.99 Super XXL Novels: 250K +

It's a good, and I think fair system for both authors and consumers. I mean, come on - the average candy bar costs $0.99 - and I think a short little story is probably more nourishing than a Snickers.

Remember what you're paying for - the amount of time you get to be entertained by a book.

In a world where everything has gone Supersize for so little investment - where you can get a Gazillion Ounce Big Gulp Slurpee for $0.99, but "real" food (i.e. an organic apple, for example) costs so much more - we have developed a Wal-Mart mentality where we want everything for nothing.

But the reality is you still get what you pay for - a $0.99 Slurpee is something that took very little energy to produce. The apple, on the other hand, took a long time to grow, and under the loving, watchful eye of an organic farmer.

So with ebooks. A $0.99 book should be a short-short - something it took an author perhaps an afternoon or two to write and polish. A 100,000 word tome that took a writer half of his life to complete, might, perhaps, deserve a little more investment.

There has to be a middle ground between the price-gouging of agency model and the deep discounts of Amazon and Wal-Mart. I think basing ebook price on length might just be the place we're looking for.

-Selena Kitt


  1. There are two general schools of thought regarding ebook pricing. Joe Konrath has argued over at his blog that the $2.99 price for a full length novel is fair to his readers, and that's what he charges. This seems to work well for him, since he's making good money that way, but your argument for price based on length has merit too, since other factors being equal, you get more from a longer work.

    In determining our own pricing, we consider a number of factors. One is length; a "Tuppshar Short", which is generally any work less than 10k words, is currently priced at $1.49, since to charge the same amount we do for a full-length novel would be unfair.

    For novels, we have other considerations, one of which is to sell a lot of copies and establish the author and the work. This is why we chose the $2.99 price for most of our longer titles. Since most of our authors are relatively unknown, we feel that this helps encourage readers to take a chance on them. Our ebooks are, we hope, seen as a bargain (and with the 70% deal, we can still make a healthy amount on them). Thus far it seems to have worked, as sales and reviews have been good.

    I do wonder if what you're paying for is not just the amount of time you are being entertained, but also the quality of entertainment you are getting. I'd gladly pay more for a short good book than a long mediocre one.

    An interesting post, and good food for thought. Thank you.

  2. Well, not everyone offers 70%. We get 60% at All Romance Ebooks and Omnilit. We only get 50% at Fictionwise/Barnes and Noble. If we price all our titles at $2.99, we can make a healthy amount on Kindle. But not as much elsewhere. And we can't just price our Kindle versions at $2.99 because there are many distributors who say you can't price your book lower on their site than any other.

    I agree with you about the quality... but as has been said (over and over ;) on Konrath's blog and others - there are crappy books put out by the Big Six and self-publishing outfits alike. The gatekeepers haven't been so good at gatekeeping anyway... it's the consumer (in the form of reviews and ratings) who get the last say.

  3. Good points about the percentages. Since making money is an important part of why we do this, a change from the 70% to 60% or 50% would make a difference in how we price our books, and we have a firm policy of pricing our books the same to all distributors (they can then mark them down if they choose to, as Amazon has done with several titles, but we don't fully control that).

    And I agree completely about the lack of quality control at the major publishers. The search for profit has become so dominant there that they are sometimes actually turning away manuscripts for being TOO well written (Locus interview with Samuel R. Delaney, Vol. 64, No. 3, p. 68). Best to let the consumer decide, and to encourage the growth of reading communities to share recommendations.

  4. Selena, I think your eXcessica pricing should be industry standard. Unfortunately, I'm afraid that the market has already been 'spoiled' by authors selling their work for a couple of bucks or even less. $.99 for a novel? That's just ridiculous, unless it's a temporary super-promo, or an old book that needs some new attention. Authors don't even get those $.99 because the distributor will take a large portion of it. Personally, I can't take authors who sell their work for so little not very seriously, or is that just me?

    After re-reading Joe Konrath's article, I decided to go under 5 bucks. But $4.99 is really a minimum, since I'm not only the author but I'm also doing all the promotion myself, and which is taking time from writing something new.

  5. I also just popped over from your post on Joe Konrath's blog to see what you were saying about the ebook pricing issue. I'm uniquely interested in this issue, because, in addition to being an ebook author, in my real life, I'm a marketing anaylst.

    I really like the way you guys have chosen to price at eXcessica. It makes sense on a "you get what you pay for" basis (assuming that the quality of writing is always good), and I think consumers can appreciate that.

    I'm sorry, but I disagree with Joe's analysis of price. He is looking only at his own books and seeing that the lower priced ones outsell the higher priced ones (but not proportionately), and that he makes more money with his lower priced ones, because he gets a bigger cut, but that doesn't mean cheaper books equal higher profits.

    Ebooks really aren't very price sensitive; his own data show that, and so does Amazon's. Higher priced books dominate the Kindle bestsellers list. If ebooks were price sensitive, that list would be filled with $1-$3 books, rather than mostly $6-$10 books.

    --Maria Romana

  6. I think ebooks are price sensitive until you hit a certain level of platform. I think if you're a totally unknown author to anyone... most will have to think a bit before plunking down the money.


    You have a really big platform. You both inspires me and makes me a little envious. But I also know you've worked your ass off, which I respect and you have a LOT of books out there. I think higher price points work for you.

    There is such an explosion, and so much competition out there, that I'm not sure it'll work for everybody, including me.

    I started out with all three of my novellas at 99 cents because they were novellas and also because I was so new and wanted to get more exposure.

    Then I got tired of charging 99 cents for everything. So I raised the second two, longer novellas to 1.99 but left Kept at 99 cents.

    Then I had a reader blow a gasket over having to pay 89 cents for something she felt was "too short" (Amazon had put Kept on sale.) She later clarified that she hated the book, but... I don't understand why someone who doesn't like a book would primarily complain that it wasn't longer. Does not compute.

    At any rate, right now my pricing structure is:

    Kept $1.99 (because it's 21,000 words and also free in PDF form off my blog)

    Claimed and Mated: $2.99 because they are 35k words.

    Blood Lust (compilation) $3.49 (right now, but will likely end up 3.99 once it reaches it's momentum. It's about 92k words.

    I'm probably still selling too low. I think a LOT of consumers are getting spoiled on cheap reads and free reads in the case of the larger publisher promos... and its' bad for all of us.

    But it feels like charging higher means never reaching that momentum/platform you need for larger visibility and sales. As competitive as it's getting, how else will writers get noticed?

    I will likely raise my prices a bit again in the future once my platform is large enough to warrant it, but right now I think the prices are as high as I can make them and still get read, unfortunately.

  7. *You both inspire me and make me. (Wasn't trying to talk like an LOL cat, just originally started by referring to you like you weren't here cause I'd originally started replying to Maria. Then I felt that was rude and reworded but didn't fix all the grammar. I'm not usually a LOLcat.)

  8. Hi Selena, I mentioned you on my blog in the part 1 response to J.A. Konrath.

  9. On Amazon, some eBooks are now selling for MORE than the pBook versions.