Monday, April 18, 2011

On the Pricing of E-Books

I think I'm finally settling on what works for me in pricing my ebooks. At first, I waffled all over the place, like a bit of straw buffeted this way and that by every passing idea. And boy, people are full of ideas about this subject. Most of them, however, jump on the bandwagon to lower prices...and lower them some more... They point to phenomena like Amanda Hocking, whose ebooks sell for $2.99 on down. Sometimes, reading these opinions feels like being nibbled by extremely timid but persistent piranhas. Oh, it's just a little bite. You won't miss it. It won't hurt a bit.

This reminds me of one of the first SFWA Business Meetings I attended. I think it was in the mid-80s; Ben Bova was President (and he'd just written a book about ebooks). We were discussing advances, lamenting the fact that although the cost of living had increased over the last period of time (maybe it was a decade, but it doesn't matter), advances, particularly for first novels, had not. Some poor clueless soul at the back of the room stood up and said, "I don't care if I get $2,000 or $2 for my novel, I'm just thrilled to have it in print."

And the rest of us, who had bills to pay and kids to raise, groaned.

When the going gets tough, businesses go with cheaper labor, cheaper goods. Why is the governor of Wisconsin set on attacking collective bargaining, instead of enlisting the cooperation of the workers in solving the real problem? Because individually, workers are replaceable by others who are less experienced and more desperate and will work longer and harder for less. In other words, exploitable workers.

Nathan Bransford's discussion of "99 Cent Books and the Tragedy of the Commons" merits consideration. He points out the the number of book-buyers isn't infinite. It's a big pie, and we can help make it bigger by writing incredibly wonderful stuff and encouraging a generation of new readers, but at some point, we're competing for slices of that pie. Writers like Hocking are "early adopters" of the method of aggressive internet marketing and aggressively competitive prices. Bransford writes:

At the end of the day, there are only so many people in the world who read books and only so much time in the day they spend reading them and so much money they're willing to spend for them. People do buy a few more books than they end up reading, but not that many more.

So basically in this hypothetical you end up with a situation where no one makes much money per copy sold and a good bulk of the readership that would probably have paid more if they had been required to. Unknown authors would no longer derive a benefit from the discounting.
If you think of discounts as resources, those discounts could end up depleted when the early movers drive down prices, and no one is able to derive benefit from them anymore.
And when book prices are $0.99, there would be still more pressure to give books away for free to try and build an audience. It's not that hard to envision a price race all the way down to free for debut authors.

So what is an original ebook worth? What is a reprint worth? At what price point are readers willing to buy a legitimate copy rather than a pirated one? No one knows. It all depends.

For me, one of the tangles in this web is how I value my own work. Am I driving prices down, thereby making the ebook market less viable as a way of making a living for professional writers? Am I communicating by how I price my work that I am proud of its quality? Where is the "sweet spot" between conducting my business as a professional business and making my work available to the greatest number of readers?

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