Thursday, December 22, 2011

The Price Point for E-Books

It still amazes me how in only a matter of a few years, e-books have become the norm. According to this breakdown of a Harris poll, 1 in 6 Americans use e-readers (only a year before it was 1 in 10), and another 1 in 6 plan to get one in the next six months. I just got a Kindle myself in November.

Let's face it. E-books aren't going away. Will they eventually replace hold-in-your-hand books? Probably not. I've heard them compared to how paperback books were introduced into the marketplace in 1935 and quickly took up real estate in what used to be almost exclusively a hardcover marketplace. I can see that happening more than I can see e-books actually replacing physical books.

Author James Scott Bell had a fascinating post called Field Report From the E-Book Revolution in which he espoused on this subject. Read the comments section too as there's more info there.

The biggest "problem" I see (and this is addressed in that post and comments) is the price point for e-books. Most publishers have been charging just about the same price for the e-book version of a book as they are for a trade paperback. Given the choice between electronic and hard copy, I'm always going to go for the hard copy if the price is the same. I think others are too.

I believe the only way publishers are going to truly make money off of the e-book revolution is if they charge less for them. And by less I mean much less. $2.99-$4.99 for a full length novel is the current going rate (with some promotions even selling them for $.99). I never understood why publishers haven't figured that out.

Now it makes a little more sense. Because most authors signed their contracts before the boon of e-books, their royalty rates are going to be based on what has been the norm---hold-in-your-hand books that generally retail for $12.99 (softcover) or $24.95 (hardcover). Using that standard contract, if an author's royalty rate is say, 15% on the wholesale price, then they'll make a buck or so each book that's sold. But if the book is priced at $4.99, then they make much less.

One publisher I've seen jump on the band wagon in a good way is Marcher Lord Press. I spoke with MLP founder Jeff Gerke about their methods, and he said, "Our model is something like this: New e-books at $9.99 for six months, then down to $6.99 and eventually $2.99. Series/trilogies: First book in the series is lowest ($2.99 or lower), second book is $4.99, third book is $9.99 when new and $6.99 after six months. Our lower selling books, or ones we just want to hook people with, or on short-term promotionals are as low as 99 cents."

Not sure how much the authors actually make on these sales, but I would venture to say MLP has taken this into account in their contracts. This methodology is what more publishers need to embrace for them to succeed in the ebook marketplace. That may require new contracts and agreements, but as an author myself I would be happy to make changes along those lines because I know it would end up in more sales overall.

The playing field is wide open. Exciting things are on the horizon for authors and publishers alike! No need to fear this new frontier. Everyone's learning and exploring together, and that makes for some interesting times.

What do you think?