So unless you live under a log (in which case you have a secret base and I want to come visit), you heard that the Department of Justice sued Apple and 5/6 of the Big Six today (Random House was not included). Of the five publishers, three settled to avoid the legal costs. Two, Macmillain and Penguin, did not.
First, anti-trust investigations happen much more often than is generally spoken of. They just don't usually make it to court because court is expensive. So, in that regard, this is a big deal.
Second, barring a kangaroo court, I think Macmillain and Penguin will win their challenge.
Third, those in the traditional publishing verse on twitter were incredibly vocal today. I have pared away a lot of the self-publishers I used to follow (mostly because they failed at the social aspect of social media), so I did not get a good view of the opposite side of that spectrum.
Fourth, Twitter is an impossible place to discuss the intricacies of ebook pricing. Both sides of the argument are so complex and contain nuggets of truth that a proper conversation cannot be had in 140 characters.
Fifth, and here's the bulk of my topic today, my opinion on ebook pricing is changing. The reasons for this will take more than 140 characters. Quick recap for new readers, I've been making ebooks for a long time, like back when your choices were PDF or .MOBI (mmm mobipocket, you've grown up!). So here are the two cruxes of the argument and both are true.
ebooks are cheaper than other formats to make and manufacture.
The cost of making the actual book is a small fraction of the cost of making a book product.
The problem is, each side of the argument has latched onto one of these two truths to argue the other side. So both sides have taken 1/2 of the truth to argue the other half. It's like watching the heads-side of a quarter argue with the tails-side that only one side is a real quarter. Those watching the argument can do little but bang their head against a table.
When ebooks first went mainstream and Amazon set the bar at 9.99, I thought they were (and perhaps they were) playing to a familiar .99 value similar to that of an mp3 file on iTunes. I was outraged. 9.99? Are they crazy? That thing cost pennies to make. PENNIES!
9.99 was ridiculous. I wasn't going to pay that. Blah blah blah, grumble grumble grumble. Of course, I did pay it. I paid it a lot. That and 7.99 and 5.99. Sometimes 3.99 on special deals. I dipped my toes in the 99 cent self-pubbed market before I ran away screaming (Hocking being the best author by far I found in that pool). But then the agency model rolled out and all of a sudden I saw 11.99, 14.99, and 16.99. What? Are they crazy? That thing cost pennies to make. PENNIES!
16.99 was ridiculous. I wasn't going to pay that. Blah blah blah, grumble grumble grumble. I would not buy a book for more than 9.99. I've broken that rule twice, and both times in extenuating circumstances. First, me and my wife split the cost of A DANCE WITH DRAGONS when it was released, so really, I did not break my 9.99 rule except that the book was priced over 9.99. Second was Galen Beckett's THE MAGICIANS AND MRS QUENT, which was 11.99, but I bought it with a gift certificate I got for Christmas, so it wasn't like I used real money. I have not broken that rule elsewise, and that's so hard! THE MAGICIANS... was the first in a trilogy and they're all priced at 11.99. And Saladin Ahmed's THRONE OF THE CRESCENT MOON just came out and that's 11.99 as well. DAMMIT! I want to read that sucker, but I have principles.
Principles, dammit!
Having a discussion with a new Twitter friend, Lauren Panepinto, (who did the super duper awesome covers on Joe Abercrombie's novels--serious, I drool over those covers), I began to communicate what I had come to realize about ebooks and their pricing. I had originally expected ebooks to replace mass market paperbacks. As such, I always expected them to be priced like mass market paperbacks. $7.99? I'll scoop that shit up like crazy!
My evolving perception of pricing, however, could not be communicated in 140 characters, so I abandoned the discussion of books costing more than just manufacturing cost with a weak "I know, that's how I get a paycheck."
Kind of weak, it's true after all, but still. Weak.
If ebooks have to be priced so high because books cost more than just manufacturing, how do you justify trade paperbacks? Mass market paperbacks? They're all derived from the same product, and they're priced for what their platform is expected to be priced at (or thereabouts). So saying, we can't price ebooks that low because it costs so much more to make a book than just manufacturing! is crap. It's crap because you're not making ONLY ebooks. You're making other formats as well.
Or so I said. But I was wrong, at least somewhat. I was wrong because ebooks aren't released like other formats are. A publisher doesn't release a hardback at the same time as the trade. If you got the choice to buy a $25 hardback or a $8 mass market paperback, you'd have to really love that book or really love hardback to spring the $17 difference. Most people would go for the mass market. And publishing makes its money from most people.
The numbers are already in. ebooks are gouging mass market paperback sales, which is entirely expected, which only lends credence to my mmpb pricing. But they're cutting into all the platforms, so now where does that revenue come from instead of a hardback if the ebook is priced too low.
NOW, I will say, early numbers studies say that $7.99 is an ideal price point, and that companies will offset the reduced per title revenue with increased sales. It'll take some time for the market to bear that out, though.
Regardless, I'm starting to think that 11.99 for a new release isn't unreasonable. It's not the $25 for a hard cover, but it is, in a way, the cost that you pay to get a new release. Same goes for DVDs, so why shouldn't it be true with ebooks?
The problem where this all derails is when the ebook is priced higher than the available format print book. You know how I mentioned Galen Beckett above? Those 11.99 ebooks? Yeah, I could get a mass market trade of the same title for $6. THAT'S a problem. $11.99 for Saladin Ahmed instead of $16.95? I just saved five bucks. If I don't want to pay that, I can wait a couple years and it SHOULD drop in price and I can get it for an expense that I think is more appropriate. Those are the choices that the market makes. Things change so quickly that sometimes we forget that it takes time for things to work themselves out.
First, anti-trust investigations happen much more often than is generally spoken of. They just don't usually make it to court because court is expensive. So, in that regard, this is a big deal.
Second, barring a kangaroo court, I think Macmillain and Penguin will win their challenge.
Third, those in the traditional publishing verse on twitter were incredibly vocal today. I have pared away a lot of the self-publishers I used to follow (mostly because they failed at the social aspect of social media), so I did not get a good view of the opposite side of that spectrum.
Fourth, Twitter is an impossible place to discuss the intricacies of ebook pricing. Both sides of the argument are so complex and contain nuggets of truth that a proper conversation cannot be had in 140 characters.
Fifth, and here's the bulk of my topic today, my opinion on ebook pricing is changing. The reasons for this will take more than 140 characters. Quick recap for new readers, I've been making ebooks for a long time, like back when your choices were PDF or .MOBI (mmm mobipocket, you've grown up!). So here are the two cruxes of the argument and both are true.
ebooks are cheaper than other formats to make and manufacture.
The cost of making the actual book is a small fraction of the cost of making a book product.
The problem is, each side of the argument has latched onto one of these two truths to argue the other side. So both sides have taken 1/2 of the truth to argue the other half. It's like watching the heads-side of a quarter argue with the tails-side that only one side is a real quarter. Those watching the argument can do little but bang their head against a table.
When ebooks first went mainstream and Amazon set the bar at 9.99, I thought they were (and perhaps they were) playing to a familiar .99 value similar to that of an mp3 file on iTunes. I was outraged. 9.99? Are they crazy? That thing cost pennies to make. PENNIES!
9.99 was ridiculous. I wasn't going to pay that. Blah blah blah, grumble grumble grumble. Of course, I did pay it. I paid it a lot. That and 7.99 and 5.99. Sometimes 3.99 on special deals. I dipped my toes in the 99 cent self-pubbed market before I ran away screaming (Hocking being the best author by far I found in that pool). But then the agency model rolled out and all of a sudden I saw 11.99, 14.99, and 16.99. What? Are they crazy? That thing cost pennies to make. PENNIES!
16.99 was ridiculous. I wasn't going to pay that. Blah blah blah, grumble grumble grumble. I would not buy a book for more than 9.99. I've broken that rule twice, and both times in extenuating circumstances. First, me and my wife split the cost of A DANCE WITH DRAGONS when it was released, so really, I did not break my 9.99 rule except that the book was priced over 9.99. Second was Galen Beckett's THE MAGICIANS AND MRS QUENT, which was 11.99, but I bought it with a gift certificate I got for Christmas, so it wasn't like I used real money. I have not broken that rule elsewise, and that's so hard! THE MAGICIANS... was the first in a trilogy and they're all priced at 11.99. And Saladin Ahmed's THRONE OF THE CRESCENT MOON just came out and that's 11.99 as well. DAMMIT! I want to read that sucker, but I have principles.
Principles, dammit!
Having a discussion with a new Twitter friend, Lauren Panepinto, (who did the super duper awesome covers on Joe Abercrombie's novels--serious, I drool over those covers), I began to communicate what I had come to realize about ebooks and their pricing. I had originally expected ebooks to replace mass market paperbacks. As such, I always expected them to be priced like mass market paperbacks. $7.99? I'll scoop that shit up like crazy!
My evolving perception of pricing, however, could not be communicated in 140 characters, so I abandoned the discussion of books costing more than just manufacturing cost with a weak "I know, that's how I get a paycheck."
Kind of weak, it's true after all, but still. Weak.
If ebooks have to be priced so high because books cost more than just manufacturing, how do you justify trade paperbacks? Mass market paperbacks? They're all derived from the same product, and they're priced for what their platform is expected to be priced at (or thereabouts). So saying, we can't price ebooks that low because it costs so much more to make a book than just manufacturing! is crap. It's crap because you're not making ONLY ebooks. You're making other formats as well.
Or so I said. But I was wrong, at least somewhat. I was wrong because ebooks aren't released like other formats are. A publisher doesn't release a hardback at the same time as the trade. If you got the choice to buy a $25 hardback or a $8 mass market paperback, you'd have to really love that book or really love hardback to spring the $17 difference. Most people would go for the mass market. And publishing makes its money from most people.
The numbers are already in. ebooks are gouging mass market paperback sales, which is entirely expected, which only lends credence to my mmpb pricing. But they're cutting into all the platforms, so now where does that revenue come from instead of a hardback if the ebook is priced too low.
NOW, I will say, early numbers studies say that $7.99 is an ideal price point, and that companies will offset the reduced per title revenue with increased sales. It'll take some time for the market to bear that out, though.
Regardless, I'm starting to think that 11.99 for a new release isn't unreasonable. It's not the $25 for a hard cover, but it is, in a way, the cost that you pay to get a new release. Same goes for DVDs, so why shouldn't it be true with ebooks?
The problem where this all derails is when the ebook is priced higher than the available format print book. You know how I mentioned Galen Beckett above? Those 11.99 ebooks? Yeah, I could get a mass market trade of the same title for $6. THAT'S a problem. $11.99 for Saladin Ahmed instead of $16.95? I just saved five bucks. If I don't want to pay that, I can wait a couple years and it SHOULD drop in price and I can get it for an expense that I think is more appropriate. Those are the choices that the market makes. Things change so quickly that sometimes we forget that it takes time for things to work themselves out.