Feb 7 2010
Back in December of 2008, I wrote about the ebook tax or the surcharge that Macmillan and other publishers were placing on ebooks by charging more for the digital version of the print book. At the time I said this:
The more that I look at ebook pricing and the way that NY runs their ebook business, the more convinced I am of three things.
- They don't actually want to encourage the sales of ebooks
- They don't know what ebook readers want
- They think that we are a group of readers that they can screw around with
Times obviously haven’t changed, and my suppositions back in 2008 were correct. Publishers are working hard to sustain physical retail markets at the expense of ebook growth, that they don’t know what ebook readers want, and they think that ebook readers are a group that do not need to be cultivated. (Read this article entitled “Why eBooks Must Fail” along with this comment by Teresa Nielsen Hayden for why ebooks are viewed with disfavor by legacy publishers).
In all the press statements made by Hachette and Macmillan, neither seem interested in talking to the reader despite the fact that under the agency model, the reader is their direct customer. The agency model is how publishers perceive that they will be able to control their content by disallowing discounting by retailers and driving up the price of ebooks to such a point that it is more attractive to buy the hardcover. Thus the ebook tax.
Truly, would you rather buy a $14.99 book in ebook format that you cannot share or sell; that is in a proprietary format which has limited use or buy the $16.99 physical version from Costco or Wal-mart or even Amazon?
If publishers would decouple ebooks from print books in pricing and truly meet the market, the move to agency model might not be so disconcerting for readers. When ebook pricing is set by companies who have no experience in pricing but want to discourage ebook purchases, an ebook reader can’t help be view those publishers with a great deal of mistrust.
Dynamic pricing (which some people read as lower prices post hardcover) is really the new form of price discrimination. Airlines utilize price discrimination the best by charging each person a different ticket for a seat on the same flight. Dynamic pricing, however, depends on having a lot of knowledge about the consumer which the publishers are completely lacking.
Publishers will likely price higher for popular authors and less high for new authors and midlist authors. I anticipate that pricing will not depend on whether titles are backlist but will be dependent on the author with the expectation that the backlist titles of very popular authors are worth more than midlist new releases. Of course, with dynamic pricing, authors are totally dependent on what the publisher deems their digital books are worth. The playing field will be quite disparate. (I was thinking if I was an author I would want to negotiate a per unit royalty rather than have it be dependent on the crazy pricing experiments of publishers).
So what’s a reader to do with the publishers and their pricing plans? This is my plan.
I plan to not pay higher the physical prices and I refuse to pay over $9.99 for the digital equivalent of a hardcover. While the costs of production (editing, cover art, etc)* are no different for print books and digital books, with print books, readers have rights such as resale and the ability to share and trade; thus they value the books less.
When new fiction books that are released are in excess of the comparable print price or higher than the $10.00, I will not buy new. I will get the book either from the used market, use my library (my library has an express service where you can pay $1.00 to read a new popular release without waiting your turn), participate in Paperbackswap or other like services. I will not buy new.
What I will do, if I really want to help the author, is buy a digital copy of the backlist titles, if reasonable, or a print mass market and gift this book to a friend. In this way, I will be sending the author a royalty and seeding the love of that author with another reader. What I won’t be doing is giving the publishers the satisfaction of moving me away from buying digital.
Do you expect ebook prices to increase? What do you anticipate dynamic pricing will mean for publishers and readers? Do you plan to make any changes in your buying plans? Will you keep a log like liz m?
*I’d argue that ebooks have lower costs because manufacturing is less and there is no physical warehousing, warehouse tax, returns from resellers, and no secondary market.