Price, Value, eBooks, and Kindle Unlimited
Letters of Opinionbook prices21 Comments
There have been many discussions on social media of late regarding the price of books. Some authors are very frustrated by Kindle Unlimited and what they perceive as the devaluation of digital books.
I find these arguments a little amusing as that was the exact argument that traditional publishers made when they pushed back against Amazon’s pricing ceiling.
I remember sitting in a seminar where an individual from Bowker discussed the concept of anchoring. Anchoring stems from the concepts of primacy and recency.
People tend to remember the first things they have heard and the most recent things they have heard. When applied to pricing, people tend to fix on the first price they see for a product.
In the early stages of ebook adoption, the market grew at an astounding pace. Every month, new consumers adopted digital books and every month, every producer in the marketplace had an opportunity to set a new “anchor.”
Amazon wanted that anchor to be at $9.99. Traditional publishers wanted it to be higher. Hence the price fixing.
We know the outcome. Amazon won and everyone who buys a digital book expects the price to be a) cheaper than the print version and b) inexpensive in general.
Now there are authors who are pushing back against the continual decline of ebook prices but that ship has sailed. It sailed a long time ago with the 99c books and the non stop promotions. The new reality is that the digital book consumer expects and demands low prices and yes, maybe even “free” books.
I use “free” in scare quotes because Kindle Unlimited is not a free program. It costs the reader 9.99 to participate but because there is no transactional fee every time the book is downloaded it feels free.
In the marketplace, consumers what to get the best product at the lowest price. Producers want to get the most money for their products.
Consumers are willing to exchange a higher priced version for a lower priced version if they can achieve relatively the same result. Look at makeup and all the drugstore “dups”. Some brands like ELF produce cheap knock offs of more expensive brands like Sephora, Nars, and the like.
Telling a reader she should pay more for a book simply because she buys other products at a higher price doesn’t make economic sense to her because she sees a lower priced version of the higher priced product that delivers essentially the same result. In the case of books, it’s an emotional feeling.
Remember John Locke? He was one of the first indies to make seven figures. How did he do it? By pricing his books at 99c. He said that at that price, the competing product from traditional publishers had to be 9x better than his product.
Now, of course, there are some people who are brand loyal and will always buy a particular product regardless of the price. But for every 1 loyal brand follower there are 100 willing to try the other product that is sold at 1/10th of the cost.
This is even more true when it comes to the voracious reader. The voracious reader is likely to be a digital reader. But she is also the most price conscious reader.
Any long time publishing person will tell you that romance readers are the most price sensitive of any readership buying books. The higher the price, the more likely the romance reader will find a lower priced alternative.
She has to. In order to feed her reading habit, she needs low cost or “free” options. This was true even before digital books. The avid romance reader would read a variety of new, used, and library books. At my local UBS, I can buy Harlequin Presents for 10c each. Newer mass markets sell for $2.99 to $3.99.
To a great degree, the reader hasn’t changed but the market has evolved to meet her needs. Instead of a library and a used market, the romance reader fills her kindle with Kindle Unlimited books. And she saves her money for the one or two authors a month that have created that loyal brand relationship with.
For many a romance reader, the anchoring price for romance books was already low and digital prices are just now coming into equilibrium.
The unique factor in ebook pricing is that we don’t actually own what we pay for. Can’t resell it, can’t readily lend it out. Can’t even be certain that marketplace/hardware shifts won’t render it useless down the line. Those are my sticking points.
Wow. Kind of nice to read an article not dismissing price conscious readers as unappreciative. As a person on a limited income every dollar has to be accounted for so I do not even have Kindle Unlimited, making do with the freebies, loaners,the library and used books. I wish I could buy all the hardcover and paperbacks I wanted like I used to. But, life changes and I like someone not attempting to guilt me about my consuming the lower priced and free books; many of which are as good or better than the 5.99-14.99 priced books. I know because I read those too, just later and borrowed or second hand.
I do get quite frustrated when I read author blogs where they complain that they get $X for a KU read which is cheating them of the $2X they would get from a sale. Which, no, it’s not $X vs $2X, it’s $X vs nothing. I’m taking a chance reading your book because I’ve already made the KU investment. As a matter of fact, the only reason I’m reading your book and not something off my TBR pile, something from the library or a reread of a book I already love is because I see it as a risk-free endeavour. I have LOTS of choices. If I like your book I may glom onto your backlist, if I don’t, at least I don’t resent you for making me use my scarce book-buying dollars on your (to me) sub-par product.
Really high volume readers are not going to spend $5.99 on your book. My range is $0.99 to $2.99. To spend twice that means your book has to be 2 to 6 times as good as a cheaper book. And it’s probably not.
What Mzcue said x 1000! Since we are only leasing these ebooks and have no ability to dispose of them as we see fit, it only makes sense that they cost less – we have fewer rights, so therefore should pay less for them. I don’t understand how anyone doesn’t get that. Sure, I’m reading your book, but, I’m the only one reading it, when in the past I may have passed around a copy to 5 friends and then sold it to a used book seller.
I often wonder how newbie self-published authors can afford their publishing. Usually, it takes some time until you have gained a big readership. I have been reading romance books since 2001. Back then I was a poor student and bought 90% of my pbs used – so the author didn’t get anything from me. Nowadays I nearly exclusively read ebooks – BUT – I am a bargain shopper extraordinaire. I have a TBR pile of nearly 500 titles, I can wait until a book price drops – and I never ever buy books with cliffhangers and the follow-ups haven’t already been published. But let’s be honest, I can’t imagine an author making a decent living from selling books at such a low price. What really makes me angry are books from for example Christina Lauren or Kathy Evans published by traditional publishers. They are, IMO, too expensive for an ebook I can’t resell and don’t really own. I would really love to read those authors, but it goes against all my principles of supporting such a price. What’s even worse, I have to pay the European price for those titles which is roughly around 10 to 12 euros, instead of 8+$ This is the main reason, why nowadays I mostly read self published books. I also rarely buy from ebook publishers such as Samhain or Loose-Id. My reading patterns have completely changed over the years from reading predominantly historicals to contemporaries, from Harlequin Presents to often grittier and darker reads. The only constant that remains is the genre :-)
@Fiordiligii
I’m sure someone else can explain this better, but a self-pubbed author makes about 70% of the $2.99 if they sell their books through Amazon, so about $2.10 a book. I think trad pubbed books are about 10-15% royalties. So a book would have to sell at about $14 for the author to make the same royalty.
@Mzcue
Half the time I don’t want to own the books I read. Not every one is a keeper. When I read paperbacks, getting rid of them was practically an industry for me. And I also would never buy an ebook that I couldn’t take with me to other formats. But at least they don’t take up shelf space. And I can always buy another terabyte of storage.
@Hi Alanis, I am aware of this, however, an author also has to stem everything from formatting to promotion and editing on her own. And a newbie self-publishing author just doesn’t sell immedaitely thousands of copies. At least that’s what I assume.
I went on a bit of a click-spree over the past few weeks after months of refusing to buy anything. Prices range from free to $3.99 on the whole. The only one I’ve bothered to read was a collection of short stories that cost $7.99. Maybe the price guilted me into reading it or maybe it just says more about my attention span these days.
u r right on target, jane.
@Fiordiligii
I just figure that’s an investment cost, like with starting a small business. I have a friend who bakes elaborate party cakes and even though he does it at home, the investment in equipment like pans and tools and even things like a good selection of gel colours cost a fair bit. I’m not sure how many cakes he had to sell before he made that investment back.
@Alanis: “Half the time I don’t want to own the books I read. Not every one is a keeper. When I read paperbacks, getting rid of them was practically an industry for me.”
So essentially you’re saying that you’re okay with renting ebooks. To me it seems like a book rental should be cheaper than a purchase. However if getting rid of books is an onerous task for you, I guess you could write off the missing difference between print and ebook prices as the cost of trash removal.
@Mzcue
It really is trash removal! Between 2002 and 2010 I moved 5 times including a divorce and an intercontinental move. Trust me, with every move you re-evaluate exactly how much you need to haul around a 10 or 15 book series like the True Blood books or Anita Blake. I don’t need to own the 22nd Stephanie Plum or Kinsey Millhone book. We’re not exactly talking about first editions of fine literature.
I do keep my Lois McMaster Bujolds and my signed Margaret Atwood.
I really miss Scribd because that was the solution for my voracious reading but I can’t justify paying for a subscription when they’ve culled most of what I read/re-read. (Also, since I couldn’t read some books under certain publishers because I’m in Canada so that was ugh.)
And I really wish I can afford to drop between 7.99 to 13.99 on a book on a whim… but I have to eat? And at that price, I like to feel like I own the book so I tend to buy it somewhere else that charges me taxes on top of my digital purchase for a downloadable DRM’d copy. I’d love to buy books at the higher price range all the time but I just read far too quickly for that.
KU is helping me satisfy that voracious reading thing but it’s not like I can have unlimited books on KU since it’s limited to 10. I do feel guilty when I go “ugh why is it $8.00” when I see a book because I feel like I’m devaluing an author’s work but I have a hard time justifying that purchase especially when the book ends up being less than memorable.
I’m so glad someone finally stated the obvious. There’s an old management saying that you only manage the things you count, so the ragged paperbacks passed from friend to friend, used books sold in the huge swaths of Maine have no bookstores other than the UBS or the local flea market, never got counted.
Nor did the used English language books that made it to the book stalls in Bulgaria or Nigeria — but they certainly count the pirated copies sold in countries where there’s no legal way to buy many popular Western books.
@Eirene:
There’s a discontinuity between what this article talks about and what you talk about.
The price segment of 7.99 to 13.99 is the price range you will find the traditionally published romance ebooks in. It is not the usual price range of indie publishers, nor of the self-published authors. The KU complaint isn’t coming from traditionally published authors and publishers, because they were and are remunerated at their full selling prices. The traditional publishers don’t lose anything over KU.
Those who do, are the indies and self-published authors, who usually price between 2.99 and 6.99. For one thing, these authors and small publishers receive only the read-through rates of KU per page, and not the full selling price. For another, their losses directly impact their income. So of course they would complain, which can’t be likened to the complaints of traditional publishing houses. Nor is forcing indie authors and publishers to publish for nought doing anything about the ebook prices you talk about. These get paid, even if you don’t notice it.
You aren’t limited to 10 books a month. It is just a limit to 10 books at the same time.
As an author, I always feel like a traitor, lol, when the topic of ebook pricing arises. The market will bear what the consumer wants to spend, but it will also–as you mentioned–bear the first/last price consumers see.
I’ve also begun to feel that the financial rewards of self-publishing have been emphasized too much–it’s not about building trust and an unforgettable brand. Hence why the slide towards rock bottom prices plus the ability to see the profits in real time has resulted in a spate of authors anxious about ebook pricing.
I’ve observed time and time again that reader complaints about ebook prices rise sharply in comparison to reader satisfaction with the books. I used the example of the Sookie Stackhouse series vs the Mercy Thompson series on Facebook last week. Readers were vocal about the high ebook costs of the Sookie books as their enjoyment of the series declined. The Mercy books jumped to hardcover mid-series, and though there was some grumbling, readers were willing to pay $9-12 for an ebook because they trusted the cost was worth their leisure time.
Because when it comes to being a consumer, trust is often more important than cost.
@Evangeline Holland:
So true. I’m on a limited budget, but there are a few things I’m willing to spend more on, books and other products, because I trust/believe that they’re worth the price.
I don’t know… How much do you pay to go and see a bad action movie – once?! Mini golf for a couple of hours? A theme park?
In Australia, our books cost a fortune ($35 is not out of the ordinary), and listening to US readers complain about paying a couple of dollars for hours of entertainment makes me a little angry…
@Sonya Heaney: Everyone values their entertainment differently and availability, anchoring price, etc. all affect consumer expectation.
One thing I’ve noticed is that people pay more (and reap greater emotional rewards according to what I’ve read) for experiences. A theme park visit is an “experience” and therefore enjoyed, valued, remembered differently than a digital book.
@Jane:
You’re right. :) It just gets to me when my experience is so different.
Also, I sell my pictures online, and out of a postcard that costs $1.80, I make 16 cents! So I have a very acute, depressing idea of pricing, and am touchy when people complain about it.
Also – our books cost so much more here, and worse since we added another tax to overseas sales! Maybe if books were a reasonable price people here might read more!
I see both sides and have often used the ‘you never own an ebook’ argument myself. But, many authors have chosen to go the self-publishing route and they are authors and series I like, so those destined for my ‘keeper’ shelf get purchased in print. The rest, ones I would normally read then toss or pass to my neighbor for the food pantry, often are ebooks. BUT – I also find better discounts in print than ebook, so ebook is NOT always the best value when it comes from a traditional publishing house. That means ebooks only work for me in a limited number of genres.
Jane made me rethink some positions, but Kindle Unlimited still is not a ‘value’ for me at this time.