Thursday, 21 April 2011

E-book Pricing

There has been much talk about e-book pricing across the Internet, from authors like JA Konrath downright demanding that self-publishing writers stick to the 99c model to readers giving e-books poor reviews based on their price rather than the content. J.C Hutchins even goes so far as to write off the 99c bracket as being the "bargain basement". Now, given I've got two e-books of my own available, not to mention several in the pipeline, I thought I'd chip in my 99c on the subject.

My first e-book was The First Tale, which collected all thirty episodes of my steampunk serial, as well as containing a link to a downloadable PDF of bonus graphic material. As the word count was below 15,000, I priced it at 99c on both Smashwords and Amazon. I'd given the work away for free on a weekly basis on my Vertigo City blog, and although I'd polished it up and added the graphic extras, I felt charging any more would be unfair. I admit, given the amount of time and effort that went into formatting, not to mention producing the graphic extras, I probably should have charged more.

When I released Checkmate & Other Stories, it was initially free on Smashwords. The fifteen stories had all been published online, although I admit to polishing them up before releasing the collection. As I'd already received payment for some of them, it didn't feel right to charge again. However, when I added it to Amazon, I couldn't figure out how to add a free e-book, so I opted to charge just 99c for it (a price I have since instituted on Smashwords too).

These are standalone cases, and I freely admit I don't intend to charge 99c for everything I do. I put a lot of work into writing and editing my books, and I do the formatting and cover design myself - before you throw up your hands in horror, I've got experience of desktop publishing from my day job, and I've also done courses in graphic design. This all takes time, and it doesn't seem unreasonable to expect some form of monetary compensation. After all, I am charged out to clients at an hourly rate in my day job, so why should I work for free when I'm writing? However, there is clearly a difference between print publishing and electronic publishing, and given the means of distribution is cheaper, I can't charge the same for an e-book as I would for a paperback.

A while ago, I thought that charging $2.99 for an e-book was extortion. Then I had a discussion with the scarily talented Carrie Clevenger and when I converted the cost into UK money, I discovered that a $2.99 e-book costs just £1.84 in GBP. That's less than the cost of a small coffee in any of the major coffee chains. If you're a reader, that poses incredible value. If you're a writer, Amazon let you take 70% of that in royalties at $2.99 or more. So you earn $2.09 on a transaction (£1.29 in the UK), and a reader gets a book at a remarkably low price. Realistically, I would be prepared to pay anything up to $11 (around £6.99) for a decent e-book novel.

JA Konrath might harp on that writers should charge 99c in order to sell more books but at that price, I'm only earning 35c per sale, which is a pathetic 21p. Pardon me for being old-fashioned, but that's ridiculous. I need to sell six copies of a 99c e-book to make the same as I would selling it at $2.99. Sure, there is a rationale that the lower price would encourage more people to buy, but Heavens to Betsy, isn't $2.99 a low enough price? It's all very well if you're Konrath, selling hundreds of books a day - but what if you're just getting started?

When I started with the 99c model, I believed people would be more likely to take a punt on a book if it cost less than a dollar, and the minimal price would also encourage them to think that at least it had some value, unlike a free book. Funny thing is, I've actually had a couple of people donate money through my blog because they thought the price was too low - and one reviewer even said it was worth much more than I was charging!

I think the problem is that people don't attach much value to something if it's too cheap, and they become unwilling to pay if it's too expensive. To me, the $2.99-$4.99 bracket is just right - the e-books are still cheaper than paperbacks, and they're also cheaper than everyday luxury consumables. As a result, I now ALWAYS browse a sample before I buy, ensuring that I'm not just clicking 'buy' with merry abandon on 99c books I'll never get around to reading. Now, there are some 99c books that are so amazing it almost feels like you're ripping them off by paying so little (Danny Hogan's Jailbait Justice being a prime example) but I can't escape the nagging feeling that authors who charge $2.99 or more put in more effort.

I've also begun to see a lot of tweets and blog posts from people saying they buy 99c books but then never get around to reading them (which is fine if you just want the money, but not if you want people to enjoy the story), while others say they won't buy them as they assume quality will be low. So, if there is a section of the book-buying public that would be willing to pay more than 99c, why are we not attaching a realistic value to our work? After all, there is a principle in business that in order to stand out in a crowded marketplace, you should do whatever the competition is not doing in order to differentiate yourself. So if everyone is selling services in a bundle, you sell yours individually, or vice versa. The same applies to e-books - if the world and his wife are selling at 99c, you sell at $2.99. Sure, you might lose sales from the "random clickers" but you might also appeal to others in the same way that they'd rather spend more for a well-made pair of shoes that will last for several years, rather than buying cheap and having them fall apart after two miles.

Now, I'll clarify that this is just what I think. You might agree, you might think I'm crazy. But how do you feel about e-book pricing?

16 comments:

Tony Noland said...

As you know, I'm going to be making this decision shortly myself. I'd initially planned on pricing it at $.99, but have decided to do $2.99 instead, for exactly the reasons you mentioned. The metric of "low price = high sales" tends to run into the intangible perception of "low price = lousy author".

Of course, a price point of $2.99 still leaves open the possibility of temporary price cuts for special events, bundles of various works, etc.

Pricing and promotion are a whole separate learning curve.

Genevieve Ching said...

I agree. My strategy is to stick with $2.99 with special promotion via couponing at 99 cents under certain circumstances. For example, I have a Book Club policy, if they are buying 6 copies or more, I will give them a coupon for 99 cents. There is a balance between wanting to get your name out there and covering your costs. That said, the four P's of marketing are Product, Price, Placement, Promotion. Legacy publishers have the upper hand on Placement and Promotion and probably always will. That means, if you are an indie you better write a stellar book and price it under your legacy competition.

FARfetched said...

99 cents is definitely in my "impulse purchase" zone, especially if I have the money laying around in a gift card or other prepaid device. Given that there's a lot of very good work at that price, not to mention plenty of free books on special offer or otherwise, it gets very easy to go "hmmm" if it's priced higher. These days, I really have to want the book if it's going for $5 or higher. I can find a paper copy at a used bookstore, if I happen to be going by one. (It's about 30 miles to the nearest bookstore from FAR Manor, which is why I prefer ebooks.)

A website called ireaderreview.com has a lot of articles about ebook pricing and links to current free offers on Amazon. It's worth a click.

Icy Sedgwick said...

Tony - If I was launching both of mine now, I'd do it at $2.99. I'll keep the 99c price for short stories I might release as e-books. And you're right, you can always go down from $2.99, but you can't go down from 99c without giving it away.

GP - See, it's nice to have feedback from someone who's been there! That's a good strategy where book clubs are concerned, too. At least you know your book will be getting read that way!

Icy Sedgwick said...

FAR - That's a good point about bookstore pricing, but not all e-books exist as paper copies, and even if they do, most indies won't be able to get them into bookstores. I know what you mean about the impulse purchase appeal of 99c and Lord knows I do it myself, but now I'll download the sample first - if the sample grabs me, I'm happy to hand over my £1.84 for a $2.99 e-book.

DW96 said...

I hae 5 titles on Amazon. I originally priced my first at 99c, but it didn't move. I jacked the price to $1.99 (it's only 42,000 words.) The other four I've priced at $2.99.

I have people to pay out of the royalties and quite honestly, even at $2.99 I won't be making a fortune until I hit the 1,000 sales a day mark.

I go with you all the way on this. 99c is too cheap.

FARfetched said...

My strategy for future (this year I hope) publications, such as it is, is to roll them out at $2.99 but offer a launch price of $0.99 for the first month. I think there's a mindset that might not bite at a "retail" price of 99c, but will go "66% off — BARGAINZ!" and grab that "$2.99" book at 99c.

Ali said...

Icy, I'm very much in agreement here. I've certainly bought 99c ebooks on impulse (cancelled plane, stuck at airport for hours...) but I've often been a little disappointed about the quality.

For me, the $2.99 - $4.99 price point seems about right, with novellas (40/50k words) at the low end and longish novels (120k+ words) at the upper end.

And I think FARfetched makes an important point: it's nice to have the ability to hold an occasional sale, and that's pretty hard on 99c!

Icy Sedgwick said...

DW96 - Well this is the thing - the people who complain that e-books are too expensive seem to miss the point that work still goes into their creation - work that needs to be paid for!

FAR - That makes sense! We once had a car boot sale (or yard sale, if you prefer) and my brother deliberately priced the stuff quite high. Throughout the day he'd cross the price off and write in a lower one. Most of the stuff sold for the prices we'd wanted in the first place - but people paid because they thought they were getting a good deal!

Ali - It's funny how much the tide seems to be shifting in favour of higher prices. While I might initially be put off by a higher price, I'll still download the sample, and if that grabs me then I'll buy. The e-books are still cheaper than paperbacks and they take up less room in my flat!

Michael A Tate said...

The only time I've ever purchased a 99c book was if the free version of a classic was too poorly formatted to read.

Other than that, I just can't let myself take a 99c novel seriously enough to read, so it's not even worth the impulse buy. Now if it was recommended to me by a trusted friend, the price tag would make me happy, but other than that, I'd think 2.99 would by my minimum for a novel.

I would even that, for me at least, if you had me purchase a book for say 2.99, read it, then rate it, I might give it say 3 stars. But then if I got back in time and read it again, but this time pay 9.99 for it, I might rate it 4 stars.

Is the quality of the book the same? Of course, but the perceived excellence because of the price does enhance my enjoyment...so therefore I really can't bring myself to purchase those bargain basement e-books.

Maria A. Kelly said...

Thanks, Icy, for a well-reasoned article on what is a very timely topic for independent authors. I, too, will be making this sort of decision very soon...do I do a single short story giveaway first, then market my first ebook of short stories (which I plan on containing a few new stories) at 2.99 or the lower 99c price since I'm still trying to make a name for myself?

Lots of food for thought here.

Icy Sedgwick said...

Michael - I do think it's a shame that you just flat-out refuse to buy a book based on its price, and even worse that you give your ratings dependent on the price. Ratings should be a reflection of quality of content, and while I understand you believe the quality to be dependent on price, it's such a minefield when it comes to knowing how to price a book that it seems unfair to penalise an author for choosing a lower price.

Maria - I would recommend that you price the first e-book at $2.99. It's a very reasonable price and as you've had stories in other publications, you're not an entirely "new" writer. You could always give away a long short story for 99c to "test the water" so to speak.

Stephen said...

Hi there Icy --

If something is on digital release I think it should definitely be less than a physical, hold it in you hand, kind of item (for instance I think mp3s are horribly over priced when you consider how much a CD costs, especially considering distribution must be cheaper, etc.).

Your price of $2.99 is probably a good one (in that it's less than buying a paperback) but in a way it still feels *low* for a quality reading experience. I feel somewhat morally outraged on your behalf.

To me, if I spend a good few hours thoroughly entertained, reading an excellent book, then surely that's worth as much per hour as a video game or film in the cinema? Which are quite expensive.

However, I know some (perhaps a lot) of folks don't think that way. They think everything should be free. And it's unlikely you'll be able to educate them.

When it comes to a minimum price, one of the things I discovered working in computer games, is that lots of folks in the West won't respect a game if they get it for free. There's no upfront investment to keep them coming back for their money's worth. Similarly, I remember, as a kid, pirating music CDs, and then finding I never listened to them. I love music, and now I always buy it, because when it was free I never give it the time (and, of course, I now realise the artists producing it deserve to be paid).

So going too low, is bad.

If selling books goes the same way as, say, apps on the Apple Apps store, then I think the world will not be such a healthy place. Rubbish needs low prices to compete, and, ultimately, swamping quality products with 'noise' is to nobody's benefit.

Perhaps there's a way to instigate an honesty system, with a minimum upfront cost, while encouraging folks to come back and pay a bit more for what they think the book is *really* worth. At that point, you'll probably find an (admittedly) small number of people will pay more. But if your minimum is $2.99, it will still be extra money.

St.

Icy Sedgwick said...

Stephen - The problem with the argument of pricing something high due to the perceived value according to amount of time/emotional energy invested is that some readers will actually give an e-book a poor review based on its price, regardless of how much they enjoyed it. Personally, I agree with you, especially since a book is theoretically of greater value than a cinema ticket, but sadly the pricing structure isn't up to me!

I put the donate button on my blog so that if someone read one of my e-books and felt it was worth more than 99c/70p they could donate extra, but so far only one person has taken advantage of that...though that may be my own fault for not advertising its existence.

daniellelapaglia said...

Excellent post, Icy. I've been thinking of putting some of my flash and a few unposted stories together in ebook format and the question of price is weighing on me right now. Like you, most of the content is already on my blog for free, but people with ereaders, they'd be in a more reader-friendly format than clicking through endless screens on a blog.

John Wiswell said...

Carrie spurred us both in this direction. I think your "extra donations" model would be sound if you had a larger audience. There's a lovely theory that an artist only needs 1,000 hardcore fans to make a reliable living. Those thousand would gladly leave tips. Even if most of a million people won't download your books for free, leaving the store page behind, the core will support and attract more readers. They also don't mind so much about $2.99 as opposed to 0.99. The trouble becomes reaching enough people who passionately care about what we do.

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