Friday, June 03, 2011

The debate rages on

The debate on pricing in indie publishing, that is.

If you have a Kindle or Nook, or for that matter a Kobo, Sony, or iPad, and you read e-books at all, you’ve probably noticed the wide disparity in pricing. The price of a newly released e-book of a hardcover bestseller can be as high as $12.99 or more. On the other hand, there are plenty of $.99 e-books to be had, as well.

Mostly, those 99-centers are from indie, i.e. self-published, authors. Publishers have too much overhead to price their books that low. Amazon pays 70% royalty on e-books listed at $2.99 or more, but only 35% on those below that magic divide. Most of the time, you won’t find a traditionally published e-book much lower than $4.99. That seems a fair price to me, for a book that’s been professionally written and edited and that has professional cover art. There’s a certain sense of legitimacy in the traditionally published books: whereas I may not like the content, at least I’ll know that the product itself is pretty good.

As you know, I have a few traditionally published books out there. They’re released in mass market paperback for $7.99, which is a pretty standard price for a mass market paperback of 90,000 words. The electronic versions of those same books are also priced at $7.99. Same as the paperback. This also seems like an industry standard, and in polls, that $6.99-$7.99 price point is comfortable to a lot of people. Anything above that, and people start to complain that prices are too high.

So that’s the traditional e-books. In indie publishing, there’s no real standard. We’re all just trying to figure out what works. And we all seem to have different ideas. There are people like John Locke, who’s making a ton of money selling all his books at $.99 each. He has lots of titles that people can choose from, and that probably has something to do with it. When you have a lot of inventory, you’ll make more money than if you have just a little, regardless of price.

Some people, like golden girl Amanda Hocking and e-publishing guru Joe Konrath, as well as our own Stiffs buddies C.J. Lyons and L.J. Sellers, take a more staggered approach. They offer some of their books as $.99 titles to entice people to try them out, and then the rest of the books are priced at $2.99 or higher. Those $.99 titles are sometimes called ‘loss leaders,’ because you know darned well you’re going to lose money on them, but you hope you make up for it in volume and in sales of your other books. Some authors switch their $.99 titles out regularly, while others keep the first book in a series, for example, at a steady $.99 to get readers to try the series.

On the other hand, you have Michael Sullivan, another bestselling indie author of fantasy novels. His books are priced at $4.99-$6.99 – a deliberate choice on his (or his publicist’s) part, to align him with traditionally published authors and get away from the indie/self-published stigma. It seems to have worked: Michael sells more than 10,000 e-books per month, and when he tried to drop his prices, sales dropped, too.

Some of it comes down to perception of value. Some readers think they’ll get a more professionally written and presented product if the book is traditionally published – or if it appears to be. Some readers don’t care about professional; all they care about is price. Some authors have it as their main goal to sell lots of copies while some would rather sell less copies for more money instead of more copies for less. Some feel that the book they spent six months or a year on, is worth more than $.99. Others – and I quote Konrath here, as well as Bob Mayer – say that value has nothing to do with the cover price; value is about how much money the book makes for the author.

And then there’s the question of the devaluation of the book as a whole. Perpetuating the idea that books should only cost $.99. Setting the bar so low that there’s nowhere to go – except free – if you want to run a promotion, and so low that the public’s perception of value is skewed forever.

I could go on, but I won’t. It’s a tough issue, with many facets and good points on either side of the argument. I have to confess to being on the perception of value side myself: I’ve priced my Cutthroat Business mysteries at $3.99. Half the price of my Berkley e-books. It seemed fair. I make more per copy than I do the traditionally published books, and they’re still priced below that magical $5 mental mark, where everything supposedly is an impulse buy. They’re selling, but not like hotcakes. Then again, this stuff takes time.

I’d love to hear what you think. Is $.99 the sweet spot for lots of sales? Or is $2.99? Is anything below $5 really an impulse buy? (It isn’t for me.) Is Michael Sullivan selling so well because his books look like a bargain compared to the traditionally published fantasy books he’s aligned himself with? Or doesn’t price have a lot to do with it when it comes right down to the nitty-gritty, in your opinion?

Inquiring minds want to know.

PS – Hot Property, the sequel to A Cutthroat Business, is available for Kindle and Nook. If you’d like a free digital review copy, email me and I’ll tell you how to get one. If you do get a review copy, I’d appreciate it if you’d actually get around to writing a review at some point. Unless you absolutely hate the book, of course. Then you can feel free to keep your opinion to yourself.

Till next time!


Joyce said...

Interesting post, Bente. When I first got my Kindle, I downloaded more than a few of the books on Kindle's top 100 free books. With the exception of the classics, I only made it through a page or two of almost all of them. There was only one that was professionally written. It may be just my perception, but I imagine most of the .99 books would be of the same quality. I'm one of the buyers who believes you get what you pay for.

On the other hand, I also won't pay more than $10 for an e-book. If a book is priced similarly to a paperback, there's a much greater chance I'll click that buy button.

Karen in Ohio said...

Bente, thanks for the reminder about your new book. I will download it, tout de suite.

Barnes & Noble has "Freebie Fridays" every week, with a free download choice. I've found some interesting new authors this way, and have bought more of their books. Jill Mansell is a good example; I so enjoyed her first Millie book (freebie) that I bought the second in the series. And I also downloaded one or two of JA Konrath's freebie/99 cent books, just to see if I wanted to purchase others in his Jack Daniels series. And I have.

I refuse to pay more than $10 for an e-book, as well, but I prefer to pay less than $5. After all, it's nothing more than bits and bytes, and there's no way it costs as much as a book with pages and covers, packaging, shipping, shelving, storing, and returning, not to mention the need for human beings to sell and/or ring up purchases, then use a bag to send it off with a customer. Sorry, publishers, I don't buy it, and I refuse to "buy" it, if you know what I mean.

Joyce, lately I've been seeing traditionally published books that are so abysmally written and/or barely edited that they make me want to hurl them across the room. It's not just the e-books.

Jenna said...

Joyce, I agree, some of the self-published stuff shouldn't have been published at all.

On the other hand, Karen, I agree with you too: there are some traditionally published books out there about which the same can be said.

Re perception of value: do you expect the same quality (of writing and editing) from a $.99 e-book as you do from one that costs more?

Joyce said...

Re .99 books--After sampling a few, the only way I'll buy a 99 cent book in the future is if I know the author and/or have read something of theirs before.

Patg said...

Self-published ebooks vs small press or ePress books are two different things. Presses set the price and seem reluctant to do sales. However, the indies are changing the whole landscape and the fallout isn't over yet.
Indie books shouldn't be anymore that $3.99 with $2.99 being the norm. And they should always have a 99cent sale at some point.
Good or bad reading, you can't tell until you try and the sale 'rack' is the best place to try cheaply.

Jenna said...

One good thing about e-books (as opposed to hardcopy) is that there's usually a pretty sizable sample you can download and read to see if the book is something you'll like. My books have 20% available to sample for free; 4 chapters, more or less. Usually that'd be enough to decide whether the book is right for you or not. And yes, you could sit in the bookstore and read four chapters, but how many of us do? With e-book samples, you actually get to take your time, read it in the privacy of your own bathtub (or wherever) and really get a good idea whether the book is something you'll like or not. There's still a chance that everything will fall apart in the middle, of course, or that the ending won't be as good as you'd hoped, but at least you can get a good idea of the quality of the writing/editing that way.

Dru said...

Great post Bente.

E-book pricing is so confusing right now.

I find it is easier for me to buy an e-book of a new-to-me author if it's less than $3.00.

I've bought several e-books for 99 cents and the good and the bad were evenly matched.

I'm willing to pay up to $10 for an e-book by an author that I've read before. Only two times have I paid over $13 for an e-book and that was because I had the rest of the series on my e-reader.

I think this debate will go on until a satisfactory model is created.

Jenna said...

Thanks for weighing in, Dru! Yeah, I'm sure the debate will continue, but I'm not sure whether it'll ever be resolved, since I'm not sure whether there exists a 'right' and 'wrong' way to do it. Just like there's not necessarily a right or wrong when it comes to self- vs. traditional publishing. I think maybe there's just 'right for me,' or 'right for you,' and not a right for everyone. I guess we'll just have to see.

Patg said...

You said it, Jenna. Right for every author as they see fit. The real fallout is upon the big publishing industry (in our case) in NYC. They are at a crossroads and they will see the most change. And why shouldn't they? Every industry in the world has or will face changes, some major, and you either move with it or fall by the wayside. It has always been that way.
Things will shake out.

C.L. Phillips said...

Sorry to be weighing in on this so late...some thoughts from a classic marketing geek

1) Have a price funnel. Have some products (short stories) at .99, and have others at 2.99 and 4.99. See what happens.

2) Have enough room in your price to offer occasional promotions. If that means you have to raise your list price to do that, watch what other authors do - I think you can go up to 6.99 - that might seem high, but you are still well under the 9.99 psychological limit

3) Run bundles - offer collections of ebooks for bundled prices to your list of "favored customers".

If you are selling ebooks, you need marketing campaigns, selling seasons and something you can do over and over. That's probably why you need to design books or shorts to fill in more product. I think shorts are a great place for back story. Think of all the great character studies you could add as bonus content when people want to go "behind the scenes".

Oh, now I'm officially blabbering. Putting soap box away. Going back to shooting the word "was" on every page of this draft. :)