Help Peter David: How Much Will You Pay for an Ebook?

Peter David, Bob Greenberger, and others are banding together later this summer as the Crazy 8 Press collective to self-publish their creative works in both print-on-demand and digital formats. Which leads to the question: how much should the books sell for? David’s book The Camelot Papers, the first planned, he describes as “an original, satirical Arthurian novel with a political bent, 454 pages”. Currently, at his blog, he’s taking comments on what readers think the price for the ebook version should be.

Suggestions range from 99 cents (awfully low for that much content) to “same price as a physical paperback” (which seems to me to miss the point of ebooks) to “under $10″ to anywhere from $2.99 to $5.99. It’s neat to see an author taking input (although David has reserved the right to decide whatever he wants, as he should), even if I suspect his fans are going to provide higher answers than he might get elsewhere. Which is one reason I’m opening discussion here — what factors do you consider in deciding what you’ll pay for an ebook you’re interested in?


26 Responses to “Help Peter David: How Much Will You Pay for an Ebook?”

  1. ADD Says:

    I’d say five bucks is about right for the content David is proposing — but a better model would be to make it free and ask for donations commensurate with how much buyers feel it’s worth. They’ll make more money that way, almost certainly.

  2. Nick Says:

    I actually think that near full price of a printed copy is reasonable. No, I’m not an author. But I think the cost of agents, editors and, of course, supporting an author are what the price tag of a book is really about–not the cost of the paper. Deduct the cost of that paper, then, and charge us whatever it costs to keep talented professionals in the publishing business. Now, if this is just David publishing himself, as it seems, then I do think I’d pay less for that than a book that I knew was done by a publishing house with the full range of support staff.

  3. Jim Kosmicki Says:

    For an established author like Peter David, 2.99 to 4.99 is appropriate, especially for an almost 500 page e-book. 99 cents is a teaser to get the reputation. J.A. Konrath is probably a good model – whatever he’s charging for his new Jack Daniels book that’s an Amazon original is analogous to what David should be able to charge and expect people to pay.

    If you want me to pay full price, I better have an object in my hands (not just a digital file). An actual digital file is even better than a “cloud” file that I never really have possession of. This is why I still don’t take the major publishers’ digital comics seriously. Until I control the file, it’s just rental, and rental should always be cheaper than ownership.

  4. Danny Says:

    $0.99 is a very low price for that much content, like you said, but there’s a big value to it in the sense of making the book an impulse purchase. There have apparently been studies showing that with a lot of online content, they make more money charging $0.99 a copy than they would if they were charging something closer to what the product is worth.

    I’d probably go with either $1.99 or $2.99. Not because that’s all I’d be willing to pay, but because they’re price points that still encourages impulse buys without making it seem like it’s junk that’s not worth a higher price point.

  5. Ralf Haring Says:

    The most important concern – far more important than price – is do I own it? Can I read it on any device I choose? Is it encoded in a proprietary format that makes the purchased content useless if the publisher goes out of business tomorrow?

    If I am being sold a license to read/view/listen to the item instead of the item itself, then I expect the price to be drastically cheaper than “normal”.

  6. Joshua Says:

    @Nick – The full price of a printed copy includes around 50%-70% for the retailers and distributors… why the heck should anyone be paying that for an ebook? Even if you think you should continue to pay for talented professionals to do all the things like designing the jacket, producing copy for the publisher’s catalog, managing royalty statements, and the like, it seems to me you ought to expect a book that retails for $8 to go for no more than $4 in ebook form. And that represents a gift to the publishers who no longer have to worry about printing costs, returns or inventory. For authors selling without a publishing house, it’s an even bigger gift.

  7. Jaylat Says:

    Sorry, totally disagree with asking for donations – it’s too much like begging. I like Hutchin’s take on this: http://jchutchins.net/site/2011/04/19/why-you-wont-find-my-ebooks-in-the-bargain-basement/

    My vote is $6.99. In return you should get a digital file, not a “cloud” thingie.

  8. William George Says:

    Take whatever the final price will be after printing, shipping, getting listed in Diamond, and storage are taken into account.

    Subtract those costs from the cover price and there’s your digital price.

  9. Joshua Says:

    @William George – maybe I’m misunderstanding, but why would you be willing to pay for the amount that goes to the retailer when there’s no physical storefront involved?

  10. Jaylat Says:

    @Joshua: The value of a commodity is what a customer is willing to pay for it, not what it costs to produce. The fact that there is or isn’t a retailer / editorial staff / production facility involved doesn’t matter unless it directly affects the buyers’ experience.

    I’d pay a lot for a digital download of Steve Ditko’s oeuvre, and nothing for an artist I don’t like.

  11. Joshua Says:

    @Jaylat there isn’t a single number that is what customers are willing to pay: there’s a demand curve and a supply curve, and a quantity demanded at a given price. Despite what Hutchins seems to believe, even for books the demand curve slopes downward (fewer books are demanded as the price per book rises). If you shift the supply curve so that more of a commodity can be supplied at any given price (as is the case with digital content), then competition among the suppliers will force the price to drop. The fact that there isn’t a retailer etc involved matters because it means that competitors can make just as much money as they were making or more, while still offering books to consumers at a lower price. The producers gaining all the surplus to be had by the change in production isn’t a stable equilibrium.

  12. Jaylat Says:

    @Josh: I don’t think we’re in disagreement here. Assuming we both liked Hutchins book, I might be willing to pay more for it because the whole issue of what his overhead costs are doesn’t matter to me. They obviously matter a lot to you, so I guess you’d want to pay less.

    The supply / demand curve – at least for popular fiction – isn’t really changed by the availability of digital copies. There was essentially unlimited supply before, as if you want a paperback you can get it from multiple sources, anytime.

    To me the whole concept of “I’m not going to pay $5.00 for this book because Diamond wasn’t involved in distributing it” makes little sense. You could begrudge the fact that the author gets a higher proportion of the royalties, but again I’d have to ask why. Do you regularly check the details of an author’s book deal with the publisher before you buy a book?

  13. Joshua Says:

    @Jaylat I think you’re missing what the supply curve is… it’s the amount that suppliers are willing to supply at any given price, which in turn is based on their costs. If you change their costs, you shift the supply curve. If the price of paper doubles, the curve shifts and fewer publishers are willing to sell books at the same price as before. If you cut out printers, retailers and distributors, the curve shifts, and more publishers are willing to sell books at the same price as before. This is *exactly* what’s happening with Peter David and the new publishing company Crazy 8 that he and his buddies are starting. But because there are more publishers competing for the consumers’ dollars, the price is going to drop. It will drop whether or not Peter David & Crazy 8 start by undercutting traditional publishers, but if they don’t they’ll almost certainly be leaving money on the table.
    It’s really not about whether I begrudge them any money or not, it’s just a simple truth about markets. The market will eventually belong to the producers who are willing to undercut the others while still making a profit. David & Co can make approximately triple what they’re currently making per book while cutting the price to half what it currently is…they could try to hold out for keeping the price the same to make about eight times what they’re currently making per book, but somebody else will come along who’s willing to settle for merely triple and they’ll lose their sales. And in the mean-time there’s every chance they would make more money overall by selling the books at a smaller profit per, because the profit maximizing price is the price where marginal revenue equals marginal costs. (If you want to maximize your profits, you want to keep dropping the price to sell more units until dropping it to sell one more unit will actually lose you money. Some caveats about imperfect markets and unusually shaped demand curves apply, but there’s no reason to believe the ebook market is bizarre in this regard, and there’s good evidence that it’s perfectly normal.)
    I’m not saying that I won’t pay $6.99 because the distributor and retailers don’t get a cut, I’m saying that I won’t pay $6.99 because I have more choices than I have time to read that are going for anywhere from $.99 to $2.99. I’m saying that if they want to make the most money possible out of their books, they won’t try to preserve the price structure that was dictated by the costs of producing and retailing physical books, but take advantage in the productivity increases to maximize their profits by pricing to increase sales.

  14. Jim Kosmicki Says:

    As has been stated, here and at David’s blog, is that the current price structure for a print book has to take into account the profit pieces for printers, transportation, warehousing, and the retailer along with the publisher and the author.

    Let’s say for that $7 paperback, one dollar goes to the author and one dollar goes to the publisher and one dollar goes to the retailer. By taking a digital book and pricing it at the exact same price, somebody is absorbing those additional $4 in costs as new profit. If that’s the author, okay, but according to too many sources, including Kristine Kathryn Rusch in her blog, the traditional publisher (and agent) are changing contracts to absorb those profits for themselves, while giving very little of the additional funds to the authors. Providing the same services (publicity, editing, etc) while drastically increasing the profits from those services looks good to accountants and investors wanting those quarterly dividends, but it doesn’t work in the long run. As per most corporate thinking today, it’s short-term wise for long-term folly.

    I understand that Crazy 8 is not a traditional publisher, and that gives them the ability to re-think the fixed costs and price accordingly. Setting the price according to the old paradigm is easy, but not necessarily smart. Double the amount going to the author from the traditional print contract, include the portion that goes to the storefront (amazon, B&N, smashwords, etc), add the overhead necessary to have proper copyediting, story editing, art, etc., and set the price accordingly. Like it or not, the market so far has shown that somewhere from 2.99 to 3.99 is a price that’s getting established authors like J.A. Konrath much, much more money than their traditional publishing contracts ever did (read his blog if you doubt – he’s very upfront about the actual dollars earned from both styles of publishing).

  15. Jaylat Says:

    @Josh: You’re missing the point. It doesn’t matter if there are a bajillion publishers all giving their product away for free (actually that’s exactly what’s happening with webcomics now). A consumer’s willingness to pay for a given product is based on how good that product is. Books and comics are not all the same. The fact that I can read a fanboy’s weekly web comic for free doesn’t mean I’ll pay any less for Ditko’s work.

    From a practical point of view, Peter David can estimate how big his customer base is from his website stats, and determine his pricing accordingly. He might very well make more profit by charging a higher price and getting fewer sales, especially if he has a small but loyal readership.

    At any rate, his pricing decisions have nothing to do with the expense items you listed in your comment at 6. above.

  16. Joshua Says:

    @Jaylat, A consumer’s willingness to pay for a given product is based on a lot of other factors besides how good the product is, including such things as the price of close substitutes and available funds. Of course it makes a difference if there are a bajillion producers offering similar products for less, despite the fact that none of them are exactly the same. Tickets to a play or concert can run upwards of $100 per person; a DVD of the same play which can be watched by the whole family over and over again might go for $30. Why? Because plays cost a lot to produce each and every performance, and there aren’t very many of them to choose from at any one time; DVDs are cheap as hell to produce each new disc, and there are tens of thousands of shows people can watch instead. You can argue until you’re blue in the face that a family of four “ought” to be willing to pay $400 or more for that DVD because the factors that go into making performances of the play expensive and pressings of the DVD cheap are irrelevant, and the only thing that matters is how good it is, but in the real world prices get driven down towards the marginal cost of production…at least if the producers are trying to maximize profits.

  17. Jaylat Says:

    @Joshua: Well put, and glad to see that you agree with me. Substitutes do matter, and the cost of production (Diamond, the brick and mortar store, etc.) really shouldn’t affect the buyers willingness to pay at all.

  18. Johanna Says:

    I have to disagree with a bit of this. Production costs do affect willingness to pay, because no one wants to feel like a chump. To elaborate: the natural assumption is that a digital book should cost the buyer less than a print book. When publishers started trying to justify higher digital prices, they opened the door to the debate. In trying to “educate” customers around to their way of thinking, they made them aware of costs — which lead the buyers to start thinking about what they are (authors) and aren’t (legacy editorial staffs with VP titles) willing to pay for.

    If you (as a publisher of whatever kind) are making 50% more money (by cutting out distributors) while saving costs (by not printing), I expect (as a buyer) to get some of that benefit in lower prices.

  19. Jaylat Says:

    Johanna, I can see your point. An acquaintance of mine made a $4 million advance for his latest book last year, and used it to buy a townhouse in London. I’m reluctant to buy his book, even though I like his writing, because I’m not eager to add to his fortune. But I think that’s fairly small-minded of me.

    And I can see wanting a discount on digital books. But Peter David (I don’t think) is anywhere near that category, and if his charging $5 or whatever helps him pay his mortgage, so what? The fact that the extra $ go to him and not some VP editor is a plus in my opinion.

  20. Johanna Says:

    Wow, I’m impressed by your friend. :) And you’re right, the flip side of educating the buyer is in a case like this, where the author can make direct appeals to a known fanbase to counteract the downward pricing pressure.

  21. Thad Says:

    I’d gladly pay $10 for 500 pages of original content from a writer and artist I liked, given that $15 for 132 pages seems to be the current standard price for printed trades.

    But for that price I want a DRM-free file in a standard format — ideally a CBR or CBZ, with PDF running as a third choice.

  22. Peter David Says:

    I appreciate the attention you’ve given our little endeavor. I thought I’d mention that the first chapter of “The Camelot Papers” is now up on the crazy8press.com web site. Check it out. The book is planned to go live for both eBook and POD editions on July 8.

    PAD

  23. Peter David Says:

    Just for the record, the price I decided on, to start, is $4.99. It’s available at Amazon and B&N now.

  24. Johanna Says:

    Thanks so much for coming back and letting us know! That sounds like a great idea to me — I hope it’s very successful for you.

  25. Peter David Says:

    Thanks; so do I. It’s available on eBook through Amazon and B&N, and the print on demand is, for the moment, available through Createspace.com. By this time next week it should be POD on Amazon as well.

  26. James Schee Says:

    That sounds interesting, having just gotten an IPad 2 for my birthday last week I have yet to buy an eBook because prices are just SO high, and there are thousands of free classics I’ve never read.

    Yet $4.99 sounds about right, heck that’s what I used to pay for paperbacks in my teens, and now you can’t even get those for less than $8 or $9.

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