Thursday, August 13, 2009

Why Does This E-Book Cost So Much?

Rick Broida, The Cheapskate over at CNET News, is asking a question today that is probably on the minds of everyone who has ever purhased an e-book, be that book from Sony, Amazon or Barnes & Noble. Why in the heck does an e-book cost almost the same as a physical book that has so many additional costs associated with its production and handling?
Case in point: I just read a glowing review of Jonathan Tropper's "This is Where I Leave You." I'm sold; I want it. But something's amiss here: Amazon's hardcover price is $15.57, while the Kindle edition sells for $14.01.

Now, I understand books cost money. There's editing, publishing, and distribution. Paper, ink, trucks, gasoline. Storage, shipping, shelf space, sales staff. And the countless people involved in all those transactions.

E-books, on the other hand, consume zero trees. They weigh nothing, occupy no physical space, and don't get shipped in the traditional sense. Middlemen are few and far between. So you're left with, what, editing costs and the pittance you pay the authors?
Now, here is my favorite part of the article (even though I realize it will be a cold day in you know where before any publisher would dare try this idea):
Let's get some perspective. Publishers have vast libraries of old, forgotten books that are generating zero income, or close to it. Why can't I buy e-book editions for 99 cents? Last I checked, some revenue was better than no revenue.

Why aren't best sellers priced at, say, $2.99? That's an impulse-buy price, one that would encourage readers to pony up instead of waiting weeks or months to check out the one print copy the library bought.
Book publishers are making the same mistake that music labels have made in recent years. Both businesses are sitting on a goldmine of out-of-print material that generates absolutely zero income for them right now. Why not bring some of those gems out in e-book format as a test to see what might happen when they are made available for a dollar or two. I suspect that the publishers would be amazed at the amount of cash that would roll their way.

Sadly, though, I doubt that book publishers are any more visionary than music labels proved to be. Incompetent management has just about killed the major labels; I would really hate to see that happen to the book publishers.


  1. I've had a lot of the same thoughts about E-books myself. One can argue that paying for music downloads (i. e. downloading music legally) costs roughly the same as purchasing a CD, but (and this the opinion of a book geek as opposed to a true music geek) books are such wonderful physical objects while CDs are flimsy plastic discs in even flimsier containers. E-books are so completely different than physical books, but publishers seem to be treating these two things as if they were the same thing.

  2. Just wanted to stop in and say hello. I haven't been reading because of too much going on here in Florida. We are being transferred from Jax. Fl. to a suburb of Cincinnati in Oct. I have been making trips up there and a vacation trip to Ft. Worth Texas. I have kept up with your blog but just haven't posted. Hope you are well. Can't wait to hear about Glenn Beck's book. I think people have lost their common sense:)

  3. And e-books have no re-sale value which makes them disposable.

    Have you seen this?

    I thought of you immediately when I read the article. Be warned. It will make you mad.

  4. Have to put in my 2 cents. I have a Kindle. I purchase all my ebooks from Amazon. New books average $9.99 but sometimes, depending on the deal the agent made, a new book will be offered for more in the first 2-4 weeks; if you're patient, you'll get it for $9.99. But I've purchased many, many older books for as little as $1.99 and a few for zero.

    On Amazon, if you put your settings at "Low to High", you'll see what I mean.
    Hope this helps.


  5. They charge it because people will pay it. If I were in the marketing dept at, I would shadow price physical book prices, too, as long as we sold enough at that price point. Sales drop? Then consider a new pricing strategy.

    Price has nothing to do with production cost (except that it should exceed it, plus give some contribution to overhead) and has everything to do with what the market will bear.

  6. You're absolutely right, Factotum. But I hope that someone in management has asked for numbers to be run on whether they generate more revenue at $10 for each unit sold or for $5 for each unit sold. If the number of e-books sold goes up enough at the lower price, it no longer becomes a question of charging whatever the market will bear.

    I think they risk alienating a whole lot of potential customers, like me, who would buy lots of books at a $5 price but almost NONE at $10. For $10 I want something tangible.

  7. Sam, you are right. The first objective should be to optimize profit!

  8. Alissa, you have expressed many of my observations about e-books. True book lovers treasure books as physical objects, not just for what is contained inside their covers. Books can be beautiful objects, worthy of very valuable collections.

    The last time I felt that way about music was back in the day when a well produced LP could be a thing of beauty. Back then some LP covers were so beautiful that they deserved to be framed an placed on the wall (something I still do from time-to-time).

  9. Melanie, it is always nice to hear from you. I appreciate you carving out the time in your hectic schedule to read my blog and to let us know how things are going for you.

    As for Beck, I've put him aside for a few days. I have to get myself back into a combative mood so that I am ready for all the hatred that will be thrown my way over at Amazon when I post the review there. I know it's coming and I refuse to let that stop me from posting there - just need to be in the right mood.

  10. C.B., that's one of the things that bugs me, too. Not only do e-books not have any resale value, Amazon makes them readable in only their Kindle. I am willing to bet there is bootleg software out there to convert the Amazon format to formats readable in other devices BUT why should the consumer have to go through all that?

  11. That's good advice, Jane. Thanks for chipping in with your two cents. :-)

  12. Maximizing the bottom line is sure what I would be shooting for, Factotum. But common sense does not always prevail; sometimes pride and stubborness get in the way.