Yesterday, Joe Konrath provided a detailed analysis in the comments to a recent post discussing whether agency pricing was in the best interests of authors or not.
Joe was a long way down in the comments and Passive Guy didn’t want you to miss these:
1. Agency pricing has hurt legacy authors. If I were in control of the 8 books of mine that Hyperion, Hachette, and Berkley have the rights to, I’d be selling a minimum of 5x as many. I come to this number by comparing the sales of their overpriced editions to my $2.99 self-pubbed novels. I stopped counting the money I was losing when I reached $200,000, because it was giving me an ulcer.
I’ve shown, time and again, that a lower price more than makes up profit in volume. I’ve begged my publishers to drop prices. They haven’t. And as a result, we both earn much less than we could. But there’s a reason for this. It is:
2. Legacy pricing isn’t to prevent a monopoly by Amazon. It’s to slow down the eventual demise of print.
Publishers control print distribution. That’s how they make their money and pay for those Manhattan offices. They want the print system to continue. So by controlling price they can keep ebooks expensive and sell more paper. This annoys readers, and the authors smart enough to know what is actually going on.
3. The whole idea that people are “conditioned” to pay a certain price is absurd. We pay for the things we want, and if we want them badly enough, we pay a lot. But we compare like to like, and there is supply and demand at play.
Ebooks are an unlimited supply. The cost pennies to reproduce and distribute. They aren’t tangible and can’t be resold.
An ebook is NOT analogous to a hardcover. Because readers are used to paying $25 for a hardcover does not mean they’ll be thrilled paying $12.99 for an ebook. Apples and oranges.
The goal of a business should be to find the sweet spot between pricing and profit, taking volume into account. That’s how revenue is maximized.
Besides, readers are apparently NOT conditioned to high ebook prices, and are boycotting expensive ebooks and giving them 1 star reviews by the hundreds. Only a fool refuses to listen to their customers.
Publishers SHOULD cut their prices to $2.99. They’ll sell more and earn more. And it won’t hurt my self-pubbed sales, because then readers would be able to buy more ebooks.
Currently, someone with $15 to spend can buy a Patterson ebook and a Konrath ebook.
If Patterson were the same $2.99 price as me, I believe it is likely that the reader would buy two Patterson ebooks, and two Konrath ebooks, and then perhaps even try someone else. Low prices foster a buffet mentality, where people consume more than they normally would.
As for “the biggest books in print appear to be the biggest ebook sellers”, look for that to change. Most NYT bestsellers are such because of distribution–they’re EVERYWHERE. You can’t get away from a new Lee Child or James Patterson release.
Naturally, the more places books are for sale, the more they’ll sell. And those buying new ereaders will gravitate toward the familiar.
But when print sales really start to drop off, I predict that the correlation between print and ebook bestsellers will really begin to differ. Especially if legacy publishers sell Stephen King ebooks at $18.99, as with his new release.
Consumers put up with it now. But that will happen less and less.
The agency model is a huge fail, and I’ve likened it to selling a few more drinks on the Titanic before it sinks.
If you don’t stop by Joe’s blog regularly, you should – A Newbie’s Guide to Publishing