PRH Still Doesn’t Like the Subscription eBook Model (The Fools!)

26 August 2016

From The Digital Reader:

Penguin Random House has in the past denied that readers want an ebook subscription service.

What with Kindle Unlimited now paying authors and publishers more than the Nook Store, and possibly even more than Kobo or Google, that excuse was getting a little thin, but recently PRH changed its tune.

The global CEO of Penguin Random House, Markus Dohle, was speaking at the Global Top 50 Publishing Summit at Beijing International Book Fair in China earlier this week . According to The Bookseller, Dohle said that:

PRH had not signed its titles up for any subscription services, such as Amazon’s Kindle Unlimited, Mofibo or Scribd, because the ‘all you can eat’ models threaten to “devalue” intellectual property (IP) at a time when most authors can barely afford to earn a living.

In the US, Dohle said 40% of the readership accounted for 85% of publishers’ revenue, so “heavy readers” switching to subscription models would have a “huge impact” on the industry.

He explained that the industry’s existing publishing model, successful for over 500 years, was “robust” and “not broken at all”, and argued that subscription models were “not in the reader’s mindset”. If they became popular, they would ultimately lead to “lower prices” and “a huge devaluation of IP”, Dohle said.

“A la carte is not broken […] I don’t see us supporting subscription models, because we just don’t need it,” he said. “Somehow we have to protect the measure of our intellectual property. Take an e-book for $12, that’s entertainment for 15 to 30 hours. That’s a fair deal compared with a movie and other media formats. I think we have a very robust pricing model in the market and subscription would just change the whole dynamic.”

Link to the rest at The Digital Reader

PG says this is wrong on so many levels (several of which are discussed in the OP), but PG has to mention one because he’s heard it so many times before from European publishing executives.

The value of a product or service is determined by the customer, not the seller.

If the customer will pay $10 for a product, that’s the product’s value. If the seller prices a product at $15 because that’s the true value in the seller’s mind, but the customer is only willing to pay $10, the product’s value is still $10.

Perhaps it’s partially a consequence of minimum book pricing laws in some European countries where the publisher sets the retail price, but, unless a customer is forced to purchase an item at a specific price (hello, college textbooks), in a free market the customer determines the value.

If a price is too high, the customer will simply not buy a product. (PG will note that readers in countries with fixed-price book laws regularly utilize a variety of technical means to disguise their physical location so they can purchase books online at lower prices.)

The idea behind the “devaluing” argument is that customers can be easily manipulated by simply charging higher prices. PG believes this is an elite executive’s ignorant view of the proletariat’s “mindset” and the epitome of stupid short-term thinking. Heaven forfend that the serfs ever hear of a lower price for anything. Prices must always go up and never go down.

If a customer, even a “heavy reader”,  enjoys reading books, but books cost more than the customer is willing to pay, the customer will respond in any number of ways — borrowing, buying used, finding something else to do that is also enjoyable and costs less, etc., etc., etc. No consumer is obligated to remain a heavy reader.

From Trad-Pub to Self-Pub–Tips and Observations

10 June 2016

From author Elizabeth Spann Craig:

This is the second time I’ve gotten the rights to my characters back from a publisher and taken a trad-published series to self-pub.  The last time I did this was five years ago.

There were some big differences between this time and last time.  The first time I’d had only one book released in the series before taking it to self-pub.  This time the series had five books in it.

This latest series had a nice following but I found that many of my readers for the Penguin series  seemed unaware of my self-published series.  They would email me asking when the next Southern Quilting Mystery was coming out and I would tell them…and then ask if they knew about my Myrtle Clover series.  Many times they didn’t.

One reason they didn’t is because Penguin didn’t want any non-Penguin books included in my author bio.  I can understand this.  So not only were my self-published books not included in my bio, the original trad-published book in the series (from Midnight Ink) wasn’t, either.

So that’s officially my favorite thing about taking this series to self-pub. I loved, loved, loved being able to advertise my self-pubbed series in the back of the book.

. . . .

And now for the curiosities from this release.   Print sales have been very strong…I’ve ranked as high as in the top 15,000–18,000 for printed books on Amazon.  It’s also selling well through IngramSpark, which tells me that bookstores are ordering it for customers.

The oddest thing about that to me is that the book clearly isn’t competitively priced in print–it’s running at $10.99, which I think is pretty high.  But when you’re doing POD (print on demand) with CreateSpace and Ingram, that’s the kind of price you have to set to make a profit.

So…why are the readers buying it?  I suspect that’s because these readers always did buy this series in print.  They went to the bookstore and purchased them there.  They want the print edition.

. . . .

The ebook sales have been even stronger than the print.  I suspect this is because I set the ebook price at $4.99.  Other releases in the series are at $7.99.  I’m undercutting my other books and the releases of trad-published cozy writers.

Link to the rest at Elizabeth Spann Craig and thanks to Deb for the tip.

Books’ Prices and Writing’s Value: Careful What We Asked For?

23 May 2016

From Writer Unboxed:

Blurring ‘Our Dignity, Our Value’

“The biggest issue is one that will be difficult for us to recover from…the degradation of our worth as creatives.”

That line is from a piece here at Writer Unboxed a year ago, in May 2015. Our colleague Heather Webb, in As Writers, What Are We Worth?, was anticipating a groan heard ’round the world.

Last month, when I led a round-table discussion at Berlin’s Publishers’ Forum, our topic was “Re-Thinking Ebook Sales and Understanding the Consumers.” But what drew the biggest response was book pricing.

“The consumer,” one of our publishers said, “is in perpetual confusion. No way to understand what a single book costs or how to value our authors’ work.” And at the influential publishing house Bastei Lübbe AG, executive board member Klaus Kluge is calling book prices “staggeringly low” in an interview with Sabine Schwiering Tert at

In the UK in January, Penguin Random House CEO Tom Weldon told my Bookseller colleague Benedicte Page: “”One of the biggest challenges in 2016 will be e-book pricing: how do we maintain the value perception of our quality content and maximize revenues across all formats for both authors and publishers?”

. . . .

What have we done to the idea of writing’s value? How fuzzy is this math going to get?

That’s my provocation for you today. How are today’s pricing problems affecting what Webb characterized here last year as “our dignity, our value, and the viability of this industry”?

Books were always commodities of a kind, and buying second-hand romances by the grocery-bagful didn’t start yesterday.

. . . .

With both the trade and the self-publishing sectors in rampant over-production as they are today, you’re facing a sheer rock face of competition for every glance your book might get, let alone a read, let alone a sale. Your price is in free-fall.

And we can look to our cohorts in Hollywood for a little guidance here, too. You may not remember what the advent of Blockbuster video and then Netflix did to film. But those of us who watched those developments roll in know. Suddenly there were films everywhere, peopled with actors who are not quite the stars they look like speaking dialog that’s as wooden as they are, in strangely unsatisfying knockoffs of other films.

We can’t entirely blame independent authors for this gauzy focus on pricing in books. As the indie insurgence began to impact the trade a few years ago, authors who had never been able to get past the agents and editors, the dreaded gatekeepers, found that they could self-publish in our digital age. But self-selling was a different thing.

When you have no marketing department behind you, when you’re not even listed in a publisher’s catalog or recommended to a Barnes & Noble buyer—and no one’s ever heard of you in the world of books—the one way you might turn the head of a potential buyer cruising Amazon is offer a low price. Or no price.

. . . .

If the trade was aghast at Amazon’s institution of $9.99 as a viable price for the ebook version of a hardcover hit, it’s tempting to mutter “all is forgiven” now. I know many authors who’d love to get $9.99 for their ebooks. Free downloads by the hundreds might feel exhilarating, but your take-home pay? And while it’s popular to hunker down in the bloggoria and shoot the breeze about the “sweet spot” between $2.99 and $4.99, what frequently is not mentioned is frequency: how many of those things do you have to sell at $3.99—even if you’re getting 70 percent—to put together an income?

. . . .

And nobody forced the industry to follow the self-publishing sector in driving the car right on over the cliff. For a time, a UK publisher staged a 20-pence promotion on some of the hottest titles of the year. Now, the bigs are in “new-agency” pricing contracts with Amazon that somehow have them charging high “this price set by the publisher” prices for ebooks at the very moment that the industry needs to energize its digital investments, not price them out of reach.

Link to the rest at Writer Unboxed and thanks to Kristian for the tip.

PG says successful indie authors are very savvy about pricing their books at a level that maximizes author income. And more than a few earn their living from their writing. And nearly all authors who were traditionally published earn more as indies.

Yes, there are exceptions, but PG hears and reads success stories often enough to feel confident these are reasonably reliable generalizations for mid 2016. Simply put, in 2016, an author is much more likely to be able to support themselves as an indie than as a traditionally-published author.

The “pricing problem” that bothers Big Publishing is centered around the unfortunate reality that ebook prices which will maintain an indie author in fine fashion don’t generate nearly enough money to support a large publisher, regardless of how little it pays its authors.

One of the pivotal stages in a disruptive innovation comes when low-priced producers learn how to satisfy an economically significant portion of the overall market and use that position and their low prices to keep garnering more and more customers. These customers are satisfied with the quality of the product the low-priced producers offer and the low-priced producers have reached a point where they sell enough products and earn enough money to continue their business without interruption and without infusions of new capital. In short, the low-priced producers – indie authors – aren’t going away.

Speaking generally, more and more purchasers of ebooks are making purchasing decisions that say they don’t see enough added value from large publishers to justify the higher prices they have to pay. If $2.99 buys them an enjoyable reading experience, why would they pay $14.99 for an enjoyable reading experience?

The more enjoyable reading they experience for $2.99, the less likely they are to ever go back to paying $14.99. They’ll spend time digging around in the $2.99 bin to find a good book instead of paying $14.99. If they get stuck with a $2.99 clunker, they won’t give up on $2.99 books because experience has taught them there are more than a few good reads available at this price.

The question that Big Publishing can’t afford readers to ask is “Will I get five times more enjoyment if I pay $14.99?”

PG has been in the tech business for long enough to see the disruptive innovation process play out in many different markets. In each case, the incumbent market powers believe they add some special sauce to their products for which customers will always be willing to pay incumbent prices. Names like Novell, Lotus 1-2-3, Digital Equipment and Sun Microsystems come to mind, names once associated with the finest products, products that customers were happy to buy at the prices these companies set.

Today, major publishers assume today’s market will support the same prices as the book market of 2-3 years ago. They want to believe customers will agree that ebooks should be priced like printed books. They want to believe that ebook purchasers pay close attention to how much printed books cost and will use that price to determine the reasonable price for ebooks.

PG says these publishers do not understand consumer behavior.

Referring back to the OP, the relevant question in 2016 isn’t “As Writers, What Are We Worth?”

The real question is “Publishers, What Are They Worth?”


Price Too High Wishlist

11 May 2016

In case you didn’t read through the comments to Ebook Sales Decline Continues, J.A. and Mike said they have a “Price Too High” or “Overpriced” wishlist on Amazon.

When they see an interesting traditionally-published ebook that is overpriced, they simply save it to the Overpriced wishlist and wait for the price to come down.

PG has several different wishlists, but just added an Overpriced Books list.

PG reads a lot of history and the definitive account of The War of Jenkins’ Ear will be just as timely in six months at $2.99 as it is today at $12.99.

Visitors to TPV have also mentioned eReaderiQ, which lets you create watchlists and will email you when a favorite author releases a new book, a book drops to a price that is reasonable for you, becomes available on Kindle, etc. PG also uses CamelCamelCamel which provides a price-drop service for books or anything else Amazon sells.

One of the nice things about these services is that they will alert you to temporary price-drops, unannounced one-day flash sales, etc.

Libraries Call on Multinational Publishers for Fair Ebook Pricing

5 April 2016

From CNW:

Canadian Public Libraries for Fair Ebook Pricing continue to advocate for more reasonable prices and terms for ebooks from multinational publishers with an open letter to Hachette Book Group, HarperCollins, Macmillan Publishers, Penguin Random House and Simon & Schuster.

Some multinational publishers charge libraries as much as three to five times more for ebooks than the consumer price, while others place caps and time limits on use. Current ebook pricing models lead to fewer titles and fewer copies for readers to discover, despite booming borrowing rates and high demand.

Public libraries are key players in the publishing industry, both as major purchasers of books and ebooks, and promoters of reading and literacy. With the open letter, libraries are advocating for a pricing model that introduces fairness and flexibility, specifically:

  • A hybrid of existing pricing models that would offer libraries of all sizes the ability to buy the number of copies and also the type of copies (perpetual or limited access) that meet their needs.

The hybrid model includes:

  • A reasonable premium price for ebook copies with ongoing and perpetual access, as the $85 and $100+ pricing is not sustainable.
  • A lower price option for ebook copies with limited access because of time or use restrictions. This pricing should be slightly higher than the consumer price.

Link to the rest at CNW and thanks to Ron for the tip.

The Power of Free: How to Sell More E-Books

29 March 2016

From Publishers Weekly:

Do you want to sell more books and increase the value of your author brand? Then give some of your e-books away for free.

To many authors, the idea of giving their work away for free is counterintuitive—and possibly abhorrent and sacrilegious. Free devalues your work, right?

Wrong. Free makes your work more valuable. As an author, you are a brand. Readers buy books from authors who have earned their trust. But to earn readers’ trust, you must first earn their awareness. If readers don’t know you, they can’t trust you—your brand carries no value to them. You’re invisible. Even if you’re already a New York Times bestseller, there are millions of potential readers out there who have never heard of you and have never read your stuff.

Free makes it possible to reach new readers who would otherwise never take a chance on you. Free enables readers to sample and discover new authors without financial risk.

According to the 2015 Smashwords Survey, free e-books get 41 times more downloads on average than other e-books. This is the power of free. Free drives sampling and discovery.

Link to the rest at Publishers Weekly

Why e-books cost so much

18 March 2016

From CNET:

Here’s something that tends to get lost in the debate over e-book prices: Paper doesn’t cost very much.

There’s a perception among consumers that an e-book should cost very little or next to nothing because there is no paper, printing, and shipping involved.

But in fact, for a new best-selling hardcover, all of the costs associated with print, from the printing to the shipping to the distribution to the warehousing to returns, amount to a mere few dollars per copy, depending on the size of the print run.

The vast majority of a publisher’s costs come from expenses that still exist in an e-book world: Author advances, design, marketing, publicity, office space, and staff.

You can therefore imagine the fear that e-book prices instill in publishing executives’ hearts. They’re only saving a few dollars per copy in the switch to the e-book world, but the prices of books were slashed more than half: from $24.99 to $9.99 and even lower.

. . . .

Not only are publishers’ margins better on higher-priced print books, but when bookstores close it has enormous ramifications for the industry. When Borders went bankrupt, for instance, Penguin Group was its single largest creditor, with $41.1 million outstanding.

And even aside from financial considerations, publishers’ entire reason for existence is bound up in print. The major publishers are, quite simply, the best companies in the world at getting print books from authors to readers. Most of the tools at their disposal for making a book a hit are tied to a print world, from buying front-of-the-bookstore placement (yes, publishers pay for that) to book tours.

As the exponential growth of e-books has slowed, some publishers are even whispering their hopesthat perhaps the rate of e-book adoption will slow further and print will be viable well into the future.

But meanwhile, on the other side of the e-book price divide are consumers. Whatever the cost of paper, $10-plus e-books look mighty expensive when they’re undercut by 99-cent Kindle best sellers sold by authors who don’t have a publisher’s overhead.

Publishers have a massive problem with perception of value. When you can’t hold it in your hands and easily pass it along to a friend, $10-plus just feels too expensive to many people.

Link to the rest at CNET and thanks to Dave for the tip.

How Apple and Big Publishers Pushed E-Books Toward Failure

8 March 2016

From Bloomberg Business:

Apple suffered a final defeat in its legal fight with the Justice Department over e-books Monday, when the Supreme Court refused to hear the company’s appeal. When the case was filed in April 2012 it was seen as a fight over the future of the digital book industry, with Apple Inc. and the five biggest publishers aligned against Inc. While Apple and its allies lost in court, their vision for the industry won out. It hasn’t been good for e-books.

The Apple case centered on whether publishers or online retailers  would determine the prices for e-books. At the time, Amazon was selling e-books at a loss, buying a book for, say, $14.99 but then charging Kindle users just $9.99. Publishers worried that tactic would train customers to expect books to come cheap forever.

. . . .

While Apple fought through the courts, the publishers all settled with the Justice Department. Meanwhile, Amazon decided that letting publishers set their own prices wasn’t such a bad idea, after all. Its newest deals with the big publishers allow them to do so. If Apple hoped to gain an advantage over a rival, it failed. Amazon controls about three-quarters of the U.S. e-book market, according to Good e-Reader, a website that follows the industry. In 2010 it made up 54 percent of the market.

Once Amazon gave up on its goal of setting a $10 standard price for e-books, the prices began to rise. Today, three of the top five best-selling books on the New York Times list for fiction cost at least $12. It’s not unusual to be able to buy a paperback book for less than the cost of the digital version.

There’s a widespread assumption that digital media always wins out over physical media. But even the Internet isn’t immune to the basic laws of economics. E-book sales declined 12.3 percent over the first 10 months of 2015, compared with the previous year, according to the American Association of Publishers, which compiles data from 1,200 companies.

. . . .

“It’s a fascinating question and clearly what it shows is that purchasers make a decision based on price,” said Robert Thomson, the chief executive officer of News Corp., which owns Harper Collins, in a recent call with investors. “They are valuing a print book versus an e-book.”

Thomson said he still expects e-books to grow as a percentage of the company’s overall book business, but acknowledged that people have lots of choices on their devices, and won’t necessarily choose books over other forms of entertainment.

Link to the rest at Bloomberg Business

The Collective Insanity of the Publishing Industry

1 March 2016

From author and TPV regular Gene Doucette:

Unless you’re a writer, I imagine you haven’t been paying quite as close attention to the publishing industry and all its weirdness as I have, and that’s a shame, because it’s been really entertaining.

Actually, entertaining isn’t the right word.  It’s been insane, but the kind of insane that’s unreasonably fun to watch from a safe remove.  Like watching a man stop traffic to cross against a green light by shouting, “I’ll bite your car!”  As long as it isn’t your car he’s threatening, it’s sort of funny.

You might imagine that as an author with published works for sale, I am not at a safe remove when it comes to the publishing industry.  That’s sort of true, but only sort-of.

Here’s a superb example of the madness of which I speak, and why I’m not concerned that anyone will be biting my car.

In 2014, there was a drawn-out dispute between Amazon, and Hachette.  The latter is one of the largest publishers in the world, and Amazon is a company that sells things, such as books.  The essence of the dispute was that Hachette—and all the other publishers we affectionately refer to as ‘the Big 5’—wanted more control over the list price of their e-books on Amazon.

That sounds thoroughly reasonable, and it sort of is, but please let me explain because the crazy is in the details.  What was happening was that Amazon was discounting the price of the ebooks, and it may seem like this is something the Big 5 would want to stop, except the markdown was coming off of Amazon’s end.  In other words, if Hachette wanted to charge $15.99 for an ebook, and Amazon marked it down to $9.99, Hachette was still paid their cut of the full price of the book.

More people will buy a book at $9.99 than at $15.99, so essentially, the Big 5 was coming out ahead in this arrangement in every conceivable way.  They collected royalties at an unreasonably high price point while moving the number of units that corresponded to a lower price point.

So of course that had to be stopped right away.

Hachette fought for, and won from Amazon, the return to something called the Agency Model, whereby they set their price and Amazon wasn’t allowed to reduce that price.  So that $15.99 book stayed at $15.99 until Hachette decided to change it.

Soon after that contract was signed, the other Big 5 contracts came due, and they all asked for the same Agency Model arrangement.  Thus, the finest minds in publishing—or one might assume—negotiated themselves out of an arrangement whereby they sold more units at a lower cost without suffering the financial impact that comes with a lower unit cost.

On purpose.

This isn’t even the crazy part.

After securing the right to price their ebooks unreasonably high and having those prices stick, the first thing the collective brain-trust of the Big 5 did was raise their ebook prices even more.  Often, the prices were higher than the price of the print edition, which is just fundamentally insane.

. . . .

Here is why I can laugh at this from a save remove: I don’t have a contract with a traditional publisher.  If I did, I’d be hopping mad, because what I just described above is an entire industry trying to take away a viable (and lucrative) sales channel for their own authors’ work.

Link to the rest at Gene Doucette

Here’s a link to Gene Doucette’s books. If you like an author’s post, you can show your appreciation by checking out their books.

One Star Reviews Over Book Prices are Dumb.

18 February 2016

From author Larry Correia:

This review was posted for Son of the Black Sword.

1.0 (odljout of 5 starsThis rating has NOTHING to do with the writing!

(Name removed because he probably meant well, and this isn’t personal)

Format: Kindle Edition

I read and absolutely loved, Correia’s monster hunter books. Own each and every one of them. I was so looking forward to reading this one after I saw the blurbs for it. However, I cannot bring myself to allow the publishing company that Correia has his contract with, to take advantage of me. Like many of the ‘main stream’ authors, or rather, those that aren’t taking advantage of self publishing, the cost of the book is inane. The Ebook. Which costs the publishing company NOTHING to create in comparison to hardback, and paperback books. Costs more than the Paperback. That alone, will prevent me from purchasing this book, until the price is fixed to something reasonable.

I know writers aren’t supposed to respond to reviews, but I’m not responding to this as a writer, I’m responding to it as a retired accountant.

I am the author in question. Your review doesn’t hurt anything except my overall average. You aren’t sticking it to the man. You aren’t harming the corporate fat cats. If you think the book sucks, give it one star. That’s awesome. That’s what the stars are for. But you don’t use one star to bitch about the price of eBooks. That just makes you look stupid. We shouldn’t still be having this conversation with anybody who isn’t a Bernie Sanders supporter.

Now, Accountant Hat on. This is pretty basic stuff. This is how basic costing works, not just for books, but quite literally everything. But today, we’ll talk about books, because your ridiculous review has pissed me off.  I’m going to dumb this down and keep it simple as possible.

I produce a product, which I sell to a publisher. Under that contract I am given an advance against royalties (money up front), and then I get royalties based upon a percentage of the sales price. This is good. This is how authors GET PAID.

Now, over on the publisher side they have a bunch of costs associated with the production of my product. Some of these costs apply to both ebooks and print. However, contrary to what most people think printing isn’t the big deal, as much as all the other stuff.

. . . .

Some products are more profitable than others. When you go to a fast food restaurant, the margin on the burgers is slim. If they sold nothing but burgers they’d be in trouble. However, the margin on soda is amazing. That soda you spent a couple bucks on? The most expensive thing involved was probably the cup. When I was selling guns, guns were cut throat, high competition, and on most brands I’d only make 10-15% on the sale of a gun. But then I’d made 40%-50% on accessories. That was how I kept the lights on.

Ebooks are like that. Publishing is an industry with crappy margins. Don’t believe me? Ask Borders. Yes, ebooks have a lower direct cost, but that is all still going into the same company bucket. Some lines are more profitable than others. Duh. It isn’t about “fairness”. Business has nothing to do with fairness. Business is about staying in business.

That’s the basics of how costing works.

But wait, there’s more!

Now we get into Econ 101! (I love Econ).

So now that you know how much you have to make in order to keep the lights on, you want to maximize your profit. You want to sell it for as much as possible, but not for too much because that will turn some people off and you’ll sell fewer units, so you want to get that sweet spot where the supply and demand curves meet.

Some people are willing to pay more, others are willing to pay less. Go super cheap, make less per unit, and sell more, and at the other end you go super expensive, make more per unit, but sell less. Which is why the Nissan Versa and Aston Martin DB9 can both exist.

. . . .

Books aren’t cars, but they’re basically interchangeable entertainment products. Some authors’ brands can get away with a higher cost because they’ve established that they’re a Honda, and some new guy is going for moped prices because his quality isn’t established and the only way he can hope to attract customers is by low price. The super cheap customer isn’t going to buy the Ferrari, and Ferrari is just fine with that.  But when cheap guy posts a one star review for the Ferrari, we’re all going to laugh at him. For the record, I’m not a Ferrari. I’m more of a Ford Expedition.

Since there isn’t some super easy way to tell you what the perfect sweet spot is, publishers guess. Some guess too high, and others guess too low. Who guesses just right? Well, we don’t know, because it isn’t like you go around showing your competitors your P&L (that’s a Profit and Loss statement for you Bernie fans, for those guys, think of it as magic voodoo).

Oooooh, but there’s even more!

What? Pricing eBooks is even more complex? Unpossible!

Yes, because now lawyers get involved!

Did you know that Amazon is actually a business too? And that it exists to make money? And that it also wants to maximize its profit? Crazy. Bernie should do something about that.

Publishing houses don’t work off the same contract as lone self-published authors. In fact, for a publishing house to set up an ebook distribution deal with Amazon there is a lot of wrangling, and Amazon gets a say in how those books are priced. This involves lawyers (see that line about Overhead, they probably go in that bucket).

. . . .

Once my publisher got that contract hammered out, and Amazon was happy with the minimum prices they agreed to, I was super happy, because now on my personal P&L I was making a whole lot more money by having my eBooks in the biggest marketplace. Yay.

. . . .

Now if you’re self-publishing and trying to decide how to price your book, it is simpler. You don’t have a bunch of lawyers involved, and you don’t have all that G&A and Overhead. Lots of self-published folks go 99 cents, others do the $2.99 to maximize the royalty percentage. Same principle. You’ve got your market and your demand curve, and you’re going to price accordingly. You need to figure out the price that maximizes your return. Whatever you set it at, somebody is going to come along and say it is wrong. ONE STAR!

This all boils down to a question of entertainment dollar value to the customer. If you want it now, and you really like this particular brand, you’ll realize that you spent more than that on your burger combo at lunch today and buy the book. If that isn’t worth your entertainment dollar value, then you won’t purchase.

In pricing, nobody is “taking advantage of you” unless you are stuck in a monopolistic situation. Ruth’s Chris costs more than Sizzler, but Ruth’s Chris isn’t taking advantage of you, they are pricing according to their brand and their product to maximize their position in the marketplace. If they price too high, then they will not make a profit, and will have to adjust or lose market share. Which is kind of funny, because in this tortured analogy, I’m actually priced more like Sizzler, and you just gave a one star review to Sizzler, because I’m not priced like McDonalds.

Link to the rest at Monster Hunter Nation

Here’s a link to Larry Correia’s books. If you like an author’s post, you can show your appreciation by checking out their books.

PG has enjoyed Larry’s books and also several of his blog posts. He has no doubt Larry was a good accountant back in the day.

However, the new reality for ebooks is that authors who use publishers are becoming high-priced options for readers. Indie authors and Amazon are in a continuing process of resetting pricing expectations for readers.

Publishers and authors don’t like to think their books are commodities, but, for some percentage of readers, they are. If I’m at the grocery store and see a bottle of something priced at $7.99 sitting on the shelf next to bottles priced at $2.99 and $0.99, even though I know the $7.99 product is high quality, my mini economic self-interest analysis might conclude that the $2.99 or $0.99 product might suit my needs as well. Maybe I won’t even notice the difference.

Larry is correct that, generally speaking, publishing is an industry with terrible margins. As he points out, publishing is also an industry with lots of costs. PG will observe that most publishers are not paragons of efficiency. When an author uses a publisher, the author is requiring his/her readers to pay for the publisher’s costs, regardless of how expensive or inefficient the publisher may be.

In a typical ebook publishing contract, the publisher receives three times as much as the author receives for each ebook sold. Given a choice, many readers would likely prefer to pay the author three times as much as the publisher because, in such readers’ minds, the true value of a book is created by the author.

Simply put, indie authors are far more cost-efficient producers of ebooks than authors combined with publishers are.

Ebooks sold via ecommerce are technology products. While Walmart is a retailer, Amazon is a technology company. The rules for technology companies and the products they produce were established in the late 20th and early 21st centuries: add features and push prices down. Relentlessly.

Even without adjusting for inflation, computers cost much less today than they did in 1990. Ditto software, particularly software that lives on the web. Ebooks are web-delivered software and pricing has changed accordingly.

Perhaps Larry’s one-star reviewer broke some unwritten rule that prohibits complaining about pricing in an Amazon review, but that reviewer is also the reading market sending a signal to authors and publishers: Your pricing is too high. I can buy perfectly good ebooks for much less. Change or die.

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