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Readers Boycotting Kindle Titles Priced Above $9.99

Pricing is a red-hot topic among publishers when it comes to ebooks. As I said in a Q&A for Forbes.com last week, cost-driven pricing (especially when the costs in question are calculated based on printed output) is a poor approach for ebook publishers. Readers simply don’t care how much it costs a publisher to produce an ebook — they only care how much it’s worth to them. (This is especially true for the iPhone, where books must compete alongside games, music, movies, and other “apps” primarily priced well below $10.)

Now a group of readers is rebelling against books priced above $9.99 in the Kindle store (using Amazon’s own tagging system, ironically) and there’s a very interesting explanation of the rationale over at Electronic Cottage (all emphasis from the original):

The price also acknowledged the obvious: a Kindle edition is less valuable than a hardcover; although you cannot pass along your Kindle edition to friends, you are at least paying a significant amount less than the hardcover price. Unfortunately, short-sighted publishers feel they are losing dollars instead of realizing that a $9.99 Kindle sale doesn’t usurp a hardcover sale. It is a brand new entity. A plus. Pure gravy.

I joined the boycott yesterday when I went to buy the new Harlen Coben book, only to be stopped by the high price. Since then, I’ve added the boycott tags to books over $9.99. I’m not happy about it. I’d rather buy the latest installment of Myron Bolitar’s adventures and Chris Knopf’s 2008 release, “Head Wounds.” In fact, I was one of those who clicked Amazon’s “Tell the Publisher” button to indicate that I wanted a Kindle edition of “Head Wounds.” But not at $15.40. I’ll wait for the paperback. Or get back into the library habit that I abandoned for my Kindle habit. I was irresistibly tempted by the lower prices of Kindle editions, I admit it. I just counted my Kindle orders since I got the reader in December 2008.144 Kindle books. Yikes. 144 books. I had no idea. Publishers, are you paying attention?

That’s a very good question.

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  • http://www.twitter.com/sterlingbooks Kate Rados

    As much as this news may sting, at least it’s concrete feedback from the eBook audience. The ‘lowest retail price’ model (ie. paperback pricing) may not work anymore, so it’s up to us to continue to experiment. No one in the finance department would want to hear that in this economic climate, but the trick is to find the balance between asserting the value of your content without alienating your budget-minded audience.

    IMHO and possibly preaching to the choir.

  • http://www.fictionmatters.com Bradley Robb

    I’m a pretty big proponent of eBooks being priced at impulse-buy levels in order to exceed sales levels experienced by traditional publishing. As you yourself said, it’s price-driven cost, and not the other way around, which are going to really push eBooks into the mainstream.

  • Paul

    The problem is that $9.99 is a totally arbitrary figure. Just because iTunes sells “albums” for $9.99 doesn’t make it the right price for ebooks. And just as hardcovers and paperbacks are priced across a broad spectrum, so shouldn’t ebooks? Yes, ebooks should clearly be priced lower than print, but the notion that ebook revenues are gravy is ridiculous. Over the next five years, ebook revenue is going to make or break a lot of publishers.

  • bowerbird

    paul said:
    > Just because iTunes sells “albums” for $9.99
    > doesn’t make it the right price for ebooks.

    you’re right. $10 is just a round number…

    most e-book publishers find greatest success
    – defined as the most money coming in –
    at the round number of $5.

    when o’reilly raised the iphone-app price for
    “the iphone missing manual” from $5 to $10,
    sales dropped to 25% of what they had been;
    when they put it back at $5, sales rebounded.

    will people pay more for some e-books? sure.

    will we allow the publishing industry to squeeze
    us through every single point on a pricing curve,
    milking all the $20 purchasers first and then all
    the $15 buyers and then all the $10 customers
    and then all the $5 ones at the barrel’s bottom?
    probably not. it’s likely that we’d feel exploited.

    especially when some publishers — mammals –
    seem to do peachy-keen at a lower price-point…

    it’s important to remember, too, that “piracy” is
    always an option, especially once people become
    more fluent with a digital version of their books;
    publishers can be hurt by excessive prices, which
    erode customer willingness to “play by the rules.”

    frankly, resisting lower prices is dinosaur thinking,
    a product of a mind-set that continues to operate
    on the line of physical-object high-variable-prices.

    once you understand, deep down in your d.n.a.,
    the important fact that digital goods like e-books
    have variable-prices that approach zero, the new
    object becomes to sell as many units as possible,
    and low prices are the best way to attain that goal.
    this is the mind-shift that is so radical that your
    typical traditional corporation will never grok it…

    -bowerbird

  • Lauri

    OK, I’m a former financial exec with a tech publisher. Here’s the deal: the accountants don’t make the call on the price of e-books. Publishing management is trying to make as much money off e-books as possible. At the same time, they see the market as negligible and only eroding hardback sales.

    The thing is, e-books don’t require the massive overhead that print books do. No paper- which is commodity priced and can make or break a publisher if there’s too big a jump. No inventory to finance while it doesn’t sell. No inventory to store and distribute. No shipping. Basically, e-books do away with the biggest costs in publishing. Publishers can even cut out the retailer (and take the retailer’s markup) if they set up their own, attractive, easy-to-use website for downloads.

    So, in theory, a publisher should be able to price a book at the gross margin of a print book (cover price minus paper, printing, distribution, freight, author royalty, etc.) plus the cost of the author royalty and make the same amount on a per unit basis as if they’d sold a print copy. In that case, who cares if it erodes the print sales, the publisher is making the SAME amount.

    The question is what does the publisher add to the e-book publishing process. You’d hope it would be selecting quality manuscripts, editing and providing marketing and online distribution channels. The reality is most publishers cut their editorial staffs years ago, so that manuscript acquisition is all they do. Editing a ms. is more often the author’s responsibility. And book advertising? Only a VERY few established, best-selling authors get any advertising outside the trade rags.

    So, will the Publishing business go the way of the Recording industry as e-books become more popular? The Amazon boycott should be a wake up call…but I wouldn’t guarantee it.

  • http://community.toc.oreilly.com/profile/VictorCurran PublishingMojo

    Of course you won’t pay as much for an ebook as you will for a hard-copy book. The price of ebook content, whether it’s 10 dollars or 10 cents, is only a fraction of the total cost of ownership. The retail price of a hard-copy book may be much higher, but it’s the only money you’ll ever have to spend to use that content forever.
    Over a period of years or decades, you’ll have buy a series of new ebook devices and software upgrades, and of course pay monthly for internet access. Renting and buying are both sound choices, depending on your income and your needs, but landlords can’t get away with charging as much to rent a home as to buy one.
    Readers have figured it out: ebooks are rentals. How long will it take publishers to figure it out?

  • http://www.meltwizard.com Jake

    If Amazon sold Kindle books as a cheap add-on to a paperback or hardcover purchase, I’d buy it. I buy Kindle books for the immediacy, but I am always disappointed later that I cannot add it to what is effectively my personal lending library. I also doubt I’ll be able to pick it up and read it again in 15 years, can’t ever give it to my kid, etc.

    Amazon loves bundles. If the Kindle store said “get this kindle book for 50% off if you get it along with [a physical variant]” I would probably be buying a lot more books. (At least twice as many, technically!)

  • Clarknet

    I concur with Jake– Amazon would do well to combine the physical sale of a book with a Kindle version discounted. I would be a very happy consumer to spend that extra bit. I want the physical book to own it; and the Kindle version to read it on the go. I liked the concept of using “rental” from PublishingMoJo’s post regarding the ebook versions.

    I would be willing to wait on the physical copy if I could get the ebook/Kindle version immediately, and wait for a large enough que for the publisher to go to print a large enough “known” demand to manage costs and reduce inventory.

  • 9hatsincloset

    You would think Amazon would get a clue from it’s own “used book” section, where you can pay much less for a used copy of a best seller, say waiting a whole 2 weeks could save you more than this Kindle I have. Right now a used copy of Cussler’s Jungle is out there for $13. In two weeks there will be competition at $6. But the Kindle price will remain the same. To much! Amazon isn’t listening to this, but the direction seems all to clear. I am guilty of falling into this cycle of Kindle-Vision.