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Piracy, pricing, and ebook hoarding

How is ebook pricing changing our behavior?

I was on a conference call recently talking about piracy with Joe Karaganis, Brian O’Leary and Ruediger Wischenbart. At one point someone mentioned that piracy can be avoided when content is made available at a reasonable price and in all convenient formats. That begs the question: What’s a “reasonable price”?

I asked the group if they felt $9.99 is the answer. All three of them said that’s too high. Maybe we’re too focused on the 99-cent phenomenon and, of course, it’s hard to state a “reasonable” price when talking generally about all types of books (e.g., trade, technical, etc.) Nevertheless, it’s disturbing to think that the future of ebooks features a race to zero on pricing.

As long as publishers are offering nothing more than quick-and-dirty p-to-e conversions we can’t really expect consumers to pay more, especially since the e-version loses functionality (e.g, lending restrictions, can’t resell). I mentioned when richer products arrive and they leverage the device capabilities they won’t have to be as cheap as the quick-and-dirty conversions. Joe and Brian weren’t very optimistic about that. Brian pointed out that $9.99 has become such a standard in consumers’ heads that it will be hard to break that price point.

Joe then brought up a very interesting point: Pirates tend to be ebook hoarders. He noted that the definition of  a “personal collection” has changed from dozens or hundreds to thousands of titles.

That’s when I remembered that I’m an ebook hoarder too. Low ebook prices have caused me to change my behavior. When a book is $9.99 or less I don’t even think twice about clicking the buy button. The result? I now have more unread ebooks on my Nook than I ever had before. And the number is growing. Every week. I’m heading towards a situation where one day I’ll have bought far more ebooks than I can read in the rest of my life and I’ll bet I’m not alone.

What we’re creating here is a world where lots of content is purchased but much of it is never read. Is that really what we want? Is there actually a benefit to publishers and authors when consumers pay a higher price and therefore have more skin in the game?

Consider these purely hypothetical scenarios:

    • Scenario #1: An ebook is priced at $1, sells 100 copies but only 3 buyers actually read it.
    • Scenario #2: That same ebook is instead priced at $20, sells only 5 copies but every customer reads it.

Which scenario do you prefer as publisher/author, especially if you’re looking to sell the next book in the series?

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  • http://www.bradleyrobb.net/ P. Bradley Robb

    Ah Joe, it’s a tough question, one that is equally answered with another question – Is publishing a business or an artistic hobby? 

    If it’s a business, the answer is “Sell more.” If it’s a hobby, then the answer is Scenario #2. Fortunately we live in an age where some people can make a living off of their hobbies. But, I suspect that, when the question gets asked at the highest levels, a lot of people will drive towards Scenario #1.

  • http://twitter.com/PuckOfPooksHill Paul Stokes

    Surely the e-book hoarder will buy the second $1 book in the series anyway irrespective of whether they’ve read it or not?
    And if you’re writing as a way of striving towards personal immortality is it better to have 100 copies “out there” or just 5?

    • jwikert

      Those are great questions and I think the answer is…”it depends.” It depends on each publisher/author’s objectives. Although I tend to agree with you that the hoarder is likely to buy that next $1 book I wonder if they always will. At some point you’ve got to realize that you’re never going to get to read any of that content. And I guess I’d rather know that my book was consumed and appreciated, not just bought and collecting virtual dust.

  • Ricardo Veguilla

    “What we’re creating here is a world where lots of content is purchased but much of it is never read.”

    I don’t think the world you describe is new. I’ve heard that same observation being made from people on the traditional publishing and/or book selling business. The difference is that now books don’t occupy physical space so it’s easier to hoard more.

    • jwikert

      That’s true, which is why I highlighted the point Joe K. made about the changing definition of a “personal collection.” Now we have unlimited space for our hoarding efforts.

  • Preston DuBose

    Price is certainly an issue, but if it’s above my threshold then I don’t turn to piracy. I just don’t buy the book. However, I’m sadly probably in the minority because I’m a writer and more sensitive to piracy than most.

    Back on the customer side, to be honest even $9.99 for fiction rankles when I know the paperback can be had for less. I typically wait until I see an e-book I want in the $7.99 range before I bite. I’ll pay $12-14 for books in a series that I’ve really been anticipating, but those are fewer and fewer these days. I think a good rule of thumb for publishers should be to keep e-books priced on par with the lowest available cover price. 

    • jwikert

      I agree that it’s an awkward situation when the ebook is priced higher than the print book, especially if the former is simply a digital reproduction of the latter with no other added value. I’m finding myself less price sensitive though. If there’s an ebook I really want I won’t have a problem paying $20 or maybe even a bit more for it. It’s clear I’m in the minority though. And as a publisher, when I see a print book available for, say, $25 and the ebook available for $9.99 I figure I’m getting a great bargain on the ebook. After all, it didn’t cost $15 (difference between $25 and $9.99) for printing, distribution, etc.), so, all else being equal, there’s less profit left for the publisher in that ebook sale vs. the print book sale.

  • http://twitter.com/LesterSmith LesterSmith

    As a writer, small-press publisher, and ardent reader, I can’t bring myself to pay above $9.99 for an ebook. It makes me feel robbed, and there are so many other things to read–many of them public-domain classics at Gutenberg.org. Frankly, even $9.99 feels high. Give me $4.99 or $5.99, and I’ll buy without hesitation.

    • jwikert

      Yours is a scenario I really struggle with. It sounds like you’re saying all books are replaceable by other books. Don’t you have any favorite topics or authors? I just finished reading a book about the former Pittsburgh Pirates pitcher Dock Ellis and I don’t remember what I paid for it but there’s no other book that could have replaced the experience I had reading that one. Are books really commodities that can easily be interchanged the way you’re describing them?

      • Marco Giroto

        I think that there are a few titles that are irreplaceable. But, some titles, readers can replace very easily.

  • Jeremy Greenfield

    Interesting piece, Joe. 

    In regards to pricing, I’m not sure where this idea that consumers are dead set on only paying $9.99 comes from. If you look at e-book best-sellers every week, many of them are priced above $10: http://www.digitalbookworld.com/2012/no-easy-day-tops-e-book-best-seller-list-as-release-approaches/

    And, as it turns out, the recently approved settlement between the DOJ and three of the largest U.S. publishers might keep prices for many of the most popular e-books at the same level they were at before the settlement or higher. 

    • jwikert

      Thanks Jeremy. Scanning through that bestseller list it seems as though the $9.99-and-higher titles are ones with either strong author brand names (e.g,. James Patterson) or huge press visibility (e.g., No Easy Day). So it’s clear the big names can command a higher price but they represent a tiny percentage of the entire catalog of ebooks. I don’t think very much of the rest of the midlist is able to successfully price that high. The situation is even worse for a new author with no platform or PR campaign.

  • Joe Esposito

    I disagree with the notion that piracy will disappear if book prices were low and that these low-priced books were easy to obtain and use.  I think that some piracy would disappear in that context, but not all of it.  Is iTunes too expensive or hard to use?  I don’t think so.  But music piracy continues.  This is not an argument for high prices or low, for DRM, for litigation, or for anything else.  I am simply expressing skepticism that publishers are solely responsible for piracy.  Some people are pirates because they are pirates.

    Joe Esposito

    • jwikert

      I’m not suggesting it will ever go away but I do believe making content available in convenient format at a reasonable price is likely to lessen piracy. It would be interesting to know how piracy rates today compare to the pre-iTunes era. Have you seen any stats on that?

      • Espositoj

        I agree with this as stated, though we can debate what a reasonable price is.  I don’t know anything about the stats for music before iTunes.  The whole question of how much piracy there is remains a mystery to me.

  • http://vsvevg.wordpress.com/ Abby Smith

    As an author, I prefer #2. Interesting post, thanks, Abby

  • http://twitter.com/PeterTurner Peter Turner

    Really interesting post, Joe.  It seems to me that the phenomena you describe of a world where lots of content is purchased and not much is ever read was one we could have anticipate. After all, it’s not like we have more hours in the day to devote to reading or that eBooks as a format are likely to make readers of people who wouldn’t otherwise. The only people who may be reading more are folks who travel a lot, as lugging books around is a bit of a barrier. What we’re seeing is the effect of the “gee wiz factor” that hits consumers when they have a shiny new toy. 

  • Kithfan

    I definitely have books I might never read, because they were free or $1 or $2 at amazon or B&N. Cheap books makes me snap up anything that even remotely looks good… and now I have to clean out my Nook because I just know I’m not going to read them. 

    Another bad habit is adding anything that sounds good to Goodreads ‘To Read’ list. I just cleaned it out a week or so ago because, yet again, I already know I am never going to read half of those books. No need to stress myself out with a list of 300 books ‘To Read’ and that list growing daily. 

  • Kithfan

    I’m also all about price. If the ebook price is too high, I buy it used. If it’s new, I wait until the there is a used book at a price I’ll pay. Authors work hard on their craft, and as a writer, I get that. As a reader, I know that I’m just not going to pay $12.99 for an ebook. I’m not going to pay $29 for a hardback novel. I am going to wait and buy it used… not because I have issues with the quality of the book or the industry itself, but because I’m just not going to spend over X amount of dollars on a book. I feel like publishers want readers to treat books like gold coins– collectible at any cost. When readers are AVID and VORACIOUS, our hobby can get expensive. We’re not going to cut corners on the quality of material we’re reading. The cut has to come elsewhere. 

  • Roger Blanks

    Scenario #3: ebook for free however it’s sponsored. No one needs to worry about buying and not reading and on the other hand, book publishers, authors make money anyway, moreover, advertisers show their ads within the ebooks with a very targeted audience. As result, piracy becomes useless. ;)