My model is affordable electronic fiction. But I don’t think everyone has to match the BooksForABuck.com model in order for eBooks to continue to gain share in the marketplace.

Rob Preece
Publisher

That 50-66% quote is about ebooks, not paper books.

Does it make any sense that publishers would agree to sharing 66% of their profit just to have their book on the Kindle?

Personally, I don’t think so. The Kindle wouldn’t exist if it didn’t have high-quality books from the major publishers. The publishers had the power to say “H*ll no,” and they didn’t because they couldn’t get it into their heads that publishing was changing and ebooks were a growing market with major potential. They also hadn’t paid enough attention to the costs involved for the distributors to see that they were being robbed.

These publishers trapped themselves and the small indies into this financial trap, and I doubt this will change.

For a look at how well, ebooks are doing recently, this blog by literary agent Kristin Nelson talking about the last quarter’s royalties from her authors is worth a read.

http://pubrants.blogspot.com/2009/10/tectonic-shift.html

Meanwhile, the distributors take a vast majority of the profit. In ebook distribution, the average cut for a distributor is between 50-66% of the book’s price. That means that the publisher can’t price a book too cheaply if it wants to sell ebooks in the venues where a vast majority of people buy books. The distributor won’t make enough profit so they won’t be interested, and the publisher will go bankrupt.

In comparison to other product creators, publishing has always been crippled because of the cheap price of books. Until the middle to late 20th Century, a book wasn’t considered a manufactured good; it was a precious piece of culture that must be priced cheaply so anyone could buy it. The publishers were rich, cultured folks like the Simons who published books they believed needed publishing, and they weren’t in it for the all mighty buck or for stockholders.

When the conglomerates took over publishing, they didn’t care about the books, they cared about the profit, but they were trapped by the expectations of buyers who expected low-priced books.

The conglomerates began to cut the cost of creation by lower the cost of authors– authors now make smaller royalties and advances than they ever have– and by cutting the cost of editing by paying editors less and making them do more and more.

Meanwhile, the distributors and the book chains and stores have faded away until only a few now control the flow of paper books to consumers so they control much of the profit, and Amazon has the ebook publishers in their grip with their control of both the price of the book, its look, and a large percent of its profits, and the other big distributors are beginning to follow their lead to the detriment of publishing’s financial health and existence.

And you all whine about wanting a $4 book and think it’s all the publishers and authors’ faults that you can’t get one? Obviously, you really don’t understand the publishing business.

I am not sure whether $4 novels are necessary to attract an ebook
audience or not. What I do know is that whether the book costs $4 or
$10, the consumer better believe they are getting value for their money.
I suspect that other than immediately after the release of a novel, $4
is closer to the right price than $10. Publishers have to get their
costs down to a point where they can sell ebooks cheaply and still make
a profit. If they don’t, then I suspect that more and more authors will
have to self publish if we want the novel to remain a viable medium in
the 21st century.

No, this isn’t an abstraction! First-hand, I’m aware of the issues here. I’m delighted that my publisher, Twilight Times Books, has been so sensible on the price issue.

David

I was thinking that $ 2.00 to $ 5.00 (USD) would be a good price range, depending on the size of the book and the complexity of the production work flow, as described by Elizabeth Burton in a comment below.

Some people people can’t believe that a 2-dollar or 4-dollar ebook can be well written, carefully edited and professionally produced. There are people who judge the quality of anything, and everything, by the price: the higher the price, the better the product.

Now is the perfect time for ebook authors and publishers to dispel this foolish myth.

Michael Pastore
50 Benefits of Ebooks
Price: $ 2.00

More important than cheap pricing, books need to be interesting enough to buy. While a lot of major publishing is junk, at least in my opinion, there are still book I want to buy and read. But so far I haven’t purchased from the small publishers like Smashwords because I haven’t seen any title that capture my interest. Sure, there are probably good books independently published (I do plan to buy and read a Steve Jordan science fiction novel someday when the book queue is a bit shorter) but in competition with known authors or even the free classics, the indie titles are a low priority even if they cost less.

So it comes down to I’d more likely pay $9.99 for the new Greg Bear novel than $4.00 from an unknown author.

Likewise, lets remember something; in books, the brand is not the
publisher the author is (There are some exceptions, but those will
remain exceptions and not change this basic paradigm). If we surveyed
people about who wrote The Da Vinci Code or the Harry Potter Series, I
suspect, that vast majority of people would give you the correct answer
(even if they never had read the books); ask them who published those
books and I suspect the majority would not know the answer. If an
author switches publishers, the readers will follow. Therefore, there
is little real advantage in the publisher “improving” their product.
Particularly if such enhancements will significantly increase the cost
of the product.

Is there a way to get around this basic fact? I doubt it. Media,
unlike other products, has proven rather resistent to building brand
identities that stretch across more than a narrow range of products (For
example, Star Trek, Star Wars, CSI and Law and Order). People are not
going to be more inclined to buy a book because Putnam published it, or
watch a TV show simply because it is on NBC.

Now lets go back to the price issue for the moment. A DSL connection
costs $20 a month, Cable TV maybe about $70 a month. Both will provide
essentially unlimited distraction during that period for those who want
to spend their time using the internet or watching TV. Books have to
compete against that. Lets say the average dedicated reader can read 2
books a week. Thats going to essentially boil down to 9 books a month.
Even at Amazon’s $10 a book, that makes books one of the more expensive
entertainment propositions.

So why do we need cheaper ebooks? Because so many other forms of
entertainment are cheaper as well.

Why? Because it’s not as simple as saving to plain text, especially with regard to fiction. Readability is still a factor, which means italics have to be replaced where they’re needed. There are issues of spacing as well, and removing formatting elements that don’t convert but don’t convert, either. It takes me about 20-30 minutes to render my working file to plain text so I can send it to the Library of Congress.

The basic problem with discussions of ebook pricing is that those who do most of the complaining about price see only the finished product. And they say to themselves “I can do this in ten minutes.” They’re probably right, but to assume every reader has that same ability–or even the desire–to set up the book reveals why the issue of ebook price is never going to be resolved.

What’s more, most if not all of those who complain about the price have never taken a writer’s manuscript from draft to final galley. They have no idea how many hours go into editing, copyediting, proofing, correcting, revising and, finally, formatting. Not to mention cover art, meta data creation, copywriting descriptions and cover copy.

I don’t agree with the mainstream publishers that ebooks should be priced at or near the price of the print version. However, to continue to insist that ebooks should be cheap because they “don’t cost anything to produce” reveals an ignorance of the mechanics of publishing.