Richard Curtis on e-book pricing

Richard Curtis is a literary agent and founder of E-Reads a publisher dedicated to bringing out-of-print books back in electronic and print formats. This means that he may have more insight into e-book pricing than most people. Here is an excerpt from his E-Read blog. It raises some points I’ve never seen mentioned before:

What’s behind that high list price for so many e-books has to do with a stubborn fact of book publishing life. The business model of traditional publishers like Random House, Simon & Schuster and Penguin, is built around printed books. The profit to be made on a successful “book-book’ is at this time far greater than that made on an e-book. Furthermore, publishers employ sales representatives who earn commissions on sales of printed books; they do not earn anything on e-book sales.

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It stands to reason, then, that from the viewpoint of a publisher and its sales reps, a low e-book price will cannibalize the profit made on sale of the higher priced print edition, and deprive the sales reps of their commissions. To bring the e-book profit up to parity with that of the print book, publishers must bring the e-book list price up to parity with that of the print book as well. That explains why Temptation and Surrender, the Stephanie Laurens novel selling in e-book for 25.99, is being sold for the very same price in hardcover on amazon.com. When a hardcover edition goes out of print and a cheaper paperback is issued, the publisher will in all likelihood lower the e-book price to maintain that same parity. (And there are mystifying anomalies. The Grand Finale, the Evanovich novel mentioned above that sells for $14.99 in e-book format, can be purchased in mass market paperback for $7.99!)

Note: also see HarperStudio Re-Enters Digital Book Pricing Debate, published today on GalleyCat.

3 Comments on Richard Curtis on e-book pricing

  1. If you cut out the DRM and the distributor then the sums come out much better – http://www.di2.nu/200903/02a.htm

  2. Greg Schofield // March 2, 2009 at 5:25 pm //

    One reason a print book may be cheaper than an inflated e-book price is that print books get dumped on the market when initial sales do not meet expectations.

    Another is that some print houses are just not e-book friendly, they do it to look up to date and modern, because the market expects them to — but it frightens them silly.

  3. Richard Curtis is exactly right. Large publishers set their eBook prices based on their paper prices. The prices don’t depend on the marginal cost of eBooks (whether DRMed or not). Basically, publishers act as if they believe that eBooks are a good substitute for paper books and don’t want to undercut one with the other.

    Actually, I think this makes sense for the big publishers (although as I’ve pointed out before, it’s not the model BooksForABuck.com and many small publishers follow). Why should they care where their sales come from–and the few pennies they save by going digital don’t change anything.

    I hadn’t really thought about the commission angle, but yes, sales guys/gals probably really don’t like eBook sales as I imagine the eBook distributors are house accounts rather than sales commission accounts.

    Rob Preece
    Publisher, http://www.BooksForABuck.com

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