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.
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.