Discussion among commenters regarding the prior two installments of this series, In the Era of eBooks, What Is a Book Worth? (I) and In the Era of eBooks, What Is a Book Worth? (II),continue to focus on interchangeability of authors, with some commenters agreeing with the idea and others (the majority) disagreeing.

I don’t intend to rehash this argument in this final installment, but I would refer readers to On Books: Murder Down Under, in which I review the mysteries of Australian author Vicki Tyley, as an example of an indie author who I consider the equivalent or near-equivalent of some well-known traditionally published mystery writers. Similarly, I would refer readers to On Books: The Promises to Keep Quartet, in which I review Shayne Parkinson’s ebooks. Parkinson is another indie author who I consider the equivalent or near-equivalent of some well-known traditionally published historical fiction writers.

I will note, however, that if authors are not interchangeable, then ebookers are buying a unique, potentially scarce, commodity that is not replicable in the marketplace, justifying high pricing. Additionally, as a unique item, there is no reason why pricing shouldn’t be even higher. In fact, it might be worthwhile for publishers to create an artificial scarcity by limiting the number of ebook versions of a particular novel that can be sold, which, when combined with the lack of author interchangeability, could drive pricing even higher.

However, because I do find authors to be interchangeable, in this final installment I will attempt to determine just where in the continuum of book pricing ebooks should fall.

The publishing business, until recently, began with the hardcover. Publishers set a suggested retail price against which they charged booksellers a wholesale price. Until the advent of discounting of books about 50 years ago, booksellers sold the hardcovers at the suggested price. But to publishers, the selling price didn’t — and continues not to — matter much. Regardless of how much a hardcover is discounted, the publisher gets a “fixed” wholesale price. If the wholesale discount is 50%, the bookseller pays the publisher $15 on a suggested retail price of $30; the bookseller then retails the hardcover for any price between 1¢ and $30 (or more), either making or losing money on the sale.

The fly in the publisher’s ointment, however, has been and continues to be returns (see, e.g., It’s Raining, It’s Pouring: Returns in an eBook Age and A Modest Proposal: A 21st Century Publishing Model). When setting the price for a hardcover edition, the publisher needs to consider myriad costs, including returns of unsold copies. Although not a perfect science, production and return costs of the hardcover can justify the hardcover’s pricing, at least to a reasonable extent.

In addition to the hardcover production and return costs, it is the hardcover sales — because it is traditionally the first available edition of a book — where the publisher tries to recoup all of its expenses plus make a profit. The publishing of a paperback version, traditionally, was for long-tail profits.

An interesting thing about print book pricing is that publishers recognize — and have recognized for decades — that even though the production and return costs of paperbacks and hardcovers are quite similar, the publisher cannot charge readers who buy the paperback the same price, or even close to the same price, as is charged for the hardcover. The gap, which is better described as a chasm, between hardcover and paperback is enormous, with the paperback often having a suggested retail price as little as 20% to 25% of the hardcover’s suggested price, and selling for about 50% of the discounted hardcover’s real selling price.

Yet with these enormous differentials staring them in the face, publishers are satisfied — until it comes to ebooks. Suddenly, then, the perspective changes and discounted pricing is a bugaboo because it threatens to “devalue” books.

There is no sense in repeating all the things (and the arguments pro and con) that differentiate ebooks from print books, such as restrictive licensing (lease vs. own), DRM, reproduction costs, warehousing costs, no returns, etc. It suffices to say that whereas publishers see no devaluing of print books that we own and can freely disseminate and even resell when print books are discounted, they see devaluing in discounting ebooks, even though we cannot do any of the same things legally.

With interchangeability of authors, a no-returns policy (i.e., no consumer returns and no ebookstore returns), and the DRM-imposed restrictions on ebooks, there is no justification for pricing an ebook above the price set for the lowest suggested retail price for the paperback version. In the era of ebooks, an ebook is not worth more than a paperback; if anything, it is worth less.

It is worth less because the only thing an ebook provides that a paperback or a hardcover version do not is portability convenience. Once that is eliminated from the equation, an ebook provides nothing else that is superior to the print version. In fact, I’d daresay everything else is inferior. Certainly, quality control is inferior and when I buy a print version that is riddled with errors, I can return it to the bookstore, which can return it for credit to the publisher — something that cannot occur with ebooks as there is nothing to return.

If scarcity were a factor, as it can be with print books; if resale value were a factor, as it can be with print books; if the marketplace set the final retail price, as is the case with print books; if authors weren’t interchangeable; if I could lend an ebook as often as I wanted to whomever I wanted, as freely as I can with print books; if quality control for ebooks equalled that of print books, or even came close; if I owned an ebook like I own a print book; if myriad other advantages of print books were at least nearly approached with ebooks, then higher pricing would be justifiable — but they aren’t and it isn’t.

In fact, what has occurred is just what publishers feared: books have become devalued. But the devaluation has come about as a result of the absurd ebook pricing instituted by publishers, notably the Agency 6. Whereas before readers like me would willingly buy print books at relatively high prices, largely because we saw some value in doing so, we have now been converted to ebooks and are shopping for books at the under $4.99, and often free, price point.

Publishers fought the $9.99 bestseller price that Amazon tried to impose. But what they failed to recognize was that the $9.99 price point was applied to a limited number of ebooks and because ebookers were psychologically happy with that price point, they also bought, without much complaint, ebooks at higher price points — ebookers didn’t actively restrict themselves to ebooks that did not exceed a significantly lower price point. The imposition of agency pricing by the Agency 6 altered buying habits. Now instead of being satisfied with a $9.99 price point, many ebookers, such as myself, have set a significantly lower price point and actively look for ebooks that do not exceed that price point. For us author interchangeability is fact. Whereas before I might have bought a Stephen King novel, now I ignore King and find low-price equivalents, of which there are many. Similarly, I buy Vicki Tyley mysteries rather than mysteries by P.D. James or Martha Grimes, and I buy Shayne Parkinson historical novels rather than those written by Philippa Gregory or Elizabeth Chadwick.

A restricted ebook, such as is published by the Agency 6, is simply not worth more than the lowest suggested retail price for the paperback version, which is usually 25% to 30% of the suggested retail price for the hardcover. It is time for publishers to stop devaluing their books with unrealistic agency pricing for ebooks and let the marketplace determine ebook pricing, as is done for the print versions.

Via Rich Adin’s An American Editor blog


  1. Rich,
    I’m a proponent of affordable eBooks but I completely disagree with you on the value proposition. To me, and I’m sure I’m not unique in this respect, eBooks have far more value than paper books.
    1. You mentioned portability. I can carry multiple books when I travel, etc.
    2. Storage. A substantial portion of the square footage of my house is occupied not by me but by physical books. A huge part of the true cost of books is the space they occupy, with associated climate control.
    3. Instantaneous satisfaction. I don’t schedule my reading months in advance. Sometimes I want a book now…and I can download it now.
    4. Non-duplication. In my paper days, I often bought books I already owned because I’d forgotten I had them. Now Amazon or B&N will keep track for me.
    5. Digital life. Unlike my rotting paperbacks from the 1970s, I expect my eBooks to look equally good as long as I live
    6. Readability. I find eBooks more readable than paper. I don’t need two hands to hold the book open, I don’t have to find bookmarks, I don’t need to turn on the light at night (when I use my Color Nook).
    7. Backlist. When I buy an eBook from a new author, I can quickly buy her entire backlist. In paper, many of these are out of print.
    8. Environmental. To me, not contributing to the deforestation of Indonesia is worth something. Also worth something is not having to make a special trip to the bookstore or require a special trip from UPS.
    9. Privacy. I often read in public. I prefer not to have other subway riders know what I’m reading. (Yes, I could buy a book cover for paper books, but although I actually own such a cover, I can never find it when I go outside).
    10. Availability. I’ve often shown up for meetings, only to learn that other attendees are delayed. Even if I just have my PC, I can read the same book I’m reading on my reader, using the Kindle or Nook for PC application. Try that with your paper book.

    Bottom line, to me an eBook has greater value than a paper book because I value these aspects more than the small R-value increase in insulation provided by paper books lining the wall or the ability to resell a paper book at pennies on the dollar. Others, you for example, may disagree which is fine but not universal.

    Traditional hardback-first publishers use hardbacks to segment the market, getting big bucks from those who desperately want the latest from their favorite author and who don’t find other authors to be perfect substitute. Doing so, in some cases, maximizes profits and lets them repay the huge advances they offered these authors. As eBooks are good substitutes for hardback, it’s no surprise that they’d be reluctant to offer eBook versions at the same time and at sub-$10 prices.

    What is a book worth? It’s worth what people will pay. Certainly, at $10, or $5, or $.99 or even $15.99, a good book offers a lot of entertainment (or education) value for the dollar when compared to movies, computer games, or other entertainment competitors.

    Rob Preece

  2. OK, now I get your concept of “interchangeable authors” — I don’t totally agree, and I think we’re using the words slightly differently, but I can at least understand it.

    sometimes, one author (of the same tier) will be “as good as” another, because I’m in the mood for a specific genre. If I can’t read Josephine Tey, I’ll read Ngaio Marsh and be happy. If I’m in the mood for romantic suspense, I can equally read Nora Robert’s latest or early Jayne Ann Krentz… but I’m not going to be happy with Jennifer Crusie because, no matter how good she is, her writing isn’t what I’m in the mood for… so on some level, yes, they’re interchangeable, and on another they’re not.

    Rob, yes, I agree with most of your points on the value of ebooks, but to me a collection of electrons wrapped with DRM just doesn’t have the same perceived value to me that a paper book does. And downloaded music doesn’t have the same value as a CD, nor do downloaded audiobooks have the same value as the ones I’ve got on CDs do. This may be a generational thing, but to me and to many people having possession of a physical object means more to me than possession of a virtual one.

  3. As commented in other posts there is much I agree with Mr. Adin and I agree mostly here too – the floodgates are open, the hardcover is if not dying, definitely becoming rarer and more for libraries, collectors or hugely popular and highly discounted series, the trade paperback is the new main print vehicle and the interchangeability of authors which holds at the margins – ie once you finish your list of “must authors” – will push down overall ebook prices faster than many believe.

    How will the industry adapt, who knows, but the quasi-monopoly on distribution is over and consequently the high price the industry could charge to authors first and foremost (both monetary and time-wise) and then to the public are gone with it. Sure authors need publishers to a large extent, but not at the cost of 85% or 90% of the book price and books seeing print years after being finished and handed in

  4. @Rob — All the points you make are valid, but in my point of view, not game changers, not even collectively. I, too, like the instant gratification I can get with my Sony 950 and I like having hundreds of books in the space of a half book. But I distinguish, which I understand many readers do not, between books that are keepers and books that are throwaways once read. It is the latter that I buy as ebooks.

    The other problem with the merits of ebooks that you describe is that they are merits for people who buy a lot of ebooks. (At least this has been my anecdotal experience.) My neighbor has bought exactly 3 ebooks since receiving an ereader at Christmas. Why? Because that is 1 more book than she normally reads in a given year. To her it matters little whether she carries around a paperback or the ereader. I expect that this year she may well read 5 or 6 ebooks but that number doesn’t change the value of the books to her. In fact, she complained about the pricing being the same as or higher than the paperbacks.

    Duplication — yes, I’ve done that a number of times but the fact that Amazon can tell me that I have already bought the book from Amazon doesn’t increase the value to me because it can’t tell me that I bought the book from Sony or B&N. When I think I already own a hardcover I simply ask B&N (the person at the register in the store) to look up my account and see if I have bought the book already. It works the same for me except that it takes a bit longer. Amazon could probably tell you whether you have already bought a print book from it pretty easily.

    Environmentally, print books are virtually 100% recyclable. Is your NookColor? As for reading in bed, I find it no problem to read with a bedside lamp.

    All in all, the one point you make that I wholly agree with is that it is much easier to read on my Sony 950 than to read the same book in print. My eyes are old and I like being able to adjust font size. But that is worth 5 cents to me. If it were worth $14.99, I wouldn’t be buying hardcovers, I would buy just ebooks — something I do not do.

    In any event, we agree to disagree about pricing. I tolerate higher hardcover pricing because there is a secondary market value, plus the true sense of ownership, plus I can return hardcovers and get my money back if there is something wrong with the book. I do not tolerate high ebook pricing because there is no secondary market value, there is no true ownership (i.e., legally for DRMed ebooks), and most ebooks are nonreturnable regardless of the reason. Perhaps even more importantly, print books are nearly always properly formatted whereas with ebooks it is a hit-or-miss proposition. And let’s not forget all the wonderful errors that seem to appear mysteriously in the ebook version but not in the print version. The negatives outweigh the positives. An ebook should not cost more than the paperback; it should cost less.

  5. I’m with Rob here, especially regarding the utility of ebooks: Put simply, they are better than paper because of their environmental qualities (you can recycle paper approximately 3 times, before it’s good only for toilet paper–yet an ebook reader can hold hundreds of books) and because of flexibility (font changing, background changing, brightness, device choice, making reading customizable for every person). Whereas you quickly dismiss these values, Rich, I embrace and trumpet them, and they guide my purchasing decisions such that I haven’t bought a single printed book in years.

    And as long as we’re discussing the environment: Paper does a lot more damage than cutting down a tree, Rich. The damage done by deforestation; the resultant erosion and habitat loss; the chemicals, bleaches and contaminated water used at pulp processing plants, all of which is dumped into the local watersheds with little or no controls; and of course the fossil fuels burned in driving all those trees, then the pulp, then the paper, then the books, all over the world; that damage is staggering. 3 recycle passes doesn’t clean all that up.

    By that reckoning, I’d say ebooks are more valuable than printed books, simply by virtue of the environment that it doesn’t waste in production, or in use. But I guess that’s a personal thing, depending on how much you value things like the environment.

  6. @Steve – I wonder how many electronic parts degrade in the city dumps? I grant that deforestation is a problem but it is a rectifiable problem. And trees are at least renewable. I’ve never met a transistor that wasn’t an environmental hazard.

    I don’t dispute the value of the customization that ebooks provide. The question is whether that makes ebooks worth $14.99. If it does, then why not $29.99 or even $49.99 because the value you assign to these ebook “perks” is much greater than the value of a hardcover book that sells for $29.95.

    I suspect that if the price rose, the value of these customizations to you and Rob would decline — or is there no price too high for an ebook? I also find it interesting that neither you nor Rob mentioned the value of authorship. All the value that justifies the $14.99 pricing is nonauthorial.

  7. “@Steve – I wonder how many electronic parts degrade in the city dumps?”

    Most properly-run cities have electronic-waste collection sites; indeed, in California there are tax credits for running an e-waste collection center.


    I don’t really understand your essay. Are you suggesting that ebooks should be free until we like them, at which point they should cost as much as hardcovers? It sounds like you’re suggesting that authors should make some of their works available as free or low-cost samples, which I agree with.

  8. Most properly-run cities have electronic-waste collection sites; indeed, in California there are tax credits for running an e-waste collection center.

    I, like many ebook users, don’t live in a city, properly run or otherwise. We’re lucky to have paper/glass/can recycling (which we pay to have picked up). One of the charms for me of my ereader is that I don’t have to drive to the nearest city to get a book, but can download it on my computer. But getting rid of our outdated electronics is expensive, in time (to drive to the nearest collection point, which has decreased their hours to only 2 days a week, none of which is a weekend day) and money (it costs to recycle electronics, plus the gas to get there)

  9. “Trees are at least renewable.” Sure… if you’re willing to wait 30-100 years to replace all that you lost by cutting down one tree… not to mention the aggregate damage to the ecosystem around it. Electronics are indeed recyclable, or capable of proper disposal, while they replace the equivalent of hundreds of books… really, there is no comparison. And we need trees, right now, more than we need paper.

    Also, you might add the cost of eyewear and examinations, transportation and resultant pollution costs of printed books to the estimate of how much a device is worth; for some of us, that can be hundreds of dollars over a few years’ time. It’s definitely more than a few cents.

  10. Pricing also popped up quite quickly in the comments . Adam argues that deriving digital prices from print ones is the wrong way to go … At this stage in the development of the ebook market book publishers who think about digital pricing tend to work back from the print price to find a satisfactory ebook price at 50 or 60 or X of the list price of the print work think of 195 annual subscription as the mortgage payment on a book — I bet that is the way OUP fixed their subscription price .

  11. Oh I was planning to avoid commenting yet again on this repetitious series . . but I just couldn’t get past this piece of quite breath taking deduction:
    “I will note, however, that if authors are not interchangeable, then ebookers are buying a unique, potentially scarce, commodity that is not replicable in the marketplace, justifying high pricing. Additionally, as a unique item, there is no reason why pricing shouldn’t be even higher.”

    I really do wonder what kind of mind Mr Adin has and where he gets his commercial ideas from. They are utterly baffling !

  12. Dear Rob Preece

    I am very highly skeptical that you will be able to read your e-books in 40 years. In 10 years your Kindle or Nook or Sony will be long gone and the distributor will have moved to different DRM model and DRM servers will be switched off.
    I want to see you trying to read 40 years old 8 inch floppy disk with digital document. Such document will be in EBCDIC encoding instead of ASCII. And it would be some long forgotten and incompatible version of EBCDIC.
    I think that 5 1/4 inch disk from late 1980s or even newer Zip Drive would be unsolvable obstacle for majority of people.

    E-book do have some interesting features, but, they also have disadvantages. You can not inherit e-books like I got some books from my grandfather. You can not sell e-books when you are finished with them and since you can’t sell them, it is also impossible to buy an e-book in a second-hand shop. This, in my opinion decreases value of e-book.

  13. @Name (required)… if that is your real name:

    The disadvantages of which you speak do not, in others’ opinions, outweigh the advantages of ebooks, like portability, flexibility, space savings, small environmental footprint and the ability to be backed up or read on multiple devices.

    Ebooks are not files permanently tied to physical media, as the examples you used happen to be, so you’re arguing apples and oranges. I have ebooks that used to be stored on floppies… I still have them in multiple backed-up locations, as I transferred them as media changed. So much for hardware-lock.

  14. Mr ‘Name’ … you are absolutely right and most people here would agree with your first and last point.

    Rob, above, set out an excellent schedule of the advantages of eBooks. They are all very valid advantages. But he completely ignored the disadvantages that I and many other believe are equally valid.

    There is the restrictive Licensing/Rental basis of the ‘sale’. There is the appalling DRM, restricting my use of the eBook (if I didn’t remove it, which I do). There is the DRM aspect that you, correctly, refer to. If the seller goes out of business or changes it’s policies or software etc etc … I could be screwed out of my eBook.

    As Steven, also correctly imho, points out most people here on Teleread feel that the advantages outweigh the disadvantages. However unlike Rob I don’t accept for a minute that they therefore represent a greater value and therefore merit a higher price.

    The drawbacks are serious and restricting. Together with the evident low cost of distributing eBooks in comparison with paper books, they combine to convince me that eBooks prices should therefore be significantly lower than paper ones.

  15. “I think that 5 1/4 inch disk from late 1980s or even newer Zip Drive would be unsolvable obstacle for majority of people.”

    This may be true, but likewise, in 40 years, records, cassette types, and maybe even CDs will be completely obsolete to most people. In fact, my audiobooks on cassette are basically useless now as I no longer own a cassette player.

The TeleRead community values your civil and thoughtful comments. We use a cache, so expect a delay. Problems? E-mail newteleread@gmail.com.