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Why $9.99 won’t always be an ebook pricing ceiling
May 18, 2009 | 9:53 am
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By Joe Wikert
Have you stumbled across any of those Kindle owners who get angry anytime they see an ebook price over $9.99? How about publishers who insist on maintaining their print list price for the e-version? Btw, for the record, where I work we typically fall somewhere in between; our “digital list price” is generally less than the print list price and, of course, Amazon is free to discount to an even lower price. As a consumer, when I see a Kindle price over $9.99 I’m highly likely to skip it.
Whether we want to admit it or not, Amazon is carefully training us to think of $9.99 as the “right price” for a Kindle book. We can jump up and down and scream at the top of our lungs that “the intellectual property is worth far more than $9.99″ but that doesn’t change the perception that $9.99 is a ceiling for a lot of people. So should we all just hunker down and figure out how to make money in a $9.99 (or less) ebook world? No!
Here’s the problem: In 2009 Kindle editions are nothing more than quick ports from the print edition. As a consumer, I see no value added and I rarely (if ever!) see how the publisher is taking advantage of the medium to offer me something that’s better than the print edition. In fact, the DRM that’s wrapped around most Kindle editions means I can’t pass the book along to someone else, so that makes the product worth even less to me. (Also for the record, at O’Reilly we’re proud to say that we sell all our ebooks DRM-free.)So what’s the solution? Figure out how you can add value to the ebook. Leverage the medium! As long as you keep looking at ebooks as incremental to the print business you’re much less likely to make the investments there that are required. Quick p- to e- ports will cast off revenue that’s nothing more than a rounding error to your print business. If you’re OK with that, well, that’s your problem!
I’m convinced that one day we’ll look back at this $9.99 ceiling and the limitations of the early e-reader devices (current generations of Kindles, Sony Readers, etc.) and chuckle. Rich products that fully leverage the platform they’re delivered on could be priced much higher than $9.99 and potentially even higher than the current print pricing levels. The future belongs to the publishers who are willing to invest in products that aren’t just quick-and-dirty p- to e- conversions.
P.S. — Amazon hasn’t exactly developed an “insanely great” platform for us to make excitingly rich Kindle editions for, have they? And although that platform has been around for about 18 months now I can’t say I’ve seen much progress on this front. That’s yet another reason why I wish they’d open things up like Apple has done with the iPhone. Sure, Apple still controls the platform but look at the awesome lineup of third-party apps that have resulted from their approach. And I’ll bet the iPhone OS 3.0 update due later this summer will live up to all the advance hype. How come we never see sexy platform updates like that from Amazon?
Editor’s note: this article originally appeared in Joe Wikert’s Publishing 2020 Blog and can be found here. PB
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Comments:
“Rich” how? “Leverage” in what way?
I keep seeing people going on about how e-books should incorporate multimedia and interactivity and stuff. Why? Because it’s there?
It doesn’t make sense. When I want to read a book, I want to read—not be multimediated. That may not be what you’re talking about, but I have a hard time seeing how or why an e-book should be “richer” than the print book it came from. All I want are the words (and pictures, if any).
And I certainly don’t want to pay more for it, given that I’m losing the ability to recoup costs by selling used.
Chris, I’m (sort of) saying this tongue-in-cheek, but is it possible you had ancestors who were perfectly happy with radio and saw no need for that newfangled device, the TV?…
I acknowledge there’s still a place for radio today. I listen to mine from time to time in the car but I get a lot more use out of my TV. And although Vin Scully does a great job describing the details of a baseball game on the radio, I prefer to watch it for myself on TV.
You’ll be glad to know that I believe books as we know them today aren’t going away. And there will always be a lot of interest in reading good old text off a piece of paper. But just as the TV helped bring a new platform to entertainment, I think e-books will evolve over time and offer a lot more than just the e-rendering of the print version.
I completely agree with Joe. It’s not about incorporating multi-media for the sake of adding bells and whistles, but about a richer/deeper understanding of the content (imagine being able to access referenced documents or translations, simply by clicking on the words), and also look at the community features already available via BookGlutton’s online reader. And, there’s no reason a tiered content model couldn’t be offered so that those readers who prefer to read the text only, couldn’t pay less than those who access the enhanced version.
I agree with everyone here. Joe is right, because ebooks are evolving. Ebooks will begin to include a little video clip, and then more video clips. Soon, these “rich” ebooks, comprising 1% text and 99% video — will morph into pure videos. That’s not a bad thing in itself. But in the interest of using language precisely, we should not call them books — or even ebooks. Let’s just call them videos, with a dash of text tossed in. Something like the movie “Reds”.
I agree with Chris, too. I love to read; adding multimedia will never “enhance” my reading of words-only versions of Whitman or Goethe or any so-called literary novelist. Reading a book is not the same experience as listening to audio or watching a film. The technology is more primitive, but the value is not less.
Let’s hope that the publishing Universe of the future is large enough to hold both varieties of ebooks, “rich ebooks” (filled with audio and video) and “organic ebooks” — with nothing artificial added.
Michael Pastore
50 Benefits of Ebooks
Joe I normally find your pieces quite inciteful, but I must ask the following: Have you lost your mind? Higher ebook prices, no way!!
Alex, I know, it sounds crazy. That’s mostly because we’re all living in this world where the e-book has no more functionality than the p-book. In fact, thanks to the wonderful limitations of DRM you could argue the e-book has *less* functionality than the p-book!
Let’s see how this develops over the next few years. My prediction is e-books will become much richer products and therefore justify the higher pricing levels.
You are assuming that people *want* more content and/or higher prices. What about the many, many people who just want to be able to buy a book and read it on the device of their choosing? I don’t want bells and whistles. If I want multimedia experiences, I rent DVDs. I *just* want to read the book, and I am not willing to pay a higher price for ‘extras’ just to do that.
The elusive multimedia-enhanced ebook of the future that will cost more than $9.99 has actually been available for more than fifteen years. Encyclopedias like Encarta were one of the first successful classes of ebooks. Digital encyclopedias can contain supplementary images, audio, video, 3-D models, data tables, panoramas, simulations, and links etcetera. They can also feature built-in flexible multidimensional search engines.
Now, a reference work on ships might contain extensive 3-D plans. A reference work on birds might contain audio recordings of bird calls. A future book on ancient cities might include a SimCity-style simulation. A future book on genetics might include a Spore-like body-plan synthesizer that is more plausible and less fantastical than Will Wright’s.
The 1986 book The Blind Watchmaker by Richard Dawkins (Darwin’s Rottweiler) contained a section based on a simple computer simulation program called Weasel. It would be easy to include an applet of this type with a multimedia ebook. A mathematical recreations book from Martin Gardner might include a glider gun simulation.
So perhaps prices can be raised above $9.99. However, the digital encyclopedia class mentioned above also provides a cautionary tale for merchants. Prices that move up can also be pushed down. The most relied-upon semi-reliable multimedia encyclopedia is Wikipedia. The price to access this egregiously comprehensive ebook is zero dollars and zero cents.
I don’t think a richer ebook product will be needed to break the $9.99 barrier. Just a plain old ebook with limited functionality will do it.
“Amazon is carefully training us to think of $9.99 as the ‘right price’ for a Kindle book.”
… until saturation.
Wages, rents, utilities all rise over time. Not to mention premium price hikes for in-demand product. Would readers have paid $11.99 for Twilight instead of $9.99? Would they consider $12.99 for the new Dan Brown. How about $14.99 for a Harry Potter Jnr Series?
Joe, you say: “As a consumer, when I see a Kindle price over $9.99 I’m highly likely to skip it.”
Are these impulse buys? Or do you really discount sought after titles based on price alone?
If so, what drives O’Reilly to price ebooks so high?
Not one of the 25 ebooks on your bestseller list retails (on your site) for $9.99. In fact the cheapest lists at $19.99, the dearest at $39.99. Good thing you work there, Joe, otherwise you wouldn’t be reading many ebooks on the job! I’m jesting BTW … well, kinda!
Content is what dictates price. Some arbitrary number that sits comfortably with the masses at a given moment in time is simply an indicator of sorts but it’s ridiculous to demand that a $9.99 price point becomes the standard.
Hell, I’ve paid over $9.99 for an ebook. Thank god I got that off my chest, it felt like a dirty secret I couldn’t admit to!
Of course, if I didn’t want to pay $9.99 for the iPhone: The Missing Manual Ed. 2, let alone $19.99 I could simply look in the ‘Skull and Cross bones’ treasure chest. No point though … since I don’t have an iPhone.
Whenever I hear ‘rich content’ I think videos and music clips that would only drive me away from fiction.
But that’s not the point. I think they can and would work very well for non-fiction. Things like maps and illustrations and charts with the ability to watch things change over time would be really helpful. The ability to look over the simulated terrain of a battle from the position of the general would be great if you’re studying military history.
You could probably do similar things for great sweeping fantasies or space operas too – it could work very well. Just keep music and video clips out of my novels.
Hi chrisbates, I’m glad someone *finally* asked that question! (I figured it would have been the first item I would have been challenged with.) Yes, our e-books at O’Reilly are generally higher than $9.99. That’s also true for most of the other computer books I’ve seen on the Kindle site. That’s also why I’ve never bought a single one of them.
An argument can be made that a how-to or reference guide could have different pricing thresholds than a novel. I’m not saying whether that’s right or wrong, but as long as Amazon focuses their highest-volume titles around a $9.99 ceiling I do believe the notion that $9.99 is right for *all* genres becomes more widely accepted and assumed.
Btw, we’re busy experimenting with a wide range of prices. If you look on the Apple App Store you’ll see our wildly popular “iPhone: The Missing Manual” is available as an app for $4.99, for example. It’s this sort of experimentation that we need to do today to generate data that we can study to figure out the right models for the future.
Joe,
I probably should retract that previous statement of mine a bit. On further thought content often has very little sway in ‘high volume’ print titles (fiction). The expectation is that most hardcovers retail between $25-$27, independent of author popularity.
At that price point publishers are pocketing their 40% which just so happens to be about $10. Gross profit, of course.
Now if a publisher could scale up ebook sales from their own site then the $9.99 retail price is a great model. With Amazon as retailer and their 65% discount … well, not so.