I’m sure you’ve read the same headlines I have: ebooks are cannibalizing print sales! They are driving people to pirate their media instead of purchase it! They are threatening local

Images

bookstores and small presses as Amazon/Apple/Google set out to rule us all! Or…are they? Might there be a simpler explanation for what’s going on in the book marketplace today? Might it simply be that publisher indecision—on now to market, how to price and so on—is translating into customer indecision? Might a less confused customer be a better one?

Consider the following case study. I was browsing at my local Indigo the other day, in the health and wellness section. This is a genre in which I do prefer to buy paper books. These often have diagrams or pictures in them, and in something like a cookbook, a precisely set layout actually matters. It simply doesn’t translate as well into ebook for me, so I often browse these sorts of books in person, in paper, at a store. On this occasion, I found a title which interested me. Yay, right?

Well, yay until some comparison shopping changed the nature of the sale for me! The in-store price was the list price itself, no discount: $21.99 plus taxes. I could buy it on-line from the Chapters Indigo storefront for the slightly discounted $16.71 ($15.87 for ‘members’). At some urging from my shopping partner, who noted that the book, while pretty, didn’t have all that much in the way of graphical stuff, I checked the Kobo site on a whim. And low and behold, they had it, for the relative bargain of $13.69. But then, the plot thickened. I called up the Kindle store to get a sample to check the formatting, and they had the very same ebook for $8.79!

So…is the experience of buying it in a store worth $5 more than ordering it off a website? No.
Is the experience of buying it from Canadian Kobo worth $5 more than the experience of buying it from American Amazon? No.
And most importantly, is having it in paper so important to me that it’s worth an extra $13? No again.

To those who post regularly here in defense of the publishing industry, I ask you—what do you honestly expect a customer to do when they see these sorts of price differentials? If the gap had been smaller, I actually might have sprung for the paper, and might even have bought it on the spot instead of waiting for Indigo to deliver it to me off of a website order. But we’re talking about a 40% markup here between the cheapest e-version and the most expensive print option! Can any of you honestly say that you don’t understand why I went with the Kindle store here?

It’s not about whether it’s profitable or not to lower the prices on the print books, or raise the prices of the ebooks, per se. It’s about the differential between the two editions. If the paper costs account for 10-15% of the price, as the publishers themselves have asserted they do, then the e-price should be 10-15% less. In a case like mine, where I would have preferred the print version, I’d pay the 10-15% more. In other cases, I might not. But when a customer sees such wildly inconsistent pricing, where the gap between the paper and the ebook is so high, I wager they’ll cast their preferences aside and go for the cheaper option nine times out of ten. If publishers are serious about preserving their margins on the higher-profit print books, or about saving the bookstores, or about maintaining a line on ebook prices, they need to create a more consistent and predictable buying experience where both paper and ebook versions are priced sensibly. Sure, mark up the paper price a little since paper, ink, shipping etc. do add more cost to one edition over another. But…40% is not ‘a little.’ If you’re going to price things THAT way, don’t be surprised when customers who might have bought the fancy paper version defect to the world of ebooks.

SHARE
Previous articleSocial 2 much? by Meredith Greene
Next articleAnti-plagiarism tool Turnitin can be a plagiarist’s best friend
"I’m a journalist, a teacher and an e-book fiend. I work as a French teacher at a K-3 private school. I use drama, music, puppets, props and all manner of tech in my job, and I love it. I enjoy moving between all the classes and having a relationship with each child in the school. Kids are hilarious, and I enjoy watching them grow and learn. My current device of choice for reading is my Amazon Kindle Touch, but I have owned or used devices by Sony, Kobo, Aluratek and others. I also read on my tablet devices using the Kindle app, and I enjoy synching between them, so that I’m always up to date no matter where I am or what I have with me."

6 COMMENTS

  1. The 10-15% estimate for the cost of “paper” leaves out many other costs that apply to paper books, but not to ebooks. These costs include warehousing, shipping, markup at the bricks and mortar bookstore, and the cost of returned, unsold books.

    Ebooks also have extra costs, including the cost of converting the text to the ebook format, markup at the ebook retailer, and the cost of adding DRM to each book sold. (I could easlily accept “lower quality” ebooks without DRM, if that saved me 50 cents per book.)

    I have yet to hear any publisher explain the difference in the total cost of making an ebook as compared to the total cost of making a paper book. My _guess_ is that ebooks will cost a lot less, once the legacy infrastructure of paper book printing, distribution, and sales “goes away.”

  2. Was the Kindle price reflective of the publisher’s digital list price or was that after Amazon had discounted it?

    I work at an academic publisher and we are constantly rethinking our ebook pricing. To give you an example: we sell a paperback of a scholarly monograph for $19.95. The e-book price is $15.95. Amazon may well decide to discount that down to $9.95. We have no control over that. In that sense, Amazon does undercut our print sale. So, we are left thinking we need to raise the price of our ebooks.

    It is a tricky situation and Amazon holds all the power right now.

  3. Joanna, I have a couple of points of disagreement with your perspective. First, you are confusing the retailer set price with the publisher set price. As Booby Keane notes, it matters little what the publisher set price is if it is a book that can be freely discounted by the retailer. Amazon has to pay the publisher the wholesale price, but after that is free to set any price for resale, including free.

    The price confusion is not a publisher-created phenomenon but a retailer-created phenomenon. Everywhere you go, the publisher’s list price will be the same; it is the retailer’s price that differs.

    Which brings me to the second point. You didn’t think it was worth the extra money to purchase the book at the local Indigo when you could buy it so much cheaper at Amazon. The ultimate point of your argument is that no one should charge more than a nominal sum more than Amazon charges. That ignores many of the factors that go into pricing, not least of which is the cost of operating a physical store (e.g., Indigo has to pay local property taxes, which Amazon does not). But more importantly, at least from my perspective, is that Indigo gave you the ability to view the book in advance to determine whether you wanted it or not. Picking it off the shelf and being able to phsyically compare it to other books on the same topic that also appears on the shelf is worth something. When you shop at Amazon, making the comparisons, or even knowing what to compare, is not as easy.

    As for changing you mind and going for the ebook because it was so much less than the pbook, you need to remember that the former you are leasing and the latter you are buying. That, to me, requires the ebook to be significantly less. Plus, books like you were looking at are books I like to share; easy to do with a pbook, less so with an ebook.

    Basically, your argument is that pbooks and physcial stores have no added value over an ebook or an online purchase. I suspect that for many consumers that is true — all that matters is price. However, I, for one, think pbooks and physical stores do add value and are worthy or a price differential. I would have paid the $5 difference without a second thought.

  4. Rich, I am not at all saying they don’t have value. I am saying they don’t have 40% more value. If the differential had been smaller, I may well have bought the paper version, but the gap between the in-store book price and the e-price was just too great. I am not saying either that people should not be allowed to charge more than Amazon or price the books as they see fit. That’s not my issue to solve, as a customer. My only role in this exchange is to purchase, or not. They can charge whatever they please, obviously. But if they are charging 40% more than someone else is charging, I do think they should stop being so surprised when customers do make other choices.

  5. Firstly I dispute completely that consumers/readers are in any way confused. And I see no evidence of it here or elsewhere.
    Most products we buy in life are priced differently depending on where and how we buy them. This is part of our commercial culture and has been so for yonks. If I buy veg from veg shops I pay more than if I buy from a supermarket. If I buy paper books from my local small corner shop I pay more than if I travel to town and buy in the huge mega book store. And it goes on…
    eBooks should be significantly cheaper because they have no variable cost element. Publishers make higher margins on eBooks even at prices significantly lower than paper books. So it is hardly surprising that eBooks are on the whole cheaper. What possible confusion can there be ?
    Rather than confusion, I suggest that there is frustration and anger. Frustration and anger about the outrageously high prices and profiteering by the big 6 in their pricing of eBooks, which are often equal to or higher than the paper books, and not a fraction of the price, which they should be.
    eBooks are here not because publishers confuse the public. They are not here because Amazon says they should be here. They are here because technology has an inevitable direction, and technology is now delivering the option for people to read in a fundamentally more convenient way.
    Convenience drives sales, and the trend to eBooks is inexorable and inevitable.

  6. The real issue here is that all retail book stores (from ma & pa shops to corporate chains) are simply speeding up their inevitable extinction. Studies show it takes anywhere from 10 to 15 years for such aspects such as security and commerce to equalize after a significant industry technological break-through. As a capitalist society, we are still trying to equalize the technological opportunities of the internet with simple commerce-based pricing models. Publishing companies need to embrace this change within their industry and start focusing on technological solutions and retail products such as: e-readers, storage facilities, back-up facilities, and electronic distribution models. The business/commerce model activities must shift from the old “book” based product to more service-based and hardware products leaving the actual books and a minimal profit centre. Nine times out of ten the end user will care about price significantly more than process.

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